RBR's Daily Morning Epaper

Volume 24, Issue 230, Jim Carnegie, Editor & Publisher

Tuesday Morning November 27th, 2007

Radio News ®

Arbitron to delay PPM rollout in NYC, LA,
Chicago, San Francisco and Dallas

Looks like all the PPM recent numbers issues raised by Cox Radio, Beasley and others has forced Arbitron's hand, as the company announced yesterday it will delay the commercialization of its PPM radio ratings service in nine markets. New York, Nassau-Suffolk and Middlesex-Somerset-Union will be delayed by nine months; Los Angeles, Riverside and Chicago by six months; and San Francisco, San Jose and Dallas by three months. In these nine markets, the company will keep the diaries. During the delay, Arbitron will continue to work with customers, the Media Rating Council (MRC), other industry organizations and community groups on the research and sample size issues that have been plaguing the Houston and Philly rollouts. Arbitron intends to introduce the Portable People Meter service in Atlanta, Detroit, DC and in subsequent markets, as originally scheduled.

"We remain confident in the audience estimates that the Portable People Meter service is producing. However, over the past three weeks, feedback from our customers, the Media Rating Council and other constituencies has led us to conclude that the radio industry would be better served if we were to delay further commercialization of the PPM in order to address their issues," said Steve Morris, Arbitron CEO. "We already have a number of initiatives in the pipeline for implementation in the first quarter of 2008 that we believe will improve the performance of our PPM samples. Our intention is to expand significantly this list of improvement initiatives by working closely with customers, industry organizations and community groups...We also plan to use the additional time to work closely with community leaders to review the workings of the Portable People Meter service and to gather their insights as to how we might improve compliance among persons 18-34, including ethnic young adults, across the diverse communities of New York, Los Angeles, Chicago and subsequent markets."

Steve Sinicropi, VP/GM Cox Radio Greenville/Chairman of the Arbitron Radio Advisory Council, and among the most outspoken regarding problems with PPM, tells RBR he was pleased with the move and anticipates details will be hashed out at Arbitron Radio Advisory Council meetings: "Arbitron's decision to delay the commercialization of PPM in New York is a response to customer concerns about sample size, performance and compliance. Electronic measurement will be good for radio, but getting it right is more important than getting it now. Getting it right will provide confidence in the currency. The Advisory Council is looking forward to our meetings next week to learn more about Arbitron's performance initiatives and what quality benchmarks will be needed prior to commercializing a PPM market."

RBR observation: Perhaps the problems between Arbitron and the New York City Council about the independent panel reviewing the rollout of PPM was the last straw-there may not have been time as PPM was set to go live there 12/31. Ironically, the decision does not impact PPM ratings currently in Houston and Philadelphia. Also have to note from last week when Bob Neil stated the train, meaning PPM, had left the station. But RBR cautioned it was time to slow the train down before it had a bad experience. Seems now the train has come to a complete stop and it is now best to make sure all parts are in working order--especially the brakes before the train leaves the station, again. Also, this morning Arbitron has scheduled a conference call and RBR will be there and report the findings. (For Aribtron's financial guidance see Wall Street Business Report below)

Heavy weather in early states
Iowa and New Hampshire broadcast outlets are experiencing a perfect storm: heavy retail demand due to the holiday gift-giving season and the unprecedented early dates for the Iowa caucuses and the New Hampshire primary. One consultant told the Associated Press that it's like a hailstorm in a hurricane. The two states moved ahead on the calendar to maintain their lead-off status as other states made changes to try and wrangle a louder voice in the process with an early decision date. The Iowa caucus is now scheduled for 1/3/08 and New Hampshire hits just five days later on 1/8/08. There is time between 12/25/07 and the do-or-die days of the early primary season, but it is far less than campaigns have ever had to work with, and television schedules are expected to be full to bursting throughout the month. Speculation abounds that it may be a particularly dangerous time for jarring negative advertising run against a backdrop of messages focusing on holiday cheer. Some think that interest groups not directly associated with candidates may fill the negative gap, further putting strain on station avails.

