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Volume 22, Issue 204, Jim Carnegie, Editor & Publisher

Tuesday Morning October 18th, 2005

Radio News®

Stern blasts CBS
as Sirius media blitz begins
As the countdown begins for his New Year's move to Sirius Satellite Radio, Howard Stern is charging that his current employer, Viacom's Infinity Radio, has it in for him. On his show Monday, Stern railed at Viacom-owned CBS for rejecting Sirius ads promoting his new satellite radio show that begins in January. In fact, CBS accepted one spot, but its standards and practices people rejected two others. There's no word yet on whether other TV networks have accepted or rejected the Stern ads. But Stern is taking the CBS ad rejection personally. "CBS won't allow my name on their airwaves ever again because they're going to look like it as an obscenity. I'm going to call [Viacom Co-President-COO] Les Moonves about it to see if he knows what's going on," the King of All Media declared. But whether or not his ads air on CBS Television, it's going to be hard not to see Stern when you look at a TV screen for the next couple of months. He's preparing for a six-week media blitz to promote his new Sirius show, which will be free of the FCC's indecency rules.

RBR observation: The two rejected Sirius ads apparently went afoul of CBS rules for different reasons. Only one was turned down because it promoted offensive language. The other was bounced because it was overly disparaging of terrestrial radio. That's not because CBS's parent company also owns radio stations. The network's standards and practices rules forbid one company in any field from overly disparaging a competitor in its advertising.

Emmis TV sale likely to hit 1.3B
With 940 million in sales already announced, Bear Stearns analyst Victor Miller has been running the numbers and predicts that the total price tag for the sell off of the Emmis Television group will be right around 1.3 billion bucks. So far Emmis has announced deals to sell four stations to George Lilly's SJL Broadcast Group, with backing from Blsckstone Group, for 259 million (9/30/05 RBR #192), five stations to LIN Television for 260 million, three stations to Journal Communications for 235 million and one to Gray Television for 186 million (8/23/05 RBR #165). By Miller's calculations, the sales so far carry an average multiple of 12.6 times projected 2005 broadcast cash flow, ranging from a high of 14 for the Journal deal to 10.5 for the Gray purchase. With three stations left to go, Miller predicts that WKCF-TV (Ch. 18, WB) Orlando - - the top biller in the Emmis TV group - - will have BCF of 18.5 million this year and go for a multiple of 13-14.5, or 240.5-268.3 million bucks. He sees the other two stations - - KGMB-TV (Ch. 9, CBS) Honolulu and WVUE-TV (Ch. 8, Fox) New Orleans - - bringing a multiple of 10-11 times 10.7 million in BCF, or 107-117.7 million. Of course, the New Orleans sale has been complicated by damage to the station and its market by Hurricane Katrina. All in all, that would bring total sale proceeds to a range of 1,287.5 million to 1,326 million - - with 1.3 billion right at the midway point. RBR/TVBR had predicted all along that the Emmis TV sale would bring at least 1.2 billion, even as some on Wall Street fretted that it wouldn't even hit one billion. If anything, it appears we were a tad conservative with our estimate.

RBR observation: What about the latest speculation on Wall Street - - that Jeff Smulyan will take Emmis private after completing the TV group sale? He hasn't ruled it out. We think, though, that Jeff is currently more focused on doing a deal to expand. Should Emmis be the winning bidder for either ABC Radio or Susquehanna Radio (we continue to hear from people who insist that Emmis is not out of that auction), it wouldn't make any sense to try to go private. Probably not either if Smulyan is the winning bidder for the Washington Nationals Major League Baseball Team, which anticipates 100 million in participation by Emmis. But if none of those things happen, Smulyan will be sitting with an under-leveraged company and no major expansion opportunity at hand. In that case, why wouldn't he look at lining up venture capital money to go private?

