|
|
|
Volume 24, Issue 232, Jim Carnegie, Editor & Publisher
|
Thursday Morning November 29th, 2007
|
|
|
Radio News ®
|
 How does Zell spell relief?
M-A-R-T-I-N
FCC Chairman Kevin Martin said he will ask for a vote this Friday which would grant waivers to Tribune to keep its cross-owned properties intact while Martin's proposal to eliminate restrictions on such combinations in the top 20 markets winds its way through Washington's obstacle course. That will give the commissioners three days to consider the measure and, if approved, will give Tribune the necessary window to get necessary approvals in place to enable its sale to a Sam Zell-led ESOP. Martin plans to bring his proposal up at the FCC's 12/18/07 Open Meeting, but said even if passed, he expected it would be tied up in litigation for an unknown amount of time. Therefore, he would grant Tribune waivers of two years or up to six months after the rules are finalized, whichever is longer. If Martin's rule change is adopted and survives court challenge, Tribune's top 20 market combos would be legal. He would not speculate on whether the Hartford combo, ranked outside the top 20, would be included in the waiver package. He also said that if it was solely his call, he would allow the grandfathered Chicago group, including the Chicago Tribune, WGN-TV and WGN-AM, would continue to be grandfathered going forward.
Since no other companies with cross-owned properties are facing the kind of deadlines currently before Tribune, the action Friday will be directed at Tribune only. Other companies would be dealt with on a case-by-case basis. Tribune Company Chairman, President and Chief Executive Officer Dennis FitzSimons commented, "We are pleased with Chairman Martin's proposal which, if approved, will enable Tribune's going private transaction to close by the end of the year. This will allow Tribune's local media outlets to continue their commitment to outstanding journalism and service to our readers, viewers, listeners and advertisers."
RBR observation: Whatever your opinion on cross-ownership, it has always seemed to us that it would be grotesquely unfair to force fire sales of media properties due to a proceeding in which the outcome remains in question. Tying the waiver directly to the termination of the proceeding, one way or the other, is fair.
 FCC opens the gates for LPFM
The November Open Meeting of the FCC was a landmark for proponents of community-based LPFM. The Commission adopted rules to immediately boost the service and is looking at additional measures to push it forward even more. The gains did not come without objection from two of the Republican members. Democrats Michael Copps and Jonathan Adelstein joined Chairman Kevin Martin in fully-supporting the measure. Republicans Deborah Taylor Tate and Robert McDowell both felt that in some instances it went too far. In particular, they objected to a cap on FM translator applications of ten in order to leave room on the dial for potential LPFM applications, and to protections from full power stations potentially granted to LPFMs. As Taylor said, "...they accept their license knowing that they are a secondary service, and accept both the risks and rewards that status entails."
The measures of concern to full power broadcasters include the prospect of new interference from 2nd adjacencies (which will need a push from Congress) and innoculating LPFMs from new full-power competitors trying to enter a market via a city-of-license change. The new rules and the proposed rules for which comment is being sought are below the click.
| Details of the Order and the Notice |
|
|
|
Tough 2008 in store?
That's what Lehman Brothers are saying. They expect gains of 3.7% to 310.8B in total advertising over 2007 (and they think this year will be up 2.6% over last), followed by a gain of 2.8% in 2009. But the 2008 pick-up is expected to skew toward digital platforms and even more, to national over local business. In fact, LB is looking for a 6% increase in national to 182.6B, compared to an mere 0.6% increase in local, to 128.2B. That prediction has predictable results regarding their opinion of radio. LB said, "We remain on the sidelines with radio broadcasters and outdoor advertising companies given their high exposure to local advertising and instead would favor more diversified, defensible businesses that are levered to national advertising and recurring revenue such as large-cap entertainment companies with multiple business segments, such as News Corp. and Time Warner." LB is looking for a 1.4% decrease this year, a 1.8% loss in 2008 and a 1.4% loss in 2009. The roller coaster political cycle will help television. Headed to an 0.3% loss this year, broadcast TV is expected to gain 5% in 2008, and then swoop back down 3.9% in 2009. The Internet is gobbling more and more of the pie. It had a 5.8% share in 2006, is closing in on 7.1% this year and projects to 8.4% in 2008. It's growth vector will slow as it does with all new categories, but will remain impressive, hitting 25.6% this year, 23.6% in 2008 and 20% even in 2009.
