Welcome to RBR's Daily Epaper
Volume 24, Issue 218, Jim Carnegie, Editor & Publisher
Wednesday Morning November 7th, 2007

Radio News ®

Analysts cutting radio estimates
Following the surprise report from RAB that September radio revenues plunged 7% (11/6/07 RBR #217), Wall Street analysts have been reworking their projections. "After September's significant decline, and our belief that significant industry weakness continued into October (according to our contacts), we are reducing our Q4 and full year industry estimates by 200bps [basis points] and 130bps, respectively. Our new estimates are -3% and -1.7% for Q4 and the full year, respectively," said Wachovia's Marci Ryvicker in a note to clients. "Breaking Q4 out by month, we anticipate that October will be down 4%, November down 4% and December down 2%. Our new October and November estimates are largely a result of difficult comparisons due to the 2006 elections in addition to much softer market conditions than we had previously anticipated," she stated. Ryvicker's research piece was headlined "Sept. Radio MUCH Uglier Than Expected." At Bank of America, Jonathan Jacoby has revised his Q4 industry revenue estimate to a drop of 3%, rather than 1%. "We believe the weakness in local markets will continue into 4Q, and in conjunction with indications from our channel checks that business will continue to be sluggish for the remainder of the year (i.e., esp. in NYC, LA, Chicago where buyers are waiting for the PPM rollout before placing late year business) we estimate industry revenues to be down 3% in 4Q," he said.

Looking ahead at Radio One
CEO Alfred Liggins and CFO Scott Royster are seeing more of the same coming up in Q4, meaning continued sluggishness in the radio business. Radio One stations face a particular challenge in overcoming the lack of political revenue which rolled in last year in Baltimore, Washington DC and all of its Ohio markets. Liggins said he was pleased that his stations were doing as well as they were given this obstacle. The company sees upside in several markets, including Atlanta, Dallas, Cincinnati, maybe Washington DC. And given that Philadelphia has been a "disaster," it has almost nowhere to go but up. There's room to grow in Houston as well, although they are still on the Arbitron PPM shakedown cruise there making accurate prognostication difficult. Liggins noted that the new ratings regime was experiencing growing pains but otherwise offered no particular criticism of it. The company has no plans for additional station sell-offs, and indicated it would be open to strategic acquisitions if they make sense, not that there seem to be any on the horizon (Liggins offered a pipedream about a duopoly acquisition or LMA in Los Angeles). It is looking to expand Reach Media, upgrade its internet presence, and keep on doing what it's doing with TV One. They noted that getting carriage on Echostar and Cablevision would be the best possible event to spur growth there.

Civil rights leaders want task force
Concerned that further media consolidation will make it even harder to address the lack of minority presence among the nation's broadcast license holders, a coalition of 21 groups has fired off letter to FCC Chairman Kevin Martin (R) asking for "an independent task force to study the media diversity crisis before moving forward with any new media ownership rules. They said that an "uninformed rush to eliminate ownership limits may set back the expansion of minority ownership by a generation and leave us little recourse." The group is not impressed with FCC action thus far. "The Commission already labors under a credibility deficit on this issue. Minority ownership is in crisis precisely because the FCC has long neglected to consider the issue as a critical public policy goal. The frustration is not limited to our community. The U.S. Third Circuit Court of Appeals admonished the FCC for failing to address the issue of minority ownership."

They said that a task force should be established, and its first act should be to get an accurate picture of the true minority and female ownership situation. Then it should work on improving those numbers. Only then should the FCC feel free to consider further deregulation. "The legacy of race and gender discrimination in the broadcast industry is a disgraceful reality in America today. It is not a problem that will be solved quickly or easily. But we must take the first step by truly understanding the nature and scope of our present crisis. History will not excuse ignorance as a justification for policies that further depress the level of minority ownership. We ask that the Commission take adequate steps to ensure that it makes the right choices to reach a long overdue justice on the issue of minority ownership in the broadcast media."
| Civil rights coalition members here |

RBR observation: If the FCC needs to outsource its most basic responsibilities, why bother to have the Commission at all? And don't put all of the blame on the FCC for the reduction in minority ownership. It was the US Congress that scrapped the minority tax certificate program, over the objections of the FCC and most broadcasters - indeed, most thinking people.

