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Volume 24, Issue 215, Jim Carnegie, Editor & Publisher
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Friday Morning November 2nd, 2007
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Radio News ®
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 Westwood One finally rebounding
Westwood One CEO Peter Kosann, pictured, declared the cost cutting over and said the company is again focused on investing in growth. WW1 reported that Q3 revenues were down 8.8% to 108.1 million, but that was ahead of Street expectations and expenses were down sharply. Q4 guidance is also better than analysts had been expecting. "We're done cutting costs, streamlining costs, and we're in a mode now of selective investment," Kosann told analysts. He said advertisers' upfront budgets appear to be fairly healthy and, from a business point of view, Westwood is now playing more offense than defense.
CFO Gary Yusko also reassured analysts about previous worries that WW1 was in danger of violating a loan covenant with its lenders. But with the financial picture improving, that leverage trigger is not expected to be reached. WW1 does, however, still have to renegotiate its loan terms so that ending its agreement to be managed by CBS Radio is not a covenant violation. That's not seen as an obstacle, but the lenders still have to sign off on the change. As for the reworked relationship with CBS (10/3/07 RBR #193), which ends the management agreement, but keeps CBS O&O radio stations clearing WW1 inventory through March 2017, WW1 says the proxy will be going out this quarter, with a shareholder vote in Q1 2008. There was no update on the search for a CEO successor to Kosann, a CBS employee who will exit when the management agreement ends.
RBR observation: There were sighs of relief all around last month when the long-awaited deal reworking the relationship with CBS was completed. Shareholder approval seems to be a foregone conclusion. Why would anyone vote against it? While many investors are hoping that the next move will be cashing out, with private equity or a larger media company buying Westwood One, that is not guaranteed. But a standalone WW1 still looks to be a viable company - and one that is finally ready to grow a bit after a long period of trying to halt a downward slide. Key, of course, is recruiting the right CEO to take the helm in 2008. We are all waiting for that name to be announced.
Moonves: Look for radio to grow in 2008
Q3 revenues for CBS Radio were down 7% on a same station basis, "which is not acceptable to us," CBS Corporation CEO Les Moonves told Wall Street analysts yesterday in his quarterly conference call. But he expressed confidence that new CBS Radio CEO Dan Mason is turning things around and "early indications are good" for recent format changes. Mason now has a target to shoot for. "In radio, we anticipate that '08 is going to be a year of growth," Moonves said in answer to an analyst's question about when radio would again be positive.
CAIR upset by Savage remarks
The Washington-based Council on American-Islamic Relations (CAIR) has called on radio listeners of all faiths to contact companies that advertise on Michael Savage's nationally-syndicated radio program to express their concerns about the host's recent anti-Muslim comments.
CAIR said Savage shouted anti-Muslim attacks included:
"I don't wanna hear anymore about Islam. I don't wanna hear one more word about Islam. Take your religion and shove it up your behind. I'm sick of you. What kind of religion is this? What kind of world are you living in when you let them in here with that throwback document in their hand, which is a book of hate. Don't tell me I need reeducation. They need deportation. I don't need reeducation. Deportation, not reeducation. You can take C-A-I-R and throw 'em out of my country. I'd raise the American flag and I'd get out my trumpet if you did it. Without due process. You can take your due process and shove it."
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 Radio gets boost from House resolution
An impressively bipartisan House Concurrent Resolution 244 has been introduced into the record by a pair of Texans representing both major parties, Gene Green (D-TX) and Mike Conaway (R-TX), which would head off any attempt to impose royalties, performance fees or other charges on music played over the air. 51 additional members, representing both parties, cosponsored the measure. All told, 19 Democrats and 34 Republicans appended a signature. The Resolution states that "Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings." It is in recognition of the promotional value of radio airplay. "NAB salutes Reps. Green and Conaway and their House colleagues for formally recognizing radio airplay's enormous value to both record labels and recording artists," said NAB EVP Dennis Wharton. "The undeniable fact is that radio airplay is a musician's greatest promotional tool and generates millions of dollars in revenue annually for RIAA-member companies and performers."
