RBR's Daily Morning Epaper

The heat has been turned up with 3rd qtr. Conference Calls, follow the money trail, the road map to 4th qtr.
Help your staff hit year end budget. Encourage them to Sign Up today for a Trial RBR Read.
Trial Subscription Sign Up

Volume 23, Issue 209, Jim Carnegie, Editor & Publisher

Thursday Morning October 26th, 2006

Radio News ®

Clear Channel
hangs out For Sale sign
Just a day after word leaked out that company management had started talking with KKR about a possible buyout of public shareholders (10/25/06 RBR #208), the board of directors at Clear Channel Communications has thrown open the door to all comers. Late yesterday the company announced that the board had retained Goldman, Sachs & Company as its financial advisory to consider strategic alternatives - a Wall Street euphemism for putting the company up for sale. The announcement said there was no assurance that any transaction would take place and that there would be no further public comments on the options being explored unless a specific transaction is approved by the board. Clear Channel also moved its Q3 conference call to next Monday (10/30), so we will hear something from management a week earlier than previously planned, although it is unlikely that CEO Mark Mays and President Randall Mays will have anything to say about whether they and their father, Chairman and co-founder Lowry Mays, will attempt to buy the company with equity partners. Initially, Wall Streeters had tended to discount the possibility of the Mays family trying to take Clear Channel private anytime soon - let alone inviting other bidders. The CNBC report of the KKR talks didn't move the stock much, but look for a different reaction today! While going private appeared to be a possibility a few years down the road, there are risks to doing so near-term. It was earlier this month that analyst Victor Miller of Bear Stearns laid out a scenario whereby Clear Channel Outdoor could be completely separated from Clear Channel Communications, leaving the billboard company public while Clear Channel Communications sold off assets, bought back lots of stock and was eventually taken private by the Mays family (10/11/06 RBR #198). That would take quite a while, but leave the Mays family firmly in control - perhaps without having to take on equity partners. Instead, the company has been put into play for quick action.

RBR observation: Our first thought upon hearing of the CNBC report of the KKR talks is that the Mays family would not be likely to take the risk of losing control of Clear Channel by taking on equity partners as the majority shareholders of the company. Should unforeseen circumstances make them come up short on their financial promises to their equity partners, Mark and Randall Mays could find themselves out on the street, with someone else brought in to run the company. Just ask Citadel founder Larry Wilson how that works. But the Mays family does not have voting control of Clear Channel now. Are they under pressure from other big shareholders to either buy the company or sell it to someone else? The bidding process has begun and there is now no turning back.

Advisory Council wants PPM dates
spelled out ASAP
Regardless of whether Houston or Philadelphia proves to be the first market for implementation of the Portable People Meter by Arbitron, the Arbitron Radio Advisory Council wants the company to give stations a clear time table so they can prepare. Outgoing Council Chair Bill Kelly, who is Clear Channel VP/Market Manager in Youngstown, OH, told RBR that training is the chief concern. "We started a training subcommittee which will work with Arbitron in getting PPM training up and rolling, getting feedback about what's good, what's bad, because training on both sides of this issue is the key." Kelly said the Council is also pushing the Media Rating Council and Arbitron to wrap up the accreditation process for Houston and "get it done." Arbitron has committed to completing MRC accreditation before making PPM the ratings currency in Houston, but other markets, beginning with Philadelphia, will require only completion of the MRC audit process before PPM is used for ad buying and selling. The Council has now endorsed that approach. In response to the resolution, Arbitron VP/Communications Thom Mocarsky noted that the company had already released a roll-out schedule with the target month for each of the top 50 markets, but said Arbitron will supply the Council with more exact dates, such as January 11, 2007 for Philadelphia. "We take training seriously," he said and said Arbitron will be working to make sure clients get PPM training for their staffs. He noted that there is already considerable PPM training material available on the Arbitron website.
| Read the resolution |

NAB revisits repeater objections
David Rehr has sent not one but two letters to FCC Chairman Kevin Martin concerning the practices of XM Satellite Radio adn Sirius Satellite Radio. One involves problems with the satcasters' terrestrial repeaters; the other is about the lack of a level playing field when it comes to edgy content. On the repeater front, Rehr notes a large number of admitted violations amounting to "wanton disregard of the FCC's rules," and asks that the Commission launch an immediate investigation to find out how many other violations there are that the two companies haven't admitted to. Among the violations are instances of mislocated repeaters, operation at excessive power levels, overgrown antennae and - at XM - operation of 19 utterly unauthorized repeaters, four of which are still being used. Rehr says that one Sirius repeater in Lansing MI has strayed some 67 miles from its authorized location. "Most importantly, neither Sirius nor XM explain why they initially chose to deploy illegal facilities instead of following the FCC's rules, or why it has taken both companies almost five years after the FCC authorization of their repeater networks to disclose these problems," said Rehr. He also objected to attempts to "downplay the seriousness of their non-compliance" and questions their "audacity" in asking to continue to operate non-compliant repeaters. Rehr also took two developments with Sirius' Howard Stern Show. See the related story on this page.

