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Volume 22, Issue 225, Jim Carnegie, Editor & Publisher

Wednesday Morning November 16th, 2005

Radio News®

RBR observation:
What's ABC Radio worth?
As we wait to find out - - perhaps as soon as next week - - whether Disney is going to divest ABC Radio, it's time to take out our calculator and figure out the likely price tag. A few months ago we would have said that the O&O group and ABC Radio Networks combined (without the ESPN Radio and Radio Disney networks and stations) should carry a cash price tag of 4-5 billion. But after seeing the poor pricing for Susquehanna Radio, the market now appears to be much weaker. Our sources indicate that the ABC station group should have about 450 million in revenues this year. If you apply a 40% margin, that's about 180 million in broadcast cash flow (BCF). The networks are said to bill around 250 million. That margin is likely lower, so we'll estimate 30%, for 75 million in BCF. Since the tax-advantaged structures are likely to be similar, if we use the 13 times multiple from the Susquehanna sale as the benchmark, the ABC Radio O&O group price tag comes to 2.34 billion and the networks to 975 million, for a total of 3.315 billion. Without the tax benefits, an equivalent cash sale would come in around 3.8 billion. Still not an impressive price for these beachfront, irreplaceable properties. We wait to see what Disney CEO Bob Iger will do.

Tough October all over at Tribune
Look at any segment at Tribune Company and you'll see that revenues were down in October. All in all, companywide revenues were off 3.5% to 439.2 million. TV group revenues fell 9.7% to 98.8 million - - not as bad as many of its peers, actually, since Tribune's stations didn't have as tough of comps from political advertising a year earlier. However, the company said auto advertising remains soft in many of its TV markets. "Weakness in the auto, retail and restaurant/fast food categories was partially offset by increases in movies and financial/legal," Tribune said of its TV business. Radio/entertainment revenues fell 36% to 10.6 million, due to having five fewer Chicago Cubs games in the month this year. For the entire Broadcasting/Entertainment operation, October revenues were down 13.2% to 109.4 million. Tribune's newspapers also took an October hit, with revenues down 0.2% to 329.8 million. That was mainly due to a drop in circulation revenues. Ad revenues crept up 1.4% to 264.5 million, with retail down 2%, national up 2.2% and classified up 4.7%.

Broadcast vet wants to relicense DJs
Longtime radio warrior Tom Joyner - - the other Tom Joyner for those of you familiar only with the great Urban living legend - - has taken to the pages of the The News & Observer in Raleigh-Durham with a proposal to bring broadcast indecency back under control. Joyner contends that Congress is wasting its time talking about ever stiffer fines levied on station owners. He agrees that owners are responsible for policing the airwaves, and says that most do so to the best of their ability. However, the FCC has been levying record fines, and the problem persists. More of the same from Congress, he say, will have no greater success. What is the key element of Joyner's solution? The return of FCC board operator licensing. A board operator is another way of saying DJ. Joyner said that when that licensing was discontinued, "...the era of 'shock jocks' dawned." Bringing licensing back would give air talent a stake in the matter. "Shock jocks could care less when the FCC fines someone else, but when the money comes from their own pockets it will get their attention," he wrote. "Repeated violations should result in a revocation of the offending DJ's license to broadcast. That would introduce them to a real world where saying 'Would you like fries with that' would allow them to exercise their vocal chords."

Miller, Anheuser-Busch
battling behind the scenes
Miller Brewing Company (MBC) says that rival Anheuser-Busch (A-H) is trying to strongarm cable operators into sitting on MBC ads which compare Miller Lite to Bud Light. Miller says its brew has more flavor despite recent changes in Bud Light, while A-B wants them to prove it before airing the ads. Miller says its scientists constantly monitor its competitor's brew, and have recently detected increased "bitterness units and carbonation levels." MBC further states that its comparative ads have been upheld in the past by the Alcohal and Tobacco Tax and Trade Bureau.

