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Volume 22, Issue 232, Jim Carnegie, Editor & Publisher
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Tuesday Morning November 29th, 2005
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Radio News®
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 A closer look at Spitzer's payola case
New York Attorney General Eliot Spitzer claims to have uncovered widespread payola violations by radio stations and record labels. And after announcing last week's five million bucks settlement with Warner Music (11/23/05 RBR #230), the AG, who is also busy running for Governor, indicated that radio groups are his next target, saying the improper transactions have to have two sides. But does Spitzer have any legal basis to go after radio station owners? The only real piece of new information to come out of the Warner Music settlement was its listing of what New York laws Spitzer claims have been violated. The previous 20 million bucks settlement with Sony BMG didn't cite specific violations of New York law and when RBR/TVBR asked Spitzer's office what law applied, and how, all we got was a very vague answer. Now, in the Warner settlement, he claims that under the state's commercial bribery statute, it is illegal to provide a benefit (radio airplay) without the employer's consent. Other than yet another round of allegations against fired Entercom PD Dave Universal, now working for a station in Canada, there doesn't seem to be any new evidence in the Warner settlement of station employees taking gifts from record labels or independent promoters without their employer's knowledge. That leaves Spitzer with a broad claim that he can apply "Section 349 of the New York General Business Law" against "deceptive acts or practices" on the grounds that radio playlists are tainted, and the public therefore deceived, if a radio station receives any promotional consideration from a record label - - a stance that goes far beyond any previous definition of "payola."
RBR observation: Has Spitzer provided a "mountain of evidence" of widespread payola violations, as claimed by FCC Commissioner Jonathan Adelstein? Or is it more a mole hill, with a mountain of garbage piled on to help a hard-driving politician grab headlines? We see even less hard evidence of payola in the Warner settlement than in the Sony BMG one - - and that wasn't much. Once again, we question why a politically-driven New York official is being permitted to lay down new rules for the conduct of business by radio stations and record labels in the other 49 states.
 Decency witnesses head to The Hill today
Sen. Ted Stevens (R-AK) has made public the list of panelists who will testify at the Commerce Committee's day-long "Open Forum on Decency" today on Capitol Hill. Heading the list is FCC Chairman Kevin Martin. A few loose ends seem to have been tied since an earlier list released came out last week. For one thing, that list included only companies and organizations - - the FCC was listed, but not Martin. More interesting was the inclusion of ABC/Disney as the lone network. That large, triple-header loose end has been tied, with Fox/News Corp., NBC/GE and CBS/Viacom all added to the new roster. Also, as predicted, the Parents Television Council was tapped after not making the first list - - in fact, two individuals are coming from PTC. Frequent testifier Brent Bozell will be joined by Executive Director Tim Winter.
RBR observation: Do you think, as a balance to the well-represented forces for decency, that they'll make Larry Flynt a last-minute roster add to provide counterpoint? Nahhhhhhhhh...
| List of witnesses here |
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FCC will make sure 2005 isn't a fine year for indecency
The FCC has not yet hit any radio or television stations with a fine, or even a notice of apparent liability (NAL) on charges of alleged broadcast indecency all year long. That is expected to change before the bearded old man makes way for the cherub as 2005 segues into 2006. Radio and television are both on the hook, but not at the same time - - word is that television findings, both actionable and not, will be released in December, with radio findings to follow early in 2006.
RBR observation: We will be listening closely to Chairman Kevin Martin's testimony on Capitol Hill today to see if he sheds any light on the FCC's leanings. One thing is certain, however. There are no fans of indecency on the current Commission, although the anti-indecency hawks are clearly Martin and Democrat Michael Copps. It has appeared to us that Commissioners Kathleen Abernathy (soon out the door) and Jonathan Adelstein were both at least somewhat more apt to give an ear to free speech advocates, while still expressing nothing but disdain for those who go over the line. The recently departed Chairman Michael Powell had at one time been the loudest proponent of free speech on the 8th Floor, and for a time took an approach in which the FCC tried to provide clearer guidance to broadcasters as to what was OK or not - - an approach which was torpedoed by the wardrobe malfunction of Janet Jackson. The FCC will no doubt be trying to draw a clearer line, but many would argue there is simply too much gray area for a truly bright line to ever exist. Stay tuned...
