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Volume 23, Issue 211, Jim Carnegie, Editor & Publisher

Monday Morning October 30th, 2006

RBR Observation

You Can't Be a Little Bit Pregnant
A couple of Wall Street analysts have been holding onto the position that after exploring "strategic alternatives" with the folks from Goldman Sachs, the board of directors at Clear Channel will decide to stay public and go with a restructuring plan, rather than sell the company. Perhaps they are confused because of what happened with Emmis, but this is not the way the world works. Once you have hung out the For Sale sign, the auction is underway. There is no turning back. The bids would have to be horribly disappointing for this sale process to be aborted, and that is not likely since the folks who instigated the auction are members of the Mays family, who have long insisted that the company is undervalued and are willing to pay up to go private. (Jeff Smulyan at Emmis has super-voting stock which enabled him to rule out a sale to anyone else, so that buyout fell apart when he and the independent directors could not come to terms on price.)

Not so at Clear Channel. There is only one class of stock and the Mays family owns less than 8%. This is more like the Univision auction. (Yes, Jerry Perenchio had super-voting stock, but he was not a bidder.) And while Televisa appeared to have the inside track there, due to its 10%+ stock ownership stake, it was outbid in the end. Lowry, Mark and Randall Mays know that could happen to them as well, so they are no doubt working to ensure that their bid beats all comers. Another issue which has received unwarranted attention is whether FCC ownership rules present obstacles for the equity firms already a part of the Univision buyout or who have stakes in other radio, TV and newspaper firms. (Balderdash.) These guys are investors, not operators, so they don't care about voting rights so long as they are sure that someone they trust is looking after the interests of the non-management investors. A good example is LIN Television, where two shares of stock with super-duper voting power essentially control the company. That was set up so that Hicks, Muse, Tate & Furst, which at the time LIN did its IPO was a major investor in Clear Channel, would not have an interest in LIN that was attributable in the eyes of the FCC. Hicks, Muse has since sold its stake in Clear Channel and recently bought one of those super-duper voting shares for pocket change.

Publisher note: RBR will follow Clear Channel every inch of the way as it is important to all that have a vested interest in the radio business. As many have said under their breath for years: "So goes Clear Channel So goes the radio business." Well our recommendation is do not touch that dial. Leave it set to RBR and TVBR--the voice of the broadcasting industry and Independently owned for 24 years.

Radio News ®

Clear Channel sale on Fast Track
Look for the gavel to fall quickly in the auction of Clear Channel Communications to the highest bidder. The deadline for bids is November 10th, according to the Wall Street Journal. That should be no problem for the bidding consortium working with the Mays family, but the other private equity firms may ask for an extension, since they have just begun to put together their bids. RBR/TVBR has learned that the independent directors of Clear Channel have retained Lazard Freres & Co. as their financial advisor. The company itself had previously retained Goldman Sachs to conduct the auction. Lazard has been doing quite a bit of this work lately, having previously advised the independent directors of Emmis, where no deal was reached, and the board of Disney on its sale of ABC Radio to Citadel.

Another financing alternative
You've probably seen ads in general business publications for "factoring" companies which buy receivables at a discount for up-front cash. No doubt some of those companies would take receivables from broadcast ad sales if asked, but now a new company set up by a veteran broadcaster is specifically targeting radio and TV stations for business. Big Funding Group President Bruce Wernick formerly worked in affiliate relations for Fox News Radio, Fox Sports and Talk America. He says the only thing that makes broadcast receivables different from those for sales of tangible items is that the company buying the receivables has to make sure that the spots were run, which is done via affidavits. We wondered, of course, how much the margin is for selling receivables to get cash right now, while the buyer waits for the advertiser to pay its bill in 30, 60 or 90 days. Wernick said receivables are typically bought for 70-80% of face value, sometimes 80-90%. That is based on the credit ratings of the clients, not the radio or TV station. The percentage also depends on whether or not the buyer has recourse against the station for deadbeats. However, Wernick also noted that the factoring companies will never contact the clients for payment without first contacting the station. While the margin on selling receivables is significant, Wernick sees factoring as a way for entrepreneurial station owners to get needed cash quickly and avoid having to take on an equity partner, which can be more expensive in the long run. Most deals are cut on a one or two year basis. The seller of receivables has to reach a minimum target set by the contract, but can elect to hold onto or sell receivables beyond that, so there is still some flexibility.

