RBR's Daily Morning Epaper

Volume 21, Issue 228, Jim Carnegie, Editor & Publisher

Monday Morning November 22nd, 2004

RBR Observation

The man whose nickname
is the 'Zen Master'
Mel Karmazin has returned and crossed the commercial fence to get real serious by taking the CEO position of Sirius Satellite Radio. He'll have to refit his Zen Master Bus for space flight, but it'll be worth it as he commands a salary of around 1.25M annually, along with options to purchase 30M shares of common stock, at an exercise price of 4.72 per share (the closing price of Sirius common stock on Thursday, 11/18/04), and 3M shares of restricted stock. Surprised? Nope - this was a great set-up coup by Sirius, since his buddy Howard "Self Proclaimed King of All Media" Stern himself has already signed a 100M dollar deal with Sirius.

This brings back the tag team radio champs of the world - Karmazin and Stern - as Zen Master came out of hiding or as he says "Taking the summer off" (maybe in Naples, FL no pun intended) - - to get back into the Media Mix biz. Our colleagues at Fox News Channel have provided RBR/TVBR with the audio of his first live interview with host of "Your World with Neil Cavuto" last Friday afternoon, 11/19/04, where Karmazin on the record said -"I will tell you what I did today, Friday 11/19/04, as an individual and believe in the company so much, that I bought today - and there will be a filling Monday (today 11/22/04) - in the open market today I bought 1.5 million shares of Sirius - - cash. How many CEOs today are taking their money and buying their stock?" Cavuto (eyebrows raised) simply said "Good Point." Math time -Thursday close was 4.72 per share - Times 1.5M is 7.08M dollars of Karmazin's personal cash.

Now do you really think for a minute we got suckered into writing this? Wrong-O because the Stern media hounds played right into Sirius' hands because its acquisition of Karmazin's services just didn't happen overnight, or the night after Stern was on David Letterman. Clear Channel, with its press release lashing out, saying Letterman was duped by Rolling Stone - what was that but another form of Sirius commercial? This was a great set up and for a kicker from Karmazin, tossing the name of another old buddy - Don 'I-Man' Imus - a few times during his Fox visit.

Listen to the entire six minute Cavuto/Karmazin interview.

Details on He who laughs last inside for details | More... |

Dec. 6th, Only 9 biz days left to sign up

Radio News®

Clear Channel does not
blame Letterman
For what we don't know but during Howard Stern's appearance 11/18/04 on CBS's "The Late Show with David Letterman," Letterman himself referred to a "Rolling Stone" article on Clear Channel which was less than flattering. In a statement, the radio giant said, "Clear Channel does not blame David Letterman for being duped by poor journalism." Appended to the CCU statement was a refutation of the article, which was sent to Rolling Stone as a letter to the editor which it says went unpublished.

RBR observation: Like it or not, Clear Channel is light years bigger than the next-largest radio group. In its letter to the Rolling Stone, it claims 9% of all US stations and 18% of US radio revenue. "Neither come close to satisfying any accurate definition of dominance," it wrote. Nonetheless, it is so big that whenever anyone takes a shot at radio in general, Clear Channel cannot help but get hit. Publisher note: Stern's vertical smile went horizontal. | More... |

Iger upbeat about NFL negotiations
Now that CBS and Fox have sealed their renewals with the National Football League to the tune of eight billion bucks, all eyes have turned to Disney, whose ABC and ESPN networks have yet to complete their NFL contracts. In the company's conference call last week, an analyst asked Disney President & COO Bob Iger whether he was prepared to match the price hikes that CBS and Fox had agreed to. Iger declined to answer that directly, but indicated that negotiations with the league are going well. Follow the link for more, including audio. | More... |

FCC says consumer a la carte cable costs would rise
If an a la carte pricing model were to be used by US systems, the average cable subscriber would actually experience an increase in the monthly bill, says the FCC. It was responding to various requests for such a study from Capitol Hill. The FCC said that households which restrict their viewing to nine channels or less would benefit from such a regime. However, the average household watches 17 channels, including broadcast channels carried on the system. The FCC said an average household would likely experience a 14%-30% increase in monthly rates. | More... |