Will Regent sell again?
Having recently sold off its smallest market, Watertown, NY, and a couple of AMs, Regent CEO Bill Stakelin was asked during his quarterly conference call whether he has a for sale sign hanging on any other assets. "We've never limited our options, and that includes whether or not we're talking about a merger, a sale, or acquisitions, as you're very aware. We don't have any plans right now, but we certainly consider any and everything that comes onto our radar screen that would be for the benefit of the shareholders. We'll continue to do that," Stakelin replied. The CEO said the Watertown sale was a continuation of divesting the company's smallest markets, following earlier sales of Redding and Chico, CA. He said Regent had planned to sell of the Buffalo AM from the time it acquired the cluster from CBS and the recent AM sale in Albany was the result of someone bringing Regent a good offer.

Cox Radio Q3 revenues down slightly
Cox Radio's Q3 net revenues were 111.8 million, down 0.8% from Q3 2006. Local revenues decreased 0.9% and national revenues decreased 5.2%, each as compared to Q3 2006. Other revenues increased 13.1% as compared to Q3 of 2006, primarily due to a 19.7% increase in Internet revenues during the comparable period. Stations in Atlanta, Birmingham and Greenville delivered revenue growth in the quarter, while stations in Miami, Tampa, San Antonio, Jacksonville, Houston and Dayton were down. Revenues in Atlanta, CXR's market, were up 8.7% in the quarter.
| Read More |

No big story? Hit the election some more
The previous week's big story, the California wildfires, was still smoldering enough to capture third place of total media news coverage, but it was with a mere 4% as lack of a truly major event tended to diversify and dilute editorial story options. For the most part, the media fell back on the 20080 presidential campaign, led by radio and cable TV, which gave the story 28% and 27% of coverage time and propelled it to the top of the chart as the only double-digit tale, according to the Project for Excellence in Journalism coverage chart for the week of 10/28/07-11/2/07. It was a slow week for the Middle East -- usually you can add up several segments of coverage focused on the region and easily climb into double-digits, but this week three categories combined for only 8%. The previous week featured diverse coverage as well, but that was in large part due to the voracious consumption of the California fire story, which ate media time and space along with chunks of the unfortunate state. Thus the biggest story to entirely disappear from the coverage chart, health care, had only had a 2% share to dissipate.
| Top ten lists here |


Get It? If you don't, you just
may be missing out.
Enhanced data Messagecasting on FM, HD Radio and Internet streams can make your station more competitive. Watch BE's online demos. There is one for programming & promotions, one for sales and one for engineering & IT.

Wall Street Business Report TM
Regent sees Q4 growth
After reporting same station revenues down slightly in Q3, although revenues including acquisitions were up nearly 25%, Regent Communications surprised analysts by projecting that Q4 same station revenues will be up despite the tough ad market. CEO Bill Stakelin says one month is already in the bag and pacings are ahead. So, Regent is forecasting that Q4 same station revenues will be up in the low single digits. For Q4, revenues were up 24.9% to 25.7 million, including recently acquired stations. On a same station basis, they were down 0.8%. Station operating income shot up 37.8% to 9.5 million. Same station operating income was up slightly, the company said.

Radio One recording in red
Bear Stearns thought Radio One's Q3 results were a little better than expected; others thought they underperformed; but whether or not you were an optimist or pessimist heading in, there's no denying the company was down year-over-year. Net revenues decreased 1.7% to 90.4M, and would have been a bit worse were it not for the performance of magazine Giant. Continuing challenges at KKBT-FM in Los Angeles were a large part of the problem, not to mention difficult comps caused by lack of political revenue this time around. The bottom line was a 3.7% drop in same-station results. The company is well into its program of spinning off non-core radio properties, with closure on about 130M worth of value and another 20M of so to go. The company said its basic cable offering TV One was doing very well.

