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Volume 23, Issue 230, Jim Carnegie, Editor & Publisher

Tuesday Morning November 28th, 2006

Radio News ®

Not so happy satellite holidays
Last year Howard Stern grabbed lots of media attention and drove big holiday sales for Sirius Satellite Radio, with the hype even spilling over to help rival XM as well. But that set the Q4 bar very high and neither company appears able to reignite the holiday hype and hoopla this year. Recent reports by both Bank of America analyst Jonathan Jacoby and Benjamin Swinburne at Morgan Stanley warn investors that Q4 retail sales by both satellite radio companies will be down double digits from a year ago. But there is some buzz being generated. Sirius CEO Mel Karmazin hinted broadly in an interview with SmartMoney magazine that he has approached XM about a merger, but demurred, saying he really couldn't talk about it, but then added that he had used mergers quite successfully to build shareholder value at Infinity/CBS/Viacom. Would such a deal even be possible? "I personally believe regulatory agencies are not a problem," Karmazin claimed. Jacoby isn't buying it and told clients that while Sirius management may want investors to focus on a merger scenario, he doesn't think any such deal is likely near-term. The analyst says the FCC and DOJ are not currently disposed to grant such a merger, although that could change in time with the market impact of such things as iPods and HD Radio. Also, he notes, the new Democratic Congress is even less favorably disposed to media mergers. On the financial side, Jacoby says a merger deal would have to have Sirius pay a big premium to XM shareholders and that XM may not be interested anyway if its management believes its OEM deals still give it a long-term advantage over Sirius.

RBR observation: Mel is just dreaming. No way in the world such a deal could win regulatory approval in 2007. We are hard-pressed to see the FCC ever allowing the only two providers in a particular communications sector to merge unless one is in bankruptcy. And as much as we disparage the so-called business plans of the satellite radio companies, we don't see either having to file Chapter 11 in the next couple of years. But Mel has to find some way to talk up his stock - and he certainly can't cite current subscriber figures as something to brag about.

2008: Look for the heat to repeat
If you are in a Congressional district that was hotly contested this year, and especially if it is one where the seat moved from the Republican to the Democratic side (none went the other way), look for a major Republican effort to get it back in 2008. The hottest three may be those where a scandal-ridden would-be incumbent was absent, those being the seats of Tom DeLay (R-TX), Mark Foley (R-FL) and Bob Ney (R-OH). Republicans were unable to defend with last-minute stand-in candidates, but according to analysis from the Washington Post, the districts are still considered Republican strongholds, and the party will do whatever it can to reclaim the seats. A fourth which could go into the scandal column is the seat being surrendered by Don Sherwood (R-PA). A strong push will likely be made to recapture other new Democratic seats, including two in Indiana and one each in North Carolina and Kansas. The Post notes that the Republicans will have to find other places to snatch turf in order to regain control of the chamber. On the Senate side, likely Democratic targets include Tim Johnson (D-SD) and Mary Landrieu (D-LA). Republican senators in the crosshairs likely include John Sununu (R-NH), Wayne Allard (R-CO) and Norm Coleman (R-MN). The latter may be facing a challenge from Air America radio host and Saturday Night Live veteran Al Franken.

RBR observation: The heat to repeat is a strong phrase and with repeat we will see them compete and that our colleagues in the media business takes money, cash, green backs, and politics is big business and this means advertising dollars. Whatever you lack in knowledge today learn now or hire the person that does and get ready to compete for these bucks as the political games are already under way.

Welch may not back off
Despite being turned down for a friendly purchase of The Boston Globe (11/27/06 RBR #229), both the Wall Street Journal and Boston Herald report that former GE CEO Jack Welch isn't going to pack up and go away. The WSJ reports that Welch and his group of investors are pondering whether to make a formal bid for the newspaper early in 2007, a move that would put pressure on New York Times Company management, although Welch is unlikely to align himself directly with dissident shareholders, led by a Morgan Stanley investment fund. That fund manager has been publicly criticizing Times management and demanding that the Ochs Sulzberger family relinquish its super-voting stock which gives it control of the company, despite being a minority shareholder. One key to how hard Welch will push is what happens with the current effort to sell Tribune Company, either as a whole or in pieces. If the big newspapers there, such as the Los Angeles Times and Chicago Tribune, are sold off individually, the WSJ story suggests that pressure could increase on the NY Times Co. to consider selling off the Globe in addition to its TV station group, which is currently being shopped.

