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Volume 22, Issue 234, Jim Carnegie, Editor & Publisher

Thursday Morning December 1st, 2005

Radio News®

David, Lew and Randy
in a showdown?
As RBR first reported yesterday (11/30/05 RBR #233), the hot buzz is that Randy Michaels is the former group head working with Kohlberg Kravis Roberts (KKR) to bid for ABC Radio. If Emmis is out of the running, that leaves David Field at Entercom and Lew Dickey at Cumulus as the other finalists. In order to provide Disney with the tax structure it needs to do a sale of ABC Radio, Michaels/KKR would have to acquire a public company (likely a small company involved in some way in media) to pull off the Reverse Morris Trust transaction. That would be easy enough, but it wouldn't bring much to the deal in terms of a larger platform to provide future growth to Disney as a shareholder, so it appears they would have to offer a substantially better financial deal than Entercom or Cumulus to win the bid.

RBR observation: We'd heard that KKR was working with former Jefferson-Pilot radio head Clarke Brown in going after Susquehanna Radio, but they were outbid by Cumulus. If KKR wasn't willing to go higher than the weak multiple of 13 times cash flow that won Susquehanna for Cumulus, we wonder how aggressive they'll be for the much larger prize of ABC Radio. Just equaling the Susquehanna multiple would put the ABC price tag at 3.3 billion, but we can't imagine why Disney CEO Bob Iger would let it go that cheaply. We all know how Randy Michaels made big money for Sam Zell with Jacor, so he's got a strong track record to impress his rumored KKR partners. For its part, KKR is known for making big bets - - which sometimes produce big payoffs. But it's also had some failures, including a colossal one in the media field with Primedia.

October no treat for radio
Crystal ball gazers had been predicting that October would be a tough month for radio, and they were right on target. Radio Advertising Bureau reports a loss of 7% compared the same month in 2004, which it blames on tough comps caused by last year's high political spending in battleground areas. The critical local category was only down 2%, meaning most of the serious hurt was in national - - it didn't just hit a pothole, it fell in with a 19% loss. Even non-spot revenue was down, dropping 7% to match the total spot shortfall. The disappointing results flattened out YTD comps, bringing the first 10 months of 2005 to par with the 2004 to this point. Local is up 1% YTD, counterbalancing similar 1% downfalls in both national spot and non-spot revenue. RAB works with accounting firm Miller Kaplan Arase & Co. to arrive at its totals.

RBR observation: Can this really all be blamed on the political category? While political results are a prominent topic at the average television group quarterly conference call, it's usually only mentioned in passing, if at all, in a radio revenue session. The other big factor, of course, is Clear Channel's Less is More initiative, which has the industry giant lagging the rest of radio as it works to get its house back in order. If political punched a big hole in October 2005, we can expect it to play the opposite role in 2006 - - particularly since there will be more of a local emphasis in the absence of a nationwide presidential election. With much of the action focused on the battle for the US House of Representatives, radio's efficiency and local orientation should make it an attractive tool for campaign managers.

New NAB spots to tackle satellite radio
Satellite radio isn't mentioned directly, but new spots from the NAB are more hard-hitting than the previous "You hear it here first" spots that have been running since last January to promote terrestrial radio. The new spots have what sounds like a pay telephone operator interrupting a radio broadcast at a critical point to demand an additional payment. "Radio - - you shouldn't have to pay for it," is the tag line - - hitting at XM and Sirius without actually naming them.

Give a listen to one of the new spots.

Emmis TV deals waved through
over radio protest
Broadcast Company of the Americas (BCA) does not think Emmis Communications should be allowed to sell TV stations to LIN or Journal. It doesn't object to the sale of the stations per se, it objects to the fact that Emmis is an adversary in a pending international incident involving BCA's Baja California FM. In that case, Emmis has joined with Lazer Broadcasting to protest irregularities in the transmitter location of XHBCE-FM. BCA says Emmis has no standing in the case in the first place, and is merely acting to protect the signal of its KPWR-FM in Los Angeles. And while BCA admits that Emmis's charge that the station's tower was constructed on incorrect coordinates, it says that Emmis's wording implies that the irregularity is worse than it is in fact - - impugning Emmis's character and worthiness to be a licensee. For its part, Lazer was worried about interference to its KXRS-FM in Hemet CA (Riverside-San Bernardino market). The FCC said that the matter is unresolved and under consideration by the International Bureau, so it will not be considered in regard to the television sale, and anyway, since BCA outright admitted that it's tower WAS in the wrong place, it appeared Emmis had a legitimate complaint. BCA's petition is denied. The sale of KGUN-TV Tucson AZ and WFTX-TV Cape Coral FL to Journal is granted, as is the sale to LIN of KRQE-TV Albuquerque NM, KBIM-TV Roswell NM, KREZ-TV Durango CO, WALA-TV Mobile AL, WLUK-TV Green Bay WI and WTHI-TV Terre Haute IN. The sale of WBPG-TV Gulf Shores AL to LIN is held up pending action on its license renewal application. Emmis announced late yesterday that its sales to Gray and LIN, a total of six stations, had closed, with the sale of two to Journal expected to closein the next week.

