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Volume 23, Issue 208, Jim Carnegie, Editor & Publisher

Wednesday Morning October 25th, 2006

Radio News ®

Regular Guys fired...again
It was over two years ago that Clear Channel fired the "Regular Guys" from WKLS-FM Atlanta for accidentally airing an explicit bit with an adult movie actress (4/12/04 RBR #71). But Larry Wachs and Eric Von Haessler were re-hired by Clear Channel last year and have again been bringing in strong ratings, particularly among male listeners. But they were fired again on Monday, a few days after Juan Tapia "Yogi" and Jose Carias "Panda" of WWVA-FM, also owned by Clear Channel, sued Wachs, Von Haessler and Clear Channel, charging that Wachs had secretly taped them in the studio restroom and aired the audio on WKLS. Tapia and Carias say in their lawsuit that they also complained to Clear Channel management about insults from the Regular Guys dealing with their alleged sexual orientation, race and nationality. After his latest firing, Wachs posted comments on the Regular Guys website denying that he and Von Haessler had done any more than express opinions protected by the 1st Amendment and Clear Channel policy. He insisted there was nothing secret about his taping Tapia and Carias in the restroom - that both knew he was there and that he was taping. "A case of a humorous prank has turned into a culture clash, a suppression of 1st Amendment rights, and a ridiculous smear campaign against me as well as termination of my income without due process," Wachs said, implying that another lawsuit is in the works.

Let's start the whole thing over
A group calling itself The Diversity and Competition Supporters (DCS) has filed comments with the FCC stations that the further notice of proposed rulemaking is dead in the water and must start over from scratch. The filing was submitted by Minority Media and Telecommunications Council Executive Director David Honig on behalf of his organization and others, many of which represent concerned minority groups. Honig argues that the court remand in the Prometheus decision specified that the FCC consider "proposals for advancing minority and disadvantaged business and for promoting diversity in broadcasting..." He points out that DCS offered 14 proposals the first time around, 12 of which were ignored, and that no proposals were identified this time, making it impossible to "...meaningfully solicit comments on them..." He says three things must be done: proposal must be identified, disadvantaged businesses must be defined, and the legal basis for minority relief must be explained. Honig claims that the FNPRM "...is so cursory and clumsily drawn that it is incomprehensible even to the agency's own specialized staff office and thus cannot possibly generate the full record of comments required to justify a rule. Without these parameters, comment is useless, says Honig, and "A party to an agency proceeding is not required to perform a futile act, and it would be futile for DCS to file extensive comments now."

RBR observation: DCS is calling for a restart. It wants the entire FNPRM completely rewritten, and furthermore says that its Restart Motion is unopposed. Add to that the fact that FCC Chairman Kevin Martin still owes the nation five more public forums (and who knows how many others will become part of the ever-popular Michael Copps-Jonathan Adelstein road show). If DCS is successful in getting a restart, that would kick off another round of comment collecting. Add to that the strong chance that Democrats may take over one or both houses of Congress. In the case of this FNPRM, all they would need is the House, since the Senate already approved the Byron Dorgan (D-ND)/Trent Lott (R-MS) Resolution of Disapproval which would scorch the 6/2/03 rulemaking in a more potentially more potent way than did the Third Circuit ruling on Prometheus. Tom DeLay (ex-R-TX) isn't around to block it any longer, and his successors may not have the votes even if they do have the will. So, do you think this is going to be over any time soon?

Meanwhile, over on the Left Coast...
Los Angeles Times editorialist Jon Healey has penned a column calling for an end to the ban on newspaper-broadcast crossownership. Of course, his judgment may be colored by the fact that he works for a Tribune newspaper owned in conjunction with a television station. Healey notes the suspicion that the rule originated with the Nixon administration as a way to do battle with the Washington Post, which at the time owned WTOP-TV in Washington. Healey notes that Nixon appointed FCC Chairman Dean Burch was instrumental in putting the crossownership ban into the books. But his successor, Washington communications veteran Richard E. Wiley claims it the adoption of the ban was simply a sign of the times, and actually was a legitimate attempt to avoid over-concentration of media outlets before there was 24-hour cable news and the Internet, among other sources of information. Healey claims that even back then strong arguments were made that such combinations were not harmful. He lists stats saying that at the dawn of the television era in the late 40s, about 50% of all newspapers owned a station, a number which had dwindled to less than 20% by 1969.

