RBR's Daily Morning Epaper

7 Weeks Left to maximize your inventory in '06. Help your staff hit year end budget.
Encourage them to Sign Up today for a Trial RBR Read.
Trial Subscription Sign Up

Volume 23, Issue 223, Jim Carnegie, Editor & Publisher

Wednesday Morning November 15th, 2006

Radio News ®

Is today the day?
We told you the auction of Clear Channel Communications would move very quickly. CNBC, which appears to have good sources in the private equity community, says an announcement could come before this morning's opening bell at the NYSE of the winning bidder for the nation's largest radio company. The announcement will be surprising only if it is not the private equity consortium aligned with the Mays family, consisting of Providence Equity Partners, KKR and Blackstone. Reuters reported that a second bid was submitted by Bain Capital and Thomas H. Lee Partners, although Texas Pacific Group dropped out of that consortium before it submitted its offer for CCU. Wall Street buzz puts the pricing in the 36-37 bucks per share range. Add in over eight billion of debt and that would value Clear Channel at around 25-26 billion.

Time to bail on Cox stock?
Analyst Mark Wienkes has put Cox Radio on the Goldman Sachs "America's Conviction Sell List." He thinks the stock is overpriced, based on overstated expectations that Cox Enterprises will buy out the public shareholders. More importantly, while several radio groups have indicated a pickup in business for Q4, Wienkes is not impressed. "We think 'situational growth,' that is, growth aided either by political dollars or political crowd-out, easier comps, better station ratings or other one time items is masking the weak underlying trends and that as we approach Q1 2007, a truer picture of the still soft core ad trends will become clearer," he said in the "sell" call for Cox Radio. Wienkes set a 12-month target price of 12.50 for Cox Radio. The stock closed yesterday at 17.16.

2006 political pegged at 2.1B
...and that's just the total for television. Analysts from Bear Stearns and TNS Media Intelligence said the 2.1B total amounted to a near doubling of political spending compared to the last midterm in 2002. And that's just election cash. Another 344M was dropped into issue ads. Victor Miller and Tracy Young hosted yesterday's session on political spending, prominently featuring TNS's Evan Tracey. He noted that 760M went into federal races and 1.3B into state races. On the federal side, the Democratic tide seemed to fuel last minute bet-hedging from K Street, giving blue candidates a financial edge and fueling hot spending levels right down to the wire. For example, 76% of total spending occurred in last 60 days, and 52% in the last 30 days. Another unusual trend, which Tracey said he has not seen in some time, is that the competitive landscape actually expanded as the campaign season wore on, as opposed to normal years when the eventual winners pull away. This time, challengers instead were making up ground, causing national organizations to send large shipments of cash to places they hadn't paid attention to in years. At the same time, incumbents in what were normally safe seats ended up spending a lot more than usual just to maintain their separation for their challenger, and of course, many of them were not successful in the attempt. The large number of governorships up for grabs fueled state spending, which remained heated as candidates running lost causes went ahead and emptied their warchests anyway. A lot of cash was also invested in promoting or attempting to defeat numerous ballot initiatives. The combination of an expanding battlefield, the late influx of cash from bet-hedgers put great pressure on rates, in some places driving them up four or five times over rate card. Tomorrow: A look ahead.

RBR observation: The positive in all this for radio is that intense pressure on television inventory can send spillover business to the audio-only medium. We can also attest to the fact that, in our market - we're located in the Washington DC metro area - we had hot races in both Maryland and Virginia, and at the very least, Bonneville's All-News WTOP seemed to be getting plenty of political business. It will be incumbent on radio to make itself better known to the people who make political buys before the 2008 season kicks into gear.

VNRs back in the spotlight
Watchdogs at the Center for Media and Democracy and Free Press released an update on their study on the use on undisclosed corporate video news releases (VNRs) on local news programming. They found 54 VNR broadcasts on 46 stations, with only two airings clearly sourced. Further, they claim that 90% made no attempt to source the segments at all. The study is back upped with video of the offending VNRs. This follows a study which cited 77 stations for the practice. CMD says at least eight of the original 77 showed up again on this round, and cite it as evidence against requests from industry organizations such as Radio-Television News Directors Association (RTNDA) and the National Association of Broadcast Communicators (NABC) who are asking that the investigation be dropped in favor of industry self-regulation. "Some stations have developed such an ingrained pattern of running VNRs that even a direct investigation by the FCC isn't enough to snap them out of it," said FCC Commissioner Jonathan Adelstein. "Maybe some have run so many red lights it seems like the normal way to drive. It's time to start handing out citations." VNR unsourced sources included General Motors, GlaxoSmithKline, Allstate Insurance, Novartis and a lobbying firm that represents ExxonMobil, and TV groups airing them included News Corp., Tribune, Gannett, Disney, the Washington Post Co., Sinclair Broadcasting, Media General and Univision. The watchdogs have a serious inside connection which will give their charges more teeth than is sometimes the case in the person of Adelstein, who is calling for the latest crop of stations to be added to the ongoing investigation.

