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Volume 23, Issue 207, Jim Carnegie, Editor & Publisher

Tuesday Morning October 24th, 2006

Radio News ®

Was September a down month?
The RAB tally is still a few days away, but CL King analyst Jim Boyle says his proprietary data from over 40 markets indicates that September was down 2% for radio ad sales, reversing the slight gain in August (10/2/06 RBR #191). Additionally, he says, "October bookings are described as not much better." Q3 conference calls by radio companies kick into gear in early October (although Beasley is next week), with most radio companies issuing their numbers from October 2nd through 9th. "Ongoing sluggish radio trends should weight on Q3 results and Q4 (estimated) guidance from the radio groups," Boyle warned. The CL King analyst has ratings on the stocks of three radio operators: Clear Channel "Underperform," Emmis "Neutral" and Saga "Neutral."

Evolving technology requires evolving rules
The National Broadcasters Association has weighed in on the FCC's second look at the ownership rules it originally tried to put in place back in the summer of 2003. And its arguments are comprehensive enough to fill up 139 pages. How to get all that into a nutshell? Let's give it a try. Broadcasters are facing unprecedented competition from all angles in the early stages of the 21st Century, with the result that there is "a proliferation of outlets available to consumers nationally and in local markets." All of these newcomers have programming to offer in competition with that provided by broadcasters. However, very few can match the local content provided by broadcasters, and this is a critical difference. It is important in the provision of locally-oriented news programming, and it is all-important in times of crisis, when broadcasters almost invariably are the lone source of information for citizens trying to cope. NAB argues that the competition for dollars in a limited advertising pie is increasing exponentially, putting at risk the lone medium equipped to do the job locally, and that reasonable changes in the rules are necessary to keep broadcasting, and the critical benefits it provides, competitive. NAB further argues that despite daily claims to the contrary, there is ample evidence that broadcasters are indeed serving the public interest, including mainstream audiences and small local market niches. It says consideration of relaxed radio ownership rules should be considered in view of the impact of satellite radio and MP3 devices, and due to the fact that studies have shown programming diversity actually increases in a large cluster. TV duopolies are needed for economic reasons down to and especially in the smallest markets. And ownership diversity should be encouraged by all constitutionally supportable means.

Another watchdog goes after consolidation
The sun seemingly never sets on a group of watchdogs looking askance at the media, and this week is starting off as no exception. This time it's a joint project from the Benton Foundation and the Social Science Research Council, with a study of consolidation. Guess what? They're against it. Four studies were released. The first covers ownership issues, and recommends that the FCC do a better job of assuring that stations do a good job of fulfilling this part of their licensing obligation. The second, on media access, urges a better job of ushering women and minorities into the possession of a broadcast license. The third charges that large local groups actually do a poorer job than smaller clusters in providing niche or specialty programming. The fourth counters the claim that newspaper/television cross-combinations provide superior news product, saying that it isn't necessarily the case (newspaper/broadcast companies are said to have a statistical edge over broadcast-only companies because they deliberately target strong news-oriented stations affiliated with a major network).

RBR observation: Let's look at the format charge. Benton says that uncommon formats like Classical, Jazz, Folk, Tejano, and Gospel are uncommon in big station clusters. We would counter that the Classical may have taken some hits since 1996 but is still available in large markets both commercially and as a non-com format, and it was never widely available. Jazz and Folk have NEVER been widely available, and Smooth Jazz can be found where there is an audience. There seems to be no shortage of Tejano or Gospel, in either its Black or Southern varieties, where there is an audience for those formats. Both tend to be the domain of specialty groups, however, and it would be odd to find them commonly provided by a mainstream radio group no matter how altruistic its motives. We can have the debate, ladies and gentlemen, but lets keep it within the realm of historic reality.

Equity firms eye Tribune and its pieces
You could pretty well guess that the big private equity firms would be in the bidding as Tribune Company seeks to divest big chunks of its TV and newspaper portfolios, perhaps even the whole company. The Wall Street Journal reported that the usual suspects have paired up in two consortia, with the possibility of a third. According to WSJ, one consortium consists of Madison Dearborn Partners, Providence Equity Partners and Apollo Management, while the other has Thomas H. Lee Partners and Texas Pacific Group. The report says Carlyle Group is also involved, but it is not clear yet whether it will join one of the two groups or try to form its own. In any case, the WSJ says nonbinding indications of interest are due by the end of this month, then the bidders will get down to the nitty gritty. The final outcome could be a sale of Tribune Company as a whole, or the auction of various parts.