RBR observation: Let's say you prove that your competitor's product, whatever it may be, isn't worthy to grace the inside of a dumpster. That may convince a consumer to avoid it, but it does nothing to drive them to your product. All this squabbling is enough to make you buy nothing but imports.

Chicago TV stations face second renewal challenge
A local community newspaper is following the lead of Chicago Media Action and Media Access Project (11/3/05 TVBR #216) in challenging the license renewals of just about the entire television station lineup in that city via a petition to deny. The CMA/MAP challenge was over the alleged lack of local political coverage in the weeks leading up to the 2004 election. The latest challenge, from Third Coast Press, is much more general. It accuses the stations of marginalizing minorities, failing to provide adequate amounts of news and public affairs programming, overcommercialization, inadequate children's programming. The challenge veers into political waters, accusing the stations of "tacit support of elective mass destruction, civil and human rights abuses, torture, and mass murder."

RBR observation: Tough charges to make stick, don't you think? The CMA/MAP challenge will no doubt face tough sledding, even with the documentation those organizations have amassed. But Third Coast has slathered it on so thick that any merit the petition may have will be impossible to find under all the sensational language.

Adbiz©

More from Arbitron's Advertiser/Agency
Advisory Council meeting
Arbitron has released more details and viewpoints from the inaugural meeting of its Advertiser / Agency Advisory Council (11/14/05 RBR #222), along with an updated list of attendees (the first list supplied was inaccurate). "The one message that we all wanted to send Arbitron is this: bring electronic measurement to radio and do so more quickly and more broadly than you are proposing," said Kathy Crawford, president, Local Broadcast, Mindshare (pictured). "Advertisers are demanding greater accountability from all the ad-supported media."

For the second day of the council, Arbitron invited nearly a dozen execs from CC Radio, Infinity Broadcasting, ABC Radio, Bonneville Radio, Emmis, Interep, Katz Media Group, Greater Media, Entercom, the RAB and others. "We are ready to work with radio broadcasters on the transition to PPM electronic measurement," said Sue Johenning, EVP/director of Local Broadcast, Initiative Media. "We have a wealth of experience based on the television measurement transitions in national and local markets that we've all successfully managed. When you go from diaries to meters, lower ratings do not necessarily mean fewer ad dollars. Advertisers are willing to make the necessary adjustments in their ratings goals and their ad budgets when audience ratings are based on improved methodologies."

"We established this council as an important source of input to help us shape our services," said Owen Charlebois, president, U.S. Media Services. "As we work to deploy the Portable People Meter to meet the evolving needs of the media and marketing industry, we will use this forum as a resource for making a smooth transition to electronic measurement for buyers and sellers."

| The agency and ad execs who attended inaugural meeting of the council included: |

Wendy's needs with PPM
Also present at Arbitron's first Advertiser/Agency Advisory Council (11/14/05 RBR #222) was Shannon Pedersen, Manager-Media Buying for Wendy's International. RBR/TVBR asked for her take on the meeting and what Wendy's needs are. She was surprised at some of the fears admitted from broadcast execs as well.
| Shannon shares her view on the meeting |

RBR observation: Amazing when you hear the same wants and needs for radio from client after client, media agency after media agency. Since PPM is integral to the process of improving accountability, it makes perfect sense for these three-sided meetings to be held with Arbitron. We sense a bit of compromise and flexibility is needed as well. For instance, PPM costs more. Will agencies and advertisers see that radio's rates may increase slightly to pay for transitioning to PPM? They should, if the numbers are more reliable and accurate. See again what Sue Johenning, EVP/director of Local Broadcast, Initiative Media said in the previous story.