NAB questions Stern FCC policies
NAB President/CEO has some questions for the FCC commissioners. Howard Stern is allowed to go about his business in an uncensored and raw manner now that his program is on subscription service Sirius Satellite Radio. That subscription is the buffer which frees Stern from having to follow the same indecency regulations imposed on broadcasters on the theory that broadcast programming comes unbidden into the home or automobile, where children may be able to access it. Not so subscription services such as cable or satellite, which can only be accessed by those who have willingly shelled out cold hard cash for the service. But wait, says NAB's David Rehr. People buying a certified pre-owned Acura automobile now get Sirius - and Stern - whether they've asked for him or not. And now Sirius is putting Stern on the Internet for free (temporarily) in a move advertised with the lines: "Howard Stern left regular radio and millions followed. Now billions can hear why." Rehr's question is this: If Stern can now be accessed in at least two different ways by people who did not go out of their way to subscribe to his program, how is that different to a broadcast program, and why should it be subject to a different set of rules? Rehr summed up his argument saying, "In light of these developments, drawing a regulatory distinction between satellite and traditional broadcast radio simply because satellite radio content is available on a subscription basis may no longer be justified." He wants a proceeding initiated to look into it.

RBR observation: We're all for free speech. We're also for a level playing field. This argument could have some very interesting and possibly unexpected ramifications. Stay tuned.

Spitzer settlement
being violated?
The office of New York Attorney General Eliot Spitzer is investigating whether its anti-payola settlement with one of the big record labels is being violated. As first reported by the New York Times, two independent labels distributed by Universal Music Group recently bought airplay on Entercom's late night spin show, "CD Preview." Spitzer takes the view that such shows are used to illegally distort music ratings charts by BDS and Mediabase, but Entercom has refused to cancel the show despite being sued by Spitzer. Meanwhile, the settlement announced in May with Universal (5/12/06 RBR #94) requires that any purchase of advertising time to play music has to be reported in writing - presumably so BDS and Mediabase can exclude the spins from their counting. Universal denies that any violation occurred, since it only distributes the two labels and has no control over how they promote their artists.

RBR observation: We've said it before and we'll say it again, Spitzer is just plain wrong in his interpretation of the federal laws on payola and program sponsorship identification - not to mention that the AG of a single state has no authority to enforce federal law even if he were capable of reading it correctly. Spin shows may be less-than-great programming, but they were designed specifically to comply with the FCC's program sponsorship identification rule. It would be a great service to the radio industry if someone with stations outside New York State were to sue Spitzer in federal court and have his settlements struck down as unconstitutional interference in interstate commerce. And by the way, isn't extortion a crime?

Wall Street Media Business Report TM

Fiscal Q1 conference call
Meredith hits the mark
Fiscal Q1 (July-September) numbers were right in line with Wall Street expectations for Meredith Corporation. Broadcasting revenues (14 TV stations and one lone radio station) jumped 14.3% to 82.1 million, fueled by heavy political spending, but with growth also in local non-political sales. Broadcast operating profit rose 39.9% to 17.8 million, while EBITDA rose 27.5% to 24 million. Publishing revenues were down 1.5%, with a 9.2% drop in circulation revenues more than counterbalancing a 1.3% gain in ad sales. Operating profits for publishing, however, rose 1.6% to 48.5 million and EBITDA gained 1.2% to 53.1 million. Broadcast is leading again in fiscal Q2, with pacings up in the mid-20% range, while publishing revenues are projected to be down in the single digits.

Ad Business Report TM

Roehm: Decision not made yet
on Draft FCB for Wal-Mart
Maybe it's just a technicality and the deal is indeed done. However, when asking her about the AdAge story yesterday that Wal-Mart and its 580 million dollar advertising account had chosen Draft FCB for creative and Carat for media, Wal-Mart SVP/Marketing Communications Julie Roehm confirmed what a spokesperson told AdAge: "We didn't choose yet..Friday at the earliest...its just speculation right now." That's interesting......they could be wrong here? "Anything can happen." Incumbent GSD&M, Martin Agency, Bernstein-Rein and Ogilvy & Mather also participated in the review. Wal-Mart's multicultural review continues.

RBR observation: The review probably centered a lot around arch competitor Target, which has carved a great image for itself of late in the "discount chic" arena. Wal-Mart has lost customers because of it. The image out there is Target products are more appealing and sophisticated, while still being affordable. The review was likely a lot about how to change that.