RBR observation: One of the key ways we are all going to have to maintain a nourishing diet is to make sure our own associated Internet properties are getting their fair share of the pie. Whether you want to count that money as broadcasting or Internet is immaterial to us. As far as we're concerned, a dollar is a dollar is a dollar.
 Cheaper stocks mean bigger dividends
Media stocks have gotten beaten up so much this year that you'd think some speculators would start buying them just for the dividend yields. After all, when the stock price falls, the dividend yield goes up. Of course, if you buy it and then the price falls some more, then that even bigger yield isn't very comforting. So, the trick is to call the bottom and grab the big yield at the lowest possible price. Hey, we didn't say this was going to be easy. Just before Thanksgiving, radio group owner Entercom's yield was 8.8%. Since it began paying a quarterly dividend Entercom has had one of the highest yields in radio, but that hasn't saved its stock from being dragged down with the rest of the sector. Just what is the yield at Citadel? We don't know, since the company hasn't stated a dividend policy since acquiring ABC Radio. Bear Stearns analyst Victor Miller estimates it will be about 29 cents per share, which is around a 13% yield at recent stock prices.
TV owner Sinclair Broadcast Group has a yield of 5.7%, even with the promise of 2008 political revenues ahead. Newspaper stocks are really out of favor on Wall Street, with ad revenues, particularly classifieds, falling in the face of the Internet. Thus, the New York Times Company pays a yield of 5.1% and Gannett 4.3%. Both have broadcast assets, but are overwhelmingly dependent on print. Even CBS Corporation, which would hardly fit anyone's definition of a speculative stock, is paying a dividend yield of 3.8%. Will high dividends do anything to draw investors back to media stocks? So far, the answer appears to be no.
Univision Radio applauds Arbitron decision to delay PPM
Univision Radio announced it was happy with Arbitron's decision to delay the scheduled rollout of the PPM system in nine markets: "We are pleased Arbitron has recognized the deficiencies in the PPM sample and has delayed the start of the service while improving the samples...We look forward to working with Arbitron on the research and business issues related to the PPM service, as they work to ensure their ratings are accurate. As the nation's sole radio monitoring service, listeners, advertisers, stations and networks all rely on Arbitron's measurement. We commend their responsibility in addressing issues with the sample before launching the PPM service any further. Arbitron must also commit to making improvements in Houston and Philadelphia samples since the flawed PPM data is the only currency available in those markets."
|
|
|
|
|
Ad Business Report TM
|
 "ACT for America" calls for advertisers to return to Savage
The Council on American-Islamic Relations (CAIR) recently issued an announcement that OfficeMax (11/19/07 RBR #226) had joined Citrix Systems in dropping advertising from Savage's program because of his opinions on Islam-especially related to his 10/29 show. Now, the group ACT for America (actforamerica.org) has launched an alert suggesting folks call OfficeMax to encourage the company to reverse the decision. The organization said in an announcement: "Call the OfficeMax office headquarters...and when you get an operator, in a polite but firm manner, tell the operator you have heard about the company's decision to stop advertising on the Michael Savage program because of the pressure from CAIR. Tell them you will no longer shop at OfficeMax until OfficeMax reverses this ill-advised decision." "If CAIR can succeed in this effort to silence Michael Savage, consider the chilling effect this will have on every talk radio host in America," wrote Brigitte Gabriel in the alert. ACT for America said it also would be launching campaigns targeting other companies that have "caved in" to CAIR. CAIR has also prompted the organization of Anti-Cair-Net (anti-cair-net.org), which offers info about CAIR board members, and ideas on why they are going after Savage.
|
|
|
|
| Media Business Report TM |
Feds getting set to rule on XM/Sirius?