BMW selects GSD&M as new AOR
BMW North America has selected GSD&M, Austin as its new US AOR, besting Kirshenbaum & Bond and two other finalists for the 80 Million creative account. Incumbent Fallon, Minneapolis declined to defend. The review began in July and was handled by Select Resources International. Publicis (New York/Dallas) and Grey will continue as BMW's regional agencies. "We feel confident that GSD&M will offer us a fresh, exciting perspective and an inventive new edge for the BMW brand," said Jack Pitney, VP/Marketing, BMW of North America. "BMW has carved out a unique niche in the industry by placing a premium on constant innovation and creativity. We believe GSD&M is the right agency to help us memorably convey the outstanding qualities of our brand to the public."

Lowe's teams with NCAA and CBS Sports
Lowe's announced it will team up with the NCAA and CBS Sports to support and celebrate the college sports its customers are passionate about. The three-year initiative includes activities for all NCAA men's and women's collegiate sports, with an emphasis on men's basketball. "Consumers' passion for collegiate sports is unrivaled," said Larry Stone, Lowe's senior executive vice president of merchandising/marketing. "Collaborating with the NCAA and CBS Sports provides a vital opportunity for Lowe's to communicate with consumers in a number of ways, not only through advertising, but also through interactive fan experiences." In December, school-themed gift cards from more than 95 NCAA colleges and universities, along with the NCAA logo, will be available at Lowes.com. Gift cards ordered online may be shipped directly to the recipient. In addition, collegiate gift cards for many favorite teams will be available at Lowe's stores in the teams' home states.

Media Business Report

Online newspapers enjoy double-digit growth
Nielsen//NetRatings announced that newspaper websites grew 11% year-over-year to 39.3 million unique visitors in October, comprising 26% of the active U.S. Internet population, or one out of every four Internet users. The 11% increase exceeds the growth of the active Internet universe as a whole, which rose 3% year-over-year. This research follows on the heels of last week's news of the recent six-month decline in average weekday print circulation among America's top 20 largest newspapers, as reported by the Audit Bureau of Circulations. According to Nielsen//NetRatings @ Plan Fall 2005 release, among newspaper readers, 22% have shifted their readership preferences from offline to online sources. The majority of readers, 71%, still prefer print newspapers, while 7% divide their time evenly between the two sources. NYTimes.com was the top U.S. online newspaper site, with 11.4 million unique visitors in October 2005. USATODAY.com and WashingtonPost.com took the No. 2 and 3 spots with 10.4 and 8.1 million unique visitors, respectively. LATimes and SFGate.com rounded out the top five with 3.9 million unique visitors each. Online newspaper readership demographics: More men than women read online newspapers; they constituted 56% of newspaper site readership in October, compared with women who made up 44% of online readers. People with an income between 100,000 and 150,000 and those with a bachelor's or postgraduate degree were also likely to visit online newspapers, comprising 21% and 52% of visitors, respectively.

Media Markets & MoneyTM

High Point AM goes Latino
Latino Communications is putting together what might be called a superduopoly lite, in more ways than one. The new move for Jose A. Isasi's company is the acquisition of WYSR-AM High Point NC, in the Greensboro/Winston-Salem/High Point market. He's getting it from Michael Sbuttoni's Eastern Broadcasting Group for 780K cash. The superduopoly comes in the form of a double-dip LMA between Isasi and Davidson Media Group, under which he is operating WWBG-AM Greensboro and WTOB-AM Winston-Salem. There's even a fourth station, but it doesn't quite get into the market as tabulated by BIA - - that would be WREV-AM Reidsville, which Isasi is LMAing from the Rodriguez family.

Washington Beat

Turkey trouble: Simmer the fine
for 2K good behavior reduction
Lisa Simmer found herself being broadcast on the airwaves of KOFI Inc.'s KZMN-FM Kalispell MT on 3/17/05. The only problem is that she was never informed that's where her phone call was being directed. Not only was her concern broadcast live without her prior notification, it was recorded and replayed later as well. She had called to express her concern about a turkey being dangled out of a second story window at the station - - it was part of a food bank fund raiser called "Save the Turkey." This breach of FCC regulations was admitted by the station, and it was hit with a 6K fine. Station ownership tried to duck the fine, saying it couldn't predict that DJ Paul Gray, who put the call on the air, would do so, and tried to good old plea that the act wasn't a "willful" disobedience. That trick never works - - the FCC's oft-repeated line is that the station's air staff should be well versed in the rules. If they are not, that is a "willful" omission on the part of ownership. However, the station's record of good behavior earned it a 2K reduction down to 4K.