Tribune bids were due Friday
But we may not hear much from the company soon and this may be only round one. Big equity funds had been working on bids for all of Tribune Company, but it remains to be seen how many actually stepped up to the plate to bid for an "old media" company. Tribune is currently worth about 8.1 billion based on recent stock prices, plus it has about 3.1 billion in debt. It remains to be seen whether any of the equity funds think it is worth substantially more than 11.2 billion and will bid aggressively to take the entire company. Bloomberg reported over the weekend that at least two bids were submitted - one by Bain Capital and another jointly by Thomas H. Lee Partners and Texas Pacific Group - but there was no word on pricing. Many observers expect a second phase, with the board at Tribune taking bids for individual pieces of the company. Bidders are already lining up for that round two. Media News Group is reported to be interested in all or most of the newspaper group. But local moguls are planning to bid for both the Los Angeles Times and Baltimore Sun. No doubt there are a few self-indulgent billionaires who want to buy the Chicago Cubs. RBR observation: The rumor mill has been strangely silent thus far about specific bidders for the broadcast properties, with WGN-TV & AM Chicago, WPIX-TV New York and KTLA-TV Los Angeles as the crown jewels. Might would-be buyers be playing close to the vest because they are already in negotiations for some of the smaller market TV stations, which CEO Dennis FitzSimons has been selling off as part of a previously launched program to sell over a half-billion in non-core assets? If no bid is strong enough to take all of Tribune Company, he is believed to be pushing a plan to hold onto those big three market stations, plus the biggest newspapers and the Cubs, possibly for a management buyout of a stripped-down Tribune Company.

Public interest point-counterpoint
at the FCC
Although they were not using the same venue, and were not talking precisely about the same topic, FCC Chairman Kevin Martin and the longest-tenured Democrat Michael Copps both had occasion to mention the public interest the other day. Ready for a study in contrasts? Copps was at another public forum on media ownership last Friday 10/27/06 and penned an article for the Daily Californian for the occasion. Here's what he wrote about public interest: "Let's remember that American citizens own the airwaves, not TV and radio executives. We give broadcasters the right to use these airwaves for free. They earn profits using this public resource in exchange for their agreement to broadcast in the public interest. What we need to know is whether the many communities in the Bay Area feel they are being well-served by the media served up to them." This all implies regulations and oversight. Martin was speaking before the 2006 ABA Administrative Law Conference, on regulation and the public interest. He discussed the deregulatory bent of the 1996 Telecommunications Act, and its relationship to the public interest language in the 1934 Act. Discussing a hearing on public interest in a D.C. Circuit case, he said, "The Court accepted the FCC's arguments that the term requires only that a regulation serve the public interest and does not require any higher showing of necessity. I had dissented from that FCC decision, arguing that Section 11's language requires a showing that a regulation is actually still 'necessary.' The result of this decision gives the Commission substantially more discretion in deciding whether to retain rules, since it is not too difficult to justify a rule as in the public interest. The FCC thus managed to take a tool intended by Congress to impose some rigor on the FCC's analysis and turned it into more of a procedural hurdle. The Commission only has to explain periodically why regulations on the books are in the public interest."

RBR observation: So there you have it. One side sees public interest as an indispensable regulatory foundation; the other as an impediment to be cleared aside.

Jay Leno: Newscaster
The FCC has refused to order the provision of equal TV time to Phil Angelides, the Democratic candidate for Governor of California, following a 15:41 appearance on NBC's Tonight Show with Jay Leno by incumbent Republican Arnold Schwarzenegger. NBC made the case that the segment qualified as a bona fide news interview, following a long standing precedent referential to the old Phil Donahue show. The Angelides campaign tried numerous tacks. They noted that the program is housed with NBC's entertainment division, not its news operation. It dredged up a 1984 statement from an NBC spokesperson calling the program "an entertainment show...It has always been an entertainment show and we have no desire for it become anything else." However, NBC was almost guaranteed a win since it is fighting on turf previously defended by shows such as the aforementioned Donahue program, as well as programs like the gone-but-not-forgotten ABC program Politically Incorrect, still running current events program "The Daily Show" and even "Sally Jessy Raphael," "Jerry Springer" and "Howard Stern." The FCC noted that the Tonight Show was found not to be exempt from equal time provision back when Jack Paar was behind the desk in 1960, but said that finding had been overruled many times since.