RBR observation: The performance tax or fee or royalty or whatever you want to call it is seen by many as a cash grab by the big multinational recording companies in an attempt to make up for shortfalls related to their own failure to adapt to new digital realities. There is much doubt as to exactly how much cash will wind up in the wallet of the artists that the recording companies are hiding behind, and the simple fact remains that the basic elements of the decades-old symbiotic relationship between broadcasters and recording companies are still in place. If a sudden charge to play music over the air comes into being, the logical response from broadcasters will be to make it official and label all airplay as an act of promotion and charge for the airtime.
| Bill sponsors and cosponsors |
RTNDA wants FCC off Comcast's case
The FCC has no business levying fines on Comcast news service CN8 for running video news releases on its cable network, says the Radio-Television News Director's Association on behalf of over 70 media organizations. The FCC called Comcast to task for running VNRs which it viewed as essentially promotional in nature, despite the fact that Comcast received no compensation for running them. Discussing the intent of Congress's payola statute, RTNDA argued, "That statute essentially sought to require identifications in situations where money was paid to a station in exchange for the broadcast of certain material...The legislative history shows Congress did not intend for the FCC to dictate how stations should make identifications when they independently decide to use third-party resource materials such as written press releases or their modern day electronic equivalents." RTNDA said holding journalists responsible for divining the motives of their sources takes the FCC onto an "extraordinarily dangerous slippery slope toward government censorship, and has imposed a chilling effect on the use all types of third-party materials that electronic journalists may independently decide are of interest or importance to their viewers."
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| Wall Street Business Report TM |
Westwood by the numbers
Westwood One reported that Q3 revenues were down 8.8% to 108.1 million, but that was roughly three million better than analysts had been expecting. An even bigger surprise was an 8.4% decrease in cash operating expenses. Bear Stearns analyst Christopher Ensley note that company guidance had indicated an expense increase in the low single digits and he had figured 3.5% in his modeling. So, while EBITDA was down 12.9% to 28.1 million, that was way op from the 16 million that Ensley had been expecting and the Street consensus of 15.5 million. Here is WW1's guidance for the remainder of 2007: "The Company expects its full year revenue to decrease low double digits and operating costs to decrease mid to high-single digits compared with 2006. Accordingly, we expect full year Adjusted EBITDA to exceed 90 million."
 Down quarter for Entravision
That's not a headline you've seen often, since Entravision has been on a strong growth curve for most of its history. But Q3 revenues were down 5% to 74.3 million and EBITDA declined 6% to 26.9 million. "During the third quarter we continued to execute our strategy and build our audience shares in a challenging environment. We faced difficult comparisons due to the absence of certain major events, such as World Cup and political activity, that occurred in the prior year period, as well as some softness in the advertising market, but we benefited from our focus on cost controls. Looking ahead, we remain well positioned to capitalize on the continued growth of the Hispanic population," said CEO Walter Ulloa. For the quarter, radio revenues were down 12% to 24.2 million, TV revenues were off 2% to 39.9 million and outdoor revenues grew 2% to 10.2 million. For Q4 the company expects net revenues to be flat to down in the low single digits.
Fisher details Q3 results
Fisher Communications says its Q3 2007 revenues increased 5% to 40.8M, with a 4%/1.1M dollar gain in television revenue and a 6%/679K dollar gain in radio. President/CEO Colleen Brown noted that television's performance was especially impressive given that Q3 was tough throughout the industry and TV was facing tough 2006 political comps. However, net income wasn't enough to overcome interest and tax expenses, resulting in a 601K continuing operation loss, which nevertheless wasn't quite as steep as a loss in Q3 2006, when the drop was 784K, a 23% improvement. The television side of the ledger was said to benefit from the company's entry into the Hispanic market with a Seattle Univision affiliation. It also enjoyed improvement in the local news competition. It acquired a full-/low-power TV pair in Bakersfield over the summer. Five small-market Montana radio stations are still being peddled and are considered by the company to be discontinued operations.
Revenues down, earnings up for CBS
Having sold some radio and TV stations and shut down UPN since a year ago, Q3 revenues at CBS Corporation were down 3% to 3.3 billion. But the company noted that net earnings from continuing operations were up 5% to 340.2 million and CEO Les Moonves is confident about the company's direction. For the CBS Television Network, he noted that scatter pricing is up "north of 35%" and he also expressed confidence in the turnaround taking place at CBS Radio. For Q3, TV revenues were down 3% to 2.08 billion, radio revenues dropped 12% (7% same station) to 445.7 million, outdoor grew 3% to 552.2 million and publishing gained 9% to 214.2 million. Operating income before depreciation and amortization rose 4% for TV to 476.1 million, dropped 19% for radio to 169.6 million, gained 8% for outdoor to 153.5 million and gained 5% for publishing to 23.8 million.