RBR observation: According to CMD, one of the VNRs "claimed that there is no link between global warming and more severe hurricane activity." That is a controversial statement, and one would not have to go far to find an environmental scientist to refute it. The fact that it was the one from Exxon is a problem - the kind that is likely to draw serious attention from regulators. The good news, we suppose, is that the great majority of stations have not been cited for failure to source VNRs. They do have their uses, but using them improperly with watchdogs on the job is just asking for trouble.
| Read Commissioner Adelstein's comments here |

Randy Bongarten makes a big TV buy
Long-time Emmis radio guy Randy Bongarten, who most recently ran the Emmis TV group before the company decided to sell it off, is back in broadcasting as a TV group owner to be. The television group assembled by BlueStone Television LLC is going lock, stock and barrel to a new company, Bonten Media Group, headed by Bongarten and backed by Diamond Castle Holdings. And the 230M acquisition is only the beginning. "We expect the BlueStone stations to be the first of several acquisitions," said Bongarten. "Bonten Media Group and our sponsor, Diamond Castle Holdings, maintain a strong belief in the future of television and the central role it will continue to play in America's local communities." He made a commitment to providing quality news and entertainment at each property. The group includes ABC affiliates in Greenville-New Bern-Washington NC, Chico-Redding CA, Abilene-Sweetwater TX, Eureka CA and San Angelo TX. It also features NBC affiliates in Tri-Cities TN-VA, Missoula MT, and Butte-Bozeman MT. The group features numerous LPTV satellites, reflecting the rural nature of most of its markets. BlueStone is backed by Providence Equity Partners. Closing is expected in the first half of 2007.

RBR observation: What do the private equity guys know that investors on Wall Street are missing? Providence Equity Partners, on the selling side in this case, is already an investor in Freedom Communications, will soon be a co-owner of Univision, and is bidding for Clear Channel. There is apparently still some money to be made in "old media."

Wall Street Media Business Report TM

Interep reports restructuring quarter
Early retirement buyouts of 13 executives had an impact on Q3 results for Interep. Those five million in costs over several were not all actually paid out during the quarter, but had to be immediately expensed for financial reporting. Commission revenues during the quarter were down 11.3% to 17.9 million, but that was attributed almost entirely to the loss of Radio One as a rep client, although Interep also noted "a general softness in national radio advertising." The operating loss before depreciation and amortization was 3.8 million, versus operating income of eight million a year ago. The bottom line net loss, including that five million in severance costs, was 9.5 million, compared to net income of a half million a year ago. Interep does not conduct a quarterly conference call with analysts.

Ad Business Report TM

Radio less cluttered than TV
Empower MediaMarketing has conducted an analysis of radio advertising clutter in 15 markets, identifying the most and least cluttered locales and station formats, and supporting Clear Channel Communications' contention that its "Less is More" initiative has resulted in less commercial interruption of programming. Empower's analysis of Nielsen Monitor Plus data from the nation's top 14 markets plus the agency's home market of Cincinnati revealed the following:
| Read More... |

JRN to handle sales for "Troop Talk"
Jones Radio Networks has added Troop Talk: Voice of the Troops to its impressive talk show roster. JRN will handle both advertising sales and affiliate sales for the program. "Jones Radio Networks is very excited about representing Troop Talk," said Amy Bolton, VP/GM of News/Talk, JRN. "This show is about connecting our soldiers serving overseas to their families and their country. It isn't about taking a political stance on the war; it's about supporting our troops." Through engaging, live interviews with U.S. military members who have served and continue to serve, Troop Talk hosts Capt. Trip Bellard and civilian Leah Lett give listeners a unique, first-hand account of what's really happening in the global war on terror. Bellard graduated from the United States Military Academy at West Point and received the Bronze Star for his service in Iraq. Troop Talk was conceived after Bellard was invited to appear on a radio program to share his Iraqi war experiences. His interview received an overwhelming response from listeners and Troop Talk soon followed. Troop Talk can be heard each Sunday from 10:00 a.m.-Noon ET.