RBR observation: We are not sure why Morgan Stanley is pursuing the course of publicly attacking the controlling family at the NY Times Company. We cannot imagine anything short of a change in federal law or SEC regulations that would persuade the Ochs Sulzberger family to turn its super-voting shares into regular shares. We note that the SEC floated a proposal a few years back which would have barred the creation of any new publicly traded companies with disproportionate voting shares, but would have grandfathered those already in existence. The response from the investing public was overwhelming to the point of being almost unanimous in support of the idea. In fact, many investors also demanded that the SEC go further and set a date for the sun-setting of all existing super-voting shares. So, did the SEC enact this extremely popular proposal? Nope. The companies who have such super-voting share arrangements and the investment bankers who hope to make fees from future IPOs of companies where the founders might want to hold onto voting control without actually having to own a majority stake succeeded in getting the whole idea shoved permanently to the back burner.

Road show heads to the Pacific NW
Media watchdog Reclaim the Media, the Seattle Times, Bellevue Community College's KBCS-FM, the Minority Executive Directors Coalition and the Communications Department of the University of Washington are hosting yet another public forum on the topic of media ownership. It'll convene Thursday 11/30/06 from 6PM-9PM at the Main Auditorium of the Seattle Public Library. In addition to luminaries such as Time publisher Frank Blethen, Sen. Maria Cantwell (D-WA) and Rep. Jay Inslee (D-WA), Democratic FCC Commissioners Michael Copps and Jonathan Adelstein will be on hand. According to Ryan Blethen of the Times, it will be the Commissioner's second visit to the city. They also participated in an unofficial forum in 2003 the first time the media ownership rules came under serious FCC review. That 2003 rulemaking is now being considered again under court remand. According to reports, the three Republican commissioners declined invitations. The FCC has held one official ownership forum in Los Angeles and has another in the works for Nashville TN 12/11/06.

FCC umpiring and Jackson v. Simpson?
The New Republic's Michelle Cottle has weighed in with a piece called "The FCC's Illogical Standard of Indecency." Cottle's take may be of interest to broadcasters who have to live under the nebulous and inconsistently-enforced rules. For starters, she thinks as fleeting as the Janet Jackson Super Bowl incident was, it could probably, in her opinion, pass muster as an example of indecency. She would therefore shoot down the network argument that the incident in not indecent on fleeting and inadvertent grounds. On the other hand, "...given that CBS was apparently clueless regarding Jackson and Timberlake's plans, the purity police should probably just let this one go." She wonders how much money and how many man-hours have been wasted on this, a case in which the network clearly was not aiming for the display it inadvertently got. She finds more obvious offensiveness in the plan to put on the infamous OJ special. It was on tape, it's contents were known, and it was to many people "truly objectionable." But here too, she says the FCC had no business intruding - on First Amendment grounds. She wrote, "Not every public affront must be dealt with by the government. In this case, the public proved capable of handling the situation itself."

RBR observation: Hear, hear. The less we resort to shackling one of our most basic freedoms, the better. Increasingly effective parental blocking technologies and the channel changer, whether it be a remote, push button or the good old-fashioned dial, are tools of choice.

Why Do We Bring
Radio & TV Together?
Right this minute Radio & TV are more closely tied together than ever before. Both regulated by the FCC, we are being Challenged by New forms of Media from the likes of: iPods, Mobile Services and do not forget internet giants like Google and Yahoo. Contact & Discuss how you can Partner with RBR in the January report.