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Ad Business Report TM
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Red Zebra Broadcasting signs for PPM in DC
Arbitron announced Red Zebra Broadcasting, owner of Redskins Radio, The Washington, D.C. ESPN Radio affiliate and the flagship radio stations for the Washington Redskins and Hall of Famer John Riggins, has signed a multi-year agreement that includes Portable People Meter ratings services when the service is introduced in Washington, D.C. ESPN on Redskins Radio includes: WXTR-AM Alexandria, Virginia (730 kHz); WWXT-FM Prince Frederick, Maryland (92.7 MHz) and WWXX-FM Warrenton, Virginia (94.3 MHz). PPM ratings are scheduled to become currency in DC in December 2008. The last Diary book for the Washington, DC market will be Summer 2008.
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| Media Business Report TM |
Quick closing in Connecticut
That didn't take long. Just seven days after announcing a deal to sell two Connecticut newspapers to Hearst Corporation (10/26/07 RBR #210), the transaction has closed and Tribune has 62.4 million bucks in its coffers. This time there was no court battle with the UAW local, which ultimately scuttled a previous deal to sell the Stamford Advocate and Greenwich Time to Gannett. Hearst agreed to assume the union contract.
 Survey: majority of web users
prefer current model of online ads
On the first day of the Federal Trade Commission's (FTC) workshop on "Online Behavioral Targeting," the Direct Marketing Association (DMA) indicated that providing relevant marketing materials to consumers online is fueling the unprecedented growth in the Internet. Consumer response to a national survey found when given a choice about how Web content should be paid for, 72% of web users preferred that websites not charge them, and instead be funded by advertising. 86% confirmed that they usually visit free websites where the content they use is paid for by advertisers; only 10% said that the websites they access either charge them a subscription or pay for each download or use.
81% stated that the Internet made their lives better by making it easier to gain access to products, services, and content such as news, video, or music. When asked about their Internet shopping habits compared with two years ago, the overwhelming majority (86%) of Web users confirmed that they were doing the same amount of shopping or more. Finally, when all respondents, both online and offline, were asked whether they were aware that Internet companies were collecting information regarding their Web browsing, it was clear that consumers were aware of this practice. In fact, only 30% indicated they were not aware of it, and a significant portion of those who were not aware had not yet used the Internet.
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| Media Markets & Money TM |
Forever expands in Pennsylvania
Now we know why Forever Broadcasting spun a Johnstown PA AM station to Sima Birach a little while back. It has filed to pick up four stations in the Johnstown area, which will create a regional cluster with four AMs and five FMs. The transaction, with Nicholas Galli's 2510 Licenses, will bring in WPRR-AM Johnstown, WCCL-FM Central City and WBHV-AM/WLKH-FM Somerset. The price being paid by Forever, whose ownership lineup includes Donald J. Alt, Kerby E. Confer, Carol B. Logan and Lynn A. Deppen, will be 3M. The group's Johnstown holdings, licensed to that city, already include WNTJ-AM, WFGI-FM, WKYE-FM & WJHT-FM. Also in the area are WNTW-AM Somerset and WRKW-FM Ebensburg. The previous deal for WNTH-AM Johnstown with Birach was valued at 230K.
Close encounter in Fresno
Todd Lawley's Peak Broadscasting has completed its spin of KOQO-FM in Fresno to veteran western broadcaster Lotus Communications, according to brokerage firm Kalil & Co., which handled the transaction. The price was 8.4M. Lotus is headed by Howard Kalmenson.
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| Washington Business Report TM |
Coastal Carolina TV keeps its satellite
 Esteem Broadcasting filed to acquire WFXI-TV Morehead NC & WYDO-TV Greenville NC from Piedmont Television back in March for 5.885M. They operate in the geographically expansive Greenville-New Bern-Washington NC DMA as flagship and satellite, both carrying Fox programming. As the new licensee, Esteem was forced to defend this arrangement. Aided by testimony from BIA's Mark Fratrik, Esteem was able to show that WYDO would be unlikely to survive on its own as in independent station, so even though it failed to meet some criteria under which flagship-satellite relationships are granted, it was allowed to continue to operate as it had under prior ownership.