RBR observation: As we noted previously, top Tribune management, led by CEO Dennis FitzSimons, would prefer to sell only part of the company and keep the prime assets focused in the three biggest markets, New York, LA and Chicago (9/28/06 RBR #189). But the independent directors on the Tribune board have a fiduciary obligation to all shareholders and may not share his objectives. If the bids for the whole company come in with strong numbers, FitzSimons may have to beat the best or watch a new owner take over.

Dean Goodman a free agent
Veteran radio executive Dean Goodman is back on the market after about a decade in the TV business. Goodman has resigned from Ion Media Networks as President and COO and a company announcement says his position will not be filled. That leaves CEO Brandon Burgess heading day-to-day operations as well as his other duties. Goodman had been with the company formerly known as Paxson Communications and more recently Ion Media Networks since the 1990s when it mostly owned radio stations, since sold to Clear Channel, before building up the nation's largest collection of TV stations and launching a national network. The announcement said Goodman will be pursuing other interests. "For over a decade I have had the privilege of working with an incredible group of individuals on building a great radio company, launching a television network and assembling the largest TV station group in the US. I am proud to have been a part of the company's continued growth and especially thank the employees for their support and hard work over the years," said Goodman. According to an SEC filing, Goodman will receive a three million payment for termination of his employment agreement, accelerated vesting of restricted stock and options and some other benefits. Until the end of 2009 he is prohibited from lobbying activities before the FCC or Congress and is specifically bared from providing any services to two specific companies, whose names were redacted from the public filing and filed under seal with the SEC.

RBR observation: It is pretty easy to guess that one of those companies is NBC Universal, a major shareholder of Ion which would like to get out of that arrangement. Is the other its parent company GE, which would seem to be redundant, or someone else?

Executive Comment

The Coming Ad Revolution
in Radio Ad Buying
Much conversation has been given to the measurement of Television spots, combined with the ratings from Nielsen Media Research, whereby this form of new measurement will allocate the actual ratings with the number of eyeballs watching a particular commercial. This will let advertisers and their respective agencies determine who is watching their TV commercials as well as the number of people tuned in to see their ad. A lot of media people have suggested that perhaps this is too much information. Meanwhile, however, others suggest the ability to measure these indices will provide financial leverage to the broadcast community on spot load, spot location, etc. In effect, charging more for spot location but clearly commercial ratings will become the currency. Sounds almost like a pricing model for product placement, doesn't it?

Rapid growth of new business models
As discussions continue in Television, Radio is also entering the digital era as Arbitron and other data firms are evolving into electronic measurement. With the recent announcement of ongoing tests in Houston and Philadelphia and the concurrent need for MRC accreditation, Arbitron is moving ahead with this technology. Simultaneously, Jess Hanson at Clear Channel and other research gurus at similar broadcast outlets explore other measurement methodology and means. Along with this electronic measurement, ad tracking company Media Monitors can now combine radio ratings with commercial placement. This conversation is somewhat premature, but revolutions are started by forward thinking companies or events. What this electronic revolution can bring is a decidedly new way for radio stations to price their inventory and for advertisers to seek their best audience. When these new technologies are fully employed, both the radio industry and advertisers will have the ability to determine a more complete ROI for their respective investments. Yes, radio will move toward pod placement and more importantly advertisers will now be able to choose formats and spot locations within that format that will allow for the potential of larger listening audiences. But this evolution into electronic ratings will surprise some people when they learn radio's true pervasiveness and which commercials rate highest. This must not be construed as hurting radio. Instead, it will allow companies that embrace these new technologies the time to plan. Most of Europe is already moving to the PPM model and the delivery of a specific targeted audience is quickly becoming the exchange rate. The question then is, "Will the European model for buying radio make its way to the States?" A reverse revolution!

Joe McCallion, EVP
Media Monitors
New York

Wall Street Media Business Report TM

More on the New York Times
The television stations of the New York Times are on the block, but its radio stations are not (we incorrectly noted the radio stations in our mention of the for-sale broadcast group last week). A New York Times spokesperson said that Classical WQXR-FM isn't going anywhere, and will remain a brand extension of the newspaper. The company's New York AM, WQEW, is a different matter, however. It's been leased to ABC for years now, and the Mouse House indicated last spring that it intended to exercise its option to purchase the station. The 40M deal is expected to close Q1 2007. Also, regarding the meeting of expectations, despite reports, the Times says it did that and more. It reports its earnings per share on a GAAP basis, and analysts figure it out differently. With adjustments to account for that, the company did what was expected of it in Q3 2006.