RTNDA backs convicted reporter
The Radio-Television News Directors Association has come to the defense of WJAR-TV Providence reporter Jim Taricani, who was convicted of criminal contempt of court for refusing to tell a special federal prosecutor who gave him an undercover FBI videotape of a top aide to then-Mayor Buddy Cianci taking a bribe. Taricani faces sentencing on December 9th for up to six months in prison. RTNDA used the occasion to call for a federal shield law to protect journalists from revealing confidential sources. "RTNDA supports Jim Taricani in his principled stand to refuse to reveal the identity of a confidential source. Jim's commitment to keep his promise to his source serves the public as well as other journalists. If sources with access to important information fear exposure, they will not come forward, and then the public will be kept in the dark about officials and institutions. Jim is willing to sacrifice his freedom and put his health at risk rather than reveal his source. RTNDA also applauds NBC Universal for its commitment to support Jim in his battle," the organization said. "Jim has been placed in this position because the law does not recognize that reporters are obliged to protect the confidentiality of their sources. Thirty-one states and the District of Columbia have shield laws. It is time for a federal shield law to protect reporters like Jim and those facing contempt of court rulings in other ongoing investigations. RTNDA will join other journalism groups to ask the next congress to enact a federal shield law," RTNDA said.

A retiring warhorse holds forth
Sen. Ernest Hollings (D-SC), who has long had a say in the course of the broadcasting industry owing to his big seat on the Commerce Committee, gave his final floor speech in the Senate last week. He didn't have much to say directly about broadcasting this time around, but he did make a couple interesting comments about campaign finance.
| More... |

ACLU weighs in on Ryan, indecency
Where's the bright line, ACLU wonders, that separates decent and indecent speech? The lack of such a line chills free speech - - broadcasters are wary of taking a major hit, both financially and otherwise, and stay away from anything remotely questionable, becoming self-censors. The decision to stay away from the airing of "Saving Private Ryan" by 60+ ABC affiliates, despite the fact that the movie had been shown uncensored twice before without government sanction, is a chilling example of what indecency enforcement has become. ACLU Legislative Counsel Marvin Johnson said, "The ambiguity by the FCC on what exactly is indecent means an increasingly diminished marketplace of ideas. It's ironic that on Veterans Day, many stations are unwilling to air a movie designed to honor our veterans. One of our most fundamental rights is the freedom of expression - - and the FCC's decisions represent an increasingly clear attack on that right." ACLU say the FCC approach, "they know it when they see or hear it," is inadequate, and also called into question the FCC's refusal to give guidance in advance to television stations. Johnson concluded, "A fear among broadcasters to air certain material can only have a chilling effect on the freedom of speech. In some ways, this is worse than censorship - - broadcasters have no idea when the FCC will be coming after them."

Adbiz©

The original Mr. Wendy is back
Pictures of Wendy's founder Dave Thomas, who died of liver cancer in 2002, will be featured in a new series of ad celebrating the chain's 35th anniversary. The first television and print ads appeared 11/19 and more TV spots will air for a month beginning today. The spots will reference Thomas' business philosophies such "Just be nice" and "Don't cut corners." Thomas pitched Wendy's burgers, fries, chili and shakes in more than 800 television ads over 12 years, emphasizing the quality of the chain's offerings with a folksy, straightforward delivery. Most recently, the company's ads featured Mr. Wendy, an "unofficial" spokesman who often embarrassed his wife by promoting Wendy's menu everywhere he went. The humor-based campaign was recently abandoned.

ALLTEL selects Campbell-Ewald Detroit as AOR
Wireless, local telephone, long-distance, Internet and high-speed data services provider ALLTEL announced that it has selected Campbell-Ewald Detroit as its AOR. The agreement is effective immediately. "Campbell-Ewald presented creative work that directly supports our brand efforts," said Frank O'Mara, EVP/Marketing for ALLTEL. "Campbell-Ewald will help strengthen the emotional link with our customers and drive consideration in the marketplace." "With its customer's first culture and services, we are tremendously excited about helping ALLTEL carve out an even more distinct and successful market position," said Campbell-Ewald President Jeff Scott.

