RBR's Daily Morning Epaper

Volume 21, Issue 207, Jim Carnegie, Editor & Publisher

Friday Morning October 22nd, 2004

Radio News®

Spotload excess not child's play
for Viacom, ABC
The FCC is getting tough on children's programming. It has entered into consent decrees with, in one case, Viacom and Coxcom Inc., and in another, with ABC's International Family Entertainment, Time Warner Cable and Charter Communications. The issue is commercial overages on children's programming, and the biggest upshot is a total of 1.5M going into the US Treasury. Coxcom, TW and Charter were three cable operators who were named in the agreements, but they are essentially interchangable with any cable operator in the USA which carries ABC Family Channel, the subject of the IFE/ABC/Coxcom decree, or Nickelodeon, the subject of the Viacom/TW/Charter decree. ABC and Viacom have both agreed to a compliance plan to assure that they do not again stray over the spotload line. In addition, ABC will be sending 500K to the US Treasury, and Viacom will be sending in 1M - - in both instances the payments are considered to be voluntary contributions, and in no way carry the forward-reaching effect that would attach to an FCC fine. "The consent decrees entered into today will not only help protect children who watch these cable channels, but will have a much broader impact," said FCC Chairman Michael Powell. "All cable operators, DBS providers, commercial television broadcasters, and companies that provide children's programming should know that we will vigorously enforce our children's advertising limits. We will continue to take swift and appropriate enforcement to protect the interests of children."

Sinclair refuses Rappaport;
Kerry, Burger King refuse Sinclair
Sinclair Broadcast Group has announced that it will not be airing "Stolen Honor" in its entirety, and instead is going to air a program called "A POW Story" Politics, Pressure and the Media." As such, it has refused an offer from Deborah and Andrew Rappaport to pay expenses plus 1M dollars to air a pro-Kerry documentary in order to provide balance to "Stolen Honor." Meanwhile, the Kerry campaign has refused to have anything to do with the program, and Burger King has opted out of advertising the day it airs.

RBR observation: Burger King? By the sound of it, this corporation is obviously a monarchist organization - - they probably don't care about any silly old election no matter who the candidates are. | More... |

Campaign dollars:
There are billions and billions and billions of them
Actually, ad on one more billion and you'd have it just about right. The Los Angeles Times says that 3.9B dollars figure to have been spent on federal elections this year. Not only that, they say that is a conservative estimate. The presidential battle itself is generating over 1B. The total for the 2000 campaign was about 3B. The increase in the personal contribution ceiling from 1K to 2K and the unprecented spending of 527 organizations is given much of the credit for the increase.

McGraw-Hill boosts Q4 outlook
McGraw-Hill's TV group is pacing up 20% for Q4 after seeing revenues rise 9% in Q3, but that's not the main reason for the company boosting its guidance - - its financial services business is going gangbusters. Look for earnings to be up in the double digits next quarter, not just the high singles, President and CEO Terry McGraw told analysts. And while broadcasting is only a small piece of the company,

he was pretty upbeat when talking about Q3 results for McGraw-Hill's Information and Media Services division.

Tax dollars go digital
The Corporation for Public Broadcasting has announced nine million dollars in grants to an additional 133 local public radio stations in 31 states and territories to help them pay for the equipment they need for the transition to digital radio. With the latest grants, CPB has now awarded grants to 285 public radio stations and 170 public television stations for their digital transition. These funds are part of the nearly 150 million in funding that Congress has provided to CPB over the last four years to assist public broadcasters to convert from analog transmission to digital. | More... |

40 years, same sponsor
Some of our younger readers may find it hard to believe that annual ad contracts used to be commonplace in radio. So just think how unusual this is - - WCLV-FM Cleveland has been airing "Symphony At Seven" Monday-Friday for the past 40 years and the sponsor from day one is still onboard. Of course, that sponsor being a bank, it has changed names a few times, but KeyBank (Cleveland Trust back in 1964) and WCLV will celebrate the long association, along with the other current sponsor, McDonald Financial Group, with a special live broadcast November 1st at 8:00 pm from Severance Hall by Apollo's Fire, Cleveland's baroque orchestra. According to WCLV, the 1964 contract with the bank was the then-two-year-old station's largest ever and the first acknowledgement by a major advertiser that the Classical FM station was reaching a significant and valuable audience.

