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Volume 22, Issue 226, Jim Carnegie, Editor & Publisher

Thursday Morning November 17th, 2005

Radio News®

Analyst sees more gloom for radio
After digesting Q3 reports and conference calls, Goldman Sachs analyst Mark Wienkes sees a no growth environment and no sign of change. He's expecting flat revenues for Q4 and challenges ahead in 2006. "We expect our radio broadcasting companies to continue to manage through the soft environment in the fourth quarter and finish a year that many operators would likely want to qualify as a 'do-over' on the playground," Wienkes said in a note to investors. In his view, the current consensus of his peers for radio companies to deliver 15% growth in earnings per share in 2006, which implies revenue growth of 3-4%, is still too high, so he's recommending "minimal exposure" to radio stocks. "With industry revenue flattish and the share shift from CCU continuing, we find too little growth of growth investors and not deep enough value for value buyers," the Goldman Sachs analyst said.

Disney on deck today
All ears will be turned to the Mouse House quarterly conference call this afternoon. We don't expect CEO Bob Iger to actually announce a sale of ABC Radio, but everyone will be listening carefully for any indication of whether he is leaning toward or away from such a sale. The bids are in and, if there is to be a sale, it will likely be announced before the end of this month. Meanwhile, the Thomson/First Call consensus is that Disney will report a 4% revenue increase for its fiscal Q4 (July-September), with earnings per share down 4% to 18 cents.

FCC's Consumer panel meets Friday
The agenda of the FCC Consumer Advisory Committee this Friday looks almost like a typical agenda for the Michael Copps/Jonathan Adelstein road show, albeit with a more diverse slate of topics. "Media Ownership and Consumer Interest: is one of them, complete with speakers like MMTC's David Honig, Anthony Riddle of Alliance for Community Media and Prometheus Radio Project's Hannah Sassaman. Prometheus is the group that defeated Michael Powell's ownership rules in the Third Circuit. Another panel will is called "Recommendation Concerning Consumer Interest Obligations of Digital Television Broadcasters" - - prominently featuring Capitol Broadcasting's James Goodmon, who has logged quite a few frequent testifier miles in Washington over the past few years. There will be a demonstration of captioning and DTV technologies, and additional panels: "Perspectives on Telecommunications Competition and Consumers," Recommendation Regarding Access to VRS networks," and Public Participation via new Information and Communication Technologies at the FCC." Shirley L. Rooker, chair of the Committee, will oversee the event.

There's meth to Walters' madness
John Walters is mad about drug abuse, and he ought to be - - he's the so-called national drug czar, as director of the White House Office of National Drug Control Policy. He's putting methamphetamines in the crosshairs with an ad campaign which will target cities where illegal production and sale of the substance are a particular problem. The 30-second TV spot has already hit the airwaves in Springfield MO. According to the Associated Press, it will also get air time in Atlanta GA, Austin TX, Charlotte NC, Chicago IL, Dallas TX, Denver CO, Des Moines IA, Grand Rapids MI, Miami FL, Louisville KY, Minneapolis MN, Pittsburgh PA, Portland OR, Raleigh-Durham NC, Sacramento CA, Salt Lake City UT, San Antonio TX, San Francisco CA, Seattle WA, Savannah GA and Tampa-St. Petersburg FL.

Diddy or didn't he? FEC is checking
The Federal Election Commission is looking into allegations that a get-out-the-vote organization formed by Sean "Diddy" Combs was actually a group promoting the campaign of Democrat John Kerry to defeat incumbent Republican George W. Bush. A conservative watchdog, the National Legal and Policy Center claims that Combs' group, Citizens Change and its "Vote or Die" campaign went over the line, and was taking political stance rather than simply trying to bolster the voter rolls. Although Combs was said by the Associated Press to have not endorsed either candidate on the record, actor Leonardo DiCaprio used the "Vote or Die" rallies to endorse Kerry. The FEC is looking into the charges.

If at first you don't succeed...
Despite being soundly defeated in his first run for the US House of Representatives last year, Wisconsin broadcast group owner Dave Magnum is running again. "Being the optimist I am, I'm not unnerved by having to persuade 13% of voters in this district," Magnum told WisPolitics.com as he announced his candidacy for the Republican nomination in Wisconsin's 2nd District. That reference to 13% is what it would take to close the 26% gap last time, when 63% of the district's voters reelected Rep. Tammy Baldwin (D-WI) and 37% voted for Magnum.