RBR observation: We think the FCC interpreted precedent correctly in this case. However, that doesn't mean it's the correct policy. During presidential elections, the late night shows sometimes make a play to book the candidates and candidates is the operative word. If one was invited and not the others the uninvited would have a legitimate gripe. That doesn't mean politicians shouldn't be booked. We've seen the ubiquitous Sen. John McCain (R-AZ) show up all over the media landscape, and regardless of your opinion of his own opinions, it is undeniable that he knows what to do in front of a camera or microphone and makes a very good guest in a wide variety of formats. And there's nothing wrong with that. But if this were to occur in the run-up to his own re-election, RBR thinks it would be only fair to allow his opponent a crack at the same forum. While the decision on whom to book belongs to the Tonight show producers, rather than the network, you'd think they'd simply offer Angelides the time in this case. Since that isn't happening, maybe this is a rule in need of some tweaking.

Wall Street Media Business Report TM

CCU Reports Today- Ta Dum
Clear Channel Communications reports its Q3 results this morning, having rescheduled its quarterly conference to come a week earlier than originally planned after announcing that Goldman Sachs had been retained to take bids on the company. But the auction of Clear Channel is likely to be off-limits for any discussion today. What analysts will be looking at is how well Clear Channel Radio is growing revenues following its Less is More program in 2005. No doubt Q3 2006 radio revenues will be up sharply from 919M a year ago. More importantly, will revenues be back above the mark of 960 million from Q3 2004, before LIM kicked in?

RBR note: Beasley Broadcast Group also reports today.

Ad Business Report TM

California Prop 89 radio spot, video is a rap song
As Election Day nears, dry political ads bombard the airwaves and voters tune out, a rap song breaks tradition, reaching new audiences and using new technology. The new 60 second ad for Proposition 89, About Time for 89, began airing Friday on a wide variety of stations in major cities throughout the state.
| Hear it here |

The music video for the song, About Time for 89, is quite likely the first rap music video to be written about a proposition. The message, that "political corruption is on the rise, donations are comin' in super-size" and "Proposition 89 is real reform," breaks from politics-as-usual with high-tech delivery methods like YouTube, where it has had 10,000 online views in just over one week and has attracted a wide audience from hip-hop DJs to political columnists.
| See the video here |

"We are using the music video medium as a vehicle to communicate legislative messages in a hip, entertaining way," said Michael Lighty, Prop. 89 campaign manager. "In addition to the entertainment value, the lyrics resonate with voter frustration about political corruption and offer them a solution -- Yes on 89." Proposition 89 would clean up the corruption in California politics by capping contributions from corporations to ballot initiatives at 10,000 dollars. It also sets up public financing of elections to level the playing field with funds for candidates who reject private contributions. It also restricts all contributions to candidate campaigns.

Media Business Report TM

Chicks shut out of NBC?
Weinstein Co. is saying that it was barred from advertising its new release "Dixie Chicks: Shut Up and Sing" on NBC and CW, and while CW is denying that it took any such action, NBC told Daily Variety that it did because the ads were disparaging to President Bush. Meanwhile, Reuters says that CNN and National Public Radio turned down ads for "Death of a President" from Newmarket. Harvey Weinstein said in a release, "It's a sad commentary about the level of fear in our society that a movie about a group of courageous entertainers who were blacklisted for exercising their right of free speech is now itself being blacklisted by corporate America." The controversy has its roots in 2003, when Dixie Chicks lead singer Natalie Maines told an audience overseas that they were ashamed of the president. It led to a revolt among Country music fans and widespread allegations that radio companies were sending down no-play dictums to their stations. Although Clear Channel is frequently hit with that charge, and we heard Cox mentioned recently, the only group which actually ordered them off the air was Cumulus. At the time, Cumulus head Lew Dickey told Congress HQ staff was merely trying to take heat for local PDs who would have almost all done the same if left to their own devices. According to Reuters, most outlets approached to run the ad have done so, including local NBC outlets. The "Death of a President" is a documentary-style fiction depicting the assassination of President Bush and its aftermath.