RBR observation: Radio stations will be afterthoughts to most political operatives, so the case for your station should have been made yesterday. More importantly, this is the perfect opportunity to target local businesses that often rely on local television but are finding themselves crowded out. Show them results for a decent price and you may very well add a new member to your year-round client base.

FCC direction becomes apparent today

Chairman Kevin Martin will preside over an FCC Open Meeting heavily laden with broadcast items today. At least, that's what the schedule says. He's been known to slam on the brakes when he's unsure a vote is going to go the way he would like. The FCC plans to take a look at the court-remanded media ownership proceeding, affectionately referred to as the 2006 Quadrennial Review. This proceeding covers a lot of territory, but the 800-pound gorilla, Martin's proposed elimination of cross-ownership restrictions in the top 20 markets, is expected to be brought up for a vote, if at all, at the December 18 meeting, providing about a month for public comment. Also on the agenda: A look at LPFM; public interest standards for television stations; the competition in the delivery of video programming; the state of competition in the market for video programming; a look at leased commercial access for video programmers, development of competition and diversity in video programming distribution and carriage. The meeting is scheduled to kick off at 9:30 AM.

RBR observation: As we noted, it is unlikely that the cross-ownership proposal will receive anything more than discussion today. The parties looking to the meeting with a sense of anticipation seem to be the watchdog community, which hopes to make gains in opening broadcast and cable to minority, female, small and otherwise socially-disadvantaged businesses.

CBS/Entercom deal finally waved through
A double deal sending stations in Memphis TN, Cincinati OH, Austin TX and Rochester NY for a grand total of 262M has finally been cleared for takeoff by the FCC, over a year after the transactions were officially filed at the Commission. The holdup has been a petition to deny filed by Ed Stolz's Royce International, which has been involved in a long-term dispute with Entercom over KWOD-FM Sacramento CA. The FCC first denied Royce standing to make the filing, since its complaint was based on private rather than public interest. But it did consider it as an informal objection and rejected it anyway. Royce mainly argued that the transaction would overleverage Entercom, saying that the company has failed to demonstrate its financial qualifications to consummate the agreement. Entercom said to the contrary that they are no more leveraged than many similar companies and will have no trouble closing the transaction.

Wrapping it up, the FCC wrote, "Royce's financial objection is grounded on its private contractual dispute with Entercom concerning Entercom's payment to Royce of the purchase price for Royce's Station KWOD-FM Sacramento CA. The Commission is not the proper forum for the resolution of this matter." A 220M application for the stations in Memphis, Cincinnati and Austin was filed 8/28/06. The 42M Rochester portion was filed separately on 9/6/06, keeping it clear of the other stations since Entercom will need to spin off stations there to remain in compliance with local ownership caps.

Consent decree skates around indecency issue

CBS Corporation will get a renewal for KUTV-TV CBS/2 in Salt Lake City, despite complaints of airing indecent material subsequent to a consent decree inked in 2004 resulting in a 3.5M payment to the US Treasury. The cost: another 300K tied to another consent decree. As is typical in consent decrees, CBS admitted no wrongdoing, but agreed to make a "donation" to Uncle Sam and promised to engage in an educational program to assure that its employees do not go down the same questionable avenues again. But CBS stations were nailed with an NAL in 2006 for airing an episode of "Without a Trace" deemed to contain apparent indecent material. That in turn led to an objection to the renewal of the license for KUTV from Andrea Gutton and Sharilee Guest. CBS disputed the finding of the NAL, saying that "...it had presented nothing indecent and that none of its employees had done anything wrong." It later added that "it was not readily apparent" that certain portions of the earlier consent decree "might apply in the context of scripted shows such as 'Without a Trace.'" Although it still does not admit to indecency, CBS acknowledged it may have inadvertently failed to live up to the remedial portion of the earlier agreement, leading to the latest 300K consent decree. Again, there is no finding of wrong-doing, and the license renewal for the station is granted.