Conference Calls 2005

Counting down the quarters at Susquehanna
There's not a lot to talk about when you're waiting to close on the sale of your company - - and conference calls for Susquehanna Media have never tended to be lengthy anyway. Since the company had already reported its financial numbers earlier this week (11/15/05 RBR #224), the main news item out of yesterday's call was CEO David Kennedy assuring Wachovia bond analyst Bishop Cheen that Susquehanna Media does, indeed, plan to cash out its bonds immediately after closing on the sales of its radio and cable units in the first half of 2006. Providing some detail on the earlier numbers, Kennedy said the company's radio stations in San Francisco, Atlanta, Dallas and Cincinnati were the top performers for the quarter.

Adbiz©

Katrina to drop media spend 1.13 billion in 2005-06
Hurricane Katrina will cause total media spend to fall by 1.13 billion from August '05 to September '06, making it the costliest natural disaster on record to hit the media industry, according to data released yesterday by PQ Media. The loss is estimated to account for 2.2% of media spend in the 20 affected DMAs in the 12-month period. Of these DMAs, New Orleans accounts for 64.8% of the total loss, or 732.5 million, a staggering 14.3% decline in the city's projected annual media spending. From a broader industry perspective, the total represents a decline of only 0.2% of the 887.37 billion in media spending expected in the next year.
| Read More... |

AOL, Yahoo, MSN, others
hang "sold out" signs; raise rates
The front pages of Yahoo, AOL and MSN are now sold out on big display ads for months in advance, according to a WSJ story yesterday. Websites offering car-buying tips are booked so far in advance - - up to 18 months in some cases - - that they are selling ads for next year in a process similar to the way network TV spots are sold. "We have a supply issue," says Joanne Bradford, chief media revenue officer at MSN told the paper.
| Read More... |

RBR observation: Like the story mentioned, advertising backlogs also occurred during the dot-com boom in the late '90s, with online sales peaking at 8.1 billion in 2000. This time around, however, the spend bears fewer markings of a "land grab" and more evidence of better measurements and research backing the planning and buying. A longer and more proven data trail, if you will.

Media Markets & MoneyTM

Lincolnshire on
Excelsior/Dial-Global purchase
RBR contacted Lincolnshire Management Principal Mike Lee (pictured) and Managing Director Michael Lyons about the recent majority stake acquisition of Excelsior Radio Networks and Dial-Global
(11/14 RBR #224).

Why was Lincolnshire, which heretofore had no radio investments,
now interested in radio?
"Lincolnshire was initially attracted to the business due to the strength and track record of the management team. As we analyzed the business further, we liked the niche market position they have established and their ability to attract producers and advertisers," said Lee. We also asked Lyons what the plan is going forward with expansion/strategy: "With regard to growth, we want to continue executing against management's plan: leverage the scale that they've achieved and continue to provide outstanding service to their clients. On the acquisition front, we will work alongside management and examine the opportunities as they arise."

FCC will neither delay nor deny TV deal
A chunk of KHIZ-TV is being sold in stock deal which has a group of individuals including Ray Webb, R. Todd Webb, Rae Ann Compton and Deborah Sweeney (the Webbs) up in arms. The deal is sending a portion of the station's license company, Sunbelt Television Inc. from Estates of Margaret R. Jackson and J. Riley Jackson (Ellen Zenz, Executor) to Initial Broadcasting of California LLC and TVPlus LLC (8/8/05 RBR #154). The deal will just about double IBC's stake. However, the Webbs say the estates can't sell because they in fact do not own part of the station, a matter they have been trying to get the California court system to see their way. The FCC has ignored their effort to stop the deal, however, saying that it does not enter into matters which rightly belong in the court system, and that precedent tells it to proceed normally. As it turns out, the Webb's case was further damaged at the Commission level when they lost in court. Their new plea to hold up the deal while they try to appeal the court decision failed to hold water at the FCC on the exact same grounds as the first attempt.

Close encounter in Des Moines
Broker Jamie Rasnick of John Pierce & Company tells us that Peter Davidson has taken the keys to yet another of his many acquisitions. This time it is KXLQ-AM Indianola IA, serving the Des Moines market. Seller Warren Broadcasting received 425K for the station.