 Dobson's tax-exempt status challenged
Citizens for Responsibility and Ethics in Washington (CREW) are goint to the IRS, asking if perhaps the political activities of Focus on the Family's James C. Dobson warrant the removal of the organization's tax exempt status. It argues that Dobson on several occasions has or has appeared to endorse and/or campaign for candidates for federal office, including Patrick J. Toomey in Pennsylvania (who failed to win a Republican Senatorial primary), and Tom Coburn, who won a Senate seat in Oklahoma. CREW cited instances where individuals working for progressive-leaning non-profits have been investigated on the same grounds, and wants to make sure the IRS is treating each side equally.
RBR observation: Noncoms that wish to avoid paying taxes have to be careful about their political speech, and that particularly includes the content of any advertising they choose to place in the broadcast media. However, we don't think there is anything here for broadcasters to worry about. Station licensees are not electioneering referees. If a noncom buys time to air speech which threatens its tax-exempt status, we think that is the IRS's lookout, not the broadcaster's.
David Kurtz dead at 73
He was the behind the scenes half of the partnership that owned WBEB-FM Philadelphia. That was by choice. David Kurtz was always happy to let Jerry Lee be the public face of station, while he toiled in the accounting department - - working at the station until about a month before his death. "We put the station on in 1963. Initially, I had no ownership," Lee told RBR, but he became Kurtz's 50/50 partner in 1969. Together they built the first successful stand-alone FM station in the nation. In 1968 the station, then called WDVR, set an industry milestone by becoming the first FM station to bill one million bucks in one year. Through innovation and heavy promotion, WDVR (which became WEAZ and then WBEB) has remained one of the highest rated stations in Philadelphia and withstood the waves of consolidation which claimed most other big-market FMs. There had been speculation that WBEB would have to be put up for sale to settle the estate when one of the partners passed on, but Lee tells us that was recently resolved. Knowing that his time was short after a two-year battle with cancer, Kurtz executed a contract that will now allow Lee to buy out the other 50% ownership stake. A public memorial service for David Kurtz is set for 10:30 this Saturday (12/3) at George Washington Memorial chapel in Plymouth Meeting, PA.
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Adbiz©
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 TiVo unveils ad search product for television
TiVo plans to offer the first television-based ad search solution in the Spring. Leveraging TiVo's search capabilities, the new product will deliver relevant, targeted advertising to subscribers that want to view particular advertising categories. Leading media and advertising agencies including Interpublic Media, OMD, Starcom Mediavest Group and The Richards Group, as well as Comcast Spotlight, the ad sales division of Comcast Cable, have worked with TiVo on the new product. Agency research and development techniques will contribute in determining relevant categories of interest, such as automotive, travel, telecommunications, and consumer packaged goods, as well as determine relevant pricing models. Advertisers will have the ability to deliver ads on demand and targeted to consumers, without the limitations of traditional TV media placement. Ads will be delivered to subscribers who can conduct a search for a product by category or associated with keywords, utilizing the same revolutionary keyword search techniques offered with Internet advertising, resulting in increased relevancy for the consumer, as well as efficient, measurable results for the advertiser. TiVo launched an interactive direct response ad program in August, where subscribers were given the opportunity to respond to a customized call to action or branded "tag" in select spots. TiVo's new search advertising product allows advertisers to further engage their target consumers.
The idea is making media agencies happy: David Verklin, CEO of Carat Americas, tells RBR/TVBR: "The next battleground in marketing is the issue of waste. The idea of how many people see ads today that are not in the target and how we have never really calculated that into the CPM because our CPM metrics are always demographic. I think Visible World technology, the addressable technology, or the Invidi technology, any of that stuff, Navic, are all so exciting. Everyone's talking about the concept of engagement, creating marketing and advertising programs that engage the consumer. To me the plain language way of saying that is "advertising to the interested." You really want to put ads in front of people that are interested in seeing it. It is the solution to TiVo, it's the solution to all of our problems is to advertise to the interested."
