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Volume 22, Issue 216, Jim Carnegie, Editor & Publisher

Thursday Morning November 3rd, 2005

Radio News®

Cox's Neil sees HD multicasting
as "killer ap"
He's still waiting for research on how to number HD Radio multicasting channels, but Cox Radio CEO Bob Neil is gung-ho on the new technology. He told analysts during his quarterly conference call that multicasting is the "killer ap" for terrestrial radio's move to digital. If consumers can get twice as many channels with a new receiver - - and not have to pay a monthly subscription fee - - what's not to like? Meanwhile, Neil got in a dig at some digital competitors in the wake of recent hurricane strikes. Noting the exceptional performance of staffers at Cox's own stations in Miami and other broadcasters as well, Neil noted that "satellite radios and iPods are of little use to people when there's an emergency in their community and they need to feel connected and informed." Because Miami is still a bit topsy-turvy, Cox didn't provide Wall Street with any financial guidance for Q4, although Neil said the quarter is currently pacing flat. Miami had been one of the company's strongest markets in Q3.

CBS eying cable buy?
It may not have been idle speculation when Viacom Co-President/COO and CBS Corp. CEO-to-be Les Moonves spoke this week of getting CBS into cable TV after the Viacom split (11/2/05 RBR #215). Bloomberg News reports that Moonves is in talks to buy College Sports Television Networks (CSTN) for as much as a half billion bucks to operate in conjunction with CBS Sports. CSTN airs more than 35 collegiate sports - - ranging from basketball and hockey to water polo and fencing. The privately owned company was launched two years ago by Brian Bedol and Stephen Greenberg with financial backing from Coca-Cola, George Soros private investment group, Allen & Co, JPMorgan Chase and Constellation Ventures.

RBR observation: Certainly fits the idea of a brand extension. CBS Sports has already been successful in the Internet arena by acquiring former partner SportsLine. CSTN competes with Disney's ESPNU, but there are so many college teams in so many sports that there should be no shortage of content for everyone to go after. And until cable reaches the overload point for sports junkies - - and who knows where that might be - - everyone is going to be looking for ways to claim a piece of that cable pie.

Issue ad too hot for Hot-97
According to the New York Daily News, Emmis Communications's WQHT-FM Hot-97 in New York refused an ad promoting a rally critical of President George W. Bush. A group of groups called The World Can't Wait, Drive Out the Bush Regime wanted to run a :60-second spot promoting Big Apple a rally and march. According to NYDN, shortened versions of the spot have run on other stations, and Hot-97 was said to have initially approved the spot. However, corporate staff decided to err on the side of caution and squelch the ad. The text of the ad does appear to be quite provocative, mentioning torture and leaving people to die in New Orleans.

RBR observation: This is a tough call. If you turn down one issue ad, and then accept another, you are really opening yourself up to charges of placing a corporate filter on the First Amendment. A zero-issue ad policy is tough to pull off because it is a relatively easy matter to sneak a message into what on the surface appears to be a standard promotional spot. If a legitimate group has the cash, and is not presenting creative that is actionably indecent or otherwise illegal, as a steward of the public airwaves, accountable to the public, it is probably best to err on the side of airing whatever comes your way. Like indecency, the line between what is and is not too controversial is utterly impossible to define.

Chicago, Milwaukee on the license-challenge MAP
Watchdog Media Access Project, acting as counsel for local public interest groups, has launched a challenge to license renewal efforts by television stations in Chicago and Milwaukee. A veritable Who's Who of television group owners is named in a complaint based on their alleged failure to adequately cover local and state elections. In Chicago, broadcasters are taken to task for devoting less than 1% of newscasts to non-federal elections in the four weeks leading up to Election Day. During that same time frame, Milwaukee stations were charged with devoting less than 1% of newscast time to state elections, about 2% to ballot issues and about 1% to other local elections. MAP quotes the Commission's own language of 1984, when it declined to specify limits. MAP says the Commission stressed that "the basic responsibility to contribute to the overall discussion of issues confronting the community is a non-delegable duty for which each licensee will be held individually accountable." The charges are based on data culled by newscast monitoring by the Center for Media and Public Affairs. Results for the five highest rated stations in Chicago showed 7.8% of newscasts going to election coverage, with 79% of the 7.8% devoted to presidential or US senate campaigns and only 8% of the 7.8% devoted to all other Illinois races combined. In Milwaukee, 5.2% of newscast time went to election coverage, with 77% on presidential/senatorial races and 4% for local office races and ballot issues. | Caught in the watchdog dragnet |