Equal time figures in small town politics
A station in Kings Mountain NC has had to pull a night shift DJ from its schedule, all because one person complained. It wasn't about program content - - the DJ reads the news and spins Gospel CDs. The problem is that the DJ is also a member of the Kings Mountain City Council, and the complainant is trying to unseat him - - and take over the seat. And he has backing from the FCC. According to the Shelby Star, Jerry Mullinax was forced to exit the airwaves or the station, Geddings & Phillips Broadcasting Corporation's WMKT-AM 1220, would be forced to give challenger Tommy Hawkins equal time. As it stands, the station is giving him 200 free commercial spots and at least 15 minutes of free air time to catch up. The FCC said the fact that Mullinax never mentioned the campaign in any way didn't matter. Kevin Geddings, the station's owner, does not agree with the FCC, but said his small station does not have the wherewithal to mount a legal challenge. Kings Mountain is just west of Gastonia, which itself marks the western extremity of the Charlotte-Gastonia NC-Rock Hill SC Arbitron market.

Sex in advertising may be counterproductive
You may want to think twice before using sex to sell your goods or services. For starters, men and women have an entirely different take on the use of sexual imagery in advertisements, according to a study from MediaAnalyzer Inc. which gauged its use in print advertisements (we report it here for your consideration of a carryover effect into broadcast advertising). Your first common effect is that you will lose the women. They will not like it and will tend to avoid looking at it. Men, on the other hand, like it, and will spend time with the ad, and will even become motivated to purchase the product. But even that has a downside - - the elements which attract men to the ad in the first place also tend to override recall of the brand name being advertised. You may inspire them to buy beer, but it might be the other guy's beer rather than your own. Something to think about.

Watchdog attacks CATV pricing policies
The American Consumer Institute is claiming that lack of effective competition is allowing cable companies to hike fees well above the rate of inflation at a time when telephone services are actually decreasing and Internet service is trending flat to down. Working in conjunction with senior citizen advocate the OASIS Institute, it is further claiming that older Americans are getting the worst of it. The basis of the claim is that they rely on cable companies to a greater extent than younger and more mobile demos, spend more time with it, and generally have less persons per household sharing use of cable and helping out with costs. As for competition, using FCC data, ACI says that cable systems operating without effective competition charge 15.7% more than those rare few which are in a competitive market, offer 5.6% less channels, and charge 27.2% more per channel. It claims that consumers will be overbilled by more and 100B over the course of five years. ACI and OASIS are urging the FCC to let telcos into the game to make MVPD competition more universal.

NAB to honor three anchors
With the recent departures from all three network news anchor chairs, NAB is preparing to honor all three with its Distinguished Service Award at NAB2006 in Las Vegas next April. "Tom Brokaw, Dan Rather and Peter Jennings will be remembered as broadcast industry icons. They were on the front lines of history and were voices of authority in times of turmoil. It is a pleasure to recognize their valuable contribution to our nation with this year's DSA award," said NAB President and CEO Eddie Fritts, who is preparing for his own departure from the trade association. Brokaw anchored the "NBC Nightly News" from 1983 to 2005, Rather anchored the "CBS Evening News" from 1981 to 2005 and Jennings was sole anchor of "ABC World News Tonight" from 1983 until his death in 2005.

Adbiz©

More on Home Depot
pulling out on spot radio
This August, Cumulus CEO Lew Dickey said his Q2 numbers were particularly hard hit by the decision by Home Depot, which had been the company's biggest advertiser, to switch most radio spending from national spot to network (8/5 RBR #153). This loss to network radio has been dubbed the largest loss of spot radio advertising ever. When stations clear these less expensive networks' spots, they lose out on bigger dollars a spot ad would have brought. Some stations off the record are now getting concerned at how much revenue they give up to the networks for programming product. RBR sources delivered us the actual RFP in which all of the networks--Premiere, Jones, Westwood, etc.--had to conform to be included on the buy. This has been circulating around in the medium as well. It's a great insight as well on how network radio is bought. Email your thoughts on the issue to [email protected]