RBR observation: A station booming in from Mexico has the potential to interfere with a Los Angeles FM, and the Mexican owner questions the standing of the American broadcaster to defend his contour? Is Emmis supposed to wait until a foreign entity comes over the border and sets up a jamming station on the Santa Monica Freeway? Duhhhhh.

All talk, nothing but talk at Commerce
The fact that nothing actually happened beyond hours of testimony at Tuesdays' Senate Commerce Committee "Open Forum on Decency" has led Bear Stearns analyst to report that "...not much changed yesterday on the indecency issue." However, he took note of Chairman Ted Stevens' (R-AK) announced intention to hold another hearing 12/12/05, and suspects that by then he may have some actual draft material to begin looking at. Miller notes that Stevens seems to favor a voluntary ratings system for cable that would mirror that put in place long ago by the motion picture industry. In fact, he suspects that "...the FCC and Congress are looking for pressure points that would convince the cable network programmers that they should voluntarily adopt indecency standards similar to those imposed on broadcasters." That includes threats of unwanted regulation in the form of mandated a la carte or family-tiered channel options.

A la carte attracts comments
Bear Stearns analyst Victor Miller says that the cable industry is not going to be very happy with FCC Chairman Kevin Martin's practical endorsement of a new a la carte channel selection system - - a safe observation since at the same session, NCTA's Kyle McSlarrow called any such mandatory regulation unconstitutional. Although Miller thinks establishment of such a thing is beyond the FCC's scope, he said it may provide cover to legislators who could make it a matter of law. Meanwhile, Consumer Union's Gene Kimmelman came out in favor of the concept, while BuzzMachine blogger Jeff Jarvis attacked it, kind of. Jarvis notes the argument made by NCTA and by new entrants to basic cable such as Radio One's Television One - - that channel bundling is necessary to preserve diversity and give new entrants a chance to get established - - but he seems to think that on-demand is the new wave and it'll change the whole ballgame regardless of how the current skirmishes turn out.
| For more reporting on their comments, please have your mouse burrow here |

Adbiz©

Arbitron, Nielsen set date
for second Apollo Pilot Client
Advisory Group meeting
Arbitron and VNU's Nielsen Media Research have picked 1/11 as the date for the second meeting of the Project Apollo Steering Committee. Representatives of advertisers, agencies and market research firms will gather again in New York City to continue the work of the Committee as it sets the direction for the pilot test of Project Apollo, the Arbitron/VNU single-source market research service. The first meeting of this group took place in New York on 10/19. "Over the past few weeks, we have been able expand the number of participating advertisers on the committee. These are companies who have signed or are working to sign an agreement for the Project Apollo pilot test service that we are launching in the beginning of the year," said Dave Thomas, SVP/Strategy and Business Development for Nielsen. "The six major advertisers who sit on the Project Apollo Steering Committee spent an estimated 6.1 billion dollars in advertising on measured media in the United States last year." So far Arbitron has only announced that Proctor & Gamble and SC Johnson have signed contracts to participate. We assume the other four are planning on signing as well. Arbitron and VNU are deploying a pilot panel for a national marketing research service that will consist of approximately 14,500 participants in 6,250 households. Dubbed "Project Apollo," the service would collect, for the first time, multi-media exposure and purchase information from a common sample of consumers. These individuals will carry Arbitron's PPM to collect exposure to broadcast television, cable and network radio. Consumer exposure to other media such as newspapers, magazines and circulars would also be collected through additional online surveys.

Norwegian Cruise Line moves
planning, buying to GSD&M
Norwegian Cruise Line has awarded buying and planning GSD&M, Austin, Texas, its creative AOR. The move comes in advance of its brand re-launch next year. The move came without a review. The media account is now at JL Media, Union, NJ.

Media Markets & MoneyTM

EMF stays hot with Coolidge buy
The ever-expanding noncom Contemporary Christian Group Educational Media Foundation continued its growth pattern with the acquisition of a new station on the outskirts of the Phoenix market. The Coolidge AZ FM will cost it 2.5M. KCOO-FM was still a CP when EMF originally struck an LMA/affiliation agreement back in January which was designed to place the group's K-Love network on the station. It's a Class C0, with 10 kw @ 3,025' in the reserved band at 89.9 mHz. The seller is Living Proof Inc., which will still have an FM in Massachusetts, two in Michigan and four in California.