RBR observation: We've been listening to the conference calls. Newspapers are facing serious challenges, as is the broadcasting industry in general. The Third Circuit, in remanding the ownership rules to the FCC, noted that there was evidence that newspaper/broadcast combinations often produced a superior news product, even if they cannot be run as the group's accounting department might wish. It'll be interesting to see where this one goes as the remand winds its merry way forward.

First analyst rates SWMX a buy
Its stock is still in penny stock territory, but SWMX (SoftWave Media Exchange) has attracted the attention of one Wall Street analyst, who has initiated coverage with a "strong buy" rating. The research team at CapStone Investments, headed by Director of Research Jackson Spears, says the business model for SWMX is attractive due to potential high recurring revenue, operating leverage, high cash flows and a high return on invested capital. "We believe that the operating margin could exceed 40% in FY 07 and eventually could approach 50%," the report said. Based on a fee of 10% of gross billings, CapStone says the potential market for the advertising sales exchange run by SWMX for radio and cable TV could exceed six billion annually, with a potential addition of a half billion from the 2008 presidential campaign. With the stock currently trading around three bucks, CapStar put a target price of 4.50 on SWMX.

RBR note: SoftWave Media Exchange is a revolutionary Internet-based marketplace that lets advertisers quickly and easily create targeted, ROI-based advertising campaigns and enables broadcasters to maximize the value of their inventory on a moment-to-moment basis, resulting in increased efficiency and profitability for both parties.

2.6B forecast for 2006 political
Each national election has become an occasion for setting a new record in campaign spending, and the 2006 midterms will be no exception. According to the Center for Responsive Politics, a 2.6B spendfest constitutes a "conservative estimate" of the total to be spent this cycle. According to news service Agence France Presse, the watchdog's estimate is based on money raised in by candidates. In competitive House races, candidates are averaging 760K in accumulated warchest funds, with incumbents enjoying a seven-to-one advantage. Those running for the 33 Senate seats in play this year have pulled in an average of 5.8M, with incumbents enjoying a five-to-one advantage. A spokesperson for the Center said expenditure are tracking to be up 18% over the 2002 midterms. A total of 4.2B was said to be spent in 2004, thanks to the presidential contest at the top of the ticket.

RBR observation: The big advantage incumbents have over challengers in being erased as much as possible in the many races deemed to be in play as the Democrats try to wrestle Congress away from the Republicans. In general, the Democrats are targeting campaigns where they see a chance to pick up a seat, closing the incumbent to challenger gap. Republican national organizations have been playing defense for the most part, and attacking troubled Democratic incumbents where they can. As we go into the final two weeks, it only figures to get hotter as seemingly more and more seats are brought into play. But if you're in one of the hotspots, you probably already know all about this...

Pye Chamberlayne dead at 68
The UPI radio service is long gone, but many in radio still remember Pye Chamberlayne, who reported from Capitol Hill for over three decades. The photo from his personal website shows Chamberlayne covering a 1968 peace rally in Washington. More recently, since retiring in 1999, his web blog has focused on such things as photos of local bears and a fox eating a hot dog from his hand on the deck of his Virginia home near the Shenandoah River. According to UPI, Chamberlayne's wife Mary reported that he died peacefully overnight last Friday, had not been ill and had projects planned for Saturday. Pye Chamberlayne was 68 and had begun his reporting career in 1953, joining UPI in 1962.

Clear Channel in buyout mode?
CNBC reported late yesterday that Clear Channel Communications is in talks with private equity firms, led by KKR, on a possible buyout of public shareholders. There has been no comment from the company and CNBC said its sources said the talks are in the early stages. However, the Mays family has long been frustrated with the low valuation of its stock by Wall Street and Clear Channel has repeatedly bought back its own shares because of the pricing.

Ad Business Report TM

GM's Mike Jackson
on making presentations
In December's Radio & Television Business Report Magazine, we interview Mike Jackson, VP/Marketing and Advertising for GM North America. Here are two excerpted questions:

What advice can you give traditional media like radio, broadcast, TV and cable in making presentations to your office?
Consumers aren't sitting, taking messages from any one medium and even though the whole notion of integration is important, we feel that all of these mediums are very, very viable and very, very valuable. So we're looking at ensuring that all of our marketing and media plans are really totally integrated...
| Read More |