"Feed the Pig" PSA campaign
encourages 25-34-year-olds to save
The American Institute of Certified Public Accountants (AICPA), Pennsylvania Institute of CPAs (PICPA), and the Ad Council are encouraging Americans aged 25-34 to Feed the Pig as a key step to building a solid financial future. Featuring Benjamin Bankes, the traditional childhood piggy bank transformed into an attention-grabbing icon, the national multimedia public service announcement (PSA) campaign inspires 25-34 year olds to reignite the savings habit by taking small, easy steps to take control of their finances. To begin taking these small steps, the target audience can find free financial information and tools by visiting a new Web site, www.FeedthePig.org. The campaign was launched on Tuesday. Feed the Pig is the Ad Council's latest campaign and will TV, radio, print, Web, digital and outdoor advertising such as billboards and bus kiosks, and run for a minimum of three years.

Media Business Report TM

Locals bidding for Boston Globe
The New York Times Company put its TV group up for sale last month (9/13/06 TVBR #178), but has not expressed any interest in selling any of its newspapers. Nevertheless, some local moguls are putting together a bid to buy The Boston Globe. The source for this report is pretty reliable - The Boston Globe itself. The newspaper says retired GE CEO Jack Welch and Jack Connors, co-founder of the Hill Holiday advertising ad agency, are working on a bid to return the newspaper to local ownership, despite the insistence by the New York Times Company that the property is not for sale, despite its current financial difficulties. According to the Globe, JPMorgan is advising Welch and Connors and has told them the paper is worth 550-600 million today, down substantially from the 1.1 billion that the Times Co. paid in 1993.

Media Markets & Money TM

Gap fills the breach for troubled AM
George Laughlin's Gap Broadcasting LLC has agreed to buy bankrupt KTIB-AM Thibodaux LA for 650K. The station is under the care and feeding of Michael Chiasson, who has been acting as trustee for La Terr Broadcasting Corp. The station was said to be silent at the time the contract was executed. Thibodaux is part of a radio market served by Eastlan, called Houma-Thibodaux-Morgan City LA. It's in the southern portion of Louisiana just west of New Orleans.

Washington Media Business Report TM

Objection overruled
Dateline Boston: Two separate petitioners have offered informal objections for a license renewal to Charles River Broadcasting for WCRB-FM. In both cases, the petitioners note the planned sale of the station and its reported flip from a Classical to Country format. One of the petitioners cited the "cultural imbalance" that would be created in the Boston area; the other said former WCRB licensees Ted and Nathalie Jones had established a trust in 1979 guaranteeing a Classical format on the station for "the next 100 years." The FCC noted that the comments more fittingly belonged as part of proceeding under which the station was being sold, but that in any case, as a government agency it was precluded by the First Amendment from taking any position on the station's programming.

RBR observation: What makes the case interesting is that perhaps unbeknownst to the petitioners, WCRB is part of a three-way deal that will in fact keep a commercial Classical format alive. Charles River is selling WCRB to Greater Media, who will keep the 102.5 mHz dial position and move its WKLB-FM Country format there. 99.5 mHz WKLB-FM, meanwhile, will be swapped to Nassau Broadcasting, who will take over and reinstall the WCRB calls (in exchange for a station in the Philadelphia market). In the end, WCRB will still be around for the petitioners to enjoy.

Entertainment Media Business Report TM

WEEI adds Springfield, MA
Sports Radio WEEI continues its expansion throughout New England with the launch of WVEI 105.5 FM today at 2 PM. The Springfield, MA station was acquired by Entercom from Great Northern Radio for 5.75 million in February. It will simulcast all of WEEI-AM's programming, including Red Sox Baseball beginning in 2007 and Patriots Monday. For several years, WEEI has simulcasted on 1440 AM WVEI in Worcester, MA. In 2004, it added 103.7 WEEI-FM in Providence, RI. The addition of WVEI will bring the WEEI signal to more than 600,000 listeners in Western MA and parts of Northern CT.

Internet Media Business Report TM

Autobytel announces most requested vehicles for Q3
Autobytel has announced its latest Consumer Choice report, revealing the most requested vehicles and overall buying decisions among Autobytel's millions of shoppers during the third quarter. Here's a quick look at the big winners and losers for Q3, and the trends that defined the quarter on Autobytel's car buying websites:
| Read More... |

Stock Talk

Stocks close a bit higher
The Fed held firm on rates and Wall Street traders staged a very mild celebration, pushing prices up just a teeny bit. The Dow Industrials rose seven points to 12,135.