RBR observation: Home Depot is not the only home improvement store out there. Remember, a good switch pitch can be made to Lowe's
| Here is the RFP from Initiative Media |

DISH reups with Turner
Media Group for ad sales
Turner Media Group has extended its exclusive third-party, ad rep agreement with EchoStar's DISH Network satellite TV service. Turner Advertising Group (TAG), a division of TMG, works in conjunction with DISH Network's internal advertising division to represent advertising time on the largest and most advanced interactive television advertising platform in the world. The announcement was made by Gary Turner, president and CEO of Turner Media Group, and Michael Neuman, president of EchoStar's DISH Network. "TMG continues to be a top advertising innovator and a leader in the development of customized media solutions across DISH Network's advanced platform," said EchoStar's Neuman. "TMG has helped DISH Network raise the bar in television advertising and remain the leader in iTV enabled advertising. We're very excited to extend our working relationship with TMG and confident that their efforts will continue to result in substantial growth of our general market, direct response and interactive advertising businesses."

New SNTA study says syndie offers
advertisers better ROI
According to an analysis conducted by the Syndicated Network Television Association (www.snta.com) finds that syndication offers advertisers a better return on investment than network and cable. The study, focusing on the coveted adult 18-49 target during the Spring 2005 period, demonstrates that syndication's shorter commercial pods improve commercial recall and that syndication's viewers remain more engaged during commercials than viewers of either network or cable. The findings also show that inclusion of syndication increases reach and efficiency, as compared with using primetime alone.
| Other findings |

Media Business Report

Dream reborn for NBC Uni?
The Los Angeles Times reports that NBC Universal is back in the hunt for DreamWorks SKG after earlier balking at the one billion bucks price tag being sought by David Geffen, Jeffrey Katzenberg and Steven Spielberg for their movie studio. What brought NBC Uni back? The paper says Viacom's Paramount Pictures began its own courtship of DreamWorks and NBC Uni executives didn't want to see the studio end up in their rivals hands. So, they apparently got parent GE to open its purse and make a more aggressive bid. Although what's up for sale is only the live-action studio, it would also carry with it the rights to distribute movies from DreamWorks Animation, which did an IPO last year.

Media Markets & MoneyTM

Davidson makes a Mega move in City of Brotherly Love
Rapidly-expanding Davidson Media Group is adding another high profile market to its list with an 8.75M deal for Mega Communications' WEMG-AM in Philadelphia. According to brokers at Kalil & Company, the deal will put DMG into its 19th market, and 14th state. It has radio properties in NC, SC, VA, RI, CT, AR, MI, MN, TN, IA, KS & MA. Mega, which has been slowly slimming down its portfolio, remains in Washington, Tampa and Orlando.

RBR observation: A frequent Davidson move has been to enter markets which have not yet attracted the attention or acquisition dollars of one of the big Hispanic groups and establish themselves in an Hispanic format. DMG won't have to go to the trouble of engineering a format flip to adopt that strategy this time, since Mega has been operating the station in Spanish for some time now.

Sunburst bursts into Louisiana
John Borders and Don Tucker aren't wasting any time building their new Sunburst Media group. The reborn company made its first acquisition, KKLD-FM Phoenix, just a few weeks ago (8/30/05 RBR #170). Now, broker Tom Gammon of Americom says Sunburst has a deal to buy four stations in Houma, LA for 12.5 million bucks. Long-time owner Guaranty Broadcasting, headed by George Foster Jr., will be cashing the check and turning over the keys to KJIN-AM, KCIL-FM, KXOR-FM & KBZZ-FM. With the Houma acquisition, Danny Fletcher, who ran the first Sunburst's McAllen-Brownsville, TX operation, is again teaming up with Borders and Tucker. He'll be a co-owner as well as Market Manager for the Houma cluster.