RBR observation: This is a routine process every time such a combination is sold. We would suggest that if it were possible to operate otherwise, a smart owner would put independent programming on the satellite and increase income. If that is not what is happening, there is no doubt a very good economic reason for it, and if there is no compelling third-party objection, we would just waive such operations through without further fuss and muss.
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| Entertainment Business Report TM |
Dr. Elmer Huerta joins GLR Networks
Recently named President of the American Cancer Society Dr. Elmer Huerta joins GLR Networks to host "Cita con el Doctor," a health-topic show that looks to answer listeners' questions and health concerns, all them while helping our community. The one hour show airs live Monday-Friday, 2 pm - 3pm PST / 5 pm - 6 pm EST.
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| Transactions |
31K WMTR-FM Toledo OH (Archbold OH). 22.4% of Nobco Inc. from Max E. Smith Sr. (36% to 23.6%) to Max E. Smith Jr. (38% to 50.4%). Cash. [File date 10/15/07.]
60K KCOX-AM/KTXJ-FM Jasper TX. 73.68% of Crosstexas Media Inc. from Richard S. Tallent (13.16% to 0%); Carol A. Tallent (13.16% to 0%); Theodore J. Bordelon Jr. (13.16% to 0%); Barbara J. Bordelon (13.16% to 0%); and Harold E. White (21.04% to 0%); to Ruben Calfee (13.16% to 50%); Telissa Calfee (13.16% to 50%);. Cash. [File date 10/15/07.]
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| Stock Talk |
Stocks take a dive
High oil prices and the mention of the I-word (inflation) in the Fed's rate cut statement struck fears in traders that the rate cutting might be over - and the Fed might even start raising rates. That sent stock prices tumbling. The Dow Industrials dropped 362 points, or 2.6%, to 13,568.
Almost all radio stocks were down. The Radio Index fell 0.478, or 0.4%, to 17.767, its lowest level since October 17, 2000. Fisher fell 5.8% and Entercom 5% as the worst performers. One of the few radio stocks to move up was Westwood One, which shot up 15% after reporting better than expected Q3 results.
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| Radio Stocks |
Here's how stocks fared on Thursday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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49.17
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-1.45
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Google
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GOOG
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703.21
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-3.79
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Beasley
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BBGI
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7.59
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+0.06
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Hearst-Argyle
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HTV
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22.26
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-0.04
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| CBS CI. B |
CBS |
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28.26
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-0.44
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Journal Comm.
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JRN
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8.49
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-0.42
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| CBS CI. A |
CBSa |
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28.27
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-0.47
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Lincoln Natl.
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LNC
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60.56
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-1.81
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| Citadel |
CDL |
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4.29 |
-0.11 |
Radio One, Cl. A
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ROIA
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3.40
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-0.09
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Clear Channel
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CCU
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37.54
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-0.23
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Radio One, Cl. D
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ROIAK
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3.40
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-0.09
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Cox Radio
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CXR
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11.60
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-0.48
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Regent
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RGCI
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2.31
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+0.01
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Cumulus
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CMLS
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10.10
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-0.21
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Saga Commun.
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SGA
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7.29
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-0.01
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Debut Bcg.
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DBTB
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0.85
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unch
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Salem Comm.
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SALM
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7.85
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-0.15
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Disney
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DIS
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33.80
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-0.83
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Sirius Sat. Radio
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SIRI
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3.12
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-0.24
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Emmis
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EMMS
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5.05
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-0.14
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Spanish Bcg.
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SBSA
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2.51
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-0.09
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Entercom
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ETM
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17.62
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-0.93
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SWMX
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SMWX
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0.03
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unch
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Entravision
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EVC
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8.83
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-0.27
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Westwood One
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WON
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2.46
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+0.32
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Fisher
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FSCI
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45.48
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-2.79
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XM Sat. Radio
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XMSR
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12.45
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-0.83
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Wall Street Business Report
* Westwood by the numbers
* Down quarter for Entravision
* Fisher details Q3 results
Media Business Report
Quick closing in Connecticut
Didn't take long just 7 days to sell 2 CT papers to Hearst...
The Survey Says
Majority of web users prefer
current model of online ads...
Media, Markets & Money
Forever expands in PA
Now we know why Forever Broadcasting spun a Johnstown...