Conference Calls Q3 2004

Strong Q3 results from McGraw-Hill
Broadcasting is a pretty small piece of the pie at McGraw-Hill companies - - providing only 27 million of 1.7 billion dollars in revenues for Q3 - - but it was one of the strong growth areas, with revenues from its eight-station TV group up 9%. The big mover was Financial Services, where revenues grew 14.1% to 502.8 million and operating profits jumped 17.7% to 202 million. Broadcasting is part of the Information and Media Services unit (BusinessWeek magazine is the biggest part), where revenues were up 6.6% to 187.8 million and profits jumped 23.3% to 23.8 million. In all, company revenues were up 5.8% to that 1.7 billion figure and income from continuing operations rose 12.2% to 324.5 million. "Record results in Financial Services, improvement in higher education, a pickup in advertising and careful cost controls all contributed to our third quarter performance," said CEO Terry McGraw. "As a result, we increased our operating margin to 32.4% in the third quarter."

Adbiz©

Massive Inc. launches ad-serving network for video games
Massive Inc. has launched the world's first video game advertising network, delivering significant reach among 18-34 Males. Massive says it can dynamically serve advertising across a network of premier online video game titles and return measured results on consumer interaction with this brand messaging - - so advertisers can run time-based campaigns. The Massive Advertising Network claims delivery for advertisers the single largest aggregated audience of gamers and reach across the 18-34 male demo. Unlike outdated in-game advertising models based on static placements in individual games, Massive provides interactive and fully accountable visibility with the demographic and complete control over reach, frequency and timing of when ads air. Massive's system is designed to aggregate online gamers into a single audience. The company has so far signed game publishers UbiSoft, Atari, Universal and Konami as partners. Massive says the new technology will also enable marketers to place and change gamescape marketing messages in real time - - projected right into online games. Advertisers can also schedule ad placements for certain blocks of days or weeks or even dayparts for certain periods of the day.

Fox upping prices for baseball
Backed by soaring ratings for its American League Championship Series, Fox TV has hiked prices for its commercials by as much as 40%, sources told the NY Daily News. That means advertisers who tried to wedge themselves into games six and seven of the Red Sox and Yankees match-up were forced to fork over 245,000 for a 30-second spot, up from 175,000 Fox was charging when it pre-sold the games in the upfront. Even with the hiked prices, buyers said ecstatic ratings made the games a must-buy. Game Six drew an 18.3 rating, up more than 50% from the comparable game last year.

Chevy's "American Revolution" effort having impact
USA Today reports as part of its revised marketing plans designed to promote 10 new models to be rolled out in 20 months, Chevrolet introduced the umbrella Revolution campaign. It has created 40 ads in the series. The campaign replaced individual dealer advertising, the "We'll Be There" car ads - - and Chevy's long-running "Like a Rock" truck ads.
In the 10 months since they first began airing, the ads have had an impact on model interest, brand awareness and on dealer participation in Chevy's campaign:
--More consumers have gone to the division's Web sites to learn about vehicles. Unique visitors are up 140% at the Malibu site and 280% at the Aveo site.
--The revamped C6 Corvette is virtually sold out for the year.
--About 98% of dealers have participated in the new campaign, vs. 20% for "We'll be There."
--A study by research company Millward Brown ranks American Revolution as the seventh-most-recalled U.S. advertising campaign. Still holding the top spot is Chevy's now-defunct Like a Rock.
Helping create the impact is big ad spending by GM - - up tenfold this year. Chevrolet's cut: 100 million, according to TNS Media Intelligence/CMR.
--The new Revolution ads are a hit with consumers surveyed by Ad Track, USA Today's exclusive weekly poll. Of those familiar with the ads, 26% like the ads "a lot," above the Ad Track average for all ads of 21% - - and way above the average for auto ads of 16%.