Media Markets & MoneyTM

Birch back in business as Joyner goes for the roses
Research maven and former station owner Tom Birch, of Birch/Scarborough and Opus Media fame, is getting back in the ownership business, as Tom Joyner decides to "smell the roses." The focus is a trio of stations on the Virginia-North Carolina border. Dick Kozacko told RBR that the stations include WSHV-AM/WKSK-FM South Hill VA and WICE-FM Clarksville VA. Formats are Black Gospel, Country and Oldies respectively. The towns are situated near the state line off I-85 between Richmond and. - well, let's let Mr. Birch explain: "Raleigh-Durham is one of the fastest growing markets in the US, and the population is pushing into the area covered by these stations. I'm excited about the opportunity and will be moving to the area to assist in development." For his own part, Joyner - - not to be mistaken for the syndicated ABC morning talent - - said, "...after 41 years in broadcasting, it's time to smell the roses that I've heard so much about and I look forward to spending more time in that garden with my two beautiful granddaughters." Joyner won't be completely out of the biz - - he still has WFQX-FM Chase City, which is also in the same general vicinity.

Where are multiples these days? Still high - - Part 7
If radio prices are too rich for your blood, you may want to look at TV - - but you won't find any bargains there, either. "We've got a lot of television deals to judge by," broker Elliot Evers of MVP said, adding, however, that "unique assets get more." Just as in radio, multiples in a couple of Top 10 market TV deals in recent years have been through the roof. "Sometimes in large markets, people just kill to own them," he noted. "Despite all this bad press about radio lately, TV is still trading at a significant discount to radio just because people perceive more issues in the industry," Evers said. So, TV multiples outside the Top 20 markets are in the 10-12 range, which is less than you'd have to pay for a cash-flowing radio station in the same market. You will likely, however, have to pay more for a news leader. "Definitely. News is still, despite people's ability to find their news in lots of different places, news in television is still the key branding device - - in any size market," Evers explained. "If we see a station in a medium to small market where the guy has cut out news, or didn't have news, that station has a challenge to differentiate itself from all the other media sources that the viewer has to look at. News is still the card that the local television station plays to get people to watch, to pay attention, and that advertisers associate with a value proposition," he said. "Somebody who does news has a strong news position, that's a powerful, powerful thing. Somebody who doesn't, we can still sell them, but that's going to enter into the equation," the broker said. This article appears in its entirety in the November issue of RBR Solutions magazine. To subscribe to the all new January debut issue of Radio and Television Business Report - The Real Business Magazine, see below to receive it - - or call April McLynn here to get your free copy: 703-492-8191.

2005: Year of Local Muscle

Dec. 6th, Only 9 biz days left to sign up

January 2005 Debut!
Radio & Television
Business Report
What Radio & TV both need to overcome in 2005 is the focus of the January Report. If you don't get it then you won't know what lies ahead - so Get It! It's Free!

If you want the January Debut issue, please register now. All orders must be in by
Monday December 6th, 2004.

Washington Beat

Going from unamended to dismissed
Almost 120 FCC applications have been dismissed for lack of paperwork. The stations had pending business before the Commission on either one of Forms 301, 314 and 315 at the time of the freeze imposed in September to allow for the forms' updating pursuant to the Third Circuit Court's blessings on the plan to substitute Arbitron-based radio market definitions for the old signal contour-based definition. On 10/8/04, the freeze was lifted, and those with pending business were given a month, through 11/8/04, to file amended applications. As the FCC put it, "These applications were required to demonstrate compliance with the new local radio ownership rules or to request a waiver of these rules. No amendments have been received for these applications...Accordingly; the Bureau is dismissing these applications..."

Auction 37 remains static
It appears that most of the money people brought to spend on FM sticks in FCC Auction No. 37 is on the table. As of this writing, the sale is into Round 51, but the total take for the government is still stuck in the 185M dollar range. College Creek and Bigglesworth Broadcasting are holding onto the top bidder slots, at over 42M and 24M respectively. College Creek's 7M+ bid for a Mesquite NV stick is the most plunked down on a single station.

Monday Morning Makers & Shakers

Transactions: 10/11/04-10/15/04
Trading came back, and almost 100M was earmarked to change hands in radio alone. However, the great bulk of that was basically a paper transaction as Viacom's Infinity signed a San Francisco FM over to SBS in exchange for a piece of the action with the Hispanic specialist. The lone TV deal pulled in another 20M and change.

10/11/04-10/15/04	Total
Total Deals	11
AMs	7
FMs	4
TVs	1
Value	120.141M

| Complete Charts |

Radio Transactions of the Week
Infinity puts a stick into SBS
| More... |

TV Transactions of the Week
Nexstar sidles into Rockford
| More... |

Transactions

KSBT-TV Santa Barbara-Santa Maria-San Luis Obispo (San Luis Obispo CA) from New Vision Media LLC to Evening Post Publishing Company.

