RBR's Daily Morning Epaper

Volume 21, Issue 204, Jim Carnegie, Editor & Publisher

Tuesday Morning October 19th, 2004

Radio News®

ASCAP cuts new licensing deal with radio
Radio broadcasters now have agreements in place with both of the giant music licensing organizations. The latest agreement, totaling over 1.7 billion dollars, is with the American Society of Composers, Authors and Publishers (ASCAP), going back to 2001 and continuing through 2009. The new deal is similar to the one negotiated with Broadcast Music Inc. (BMI) last year in that fees are fixed, rather than being based on each station's advertising revenues. The new deal negotiated by ASCAP and the Radio Music License Committee (RMLC) has already gotten approval from a federal judge, as required under a long-standing legal settlement.

RBR observation: We may be jumping the gun, but based on the last round of RMLC negotiations with BMI and ASCAP, it looks like music license fees should be a much less contentious issue going forward. Broadcasters have finally succeeded in ending the practice of basing music fees on their revenues, which rewarded (or punished) BMI and ASCAP for sales efforts that might have nothing to do with music programming - - but they still managed to reach financial terms which satisfied both music licensing organizations. And all this was accomplished without anyone storming out of the negotiations and heading to court. Kudos to everyone involved on all sides. | More... |

How the new ASCAP payment will work
Virtually every commercial radio station in the nation (except for a few hundred Religious stations covered by a separate agreement) should soon receive a new music license agreement from ASCAP, based on the agreement approved Friday by a federal judge in New York. According the Keith Meehan, Executive Director of the Radio Music License Committee (RMLC), here's how the payments will work. For the years 2001-2003, there will be no retroactive adjustment of the fees already paid to ASCAP as the organization and RMLC negotiated on the deal finally reached this year. For 2004, each station's fees will be 6.2% higher than those paid in 2003. Meehan told RBR that the straight percentage increase is being used because this year is already so far along. In all, radio stations paid ASCAP 166.2 million dollars last year, so this year's fees will total nearly 176.5 million. A new allocation formula will take effect for 2005-2009. Fees will be determined by several factors, including the type of license - - whether the blanket music license (used by most stations which play a lot of music) or the per program license (used by many Talk and News stations which only make occasional use of music) - - market size and listenership.

Allow me to threepeat myself:
The fine sticks
Infinity just isn't giving up in its attempt to duck an indecency fine leveled at the "Deminski and Doyle Show" aired on WKRK-FM Detroit. In addition to repeating its repeated claim that the FCC's indecency rules are unconstitutional, this time it brought in a third party who took a novel approach to protesting the FCC's actions. The 27.5K fine was assessed for a show which took place 1/9/02. The third party is Carl E. Person, who said in a Petition to Intervene that he is a regular listener to Howard Stern in New York, and that he purchases air time on radio stations there and elsewhere. He said that the FCC's action against Deminski and Doyle could influence Infinity to turn off Howard, depriving Person of an outlet for his commercials, not to mention his own Personal entertainment. [Editors note: Carl E. Person. Personal with a capital P. Get it? Pretty bad, huh?] The FCC didn't break a sweat swatting off Person, noting that "The Howard Stern Show" was not in question here, and that Person did not have standing to participate in the proceeding, and even if he did, he sacrificed it by not getting involved at the outset. Commissioners Michael Copps and Kevin Martin added brief comment on the insufficiency of the fine. Martin said he would have extracted multiple offenses from the 1/9/02 show, resulting in a fine of more than 200K.

Ford expands Sirius offering
Blame it on Stern? Ford Motor Company announced that it is upping the availability of Sirius Satellite Radio as a dealer-installed option, and is targeting up to 20 vehicle lines for factory installations over the next two years. That's something Sirius has been waiting for now for some time - - factory installations by Ford to let it compete with what GM has already been doing for rival XM. Ford, Mercury and Lincoln now offer Sirius as a dealer-installed option on nine models. Beginning this fall, this offering will be expanded to four additional models - - Ford Escape, Crown Victoria, Mercury Grand Marquis and the all-new Mercury Mariner. The feature is currently available on the Ford Explorer, Sport Trac, Expedition and Thunderbird, the Mercury Mountaineer, the Lincoln LS, Aviator, Navigator and Town Car. Over the next two model years - - 2006 and 2007 - - Ford and Lincoln Mercury plan to offer Sirius as a factory-installed option on up to 20 vehicle lines.