Washington Beat

Six more Auction No. 37 FMs cleared
The FCC is still clearing the way toward the granting of CPs based on last fall's FM Auction No. 37. This batch will have to get their financials resolved with the FCC by Halloween - - 10/31/05 - - with the grace period failsafe of 11/15/05 serving as the true drop-dead date. College Creek Broadcasting is the applicant for five of them, with sticks on the line in Del Norte CO, St. Maries ID, Burdett KS, Ness City KS and Mesquite NV. The sixth station, earmarked for Ipswich SD, is headed for Owensville Communications.

Postponed: DTV markup moved back a day
Instead of getting together on Wednesday, 10/19/05 to take the next step toward setting a hard deadline for the DTV transition, the Senate Commerce Committee to consider legislation on Thursday, 10/20/05. Moving back consideration of the legislation is not expected to result in the deadline date being moved as well. DTV-Day is expected to be 4/7/09.

RBR Stats

Euro mobile users use
music phones four times more
Telephia reports European mobile consumers are four times more likely to use their music-capable wireless phone (e.g., phone with MP3 player) than their American counterparts. According to Telephia's Europe and U.S. Device Reports from Q3 2005, 36 percent of European mobile phone users who have wireless music phones use their devices to listen to music, while only eight percent of U.S. music phone owners use their phones to listen to music. Consumers who purchased new mobile phones in the last six months have even higher utilization rates at 43 percent for Europeans and nine percent for Americans. According to Telephia data, music phone usage has grown much more rapidly in Europe than in the U.S. Almost two years ago, in Q1 2004, both Europe and the U.S. showed a one percent penetration rate of music phones among mobile phone subscribers. The latest Telephia figures from Q3 2005 show that 14 percent of European mobile phone subscribers now own a music phone, but the penetration rate for U.S. has increased only slightly to 2%.

TVBR TV News

Affiliates fret about iPod deal
Disney/ABC may be embracing new media with last week's deal to sell video downloads for Apple computer's new video iPods (10/13/05 TVBR #201), but what' in it for ABC Television affiliates? Nothing, apparently, and the affiliates are letting the Mouse House know they are none too pleased about it. A letter to Disney management from its affiliate association board of governors complained that the affiliates weren't even consulted about the deal, let alone included in a share of the proceeds. As you would expect, the affiliates worry that making episodes of hit shows, such as "Desperate Housewives" and "Lost" available for download soon after they air could reduce the value of the spots that affiliates sell locally within those shows. So far, there's no word on a response from the net.

TVBR observation: The dollars, at this point, don't amount to much, but the affiliates know that will change in time. It's hard to imagine that large numbers of people will want to watch half hour or hour shows on tiny iPod screens after shelling out big bucks for a plasma set at home. But iPod downloads now could lead to hi-def downloads for full-size screens in the future. The affiliates are correct in deducing that if they're going to get a share of the proceeds, they're going to have to act now. Otherwise, the value of their network affiliations will gradually erode.

Transactions

4.25M WOST-TV CP Mayaguez PR from Signal Broadcasting (Jose J. Arzuaga et al) to CCMG Puerto Roci License LLC (Corporate Media Consultants Group), a subsidiary of Max Media LLC (Charles Glover, A. Eugene Loving Jr., Walter Corcoran, Charles Fox, John A. Trinder). 330K into various escrow accounts, cash. [File date 9/19/05.]

250K WWKO-FM Gainesville-Ocala FL (Belleview FL) from Walker Information & Education Institute Inc. (Stuart Scott Walker) to Bible Broadcasting Network (Lowell L. Davey et al). 25K earnest money, balance in cash at closing. [File date 9/20/05.]

0 WSQH-FM CP Jackson MS (Forest MS) from Salt and Light Communications Inc. (Larry Durham) to American Family Association (Donald E. Wildmon). Donation. Station is noncommercial. [File date 9/20/05.]

Stock Talk

Broadcast stocks miss modest rally
Most stocks got a modest boost on Monday from a couple of bits of good news - - GM struck a tentative deal with its unions over health care costs and the US Supreme Court refused to let the government pursue a racketeering case against tobacco companies. The Dow Industrials rose 61 points, or 0.6%, to 10,348.