June Barnes: 803 731-5951
Carl Marcucci: 703 492-8191 ext 202
Jim Carnegie: 813 909 2916

January 2007 report:
* AdBiz--Spot cable keeps getting hotter
* One-on-One--Alan Frank, CEO Post-Newsweek Stations

Executive Comment

A prescription for radio managers
Everyone seems to be an expert on what ails radio...and maybe even more so, those of us who are ex-pats. However, I am of the opinion that there are three things NO ONE is talking about that are necessary for radio management today:

1) Admission that there is no light at the end of the tunnel. Radio remains a hugely profitable business - but in the foreseeable future it's not going to be a growth business again. So get over it. Focus on maximizing profits from a stable revenue stream. Just that tactical shift alone will lighten the load and give staffs a morale boost they need. They feel that they've been failing because they aren't putting double digit gains on the wall. Plus, management will look less ridiculous when they do quarterly reports ("Pay no attention to the man behind the curtain...")
2) Redefine the job. The job is to pull as much cash flow from the business as possible in the next decade while the investment in radio stations will be written down. Ouch...no one wants to hear that, but it's a reasonable strategy. Instead of thinking of radio licenses as assets with long term value, look at them as depreciable assets. If something comes along to rejuvenate their value, all the better, but no one can see that now, so let's be realistic. Imagine you run a horse shoe distribution company in 1920 - it's not pretty, but it is manageable.
3) For God's sake - quit moaning. Business has to be about more than just growth. No wonder so many good people are jumping ship. It's incredibly demoralizing to hear how poorly the business is doing when the reality is that it's still doing pretty damn well (see point #1 above). Woe-is-me is both tiring and makes radio management sound like such a victim. Time to move on.

Most of this requires courage and rethinking that is difficult. In a public company, it may be impossible. For a business as fun and dynamic as radio it's disheartening to hear the endless procession of whining nincompoops. It is what it is. Get over it and have some fun today. You're lucky to be in such a fun business.

Jackson Dell Weaver
Chief Executive Officer
eTAGZ - www.eTAGZ.com
Seattle, WA

Ad Business Report TM

Radio rocks retail on "Black Friday Week"
The term "Black Friday Week" refers to the days leading up to and including Thanksgiving Day plus the weekend that follows. This year, that period is November 20-26, during which most holiday ad campaigns are in full swing, providing "consumer shopping inspiration" via radio. Radio ad tracking and verification company Media Monitors measured radio spot activity to create the Spot Ten Black Friday Week chart, showing the ranking of top general merchandise department stores advertisers in major and secondary markets during that time. The top ten advertisers on the Spot Ten Black Friday Week chart aired a combined total of 30,354 spots in one week, as follows:
| Read More... |

"Selling radio ads in new ways"
Bear Stearns broadcast analyst Victor Miller and Internet analyst Bob Peck hosted a conference call yesterday, "Selling radio ads in new ways," that discussed and provided updates on the online ad selling model of SoftWave Media Exchange (SWMX). SoftWave CEO Josh Wexler and COO Bill Figenshu were present for the presentation. Miller opened by mentioning as Google's up to 1 billion dollar potential acquisition of dMarc grabbed headlines months ago, it is apparent that the radio companies and investors are increasingly focused on new ways for traditional media to capture new ad dollars. Wexler stressed that broadcasters and ad agencies have perhaps never been under more pressure to deliver results. Broadcasters are looking at thinks like TiVo, time shifting and user-generated content - both in radio and television - and are trying to figure out the landscape of how to best serve the ad community. On the flip side you have agencies that are under tremendous pressure to deliver ROI. "So when you think about how you really have to operate today in order to develop a campaign, there are all sorts of complexities," he explained. "You have planning, which involves Arbitron and Nielsen; you have pricing which involves third party data sources like SQAD; you have sales reps which represent a myriad of different media owners; you have order delivery (delivering creative from the agency to the various media outlets); you have spot verification; invoice delivery; reconciliation and last but not least, ROI analysis. What SWMX provides for agencies and broadcasters is one place to do all of these steps - from planning to ROI analysis...that is not being done today in broadcast media and that is what SWMX is providing." In updating SWMX's offering, Figenshu pointed out the company now has 1,500 station clients in the top 50 markets opted in to use the service-which begins by making offers on behalf of agencies for their inventory. Stations can accept or decline. There is no box or software, as with some competitors. All commercials and orders are downloaded via the site. 70% of their business is flighted/full-rate, not remnant. SWMX is also operating in the spot cable marketplace, with local television to come in the next month or so. The company is currently building in requested tools such as buying on a GRP or CPP basis; how to handle make goods; automating spot verification, reconciliation; real-time invoicing and integrating agency systems.