DHHS takes to the airwaves

The Department of Health and Human Services has gotten into some trouble over the last couple of years for its advertising and PR practices, and against that backdrop it's getting set to enter the arena again. This time, however, it should be smooth sailing. It is putting together an advertising campaign to combat underage drinking, targeting the parents of children aged 11-15, 11M of which are said to be alcohol users. The multi-media effort will utilize TV, radio, the Internet, newpapers and magazines.

RBR observation: This is a goal most Americans can get behind, so this time there should be no political problems for DHHS. Just so long the script doesn't include lines like, "This is Karen Ryan reporting that this kid is blotto."

Conference Calls 2005

Braves not missed at Cox Radio
Total revenues were down 3.2% to 113.3 million bucks in Q3 at Cox Radio, but Bob Neil isn't getting upset about it. National billings were down 7%, which is an industry problem, and local ad sales were down 2%. However, if you discount the impact of last year's Atlanta Braves play-by-play contract in Atlanta, Cox Radio's Q3 local revenues would have been up 2%. So, while revenues were down, costs were down significantly without any payments to the Braves this year - - and Cox Radio's station operating income rose 5.6% to 51.3 million. Free cash flow jumped 7.3% to 28.5%. During the conference call, some participants asked whether the company ought to raise its dividend significantly, as Citadel has done, or even have Cox Enterprises cash out other shareholders at a premium price, say 20% above current trading levels, and still not have particularly high leverage. But Neil demurred, saying the board has authorized a 100 million bucks stock buyback, so that's what management is doing.

Radio and TV both gain at Univision
Their English-language peers may be struggling with a tough advertising market, but Univision reported Q3 gains for both its TV and radio operations. TV revenues rose 4.6% to 343.3 million and operating income gained 3.7% to 129.4 million. Radio revenues rose 7.8% to 96.9 million and operating income increased 18.5% to 41.6 million. Add in Univision's music and Internet businesses and total revenues were up 4.2% in Q3 to 497.5 million and operating income gained 7.5% to 180.5 million. Noting that upfront sales were up in the mid-20s range, company officials told analysts to expect growth to continue.

Adbiz©

Pool, Russo, Crawford comment big bucks
spent on Stern replacement promotions
By now, most know of Infinity buying 24 full-page ads as the sole sponsor in this week's edition of Ad Age to promote Stern replacements, including Adam Carolla, David Lee Roth, Penn Jillette and Rover. The cost for that alone was reportedly around 800,000 dollars. What was the reason for that kind of spend? Was it to increase brand awareness for the radio buyers?
| Agencies tell it straight up |

Dairy Queen taps RPMC for The Apprentice promo
RPMC announced it is playing a key role in Dairy Queen's "Now Hiring! Become DQ's Blizzard Apprentice" promotion. Developed to support DQ's starring role this month in an episode of NBC's "The Apprentice," the promotion developed around the Blizzard Flavor Treat marks the first time a company appearing on the show has created a national promo to find a real-life apprentice. The contest also marks the third time this year that RPMC has been tapped by DQ to manage travel and promotional services for the brand's marketing of some of its signature offerings. RPMC also played pivotal supporting roles in Dairy Queen online campaigns for the "Dairy Queen/Alienware" sweepstakes and "DQ Arctic Rush Challenge" instant-win game.

Media Business Report

Knight Ridder under pressure to sell
A major shareholder of Knight Ridder is threatening to lead an effort to replace the board of directors at Knight Ridder unless the current directors agree to put the company up for sale. Private Capital Management LP, which owns about 19% of KR, said in a letter filed with the SEC that a sale is the only viable option after seeing the newspaper company's stock price collapse 25% over the last year or so and, in Private Capital's view, the likelihood that newspapers will continue to lose advertising to the Internet. KR management offered no response to the investment group's demand.