RBR observation: The rules requiring that citizens be put on notice and that they may be broadcast, and the necessity of getting their permission, is not exactly an exotic item buried under 20 tons of federal bureaucratic dogma. You'd think that just about anybody who gets in front of a mic is aware of this rule. Just to be sure, you may want to remind your air staff at the next staff meeting.

Programming

Cingular and MobiTV launch radio service
Cingular Wireless and MobiTV, a live mobile television and digital radio service, announced the launch of the "MobiRadio" service for Cingular subscribers. Customers can listen to more than 40 channels of commercial-free Music Choice formats streamed to their mobile phones. "We successfully kicked off our partnership with Cingular earlier this year with the launch of the MobiTV service. Scaling our solution with Cingular to offer their subscribers the first opportunity in the industry to experience the MobiRadio service is revolutionary," said Phillip Alvelda, CEO and Chairman of MobiTV. The cost is 6.99 a month plus kilobyte usage.

Transactions

3M KEXA-FM Monterey-Salinas-Santa Cruz (Salinas CA) from Wolfhouse Radio Group Inc. (Hector Villalobos) to Buckley Broadcasting Corporation of Salinas, a subsidiary of Buckley Communications Inc. (Richard D. Buckley Jr. et al). 150K escrow, balance in cash at closing. Includes reverse non-compete under terms of which buyer agrees to refrain from employing an Hispanic format for at least two years. Duopoly with KIDD-AM/KWAV-FM. Seller retains four stations in the market. [File date 10/21/05.]

232K KCTX AM & FM Childress TX from Kenneth Paul Harris Sr. to James G. Boles. 5K escrow, balance in cash at closing. Seller also receives assets of Turkey Hotel in Turkey TX. [File date 10/21/05.]

Stock Talk

A slight downtick for the market
Good news on the retail sales front wasn't enough to get Wall Street traders excited, so stocks drifted down slightly. The Dow Industrials dropped 11 points to 10,686.

Radio stocks also fell a bit. The Radio Index was off 0.741, 04 0.4%, to 186.143. The only significant move was a 3.5% drop for Saga.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		37.13	-0.39	Jeff-Pilot	JP		54.68	-0.21
Beasley	BBGI		13.54	+0.08	Journal Comm.	JRN		13.89	-0.11
Citadel	CDL		13.53	-0.07	Radio One, Cl. A	ROIA		10.42	+0.04
Clear Channel	CCU		31.50	unch	Radio One, Cl. D	ROIAK		10.44	+0.04
Cox Radio	CXR		14.90	-0.03	Regent	RGCI		5.05	+0.02
Cumulus	CMLS		11.20	-0.22	Saga Commun.	SGA		11.80	-0.43
Disney	DIS		26.06	+0.05	Salem Comm.	SALM		18.94	-0.16
Emmis	EMMS		19.22	+0.11	Sirius Sat. Radio	SIRI		7.17	+0.19
Entercom	ETM		31.08	+0.13	Spanish Bcg.	SBSA		5.72	-0.06
Entravision	EVC		7.44	-0.11	Univision	UVN		29.21	-0.10
Fisher	FSCI		46.50	-0.28	Viacom, Cl. A	VIA		32.81	-0.16
Gaylord	GET		41.45	-0.55	Viacom, Cl. B	VIAb		32.71	-0.21
Hearst-Argyle	HTV		23.68	-0.02	Westwood One	WON		17.55	+0.38
Interep	IREP		0.38	-0.06	XM Sat. Radio	XMSR		29.19	+0.53
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

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Below the Fold

Ad Biz
Wendy's needs with PPM
Shannon Pedersen, First, radio execs' fears that advertisers will pull dollars.