Sinclair heat continues
Another letter from Capitol Hill has been sent to FCC Chairman Michael Powell - - the third such missive - - in reaction to the Sinclair "Stolen Honor: Wounds That Never Heal" controversy. Meanwhile, financial analysts are not finding the controversy to be productive in terms of the group's bottom line. 18 senators fired off a letter to Powell, followed by about 30 reps. This time, 85 reps have lent their names to a letter which said in part, "The American public, which owns the airwaves that Sinclair would use for its partisan political purposes, expects the FCC to uphold the basic principle of fairness which is at the root of our democracy. If Sinclair Broadcasting is allowed to proceed with this broadcast, it is difficult to understand how equal time policies will not have been violated. We urge you to investigate this matter without delay, and would appreciate an immediate reply regarding your intentions to investigate these allegations." Many of the reps who signed the first letter hopped on this one as well, but now their ranks include party leaders Nancy Pelosi (D-CA), Steny Hoyer (D-MD) and Robert Menendez (D-NJ). Meanhwile, Lehman Brothers thinks Sinclair may suffer both financial and political damage, and knocked a dollar off of its 12-month prognosis for the group, taking it from 10 dollars down to nine. It's trading around seven bucks at the moment.

Veterans group asks Sinclair for equal time
Veterans Institute for Security and Democracy President Richard L. Klass, a retired Air Force colonel, is asking for Sinclair for some balance, and is says his group is both willing and capable of providing it. In a letter to Sinclair President/CEO David Smith, he made four points:

(1) The decision to air "Stolen Honor: Wounds That Never Heal" should be made at the local station level, not at the Sinclair HQ;
(2) Require that any station showing "SH:WTNH" also show "Going Up River," in the same time slot and within two days of "SH:WTNH;"
(3) Charge equal rates to the sponsors of each show; and
(4) Air a discussion panel made up of Vietnam veterans associated with each production.

That is not the only offer Sinclair has on the table. Michael Moore, who was rebuffed in his attempt to bring his own incendiary documentary, "Fahrenheit 911," to the small screen via pay-per-view, has offered Sinclair the right to broadcast it along with "SH:WTNH" free of charge.

Adbiz©

Activision and Nielsen Entertainment
announce product placement test
Activision and Nielsen Entertainment unveiled three new developments in their ongoing initiative (first announced in April) to develop standardized tools to measure the value of in-game advertising: | More... |

25 million in Arby's Co-ops returns
to Fletcher Martin Ewing
After a two-year absence, Arby's largest franchisee, RTM Restaurant Group (RTM), and 24 spot market co-ops moved their broadcast media buying account back to Fletcher Martin Ewing (FME), where the accounts had been handled since 1979. The new FME buys will begin in Q1. Two years ago, the co-ops made the decision to move their broadcast media buying accounts from FME, an integrated agency, to a large media buying service. At the time, FME debated whether or not a mid-size agency could compete in the media buying business. It determined that there was value for their clients in having the service in-house. Says FME CEO Andy Fletcher: "We have always believed that media buying is an important discipline to have in-house," said Fletcher. "So when one of your most valuable clients returns to you, it is tremendous validation that what you believe to be true is indeed true. At FME, we are concerned about the cost per point but we are obseswsed with the cost per customer. That is the value we bring to our clients by having media buying integrated within our agency." While these co-ops had moved their broadcast media buying away from FME two years ago, the print account remained at FME. FME has since increased its presence in the Arby's system in print buying, now handling roughly 70% of all the print volume in the system.

SNTA: Syndicated TV reaches holiday shoppers
The Syndicated Network Television Association (SNTA) has released a new study showing that syndicated television programs are the best place to reach shoppers in December, it was announced by Mitch Burg, SNTA President. The study focuses on the emergence of the young adult and male segments of the population who buy closer to the holiday season and syndication's success in delivering those shoppers. "With syndication ratings remaining strong and skewing younger throughout December, and broadcast network ratings dropping by 15% in the same time period, it stands to reason that if you want to reach those last minute shoppers, syndication is the place to do it," said Mr. Burg. Highlights: | More... |

BK launches new effort
for chicken sandwiches
Burger King announced the launch of a new ad campaign that brings back the Subservient Chicken in a winner-take-all world championship title fight between Burger King Corporation's two premium chicken sandwiches the Tendercrisp and Spicy Tendercrisp. The "Chicken Sandwich World Championship" campaign chronicles the road to the world championship belt from training and weigh-in to the actual "Friday Night Fight" event on Direct TV's Pay Per View November 5 at 10 p.m. Direct TV Pay Per View viewing will be free and the fight will also be simulcast at www.chickenfight.com . Consumers can now go online to www.chickenfight.com and vote for their favorite chicken and, of course, support their "chicken of choice" with their visits to BK.