MBR observation: Who would the buyer be? KR is the second largest newspaper group, behind Gannett, and would be a huge acquisition for any of the other large groups to try to pull off - - not to mention the antitrust problems. And, of course, they're all facing the same problems that have weighed on KR's stock price. Private equity funds might be interested, but we doubt that they'd want to pay a premium price for a big player in an unattractive sector.

Media Markets & MoneyTM

Close encounters in Texas
Bill Whitley of Media Services Group has let us know that a couple of the deals he handled have come to closure. The first is actually the first part of another deal. In Lubbock, NextMedia has completed the 1.5M acquisition of KBTE-FM from Dove Media pursuant to an LMA/option. From there, it will go on to Wilks Broadcast Group, along with three other Lubbock FMs and four in Reno NV as part of a 34M deal announced over the summer. The other deal has the cachet of a Paris address, until you find out it's the one in Texas, not France. In that one, Larry Ryan has taken the keys to KPJC-AM from Paris Junior College for 35K.

Goldman, Sachs unmoved by Sirius Q3
Yesterday's Q3 report from Sirius, while it was a record-breaker (11/2/05 RBR #215), it didn't change Goldman, Sachs & Co.'s Mark Wienkes' outlook on the stock - - it's still ranked as Underperform in his view.
| Read his analysis here |

Washington Beat

Another parcel of Paxson stations wrist-slapped
Another group of Paxson O&O television stations has been commended by the FCC for generally serving the public interest, and the stations were thus rewarded with license renewals. At the same time, they were admonished for allowing a period of time to go by during which they were not providing program guide publishers with the age-group targets applicable to its children's educational programming schedule. Even though most publishers do not pass this information along to their readers, the FCC requires they are provided with it in hopes that they will. The stations caught this time include WVPX-TV Cleveland-Akron OH (Akron OH, Ch. 23), WUPX-TV Lexington KY (Morehead City KY, Ch. 67), WPXK-TV Knoxville TN (Jellico TN, Ch. 54), WPXA-TV Atlanta GA (Rome GA, Ch. 14), WIPX-TV Indianapolis IN (Bloomington IN, Ch. 63), WPXD-TV Detroit MI (Ann Arbor MI, Ch. 31), WNPX-TV Nashville TN (Cookeville TN, Ch. 28) and WPXH-TV Birmingham AL (Gadsden AL, Ch. 44).

RBR observation: Paxson did a very smart thing. It fixed the problem itself, and also told on itself. The FCC places a very high value on candor. If the FCC believes you are honest and aboveboard, especially to the level of turning yourself in for what might otherwise remain an undiscovered infraction, you will have earned the benefit of the doubt. Give the FCC reason to doubt your candor, however, and watch out. If the Commission thinks you lied about one thing, they'll suspect there are other lies out there waiting to be discovered. Wise move, Paxson.

Ratings & Research

Arbitron releases
"Network Radio Today" report
Arbitron released its first Network Radio Today report, offering info on national radio listening and network radio audiences drawn from the RADAR network audience service. Network Radio Today shows that network radio reaches about 75% of all radio listeners every week. A radio network is an organization that provides programs, services and commercials to local affiliate radio stations throughout the U.S.

The Network Radio Today report revealed that network radio:

- Reaches nearly 80% of the 25-54 age group and nearly three-quarters of teens, ages 12 to 17, on a weekly basis.

- More than 85 million adult women listen to network radio each week. 80% of full-time, working women who have children under the age of 12 listen weekly.

- Reaches listeners everywhere with more than 128 million adults listening in their cars each week, compared to the 93 million who listen at home.

- Appeals greatly to the U.S. ethnic population. Nearly nine out of 10 Black Americans, age 12 and older, listen to network radio each week. Approximately two-thirds of U.S. Hispanics, age 12+, listen each week.

"Network radio has the ability to deliver key advertising messages to well-defined demographics and social-economic groups," said Bruce Supovitz, VP/National Radio Services, Arbitron. "This medium offers national advertisers a convenient, one-stop access to build reach quickly and efficiently across the nation."