Lincoln boosts dividend
Lincoln Financial Group has boosted its dividend by two cents per share to 41.5 cents. It's the 25th straight year that the company has increased its dividend. The higher dividend will be paid February 1, 2008, to shareholders of record on January 10th.

Ad Business Report TM

Cox Radio's Bob Neil still outspoken on PPM
On yesterday's Cox Radio Q3 conference call, CEO Bob Neil spoke about strong categories for the quarter and commented as well on the ongoing issue of PPM-one that he has been quite outspoken about over the last year or so. While noting in our story in Radio News that his Houston stations are doing well with PPM so far, "...we're not pleased at the continuing sample problems in Houston, although they're gradually improving there-but not fast enough. And you know from Beasley's call yesterday, Philly is not making much progress." He also noted that they are not happy with a methodology that was virtually guaranteed by Arbitron to increase market revenues is causing them to decline: "September was the first month where virtually all of the business was placed off of PPM currency and the market was down a disappointing 5% compared to the market being up 1% through the first six months of the year."

He further cautioned that if the scenarios of Houston and Philly are repeated in the largest radio markets getting ready to roll PPM out-NYC, LA and Chicago and Long Island-both in sampling and revenue, it's not going to be pleasant." He said that Arbitron cannot continue to defend sampling that results in demos' sampling targets at 50-60% of their target..."they can't continue to defend that that is accurate information. If that's so, then it doesn't make a lot of sense to have a sample target." Neil mentioned that the strongest ad categories for CXR in the quarter were Financial Services, up 19%; Telecommunications, up 9%; Home Improvement, up 18% and Grocery and Convenience Stores, up 45%. Softer Categories included Real Estate, down 22%; Hospitality, down 30%; Appliances and Electronics Retailers, down 37%; Automotive (still their largest category), down 12%.

Bob Neil: PPM generated
"tremendous amount of chaos"

On yesterday's Cox Radio Q3 conference call, CEO Bob Neil mentioned many of the agencies out there haven't been properly trained on the PPM transition. "Having said that, the agencies are going to use anything they can to try and negotiate with you on price. Arbitron was selling snake oil when they were trying to get everybody to sign up for this-that agencies will make this one-time conversion and what have you. Of course, that's unmitigated baloney...But at the end of the day there are a couple of things going on. There is a tremendous amount of chaos among the agencies trying to figure [this] out. Things have changed, so how do they use this information now? [with] most agencies there is no consistency at all in terms of whether they're going to use the most recent months; whether they're going use the a blended average of two, three or four months. It's all over the road. So whenever you have that kind of chaos in a market, it doesn't bode well for the revenue situation. This is probably about what we've seen in Philadelphia-they've pretty much stayed negative from the moment it was introduced."

RBR observation: Radio was down 7% in September-the marketplace is tough. A TV station that served the Philly market from Reading, PA was recently sold after bankruptcy-WTVE Ch. 51. So Philly, like many other markets, is losing dollars to other mediums. Can we blame PPM? Not completely, that's for sure. PPM is supposed to get more confidence and ad dollars from agencies-once it gets established and the bumps smoothed out. We hope that's sooner, rather than later.

Media Business Report TM
Tough times for newspapers
Circulation figures from the Audit Bureau of Circulations show that US daily newspapers lost 2.6% of their subscribers in the six-month period through September. Of the 20 largest newspapers, only three saw circulation rise. Gannett's USA Today, already #1 in circulation, posted a gain of 1.04%. Tribune's LA Times, #4, gained 0.5%, and the locally owned Philadelphia Inquirer, #16, was up 2.31%. Circulation declines among the big dailies ranged as high as Cox's Atlanta Journal-Constitution, #20, down 9.08%, and Belo's Dallas Morning News, #12, down 7.68%.