Radio stocks were also slightly higher. The Radio Index rose 0.548, or 0.4%, to 146.918. Emmis was the big winner, up 3%. Citadel rose 2.4%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.50	+0.18	Hearst-Argyle	HTV		23.40	-0.09
Beasley	BBGI		6.95	-0.11	Journal Comm.	JRN		11.60	+0.02
CBS CI. B	CBS		28.61	+0.27	Lincoln Natl.	LNC		64.02	-0.07
CBS CI. A	CBSa		28.53	+0.23	Radio One, Cl. A	ROIA		6.60	+0.11
Citadel	CDL		9.83	+0.23	Radio One, Cl. D	ROIAK		6.61	+0.07
Clear Channel	CCU		32.35	+0.15	Regent	RGCI		3.62	+0.03
Cox Radio	CXR		15.81	+0.18	Saga Commun.	SGA		7.96	-0.07
Cumulus	CMLS		10.19	-0.08	Salem Comm.	SALM		13.11	-0.15
Disney	DIS		31.20	-0.18	Sirius Sat. Radio	SIRI		3.65	-0.07
Emmis	EMMS		11.85	+0.35	Spanish Bcg.	SBSA		4.74	unch
Entercom	ETM		25.80	+0.18	Univision	UVN		35.05	-0.03
Entravision	EVC		7.31	+0.01	Westwood One	WON		7.70	+0.09
Fisher	FSCI		42.13	-0.76	XM Sat. Radio	XMSR		10.17	+0.01
Gaylord	GET		47.00	+0.02	-	-	-	-	-

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]

With all the press about how soft business is, I just thought you might like to know that we're setting records in three markets. Our Clayton, GA AM/FM WGHC/WRBN, our Franklin, NC AM/FM WFSC/WNCC-FM and our AM only WNEG, Toccoa, GA are having the biggest months ever in their 50 year history and politics is only contributing about 10% of the total gross. Without politics, we would still be setting records. It appears that 4 of the six markets we operate will have record revenue in 2006. Furthermore, this is the biggest month in revenue for our group which was formed in April 2001. I might mention that we sold off one station which was a big producer so if you compared station to station, business is very good. It's not just us. I have spoken and communicated with small market operators across the country through the Idea Bank membership (400 plus small market stations across America) and guess what, they are having a banner year too...
| Read More |

Art Sutton
President/CEO
GA-Carolina Radiocasting
Toccoa, GA

Below the Fold

Ad Business Report
New Wal-Mart agency or not?
Wal-Mart SVP/Marketing Communications Julie Roehm says there is no decision yet.

Media Business Report
Locals bidding for Boston Globe
The New York Times Company put its TV group up for sale last month, but now some local moguls want to buy The Boston Globe, which isn't for sale.

Media, Markets & Money
Gap fills the breach for troubled AM
George Laughlin's Gap Broadcasting LLC has agreed to buy bankrupt KTIB-AM in Louisiana.

Washington Media Business Report
Objection overruled
The FCC turns aside two objections to the sale of WCRB-FM Boston.

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

Sinicropi to chair RAC
Steve Sinicropi, VP/GM of Cox Radio in Greenville, SC, has been elected Chair of the Arbitron Radio Advisory Council, taking over the gavel for the next meeting. Elected Vice Chair is Chuck DuCoty, COO of NRG Media.

Wheat harvested
by Entercom
Former Clear Channel Indianapolis Market Manager Chris Wheat has landed at Entercom. He will be Vice President and Market Manager for its Norfolk, VA cluster.

More News Headlines

Jerry Lee takes
a bite outa crime
The recipient of the world's highest criminology honor will be announced in a global interactive ceremony this morning from Stockholm and the Jerry Lee Center of Criminology on The U of Pennsylvania's Campus in Philadelphia. The 2nd annual Stockholm Prize, widely regarded as the "Nobel Prize" in Criminology, represents a major milestone in the criminology community's ongoing efforts to gain awareness of and support for criminology research on an international stage. Each year the winner receives the distinction as well as a corresponding monetary prize of 150,000. WBEB-FM owner and noted criminology philanthropist Jerry Lee is one of the major benefactors of the endowment that funds the Stockholm Prize.

RBR Radar 2006

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

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. CapStone Investments 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. 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: If you have not checked out this model then do so today.
10/25/06 RBR #208

Clear Channel in buyout mode?
CNBC has reported 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.

RBR observation: And the Hits just keep on Come'n and the heat is being turned up.
10/25/06 RBR #208

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

Account Executive(s)
Reach Media seeking experienced Account Executives to represent and sell various media products. Must have strong sales background in internet, event sponsorships, and/or network radio, particularly targeting the African-American demographic. Immediate openings in Dallas, New York, Chicago & Atlanta. Resume, references & salary history. EOE.
See Radio Careers

Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.

Other Links

State Associations

Contact Us

Help Desk

__FIRST__ __SECOND__ :
Having problems with our epapers?
Please send Questions/Concerns to:
[email protected]

If you wish to remove your name completely from our database use this link __UNSUB__

RBR Epaper -- 108 annual
or just 9 a month