Ad Business Report TM

Brookstone names new AOR; launching campaign
Brookstone is handing out holiday gifts early, naming Cramer-Krasselt | Hampel Stefanides as its first agency of record, and awarding PR duties to its subsidiary agency, CKPR. The specialty retailer, best known for its iconic catalog and distinctive consumer products and gift items, has hired the agencies to conduct an integrated fourth-quarter advertising and marketing push. The holiday campaign will be followed by broader branding and public relations efforts, which will run through 2007. For Cramer-Krasselt | Hampel Stefanides, the New York office of Cramer-Krasselt, the nation's fourth-largest independent agency, Brookstone is the first new account announced under GM Jeff Johnson, who joined the company in July. The Brookstone holiday ads, juxtapose holiday "wants" against everyday "needs." The ads also suggest that gift giving is not only about the receiver, but says a lot about the giver as well. The campaign features the headline, "Give Them What They Want." Different creative executions are scheduled to appear in print and online, including The Wall Street Journal, USA Today, www.food.com and www.weather.com. The ads are meant to drive consumers to Brookstone's website (www.brookstone.com), catalog and chain of 310 stores around the country. The campaign will include in-store promotional materials and PR support via CKPR, Cramer-Krasselt's public relations subsidiary.

Washington Media Business Report TM

More campaigns,
more debates ducked
Local radio and television stations in the Austin TX area are ready to provide the time to put candidates on the air. Their noble purpose is to serve the public interest in one of the finest way a broadcaster can, by hosting a debate in the run-up to an election. But you can't hold a debate if the politicians refuse to show up. According to Austin American-Statesman website statesman.com, four incumbent US Reps have been offered the opportunity to debate their challengers on the air. And all four have declined. The shy politicians include Democrat Lloyd Doggett and Republicans John Carter, Lamar Smith and Michael McCaul.

RBR observation: Fine. We understand when a football team or political candidate decides to sit on a lead. As a football fan and a concerned citizen, we hate the tactics used in either arena, but we grudgingly understand it. But please, politicians, if you're going to refuse to do a debate, which can be truly informative political programming, then do not come around between elections looking for free time to put your often misleading and misinformative advertising on the very same airspace.

Media Markets & Money TM

Mountaineer climbs Oak Hill
Thomas Moffit Jr. is adding another station to his commercial/noncommercial combination of stations. For the commercial side of the portfolio, he's picking up WOAY-AM Oak Hill WV, in the Beckley Arbitron market. The seller is Eugene C. Ellison's Commissioned Communications Inc., for a price of 300K (50K of that is earmarked for the studio). Moffit's for-profit company is Mountaineer Media, and it already has a pair of AMs in the Knoxville TN area. Moffit is also listed a principal at three noncom FMs in Tennessee and another in New Jersey.

Entertainment Media Business Report TM

"Mantalk 640" launches in SoFla
South Florida's newest station launched yesterday via James-Crystal radio group. "Mantalk 640," is designed exclusively for men, with a lineup that includes "Mancow" (6am-12 Noon); Jim Rome (12 Noon - 3pm); Don & Mike (3pm - 7pm); and Tom Leykis (7pm - 10pm).

Mancow also lands in Cincinnati, Reno; moving in LA?
Along with Mancow's Morning Madhouse leading off the all-new "Man Talk 640," in Miami-Ft. Lauderdale (see above), Cumulus Media Partners has also added Erich "Mancow" Muller to their soon-to-be launched FM Talk format in Cincinnati, which debuts in early November. Mancow also has Reno a-buzz, having recently added Mancow on its former Howard Stern outlet KBZZ-AM. Meanwhile, LA Sports Talker AM 570, KLAC is allowing Mancow to be shopped "in the market" citing format realignment on the Clear Channel sports outlet. Station Manager Don Martin says of Mancow, "there is not a more talented performer on the air today, but TRN FM and Clear Channel mutually recognize that Mancow needs to reach beyond the sports talk audience in Los Angeles, several options are being considered."