Executives at XM and Sirius expect to get regulatory approval for their proposed merger by the end of the year, according to a write-up in USA Today. Analysts are said to be unsure (although we've seen more thinking it will get done than not lately). Many of the watchdogs keeping an eye on the merger remain steadfast in their opposition. USA Today says that the DoJ may go public with its up or down thumb any day now, to be followed by the FCC. The debate hinges on whether the two companies are seen as the sole competitors in a unique market, as they were originally chartered, or as just another couple of audio services along with radio, iPods, the Internet or whatever else one can name.
RBR observation: Most broadcasters believe there are huge differences in the two businesses. A local broadcaster does not have over 100 channels at its disposal, and the satellite services need not pay any attention whatsoever to local idiosyncrasies, much less deal with local emergencies. Although both companies are still losing money, both say they can and will survive on their own if the merger does not go through. We'd strongly argue that the services are unique, and since their continued survival as competitors is not an issue there is no reason to grant a government-sanctioned monopoly.
 Hearst-Argyle Television and Google strike AdWords deal
In an effort to target the growing local search ad market, Hearst-Argyle Television announced a deal with Google to become the first television industry reseller of the Google AdWords ad program. Hearst-Argyle will become an official reseller and will use its Web sales force to provide marketers in its 26 local markets access to Google AdWords. AdWords is an online advertising platform designed to help small and medium- sized businesses use the Web to find new customers by delivering relevant ads when users search for specific products and services. "This is a terrific partnership to expand the digital suite of solutions we provide our advertisers," said Terry Mackin, EVP/Hearst-Argyle Television. "This entry point to the local search market complements our existing digital media efforts which include local content, social networking, and being a primary destination in all our markets on 'all three screens'." In June, Hearst-Argyle became the first independent TV station group owner to establish a content- and revenue-sharing arrangement with Google's YouTube. To date, Hearst-Argyle has launched 26 YouTube Channels populated with news, weather, sports and entertainment videos as well as with original, local television programming and content from its recently launched social-networking site High School Playbook (www.HighSchoolPlaybook.com).
|
|
|
|
| Media Markets & Money TM |
K-LOVE adds in Washington
The ever-expanding K-LOVE Network, put forth by Educational Media Foundation, has struck again. This time its moving into the Wenatchee WA market with KFIO-FM, a station at the nether reaches of the reserved band on 88.1 MHz. The seller is Douglas County Educational Radio Association. According to Exline broker Andy McClure, the price is 100K. DCERA is headed by Tom Read, a long-time veteran of PacNW religious broadcasting.
|
|
|
|
| Washington Business Report TM |
FCC stays busy in December
 The five commissioners have a potentially explosive Open Meeting on the calendar for 12/18/07, and a standing invitation to visit the Senate Commerce Committee in 12/13/07. That will happen after the same committee votes on Byron Dorgan's (D-ND) bill to stall whatever FCC Chairman has in mind for the 18th. Now comes word that the House Commerce Committee is getting into the act as promised. It has officially placed an oversight hearing on its calendar for 12/5/07, under the jurisdiction of Ed Markey's (D-MA) Subcommittee on Telecommunications and the Internet.
RBR observation: If nothing else, former FCC Chairman Michael Powell's attempt to loosen media ownership rules back in 2003 has made the five commissioners among the most popular Capitol Hill guests (or menu items, depending on your perspective).
|
|
|
|
| Entertainment Business Report TM |
Flagship WKTU drops Whoopi Goldberg
Looks like Premiere Radio Networks' Whoopi is becoming toast: Rhythmic CHR WKTU-FM has dropped the syndicated "Wake Up With Whoopi" show. The NY Daily News reported that a memo was circulated to the WKTU staff saying the station would stop carrying the show as yesterday morning. Indeed, an overnighter was filling in yesterday, playing music. This is the third market dropping the show in weeks-including CC Radio's WISX-FM Philadelphia and WLIT-FM Chicago. She's got eight more markets left. We wonder where she'll get behind the mic, at "The View" studios?