Media Markets & Money TM

Buyer will forego Fargo FM
The price tag is in for James Ingstad's acquisition of a Clear Channel Fargo ND-Moorhead MN two-AM, five-FM superduopoly. However, CCU's grandfather clause will not be able to move over to the new owner, meaning that one the FMs will spin again before the deal is complete. The price for KFGO-AM, KKBX-FM, WDAY-FM, KDAM-FM, KVOX-AM, KRVI-FM and KFAB-FM will be 14M. KFAB-FM won't be around for long, however. It'll go straight to Religious/Educational noncommercial operator Northwestern College, headed by Alan S. Cureton. Ingstad will get a 500K credit toward tower lease fees, and after the station is appraised for fair market value, will take anything in excess of 500K as a tax write-off for a charitable donation. Northwestern already operates KFNW AM & FM in the market.

RBR observation: Shave and a haircut? You bet, and it'll cost Clear Channel a lot more than two bits. Six of these stations came from the Ingstads in a deal filed with the FCC 7/31/00. It had a value of 46.3M. BIA pegged the price of KDAM-FM at 800K, for a total cluster assembly cost of 47.1M. The new deal has a face value of less than a third of the 2000 agreement. Extraordinary.

Washington Media Business Report TM

File under fine
The latest culprits have been named in the FCC's ongoing war against those who would fail to maintain their public file to specification. A quartet were caught, as usual, while attempting to renew their licenses. Here is your virtual post office wall of the apparently liable. All of the stations were granted renewals. * New Jersey Catholic Radio, operating as licensee WVRM Inc., and operator of WDDM-FM Hazlet NJ in the Monmouth-Ocean market, has been hit for the full 10K. Its issue/program lists from Q2 2001 to Q1 2006 were missing. * Radio One's WKAF-FM Brockton MA (Boston) intermittently omitted to file issue reports, and was hit with a 10K fine. * KCRX-FM Seaside OR, owned by New Northwest Broadcasters LLC, was hit for 4K for intermittently failing to keep its issues/program lists on file. * Detroit Public Schools operates noncom WRCJ-FM Detroit. It allowed one of its personalities to remain on the air while running for a seat on the University of Michigan Board of Regents, and aired PSAs voiced by a Congressional candidate, and failed to note either in its political file. Considering its lack of funding, the FCC hit it with a 2K fine.

Internet Media Business Report TM

Majority of auto dealers plan to
increase online ad spend in '07
Nearly two-thirds of car dealers said they will increase their online advertising budgets in 2007, a recent Cars.com dealer poll found. The results echo online advertising expenditures reported by eMarketer.com, which expects car dealers nationwide to spend 1.9 billion on Internet marketing in 2006 -- more than twice what they spent in 2004. The group projects a 42% increase in 2007. In the October issue of Cars.com's monthly DealerADvantage newsletter, dealers were asked to share their ad plans for the new year. More than 20% said they will maintain their current spending levels, while 18% expect to spend less.

Engineering Media Business Report TM

KRLA boosts signal to 50,000 watts
Salem's News Talk 870AM KRLA has amplified its coverage area, boosting its day time signal from 20,000 to 50,000 watts across the Greater Los Angeles area. From Santa Barbara to Laguna Hills, an additional 1.3 million listeners now have the opportunity to tune in to the conservative news and opinion programming KRLA 870 offers its growing audience.