KJAV-FM McAllen-Brownsville TX (Alamo TX) from Paulino Bernal to Border Media Partners LLC.

KANM-AM Albuquerque NM from Aragon Broadcasting Company LLC to Vanguard Media LLC.

| More... |

Stock Talk

Greenspan speaks, stocks fall
A warning from Fed Chairman Alan Greenspan about the growing US trade deficit sent stock prices lower on Friday. The Dow Industrials fell 116 points, or 1.1%, to 10,457.

Radio stocks joined in the retreat. The Radio Index fell 2.715, or 225.499. Radio One's Class A stock fell 2.6% and Class D 2.9%. Arbitron was off 2.4%. Sirius Satellite Radio jumped 9.5% after Mel Karmazin was named its CEO. Rival XM was up 1%.

Radio Stocks

**Here's how stocks fared on Friday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		36.36	-0.89	Jeff-Pilot	JP		49.23	-0.43
Beasley	BBGI		17.52	+0.13	Journal Comm.	JRN		17.39	+0.17
Citadel	CDL		15.01	-0.31	Radio One, Cl. A	ROIA		13.28	-0.36
Clear Channel	CCU		34.23	-0.58	Radio One, Cl. D	ROIAK		13.34	-0.40
Cox Radio	CXR		15.95	-0.02	Regent	RGCI		5.57	-0.05
Cumulus	CMLS		15.40	+0.02	Saga Commun.	SGA		17.88	-0.32
Disney	DIS		26.66	+0.29	Salem Comm.	SALM		25.60	-0.51
Emmis	EMMS		18.94	-0.29	Sirius Sat. Radio	SIRI		5.17	+0.45
Entercom	ETM		35.81	-0.23	Spanish Bcg.	SBSA		10.86	-0.18
Entravision	EVC		8.28	unch	Univision	UVN		29.95	-0.41
Fisher	FSCI		47.10	-0.68	Viacom, Cl. A	VIA		35.66	-0.89
Gaylord	GET		35.41	-0.60	Viacom, Cl. B	VIAb		34.72	-0.73
Hearst-Argyle	HTV		25.50	-0.15	Westwood One	WON		22.96	-0.35
Interep	IREP		0.80	+0.05	XM Sat. Radio	XMSR		35.01	+0.36
International Bcg.	IBCS		0.02	unch	-	-	-	-	-

__UNSUB__ to this email service.

Bounceback

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

This reader says Howard Stern is biting the hand that fed him.

As a longtime broadcaster who relishes all of the challenges that technology, competition, and creativity thrust upon us I feel compelled to speak out on Howard Stern's defection to satellite radio. I will be the first to say Howard has every right to "seek" the almighty dollar and he has a duty to speak out against our current indecency standards which are non-descript. However without local radio and radio syndication Howard would not have the platform nor audience he currently enjoys. The men and women who gave Howard the opportunity and freedom to enjoy his celebrity are some of the very same people who are not seeing that same loyalty as he "looks out for himself" as the headliner for satellite radio. In this me generation that is not unusual unto itself but it can turn ugly if Howard decides to rail against the same people and companies that gave him his chance at fame. Although he hasn't asked for it, my advice is keep your integrity and do the best job for your current employer until such time that you are released from your contractual obligations, you at least owe that to the medium that allowed you to become a headliner.

John Columbus, Market Manager
Cumulus Tallahassee

[Editor's note: Stern is not carried on any Cumulus station.]

Arbitrends

Upped & Tapped

Now a VP,
but still a Guest
Laramie Guest, who has been creating custom software programs at American Media Services since 2001 has now been promoted to Vice President of Engineering & Research at the radio brokerage and signal upgrade firm.

Stations For Sale

Tennessee/Alabama AM
Great AM opportunity in excellent Tennessee/Alabama border market. Adjacent rated market coverage.
Cliff at Clifton Gardiner & Co (303)758-6900
[email protected]

More News Headlines

CRG Media launches with Duke and the Doctor and Rick & Bubba

Herb Cohen to present opening keynote at RAB2005

Talker calls Condi "Aunt Jemima"

October Digital
Solutions Magazine

Who Will Sit on the Throne?
The election -What is in it
for Broacasters?