Beasley announces 8th "Christmas Across the Lands"
Randy Sherwyn, PD of Beasley's WJPT-FM Ft. Myers, FL, will host the eighth annual "Christmas Across the Lands," a 12-hour radio Christmas show that airs mainly on Christmas Eve and Christmas Day in markets across America and overseas. The concept of this event originated eight years ago on Southwest Florida's B 103.9 WXKB-FM when Sherwyn, in the spirit of the holidays and with the thousands of troops stationed overseas in mind, devised a heartfelt way to bring a little holiday cheer and warmth to U.S. troops stationed overseas who were away from their families during the Holiday Season. Additionally, the show will air in international territories including Canada, West Indies, Cayman Islands, New Zealand, Dubai, Sri Lanka and the Philippines. With the support of the American Forces Radio Network (AFRN) and the Canadian Forces Network/Europe (CFN), "Christmas Across the Lands" will be heard by military personnel stationed in over 175 countries around the globe including "Freedom Radio" in Iraq.
|
|
|
|
| Internet Business Report TM |
 Yahoo, AOL
may shutter web radio
Even the big buys can't manage the new rates: Yahoo! and AOL may shut down their Web radio services after being hit with a 38% increase in royalties to air music, reported Bloomberg. "We're not going to stay in the business if cost is more than we make long term,'' Ian Rogers, GM at Yahoo's music unit, said in an interview. Yahoo and AOL stopped directing users to their radio sites after SoundExchange began collecting the higher fees in July, after the March ruling by the Copyright Royalty Board (CRB) Yahoo is promoting a music service offering videos and songs for sale rather than its Launchcast, the largest web radio site, Rogers said. As a result, the number of people using Launchcast fell 11% to 5.1 million in October, according to ComScore. AOL Radio users declined 10% to 2.7 million from 3 million. Radio sites attracted 51.2 million U.S. visitors last month, more than a quarter of all U.S. Web users. "The current math doesn't add up,'' Lisa Namerow, managing director of AOL Radio told Bloomberg. "If the rates remain as they are, it would be very challenging to sustain a business that is profitable.'' The radio sites generate revenue by selling advertising. Congress may be the last resort for the Webcasters. Bills introduced in the House by Rep. Jay Inslee (D-WA) and in the Senate by Senator Ron Wyden (D-OR) would repeal the royalty increases.
CBS Radio signs with Truveo for search
CBS Radio's websites will gain access to a host of new searchable video content through a partnership with AOL's Truveo. More than 35 CBS Radio stations across the country have integrated Truveo's video search engine online with more scheduled to launch in the coming weeks. Visitors to the websites will be able to search and browse through tens of millions of videos from thousands of sources across the Web. In addition to searching user-generated video from sites such as YouTube and Dailymotion, Truveo also features video from CBS, ABC, BBC, CNBC, CNN, Disney, FOX, Le Monde, MTV, NBC, NFL.com, Skynews and more.
|
|
|
|
| Transactions |
1.3M WECK-AM Buffalo-Niagara Falls NY (Cheektowaga NY) from Regent Broadcasting of Buffalo Inc. (William L. Stakelin) to Culver Communications II Inc. (Richard C. Greene). 50K escrow, balance in cash at closing. Duopoly with WLVL-AM Lockport NY. [File date 11/8/07.]
|
|
|
|
| Stock Talk |
Great day for Radio stocks
With the Dow's 300 point gain, Radio stocks were overwhelmingly up, with only six down. Arbitron generally stopped its slide from yesterday and was down 1.10 at the end of the day.
|
|
|
|
| Radio Stocks |
Here's how stocks fared on Wednesday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
|
Arbitron
|
ARB
|
|
40.60
|
-1.10
|
Google
|
GOOG
|
|
692.26
|
+18.69
|
|
Beasley
|
BBGI
|
|
6.82
|
-0.15
|
Hearst-Argyle
|
HTV
|
|
19.30
|
+1.41
|
| CBS CI. B |
CBS |
 |
27.14
|
+0.78
|
Journal Comm.
