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Volume 23, Issue 232, Jim Carnegie, Editor & Publisher

Thursday Morning November 30th, 2006

Radio News ®

No French kiss
for the Mays boys
JC Decaux may be hot for a merger with Clear Channel Outdoor (11/9/06 RBR #219), but the Paris passion is not being reciprocated from San Antonio. Clear Channel Communications and Clear Channel Outdoor issued a statement saying there are no talks going on with Decaux or anyone else. Clear Channel Outdoor is owned 90% by Clear Channel Communications and 10% by public shareholders. That situation will continue once Clear Channel Communications is taken private in a pending buyout by private equity investors and the Mays family and the company said it has no plans to separate Clear Channel Outdoor into a stand-alone business. CC Outdoor is the world's largest outdoor advertising company and Decaux is #2, although the latter has a relatively small presence in the US.

FTC busts supplement scammer
The American tradition of hucksterism is alive and well, and occasionally it takes to the airwaves. Perhaps Grace Slick would be interested in this one. In her Jefferson Airplane Alice Through the Looking Glass tribute "White Rabbit," she noted that "One pill makes you large...And one pill makes you small." Now we find out about one that makes you tall. Sunny Health Nutrition Technology & Products Inc., owned by Sunny Sia, will pay 375K in consumer redress and is liable for another 1.9M if the FTC finds out that it has that much tucked away somewhere. The dietary supplement HeightMax was the lead scam product, and it used radio ads (in both English and Spanish) plus back-of-magazine ads in well-known titles such as Newsweek, Rolling Stone, and Maxim for marketing purposes. They claimed that HeightMax would add two or three inches to the average 12-25 year old, with 10%-25% height gain after six months of use and 20%-35% after twelve. Sunny used a fictional doctor it "invented," an expert with a Ph.D. in Biochemistry named William Thomson, to push its wares. Also cited were two other supplements. One was a fat blocker and the other a bone-growth supplement aimed at the older demographic.

RBR observation: Would anybody out there fall for this pitch? No? Then it shouldn't get on the air. If a product sounds too good to be true, it probably is not true, and responsible broadcasters owe it to their audience to keep the snake oil salespeople of the world off the air. (And that goes for you magazines, too.)

Disney boosts dividend
Shareholders at the Walt Disney Company will find a little something extra in their next dividend check. The company announced that its board of directors has approved a 14.8% increase in its dividend. That is a four cent per share annual increase, taking the annual dividend payout to 31 cents. Unlike most companies, which pay dividends on a quarterly basis, Disney pays just once per year. The 31-cents-per-share payment will be paid January 12, 2007 to shareholders of record on December 15, 2006.

Copps takes to the Seattle Times
Democratic FCC Commissioner Michael Copps is once again taking advantage of the bully pulpit that is at the beck and call of holders of that office (and really, who knew FCC Commissioners had a bully pulpit before 2003?) and was given space and ink to put what is becoming almost a stump editorial in the Seattle Times in advance of his appearance at a media forum there with colleague Jonathan Adelstein. This time, the Times is one of the session's sponsors, along with watchdogs that usually have to set these types of meetings up on their own. Copps noted as much, writing, "Seattle is a special town in which to have this crucial conversation. It is fortunate enough to have a paper (the very one you hold in your hands) that has firmly committed itself to covering and editorializing on the troubling issue of media consolidation - an issue that makes many media outlets, especially those owned by large conglomerates, very uncomfortable." Copps noted the fault lines within the Commission's 8th floor on the topic of media ownership, writing, "Once again, the openness of our media is under direct threat from the very federal agency charged with promoting media localism and diversity."

RBR observation: We're not taking sides in noting that it's quite common to see pieces on the evils of media consolidation. Rarely is the case made to the public how they might benefit from further consolidation. Opponents of consolidation have made the charge that media conglomerates have been content to simply ignore the story. If that's true, it may be time to consider a more proactive path in stating the case for looser regulations. When is Kevin Martin going to post the position of the FCC majority?