Washington Beat

FCC liberates 10K
from Lake Charles TV
Soon-to-be-sold Liberty Corp. has uncovered a rash of file irregularities regarding its compliance with children's programming regulations during the current license renewal cycle. The latest will cost it 10K. The station is NBC 7 KPLC-TV in Lake Charles LA. FCC rules limit commercials during children's programming to 10.5 minutes an hour on weekends and 12 minutes an hour on weekdays. Did KPLC go over the limit? We'll never know, at least for the period from the beginning of 1997 through the end of 2000 - - the records were never filed, and the omission was only discovered in February 2005. In a lot of children's programming cases of late, the FCC has simply noted the problem and written it off as minor and/or inadvertent, or it's issued a fine-free admonishment. This time, given the length term of the violation, it went for the full bore fine. Otherwise, the FCC found the station to be operating in "...the public interest, convenience and necessity," and granted it its renewed license. It is being sold to Raycom as part of a group deal valued at just under 1B dollars.

Engineering

Continental Electronics delivers
transmitters for HAARP project
They're not just working with broadcasting: Continental Electronics announced it is ahead of schedule in delivering 132 ultra-low-noise transmitters to U.S. government contractor BAE Systems for use in the High-Frequency Active Auroral Research Program (HAARP) near Gakona, Alaska. When the massive planar array for ionospheric research is completed in 2007, it will include a total of 180 Continental D616G 10-kW combined transmitters, which the company is upgrading specifically for HAARP. HAARP first installed Continental transmitters in 1993 when the project began. Said Robert Jacobsen, the HAARP project manager for BAE Systems: "Continental Electronics was the company that best met our rigorous specifications back in the early 1990s, when we began using their solutions. Their transmitter is a beautiful piece of equipment that does the job it is intended to perform extremely well. There is no other product available on the market that can do what we have designed it to do." The U.S. government is constructing the HAARP facility to conduct upper-atmospheric and solar-terrestrial research via a phased array transmitter, with an aim of learning more about the ionosphere, the atmosphere layer ionized by solar radiation with natural electrical currents that can be modulated with powerful radio signals. Much of the ionosphere's scientific potential lies in satellite communications, which depends on signals passing through it. The ionosphere also causes nighttime skywave bounces for AM and world-wide signal bounces for shortwave. BAE Systems today leads the installation at HAARP, which began in 1993 with 18 transmitters, grew to 48 in 1998, and is currently being expanded to a total of 180 transmitters -- all built by Continental with some components from BAE and other suppliers. The final expansion will bring the HAARP array to full power, with its ERP increasing from 84 dBW to about 96 dBW. It will have greater transmitter modulation capability, variable frequency range, and beam steering than any other high-frequency transmitting system in the world. Continental is under contract to supply six transmitters per month. The transmitters for HAARP needed to have extremely low noise characteristics to maximize the ability to manipulate the ionosphere.

Transactions

10M WTLN-AM & WHIM-AM Orlando (Orlando, Apopka FL) from TM2 Inc./Alton Rainbow Corp. (Thomas H. Moffit Jr.) to Pennsylvania Communications Corp., a subsidiary of Salem Communications Corp. (Stuart W. Epperson, Edward G. Atsinger III). 500K escrow, balance in cash at closing. 9.4M allocated to WTLN, 600K to WHIM. Superduopoly with WORL-AM Altamonte Springs, being acquired in a separate transaction. LMA 10/1/05. [File date 10/24/05.]

1K WXRB-FM Dudley MA from Nichols College (Keith E. Lamonica) to Peter Q. George. Cash. [File date 10/24/05.]

Stock Talk

GM drives down Dow
General Motors fell to an 18-year low amid concerns about the financial condition and future prospects of the giant auto maker. That dragged the Dow Industrials down 12 points, or 0.1%, to 10,675. But other broad indices were slightly higher.