Media Markets & MoneyTM

Birach finds harbor in Ann Arbor
Sima Birach is expanding his AM-only empire into another market with a 1.5M dollar deal for WSDS-AM in Salem Township, MI. The station is part of the Ann Arbor MI market. The seller is Koch Broadcasting. Birach will pay half of the total in cash by closing, is expected to kick in at least 200K within a year of closing, and is expected to completely pay off Koch by the second anniversary. The acquisition gets Birach into his fourth Michigan market, along with Detroit, Grand Rapids and Flint. He has additional properties scattered in places like Washington, St. Louis and Pittsburgh, among others.

Price calculated for SF FM
The merger deal between Infinity and Spanish Broadcasting System, which sends KBAA-FM San Francisco to SBS (10/6/04 RBR Daily Epaper #195), has been filed with the FCC. RBR calculations based on the contract indicate that the station is valued at 75.316M dollars, a conclusion in turn based on SBS's closing stock price on 10/4/04.

IDT looking to sell Liberty Broadcasting?
In the 10/22 edition of the weekly "Forward" newspaper, IDT Corp. Chairman and founder Howard Jonas is profiled, speaking on the development of O&O WMET-AM DC and saying he plans to sell Liberty Broadcasting, formerly Talk America Radio Network. However, he told the influential Jewish weekly that he would keep some of the top hosts for WMET and still wants to acquire more stations. IDT had no additional comments on the story after we contacted them. | More... |

Washington Beat

Boerne free? Nope
Paulino Bernal Evangelism owns and operates KBRN-AM Boerne TX, in the San Antonio area. However, the FCC found that operation to be lacking in the areas of maintaining a local studio, maintaining operational EAS equipment, and maintaining a public file. The total cost for these offenses was set at 25K. Bernal challenged only the public file charge, saying that "the file has long been located in an envelope in plain sight at the station's studio/transmitter." Further, an employee with limited English who was apparently in a panic due to the presence of an FCC inspector failed to point it out. This excuse didn't sit with the FCC. Bernal tried to duck the fine on the poverty plank, but failed to document its financial condition. It's further claim of no priors was upheld in regard to KBRN, but there was a prior at a different Bernal station, so that excuse was shot down as well. Bottom line: the full 25K fine sticks.

Transactions

KADN-TV Lafayette LA from KADN-15 Inc. to Comcorp of Louisiana License Corp.

WMOO-FM Derby Center VT and WIKE-AM Newport VT from Northstar Media Inc. to Nassau Broadcasting Holdings Inc.

| More... |

Stock Talk

Another mixed day
Nobody's sure which way oil prices are going, some corporate earnings reports have been good, others bad, and then there's that election in a couple of weeks. So Wall Street stock traders are going every which way. The Dow Industrials ended Thursday's session down 21 points, or 0.2%, at 9,866, but the S&P 500 and Nasdaq Composite were up slightly.

The Radio Index moved up 2.761, or 1.3%, to 211.031. Spanish specialist Entravision was the big mover, up 4%. Saga gained 3.3% and Clear Channel rose 2.8%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		36.00	-0.35	Jeff-Pilot	JP		46.79	-0.24
Beasley	BBGI		15.00	unch	Journal Comm.	JRN		16.04	-0.26
Citadel	CDL		14.14	+0.34	Radio One, Cl. A	ROIA		14.21	+0.06
Clear Channel	CCU		31.11	+0.84	Radio One, Cl. D	ROIAK		14.10	-0.03
Cox Radio	CXR		13.90	-0.05	Regent	RGCI		5.65	+0.08
Cumulus	CMLS		14.39	+0.30	Saga Commun.	SGA		17.51	+0.56
Disney	DIS		25.30	+0.56	Salem Comm.	SALM		24.99	+0.19
Emmis	EMMS		18.42	+0.37	Sirius Sat. Radio	SIRI		3.84	+0.06
Entercom	ETM		30.40	-0.43	Spanish Bcg.	SBSA		10.01	+0.09
Entravision	EVC		7.52	+0.29	Univision	UVN		30.02	-0.03
Fisher	FSCI		47.67	-0.03	Viacom, Cl. A	VIA		34.87	+0.45
Gaylord	GET		31.47	+0.17	Viacom, Cl. B	VIAb		34.46	+0.57
Hearst-Argyle	HTV		24.95	-0.03	Westwood One	WON		20.62	+0.47
Interep	IREP		0.76	-0.04	XM Sat. Radio	XMSR		30.94	+1.78
International Bcg.	IBCS		0.02	unch	-	-	-	-	-