Regent has cash at the ready
Regent Communications closed a deal with its bank consortium, headed by Bank of America, to enter a new credit agreement totaling 240 million. The facility consists of a Senior Secured Term B Loan Facility for 115 million, a Senior Secured Revolving Credit Facility for 75 million and a Senior Secured Delayed Draw Term Loan Facility for 50 million. The Credit Agreement also provides for an additional 100 million incremental loan facility. Regent said in an SEC filing that it will utilize the proceeds available under the Credit Agreement to repay borrowings under its former credit facility, as well as fund its pending acquisitions. Regent has a 125 million deal pending to acquire five stations in the Buffalo market from CBS Radio and is already operating the stations under an LMA>

A look at media's part
in polarizing populace, part 1
Diana C. Mutz of the University of Pennsylvania appeared at the Brookings Institution in Washington 11/28/06 to discuss the increasingly polarized American public. While she notes the media's complicity, she also pointed out that it's just one element of society working toward or against that trend, and the reasons for the media's effect are not based on decisions made in smoky back rooms by conglomerate moguls, but rather are natural outgrowths of the way the media has evolved for better or worse. One factor is the expanding news hole, and more to the point, the expanding news sources available at all hours of the day. Consumers can pick the source that reinforces their own viewpoint, whether it be Fox, CNN, Rush Limbaugh, Al Franken, NPR, local or network TV newscasts, the local newspaper, a favorite magazine or someplace in the blogosphere, and thereby miss out on reasoned presentations from the opposition. Along the same lines, there is so much non-news programming available at all times that consumers can avoid the news entirely. In earlier years, there were three dominant networks that presented the news at the same time, increasing the odds that the average person would get at least some exposure. This effect is amplified because the news junkies tend to be the people with strong opinions in the first place. In choosing their own brand of news, their strong opinions tend to grow even stronger, whether it firms up to the left or the right of center. The news avoiders tend to be the moderates, and their absence from the argument leaves the debate, and much of the voting, to the citizens on the flank. So by doing a good thing - providing consumers with more choice, broadcasters and other media are inadvertently contributing organically to increased polarization. More to come.

RBR observation: It doesn't take a long time covering the Washington beat for any industry to become aware of what is almost certainly the major polarizing element in society. It's gerrymandering of House districts, a thoroughly bipartisan pursuit which has granted numerous safe districts to both parties, meaning candidates there can win by playing to their hardcore constituencies. The House, intended by the Founding Fathers to be the wing of the government most closely reflecting the pulse of the nation, has instead become somewhat balkanized, while those in the Senate who face an undivided statewide constituency often being forced to run more toward the center.

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:
* News/Talk: Local News and Weather where Content is King and make Money
* Research: CBS’s David Poltrack first hand view of Nielsen’s Commercial Ratings
| View '07 Content Focused Reports Calendar |

Wall Street Media Business Report TM

Up quarter for VNU
Privately owned VNU still has public bonds, so it reported that Q3 pro forma revenues were up 6% to 904 euros. The Media Measurement & Information unit, which includes Nielsen Media Research, was again the main profit center. Operating income, however, was down 29% to 72 million euros, which the company said was negatively impacted by some acquisition-related items. In his quarterly conference call with analysts, CFO Rob Ruijter credited the AC Nielsen consumer data operation and Nielsen Media Research, the TV ratings service, with being primarily responsible for the revenue gains. Revenues for the Media Measurement & Information division, with includes Nielsen Media Research, rose to 266 million euros from 250 million. Operating income was 59 million euros, up from 50 million. For the Marketing Information division, which includes AC Nielsen, revenues were off slightly to 472 million euros from 473 million euros. Operating income dropped to 23 million euros from 38 million euros. Revenues for the Business Information division, which includes tradeshows and such publications as The Hollywood Reporter, Billboard and R&R, revenues were 160 million euros, up from 153 million euros. Operating income jumped to 26 million euros from 14 million euros.

RBR observation: The current conversion rate for the buck is about 1.31 to the euro. VNU is still a Dutch company, but we look for it to be reincorporated in the US and renamed in a few months to prepare for an American IPO. The recent private equity buyout was truly an international affair. According to the Q3 report, VNU and its new owners borrowed 5.4 billion American greenbacks and nearly 1.2 billion euros (about 1.5 billion bucks) to fund the going-private transaction.