Emotional bond to radio ads strong
among African-Americans, Hispanics
A look into the multicultural findings of Personal Relevance Two: Radio's Receptive Ad Environment reveals that African-Americans and Hispanics have exceptionally high receptivity to ads on the radio compared to other media. It's the fourth study from the Radio Ad Effectiveness Lab (RAEL) and the first to examine emotional connections, ad relevance, and ad acceptance of media across race and ethnicity. The study confirms: (1) Radio's receptive ad environment is especially strong among African-Americans and Hispanics (especially Spanish-dominant Hispanics); and (2) African-American and Hispanic populations show some additional, unique emotional connections with their radio stations, indicating strong lifestyle bonds with formats targeting those populations. Personal Relevance Two identifies ad receptivity by closely examining emotional connections, ad relevance, and ad acceptance across four media: radio, the Internet, TV, and Newspapers. While the basic finding that radio listeners appear to be especially receptive to the advertising they hear on the medium was generally true across all ages, genders, race/ethnic groups, and radio formats, that conclusion was especially true for African-Americans and Hispanics.
| Read More |

Washington Media Business Report TM

A Commerce Committee recap
The Senate committee that handles the most amount of business of interest to broadcasters, without a doubt, is Commerce. Six of 12 Republicans are standing for re-election, and so are three of 10 Democrats. On the Republican side, Chairman Ted Stevens (R-AK), John McCain (R-AZ), Gordon Smith (R-OR), John Sununu (R-NH), Jim DeMint (R-SC) and David Vitter (R-LA) are idle, as are Democratss Daniel Inouye (D-HI), John D. Rockefeller (D-WV), John Kerry (D-MA), Byron Dorgan (D-ND), Frank Lautenberg (D-NJ) and Mark Pryor (D-AR). Of the Republicans angling for re-election, Trent Lott (R-MS), Kay Bailey Hutchison (R-TX), Olympia Snowe (R-ME) and John Ensign (R-NV) are not on the endangered species list. George Allen (R-VA) is in a nip-and-tuck race against challenger Jim Webb (D), and Conrad Burns (R-MT) is reportedly facing an uphill battle to retain his seat against challenger Jon Tester (D). The three Democrats were reportedly on the Republican's list of potential targets at the beginning of the 2006 election cycle, but none of them are believed to be endangered any longer. This list includes Bill Nelson (D-FL), Maria Cantwell (D-WA) and Ben Nelson (D-NE).

Media Markets & Money TM

Epperson doubles a double in Tidewater
Nancy Epperson's Chesapeake-Portsmouth Broadcasting has filed with the FCC to acquire WBVA-AM Bayside VA and WVAB-AM Virginia Beach VA out of bankruptcy, pursuant to a court order issued in July. According to broker Ray H. Rosenblum, who arranged the transaction, the pricetag is 775K. Epperson, the wife of Salem Communications honcho Stuart Epperson, already has a pair of AMs in the Norfolk-Newport News-Virginia Beach-Hampton, or Tidewater, market, WPMH-AM and WTJZ-AM.

Close encounter in Rapid City
A 19M transaction sending a six-station superduopoly cluster from Triad Broadcasting to Schurz Communications has come to a close, according to brokers from Kalil & Company. The cluster includes Country KOUT-FM, CHR KRCS-FM, AC KKMK-FM, Classic Rock KFXS-FM, Ag KBHB-AM and Oldies KKLS-AM. Schurz is involved in a variety of communications ventures, including television, newspapers and phone books.

Internet Media Business Report TM

Pontiac buying virtual land
in "Second Life"
Pontiac is joining a group of companies buying virtual real estate in Second Life (www.secondlige.com), an online 3-D world built and owned by the residents that "inhabit" it. Pontiac's Second Life contribution will launch with a six-region land mass called Motorati Island. Pontiac is providing free lots of land around "Motorati Island" to Second Life businesses and graphic artists for contributing to the car culture there. Users are asked to go to www.Motoratilife.com, to begin the process. Pontiac will review user's proposed projects and appropriate land accordingly. Expected projects include weekly competitive driving events, drive-in theaters with car related films, car-themed fashion shows, live concerts and drive-in restaurants. Leo Burnett Detroit is leading the project and collaborating with Campfire (New York City and Orlando). "Our mission is to work with the Second Life community to create a place for car lovers that doesn't exist today," said Mark-Hans Richer, Director of Pontiac Marketing. "However, our approach isn't to be a 'me too, marketer' and simply have a presence in the space. Rather, we want to empower the car community in Second Life and develop with them in a unique and meaningful manner. We aren't completely creating the experience - the Second Life users are. We're just providing the inspiration." Plans are in development to build a virtual Pontiac dealership, selling the newly introduced Pontiac Solstice GXP. In November, Second Life users selected for land development will begin building their projects. Pontiac's presence in Second Life will officially launch with a multimedia grand opening event-likely using integrated online, print, radio, cable and broadcast TV.