RBR observation: It seems it's almost always a bad idea to let politics enter into a run/don't run decision, or even appear to enter into it.

Media Markets & Money TM

Built or Un-built, that is the question
When you're building out your national group, is it better to get a station that's already up and running or to acquire a do-it-yourself CP? Is you're Educational Media Foundation, you may opt for one of each. The noncom Religious operation is getting up-and-running KAGT-FM in Abilene TX for 450K and the CP for WWLA-FM in South Charleston WV for 150K. In both cases, half of the price tag will be paid over time via promissory note. Both stations are in the reserved band. WWLA will build-out as a Class A on 89.3 mHz with 300 watts at 528'.

Close encounter in Clifton Forge
According to Media Services Group brokers Bill Whitley and Stephan Sloan, Todd Robinson has closed on his acquisition of an AM-FM combo in unrated Clifton Forge VA. The seller of WXCF AM & FM is Impact Broadcasting. The pricetag was 400K. Other Robinson-owned stations in the area include WKEY-AM/WIQO-FM Covington VA and WSLW-AM White Sulphur Springs WV/WKCJ-FM Lewisburg WV.

KTON-AM sold in TX
KTON AM Belton, TX, owned by M & M Broadcasters, Ltd., (Gary Moss, President), has been sold to Hereford Agri-Fuels, Inc., Jerome Friemel, President, for 900K cash at closing. Sandi Bergman, President, MyBroker, served as the broker. In the deal, the seller also gets an additional 3% of total gross purchase price amount if station is subsequently sold to any third party in which buyer does not retain at least a 51% interest.

Washington Media Business Report TM

National Warchests
grown down to the wire
Cash continues to flow into the four national congressional committees, and in the first 18 days of October, the two Democratic operations pulled in 15.5M compared to 10.1M for their Republican counterparts, according to the Associated Press. Almost all of the differential came on the Senate side, where Democrats outdrew Republicans 9.1M to 3.6M. The Republicans held a slim 6.5M to 6.4M edge on the House of Representatives side. Going into the last two weeks, the Democrat Senatorial effort still had 9.7M to spend and the House committee had 17M. The Republican Senate/House totals were 8.9M/18.3M.

RBR observation: The last minute heat meter will determine where this national money goes. The longer a race stays in doubt, the more chance it will attract some of this cash.

Entertainment Media Business Report TM

Envision Radio Networks adds
"The Christopher Lowell Show"
Envision Radio Networks announced the launch of The Christopher Lowell Radio Show, available for barter. Emmy award winner and best selling author Lowell has had a show on Discovery for ten years and is best known for his mantra, "You Can Do It'" and for his problem solving expertise. "We are thrilled to be working with the most talented person in the design world, Christopher Lowell," says Envision Radio Networks President and CEO Danno Wolkoff. "Christopher has already brought success and innovation to TV, publishing and Internet and now he has turned his talents to Radio. This show will bring new listeners and advertisers to local radio."

Pete Townshend
walks off Stern interview
Who guitarist-songwriter Pete Townshend walked of his scheduled interview on Howard Stern's Sirius Satellite radio show last week upon hearing his 2003 arrest in London on suspicion of possessing child pornography was to be brought up. Townshend was cleared of the charges. Townshend, along with girlfriend Rachel Fuller and Who lead singer Roger Daltrey, was listening to Stern's broadcast as he waited in a London studio for his interview to begin. Co-host Robin Quivers brought up the child pornography issue and Townshend's claims that he was abused as a child, mentioning "we could ask him about that," Townshend promptly left the building, leaving Daltrey and Fuller to talk to Stern. The Who is in the midst of a 15-month concert tour for their first album in 24 years, "Endless Wire."