RBR observation: There has not been a meaningful indecency finding since the maximum price tag went up to 350K. While many have pointed out to the chilling effect the new max has had on programming, others have noted that it may also chill the FCC's willingness to take it out of the box and actually use it. At some point there will probably be another Janet Jackson type incident that gets the full focus of the national media spotlight, and the enforcement issue will come front and center. But how many more small indiscretions will be allowed those who have signed these decrees? Stay tuned.

Wall Street Business Report TM

Arbitron reissues guidance
As a result of its decision to delay further implementation of PPM (see above), Arbitron is updating its previously issued guidance to reflect the resultant financial impact. Earnings per share (diluted) for 2007 are currently estimated to be between 1.30 and 1.35 as compared to its previously issued earnings per share guidance of 1.35 to 1.45. In addition, the company currently estimates the impact of foregone revenue and additional costs required to produce diary estimates in the affected markets will reduce 2008 earnings by 0.22 to 0.33 per share (diluted).

Ad Business Report TM

Dial Global Digital 24/7 syndicates KPIG
Dial Global Digital 24/7 Networks and Mapleton Communications announced syndication of the legendary KPIG Radio (KPIG-FM), the award-winning Santa Cruz-Monterey, CA based station. Availability begins 12/31. DG will also handle ad sales. KPIG Radio is an "Americana" format that has long been known for its quirky sense of humor, unique music and live DJ mix. As the first radio station in the US to stream on the internet (www.kpig.com) in 1995, KPIG has created a loyal worldwide audience. Programming will be formatted for national satellite distribution and local replay by affiliates. Local affiliates will adopt the station moniker KPIG/Pig Radio. Additionally, DG will have an arrangement to provide KPIG to stations for use on HD multicasts.

Ad impressions for Japanese cars tops last fall
Even with the home court advantage, U.S. automakers had a hard time keeping up with their Japanese counterparts when it came to reaching U.S. consumers, according to the results of a research report released by Integrated Media Measurement Inc. (IMMI), a provider of data to media companies and advertisers that links media exposure to consumer behavior. The research, which was collected by monitoring actual individual ad exposure in six key markets, also shows that marketers advertising on multiple platforms need to look at combined data, in this case television and radio, to get a true assessment of the effectiveness of their campaigns. Japanese auto manufacturers reached on average 22% more audience than U.S. automakers and 27% more than European manufacturers. The study was based on the number of times car ads were seen by consumers in New York, Houston, Denver, Chicago, LA and Miami on both television and radio during August-October 2007.

The automaker with the greatest number of overall net impressions on both radio and television was Honda, which garnered 28% more reach than the average of all the other automakers combined. Mazda had the most television net impressions at 37% above the average and BMW was an overwhelming leader in radio with 239% more impressions than the average. When it came to effectively using a cross-platform strategy, Ford had the highest percentage increase in their overall unique audience when adding a second medium, in this instance radio. Ford showed a 37% increase in their overall reach when the number of radio impressions were factored into their TV numbers. "Looking at just radio, or just television, does not give advertisers a true sense of their campaign's performance," said Amanda Welsh, head of research for IMMI. "Rather than looking at isolated data, which will yield an incomplete picture, marketers need to implement a cross-platform measurement strategy to evaluate the effectiveness of campaigns that are on multiple platforms."

Media Markets & Money TM

GAP handles Radioactive material in Montana
Skip Weller's GAP Broadcasting, the second similarly-named group backed by Oak Tree Capital Management, is taking a Randy Michaels FM off the hands of Clear Channel, adding it to its Missoula-area cluster. The Michaels KXGZ-FM 101.5, licensed to Radioactive LLC, is a recently constructed Class C1 licensed to Frenchtown MT. Weller's GAP Broadcasting of Missoula will pick it up for the same 500K Clear Channel was going to pay, and it will nestle into one of the clusters Weller acquired in its foundational multimarket acquisition from Clear Channel. Other stations in the area include KGVO-AM, KLCY-AM, KLYQ-AM, KBAZ-FM, KYSS-FM & KENR-FM. An engineering study accompanying the FCC paperwork notes that the stations form two distinct markets under contour method analysis.