Integrent launches online local buying service
Interactive agencies that have been reluctant to purchase advertising on local publishers due to the difficulties involved with building and scaling campaigns across hundreds of local websites may be interested in a new local buying service called "Centro." Chicago-based Integrent is banking on drawing its share of the increasing opportunities for more local media spending online from national clients. "Centro makes it easier and more cost-efficient for agencies to effectively and substantially purchase advertising on hundreds of branded local websites at once," said Alan Schanzer, North American Managing Partner of MEC Interaction. "This includes newspapers, TV sites, radio sites, alternative weeklies and business publications - the plawces consumers tend to trust for local insight." Centro's system includes more than 1,300 local sites encompassing online newspapers, TV and radio sites, alternative weeklies and business publications from each of the Top 100 markets in the US, comprising over 50 million unique users each month. Centro has established relationships with leading local media brands such as Advance, Belo, CBS Television, Cox, Hearst, McClatchy, Media General and others along with helping over 150 recognized brands, through their respective agencies, such as Allstate, American Airlines, Dell, Ford, Mercedes-Benz, Northwest Airlines, SBC, State Farm and United Airlines.
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| HD Radio 2006 |
 December 6: A big HD radio announcement coming
The press and radio trades received this email, and iBiquity CEO Bob Struble confirms it's about HD: "On Tuesday, December 6th, radio will change forever - - for the better. Join CEOs from the world's leading radio companies as they jointly announce the most significant innovation in more than 50 years. Tuesday, December 6th at 8:00am Waldorf-Astoria Hotel New York, NY." Part of the HD Radio logo was found in the release as well. We asked Struble, will the consortium announce the big HD multicast consortium details (9/6/05 RBR #174) that the big groups have been meeting about? "I think there's been a ton of discussion amongst the group heads on what it's going to take for the industry to make HD Radio successful. And if the announcement were along those lines, I think that wouldn't be surprising...I do know that Clear Channel and Infinity will be among the groups at that announcement...We've been working very closely with them and I think that anybody who has been following the industry is going to be pretty pleased with whatever announcement they make."
RBR observation: A carefully crafted effort among as many broadcasters as possible offering a variety of DIFFERENT and REFRESHING multicast HD formats will not only drive people back to radio in many markets but give them more reason to go out and buy HD receivers. Without multicast channels, many consumers just don't see the need to upgrade to HD. You want to offer a better, FREE alternative to satellite? Offer up some of the formats it has. We also assume there will be an unveiling of a spot campaign across the groups hyping HD Radio (long overdue).
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| Media Markets & MoneyTM |
Central PA group expands
Sunbury Broadcasting Corp. has a deal for a pair of Milton PA radio stations which will expand its cluster in the previously unrated area between state capital Harrisburg and Little League Baseball capital Williamsport. The stations being acquired are WMLP-AM & WVLY-FM. An LMA began this week. Brokers Greg Guy and Larry Patrick of Patrick Communications peg the pricetag at 3M. Milton is on the northern reaches of the Sunbury-Selinsgrove-Lewisburg PA market, which Arbitron ranks at #211. Sunbury Broadcasting, headed by Roger S. Haddon Jr., will go to five stations there. It already owns and operates WKOK-AM & WQKX-FM in Sunbury and WEGH-FM in Northumberland.
First Broadcasting sells KAZZ-FM Spokane
First Broadcasting Partners has agreed to sell KAZZ-FM Spokane to Jerry Clifton and Greg Mack's Arizona-based Proactive Communications for 1.75 million. First Broadcasting had upgraded the station's signal to cover all of Spokane with 25 kW at 328 ft. HAAT. Proactive also owns KMJY-FM Newport, WA, also within the Spokane metro. Kalil & Co. was the broker for the transaction.
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| Washington Beat |
If the permission isn't on paper...