Washington Beat

Upton applauds decency
stirrings in Senate
Fred Upton (R-MI), Chairman of the House Energy and Commerce Committee's influential Subcommittee on Telecommunications and the Internet, welcomed the all-day session held by the Senate's Commerce Committee on the topic of broadcast decency. Upton is the House sponsor of the "Broadcast Decency Act" of 2004 and 2005 - - that legislative body has passed it twice only to watch a Sam Brownback (R-KS) companion bill run out of steam in the Senate. "I am pleased that decency legislation seems to be gaining steam in the Senate," said Upton. "The public is on our side, and so is the law. My bill does not alter current decency standards - - the laws for indecency have been on the books for decades and they have been upheld in the courts. By increasing the fines for indecency to 500K, the fines will be at a level where they cannot be ignored. The current cap for fines is 32.5K - - to put that into perspective, a 30-second commercial aired during this year's Super Bowl cost 2.4M - - that's 80K a second! With passage of this legislation, I believe that broadcasters will think twice about pushing the envelope. I look forward to working with the Senate, and I am confident that at the end of the day we will be able to deliver something of real value to American families." Upton's bill also puts broadcast licenses into play and includes the possibility of 11K-500K fines against performers.

Programming

United Stations discontinuing
Dick Clark's AC show at year's end
United Stations EVP/Programming Andy Denemark has confirmed with RBR that one of Dick Clark's programs - - Dick Clark's US Music Survey - - for AC will be shuttered at the end of the year. A guest host from KOST-FM LA has been filling in for Clark since his stroke and there are only about two dozens affiliates left. While Denemark says Clark is doing better all the time, he still isn't up to handling a four-hour long-form program each week. Clark will be making an appearance at ABC's Rockin' New Year's Eve program. Clark's other programs for Oldies stations-Dick Clark's Rock, Roll, and Remember-and the vignette Dick Clark's Music Calendar are still going strong, says Denemark, produced fresh with a huge library of Dick Clark archives from the show's history.

RBR observation: The Dick Clark radio shows have been on the air for almost 25 years. When Clark gets back behind the mic, he'll be able to infuse some fresh content into his Oldies offerings for years to come. We hear he's anxious to get back to it soon as possible.

"Radio Deluxe With
John Pizzarelli" debuts
A new syndicated weekend show debuts this weekend in the U.S. and Canada. Hosted by jazz guitarist, vocalist, and Telarc recoding artist John Pizzarelli and his wife, singer Jessica Molaskey, the show is set in the "deluxe living room" of John and Jesse's "modest but well-appointed Manhattan apartment." Radio Deluxe With John Pizzarelli features the best music of the American Songbook and some of the best people performing it today. Initial guests on the show will include Steve Tyrell, Ann Hampton Callaway, Keely Smith, Stacey Kent, Tony Danza, American Idol finalist John Stevens, Margaret Whiting, Regis Philbin, Barbara Carroll, and Annie Ross. The two-hour recorded program debuts this weekend in markets that include Los Angeles, New York, San Diego, Denver, and Toronto. For more info: www.radiodeluxe.com.

Transactions

1.2M WSRC-AM Raleigh-Durham (Durham NC) from Durham Christian Radio Inc., a subsidiary of Willis Broadcasting Corp. (Levi E. Willis) to Davidson Media Station WSRC Licensee LLC, a subsidiary of Davidson Media Group LLC (Peter Davidson). 60K escrow, balance in cash at closing. Duopoly with WTIK-AM Durham NC. [File date 11/4/05.]

325K WGTX-AM DeFuniak Springs FL from Beebe Communications LLC (John H. Beebe) to The Sportzmax Inc. (Stephen C. Riggs, Warren L. Howell). 50K escrow, balance in cash at closing. LMA 11/1/05. [File date 11/2/05.]

Stock Talk

Strong economy weakens stocks
The government reported that GDP growth for Q3 was at an annual rate or 4.3%. While that's good news for the nation, it made Wall Street traders fear further rate hikes by the Fed, so stock prices fell. The Dow Industrials were down 82 points, or 0.8%, to 10,806.