One On One
with PHD's Patrick McNew -
The man that over sees spot
for Chrysler Group.

Engineered For Profit
'05 budgets and capital expenditures, our close up look at who's planning to buy what next year.

October Zinio Solutions Magazine
Read RBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the October Issue of RBR

RBR Radar 2004

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

Sirius news:
Karmazin is new CEO
Did Sirius Satellite Radio get even more than the "King of all Media" when it signed its half-billion-buck contract with Howard Stern? Mel Karmazin becomes Da Man.
RBR observation: Karmazin- nicknamed the 'Zen Master' can now go back to that souvenir year 1978 when the number 1 song was Night Fever by The Bee Gees, drive a VW Bus, grow that long hair again with a perm to boot. In reality, this should speed up Howard's early termination of his Infinity contract and debut on Sirius. What remains to be seen is whether the team of Mel and Howard can work their magic again in satellite as they did in terrestrial radio. Joe Clayton took a company whose product launch was behind schedule and whose finances were in a mess and got it back on track. But he was a telecom guy. Now Mel is taking over to focus on what he knows - - how to build audiences and revenues. But he faces quite a challenge. Not only is Sirius still playing catch-up to XM, but the jury is still out on whether the satel! lite radio business will ever produce a dime of profit at either company. By the way Mel, feel free to call our Executive Editor, Jack Messmer, if you ever want to listen to his theory of why the churn rate for both satellite radio companies will have to be at least twice what's built into their business plans.
11/19/04 RBR #227

Publisher Observation
Stern all smiles with Letterman
The "King of All Media" was the opening act for David Letterman, I was expecting the F word, Stern's normal radio act and anti-everything thinking this is going to be good but even I got surprised. Nope it didn't happen. Letterman was a not funny interviewer but a knowledgeable one on Clear Channel, Stern's Fines, and of course comparing Stern to Oprah's content. Oprah can do and Stern can't but if he does he gets fined. In short - a great commercial for Sirius Satellite Radio with Stern being the official spokesperson. 11/19/04 RBR #227

Where are multiples these days?
Still high - - Part 6
The early days of radio consolidation focused on big markets and then moved down. So much buying in large markets is already done, so the attention has shifted. "There's definitely an opportunity in the large unrated and smaller rated markets," 11/19/04 RBR #227

NBC Universal in mega-pact
with Nielsen
An unprecedented contract for Nielsen to provide audience measurement data to the full range of NBC Universal's national and local TV businesses - - including the NBC Television Network, NBC Enterprises/NBC Universal Domestic Television, Telemundo, the cable networks Bravo, CNBC, MSNBC, USA Network, and SciFi, the 13 NBC-owned-and-operated television stations, and the 11 Telemundo television stations.
TVBR observation: Fact, NBC had been a consistent supporter of the LPM roll-out in the top 10 markets. It is important, though, for Nielsen because NBC is supporting a lot more than LPM. It's also putting its money behind the huge expansion of the National People Meter sample that was announced last year and NBC Universal has committed to encoding for the Active/Passive meters that Nielsen plans to introduce next year. Those updated meters will measure time-shifted DVR viewing as well as live viewing - - and while Nielsen can identify most programs through digital signatures, the new meters are more accurate when encoding is used. 11/19/04 TVBR #227

Where are multiples these days? Still high - - Part 5
Every station owner who's even thinking about selling wants to know where multiples are these days. But brokers tell us that's not usually the key consideration for buyers in today's market. "I don't believe in multiples a whole lot anyway, at least as a pre-determiner of price,"
RBR observation: Sometimes it comes down to want vs need. If you own it what do you need to get a sale done? 11/18/04 RBR #226

FCC FM auction seems
to be losing steam
As of this writing, FCC Auction No. 37 is in Round 39, and the total of all standing bids has actually gone down 239K dollars to 184.595M and change. IN fact, only 275 of the 288 stations up for grabs even have a high bidder at the moment. 13 are listed as FCC-owned.
11/18/04 RBR #226

Account Manager Arbitron Outdoor
Selling and servicing the Arbitron Outdoor products to outdoor media companies. 3-4 years media sales experience, Outdoor industry sales preferred.

General Sales Manager
Los Angeles need with 5 years radio sales management experience. EEO. Reply to: [email protected]

See Radio Careers for more info.

Other Links

State Associations
Contact Us