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Radio Media Moves
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 A Magic promotion
Greater Media Boston has promoted Kristen Apicerno to Local Sales Manager at WMJX-FM "Magic 106.7." She joined Greater Media Boston in 2002 at WKLB-FM and has been a Sr. AE for WMJX since 2003.
McEnroe on air in NYC
WEPN-AM "1050 ESPN" New York, the flagship station of ESPN Radio, has added Patrick McEnroe as an on-air host, beginning tomorrow (3:30-6:30pm, following Syracuse football). McEnroe, an ESPN TV commentator and captain of the US Davis Cup tennis team, will host a show each Saturday, at a variety of different times.
Wertzler to Wisconsin
Radio veteran Karl Wertzler has been named General Manager of NextMedia's Kenosha, WI cluster, including Rock WIIL-FM and Talk WLIP-AM. Wertzler most recently served as Market Manager of Midwest Communications' Terre Haute, IN Cluster.
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More News Headlines
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Imus: It's official for 12/3 on WABC
Of course, we've all known for weeks, but now it's completely official" Don Imus comes back to radio on WABC-AM NY on Monday December 3. Imus will return with former sidekicks, including newsman Charles McCord. Citadel plans to syndicate via ABC Radio Networks.
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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FCC gets an earful on localism
NAB's Marcellus Alexander pointed out at the FCC Localism Forum that broadcasters cater to their local audience or they go out of business. Eleven other witnesses, including Capitol Broadcasting's Jim Goodmon agreed, at best, in part, or not at all. Goodman asked that no changes in ownership rules be made until the new realities of digital broadcasting are fully understood.
RBR observation: This is the second time in two weeks that we have heard a prominent regional broadcast owner refuse to take a bullet for the big consolidated broadcast companies that seem to be the cause of most of the heat being directed at the business. Goodmon followed Russ Withers, who declined to defend his competitor Clear Channel under questioning from Byron Dorgan (D-ND) at a 10/14/07 Senate Commerce Committee hearing. To underscore, Goodmon said no to deregulation and yes to public interest standards and reporting requirements. Extraordinary.
RBR note: Details with all testimony text in this RBR report page.
11/01/07 RBR #214
No announcement on Lincoln sale
One analyst pressed Lincoln Financial Group CEO Dennis Glass for an answer about the status of Lincoln Financial Media - "is this thing for sale, or not?"
RBR observation: A non-answer answer if ever we heard one. So, we wait. As reported previously, our sources say Raycom has the inside track to buy the TV group for about 500 million, but that the radio stations will be sold in pieces for a total of about 650 million. The other piece, the sports broadcast operation, is expected to bring about 50 million.
11/01/07 RBR #214
Sirius hoping for holiday joy
Wall Street is concerned about soft retail sales of satellite radio receivers, but Sirius CEO Mel Karmazin says his retail partners say they're expecting a good holiday sales season In his conference call, Karmazin remained optimistic about winning merger approval for a closing before the end of the year. How long will it take to close the merger once the approval comes, one analyst asked? Karmazin said if the approval comes on Monday, the closing will be on Tuesday.
10/31/07 RBR #213
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RBR Classifieds
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New Listing
Regional Sales Manager
JonesTM in Dallas, home of the Cowboys and the opportunity to work with the best talent in the business today as we need a top RSM with 2-5 yrs pro sales experience; with heavy outbound e-mail and phone prospecting; solid presentation, computer skills. Drug screening is a condition of employment. EOE. There is a lot more to this opening. See Radio Careers
Ad Sales Rep
Imagine Media Ad Sales Without - Long Commutes, 8:30 Sales Meetings, Bonus Spots, or selling Print in an Electronic medium. More Reasons to consider Selling Advertising with RBR. Honestly, we are so busy we can not service all the accounts. Can you help us? Our Budgets Are Realistic. Compensation plan is good. If you are good, our Compensation plan is Great. If you are Great, our Compensation plan is Unbelievable! In confidence, contact Publisher Jim Carnegie at [email protected].
Associate Web Editor
Ideal candidate will work with our News Team developing / delivering quality web & e-paper content on a daily basis requiring a tremendous amount of creativity, flexibility and an ability to work on a deadline. Skills: Intermediate understanding of how websites, web pages are constructed and ability to write "News" ready copy. Plus, important, must be a strong communicator both Verbal / Written and able to manage multiple tasks. See Radio Careers
Additional Positions
Available in RBR Classifieds.
See Radio Careers.
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