|
JRN
|
|
9.05
|
+0.18
|
| CBS CI. A |
CBSa |
|
27.20
|
+0.78
|
Lincoln Natl.
|
LNC
|
|
60.90
|
+3.28
|
| Citadel |
CDL |
|
2.29 |
+0.10 |
Radio One, Cl. A
|
ROIA
|
|
2.08
|
+0.14
|
|
Clear Channel
|
CCU
|
|
35.29
|
+0.49
|
Radio One, Cl. D
|
ROIAK
|
|
2.13
|
+0.18
|
|
Cox Radio
|
CXR
|
|
12.18
|
+0.25
|
Regent
|
RGCI
|
|
2.08
|
+0.06
|
|
Cumulus
|
CMLS
|
|
9.05
|
+0.43
|
Saga Commun.
|
SGA
|
|
6.80
|
-0.04
|
|
Debut Bcg.
|
DBTB
|
|
0.80
|
unch
|
Salem Comm.
|
SALM
|
|
7.88
|
+0.09
|
|
Disney
|
DIS
|
|
32.69
|
+0.97
|
Sirius Sat. Radio
|
SIRI
|
|
3.53
|
-0.03
|
|
Emmis
|
EMMS
|
|
4.54
|
+0.46
|
Spanish Bcg.
|
SBSA
|
|
1.75
|
unch
|
|
Entercom
|
ETM
|
|
17.13
|
+0.44
|
SWMX
|
SMWX
|
|
0.01
|
unch
|
|
Entravision
|
EVC
|
|
8.00
|
+0.56
|
Westwood One
|
WON
|
|
1.97
|
-0.06
|
|
Fisher
|
FSCI
|
|
42.00
|
+0.28
|
XM Sat. Radio
|
XMSR
|
|
13.71
|
-0.49
|
|
|
|
|
|
|
Bounceback
|
 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
|
|
|
Below the Fold
|
|
Advertising Business Report
"ACT for America"
calls for advertisers to return to Savage
Media Markets and Money
K-LOVE adds in
Washington, Wenatchee FM sold
Washington Beat
FCC stays busy in December
House hearing added to sked
|
|
|
Stations for Sale
|
Seller Financing Available
Mississippi FM
Buy or Lease Studios, Tower
Gordon Rice Associates
(843) 884-3590
or E-mail Gordon Rice
 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
[email protected]
|
|
|
Radio Media Moves
|
Three upped at First
Innovative broadcast firm First Broadcasting has upped three of its top execs. Hal Rose has been promoted to Chief Operating Officer, Bob Denny to Executive Vice President Technology and Software Development, and Neil Read to Senior Vice President Finance. "Hal, Bob and Neil have been among our most effective and successful executives, and each will play a key role on the company's continued development and expansion, especially on the transactional, technical and software development fronts," said CEO Gary Lawrence.
|
|
|
More News Headlines
|
CBS Writers pointing at 12/20 strike date
News writers for CBS are ''strongly considering" a Dec. 10 strike date, casting doubt on whether the network will be able to air its planned presidential debate, reported CBS. A spokeswoman for the WGA told CBS that no date has been officially set, but that Dec. 10 "is a date that we are strongly considering." Several Democratic presidential candidates-including Illinois Sen. Barack Obama, John Edwards and New York Sen. Hillary Clinton--have said they would not cross a picket line to participate in a debate. Meantime, according The Drudge Report, CBS execs and Katie Couric are meeting to discuss whether to cancel the debate. Yesterday, CBS reported internal CBS emails began to circulate saying that members of the writer's union were notified of a strike date. However the WGA later said that no specific date had been set and that no official email had been sent. The writers working for both the CBS network newscasts and local news stations have been working without a contract for more than 2 years.