Ratings & Research

35% of Americans using the net to gather info on election
Less than two weeks before the 2006 mid-term elections, a new Associated Press/AOL News poll cites that 35% of Americans, and 43% of likely voters, are using the Internet to get information about the upcoming election. According to the poll, those who describe themselves as liberals are more likely (51%) to get election information from the Internet compared with 42% of moderates and 39% of conservatives. In addition, the poll found that almost a quarter, 24%, of respondents who get election information from the Internet indicated that they have accessed a blog this election season to gather information, while 10% of Internet users have accessed a message board, chat room or blog to participate in election discussions. The number of blogs has grown considerably since the previous election season. In its State of the Blogosphere, August 2006 report, Technorati claims that the worldwide blogosphere has doubled every six months for the last three years - or 175,000 new blogs per day.

Other findings include
49% of men get news or information about the election from the Internet, compared with 38% of women; 59% of those under 35 years old get election info from the Internet, 39% of those over 35 and 18% of seniors over 65 use the Internet to get election info; Likely voters who get election info from the Internet are more likely to trust the Republican party on who would best handle taxes, 46%, compared with 38% who do not use the Internet to get election info; Those who get election information from the Internet are less likely to say that corruption and scandal in Congress will influence their vote in November, 34%, than those who do not use the Internet to get election info, 48%.

Engineering Media Business Report TM

HD Digital Radio auto
plug-Ins to be unveiled
HD digital radio will make a splash at this year's SEMA show in Las Vegas, which kicks off this week. Several electronics manufacturers will unveil HD radio plug-ins for autos, converting existing car stereos to HD digital radio. This is a big leg up for HD Radio in the automotive electronics aftermarket and the first demonstrations of these portable converters.

The HD Radio displays are:
- AAMP of America, Peripheral branded car connectivity unit (which adds HD Radio to a vehicle's existing audio system)
- DICE: Car connectivity unit (which adds HD Radio to a vehicle's existing audio system)
- Directed: FM modulation car connectivity
- DUB: variety of customized cars and SUVs featuring HD Radio systems
- Eclipse: Toyota Sequoia and Pontiac G6 Convertible equipped with Eclipse system
- Hahn Racecraft: Chevrolet Colorado equipped with Kenwood system
- House of Kolors: Chevrolet Cobalt equipped with a Kenwood System
- Hyundai: Sonata, Tiburon and Accent equipped with Kenwood HD Radio systems
- Katzkin Leather: Saturn Sky equipped with a Kenwood System
- Kenwood: Kenwood systems
- Magic Touch: Chevrolet HHR equipped with JVC system
- Metra: Car connectivity unit being demonstrated live through Toyota, Honda, General Motors and Ford factory head units
- Stop Tech: Chevrolet Corvette equipped with Kenwood System
- Visteon: HD Jump, new dockable mobile/home system

Monday Morning Makers & Shakers

Transactions: 9/11/06-9/15/06
For the first time since the beginning of August, no television deals crossed the virtual portals of the FCC transaction database. In fact, only eight relevant documents made it into the hopper. One of them was all it took to propel the total into the nine-figure range, though, and that was Regent's acquisition of CBS stations in Buffalo. Riviera's buy of a Prescott Valley AZ FM accounted for most of the remaining value.

9/11/06-9/15/06	Total
Total Deals	8
AMs	4
FMs	9
TVs	0
Value	157.755M

| Complete Charts |

Radio Transactions of the Week
Citadel goes where the tusks are looser
| More... |

TV Transactions of the Week
LIN scores big with Viacom spinners
| More... |

Transactions

42M NM Licensing LLC, a subsidiary of NextMedia Group Inc. (Skip Weller et al) from WJBR License LLC, a subsidiary of Beasley Broadcast Group Inc. (George Beasley et al) to 1.75M letter of credit, 750K letter of credit, balance in cash at closing. Includes non-compete. LMA 10/1/06. [File date 10/13/06.]

275K KBTC-AM/KUNQ-FM Houston MO from Metropolitan Radio Group Inc. (Mark L. Acker) to Media Professionals Inc. (Amy Vermillion, Rick Vermillion). 30K escrow, balance in cash at closing. LMA 10/15/06. [File date 10/12/06.]