Family Educational Association (FEA) wasn't exactly blowing anyone's doors off when it put up a new antenna for WPLI-FM in Levittown PR last April. At 26.4 watts, the 88.5 facility was a modest operation. However, it was supposed to be a directional antenna, with 34 watts on a horizontal polarization and 100 watts on vertical polarization. The 26.4 watt horizontal configuration included no vertical polarizing at all. The owner's defense included the claim that they were simply running tests in preparation for possibly filing for a CP to upgrade the station, and that they "...voluntarily disclosed to the San Juan office that the test would soon commence." However, FEA apparently never went to the trouble to file for a CP, and the cost for that omission is 7K. The FCC did take into account FEA's past record of compliance and reduced the penalty to 5.6K.
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| Ratings & Research |
 BIGresearch: Consumers are shopping less and less at malls
A quick snapshot: here are some BIGresearch stats from their monthly trend file on how consumers are shopping less at malls. When asked to agree with the statement, "I am shopping less at enclosed shopping malls and more at free standing stores," the percent of Yes answers has gone up to 15.1% in 11/05 from 13.8% in 11/05 - - that's in just one year.
| See the details here |
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| RBR Stats |
Cyber Monday a healthy one
According to the Shop.org/BizRate eHoliday Mood Study 2005, 77% of online retailers said that their sales increased substantially last year on the Monday after Thanksgiving, a trend that is driving serious online discounts and promotions on Cyber Monday this year.
| Read More... |
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| TVBR - TV News |
 TV Auction No. 64 takes shape
with LPTV sideshow
The FCC's 3/15/06 auction of 11 TV sticks is taking shape, and the run-up schedule is now available. The seminar auction will kick off the festivities on 1/11/06, with a steady progression of pre-auction events taking place between then and the first sounding of the gavel. The date of the seminar also signals the opening of the Form 175 filing window, which will remain in that condition for nine days, until 1/20/06. Upfront payments are due 2/17/06, the mock auction will be held 3/13/05, followed by the genuine auction 3/15/06. In the Victoria situation, Humberto Lopez already has an app in for the Channel 31 opening, and petitioned the FCC to accept no further apps. Lopez is already running KVHM-LP on that channel in that town, and says he is the only one who will negotiate non-conflicting operational parameters for the new station. Therefore, he wants his applications granted "outside the auction process." The FCC rejected this out of hand, saying its rules prevent assessing technical aspects of the proposals beforehand. Sticks up for grabs are listed below, except for one in Jackson MS, which is limited to a group which has been contesting the allocation since 1997 (9/27/05 TVBR #189).
TVBR observation: To the best of our knowledge, the construction of a full power station on the same channel and in the same town as a low power station is likely to bring about the demise of the low power facility, unless it can find unused spectrum to which it can retreat. The danger of trying to upgrade a Class A or LPTV, if that is the plan here, is opening the channel up to anyone who wants to make a bid. Lopez may still get the channel, but the FCC is going to make him earn it - - and roll the dice.
| FCC TV shopping list here |
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| Transactions |
11.5M Two FM CPs St. George-Cedar City UT (Mesquite NV, Hurrucane UT) from College Creek Broadcasting Inc. (Bruce Buzil, Neal Robinson) to Western Broadcasting LS LLC, a subsidiary of Simmons Media Group LLC (David E. Simmons). 9M allocated to Mesquite NV CP; 2.5M allocated to Hurricane UT CP. 1.869M deposit, 100K Hurricane CP build-out credit, balance in cash at closing. Superduopoly with KADD-FM Logandale NV & KZHK-FM St. George UT. CPs are for Class C in Mesquite NV on 96.7 mHz with 57.6 kw @ 2,383' and Class C in Hurricane UT on 102.9 mHz with 91.9 kw @ 2,034'. Radio ratings provided by Eastlan. [File date 11/2/05.]
N/A WRGC-AM Sylva NC from Georgia-Carolina Radiocasting Company LLC (Douglas M. Sutton Jr.) to 540 LLX, comprised 50-50 of Georgia-Carolina Radiocasting Company LLC (Douglas M. Sutton Jr.) and Anderson Communications LLC (Charles M. Anderson). AM Auction 84 settlement. Anderson is withdrawing application for AM CP in Mascot TN which was mutually exclusive with upgrade for WRGC in exchange for 50% interest in the station. [File date 11/2/05.]