Marketing

GM and Ford sales down 23% in October
As Americans continue to pull back the reins on uncertainty, based on everything from job losses to natural disasters, GM and Ford are really feeling the pinch. They reported 23% declines in October U.S. sales. Industry-wide, sales slumped to their slowest pace in seven years. Chrysler said U.S. sales rose 1% in October, giving it 19 consecutive months of year-over-year gains. Toyota and Honda posted October gains of 5% and 4%, respectively. Adding insult to injury, Moody's cut GM's debt rating deeper into junk territory status on Tuesday, citing sliding market share and uncertainty about fixing its problems.

Transactions

20M WRDA-FM St. Louis (Jerseyville IL) from Emmis Radio License LLC, a subsidiary of Emmis Communications Corporation (Jeff Smulyan) to Radio One License LLC, a subsidiary of Radio One Inc. (Catherine L. Hughes, Alfred C. Liggins). Cash. Duopoly with WFUN-FM Bethalto IL. [File date 10/11/05.]

1M KWEY-FM Oklahoma City (Blanchard OK) from Wright Broadcasting Systems Inc. (G. Harold Wright, Carol A. Wright) to Nick Radio Inc. (Tony Tyler, Ty A. Tyler). Cash less buyer's expenses to build tower, up to 550K. Superduopoly with KTLR-AM, KKNG-FM, KTUZ-FM & KOCY-FM. Option agreement signed 10/22/02. [File date 10/7/05.]

Stock Talk

Corporate profits boost stocks
Strong Q3 earnings news, including media giant Time Warner, boosted stock prices on Wednesday. The Dow Industrials rose 66 points, or 0.6%, to 10,473.

Radio stocks joined in the advance. The Radio Index rose 3.789, or 2%, to 195.114. Spanish Broadcasting System was the star performer, up 5.1%. Emmis, Entravision, Radio One, Salem and Saga were all up 3% or more.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		37.78	+0.38	Jeff-Pilot	JP		54.33	-0.13
Beasley	BBGI		14.59	+0.09	Journal Comm.	JRN		14.08	+0.08
Citadel	CDL		13.75	+0.02	Radio One, Cl. A	ROIA		12.08	+0.37
Clear Channel	CCU		30.15	+0.25	Radio One, Cl. D	ROIAK		12.11	+0.39
Cox Radio	CXR		15.04	+0.41	Regent	RGCI		5.00	-0.03
Cumulus	CMLS		12.29	+0.21	Saga Commun.	SGA		12.55	+0.49
Disney	DIS		24.82	+0.16	Salem Comm.	SALM		20.15	+0.67
Emmis	EMMS		20.21	+0.64	Sirius Sat. Radio	SIRI		6.89	+0.37
Entercom	ETM		29.95	+0.19	Spanish Bcg.	SBSA		6.44	+0.31
Entravision	EVC		8.30	+0.28	Univision	UVN		27.46	+0.79
Fisher	FSCI		48.75	+0.50	Viacom, Cl. A	VIA		31.89	+0.28
Gaylord	GET		40.00	+0.64	Viacom, Cl. B	VIAb		31.73	+0.18
Hearst-Argyle	HTV		24.19	+0.14	Westwood One	WON		18.63	+0.01
Interep	IREP		0.40	-0.03	XM Sat. Radio	XMSR		28.13	+0.28
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

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This is your column, so send your comments to [email protected]

Radio Media Moves

New Schurz
heading Schurz
Todd Schurz has been named President and COO of Schurz Communications, succeeding his uncle Franklin in heading operations of the radio/TV/newspaper company. Franklin Schurz will now be Chairman and CEO. Todd had been President and GM of WSBT-TV South Bend, IN.

Jaibur riding Route 81
Former Interep/Philadelphia exec. Kevin Jaibur has joined Route 81 Radio LLC as General Manager and General Sales Manager of WCOJ-AM West Chester, PA, serving Philly's western suburbs.

On the Main Line
Recently launched Main Line Broadcasting has named Marc Guralnick Executive Vice President/Sales for its nine-station group in the Richmond, VA and Hagerstown, MD markets. He had been a Clear Channel GSM in Philadelphia.

A VP for PPM
Arbitron announced that John Snyder has been promoted to the newly created position of Vice President, Portable People Meter Sales, making him the primary strategist for PPM sales, focusing on radio groups and agency holding companies. Snyder had been VP, National Group Services, handling the Clear Channel and Citadel accounts.