KFC brands where no brand
has branded before
No joke - KFC became the world's first brand visible from outer space by unveiling a record-breaking, 87,500 square-foot updated logo of its iconic founder, Colonel Sanders, in the Area 51 desert. The event marks the official debut of a massive global re-image campaign that will contemporize 14,000-plus KFC restaurants in more than 80 countries. The image of the Colonel was captured by GeoEye's IKONOS satellite while orbiting 423 miles above the Earth. "The Colonel is truly a global icon and we want everyone in the universe to see KFC's new look of the future," said Gregg Dedrick, president of KFC Corp. "KFC is boldly going where no brand has gone before as Colonel Sanders takes one small step for humankind, but one giant leap for fried chicken." The giant Colonel Sanders logo was built off The World's Only Extraterrestrial Highway in Rachel, Nevada, also known as the "UFO Capital of the World," and the epicenter of inter-galactic communication (see kfc.com).

Media Markets & Money TM

Group Crams one into to Syracuse
Craig Fox's Cram Communications is getting a bargain basement fill-in for its Syracuse NY cluster. WAMF-AM, licensed to Fulton NY, is coming from Donald de Rosa. After plunking down a 500 dollar deposit, Fox will only have to come up with another 8K to complete the purchase. The budget rack price is explained by the way the station is listed in the FCC database: licensed and silent. An STA has been applied for to get it back on the air. Provisions have been made for de Rosa to pick up at least a little bonus in the form of a 200/month LMA until closing. Cram already has WOLF AM & FM, WVOA AM & FM and WSIV-AM in the market.

Washington Media Business Report TM

One down, one scheduled, four to go
The second of six FCC-sponsored public forums on media ownership has been announced. This one will be in the back yard of Commissioner Deborah Taylor Tate, in Nashville TN. "I am extremely pleased by the announcement that the Federal Communications Commission will hold its second media ownership hearing in Nashville, my hometown, next month," she said. " Known as 'Music City, USA' because of its vibrant entertainment industry, Nashville is home to some of the greatest songwriters and musicians in the world. It is hard to think of a more appropriate location for discussing how the Commission's rules may affect these artists and their audience. I look forward to hearing from the music industry, the media, and the public."

RBR observation: If they do one a month, they could wrap up the forum portion of the proceeding by April. Of course, it could be wrapped up earlier than that if they space them closer together. What's interesting is that Nashville, following Los Angeles, makes it two markets out of two featuring a large concentration of creative community members. Looking ahead, Will Sen. Byron Dorgan (D-ND) have his wish for rural forum fulfilled? Will Sen. Barbara Cantwell (D-WA) get one in the Pacific Northwest? Will it matter, or will it be the same procession of axe-grinders that usually show up to these meetings? Time will tell...

NABOB wants to tune in to member's local gripes
The gripes the National Association of Black-Owned Broadcasters is interested in specifically are those concerning the court-remanded look at media ownership rules. It has already filed comments opposing any further deregulation, saying under current rules, African American ownership of broadcast stations has declined 20%. It's looking to members for information to include in reply comments due no later than 12/21/06. "We would like to include in our Reply Comments specific examples of situations where the current ownership rules have had a negative impact on the ownership of broadcast facilities by minorities. We ask all NABOB member stations to provide information to NABOB about the impact of consolidation upon your stations and upon the communities you serve."

Internet Media Business Report TM

Vodafone and Yahoo! to launch
advertising on mobile devices
Vodafone and Yahoo! have formed a strategic alliance to pool their expertise to create an innovative mobile advertising business that will enhance the customer experience on mobile phones while providing both companies with a new revenue stream. Through this alliance, Yahoo! will become Vodafone's exclusive display advertising partner in the UK. Yahoo! will use the latest technology to provide a variety of mobile advertising formats across Vodafone's content services. Yahoo!'s sales force and technology team will work with Vodafone to derive benefit from mobile's ad opportunities. Vodafone and Yahoo! intend to roll out the initiative in the UK in the first half of 2007. Under the plans, customers who agree to accept carefully targeted display ads can expect to enjoy savings on certain Vodafone services. This proposition could extend to key Vodafone mobile assets including the Vodafone live! portal, games, television and picture messaging services.

Ratings & Research

Time for radio to take some chances
by John Snyder, VP/Portable People Meter Sales, Arbitron

"Time for radio to take some chances." That was the headline on a daily fax after a group panel that took place at the NAB in Dallas. Cumulus' Lew Dickey said, "We can't be afraid to fall on our faces."