MyPathTV launches, partners with AOL
Just launched MyPathTV (www.mypathtv.com) is devoted to mind, body and spirit video programming. The channel features wellness and spirituality thought leaders such as Dr. Andrew Weil, Dr. Deepak Chopra, Shakti Gawain, Joseph Campbell, Ram Dass, Sheri Huber, Dr. Larry Dossey and more. In addition to logging directly onto the website, users can access MyPathTV via AOL. For a fee, consumers can log on mypathtv.com to view hundreds of commercial-free mind, body and spirit video programs in a full-screen TV-style format. Joseph Lehnen, a former Wall Street exec, developed the idea for MyPathTV in 2005.

Entertainment Media Business Report TM

Nova M set to launch
Air America co-founders Anita and Sheldon Drobny have formed a new liberal talk network to be run under CEO Mike Newcomb. Phoenix-based Nova M Radio launches 10/30. Nova M is leasing KPHX-AM Phoenix and KDXE-AM Little Rock. They reportedly have commitments from other stations as well. The network also intends to lease or buy other stations. Two weeks before Air America filed for bankruptcy earlier this month, Newcomb said he and the Drobnys made a proposal to take a controlling interest in Air America, but the offer was declined. The new network will include "The Mike Malloy Show" from 9 p.m.-Midnight. Malloy is a former Air America host. Newcomb (a former AZ candidate and for governor and physician) airs from 9 a.m.-Noon and Peter B. Collins, a San Francisco talker, air 6-9 p.m. John Zogby, Zogby International CEO, will also host a non-partisan show "The Pulse of the Nation." Joe Trippi, who ran Howard Dean's 2004 website, will serve as media and communication consultant to the network.

Ratings & Research

Arbitron announces 2008-2009 survey dates
For stations who won't have PPM in their market by 2008, Arbitron has announced its diary survey dates for 2008 and 2009. These dates adhere to the new arrangement that Arbitron announced in July (7/18/06 RBR #138), with elimination of the one week break between the Spring and Summer surveys.
| Here is the list of dates through 2009 |

Stock Talk

Waiting for the Fed
Stocks closed mixed as investors waited to see what the Fed would do about rates. The Dow Industrials pushed to another record high, up 11 points to 12,128, but the Nasdaq Composite was lower.

Radio stocks slipped. The Radio Index was down 0.223, or 0.2%, to 146.147. Clear Channel and Westwood One were the best performers, up 1.3%. The worst was Salem, down 1.8%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.32	-0.56	Hearst-Argyle	HTV		23.49	+0.02
Beasley	BBGI		7.06	+0.06	Journal Comm.	JRN		11.58	-0.02
CBS CI. B	CBS		28.34	+0.18	Lincoln Natl.	LNC		64.09	+0.09
CBS CI. A	CBSa		28.30	+0.18	Radio One, Cl. A	ROIA		6.49	+0.02
Citadel	CDL		9.60	-0.12	Radio One, Cl. D	ROIAK		6.54	+0.06
Clear Channel	CCU		32.20	+0.42	Regent	RGCI		3.59	-0.05
Cox Radio	CXR		15.63	-0.04	Saga Commun.	SGA		8.03	+0.09
Cumulus	CMLS		10.27	-0.14	Salem Comm.	SALM		13.26	-0.24
Disney	DIS		31.38	+0.10	Sirius Sat. Radio	SIRI		3.72	-0.08
Emmis	EMMS		11.50	-0.06	Spanish Bcg.	SBSA		4.74	+0.04
Entercom	ETM		25.62	-0.05	Univision	UVN		35.08	-0.01
Entravision	EVC		7.30	-0.02	Westwood One	WON		7.61	+0.10
Fisher	FSCI		42.89	-0.16	XM Sat. Radio	XMSR		10.16	-0.47
Gaylord	GET		46.98	-0.62	-	-	-	-	-

Bounceback

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

Radio should charge advertisers for the production of radio commercials. A production department is valuable, needed overhead. The producer, sound effects library, voice talent, artistic creativity, and time studio time have value. We pay for it; don't we? Our Sellers and Clients invest time and energy into getting the right information for commercials. Yet radio charges nothing! What is the value of something not paid for? I imagine we are at the same conclusion! When radio finally begins to charge for commercial production, not only will radio have a new revenue source, but, advertising agencies will discover a new revenue source! Agencies can now charge for "better" radio production! The agency art director and creatives will have something fun and new to develop. Agencies can pass the costs, along with appropriate up-charge, on to the client.