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| Stock Talk |
Drug downer depresses stocks
News that pharmaceutical giant Merck was cutting jobs and closing plants sent stocks lower. Also, traders were trying to figure out whether strong "Black Friday" sales would really translate into strong holiday retail sales. The Dow Industrials fell 41 points, or 0.4%, to 10,891.
Radio stocks were also lower. The Radio Index fell 4.070, or 2.1%, to 189.304. Spanish specialists SBS and Entravision had a tough day, down 4.8% and 4.3% respectively. However, Univision rose 1.2%.
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| Radio Stocks |
Here's how stocks fared on Monday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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38.50
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-0.48
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Jeff-Pilot
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JP
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55.25
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-0.35
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Beasley
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BBGI
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13.76
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-0.39
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Journal Comm.
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JRN
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13.46
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-0.12
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| Citadel |
CDL |
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13.46 |
-0.16 |
Radio One, Cl. A
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ROIA
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10.97
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-0.03
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Clear Channel
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CCU
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32.76
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-0.46
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Radio One, Cl. D
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ROIAK
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10.96
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-0.05
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Cox Radio
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CXR
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14.77
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-0.40
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Regent
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RGCI
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4.86
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-0.07
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Cumulus
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CMLS
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12.30
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-0.12
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Saga Commun.
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SGA
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12.27
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-0.18
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Disney
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DIS
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25.02
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-0.03
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Salem Comm.
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SALM
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18.92
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-0.84
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Emmis
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EMMS
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20.38
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-0.06
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Sirius Sat. Radio
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SIRI
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7.00
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-0.13
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| Entercom |
ETM
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31.97
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-0.75
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Spanish Bcg.
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SBSA
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5.00
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-0.25
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Entravision
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EVC
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7.66
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-0.34
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Univision
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UVN
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29.85
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+0.36
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Fisher
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FSCI
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45.44
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-0.45
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Viacom, Cl. A
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VIA
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34.21
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-0.09
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Gaylord
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GET
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43.86
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-0.12
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Viacom, Cl. B
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VIAb
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34.23
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unch
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Hearst-Argyle
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HTV
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23.85
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-0.05
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Westwood One
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WON
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18.17
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-0.21
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Interep
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IREP
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0.43
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+0.04
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XM Sat. Radio
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XMSR
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29.49
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-0.86
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International Bcg.
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IBCS
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0.01
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unch
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-
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-
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-
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Radio Media Moves
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Roberts stays put
KFMB-AM San Diego announced that morning Talk host Rick Roberts has signed a five-year contract extension through 2010.
Continental
adds Lowery
Continental Electronics announced industry vet Walt Lowery has signed on to represent Continental Electronics, covering 11 states in the western U.S., including Alaska and Hawaii. Lowery has 30 years of experience in the broadcast industry, and in addition to Continental Electronics, he currently represents Nautel and RF Specialties.
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Stations for Sale
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New York City AM
Population coverage in .5mV/m estimated at over 14M. Good assets/RE. Price 15M. CA to receive info or ID. 781-848-4201 or [email protected]
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Below the Fold
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Ad Biz
TiVo unveils new product
Unveils ad search product Leveraging TiVo's search capabilities....
Washington Beat
If the permission isn't on paper...
FEA -wasn't exactly blowing anyone's doors off...
Media Markets & Money
Central PA group expands
Sunbury Broadcasting Corp. has a deal for a pair...
HD RADIO 2006
December 6: Big HD radio announcement
Press and radio trades received this email; radio will change forever...
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More News Headlines
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Small plane crashes
into Nebraska tower
A small plane crashed into a broadcast tower owned by Nebraska Educational Radio and Television, killing two adults and a child. The plane hit the tower Sunday on a windy morning as rain storms were moving through the area, though it wasn't immediately clear if weather conditions caused the crash, said The AP. The FAA is investigating. The plane crashed into a wheat field about 200 yards from the tower, and the tower, owned by Nebraska Educational Radio and Television, toppled onto the transmitter building. The building's roof was damaged but no injuries were reported on the ground. Witnesses said debris was scattered over two farms, about 170 miles west of Lincoln.