Radio stocks did not join the rally. The Radio Index fell 1.841, or 1%, to 189.186. Often volatile Beasley fell 3.2%, Spanish Broadcasting System dropped 2.7%, Fisher was down 2.4% and Cox Radio declined 2.3%.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		38.50	+0.50	Jeff-Pilot	JP		52.90	-0.01
Beasley	BBGI		13.80	-0.45	Journal Comm.	JRN		13.87	+0.11
Citadel	CDL		13.80	-0.06	Radio One, Cl. A	ROIA		11.74	-0.20
Clear Channel	CCU		31.50	-0.07	Radio One, Cl. D	ROIAK		11.76	-0.18
Cox Radio	CXR		14.18	-0.34	Regent	RGCI		5.05	-0.02
Cumulus	CMLS		11.25	-0.05	Saga Commun.	SGA		12.32	-0.13
Disney	DIS		23.49	+0.10	Salem Comm.	SALM		17.99	-0.15
Emmis	EMMS		19.86	-0.19	Sirius Sat. Radio	SIRI		6.15	-0.02
Entercom	ETM		28.67	-0.35	Spanish Bcg.	SBSA		6.60	-0.18
Entravision	EVC		7.43	-0.02	Univision	UVN		25.25	+0.17
Fisher	FSCI		45.33	-1.11	Viacom, Cl. A	VIA		31.16	-0.11
Gaylord	GET		44.61	+0.02	Viacom, Cl. B	VIAb		31.05	-0.18
Hearst-Argyle	HTV		24.10	-0.27	Westwood One	WON		18.59	-0.03
Interep	IREP		0.51	-0.01	XM Sat. Radio	XMSR		31.62	+0.22
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

Radio Media Moves

ABC Radio Networks taps Omar Thompson
ABC Radio Networks has named former CC Radio VP/Marketing and Communications Omar Thompson to the same title. Thompson will be based in Dallas and will report to Jim Robinson, President of ABC Radio Networks. Thompson will oversee all of the marketing and communications initiatives for ABC Radio Networks products and services in the News/Talk, Sports, Music & Entertainment, and Hispanic & Urban formats.

Tollefson adds radio
WTXF-TV (Ch. 29, Fox) Philadelphia Sports Director Don Tollefson is adding radio to his duties. He's now doing commentaries on Greater Media's WPEN-AM, plus hosting a talk show on the Sports/Talk station on Saturday evenings.

Large cap assignment
James McGovern has joined GE Commercial Finance Global Media & Communications as Sr. VP, Origination, with responsibility for the large cap media sector. He was previously with WestLB AG in New York.

XM reaches for Skyy
XM Satellite Radio announced that Skyy (presumably not the name his mother gave him) has been named Program Director of XM's dance hits channel. He was previously Music Director of WKTU-FM New York.

Stations for Sale

New Listing:
California Central Coast
Class A FM. Rated Market.
Asking $1.5M w/terms available.
Brett Miller, MCH Enterprises, Inc
(805) 237-0952 www.mchentinc.com

Western Colorado Powerhouse
100,000 watt C1, Scenic high growth area, new RF plant & coverage, Positive CF, big upside potential, $1.5m -- Call 970 250 9611
[email protected]

More News Headlines

Focus on digital

ABCRN debuts new website

OFFICIAL COURT NOTICE OF INTENDED RESCISSION OF SALE OF WBIX (1060 AM) RADIO STATION

A hearing to consider the proposed rescission of WBIX has been set for October 24, 2005. All objections must be raised at the hearing, which shall be held at the U.S. District Court in Boston, Massachusetts.