There are probably very few in the radio industry who would disagree that radio needs to step out on a limb and take some chances. There are also probably very few who would disagree that better programming is key to a healthy industry. So why doesn't it happen more? Is it that the industry doesn't have the creative minds to come up with new content? Why can television run shows for a couple weeks and dispose of the ones that are failures? I would argue that one of the major reasons why there is less experimentation in radio has to do with the measurement system. Think about it for a second. You go ahead and try a new morning show or switch your music, and then what? You wait and wait. The trend comes out and after reverse engineering the square root of pi you still aren't sure if the change in programming is working for or against you. Finally the book comes out and everyone agrees that you need to wait for another book before making a final call. By the time the second book is released (six months later), you no longer have an experiment on your hands; you have missed revenue on your shoulders. That's a high price to pay for creativity and I would contend one of the major reasons why we don't see radio trying more innovative programming. Enter PPM and electronic measurement. Seems like a strange hero to come to the aid of creativity in radio, but it might just hold the key. How?
| Read more... |

Transactions

650K WNNG-AM Macon GA (Warner Robins GA) from Chase Broadcasting Inc. (Gordon Van Mol) to Georgia Eagle Broadcasting Inc. (Joe Sam Robinson Jr., Cecil Pope Staton Jr.). 100K down payment, balance in cash at closing. Staton has interest in Staton Broadcasting, resulting in duopoly with WRPG-FM & WQXZ-FM and overlap with WCEH-AM Hawkinsville, which is not considered part of Macon market. LMA 10/30/06. [File date 10/30/06.]

600K WRIA-FM Peoria IL (Farmingtno IL) from AAA Entertainment Licensing LLC (Peter H. Ottmar) to IM IL Licenses LLC, a subsidiary of Independence Media Holdings LLC (David F. Jacobs). 30K deposit, balance in cash at closing. Superduopoly with WXMP-FM, WPIA-FM, WWCT-FM. LMA 9/19/06. [File date 10/30/06.]

Stock Talk

A record for the Dow
Stock prices rose Tuesday as Federal Reserve Bank of St. Louis President William Poole said the Fed's rate policy is "about right." That indication that the Fed will leave rates unchanged for a while sent the Dow Industrials up 86 points, or 0.7%, to 12,218, breaking the record set last week.

Radio stocks also gained. The Radio Index rose 1.021, or 0.7%, to 152.947. Journal Communications jumped on the sale of its telecommunications business. It was up 4%. Cumulus gained 2.4%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		44.90	+0.82	Hearst-Argyle	HTV		25.72	+0.11
Beasley	BBGI		6.93	-0.10	Journal Comm.	JRN		11.96	+0.46
CBS CI. B	CBS		29.58	-0.43	Lincoln Natl.	LNC		65.05	+0.46
CBS CI. A	CBSa		29.59	-0.41	Radio One, Cl. A	ROIA		7.05	+0.13
Citadel	CDL		10.49	+0.14	Radio One, Cl. D	ROIAK		7.06	+0.15
Clear Channel	CCU		34.11	-0.27	Regent	RGCI		3.57	+0.02
Cox Radio	CXR		17.16	+0.10	Saga Commun.	SGA		8.52	-0.15
Cumulus	CMLS		11.43	+0.27	Salem Comm.	SALM		11.54	+0.06
Disney	DIS		32.53	+0.27	Sirius Sat. Radio	SIRI		4.10	+0.01
Emmis	EMMS		12.86	+0.14	Spanish Bcg.	SBSA		4.03	+0.01
Entercom	ETM		30.08	+0.50	Univision	UVN		35.39	+0.14
Entravision	EVC		7.29	+0.08	Westwood One	WON		6.66	+0.01
Fisher	FSCI		44.00	-0.03	XM Sat. Radio	XMSR		13.99	+0.34
Gaylord	GET		49.96	+0.61	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]

Below the Fold

Ad Business Report
Radio less cluttered than TV
An analysis says so after viewing in 15 markets...

Media Markets & Money
Group Crams one into to Syracuse
Getting a bargain basement fill-in for its cluster...

Washington Media Business Report
One down, one scheduled
Four to go the 2nd of 6 FCC sponsored public forums...

Internet Media Business Report
Vodafone and Yahoo!
To launch advertising on mobile devices...

Ratings & Research
Radio to take some chances
We can't be afraid to fall on our faces...

Stations for Sale

South Georgia
AM-FM-LPTV Combo
Includes 25kw FM
Zoph Potts @ (252) 940-1680
[email protected]

Radio Media Moves

Oshin returns
Entercom announced that Steve Oshin has rejoined the company as VP/GM of KMTT-FM & KKWF-FM, two of Entercom's seven stations in Seattle. Oshin spent the last two years as Director of Online Sales for the Seattle Times.

