Welcome to RBR's Daily Epaper
Volume 24, Issue 217, Jim Carnegie, Editor & Publisher
Tuesday Morning November 6th, 2007

Radio News ®

Radio stumbles
into major pothole

Everybody thought September would be another slow month. But not this slow. The analysts over at CL King & Associates called the radio industry's -7% revenue performance for the month of September, as reported by RAB, "shocking." It seems that mid-markets are beginning to emulate large-market softness. What makes it even worse is that September 2006 was down 3% itself. The -7% was comprised of a -7% drop in local business, and an even steeper -9% loss in national (for -8% combined), leavened slightly by a +9% gain in non-spot revenue, bringing the total performance to the month back to -7%. CL King's Jim Boyle noted that his company had been looking for a -3% month and other Wall Street analysts had been expecting a slight -1% drop. He said the top 25 markets were down -4%, with the next tier dropping -6%. Smaller markets (#76 and smaller), thus far somewhat inoculated from radio's large-market sluggishness, seem to be succumbing to general economic woes, coming in with a scant +1% gain in September. Boyle is looking for a -3% Q3, and continued sluggishness in Q4 as the business heads for an 8th consecutive disappointing year.

RBR observation: On the plus side, the comps will be even easier next September. Boyle seems convinced that too many radio companies have been paring back programming and promotional expenses for year upon year. We thought about it, and we can't remember the last time a civilian in our market told us that we really had to check out what was happening at any single radio station. Nor have any of our friends who know what we do for a living asked us anything about radio. Shouldn't some bold programmer be leaping into that void? Shouldn't most of the programmers be fighting to fill it? Shouldn't they have kept it from existing in the first place?

Beasley blasts Philly PPM
Beasley Broadcast Group President and COO Bruce Beasley still thinks PPM is the way the radio industry has to go, but he tore into Arbitron in his quarterly conference for failing to hit its PPM reporting targets for key demos in Philadelphia. In his view, PPM data for the entire range of Adults 18-34 will not be at "acceptable levels" until at least Q3 of 2008. "As far as the PPM in Philadelphia, if you're an older targeted demo radio station, say 35+, there the consistencies in the indices are really good, so it's very dependable data. As you get down to the 18-24 and 25-34 demos, it becomes more undependable, for lack of a better word. I've been told by Arbitron that the 18-24 demo should be at acceptable levels by the end of January. And they're not even starting to work on new initiatives and incentives for 25-34 until the end of February. So, we see that demo, 18-34, probably not being at acceptable levels until sometime third quarter of next year," Beasley told analysts in yesterday's call. "I think PPM is a great measurement source. I think it's the right thing for us to do. But Arbitron has its work cut out in the young-end demos," he added. Arbitron declined to comment specifically on Beasley's criticism, but a spokesman said there will be an update on demo performance in the company's monthly PPM conference call this Friday. Arbitron has previously insisted that its PPM data for younger demos is accurate, despite falling below in-tab targets.

RBR observation: Whether you love or hate PPM seems to depend on your format and target demo. Immediately after hearing Bruce Beasley's PPM tale of woe in Philadelphia, we went onto the Saga Communications conference call, where Ed Christian was lamenting how long Norfolk, VA, where his company has Rock stations will have to wait for PPM. Experience thus far in Houston and Philly has shown substantially higher ratings for Rock stations under PPM measurement.


Up quarter, but no celebrating at Saga
Much of yesterday's conference call was devoted to efforts to fix problems with Saga's radio operations in Columbus, OH and Norfolk, VA, two of its largest markets. Executive VP and Group PD Steve Goldstein made a rare appearance on the call to detail personnel and programming changes that have taken place to get those key markets back on track. Despite those problem markets, Q3 revenues were up 1.2%, with radio up overall and TV down slightly. Those two big radio markets saw revenues down double digits, but that was countered by double digit gains in Ashville, Charlottesville, Des Moines, Ithaca, Springfield, IL and Keene, NH. "I think we did pretty good. I'm not saying that I'm pleased," said CEO Ed Christian. He used the quarterly conversation with analysts to again emphasize his view that there is no longer a radio industry, but two industries - a bifurcated world in radio where major market stations have to deal with transactional business where most advertising is bought by advertising agencies as a numbers game and smaller markets where "we are in control of our destiny because we establish one-on-one relationships with our clients." Asked during Q&A, which Saga conducts via email, what can be done to deal with the problems facing big market stations, Christian said it will take an industry-wide consensus, not the efforts of a single company. But he had praise for both the RAB and NAB, saying they were reenergized under their new leadership.