Wait a minute: Philly isn't accredited yet
In our article yesterday, "Steve Morris explains PPM delay decision" (11/28/07 RBR #231), we noted "Houston and Philadelphia remain accredited by the Media Rating Council (MRC), according to Arbitron CEO Steve Morris. Not so, according to Steve Sinicropi VP/GM, Cox Radio Greenville and Chairman of the Arbitron Radio Advisory Council: "For the record, Houston is accredited. Philadelphia has been audited by the MRC but is not accredited. This is an important distinction since the two markets have different recruitment methods."
|
|
|
TVBR - TV News
|
FCC adopts new reporting requirements for TV
Broadcast television stations will have to begin posting their public file on their website (or possibly on a state broadcasters association site), using a newly-standardized form which includes an update of the old issues/programs list. It will have to be maintained and updated on a quarterly basis. The new form, which will be available from the FCC online, will require broadcasters to "...list various types of programming, including local civic programming, local electoral affairs programming, public service announcements, and independently produced programming, and also includes information about efforts that have been made to ascertain the programming needs of various segments of the community, and information regarding closed captioning and video described content."
Chairman Kevin Martin said, "Today we take steps to highlight the work many broadcasters are doing to serve their community, and shine a light on those who could improve their commitment to localism." Michael Copps approved but thought it didn't go far enough, saying, "This is a good step forward. While it doesn't deliver the real kind of public interest standards that I think the American people would like to have for those who manage the public's airwaves, it will provide significantly more information than we presently have to inform us all about what and how broadcasters are doing." Robert McDowell offered some dissent on behalf of small stations already struggling with the DTV transition, fearing that the measure would "...overly burden the broadcasters without sufficient corresponding benefits to the local citizens served by the station."
TVBR observation: The burden is going to be on small independents getting by on a subsistence diet of low-cost syndicated fare. It may not be too hard to find items to put in the file for a top network affiliate with a big news staff. It will be interesting to see if the files start to become a factor in renewal hearings, and if this new television regime trickles on down to radio at some point in the future.
|
|
|
RBR Radar 2007
|
|
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
|
Explaining PPM delay decision
There may be blood in the water at Arbitron, as analysts drilled Arbitron CEO Steve Morris on the dilemma the radio medium is facing right now with PPM. As the news of Arbitron delaying the commercialization of its PPM radio ratings service in nine markets made headlines. The general theme was focused on restoring confidence and trust, but as one analyst mentioned in the call "Now that blood is in the water," when six months comes and goes, will the broadcasters be even more united in killing PPM? A class action suit is possible, but unlikely, as the MRC will be the arbitrator before it could come to that. Indeed, it boils down to confidence, compliance and currency-the three C's. Are we going to move forward in 2008 to develop this currency the radio medium needs? By slowing down and stopping the currency, are they sending a mixed signal to their investors-the PPM is not right? And by being on hold, investor confidence dropped and the stock plunged.
RBR observation: What might all of this do to agencies' and advertisers' confidence in the medium now that the numbers and methodology are in question? Could this chaos (with no blame mentioned) be hurting the radio industry in the long run because of confidence issues? We'll see in six months. In addition, we're hearing, but couldn't confirm, that the MRC was instrumental in moving Arbitron to the nine-market delay. Arbitron would not comment on the "particulars of the MRC process." (for related reports on PPM derailment see RBR)
11/28/07 RBR #231
PPM hits brakes hard
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 and will delay the commercialization of its PPM radio ratings service in nine markets. There are the usual statements but note you should view the chart on the markets in RBR.
11/27/07 RBR #230
|
|
|
RBR Classifieds
|
New Positions
Available in RBR Classifieds.
See Radio Careers
Additional Positions
Available in RBR Classifieds.
See Radio Careers.
|
 |
|
|
|
|
|
©2007 Radio Business Report, Inc. All rights reserved.
Radio Business Report -- 2050 Old Bridge Road, Suite B-01, Lake Ridge, VA 22192 -- Phone: 703-492-8191
|
|