HD Radio 2007

Volvo to offer HD Radios for 2008 models
Add Volvo to the list that includes Ford, Jaguar, Hyundai and BMW: Volvo Cars announced it will offer factory installed HD Radio receivers as standard and optional equipment in its product line scheduled for introduction in 2008. "Volvo drivers expect the highest quality in every aspect of their vehicles," Dirk Bott, Vice President Brand, Business & Product, Volvo Cars of North America. "Adding HD Radio capability truly makes our audio systems state of the art, giving Volvo drivers an even more enjoyable driving experience."

Washington Business Report TM

Lott taking off early
Another Republican Senate seat is going to be up for grabs in 2008, and it will mean an unusual double election in the state of Mississippi, due to the plans of Trent Lott (R-MS) to take an early exit from public service at year's end. His colleague Thad Cochran (R-MS) just recently said he would run for re-election. In Lott's case, he successfully did that last year, and even was elected minority whip for his party, but according to numerous reports he has simply grown weary of the Washington grind. Gov. Haley Barbour (R-MS) will be able to appoint a successor for 2008, but it is expected that a special election to fill the term will be held with the regular election next November. One name from the House Commerce Committee has been aired in regards to Lott's seat. Chip Pickering (R-MS) has widely been seen as an up-and-comer, but he has already announced his intention to retire from the House and it is unknown if he can be tempted by a move up to the Senate. But Mississippi is a reliably Republican state these days, and it remains to be seen if the Democrats can enlist a strong candidate, no matter who the Republicans get to run.

RBR observation: Lott's retirement will deprive Byron Dorgan (D-ND) of one of his consistent across-the-aisle anti-media consolidation allies. More to the point, Dorgan can usually count on moderates like Olympia Snowe (R-ME), but in Lott's case will be losing arguably the most conservative Republican to accrue significant mileage on the Dorgan frequent co-sponsor list.

Entertainment Business Report TM

WNCI apologizes for parody song
CC Radio's WNCI-FM Columbus, OH apologized on its website for airing a parody song last Tuesday. The station also agreed not to play the song again. The song, called "Bunch of Mexicans" (to the tune of David Bowie's Young Americans), describes a group of 14 Mexicans misunderstanding orders at a fast-food restaurant, working as landscapers, traveling in "packs" and evading immigration authorities. The song, written and performed by Dave Kaelin of the "Morning Zoo" team Dave & Jimmy, has aired a few times but this time raised the ire of the Ohio Hispanic Coalition (which threatened a boycott of advertisers). Kaelin and WNCI PD Michael McCoy told The Columbus Dispatch they didn't consider the song offensive, but said it was intended as a satire on Americans' view of immigrant labor.

Zapoleon Media, Marshall Arts Communications introduce "Jayne-FM"
Zapoleon Media Strategies and Marshall Arts Communications have created a new Hot AC program, "Jayne-FM." Robin Marshall, air personality at New York's CD-101.9 morphs into her "Jayne personality" each weekday for the five hour syndicated show. Jayne-FM is aimed at nighttime programming and is adaptable to fit any daypart (including weekends).

Internet Business Report TM

Westwood One signs online traffic deal with Citadel
Westwood One announced a group-wide agreement with Citadel to provide Citadel Interactive with online traffic and news services. Westwood One and Maptuit's online interactive traffic service, RealTraffic, will debut on 50 Citadel station websites by 1/1 and will provide commuters with real-time traffic info. Westwood One's online news service, MetroWebNews, will debut on more than 200 Citadel sites, also by 1/1. RealTraffic is a digital traffic application, which is seamlessly integrated into the websites of departments of transportation, newspapers, radio and TV stations across the country, giving visitors an easy to use service that quickly lets them know where traffic problems are and which routes they can use to avoid them. RealTraffic, developed by Westwood One and Maptuit, Inc. provides commuters with live traffic maps, driving directions, personalized commute pages, traffic cameras and email/mobile traffic alerts.