Minority equity attacks XM/Sirius
If XM and Sirius are to become one, then the combined entity will need to make arrangements for competition in the form of subleasing broadcast infrastructure and channel capacity to a minority-controlled entity. So says Georgetown Partners, which bills itself as "a leading minority-owned public equity firm" and also volunteers to be the beneficiary of the lease. GP Managing Partner Chester C. Davenport said such an arrangement would "establish a viable competitor to the Sirius-XM combined entity; achieve the broader public interest objectives of the FCC by encouraging minority participation in the operation and control of broadcast spectrum; and assure consumers of satellite radio programming of quality and quantity of content through the introduction of a viable competitor to the post-merger Sirius-XM." He said without such a plank, the combined entity would have a "stranglehold" on nationwide audio program delivery, and that as structured, the merger "...fails to meet any definition of serving the public interest, convenience and necessity as required by Section 310(d) of the Communications Act." Meanwhile, a pair of Senators has backed the merger. Jim DeMint (R-SC) is a fan of family-friendly tiers and content blocking options, and John Ensign (R-NV) said he hopes "...other entertainment providers will follow XM-SIRIUS' lead and offer Americans increased choices and customization."

RBR observation: What is Ensign proposing, that we just go ahead and give all the AM and FM stations to one company? We must have missed the Econ 101 class where they explained how one goes about increasing choice by eliminating the one and only choice in existence.


FCC draws heat for fast track forum
Watchdog groups are incensed that FCC Chairman Kevin Martin intends to hold its final forum on media ownership in Seattle WA with only a week's advance notice. However, the protesters may have a leg up this time, since one watchdog group which is a veteran of the opening Michael Powell round of attempted deregulation happens to be based there. The group, Reclaim the Media, are probably happy to have the meeting, but are not at all happy about the lack of warning. They said two members of the state's congressional delegation, Sen. Barbara Cantwell (D-WA) and Jay Inslee (D-WA) had specified a minimum of four weeks warning before putting together the Seattle forum. "It's appalling that the FCC would schedule a hearing of such importance with so little public notice," said Jonathan Lawson, Executive Director of Reclaim the Media. "The FCC needs to hear from rural people, Native Americans, immigrants, working people and others who often get sidelined both in the media and in public debates on the media. Unfortunately, Martin's disrespectful timing says to these same communities, 'we don't care what you think about the media.'"

RBR observation: For what it's worth, this forum will officially clear the table of promised preliminary activities before the FCC settles down to consider how it will handle the Third Circuit remand of the stalled Powell rulemaking attempt. But while the watchdog and activist communities may be running out of time, brand new and far more powerful posses are forming on Capitol Hill. Stay tuned.

House double-teams the FCC
Spurred by Senate anti-consolidation point man Byron Dorgan (D-ND), the Senate Commerce Committee is planning a session of media ownership and localism this Thursday, 11/8/07. Anybody who has been following developments on this issue over the last five years has to be wondering, what about Ed Markey (D-MA) over in the House? Wonder no longer. Markey is holding session on the topic in his Subcommittee on Telecommunications and the Internet, and will share the room with colleague Bart Stupak (D-MI) and his own Subcommittee on Oversight and Investigations. Both have the full backing and cooperation of Energy & Commerce chair John Dingell (D-MI). The session is scheduled for Thursday, 12/6/07, 12 days before Martin is believed to be contemplating action on ownership issues.

"A diversity of viewpoints in the media is important to a free flow of information in our democracy", said Stupak (pictured). "As Chairman of the Oversight and Investigations Subcommittee, I intend to look carefully at how the FCC has approached media ownership issues and ensure that the FCC's media ownership studies provide a balanced accounting of the facts, not one-sided justification for more media concentration."

"Media diversity and localism are vital to the citizens of the country and critical to vibrant civic discourse, and independent local news and information in communities around the nation," said Markey. "Congress has an important role to play in reviewing any proposal that will impact the acceptable level of concentration of media properties in a community. I look forward to this hearing and the opportunity to publicly review and debate any FCC proposals for new ownership rules."

RBR observation: Powell's 2003 rulemaking was repudiated by the Senate, but received the protection of Speaker Dennis Hastert (R-IL) and Tom DeLay (R-TX), who at the time were Speaker and Majority Leader, respectively, until the courts stepped in and effectively seconded the Senate. Hastert and DeLay will not be performing that service again. Hastert is now just a rank-and-file member and believed to be headed to early retirement, and DeLay is gone completely. Although nobody knows what Martin intends to accomplish, whatever it is appears likely to meet an instantaneous opposite reaction across the Mall on Capitol Hill.