Bounceback

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Arbitrends

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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
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RBR Radar 2004

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

Major League Baseball partners with XM Satellite - TA DUM
An 11-year, 650 million agreement enabling XM to broadcast games of every MLB team nationwide beginning with the 2005 regular season. XM will also be the official satellite radio network of MLB and have rights to use the MLB silhouetted batter logo and the marks of the 30 MLB Clubs.
RBR observation: It seems that every time we turn around, one of the satellite guys or the other is spending a half-billion or more on something. Sirius is spending hundreds and hundreds of millions of dollars on Howard Stern and the NFL; XM is spending hundreds and hundreds of millions on Opie & Anthony and Major League Baseball. All the while, both companies are losing hundreds of millions of dollars per year and they'll soon have to figure out how to raise hundreds of millions to pay for their second generation of satellites. What a business plan! And yet their stocks are darlings of Wall Street, while terrestrial radio stocks, companies which actually have positive cash flow, and plenty of it - - see their stocks in the crapper. Don't ya love it? And by the way, how smart is it of Major League Baseball to spit on its radio partners of many, many decades to team up with a new rival that, even under the best case scenario, will still have only a miniscule fraction of broadcast radio's audience for many years to come? 10/21/04 RBR #206

Life without "Friends" is tough
It's not just that NBC is running behind CBS in overall ratings four weeks into the new season, that was the case all last season, but it's also losing the 18-49 demo to the Eye network and is running neck-and-neck with, believe it or not, ABC. The Disney-owned finally has some hits after a long drought - - "Desperate Housewives" and "Lost" - - while NBC is dealing with its first season without two long-time ratings leaders - - "Friends" and "Frasier."
TVBR observation: Programming be dumped and replaced faster than a jack rabbit on a date. And if you think this is fast Mr. TV executive, well as the digital world moves more quickly the TV business will become similar to the Radio business, a 24/7 - 52 week event. Pump and Dump. NBC pumped Hawaii all summer and dumped it faster than catching the big wave and riding it in. The ratings tell the story of the CBS eye. Free TV you have more in common with radio than you think. 10/21/04 TVBR #206

Wachovia Securities Jim Boyle cuts Radio estimatesm again
Seeing nothing to improve radio ad sales in the near future cut his Q4 estimates for radio companies. Ad rate-cutting hasn't gone away, but it hasn't deteriorated either. His Q4 radio revenue growth estimates are not pretty. RBR observation: Boyle's chart comparison inside tells the story on how deep the knife has cut his Q4 revenue estimates for 10 of the 11 radio companies that he follows (all except Emmis) is worth a look see. 10/20/04 RBR #205

Shareholders ready to
go after Sinclair
A law firm representing institutional shareholders which own a piece of Sinclair Broadcast Group is preparing to sue the company for mismanagement and possible insider trading. The plans to air "Stolen Honor: Wounds That Never Heal" precipitate the action, and the law firm's investigation into it led to the discovery of the possible insider trading activity. RBR observation: The lawyers need to take a look at the proxy for Sinclair's 2004 annual shareholders meeting. All four Smith brothers still hold huge stakes of Sinclair stock and options, millions of shares each, so Robert and Duncan didn't even come close to cashing out. In all, the four control over 96% of the company's super voting Class B stock and nearly 85% of total voting power. 10/20/04 RBR #205

Account Manager
Arbitron Outdoor
Selling and servicing the Arbitron Outdoor products to outdoor media companies. 3-4 years media sales experience, Outdoor industry sales preferred. Offering medical, dental and vision, stock purchase, tuition assistance, 401(k)
See Radio Careers for more info

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

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