Ratings & Research

Black Friday traffic grows 10%
Nielsen Online, a service of The Nielsen Company, reported today that at home Web traffic to the Holiday eShopping Index grew 10% year over year on Black Friday, garnering 21.2 million unique visitors across more than 120 representative online retailers, compared with 19.2 million unique visitors last year. This growth is similar to last year's, when the Index saw 12% year-over-year growth on the day after Thanksgiving. Consumer Electronics was the fastest growing product category week over week on Friday, increasing 235% from 11/16 to 11/23. Computer Hardware/Software took the No. 2 spot with 121% Web traffic growth, followed by Shopping Comparison/Portals with 95% growth.

Cyber Monday tracking 3X higher than 2006
If the traffic on CyberMonday.com is any indication, shoppers have returned in full force from their Thanksgiving holidays and are looking online for great deals. According to BIGresearch for Shop.org, 72 million consumers will shop online this year on Cyber Monday. 31.9% of adults will shop on Cyber Monday, up 17.3% over last year (27.2%). More than half (54.5%) of office workers with Internet access, or 68.5 million people, will shop for holiday gifts from work this year, up substantially from 50.7% in 2006 and 44.7% in 2005. Men are more likely to shop from work than women (57.3% vs. 51.7%) and young adults 18-24 years old are more likely to shop there than any other age group (72.9%). Traffic on CyberMonday.com, a one-stop shop for consumers looking for Cyber Monday deals, is tracking three times higher than traffic on Cyber Monday last year, according to Mall Networks, which powers the site. By 1:00 p.m. ET yesterday, the site had more than one million visitors. The site offers promotions and special deals from more than 550 online retailers.

Transactions

N/A WNZZ-AM Montgomery AL; KYNF-FM Fayetteville/Northwest Arkansas (Prairie Grove AR); WZBN-FM & WNUQ-FM Albany GA (Sylvester, Camilla GA); WMGB-FM Macon GA (Montezuma GA); WTYB-FM Savannah GA (Tybee Island GA); WKOR-AM Columbus-Starkville-West Point MS (Starkville MS); WXKR-FM & WTWR-FM Toledo OH (Port Clinton OH, Luna Pier MI); WSOM-AM & WLLF-FM Youngstown-Warren OH (Salem OH, Mercer PA); WHLZ-FM & WCMG-FM Florence SC (Marion, Latta SC); WJXY-FM & WXJY-FM Myrtle Beach SC (Conway, Georgetown SC); KLTD-FM Killeen-Temple TX (Temple TX); KGEE-FM Odessa-Midland TX (Pecos TX); KOLI-FM Wichita Falls TX (Electra TX); and WOGB-FM Green Bay WI (Kaukauna WI) from Cumulus Broadcasting LLC/Cumulus Licensing LLC (Lewis W. Dickey Jr. et al) to Stratus Radio LLC (Scott Knoblauch, Trustee). Stations put in trust for resale as seller prepares to go private. [File date 11/5/07.]