Important:
You must act by
October 24, 2005

| Go here for official court notice |

RBR Radar 2005

Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

RBR - Radio News
Infinity update: research and Stern
An industry source tells RBR Infinity is in the midst of replacing the three "corporate research" folks that were let go. And official announcements about Stern replacements will come mid-November. RBR observation: There is no Mr. Smile face you can put on the cutting of the research executives and with saying we will be replacing them soon. Retired Roy Shapiro is a top line broadcaster and has seen it all going back to his days at Westinghouse Broadcasting then renamed Group W Radio and Group W Radio Rep firm and all know the end to the story - Westinghouse sold out. As for Shapiro he has seen all forms of audience measurement over the last 30 some years and if he is giving 100 percent to improve Infinity's research department we say good. But the man is retired and early this year RBR spoke with Mr. Shapiro at the RAB and he was enjoying retirement. When Shapiro's address changes from Florida to 1515 Broadway, NYC with a phone extension then believe it. On Stern - face it there is only one Stern and we doubt there could be any one talent or talents who could replace him as a whole. It might be a prudent move to develop local talent to fit the market and build with the markets over time. Developing a local morning program that will build the rest of each stations day parts instead of an entire station's ratings and revenues are hooked to just one person like Stern. Those days are gone and so is the revenue. Infinity and Hollander have had what - 12 to 14 months to get this Stern stuff out of the way. Na, something just does not smell right.
10/15/05 RBR #203

Sirius' fuzzy math makes
no difference to Mandel
While Sirius added 359,000 new users in Q3, nearly doubling its year-ago increase, news had it that not all of those new Sirius subscribers are actual people. Where XM waits until a car buyer activates the service to add to its new-user tally, Sirius sometimes starts counting as soon as a car with a factory OEM radio arrives at the dealership. Jon Mandel views it different - "I'd like to point out that when Mel was at CBS, and I followed him because I used to have an analyst job, we always made sure we checked Mel's data points...Some us are used to a variety of sellers tending to cook numbers, and someone else's numbers, so what else is new? We saw it for a few years at CBS. It's not like they're selling, or will be selling a whole bunch of advertising anyway on Sirius. Most of the channels-the music channels-that people listen to are commercial free. 10% of nothing is still nothing." He adds, "It does affect advertising in a sense that they may be overstating numbers by 10%, but I think it's more of an effect on overstating for Wall Street. When you buy a new car, with either Sirius or XM, if you buy it with that option, they give you three months free. So he doesn't have that revenue for three months and you're making the assumption that everybody that does it is going to pay the 10 or 12 bucks a month." RBR observation: Agree with Mandel and TVBR is finally glad someone else views satellites' churn without wearing rose colored glasses. But one thing is for sure - next to Apple's iPods this Christmas ad season, the satellite ads that will be pumping the TV, Cable and Print will be XM vs. Sirius of Biblical Proportion. Christmas is when people buy crazy things as technology waits for no one especially the younger generation.
10/15/05 RBR #203

TV continues getting
Hammered with excuses - Tribune
And another one coming as CEO Dennis FitzSimons says TV revenues are pacing down in the low double digits for Q4 after dropping 6% in Q3 to 307 million bucks. That was blamed on a generally soft ad market, the impact of Hurricane Katrina on its New Orleans stations and the continued impact of Nielsen's Local People Meters. RBR observation: The same complaints over and over this year with TV, so radio do not feel bad as the Television business is now catching up with one heck of a bad year. What TV needs to learn from radio is that programming content is king and without quality programming one does not get ratings and in return no ad dollars, as there are just too many places for advertisers to place those bucks. Publisher note: Maybe it is time for a joint RAB and TVB management sales marketing conference to compare notes and work together. Both boards and executive committees' best give this strong consideration and work together. United you stand for Free divided you fall. Just my 40 years experience speaking.
10/14/05 RBR #202

Local Sales Manager
Twin Cities at KFAN-AM 1130, America's premiere Sports Talk station, home of the Minnesota Vikings and Timberwolves. LSM needed at Clear Channel Radio Minneapolis-St. Paul. Have first hand experience developing direct sales with an understanding of Sports marketing and what it can do for your clients? Can you build, lead and motivate a winning Sports sales team? Got Game? Bring your winning attitude and business savvy to KFAN. See Radio Careers

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