Wall Street Business Report TM
Small gain, but a gain nonetheless
Saga Communications had an up quarter, despite continuing problems in its largest radio markets and, of course, the lack of political revenues this year for its TV stations. Net revenues rose 1.2% to 36.2 million and operating income gained 2.1% to 8.0 million. Radio revenues rose 1.6% to 31.9 million and operating income was up 3.4% to 9.4 million. On a same station basis, radio revenues were up 0.6% and operating income 1.2%. For TV, revenues declined 1.7% to 4.3 million and operating income was down 10.5% to 831K. Saga doesn't provide quarterly guidance, but CEO Ed Christian did say in answer to an analyst's question that he doesn't expect 2008 to be a down year for the radio industry.

Revenues up for Beasley
Q3 net revenues rose 7.2% for Beasley Broadcast Group to 33.3 million, although operating income declined 20.8% to 5.1 million. A lot of the revenue increase was due to the addition of WJBR-FM Wilmington, DE and broadcasting the NFL Dolphins football games in Miami. Otherwise, revenues were down in seven of the company's 11 markets. On the expense side, adding the Dolphins increased costs in Miami and there were costs associated with WJBR and another new station KDWN-AM Las Vegas. On a same station basis, Q3 revenues were down 2.1% and station operating income was off 13.9%. Looking ahead, Beasley expects Q4 revenues to be down 2%, which is a drop of 6% on a same station basis (excluding the Dolphins as well). President Bruce Beasley said the company is well positioned for 2008 and he expects his company's clusters to continue to outperform their markets.


Media Business Report TM
Diller busting up IAC
Some other media companies have recently announced plans to split in two, but Barry Diller is going much further - he's splitting IAC (InterActive Corp.) into five publicly traded companies. HSN will again fly solo, as will Ticketmaster. New companies will split off the vacation businesses (Interval) and lending/real estate businesses (LendingTree), leaving IAC with the rest, primarily online media businesses and investments in other online ventures. "We've been a complex enterprise almost from the very beginning 12 years ago, with hundreds of transactions over those years. And while we've created a lot of value, I've always believed our complexity and many mouthfuls of sentences to explain who we are and what our strategy is have hampered clarity and understanding with all our constituencies, particularly investors," said Diller. After the tax-free spin-offs, Diller will continue as Chairman and Chief Executive Officer of IAC. Mindy Grossman, Sean Moriarty, CD Davies and Craig Nash will continue as Chief Executive Officers of HSN, Ticketmaster, LendingTree and Interval respectively, and Bret Violette will continue as President of RealEstate.com.
| See how the company is going to be divided up |


Ad Business Report TM

CC Radio's "Lone Star" back to airing traditional spots
Back in April, the CC Radio's KZPS-FM Dallas ventured into largely uncharted territory when it adopted a country-rock music format, all without traditional commercials-"Lone Star." But The Dallas Business Journal reports that today, the music remains, but pre-recorded ads are creeping back in: "In the last couple of weeks, KZPS (92.3 FM) has run 30-second spots for Verizon Wireless and DirecTV. Commercials for Whataburger are on the way. J.D. Freeman, who oversees the station for corporate parent Clear Channel Communications, won't rule out the possibility of KZPS -- known as "Lone Star" -- eventually reverting to traditional commercials."

RBR observation: Most likely, advertisers just weren't willing to pay such a high premium for being "Lone" sponsors on "Lone Star." Also, it can be a tough sell for network and national spot advertisers who are used to a spots and dots campaign. It's tough to make big exceptions for one station on a campaign that is sold and created differently. Now, if CC Radio created an unwired network of these types of stations in each market, it might be different. Best bet-try with HD multicast formats first-stations are now allowed sponsorship on their HD-2 channels, per the HD Digital Radio Alliance.

Roehm will not re-file
suit against Wal-Mart

Ex Wal-Mart marketing exec Julie Roehm said that because a Michigan judge dismissed her lawsuit against Wal-Mart in August, honoring a provision in her contract that requires any lawsuit to be filed in Arkansas, she would not be re-filing her lawsuit. Said Roehm: "The sole purpose for filing the lawsuit was to recover the severance pay that was outlined in that contract. I thought that a settlement agreement would be reached within a few weeks. Instead, the lawsuit has expanded into other issues, and has become more difficult and financially draining than I ever imagined." Roehm also confirmed that her decision was influenced by the recent exchange of info between her lawyers and Wal-Mart's, which explained the inaccuracy of certain allegations included in her legal filing, specifically allegations about Wal-Mart CEO Lee Scott and Irwin Jacobs, who runs a major supplier firm to Wal-Mart. "I have decided to accept Wal-Mart's decision to terminate my employment and move on. I am not receiving any money or other compensation to settle my case."