Stock Talk

No credit for good weekend
Black Friday seemed to be all one might hope, but ongoing concerns about the troubled credit situation tilted Wall Street downward yesterday. Most broadcast stocks found themselves following suit, with the notable exception of Clear Channel and a handful of others. Companies that lost less than a dime probably will consider it a good day.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		48.91	-1.68	Google	GOOG		666.00	-10.70
Beasley	BBGI		6.95	-0.05	Hearst-Argyle	HTV		17.85	-1.50
CBS CI. B	CBS		26.12	-0.46	Journal Comm.	JRN		8.51	-0.41
CBS CI. A	CBSa		26.16	-0.40	Lincoln Natl.	LNC		56.65	-3.11
Citadel	CDL		2.15	-0.12	Radio One, Cl. A	ROIA		1.88	-0.41
Clear Channel	CCU		34.14	+0.46	Radio One, Cl. D	ROIAK		1.90	-0.39
Cox Radio	CXR		11.81	-0.83	Regent	RGCI		2.07	+0.14
Cumulus	CMLS		8.44	-0.44	Saga Commun.	SGA		6.99	-0.09
Debut Bcg.	DBTB		0.80	unch	Salem Comm.	SALM		7.73	-0.27
Disney	DIS		31.24	-0.60	Sirius Sat. Radio	SIRI		3.50	+0.04
Emmis	EMMS		3.93	-0.31	Spanish Bcg.	SBSA		1.76	-0.15
Entercom	ETM		16.18	-1.64	SWMX	SMWX		0.01	unch
Entravision	EVC		7.44	-0.41	Westwood One	WON		1.94	-0.03
Fisher	FSCI		41.61	-1.40	XM Sat. Radio	XMSR		13.96	-0.06

Bounceback

Send Us Your Opinions We want to
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This is your column, so send your comments and
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A commentary on the
upcoming beer wars

Editor:
Had to smile when I read the headline, "Anheuser-Busch to go against microbrews" in this morning's RBR.

So Goliath plans to put David in his place by beating David's friends over the head with a hundred million bucks. What's the plan - to inflict sufficient brain damage to render these pitiable consumers incapable of differentiating between an interesting micro and an insipid industrial brew?

One wonders, since the small craft breweries don't have A-B's deep pockets, which of them (or perhaps a microbrewers' alliance) will be first to leverage A-B's millions to their own advantage. These days, it doesn't take much of a stone to penetrate whole cloth. The reason many beer lovers prefer micros - and are willing to pay even more for them - has nothing to do with advertising and everything to do with the product itself.

Maybe Goliath and David should discuss the situation over a tall cool one - at David's place.

Cordially,
Rod Schwartz, Beer Drinker (with dinner) and Ad Guy
Pullman, WA

Below the Fold

Wall Street Business Report
Arbitron reissues guidance
As a result of its decision to delay further implementation of PPM...

Media Markets & Money
GAP handles Radioactive
Material in Montana is taking a FM off the hands of Clear Channel...

HD Radio 2007
Volvo to offer HD Radios
For 2008 models raising the list of foreign autos to plug in...

Entertainment Business Report
WNCI apologizes
For parody, The song, called "Bunch of Mexicans"...

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Radio Media Moves

Tom Bender named SVP/GM of Greater Media Interactive
Greater Media announced Tom Bender has been named SVP/GM of Greater Media Interactive, responsible for building on the foundation in place with Greater Media's interactive efforts and for coordinating and consulting individual station efforts, as well as creating company-wide systems and resources. Bender has been the Market Manager for the company's Detroit-based properties since 1986. He's responsible for changing the format of a failing AC station to become first "Classic Rock" format station in America, WCSX. In 1994, Bender managed the acquisition of WRIF-FM there.

More News Headlines

TargetSpot signs three
Streaming media advertising company TargetSpot announced partnerships with Nassau Broadcasting Partners, Soundpedia.com and FNX Radio, bringing over 50 new stations to its roster of broadcasters. TargetSpot's technology allows businesses to create, buy and place advertising on streaming radio stations. TargetSpot will soon be available on over 450 stations nationwide, and has already signed agreements with CBS Radio, Entercom and Beasley, WarpRadio, and Haystack Media. "We are already witnessing serious advertiser demand for our new model, which allows even the smallest businesses to take full advantage of one of the fastest growing media marketplaces," said TargetSpot CEO Doug Perlson. "Radio stations across the nation are discovering that our platform is an easy method for broadcasters to monetize their streaming media audience."