Stock Talk

Stocks retreat a bit
Stock prices slipped on Friday after the government reported that GDP growth in Q3 was at the slowest pace in more than three years. The Dow Industrials gave up 73 points, or 0.6%, to spend the weekend at 12,090.

Radio stocks went with the flow. The Radio Index was down 1.432, or 0.9%, at 150.617. Clear Channel gave up 2.2%, a day after surging on news that it was putting itself up for sale. Citadel declined 2.7% and Entravision was down 2.5%. XM Satellite Radio jumped 13%, with no particular news to account for the move.

Radio Stocks

**Here's how stocks fared on Friday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.50	-0.42	Hearst-Argyle	HTV		25.29	+0.29
Beasley	BBGI		6.95	+0.04	Journal Comm.	JRN		11.75	-0.20
CBS CI. B	CBS		28.97	-0.13	Lincoln Natl.	LNC		63.74	-1.17
CBS CI. A	CBSa		28.92	-0.13	Radio One, Cl. A	ROIA		6.80	-0.10
Citadel	CDL		10.10	-0.28	Radio One, Cl. D	ROIAK		6.81	-0.02
Clear Channel	CCU		34.70	-0.78	Regent	RGCI		3.60	-0.02
Cox Radio	CXR		16.16	-0.10	Saga Commun.	SGA		8.11	+0.08
Cumulus	CMLS		10.51	-0.18	Salem Comm.	SALM		13.32	-0.04
Disney	DIS		31.73	-0.25	Sirius Sat. Radio	SIRI		3.85	-0.01
Emmis	EMMS		12.34	-0.15	Spanish Bcg.	SBSA		4.79	-0.02
Entercom	ETM		26.74	+0.10	Univision	UVN		35.01	-0.06
Entravision	EVC		7.28	-0.19	Westwood One	WON		7.95	-0.04
Fisher	FSCI		42.25	-0.32	XM Sat. Radio	XMSR		11.94	+1.37h
Gaylord	GET		46.68	-0.47	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
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Below the Fold

Ad Business Report
California Prop 89
Radio spot, video is a rap song Election Day nears, dry political ads bombard the airwaves...

Media Business Report
Chicks shut out of NBC?
Weinstein Co. is saying that it was barred...

Engineering Media Business Report
HD Digital Radio
Auto plug-Ins to be unveiled...

Ratings & Research
35% of Americans
Using the net to gather election info...

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

John Mainelli named PD of Free FM NY
John Mainelli has been named PD of CBS Radio's of FREE FM (WFNY 92.3) New York. With more than three decades of experience in the radio industry, Mainelli has served in various programming positions at stations across the country, including seven years at WABC-AM (1988-95). He also was PD at KCMO-AM Kansas City, KSDO-AM San Diego, News Editor at KCBS San Francisco and held programming and consulting positions at WNEW-FM New York, KFWB-FM and KABC-AM in LA. Mainelli also wrote a radio column for the New York Post from 1998-06 and Talkers magazine from 2001-06.

Troy McGuire
named VP/News and
Programming at Fisher
Fisher Communications announced that effective January 2, 2007, Troy McGuire will assume the position of VP/News and Programming. McGuire has been with "The Daily Buzz", a national syndicated morning show, since 2004. Prior to that, he was the News Director at KPTV, a Fox affiliate in Portland.

More News Headlines

Association faults evacuation plans
The American Highways User Alliance says that 20 out of 37 urban areas flat out get an F on their report card when it comes to having effective evacuation plans in the event of a crisis, according to the Washington Post. The flunkies included major urban centers like New York, Los Angeles, Chicago, Philadelphia and Washington, according to the Washington Post.

RBR observation: We're located outside Washington, and we can't clear out the city efficiently on a Tuesday with fair weather and a minimum of fender benders, much less get everybody out of town during a disaster. We have to wonder if some problems just aren't solvable. There just isn't a whole lot of room left around here for another set of superhighways. In the meantime, aren't those daily traffic jams good for business?