Upped at Zapoleon
Mark St. John has been promoted to Sr. VP of Zapoleon Media Strategies. He has been with the consulting firm since 1995, following a long career programming local radio stations.

USRN expands
United Stations Radio Networks announced two additions. At USRN's New York office, Jim O'Neal will serve as a Senior Account Executive. O'Neal most recently was the Northeast Director of Sales for Arena Media Networks, a digital out-of-home advertising company. The USRN Los Angeles office sees the addition of Laurie Nickoloff to its Affiliate Relations staff, handling regional duties for the company's programming, production and prep services. She handled Affiliate Relations and Marketing for Premiere Radio Networks morning show division and most recently produced and marketed Rockline.

O'Reilly gets Jacked
SparkNet Communications, the exclusive US licensor and owner of the Jack-FM format, announced Mike O'Reilly as the newest member of their consulting team. Prior to joining SparkNet, Mike was the PD at KCJK in Kansas City, where he oversaw the launch of the Jack format in October 2004.

Chase to San Antonio
Cox Radio announced the appointment of Randy Chase to Program Director for KCYY-FM and KKYX-AM San Antonio, TX, effective November 17th. Chase has more than 20 years of radio and record management experience.

RBR Radar 2006

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

Bidding heats up for Tribune
It seems that once the initial bids from private equity firms came in on the soft side, other suitors decided to take a fresh look at Tribune Company. So while the company is busy soliciting bids for the pieces, new bidders are emerging for the entire thing. The latest rumor, first reported by the Wall Street Journal, has Gannett Company in line.

RBR observation: Should Gannett emerge the winner, we would not expect it to get back into the radio business. Rather, it would likely sell WGN-AM to whoever buys the Chicago Cubs. We also don't see Gannett wanting to be a sports team owner. The newspaper giant most likely is primarily interested in the Chicago Tribune, Los Angeles Times and New York/Long Island Newsday.
11/14/06 RBR #222

Sirius wants satellite radio
without satellites
Sirius Satellite Radio now wants to extend its service to Alaska and Hawaii. What is different about this is that the company has no plans to launch any satellites that would provide the service. Rather, it has applied to the FCC to extend its existing special temporary authority to operate terrestrial repeaters

RBR observation: Can you say slippery slope?
11/14/06 RBR #222

Is 40 bucks the target?
That is the rumor on The Street - that Goldman Sachs is trying to get bidders for Clear Channel Communications to 40 bucks - or more. The stock closed Friday, 11/10/06, at 34.97, but had been at 32.35 before the company announced last month that it was putting itself up for sale. It peaked at 95.50 in January 2000, but that is ancient history.

RBR observation: Look for this to move very quickly, much like the Univision auction. We won't likely hear anything official today or tomorrow, but rumors about the bids will swirl this week and a final decision should come in just a matter of days, not weeks. Another good reason is from 2000 at 95.50 to today at 34.97 time to take it and run. What does the price from 95.50 to 34.97 tell ya over the past few years? Hey, now the guys in San Antonio are just one of the players.
11/13/06 RBR #221

Download Now
October '06 RBR/TVBR Solutions Magazine

Read the pdf version from the link below or right click and choose "Save Target As" to save the pdf.
Read the October
RBR/TVBR Magazine

This pdf requires
version 6.0 or later. Use this button to update now.

Research Director
TVB (Television Bureau of Advertising) New York City Experience in media sales research/market research. Knowledge of: Nielsen NTI & NSI, TNS, Polk, Scarborough, MRI, Excel/PowerPoint. EOE
See TV Careers

Account Executive
KUVN TV 23 Univision Dallas looking for a bright and dynamic advertising executive. Must have Bachelor's deg. in Marketing or related field and at least 3 years of experience in electronic sales. EOE.
See TV Careers

Account Executive
KSTR TV 49 TeleFutura Dallas Join a fast growing sales force. Ideal executive will have Bachelor's degree in Marketing/related field and or at least 1 year's experience in advertising electronic sales. Spanish-English is preferred, but not req. EOE.
See TV Careers

Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.

Other Links

State Associations

Contact Us

Help Desk

__FIRST__ __SECOND__ :
Having problems with our epapers?
Please send Questions/Concerns to:
[email protected]

If you wish to remove your name completely from our database use this link __UNSUB__

RBR Epaper -- 108 annual
or just 9 a month