Radio stocks bucked the trend and were slightly higher. The Radio Index gained 0.485, or 0.3%, to 189.913. The biggest movers were Regent, up 2.3%, and Emmis, which gained 2.1%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		38.60	-0.03	Jeff-Pilot	JP		55.55	-0.07
Beasley	BBGI		14.02	+0.23	Journal Comm.	JRN		13.51	+0.04
Citadel	CDL		13.48	-0.02	Radio One, Cl. A	ROIA		11.14	+0.19
Clear Channel	CCU		32.56	-0.04	Radio One, Cl. D	ROIAK		11.06	+0.07
Cox Radio	CXR		14.81	+0.01	Regent	RGCI		5.00	+0.11
Cumulus	CMLS		12.35	unch	Saga Commun.	SGA		12.42	+0.12
Disney	DIS		24.93	-0.15	Salem Comm.	SALM		19.10	+0.21
Emmis	EMMS		20.84	+0.43	Sirius Sat. Radio	SIRI		7.15	+0.03
Entercom	ETM		31.85	-0.14	Spanish Bcg.	SBSA		4.82	-0.13
Entravision	EVC		7.49	-0.17	Univision	UVN		30.23	+0.05
Fisher	FSCI		45.51	-0.12	Viacom, Cl. A	VIA		33.48	-0.52
Gaylord	GET		43.26	-0.80	Viacom, Cl. B	VIAb		33.40	-0.55
Hearst-Argyle	HTV		24.04	-0.01	Westwood One	WON		18.14	-0.08
Interep	IREP		0.40	unch	XM Sat. Radio	XMSR		29.26	-0.25
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

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Arbitrends

Radio Media Moves

New VP for Radio One
Mario Christino has been promoted to Vice President, Corporate Sales & Research, at Radio One. He had previously been the company's Director of Corporate Sales & Marketing.

Miller to mornings
Radio veteran Jim Miller has joined WEMI-FM/WEMY-FM Appleton-Oshkosh-Green Bay, WI as host of "The Morning Blend." He'll also serve as Production Director for the stations.

Moody to Lakes
Karen Moody, formerly with Time Warner Cable Media Sales, Raleigh Division, has joined Lakes Media Network (LMN) in the newly created position of Vice President, Director of Sales and Marketing. LMN, headed by Tom Birch, owns four radio stations in the Greater Triangle area of North Carolina and Southside Virginia.

Stations for Sale

NYC Prime Radio
Time for Lease
7 days a week available p/t-f/t Business, Foreign language, religious, Health, Infomercials accepted. 212-769-1925 [email protected]
TV & Satellite time also available. Station Inquiries welcome

Below the Fold

Ad Biz
Arbitron, Nielsen set date
2nd Apollo Pilot Client Advisory Group meeting...

Washington Beat
Upton applauds decency
stirrings in Senate
Bill does not alter current decency standards...

Media Markets & Money
EMF stays hot with Coolidge buy
With the acquisition of a new station Out skirts of Phoenix...

More News Headlines

Metro Networks
and TrafficCast
sign traffic deal
Metro Networks and TrafficCast, a provider of predictive and flow traffic information in the U.S. and China, signed a deal to create largest traffic incident, enhanced flow, and predictive traffic services in North America. Combining the resources of Metro Networks' and TrafficCast's patented systems, technologies and ITS operational expertise, creates the nation's largest database of real-time traffic incident and flow data. Metro Networks historical traffic data is now analyzed by TrafficCast's systems, allowing Metro Networks to offer predictive traffic information to its clients. In addition, the companies are working closely together to add more speed and flow markets nationwide.

Hogan: Clear Channel may sign Internet distribution deals
Clear Channel may sign distribution deals with Yahoo or iTunes by next year, and has been in talks with Apple Computer, Yahoo and Microsoft over the past year, according to John Hogan, CC Radio CEO, who spoke at the Reuters Media and Advertising Summit in NYC.

December '05 RBR/TVBR Solutions Magazine

As a Professional courtesy and your convenience we have produced our December Solutions Magazine in PDF Format to Save on your Desk Top to archive. This requires version 6.0 or later of Adobe Acrobat Reader.

Use this button to update today and look for Santa on Tuesday December 6th.

RBR Radar 2005

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

Senate decency bill
literally put on hold
Senate Commerce Committee Chairman Ted Stevens (R-AK) said some think it goes too far, others not far enough. Given that concern was coming from two opposite directions, Stevens did not think he had the 60 votes necessary to force action. RBR observation: We call it Beltway BS. 11/309/05 RBR #233

Reese makes the case
for broadcasters
Bruce Reese took exception to the apparently widespread belief that broadcasters are filling the airwaves with filth. "To begin," he said, "it may be useful to remember that the vast majority of broadcasters have never had the FCC take any action against them on the indecency issue." Read Reese's full testimony here
11/309/05 RBR #233

Wide open "Open Forum
on Decency"
A lot of ideas were put forth at the special session of the Seante Commerce Committee put together by Chairman Ted Stevens (R-AK). While it can probably be said that all in attendance believe that it is important to protect children from objectionable material that is pretty much where the consensus ended. Comments on decency read here
11/309/05 RBR #233

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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

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