Opening at Citadel
Gordon Holmes has resigned as a director of Citadel Broadcasting after stepping down as a general partner of Forstmann Little & Co.

Below the Fold

Ad Biz
Agency bosses comment on Infinity / Stern replacement promotions. Was it to increase brand awareness for the radio buyers? No, estimated Rich Russo

Media Business Report
Knight Ridder under pressure to sell
A major shareholder is threatening to lead effort to replace the board of directors. MBR observation: Who would the buyer be for the second largest newspaper group,

Media, Markets & Money
Close encounters in Texas. Couple of the deals have come to closure

Goldman, Sachs unmoved by Sirius Q3. It's still ranked as Underperform

Washington Beat
Another parcel of Paxson stations wrist-slapped. Commended by the FCC for generally serving the public interest

Transactions
Got a few
20M WRDA-FM St. Louis
(Jerseyville IL) from Emmis

Stations for Sale

NYC Prime Radio
Time for Lease
7 days a week available p/t-f/t Business, Foreign language, religious, Health, Infomercials accepted. 212-769-1925 [email protected]
TV & Satellite time also available. Station Inquiries welcome

Prime Stations
TX, NM, CA, MI, IN, NC, VT, ME, TN, FL
For a description of all of our properties for sale go to
www.mediamergers.com
W.B. Grimes & Company,
(301) 253-5016,
Est. 1959- Thousands Sold

RBR Radar 2005

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

Moonves:
Stern loss is "slight concern"
future CBS CEO Les Moonves on the impact of losing 5% of Infinity's revenues, but Moonves insisted there was only "slight concern" about Stern's departure. Noting that Infinity recently announced 10 different replacements for Stern on various stations, Moonves said some will work and some won't. But he also noted that Stern's contract had gotten so expensive that Infinity wasn't making much profit on his show anyway. RBR observation: Stop and Please listen to Moonves audio clip above (slight concern) and you will not believe your radio ears. Words and phrases like: Not concerned about Howard because the margins are not that great - Revenues will be down and costs will be down - some formats will work some won't work - comparing Stern to a hit TV show - and in short it is all about cost reductions and margins as that is the game in radio. Hello, it is finally said on the record by the soon to be new CEO of CBS Corp that radio is just cost cutting and reduced to margins or in short just tossing crap against the wall and seeing what sticks. Which brings into play - any sale off of Infinity stations - as they are just numbers on the books and Moonves quote of "no great need to look to divest anything" and now it is more clear why some higher ups inside Infinity are not concerned - as th! e new boss is not concerned. Buy out Ad Age every week but somebody did a great snow sales job on Moonves. Radio is just about the margins? Not programming, content, branding, marketing, people - Just Margins - swell just swell.
11/02/05 RBR #215

Cumulus is radio's new #3 with Susquehanna acquisition
At 1.2 billion bucks worth with some big equity funds - - Bain Capital, The Blackstone Group and Thomas Lee Partners - - to create a new partnership, Cumulus Media Partners LLC, which could make an acquisition at a higher multiple than the dismal one being used to price Cumulus' stock. In fact, this deal is structured to be accretive to Cumulus, the public company. RBR observation: First Lew is a happy man and a creative one. Now time to plan a pro-active strategy to run them and not like radio is being programmed, managed and marketed today. The only one that may have a concern is Interep Chairman/CEO Ralph Guild as Cumulus departed earlier this year for Katz and their fold of rep firms owned by Clear Channel and RBR suspects this deal when closed will follow the same trail.
11/01/05 RBR #214

Is Clear Channel a "buy"?
After digesting last week's Q3 numbers and the company's outlook Wall Street analysts are divided on whether now is a good time to buy Clear Channel Communications stock. Declaring that "Less Down is Good," RBR observation: Analysts seemed to welcome assurances from Clear Channel Radio CEO John Hogan that local managers have "almost complete autonomy" over the mix of various length spots to meet their Less is More targets. RBR/TVBR soon heard from several of those managers who apparently never received that memo. Rather, they say, they are on a tight leash from San Antonio headquarters and closely monitored weekly. They tell us that if they aren't right in line with the national LIM limits, there is hell to pay. 10/31/05 RBR #213

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