Media Markets & Money TM
Cumulus stocking
stuffers go into trust

In preparation for its plans to go private, Cumulus is anticipating the need to spin off properties in certain markets, and has arranged to put no less than 19 stations in 14 markets under the care and feeding of Scott Knoblauch under licensee name Stratus Radio LLC. Knoblauch's duties will be to run the stations and attempt to find third-party buyers for them. The shopping list includes:

WNZZ-AM Montgomery AL
KYNF-FM Fayetteville/Northwest Arkansas (Prairie Grove AR)
WZBN-FM & WNUQ-FM Albany GA (Sylvester, Camilla GA)
WMGB-FM Macon GA (Montezuma GA)
WTYB-FM Savannah GA (Tybee Island GA)
WKOR-AM Columbus-Starkville-West Point MS (Starkville MS)
WXKR-FM & WTWR-FM Toledo OH (Port Clinton OH, Luna Pier MI)
WSOM-AM & WLLF-FM Youngstown-Warren OH (Salem OH, Mercer PA)
WHLZ-FM & WCMG-FM Florence SC (Marion, Latta SC)
WJXY-FM & WXJY-FM Myrtle Beach SC (Conway, Georgetown SC)
KLTD-FM Killeen-Temple TX (Temple TX)
KGEE-FM Odessa-Midland TX (Pecos TX)
KOLI-FM Wichita Falls TX (Electra TX)
WOGB-FM Green Bay WI (Kaukauna WI)

Washington Business Report TM
Domenici joins sanity coalition
Senator Pete Domenici (R-NM) has fired off a letter to FCC Chairman Kevin Martin (R) asking that any plans to allow unlicensed devices to operate in the white spaces between television stations be put aside. "I am concerned about the ability to regulate or remedy this problem without time for more rigorous research, study and analysis," said Domenici. "Interference from personal and portable devices would also be particularly troublesome to my constituents in New Mexico who have recently purchased digital television sets or who plan to receive government subsidized digital-to-analog converter boxes." The NAB has been tracking the Congressional effort to hold off any further action on this front. Domenici becomes the eighth senator to express reservations, joining Mary Landrieu (D-LA), Charles E. Grassley (R-IA), Lindsey Graham (R-SC), Johnny Isakson (R-GA), Saxby Chambliss (R-GA), Olympia Snowe (R-ME) and Susan Collins (R-ME). And just in case anyone were to identify this as a Republican cause, 48 members of the House have also expressed reservations, including 25 Democrats and 23 Republicans.

Ratings & Research
Liberman, KJLH sign for PPM
Arbitron announced that Liberman Broadcasting had signed a five year contract for Portable People Meter (PPM) data. The Spanish language radio and TV specialist has 16 stations in three markets, Dallas, Houston and Los Angeles, which are covered by the PPM agreement. Also this week Arbitron announced the signing of a PPM agreement with KJLH-FM Los Angeles. The independently owned and operated Urban AC station is owned by Stevie Wonder's Taxi Productions.

PPM seen impacting Summer ratings
The analysts at Bear Stearns have been crunching Arbitron data (Adults 25-54) from the Summer ratings period. They found that several major groups posted revenue weighted ratings declines: SBS (-15.3%), Salem (-9.4%), Radio One (-6.0%), Univision (-4.7%), Emmis (-3.1%), Cumulus (-2.0%), CBS Radio (-1.4%), Clear Channel (-0.8%), Citadel (-0.8%) and Cox Radio (-0.8%). Three of those groups have something in common, the analyst team of Christopher Ensley, Victor Miller and Tracy Young noted, Radio One, CBS and Univision all have stations in both Houston and Philadelphia, the two markets where the ratings data was gathered by PPM. Excluding Houston, they noted, Univision would have had one of its better ratings periods. In fact, excluding both Philly and Houston, Clear Channel, CBS, Radio One and Cox Radio would have been flattish to slightly up, rather than in negative territory.