Ad Business Report TM

Radio to win newspaper ad dollars?
Radio stations can be expected to pick up local ad dollars, such as sale-driven commercials from retail outlets, as newspapers shift their businesses online, Charles Courtier, global CEO of Mediaedge:cia, said Tuesday at the Reuters Media Summit in NYC. Courtier said newspaper's move to the Internet could be a windfall in one respect for radio. "Most people don't think well of radio's future. I don't agree. I actually think that satellite radio particularly is going to have a good future," Reuters quoted him as saying. "There is money spent in the newspaper world that is theirs for the taking." As newspapers move online they may lose some of their local ad focus, though radio may not face the same future, he said. The transition will take place as newspapers 'inevitably' end up online, the story explained. "I'm not saying the death of newspapers but I think there's an opportunity for radio there."

RBR observation: It seemed Courtier singled out satellite radio most as benefiting from the potential shift of local dollars from newspaper to radio, which makes little sense when satellite radio isn't local. Unless, of course, they change the rules and all of those local repeaters become local ad insertion boxes. That has been speculated on numerous times - make satellite radio subscriptions much cheaper in exchange for one or two local and/or national ads each hour. We're not sure, as well, that newspaper advertisers would automatically choose radio over a local newspaper site banner ad - although it would be nice! We contacted Courtier, but haven't heard back yet.

SuperSpots/Chicago wins Emmy
SuperSpots announced their first Emmy Award in the "Best Commercial Announcement" category for the animated TV concept "Rebecca @ Work." Over the past 18 months, SuperSpots says "Rebecca @ Work" has become the new Gold Standard in TV marketing for great AC stations like WBEB Philadelphia, WLTW New York, KOIT San Francisco, KOST Los Angeles, WNIC Detroit, WILV Chicago, CJEZ Toronto, KODA Houston, WASH DC, WLTM Atlanta and a host of other AC stations in the U.S. and Canada.

Media Markets & Money TM

Bold Gold finesses Fennessy AM
Vince Benedetto's Bold Gold Media Group is getting another AM station to add to its Pennsylvania group. WFBS-AM, an Oldies station back when it was on the air, is the acquisition. According to broker Ray H. Rosenblum, Benedetto will pay 10K for it, and will pick up an unspecified amount of associated debt. The station is licensed to Berwick PA on 1280 KHz. Bold Gold's other stations are in and around Scranton; Berwick is to the west in unrated territory.

Alta closes POP Radio investment
Long-time communications media investor Alta Communications has completed its first round investment in POP Radio, which provides in-store audio music and marketing. The funding provides an investment of at least 10 million to allow POP Radio (the initials are for point-of-purchase) to continue its expansion. POP Radio Chairman Jeff Shapiro said the Alta investment will give his company the leverage to expedite its growth plan. Dick Foreman of Richard A. Foreman Associates brokered the deal with Alta. Westwood One is already an equity holder in POP Radio and acts as its advertising sales agent. Westwood One and POP Radio announced earlier this month that Kmart stores had been added to the POP Radio in-store ad inventory (11/7/06 RBR #217).

Washington Media Business Report TM

Latest fines over lateness
One of the most basic responsibilities of a broadcasting company is to keep its licenses current. This can be a costly mistake, because it often mushrooms into a second, more expensive violation. Three licensees were hit for 1.5K on the "failure to timely file a license renewal application." They included Roberto Feliz (KRRP-AM Coushatta LA), Mountain Mist Media LLC (WTKI-AM Huntsville AL) and Fort Stanton Inc. (LPTV station KEDU-LP Ruidoso NM). In these cases, the stations get their applications in past filing deadline, but before the license actually expired - the paperwork is supposed to be in at least four months prior to expiration. Now for the mushroom part - filing the application after the expiration date. That oversight means you've failed to timely file, and you've no doubt been broadcasting without a license. The FCC treats this as unauthorized operation but does not treat it like spectrum piracy. Nonetheless, Regent Licensee of Chico Inc. got hit for 7K at for its FM translator K300AD in Chico CA, and WRBX/WTNL Inc. was nailed twice, for WTNL-AM and WRBX-FM in Reidsville GA, combining for a 14K hit.