38 Greene Studios picked for new Miller Lite campaign
38 Greene Studios (www.38greene.com), a NYC-based recording studio handling Mix to Picture, radio advertising and original music, has produced more than 30 football spots for Miller Lite. The ads, which promote Miller Lite as having half the carbs of Bud Light, are airing in major local markets that have football teams, including Philadelphia, Tampa, Miami, Dallas, New York and Baltimore. All spots run from now through the end of January, which is also the end of football season. Written by Mark Bernath, senior writer, and Tristan Kincaid, writer, the spots take a humorous approach with football referees and sports announcers making fun of fans at the football games and their choice of beer, namely Bud Light - the competitor. With voices echoing in and around the stadium and football language running amuck ("Flags are flying!"), the referees and announcers are out to replace the competitor with the one and only true beer of choice - the one with half the carbs of the competition - - Miller Lite! Produced by Ogilvy & Mather, all of the spots were recorded, edited and mixed at 38 Greene Studios by Casey Chester and Adam Charity. There were a total of nineteen :40 spots, eight :60 spots and four :30 spots recorded for this campaign.

Media Markets & MoneyTM

Bonneville adds Federal AM
This may be a first - - an Internet-only audio service getting a real broadcast signal. Bonneville International has for several years been running FederalNewsRadio.com (FNR) as an Internet-only add-on to its All News WTOP-AM Washington, DC, with FNR operating as a real inside the beltway news outlet for people who are either inside the federal government or deal with the federal government. That's a lot of people in the DC metro. So now Bonneville is paying Metro Radio four million dollars for WPLC-AM Silver Spring, MD and plans to put FNR on the 1050 outlet after closing early next year. Metro bought the station from Mega Communications early last year for 1.5 million.

Davidson adds two more states
Peter W. Davidson is growing his group of radio stations with a 3.9M deal that gets him into two new markets. The first surfacing of Davidson's empire-building plans took place back in January (1/9/04 RBR Daily Epaper #5), and the instant deal will take him to 10 stations in seven markets. In this deal, he is getting KREB-FM in the Fayetteville AR market and KCZZ-AM in the Kansas City market from Thomas J. Embrescia's Butler Broadcasting Company. The 3.9M going to Embrescia will be in the form of cold, hard cash. Embrescia's first deal got him six AM stations in and around three NC markets, including Raleigh-Durham, Charlotte and Greensboro/Winston-Salem. It looked like he was establishing a new niche group via the popular regional stronghold strategy, but his subsequent moves have been much more idiosyncratic. His next acquisitions were AMs in Hartford and Detroit. This deal continues that pattern, and also pulls in the group's first FM station. Total value of all the deals is just south of 20M dollars.

Washington Beat

PTC wants FCC to be accountable
When the FCC hit Fox with an indecency fine for its "Married by America" whipped cream fiasco, it cited 159 formal complaints by US citizens as a catalyst for the decision. That came as news to Brent Bozell at the Parents Television Council, however. His organization, on its own, filed 4,073 complaints. He wants the way the FCC tallies these things changed.

RBR observation: Complaint/comment inflation is upon us, just like other forms of inflation have hit in so many other areas. How about pinball and video game score inflation? How about inflated passing stats now that footballs four-yards-and-a-cloud-of-dust days are gone? Soda sizes at fast food places is another. The important thing is to not go nuts comparing Internet complaint/comment figures to the kinds of numbers generated when snail mail was all that was available. Snail mail took much more effort to produce, and you had to lick a stamp. Email campaigns can be compared only to other email campaigns. | More... |

Engineering

13 Detroit stations now trying
to get automakers' attention
Detroit continues to host, by far, the largest number of HD radio stations in the nation. If they can get the automakers' attention to help speed up OEM car radios equipped with HD, a major hurdle will be cleared for IBiquity and the HD Radio rollout in general. iBiquity announced that 10 additional radio stations in the Detroit market have recently begun broadcasting digital HD Radio signals, bringing the total number of digital AM and FM stations now broadcasting in Detroit to 13. The success of HD Radio in Detroit highlights what is taking place across the country where three of the nation's top five broadcast groups announced plans this summer to rapidly expand their HD Radio rollout efforts. | More... |