Jack-FM going global
SparkNet Communications, owner of the JACK-FM brand, is taking Jack-FM international. Ofcom, the UK's independent communications regulator, recently announced that Absolute Radio International (ARI), who launched their bid with the Jack-FM format, successfully won the new FM radio license for Oxford and the surrounding South Oxfordshire area. As in North America, Jack-FM will be programmed. The Oxford UK station is expected to launch by March 2007. SparkNet also announced former MTV VP/Music Programming and Citadel EVP/Programming Ken Benson will be spearheading Jack-FM's worldwide expansion. He'll serve as the International License Administrator for the Jack brand outside of North America.

Internet Media Business Report TM

YouTube deletes 30,000 copyrighted files
YouTube deleted nearly 30,000 files after the Japan Society for Rights of Authors, Composers and Publishers, found 29,549 video clips such as television shows, music videos and movies posted the site without permission, reported The AP. As per its stated policy, YouTube complied with the request to remove the copyright materials, made on behalf of 23 Japanese TV stations and entertainment companies, the story said. YouTube is negotiating with copyright holders to allow content to run, in exchange for ad revenue sharing. The story also said the entertainment industry group may ask YouTube to introduce a preliminary screening process to prevent copyright clips from being posted.

Transactions

230K WRFS-AM Alexander City AL from Joy Christian Communications Inc. (Ed L. Smith) to Racquel Humphrey. 1K earnest money, balance in cash at closing. [File date 10/6/06.]

1 WDBD-TV Jackson MS. from D. Wayne Elmore, Thomas R. Galloway to Alta Communications VIII Managers LLC (Brian W. McNeil, Timothy L. Dibble). Station being transferred to creditors. JSA/SSA with Mississippi Television LLP's WUFX-TV. [File date 10/2/06.]

Stock Talk

Another record for the Dow
It is not a raging bull market, but investors are pushing stock prices higher on such good news as dropping oil prices and Wal-Mart saying it will cut capital spending to boost profits. The Dow Industrials moved to another record high, rising 115 points, or 1%, to 12,117.

Radio stocks were also higher. The Radio Index rose 1.048, or 0.8%, to 146.370. Arbitron was the star, gaining 4.4%. Cumulus gained 2%.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.88	+1.76	Hearst-Argyle	HTV		23.47	-0.07
Beasley	BBGI		7.00	+0.10	Journal Comm.	JRN		11.60	-0.10
CBS CI. B	CBS		28.16	+0.23	Lincoln Natl.	LNC		64.00	+0.14
CBS CI. A	CBSa		28.12	+0.23	Radio One, Cl. A	ROIA		6.47	+0.04
Citadel	CDL		9.72	+0.04	Radio One, Cl. D	ROIAK		6.48	+0.01
Clear Channel	CCU		31.78	+0.43	Regent	RGCI		3.64	-0.09
Cox Radio	CXR		15.67	-0.08	Saga Commun.	SGA		7.94	-0.06
Cumulus	CMLS		10.41	+0.20	Salem Comm.	SALM		13.50	+0.08
Disney	DIS		31.28	-0.17	Sirius Sat. Radio	SIRI		3.80	+0.04
Emmis	EMMS		11.56	+0.01	Spanish Bcg.	SBSA		4.70	-0.10
Entercom	ETM		25.67	+0.04	Univision	UVN		35.09	+0.09
Entravision	EVC		7.32	-0.04	Westwood One	WON		7.51	+0.01
Fisher	FSCI		43.05	+0.11	XM Sat. Radio	XMSR		10.63	-0.46
Gaylord	GET		47.60	unch	-	-	-	-	-

Bounceback

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Below the Fold

Executive Comment
The Coming Ad Revolution
TV is already in the midst of a debate over measuring audiences for spots and radio is heading for some changes as well.

Washington Media Business Report
No debate? Then no freebies either
Candidates have been turning down free air time in the Austin, TX area because they would actually have to debate their opponents.

Entertainment Business Report
Mantalk 640 launches in SoFla
South Florida's newest station launched yesterday via James-Crystal radio group. "Mantalk 640," is designed exclusively for men.

Stations for Sale

Southern Small Markets
FMs and AM-FM Combos
Florida, Louisiana,
Mississippi, South Carolina
Call Gordon Rice @ 843 884-3590
[email protected]

Radio Media Moves

Heading XM Marketing
Vernon Irvin has been named Chief Marketing Officer for XM Satellite Radio, effective November 14th, overseeing all retail, direct and partnership marketing and reporting directly to President and COO Nate Davis. Irvin was previously Exec. VP and General Manager for the communications services group at VeriSign.