Transactions

2.89M WOYE-FM Puerto Rico (Rio Grande PR) from Josantonio Mellado Romero et al to Jose Juan Arzuaga Reyes. 1.33M deposit, balance in cash at closing. Duopoly with WIDI-FM Quebradillas. LMA 10/17/06 @ 5K/month. [File date 11/8/06.]

900K WMIA-AM Puerto Rico (Arecibo PR) from Abacoa Radio Corporation (Lirio Pirallo-Rivera) to Aerco Broadcasting Corporation (Angel O. Roman-Lopez). 90K down payment, balance in cash at closing. [File date 11/8/06.]

Stock Talk

Dollar, Wal-Mart worries sink stocks
A weakening greenback and disappointing sales figures from retail giant Wal-Mart sent stock prices skidding on Monday. The Dow Industrials dropped 158 points, or 1.3%, to 12,122.

Radio stocks were no exception, with virtually all lower. The Radio Index dropped 2.264, or 1.5%, to 149.340. Fisher had the worst day, falling 4.5%. Emmis was down 3.7% and Cumulus fell 3.1%.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		44.27	-0.73	Hearst-Argyle	HTV		25.11	-0.12
Beasley	BBGI		7.04	-0.12	Journal Comm.	JRN		11.80	-0.06
CBS CI. B	CBS		30.01	-0.28	Lincoln Natl.	LNC		63.40	-1.26
CBS CI. A	CBSa		30.00	-0.43	Radio One, Cl. A	ROIA		6.70	-0.19
Citadel	CDL		9.39	-0.18	Radio One, Cl. D	ROIAK		6.72	-0.18
Clear Channel	CCU		35.35	+0.07	Regent	RGCI		3.16	-0.05
Cox Radio	CXR		16.33	-0.45	Saga Commun.	SGA		8.91	+0.19
Cumulus	CMLS		10.50	-0.34	Salem Comm.	SALM		12.00	+0.09
Disney	DIS		32.59	-0.32	Sirius Sat. Radio	SIRI		4.12	-0.14
Emmis	EMMS		8.52	-0.33	Spanish Bcg.	SBSA		3.94	-0.04
Entercom	ETM		27.47	-0.75	Univision	UVN		35.44	+0.06
Entravision	EVC		7.28	-0.11	Westwood One	WON		6.50	-0.06
Fisher	FSCI		42.83	-1.22	XM Sat. Radio	XMSR		14.44	-0.83
Gaylord	GET		48.53	-1.22	-	-	-	-	-

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 rocks retail
On "Black Friday Week" JC Penney (#1) ran more radio than any other store...

"Selling radio ads in new ways"
Broadcasters & ad agencies under more pressure to deliver results...

Media Markets & Money
Buyer will forego Fargo FM
The price tag is in for Ingstad's acquisition...

Internet Media Business Report
Majority of auto dealers
Plan to increase Online ad spend in '07...

Arbitrends

Stations for Sale

Upgradeable Albany AM
License, equipment, and engineering study for upgrade, all available now. Includes property and new solid state transmitter. $240k, owner will finance. NO cash flow.
877-541-5250 (NO BROKERS)

Southern Market w/PCF
Near Major University
Owner finance - $950K
Ken Hawkins 334-514-2241
Satterfield & Perry
[email protected]

5 FM / 1 AM station NEast
2 markets, 3 station clusters.
Revenue @ 2.5M, CF pacing at
1M in 06, Asking 12.3M,
[email protected]
or 781-848-4201

Market your Stations For Sale
in our daily epapers.
Contact June Barnes
[email protected]

Radio Media Moves

AWRT welcomes Haley
Jeff Haley can't become a member of American Women in Radio and Television (AWRT) for obvious reasons, but the new RAB President and CEO has been named an AWRT Foundation Honorary Trustee. "RAB is deeply committed to the mission of AWRT. We support AWRT's work to advance the impact of women in media, " said Haley in accepting the designation.