Transactions

KXEB-AM Dallas (Frisco TX); KOKE-AM, KXXS-FM & KHHL-FM Austin (Pflugerville, Marble Falls, Leander TX); KWOW-FM Waco (Clifton TX); KLNT-AM/KNEX-FM Laredo TX; KLTG-FM, KOUL-FM, KMJR-FM & KLHB-FM Corpus Christi (Corpus Christi, Sinton, Portland, Orem TX); and KTNZ-AM/KBZD-FM, KQFX-FM & KGRW-FM Amarillo (Amarillo, Borger, Friona TX). 100% of Amigo Radio Ltd. to Border Media Partners

KLTG-FM, KOUL-FM, KMJR-FM & KLHB-FM Corpus Christi (Corpus Christi, Sinton, Portland, Orem TX); and KTNZ-AM/KBZD-FM, KQFX-FM & KGRW-FM Amarillo (Amarillo, Borger, Friona TX). from Border Media Partners to Tejas Broadcasting

| More... |

Stock Talk

Broadcasters miss out on oil boost
A drop in oil prices gave the stock market a mild boost on Monday, but broadcast stocks seemed to miss out. The Dow Industrials edged up 23 points, or 0.2%, to 9,956 and the tech-heavy Nasdaq Composite rose 1.3%.

The Radio Index, however, slipped 0.373, or 0.2%, to 209.207. Spanish Broadcasting System fell 1.4% as the day's worst performer and both Entercom and Saga were off 1.2%.

Radio Stocks

**Here's how stocks fared on Friday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		36.87	-0.05	Jeff-Pilot	JP		48.14	-0.23
Beasley	BBGI		14.94	-0.08	Journal Comm.	JRN		16.79	+0.13
Citadel	CDL		13.78	+0.13	Radio One, Cl. A	ROIA		14.07	+0.09
Clear Channel	CCU		30.84	-0.18	Radio One, Cl. D	ROIAK		13.97	+0.14
Cox Radio	CXR		14.00	-0.08	Regent	RGCI		5.54	+0.05
Cumulus	CMLS		13.77	+0.17	Saga Commun.	SGA		16.85	-0.20
Disney	DIS		25.08	+0.17	Salem Comm.	SALM		24.54	-0.03
Emmis	EMMS		18.03	+0.08	Sirius Sat. Radio	SIRI		3.81	+0.11
Entercom	ETM		31.40	-0.32	Spanish Bcg.	SBSA		10.18	-0.14
Entravision	EVC		7.41	-0.09	Univision	UVN		30.02	-0.21
Fisher	FSCI		47.45	+0.45	Viacom, Cl. A	VIA		34.94	+0.33
Gaylord	GET		31.36	+0.16	Viacom, Cl. B	VIAb		34.46	+0.41
Hearst-Argyle	HTV		25.15	+0.22	Westwood One	WON		20.58	-0.04
Interep	IREP		0.82	+0.07	XM Sat. Radio	XMSR		29.27	+0.28
International Bcg.	IBCS		0.02	unch	-	-	-	-	-

Bounceback

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Arbitrends

Upped & Tapped

Bill Burton honored by Michigan State
Detroit Radio Advertising Group President Bill Burton was honored last weekend by the Eli Broad College of Business (Michigan State Business School), which presented him with the 2004 Broad College Lifetime Alumni Achievement Award. A quotable quote from Burton at the event, who tells RBR he was quite humbled by the honor: "I came to play football at Michigan State, but instead of playing on Saturday, I was part of the team that swept out the stadium on Sunday. After that, my career blossomed, as I was a busboy at the all-girls dormitory. We were taught at Michigan State to always have a plan, and my plan for the future is when they won't pay me anymore in my current position I'll work the next 10 years for free and then go back and be a bus boy again here at MSU - - that is if they still have an all-girls dormitory."

NYMRAD awards scholarship
New York Market Radio (NYMRAD) has announced its annual award of a three thousand dollar scholarship to a minority college senior in the NYC area who is pursuing a career in radio. This year's recipient is Justin Moore, a Communication major at Ramapo College in New Jersey. He has worked at his college station, WRPR-FM, and interned at CBS News in Washington.

International

Kluge may sell holdings
He became a billionaire in US radio and TV (and made quite a number of you reading this wealthy as well), but things haven't gone so well in the former Soviet Union for John Kluge. Now Metromedia International Group has retained a financial advisor, Evercore Partners, to explore options for its various communications and media businesses in Russia and the Republic of Georgia, including the possible sale of the entire company. Those enterprises are primarily in cellular telephone and wired and wireless cable TV. The company previously sold off its Russian radio holdings.

September Digital Solutions Magazine

Complimentary Report

Quarterly Deals:
4.1 Billion spent on broadcast properties since the thaw
RBR/TVBR Observation:
Where is the action? We got it.