The #1 reason advertising agencies prefer television as a media: they often make more on production of television commercials than on flight time! The #1 reason they don't buy radio: the dollars often are not big enough because radio "settles" for a supporting role instead of a starring role in ad campaigns, and secondarily because agencies can NOT make money from radio production. If Clear Channel and CBS Radio begin charging, the rest of us can follow. Or if the rest of us begin to charge, Clear Channel and CBS Radio can follow our lead. Or how about we all get wet together?!

Mike Ginsburg
Director of Sales
KLBN-FM, KMMM-FM, KGST-AM-ESPN Deportes
Fresno, CA

Below the Fold

Ad Business Report
GM's Mike Jackson on
making presentations
Mike Jackson, VP/Marketing and Advertising for GM North America gives some tips.

Washington Media Business Report
A Commerce Committee recap
Six of 12 Republicans are standing for re-election, and so are three of 10 Democrats on the committee that oversees the FCC. Who is in a tight race?

Entertainment Business Report
Nova M set to launch
Air America co-founders Anita and Sheldon Drobny have formed a new liberal talk network set to launch 10/30.

Ratings & Research
Arbitron announces
2008-2009 survey dates
For stations who won't have PPM in their market by 2008, Arbitron has announced its diary survey dates for 2008 and 2009.

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

Menowsky
settles in
Iron City
After six years on the road for Cumulus Media as VP/Director of Training & Special Projects, Tim Menowsky is returning to selling in a single market. He has joined Keymarket Communications as VP based in Pittsburgh, which Keymarket surrounds with 14 radio stations stretching from Wheeling, WV to Stubenville, OH.

New CFO for Fisher
Mae Numata will join Fisher Communications November 27th as Sr. VP and CFO. She was most recently VP/CFO of the Seattle Times.

Two upped in Philly
Greater Media Philadelphia has promoted Jim Brown to Station Manager of WJJZ-FM, which it is acquiring from Nassau Broadcasting Partners next month. He has been General Sales Manager of WMGK-FM. Filling that position is Chris Kirchner, promoted from Sales Manager.

Double duty
Meg Stevens has been named Program Director for WMZQ-FM Washington, DC and WPOC-FM Baltimore, both Country and both owned by Clear Channel. She had been PD of WGAR-FM & WMJI-FM Cleveland.

Switching in Boston
Alan Chartrand has joined Entercom as General Sales Manager of WMKK-FM "Mike-FM" Boston. He was previously VP/Director of Sales for Greater Media in Boston.

Added at SWMX
Maryann Varsolona has joined SWMX as a Broadcast Radio Specialist providing transaction and campaign support to the expanding roster of advertising clients for the online advertising exchange. She was previously with Ogilvy and Mather.

Stalbow goes mobile
Fox Mobile Entertainment named Andrew Stalbow to VP/International, Fox Mobile Entertainment, responsible for identifying and creating new distribution channels for Fox Mobile Entertainment's content in Europe. He will oversee the group's European carrier relationships, collaborating with the carriers on new formats and business opportunities. Previously, Stalbow was in business development at Vodafone Group.

More News Headlines

Goodman to
buy stations
After resigning from Ion Media Networks (10/24/06 RBR #207), Dean Goodman is heading out to buy radio and TV stations to operate. He asked Ion to send RBR/TVBR the farewell email he sent to Ion staffers. "The broadcaster blood still runs thick in my veins, and I am off to pursue another dream of mine which is personal radio-TV ownership. I want to do this in cities where a broadcaster can make a real positive impact to the community and maybe help others with the same ownership dream realize it. This is just a small part of giving back what this great business has given me," the email said in part.

Dees gets Hall
of Fame nod
Legendary radio personality Rick Dees, who recently returned to mornings in LA on KMVN-FM, will be inducted into the NAB Broadcasting Hall of Fame during the NAB2007 Radio Luncheon in Las Vegas, April 17, 2007. "Rick Dees has been one of America's most entertaining radio personalities for nearly three decades. NAB is proud to recognize him for his significant contributions to radio and American pop culture," said NAB President and CEO David Rehr. In addition to KMVN, Dees hosts the syndicated "Rick Dees Weekly Top 40."

RBR Radar 2006

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

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.

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. 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.
10/24/06 RBR #207

NBA Minute

Program Director
WCJK-FM/Nashville, one of the most successful JACK formats in the U.S., is looking for a PD. Qualified candidates will have programming experience, a proven track record, solid leadership skills, a true flair for creativity and, oh yeah, a JACK attitude. No calls. South Central Radio Group is EOE.
See Radio Careers

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