Radio stocks were mostly lower. The Radio Index fell 2.292, or 1.2%, to 183.851. Saga had another big drop, down 5.8%, although there's been no recent news concerning the company. Volatile Beasley was down 4.7%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		38.00	+0.87	Jeff-Pilot	JP		54.53	+0.27
Beasley	BBGI		12.90	-0.64	Journal Comm.	JRN		13.77	-0.12
Citadel	CDL		13.46	-0.07	Radio One, Cl. A	ROIA		10.27	-0.15
Clear Channel	CCU		31.50	unch	Radio One, Cl. D	ROIAK		10.31	-0.13
Cox Radio	CXR		14.65	-0.25	Regent	RGCI		5.02	-0.03
Cumulus	CMLS		11.12	-0.08	Saga Commun.	SGA		11.11	-0.69
Disney	DIS		25.85	-0.21	Salem Comm.	SALM		19.03	+0.09
Emmis	EMMS		19.08	-0.14	Sirius Sat. Radio	SIRI		7.40	+0.23
Entercom	ETM		30.51	-0.57	Spanish Bcg.	SBSA		5.59	-0.13
Entravision	EVC		7.43	-0.01	Univision	UVN		28.34	-0.87
Fisher	FSCI		45.23	-1.27	Viacom, Cl. A	VIA		32.74	-0.07
Gaylord	GET		41.45	unch	Viacom, Cl. B	VIAb		32.68	-0.03
Hearst-Argyle	HTV		23.33	-0.35	Westwood One	WON		17.41	-0.04
Interep	IREP		0.40	+0.02	XM Sat. Radio	XMSR		29.97	+0.78
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

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]

Since I'm one of those who went through the process of earning a 3rd Class FCC Operators License in order to obtain on-air work, I don't have a problem with the concept of air talent being required to get licenses. However, I'm not clear that it's the solution to the problem that Mr. Joyner is trying to address (11/16/05 RBR #225). If memory serves, the creation of more radio stations in the 1980s which gave more choice to the listener and forced stations to become more competitive provided a major impetus to the rise of "shock jocks" like Howard Stern and Rush Limbaugh. They cut through the clutter and created cume magnets with loyal audiences providing strong AQH shares which generated revenue. Management loved it and, let's be honest, encouraged the misbehavior. At the same time, the growth of cable TV pushed the envelope for freedom of expression and made crassness more mass appeal (or at least more acceptable by mainstream society). It was no longer unusual to hear the word "ass" or explicit sexual references in TV promos airing during the family-friendly 7-9PM hours. There's another factor to consider. Fewer people are seeking careers in radio. Radio used to provide a great entry level opportunity into show business and mass media. Now there are abundant opportunities in cable television and, let's face it, TV is sexier than radio when you're a college kid looking to get into the communications business. Requiring a license puts up another barrier for a person who's making the choice between a career in television or radio.

Your thoughts ?

R. E. "Buzz" Brindle
Operations Manager/ Program Director
WGNA-FM, WABT-FM,
WTMM-AM
Albany, NY

Below the Fold

Ad Biz
AOL, Yahoo, MSN, others
hang "sold out" signs
Sold Out on big display ads for months in advance...

Washington Beat
FCC liberates 10K
from Lake Charles TV
Soon-to-be-sold Liberty Corp. has uncovered a rash...

Media Markets & Money
Lincolnshire on Excelsior/
Dial-Global purchase
Had no radio investments, now interested in radio?...

Arbitrends

Stations for Sale

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

Ralph Edwards dead at 92

Sen. Tom Harkin dukes it out with Limbaugh

November RBR/TVBR Digital Magazine

Ad Biz
Katrina's effect on national and spot business: We speak to agency buyers and reps about what Katrina's (and Rita's) effect has been on national spot business. How did the buys get done? How did the messages change?

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RBR Radar 2005

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

Broadcast vet wants to relicense DJs
Longtime radio warrior Tom Joyner 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. RBR observation: Yep agree hit the on-air talent where it counts and while we are at it double the fine for operator that has no respect for the product until the FCC steps in. Called - Accountability.
11/16/05 RBR #225

Wendy's needs with PPM
Shannon Pedersen, Manager-Media Buying for Wendy's International - to your point (RBR) and Gary Fries' (RAB Pres/CEO) point, we've been dealing with changes in TV measurement for years. TRP's went down, some came back up, and we adjusted then and we will keep adjusting in the future. We didn't leave the medium because the ratings were lower, rather we knew they were inflated to begin with. Same with radio. The truth is that every medium has its advantages and disadvantages, and that's what we look at when deciding what media to use for a certain product. Do costs matter? Of course, but if we feel the media will reach our consumer, and we can track it, we'll consider it.
11/16/05 RBR #225

Regional Sales Director
WideOrbit, the broadcast television industry's leading traffic, sales, and billing software solution has expanded into Radio. Looking for the right salesperson to join the team with experience working for a radio station or group with a understanding of sales, traffic, and billing systems. Excellent growth opportunity.
See Radio Careers

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