Less is More
CCU's already meaning less with syndicators and nets.

September Zinio Solutions Magazine
Read RBR in 2 simple steps:
1.Create a simple account with Zinio and download the free Zinio Reader.
2. You can then download the free September Issue of RBR

RBR Radar 2004

Click on these issues for Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Entercom gets 55K indecency fine
KRXQ-FM has been hit with a double indecency fine of 55K dollars, directed at its Rocker KRXQ-FM in Sacramento. There are two maximum 27.5K fines leveled at the "Rob, Arnie and Dawn in the Morning Show," RBR observation: Example of what KRXQ did - Arnie, speaking as a little boy, said, "Daddy's going to take me to a restaurant 'cause he wants to take pictures of me in my birthday suit"... Now that is entertainment, do not think so. We will stop there but see more details inside. Word to the wise is in order to the talentless purveyors of audio effluvium who continue to disgrace our business. If this is the Good Radio PR Entercom CEO David Field was speaking about during the NAB conference he sure went about it the wrong way. Not monitoring his stations talent. Hey, do not pass the buck on to the GM. 10/18/04 RBR #203

Eddie Fritts takes issue with WSJ
article by Lee Gomes attacking blockage of the so-called Ferree plan for DTV conversion put forth by John McCain in the Senate Commerce Committee. Fritts' response received the headline "Don't Leave Millions of TV Viewers Stranded." "There are 73 million television sets in use in America connected neither to cable nor satellite, 45 million of which are in homes that rely exclusively on local, 'over-the-air' stations as their sole source of television. These stations provide more than just entertainment; as hurricane-ravaged Florida residents can attest,.."
RBR observation: Bravo Eddie you are correct. You go Big Daug.
10/18/04 TVBR #203

Media General to appeal crossownership to Supreme Court
With license renewals for several of its television stations hanging in the balance, Media General is preparing to ask the US Supreme Court to overturn the Philadelphia Federal Appeals Court ruling which blocked the FCC's new ownership rules from taking effect. 10/18/04 RBR #203

LPM data for the Boston, Chicago, Los Angeles and New York
TVB has begun tracking the data that is now available from those markets. For the week ended Oct. 10, broadcast drew a higher aggregate primetime rating than ad-supported cable in all four markets in the three measured demos: RBR observation: Embrace and work with the technology. Fix one mistake at a time and improve on the strength in the same fashion. One step at a time. 10/18/04 TVBR #203

Pounding continues as Wall Street still lower radio stocks
S.G. Cowen analyst James Marsh sees radio stocks bump around near 52-week lows, we still see downside for the average radio stock from here, especially as we near 2006. It was the dire warning from in the latest missive to investors. And it is not just a short-term bear. Marsh sees radio revenue growth in the 2-3% range over the next five years - - a far cry from a return to the historical 7-8% range that broadcasters hope to get back to after crawling out of this prolonged ad recession.
RBR observation: Could it happen? You bet. It's because radio has been turned into a commodity and left itself open to attack. It's not going to be easy or cheap to get radio programming, management, sales and marketing back on track but it has to be done. Those who got rich, swell, and those who didn't our word GO Private and get of the headlock of Wall Street. You are killing your business not the analysts.
10/15/04 RBR #202

FCC stays out of Sinclair case
Despite protests from nearly 50 members of Congress, FCC Chairman Michael Powell has declined to intervene in Sinclair Broadcast Group's plans to air an anti-Kerry documentary over 62 of its O&O television stations. His reason is simple: He doesn't have the power to do so. RBR observation: Powell is correct. You can say "there oughtta be a law" all you want, but if there isn't a law, there is nothing that our elected or non-elected officials can do. And Powell is again correct - - you can't give someone a ticket for speeding in advance just because you're pretty sure they're going to speed. The biggest problem with this whole mess, however, is that it is occurring at a time when broadcasters have already been kicked from one end of Capitol Hill to the other regularly for over two solid years - - and let's not forget added contributions from the court system. Sinclair, if nothing else, is galvanizing opposition to the industry opposition which didn't really need any further motivation. We hope it's all worth it to Sinclair, because the entire industry may pay.
10/15/04 RBR #202

Local Sales Manager
Cumulus Broadcasting of Shreveport seeking a LSM. The person hired for this very important position will have the ability to train, motivate, write and supervise proposals, close sales with A/E's and hit or exceed monthly and quarterly local sales budgets.

See Radio Careers for more info on this once in a lifetime shot.

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