Infinity stations in Dallas, Denver and Cincinnati begin tracking radio spots
Media Monitors has signed agreements with the Dallas, Denver and Cincinnati market radio clusters owned by Infinity to provide its online broadcast monitoring services. Currently, the company tracks commercials and songs 24/7 on nearly 1,000 radio stations in North America using this technology.
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RBR Radar 2005
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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"Black Friday"
weekend spend up 5 billion
NRF survey conducted by BIGResearch found the average shopper spent 302.81 dollars, 14.2% higher than their 04 survey average of 265.15 dollars. ShopperTrak RCT Corp., which tracks sales at 45,000 retail outlets, the overall sales on Black Friday itself were relatively unchanged compared to a year ago but Its data is mostly concentrated on shopping mall retailer traffic. So RBR/TVBR goes with BigResearch since most of the traffic measured went to the non-mall retailers like Wal-Mart and Best Buy who had heavy promotions.
RBR observation: It isn't over yet, not by a long shot. Only one in 13 consumers has finished their holiday shopping. Local Account Execs should bring these numbers in hand and recommend to clients that shopping malls/mall merchant associations do some additional advertising and promotions to drive shopper traffic. See the data and demos here
11/28/05 RBR #231
Ready to bid goodbye to 2005
There's still more than a month left of 2005, but from listening to the Q3 Wall Street conference calls, it seems to us that many broadcasters would be happy to jump right into 2006 and put Q4 of 2005 behind them as quickly as possible. Pretty much everyone complained that the national spot market is soft, so they all touted how great their stations are doing on pushing local sales - - some better than others.
RBR observation: The obvious solution is to build other business categories and not be so dependent on automotive. Easier said than done, but it must be done. Stations have to develop new business categories on the local level and the reps (along with RAB and TVB) have to do it on the national level. Don't forget this lesson when the auto and political revenues start pouring in again - - unless you want to repeat this painful history.
11/28/05 RBR #231
Viacom gives its split boards
some direction
Seven independent directors have been named to the boards of the soon-to-be divided Viacom Inc. Sumner Redstone says the company has no plans to buy anything just now, even though people are pitching proposals from all angles. The new companies are being seen as well-heeled start-ups ripe for expansion however, its possible there may actually be spin-offs. The tortoise/hare split puts the slow and steady radio and TV operations under CBS Corp. and Les Moonves, and there, smaller radio stations may be put on the block.
RBR observation: Since Moonves only sees radio as a margin game look for the losers to be cut loose. 11/23/05 RBR #230
Grin and Bear
Stearns it? Not likely
Still seeing choppy to stagnant waters ahead for the radio business. For starters, it expects that relatively robust December results will be needed to salvage Q4 comps to 2004, and in the end, it doesn't believe see any signs of a particularly robust holiday month. RBR observation: It seems the key in comparing 2005 to anticipated results in 2006 is the fact that radio will have gotten itself through the tough first year of LIM. 2005 to 2006 comps will be comparing apples to apples, or LIMs to LIMs, if you will. Political funds should be the icing on that cake.
11/18/05 RBR #229
TiVo to bring TV programming
to iPod, PSP
Testing a feature in the coming weeks to let some Series2 box subscribers transfer recorded television programming to Apple iPod digital music players or Sony's PlayStation portable (PSP) devices.
TVBR observation: Once again - Technology waits for no one.
11/18/05 TVBR #229
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Account Executive - Suburban, NYC
It is Star 99.1, NYC's only Contemporary Christian music station. We look for overachievers with significant radio sales experience and offer base salary, commission, benefits and a positive environment. Giving you the tools to do your job to succeed. See Radio Careers
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
Sales and Marketing
Executive sought by rapidly growing participatory Television Company. Experience selling innovative programming to cable operators and programming executives across the United States with all aspects of the launch and rollout of a new program offering. Building a sales team and managing with their peers in the company. Prior relevant experience is a requirement. Competitive salary, benefits and stock options.
See TV Careers
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