Catalane returns
Former ABC Radio CFO Bart Catalane is back in broadcasting, though not in radio. He has been named Sr. VP and CFO of LIN Television, which owns and operates 30 TV stations in 18 markets. Catalane was most recently President, COO and CFO of Ziff Davis Media.

More News Headlines

Vox & Tallgrass
sign rep
Regional Reps Corp. announced that it has been named the exclusive regional and national rep for the stations owned by Vox Communications in Harrisonburg, VA and the Florida Keys and the stations that Tallgrass Broadcasting owns in Tulsa, OK and Independence, KS.

RBR Radar 2006

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

RBR Observation
Growth or Cut and Run?
"We believe that in our business we can never save ourselves into prosperity. We must manage expenses, but the only road to success is to raise revenues through the culture and system we describe." That is one of the 10 commandments of the Cherry Creek Radio sales culture. What do they know that the people running the largest broadcasting companies in America just can't grasp? Another of those 10 commandments notes that "when you turn out the lights, the assets go home" - in other words, growth is based on recruiting and holding onto good employees. Meanwhile the largest radio company in the country and one of the TV big four have been trying to save themselves into prosperity by ditching their most valuable assets, People. Clear Channel Radio has been axing people. NBC Universal has been doing the same thing with a reorganization dubbed NBCU 2.0. Or would it be better called NBCU -5% for the 700 people being cut from the workforce? As the saying goes - The Lights are On - But thinking short-term may help Clear Channel and NBC pay the light bills in 2007 - But is anyone at either company looking ahead to 2008 and beyond?

Editor's note: Have a comment let us know and send a photo to [email protected] Read RBR Observation in
11/27/06 RBR #229

Disney agrees to
Citadel modification
CEO Farid Suleman and his shareholders at Citadel Broadcasting has something to be thankful for as, just before the Thanksgiving Holiday, the company announced an agreement with Disney to modify the terms of the merger of ABC Radio into Citadel. The revised agreement reduces by 300 million the potential payment to Disney for the ABC Radio group and network.

RBR observation: As with most deals a little give and take on both sides. Citadel had blamed underperformance by ABC Radio for the decline in the stock price for Citadel, which triggered an increase in how many shares would be going to Disney shareholders in the merger. Disney agreed to give up some, but not all of that bonus which would have been due under the original contract. (See the details in)
11/27/06 RBR #229

RBR First: Why PPM wasn't approved by MRC last week
At Wednesday's (12/15/06) MRC meeting and vote on approving Arbitron's PPM system, the thumbs up was not given for two issues that required more inspection, according to RBR sources. They related to the compliance issue of those people, who for whatever reason, did not carry the meter every single day that they were supposed to.
11/22/06 RBR #228

Voicing Out
Your conclusion to the OJ
Cancellation piece that: "We wonder why [the Powers That Be at Fox] didn't see this coming when they decided to publish the book and create the TV special to go with it" seems so naive...Rather, it takes months of intensive, coordinated planning by dozens of creators and decision-makers, all of whom are awash in ratings data and craft their product carefully to fulfill known audience expectations. Surely they were all keenly aware of the reaction their concept.. Peter Gutmann of Womble Carlyle Sandridge & Rice, PLLC, Washington, DC

RBR note: We want to hear from you. This is your column, so send your comments and a photo to [email protected]
11/22/06 RBR #228

Red Wolf continues to stalk Citadel
The bad blood between Citadel Broadcasting and Red Wolf Broadcasting goes back to the refusal of Red Wolf to sell its WBMW-FM in New London CT to Citadel and a dispute over an FM translator, and has since mushroomed. Red Wolf has been trying to block Citadel's ability to acquire Disney radio stations and renew licenses. Through its attorney, it's filed further charges of payola, echoing those of former NY AG and now governor-elect Eliot Spitzer. The latest charges, filed by attorney Arthur V. Belendiuk of Smithwick & Belendiuk, P.C., revolve around a program called "Airbound."
11/22/06 RBR #228

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
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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.
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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.
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