Natixis Media & Entertainment observing slower video sales
Natixis Bleichroeder's Media and Entertainment division reports blockbuster films are generating fewer DVDs unit sales than in previous cycles-further complicating the numbers for movie studios and production houses beyond the WGA strike. Where a big picture used to sell 20 million units, top movies now struggle to reach 10 million units. This trend is likely due to industry maturation, the economy, and new technologies. Home video, the biggest profit center for the studios, is being impacted. Marvel's films have underperformed this holiday season with both Spiderman 3 and Fantastic Four 2 missing home video projections, generating an estimated 20% and 33% of box office revenue. They now highly question whether video revenue from the upcoming film slate will be able to generate 70% of domestic box office as Nataxis projected. If video is only 35% of box office, it implies a 19 million, or 29%, reduction in a film's average profit.

Video industry leader TWX has seen its seen its average unit price drop 15% during the first nine months of the year, resulting in a 5% DVD revenue decline on a 12% increase in units. This is after a 16% revenue drop in 2006 off of a very difficult comp the prior year. Theatrical home video revenue had dropped 5% and TV home video declined 10% during the first nine months of the year. TV series have been the growth area of the video industry the last few years, but even that business seems to have topped out, said the report. Wal-Mart is selling earlier full seasons of HBO's Soprano's or Fox's 24 for as little as 19.96 this year; but the latest season is still selling for 49 bucks for 24 and 99 for The Sopranos. Nataxis also notes DreamWorks Animation's Shrek the Third is pacing at a disappointing level with an early estimate of 6 million units sold, resulting in much less than the industry average DVD revenue to domestic box office revenue.

Witnesses named for WWOR-TV renewal hearing
The two-hour public forum on the license renewal of Fox's WWOR-TV is scheduled for 4-6PM Wednesday 11/28/07. WWOR VP/GM Lew Leone will have a chance to speak, along with Donna Sandorse of Voice for New Jersey, Institute for Public Representation's Angela Campbell, Ingrid Reed of the Eagleton Institute New Jersey Project, and Media Access Project's Parul Desai. The Secaucus NJ station has been criticized for focusing on the New York market at the expense of its NJ audience.

RBR Radar 2007

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

Clock ticking for buyouts
A few months ago private equity buyouts were all the rage. Univision had been bought, Clear Channel and Cumulus Media announced private equity buyout deals and Tribune announced a going-private twist that will have Chicago billionaire Sam Zell and a new Employee Stock Ownership Plan buyout the public shareholders of Tribune Company. Then something unexpected hit - something unrelated to the private equity business - a credit crunch brought on by major write-offs by big investment funds for their plays in subprime mortgages.

RBR observation: Who said arbitrage was easy? Despite indications that the financing is firm for the Clear Channel and Cumulus buyouts, Wall Street is pricing significant risk into their trading prices. It is highly unlikely that Thomas H. Lee Partners and Bain Capital will try to renegotiate the Clear Channel price, since they had to bid it up to win shareholder approval. So it looks like easy, short-term profits to buy the stock well below 39.20 and wait for the closing. But if the buyout somehow does crater in this turbulent credit market, who knows how low the stock price could fall? The Cumulus buyout is moving ahead, but how much worse could the credit situation become before it is scheduled to close? And Tribune really carries a big "if" for speculators. What if the FCC just sits and does nothing - no rule change and also no action on waivers? Step two of the two-part! buyout could just stay in limbo indefinitely.
11/26/07 RBR #229

Radio Advisory Council chair responds to Arbitron
Steve Sinicropi, Chairman of the Arbitron Radio Advisory Council and VP/GM of Cox Radio Greenville, sent RBR this response to the comments published Wednesday from Arbitron VP Thom Mocarsky (11/21/07 RBR #228). Arbitron positions the methodological differences between Houston and Philadelphia as a more of tweak than a major change and assured the Council that concerns over differences were unwarranted. Obviously Arbitron was wrong. More Sinicropi comment in this report page of RBR.
11/26/07 RBR #229

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