RBR observation: Had the FCC treated the last two licensees like common pirates, the hits would have probably been 10K and 20K respectively. So their good standing as responsible if forgetful broadcasters was taken into account. But it's a silly thing to be spending your hard earned cash on, isn't it?

Entertainment Media Business Report TM

Cramer quitting WW1 for CNBC?
Is CNBC planning to use Jim Cramer to build traffic and revenue for its new website after Cramer ends radio syndication with Westwood One? That's what MarketWatch's Frank Barnako is theorizing: "Makes sense to me after learning this morning that the Booyah-meister is ending his "Mad Money" radio distribution deal with Westwood One by the end of the year. CNBC says its new website, to be launched Dec. 4, will offer a 'revolutionary financial news experience' including live events and video on demand...Why not some Cramer, too? He's the Howard Stern of business news." Cramer has moved from Premiere Radio Networks to Westwood. While he certainly may move to CNBC, he may also get picked up by another radio syndicator. No reason he couldn't do both.

Internet Media Business Report TM

CBS Radio now streaming 100 stations
CBS Radio yesterday launched live streaming audio of WRKZ-FM in Pittsburgh, bringing the total number of CBS Radio stations broadcasting online to 100. With this announcement, CBS Radio now streams more than 70% of its stations online. "The Rock of Pittsburgh" can be found at www.937krock.com. Extending its audio content to an online platform is an ongoing initiative that CBS Radio began with the launch of the streams of its all-news stations in March 2005. To date, the company has amassed close to four million registered users for its online properties. All CBS Radio streaming stations can be found at www.radiomat.com

Transactions

3.8M WCHK-AM/WNSY-FM Atlanta GA (Canton, Talking Rock GA) from Cherokee Broadcasting Co. Inc. (Charles A. McClure) to Davis Broadcasting of Atlanta LLC (Gregory A. Davis). 160K escrow, balance in cash at closing. Duopoly with WLKQ-FM Buford GA. [File date 11/9/06.]

100K WRMO-FM Milbridge ME from Steven A. Roy, Personal Representative, Estate of Lyle Evans to Yamster Communications LLC (Mike McSorley). 5K earnest money, balance in cash at closing, plus assumption of unspecified obligations. LMA until closing. [File date 11/9/06.]

Stock Talk

GDP report cheers the market
Stock prices rose on Wednesday as the government's monthly report on growth in the Gross Domestic Product showed that the US economy is in better shape than many economists believed. The Dow Industrials rose 90 points, or 0.7%, to 12,227.

Radio stocks went along for the ride. The Radio Index rose 0.369, or 0.3%, to 148.805. Fisher led the gainers, up 2%. Citadel rose 1.6%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		44.76	+0.37	Hearst-Argyle	HTV		25.45	+0.21
Beasley	BBGI		7.01	unch	Journal Comm.	JRN		11.82	+0.02
CBS CI. B	CBS		30.03	-0.02	Lincoln Natl.	LNC		63.42	-0.07
CBS CI. A	CBSa		30.05	-0.01	Radio One, Cl. A	ROIA		6.59	-0.06
Citadel	CDL		9.52	+0.15	Radio One, Cl. D	ROIAK		6.60	-0.07
Clear Channel	CCU		35.25	-0.05	Regent	RGCI		2.98	-0.14
Cox Radio	CXR		15.97	+0.04	Saga Commun.	SGA		8.90	-0.04
Cumulus	CMLS		10.23	+0.14	Salem Comm.	SALM		12.32	+0.16
Disney	DIS		32.88	-0.01	Sirius Sat. Radio	SIRI		4.15	-0.02
Emmis	EMMS		8.36	-0.11	Spanish Bcg.	SBSA		4.15	+0.19
Entercom	ETM		27.30	+0.38	Univision	UVN		35.54	+0.07
Entravision	EVC		7.14	-0.02	Westwood One	WON		6.62	+0.06
Fisher	FSCI		45.12	+0.88	XM Sat. Radio	XMSR		14.07	-0.21
Gaylord	GET		49.43	+0.83	-	-	-	-	-

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]

This reader had a comment on our "Media ownership mythology" (11/27/06 RBR #229), namely that the DOJ may barge in where the FCC does not tread.