Rooney added
to WTKK
Greater Media Boston announced that WGBH-TV host Emily Rooney will join WTKK-FM in January as an on-air contributing analyst during the "Jay Severin Program," making regular weekly appearances and also making herself available to comment on the station when news breaks. She will continue as host and executive editor of "Greater Boston with Emily Rooney" on WGBH-TV.

Blank to CC in DC
Clear Channel Radio has named Ivan Blank National Director of Sales for the "new" 11-station cluster the company has created, combining its Washington, DC and Baltimore stations. Blank was previously National Sales Manager for Infinity Radio in Tampa.

Klezaras to Beasley
Michael Klezaras Jr. has joined Beasley Broadcast Group as Group Sales Manager for its office in Jacksonville, NC, part of the company's Coastal Carolina operation.

Kang gets Wired
G-N Kang has joined Beasley's WRDW-FM "Wired 96.5" Philadelphia as co-host and co-producer of the "Chio in the Morning Show."

Masterson retires
KNX-AM Los Angeles announced that General Sales Manager Mike Masterson will retire November 10th after 34 years in radio, most of it at CBS/Infinity stations and the former CBS Radio Representative. Masterson has been GSM of KNX since 1987.

More News Headlines

Shamrock signs with MJI Interactive
MJI Interactive and Shamrock Communications announced a deal for MJI to provide a group-wide solution to Shamrock's radio stations. Stations in Scranton, Tulsa, Baltimore and those in the Milwaukee Radio Alliance, jointly owned with All-Pro Broadcasting, will be supported by the Shamrock initiative. Custom design, site publishing tools and database marketing software will be provided by MJI and Radio Data Group. Station sites will debut with new designs early in 2007, with features to engage listeners and give station staff efficient ways to manage and monetize their sites.

RBR Radar 2006

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

Campaign cash flowing in
and right back out
One report shows that the National Republican Congressional Committee has spend more than 35M since 9/1/06. Another showed national Democratic Committees lagging in funding but at the same time doing a good job of playing catch-up. 527s are dropping soft money into the action again. And the FEC notes that a heaping helping of the dish from the national committees has a negative odor to it. The consensus grand total of spending we've been seeing for this political cycle is 1.4B.

Publisher note: Watch closely the political dollar as it will grow. Stop thinking political is only during elections because it is a business and a big business with massive war chests which raise cash consistently. Bottom line: Get your local stations geared to spend time with these campaign fund managers locally and in the nation's capital as it might be a wise idea to retain a former political aid in the capacity of Political Sales Manager.
10/23/06 RBR #206

Executive Comment
What are three things that Radio Must Do To be competitive in this new media environment?
Rick Buckley, owner & CEO, Buckley Broadcasting: Radio must be the king of local media and this can't be just lip service. We have to own our communities and or markets. HD represents the biggest change to radio since the advent of FM and we must support this new technology which puts us on an equal basis with all digital media... We also have to start selling the positives of radio to the public at large and stop the negative press that's been the focus of not only the trades but the newspapers as well... We are not dead, yet !
10/23/06 RBR #206

Arbitron Q3 revenue
And future is on PPM
CEO Steve Morris: "Our marketplace is being forced to deal with rapid and wrenching change and all of us at Arbitron are working to the company out in front of that change so that we can help our customers succeed, and in so doing, succeed ourselves...On the PPM front, there has been steady progress.

RBR observation: PPM is key to Arbitron's future success. It seems the company is making steady progress toward its goal of having the top 10 markets PPM-ready in 2008. Now, if Arbitron wins its patent suit against Media Audit/Ipsos, the company will likely have the electronic ratings market cornered for radio. Nielsen doesn't seem all that interested at this point in joining that fray. RFP Committee or not, Clear Channel will basically have to jump on the PPM bandwagon if Arbitron wins the suit. At this point, does Clear Channel want to wait for the outcome before it signs for PPM? It could take a while. Agencies want PPM and more and more radio companies are signing on with them. Needless to say, MRC accreditation is also pretty important to PPM's success. The next MRC meeting on PPM is imminent. In fact, it was only recently postponed.
10/20/06 RBR #205

NBA Minute

Program Director
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See Radio Careers

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See Radio Careers

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