Spanish-language ad spending
remains strong
Total ad spending in Spanish-Language media for the first half of 2007 reached 2.87 billion, reporting a 2.3% increase over the same time period last year, according to Nielsen Monitor-Plus. Spanish-Language ad spending continues to be on an upswing with increases reported for all monitored media, with the exception of local newspapers. Spanish-Language Cable TV and National Magazine showed particularly large gains due to increases in media measurement. With 105.8 million, Broadcast Media Partners (parent of Spanish-Language media company Univision Communications), is the largest advertiser across all Spanish-Language media. However, non Spanish-Language media companies comprise the remainder of the top 10 advertisers for the first half of 2007. Three automakers are in the Top 10, representing a total spending of 146.4 million targeted towards Spanish-language media in the first half of this year. Spending for the top 10 categories on Spanish-Language media reached over 1.1 billion for the first six months of this year. The Automotive category had the most spending at 316 million, more than double the dollar amount of the number two category, Wireless Telephone services at 140 million. Verizon (36 million), AT&T (33.1 million), and Sprint Nextel (26.6 million) were the top three Wireless Telephone Service companies.

1.3B The deal to take Cumulus Media private has hit the FCC database, with Lew Dickey Jr. going from being CEO of a public company to a private one, bringing in new private equity partners to cash out his former shareholders. The entire list of stations being transferred is within.
| Read More |

Stock Talk
Market up on oil price rise
Energy and tech issues took the stock market higher on Tuesday as oil surged to a record high above 97 bucks per barrel. The Dow Industrials were up 118 points, or 0.9%, at 13,661.

Radio stocks missed the bus. The Radio Index was off 0.694, or 0.6%, to 115.297, once again the low since October 17, 2000. Regent Communications fell 5.2%, despite forecasting an up quarter for Q4. Radio One Class D fell 4.1% after its quarterly results were posted. The Class A stock was down 3%. Cox Radio also reported - and finished flat.

Radio Stocks

Here's how stocks fared on Tuesday

Company Symbol Close Change Company Symbol Close Change




















Journal Comm.







Lincoln Natl.




Citadel CDL
4.08 -0.04

Radio One, Cl. A




Clear Channel




Radio One, Cl. D




Cox Radio












Saga Commun.




Debut Bcg.




Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Westwood One








XM Sat. Radio





Send Us Your OpinionsWe want to
hear from you.

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

A reader responded to our comment about the seeming lack of radio buzz in our home market...

Creativity seems to have taken a back seat, PERMANENTLY! Everybody wants to be safe, but today's listener seems to want variety and a bit of "take it to the edge" programming. Give us something we cannot find on our IPOD, entertain us again....please?

Robert T. Ganzak
Fusion Creative Marketing,
Valdosta GA

Below the Fold
Ad Business Report
Still outspoken on PPM
Cox Radio's Bob Neil noted they are not happy with a methodology...

Media Business Report
Tough times for newspapers
Circulation figures US daily newspapers lost 2.6%...

Media, Markets & Money
Cumulus stocking stuffers
Go into trust in prerp for plans to go private...

Ratings & Research
PPM seen impacting
Summer ratings and analysts at Bear Stearns have been crunching...

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Radio Media Moves

Cunningham to SBS
Spanish Broadcasting System has named Joseph M. Cunningham as the Company's Vice President and General Manager in San Francisco, where SBS owns KRZZ-FM "LA Raza 93.3." He was most recently GM for Clear Channel Radio in San Francisco-San Jose.

Joining Border
Border Media Partners announced that Joan Leonard has been appointed Senior Vice President and Controller of the Company. Leonard is a veteran of Salem Radio Network, Susquehanna Radio Corporation and Cumulus Media Partners.

More News Headlines

advising Interep

Interep says in an SEC filing that it has retained Jefferies & Company as its exclusive financial advisor as the company continues efforts to restructure its 10% Senior Subordinated Notes, due July 1, 2008, along with helping to more generally enhance Interep's financial framework. "Jefferies is providing advice and assistance in connection with analyzing, structuring and effecting these transactions, including participation in negotiations with the holders of the Senior Notes, our preferred stock and other interested parties," Interep said.

More work for Eddie
The Fritts Group, headed by former NAB President Eddie Fritts, is now lobbying the federal government on behalf of the Motion Picture Association of America. The AP says the trade group's hiring of Fritts to lobby on intellectual property issues was disclosed in a government filing.

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

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.

RBR observation: 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?
11/06/07 RBR #217

Beasley blasts Philly PPM
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.

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. There is more in this issue of RBR. See what Saga had to say.
11/06/07 RBR #217

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]

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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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