WTKK presents
Second Annual
FM Talk All-Stars
96.9 FM Talk (WTKK-FM) presents the Second Annual FM TALK All-Stars, Saturday, November 4th, from 7pm-9:00pm, at John Hancock Hall in Boston. Mike Barnicle, Margery Eagan, Jim Braude, Bill O'Reilly, Jay Severin, Michael Graham, Monica Crowley, Bernard McGuirk of Imus in the Morning and special appearance by John and Jeff - take center stage for a night of frank and candid discussion on some of the hottest topics making today's headlines. New England Cable News' Chet Curtis will moderate the event. 96.9 FM Talk is giving the "best and brightest" a chance to pose a question to the FM TALK All-Stars. Listeners are encouraged to visit www.969fmtalk.com and submit a question to be asked during the night's event.

Trumper flips Star to Movin' in PHX
Trumper's Phoenix move-in has flipped formats from Adult Standards Star 97.5 to rhythmic hits MOViN 97.5 (KMVA-FM). With a blend of hits from the '80's, '90's and today, MOViN (movin975.com) features artists such as Gwen Stefani, Prince, Justin Timberlake, Black Eyed Peas, Alicia Keys, Beyonce, Usher, Madonna, Gnarls Barkley and Outkast.

RBR Radar 2006

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

Clear Channel What is it Worth?
But, sale will create lots of station inventory
The answer is whatever the highest bidder is willing to pay. Wall Street analysts are debating the ultimate price, with estimates running mostly in the mid to high 30s, although at least two see a possibility of 40-plus. Clear Channel has 496 million shares outstanding. At 35 bucks that works out to 17.4 billion. At 40 it goes to 19.8 billion. Add in 7.9 billion of debt and the total deal value works out to a range of 25.3-27.7 billion - a hefty price tag that means only very big players will be able to participate in this game. Wallstreet is all over this issue. Regardless of who buys Clear Channel Communications, lots of radio stations will be going on the market for divestiture. We are not just talking about the smaller market clusters that the company has been slowly selling off to use up 1.5 billion in tax loss carryforwards. Some quite desirable larger market stations will also have to be divested once a sale or management buyout is agreed to. That's because Clear Channel has lots of markets with large clusters that were OK under the FCC ownership rules based on contour overlaps established in 1996, but not since a federal appeals court approved the new Arbitron/BIA market definitions adopted in 2003.

RBR observation: Whether the Mays team or a rival consortium snares the prize, job one for the winning bidder is going to be reducing debt quickly. Either will have to put lots of radio stations up for sale, both to comply with FCC rules and to rationalize the overextended portfolio. For example, having already cut a deal to sell its Fargo cluster, it is hard to see a reason for Clear Channel to remain in other North Dakota markets. And if the non-Mays team wins it will be more likely to divest non-core assets such as Clear Channel Television, RCS and Inside Radio/M Street Publications. Another easy way for the winner to raise cash and pay down debt is to sell more of Clear Channel Outdoor to the public. With its super-voting shares, Clear Channel Communications can sell off a lot of its 90% stake in the billboard company and still retain voting control. Those super-voting shares beco! me regular shares the moment they are sold to anyone else. So, while buying Clear Channel Communications from its public shareholders will require a big chunk of debt, there are options available to quickly reduce that debt load by billions and billions, while still retaining lots of cash flow.
10/27/06 RBR #210

Executive Comment
What's next....
the return of Bob Sillerman?
I have remarked over the last several months that it seemed as if the financial sector had literally disconnected itself from the main body of the economy, and, stuffed with investment monies, was simply selling things back and forth to each other, providing them a better alternative to having to return it, or not take fees on it. Now comes the other shoe....CCU, whose fortunes under the stewardship of smart, but less experienced family members, have waned, appears to be first to the altar. Even guys not smart enough to keep from collapsing the entire rate structure of the radio industry (not to mention, bringing back the FCC into the content arena) know when they are worth more dead! than alive, especially with this Wall Street crowd. ... Executive Comment from Gary Stevens, of Gary Stevens & Company. For his total viewpoint read
10/27/06 RBR #210

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, 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.

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.
10/25/06 RBR #209

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

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
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Account Executive(s)
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