Media Markets & Money TM
Clear Channel spins one in Charleston
That's the Charleston in South Carolina. WLTQ-AM is going to Mark Jorgenson and his wife Faith, who as Indigo Radio LLC will become the station's new licensee. The price is 608,230, which will be paid pursuant to terms of a promissory note. Jorgenson, who has long been in the station brokerage business, holds one other license at this point, WBCG-FM in Murdock FL.


Washington Business Report TM
It's all in the translation
Numerous commentators have addressed the need for beefed up FCC regulation to assure that disabled and non-English-speaking individuals receive adequate notice of emergency situations via the Emergency Alert System (EAS), and a notice of proposed rulemaking, filed in EB Docket No. 04-296, was released 6/12/07. It has just now been published in the Federal Register, triggering another opportunity for public comment. Primary comments are due 12/3/07 and reply comments are due two weeks thereafter, on 12/17/07. The proceeding was initiated by filings from the Independent Spanish Broadcasters Association, the Office of Communications of the United Church of Christ and the Minority Media & Telecommunications Council.


Internet Business Report TM
New NPR multimedia site launches
NPR and 12 NPR Member stations recognized for music programming are launching NPR Music, a new, free, comprehensive multimedia music discovery Web site. NPR.org/music features on-air and online content aggregated from NPR and the participating stations as well as original-to-NPR Music materials such as interviews, reviews, blogs and live performances. Stations include KEXP and KPLU Seattle; KUT Austin; WBGO Newark; WDUQ Pittsburgh; WFUV and WNYC New York; WGBH Boston; WGUC Cincinnati; WKSU/Folk Alley Kent, Ohio; WXPN Philadelphia; and American Public Media/Minnesota Public Radio. Specific sections of the site are dedicated to rock/pop/folk, classical, jazz/blues, world and urban music.


Transactions
4.4M WDZ-AM/WSOY AM & FM/WDZQ-FM & WCZQ-FM Decatur IL (Decatur, Monticello IL) from ABG Illinois Licenses LLC, a subsidiary of Archway Broadcasting Group LLC (Gordon Herzog, CFO et al) to Joyner Radio Inc. (A. Thomas Joyner). 440K escrow, balance in cash at closing. Existing superduopoly. LMA 11/1/07. [File date 10/19/07.]

2.1M WCLE AM & FM Cleveland TN from Williams Communications Inc. (Walt Williams) to Hartline LLC (Steve Hartline). Cash. [File date 10/18/07.]


Stock Talk
Citi woes worry Wall Street
Stocks fell as financial giant Citigroup warned that it will have to write off 8-11 billion bucks from the problems roiling the credit markets. The Dow Industrials fell 52 points, or 0.4%, to 13,543.

Radio stocks had another down day. The Radio Index fell 0.607, or 0.5%, to 115.991, again its lowest point since October 17, 2000. Westwood One fell 4.3% and Citadel was down 3.5%. Wall Street, however, liked the Q3 numbers from Saga - it rose 6.8%.


Radio Stocks

Here's how stocks fared on Monday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

49.62

-0.36

Google

GOOG

725.65

+14.40

Beasley

BBGI

7.42

+0.08

Hearst-Argyle

HTV

22.10

unch

CBS CI. B CBS

27.60

-0.07

Journal Comm.

JRN

8.49

-0.02

CBS CI. A CBSa

27.64

-0.05

Lincoln Natl.

LNC

59.85

-0.15

Citadel CDL
4.12 -0.15

Radio One, Cl. A

ROIA

3.37

-0.07

Clear Channel

CCU

37.06

-0.58

Radio One, Cl. D

ROIAK

3.41

-0.04

Cox Radio

CXR

11.98

-0.11

Regent

RGCI

2.33

+0.02

Cumulus

CMLS

9.82

-0.23

Saga Commun.

SGA

7.81

+0.50

Debut Bcg.

DBTB

0.89

unch

Salem Comm.

SALM

7.56

-0.16

Disney

DIS

33.88

-0.04

Sirius Sat. Radio

SIRI

3.35

+0.07

Emmis

EMMS

5.05

+0.09

Spanish Bcg.