Washington Beat
Turkey trouble: Simmer the fine for 2K good behavior reduction
RBR observation: rules requiring that citizens be put on notice is not exactly an exotic item buried under ...

Programming
Cingular and MobiTV
launch radio service
Announced the launch of the "MobiRadio"...

Arbitrends

Radio Media Moves

Addition to
Arbitron board
Shellye L. Archambeau has been added to the board of directors at Arbitron. She is CEO of MetricStream Inc.

Stevens to TM
Chris Stevens, most recently an imaging producer for BBC Radio 2 in London, has joined TM Century as Creative Director. "Chris is a genius, a brilliant composer and producer who will usher in a new generation of creative for our company," declared TM Century CEO David Graupner.

Fox News Radio
adds Weinbloom
Hank Weinbloom has been named Morning Drive Producer at Fox News Radio, where he will be responsible for the gathering and production of audio, interviews, and other programming elements for affiliates during the morning drive news segment. For the past 19 years, Weinbloom was a producer, editor, writer and reporter at ABC Radio.

Stations for Sale

NEast Facilities
Small City 25kw FM, Profitable, Canadian border area, nice facility, good upside @$595K. Top 100 mkt AM daytimer, Low dial position,
low expenses, good pop coverage, stick @$495K
[email protected]
or 781-848-4201

Southwestern Virginia AM
Price Reduced! Great coverage with a 10Kw Upgrade CP. Possible terms available. Excellent opportunity for a new owner operator.
Cliff at Clifton Gardiner & Co
(303)758-6900
[email protected]

More News Headlines

OneDomain, VCI, Marketron
settle suit

Slight up-tick in customer satisfaction may not be enough to boost spending

Crystal Radio Awards deadline

November RBR/TVBR Digital Magazine

News/Talk
Franklin Raff, Radio America Executive Producer HR - Guerilla tactics for finding the right people, what can and can't be taught. New hiring challenges facing radio execs and how to get around the problem so you get the right people, for long term HR efficiency.

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RBR Radar 2005

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

Nielsen getting down
to the PPM nitty-gritty
Getting closer to making a go or no go decision on whether to enter into a joint venture with Arbitron to use Arbitron's Portable People Meter (PPM) technology to measure TV and cable, as well as radio says it has expanded its internal due diligence team working on PPM to include additional experts in all areas. Pres/CEO Susan Whiting says "We are committed to moving with all deliberate speed..."
RBR observation: Radio groups have been cautious about moving from Arbitron's diaries to PPM, several major TV groups have been pressing Nielsen to jump on the PPM bandwagon especially groups such as Tribune and the Fox O&Os who really dislike LPM. Many want to see passive measurement. Plus, out-of-home viewing counted. Advertiser/agency community is pushing hard for PPM and not just for radio wanting passive measurement for radio, TV and cable and would love to see a common ratings currency for all three. Meanwhile, TA-DUM, Whiting is having to make a decision at a time when her parent company is in upheaval. Who knows who will even own Nielsen a year from now?
11/15/05 RBR #224

RAB's Gary Fries fires at
industry, Creditability at Stake
"The fact is that I have been telling this industry this in private conversations and industry speeches for the past 3 years. The advertising community can not understand why the radio industry is not embracing electronic measurement. They stated openly at the meeting that they have seen enough to be convinced that the diary is not accurate. They feel that if the radio industry does not move forward quickly that we will not be a credible media and not provide the accountability that the advertiser demands today. They also stated unanimously that if we go to a people meter world it will be a significant move and the net effect is that there will be more and larger spending in radio. They want to go deeper than the planned markets and they want it faster than the proposed roll out."
11/14/05 RBR #223

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