Hello
I wanted to point out that while the FCC doesn't normally look at market control in the way this article infers, the DOJ certainly does. I worked at what was then WJDX in Jackson MS in the late 90's when Clear Channel (then Capstar I believe. We had 4 ownerships in 3 years, hard to remember which actually owned it at the time!) was forced to divest itself of that station because the cluster controlled too much of the Jackson market. Obviously that is a simplification of the actual process. The outcome was that we traded for a much lower rated station (now WQJQ, Kosciusko, MS). This may actually been part of an ownership change, but the principle is the same. What no one outside the management knows is that these stations may be in the process of being sold and trying to avoid DOJ issues. My first thought was that the person explaining the regulatory need to lower ratings simply jumped to the conclusion it was the FCC when in reality it was the DOJ who was actually involved. I tend to dismiss conspiracy theories, and having worked for CC, I don't see them turning down *money* simply to hurt a format.

Jon Hosford
Director of Engineering
Montpelier Broadcasting

Below the Fold

Ad Business Report
Radio to win
Newspaper ad dollars as papers shift their businesses online...

Media Markets & Money
Bold Gold finesses Fennessy AM
Getting another AM station to add to its Pennsylvania group...

Alta closes POP Radio investment
Funding provides an initial investment of at least 10 million...

Entertainment Media
Business Report
Cramer quitting WW1 for CNBC?
MarketWatch's Frank Barnako is theorizing...

Arbitrends

Stations for Sale

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

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]

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

Radio Media Moves

New at Salem HQ
Dana Tibbitts has joined the corporate staff at Salem Communications as a public and media relations specialist. Tibbitts was most recently an independent communications consultant after handling press relations for UCLA and the Broadway department stores.

Santos to
Research Director
Research Director has selected Anne Santos as Director of Operations of the Annapolis, MD-based firm. Santos will lead a team of research specialist in analyzing audience estimates for both sales and programming purposes. Anne will be integral in Research Director's integration of Arbitron's PPM measurement into their existing service. Anne joins after serving seven years at Arbitron, where she was most recently manager of PPM Analysis and Reporting.

RBR Radar 2006

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

Rebuilding VNU/Nielsen
fun to Watch
After 32 years in on the agency side, Jon Mandel, former Group M chief of strategic solutions and MediaCom Chairman, has joined VNU as CEO of NielsenConnect, a newly formed business unit. RBR asked, how did this move come about? "[VNU] had evidently talked about this for some time. Then a few weeks ago Dave Calhoun called and sent an emissary in Susan Whiting. We went out to dinner and she said, 'Look, this is what we're kind of bouncing around, what do you think?' (More on this one-on-one in RBR)

RBR observation: It is sort of fun to watch as the pieces fall in place to rebuild VNU into a new company. After the buyout, the private equity owners recruited David Calhoun from GE as a Wall Street heavyweight to run the company. Now he has recruited Mandel, a Madison Avenue heavyweight (who is no stranger to Wall Street, either), to play a key role in making the parts of VNU work together. We hear that Nielsen Media Research CEO Susan Whiting, already running the main profit center, is in line for a bigger role as well. Meanwhile, VNU is working to sell its European computer magazines, which don't fit with anything else it does, and will likely shed a few other non-core assets as well. Still to do: reincorporate from The Netherlands to the US and rename the company - we expect something that includes Nielsen in the title. The new, improved and renamed former VNU could be ready for an American IPO as soon as 2007, but that will depend on market conditions. (More on this one-on-one in RBR)
11/29/06 RBR #231

"Selling radio ads in new ways"
Bear Stearns broadcast analyst Victor Miller and Internet analyst Bob Peck hosted a conference 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.
11/28/06 RBR #230

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?
11/27/06 RBR #229

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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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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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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