SBSA

2.55

unch

Entercom

ETM

17.36

+0.03

SWMX

SMWX

0.04

+0.01

Entravision

EVC

7.50

+0.05

Westwood One

WON

2.46

-0.11

Fisher

FSCI

43.36

-0.95

XM Sat. Radio

XMSR

13.27

+0.15


Bounceback

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Below the Fold
Ad Business Report
CC Radio's "Lone Star"
Back to airing traditional spots...

Media Business Report
Diller busting up IAC
Into 5 publicly traded companies...

Media, Markets & Money
Clear Channel spins 1
In Charleston, WLTQ-AM is going to...

Washington Business Report
It's all in the translation
Commentators have addressed the need for beefed up FCC regs for...




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Radio Media Moves

Kantor promoted
Shari Kantor has been promoted to Vice President/Director of Sales at NetSolutions, an Interep company. In her new role, she will manage the NetSolutions Atlanta sales team and work to develop new business in the Florida region. Kantor was previously a Vice President/Account Executive.




More News Headlines

Adelstein bound for IRTM in Miami
Commissioner Jonathan Adelstein (D) has agreed to meet with Urban radio professionals at the I Rock the Mic Conference and Awards session held in Miami from 11/30/07 through 12/2/07. Adelstein will participate in a closed-door session on Saturday 12/1/07 to discuss minority ownership issues, and will also sit on a public panel looking at broadcast decency under the moderation of ABC Radio Networks' Doug Banks.

Bewkes to head
Time Warner

Time Warner will get a new CEO on January 1st, with Jeff Bewkes moving up from President and COO. Current CEO Richard Parsons will remain as Chairman. "Jeff is the right person to be the next CEO of Time Warner, and I couldn't be more delighted that he will lead this company into the future," said Parsons. "Today's decision is the culmination of a thoughtful and disciplined process that began in early 2006, when Dick Parsons initially approached the Board to discuss the timetable for the CEO succession. The Board is delighted that Jeff Bewkes will be the next CEO and that Dick Parsons will continue to serve as Chairman of the Board," said Robert C. Clark, Chairman of the Nominating and Governance Committee, on behalf of the Board of Directors.




International

Media investment
in India soaring

Media investment in India is on an explosive growth path and is expected to exceed 5 billion next year and possibly hit 10 billion by 2011, according to a new study from GroupM. The study, dubbed "This Year, Next Year: India," included an examination of all major media in India, including internet, outdoor, and cinema, and concluded that overall media investment is growing at an annual compound average of 21%. Among specific media, the report discovered: Internet users have grown tenfold to 21 million since 2000. Online brand display advertising and transaction generation are the mainstay of internet ad revenues. Search is now increasingly being used by DR advertisers and total internet ad revenue will overtake magazines and radio in the near term. TV growth is being sparked by the launch of new channels and the growth of new ad categories. The majority of TV advertising continues to be for household consumer goods. Radio is often the only channel where electricity and literacy are scarce. It's set to outperform as the government releases more bandwidth, consumer appetite for music-based content rises, more people drive, and audience measurement begins. Virtually all mobile phones now receive FM radio.


RBR Radar 2007
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Triton Media Group buys Excelsior
Triton Media Group, expanding its position as a supplier of digital products and services to the media industry, announced the purchase of Excelsior Radio Networks and its subsidiaries from Lincolnshire Management. Triton is a portfolio company of a fund invested by Oaktree Capital Management, the 51 billion dollar private equity capital fund out of LA. In radio, Oaktree has investments in Liberman Broadcasting, GAP and GAP West and also has a substantial bond position in Interep. Andy Salter led the Oaktree team on this deal.

RBR observation: Sources tell us Excelsior was not for sale at the time, but the proposal, vision of the future and money offered was "too compelling." We heard the deal went for 100 million plus. Lincolnshire will still be a stakeholder as well. It's getting pretty obvious that the Landau, Schore, Agovino, Brown and Williams team are becoming the go-to guys for deals in the network radio-digital media hybrid space. Remember, Internet advertising is the #3 billing category in network radio so far in 2007. Oaktree, Google and eBay are gravitating to the network radio business largely because they're realizing it is a powerful mechanism to drive audience to websites. And don't rule out spot radio as well. With Agovino's experience in the rep business, including a stint at Interep, it might be interesting to see what happens there, even though there have been strained relations! in the past between Oaktree and Interep management over the direction of the company.
11/05/07 RBR #216


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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

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