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Volume 22, Issue 237, Jim Carnegie, Editor & Publisher

Tuesday Morning December 6th, 2005

Radio News®

Coen gloomy on ad outlook
After seeing ad spending trail GDP growth this year, Universal McCann guru Bob Coen expects more of the same in 2006, with total ad spending up 5.8%, vs. 4.6% this year. Other than the cyclical boost from political and Olympics advertising, he doesn't see anything coming in '06 to light a fire under radio and TV advertising. After so many decades of observing the behavior of advertisers, as Coen made his annual appearance at the UBS Media Week Conference in New York he seemed to be baffled by their behavior in 2005. He said major companies usually launch new products and market them when the economy is rebounding. "That didn't happen in 2005," he noted. So, while he expects the economy to be "reasonably healthy" in 2006, he doesn't see anything on the horizon to drive advertising demand, other than some upward pressure on TV rates created by political advertising pressuring inventories. Once again, the most robust growth is expected for Internet and cable TV, along with direct mail. Coen is looking for network TV to be up 6.5%, national spot 8.5% and local spot 4.5% next year - - decent growth, but not extraordinary for an Olympics/political year. In radio, he expects national business (network and spot combined) to be up 4% and local 4% as well.
| Here's his complete forecast by medium |

RBR observation: Much as we'd like to see more growth in 2006, we can't disagree with Coen's basic projections. His outlook for television is only slightly more pessimistic than the TVB's forecast (9/9/05 TVBR #177), while being slightly more bullish on cable. On the radio side, his final projections for this year still look too high, given the industry's flat performance through October reported by RAB (12/1/05 RBR #234). That may explain why he appears, at this point, to have too high of a projection for 2006. Indeed, when a member of the audience at the UBS conference asked why he was so optimistic about a radio recovery next year, Coen insisted that he wasn't optimistic at all. "The radio situation is in turmoil right now. So much of that radio money, the primary source of it is local entrepreneurs, mainly retailers and restaurants, and many of them are being consolidated. Many of them are under great squeeze as far as their margins are concerned. So it's been a tough period for radio. I think it'll improve a bit, but I don't see it turning around sharply," Coen said.

How'd the guru do this year?
A year ago, Universal McCann forecaster Bob Coen was bullish on the ad spending outlook for 2005 (12/7/04 RBR #237). That enthusiasm had cooled by June, when the guru ratcheted down most of his projections. Even so, the actual case was so much softer that even those June numbers proved to be overly optimistic. Over the course of the past year, Coen lowered his projection for national spot TV from a decline of only 1% to a 7.5% drop. For local TV he went from expecting a 2.5% gain to a drop of 3%. In radio his national projection went from up 5.2% to 1.5% (and even that appears at this point to be pretty optimistic) and local from up 5% to up 2% (also a pretty ambitious number at this point).
| Here's the blow-by-blow for 2005 |

Indecency, a la carte tied together
As has often been the case of late, regulatory issues of significance to the media business have forged alliances you just wouldn't see anywhere else. The issue of broadcast ownership deregulation was one such issue - - to look at just one of the more extreme examples, that urge to protest further deregulation brought together the firearm promoters at the National Rifle Association with the peace activists at Code Pink. The emerging battle over a la carte programming is having the same effect. The goal is to give parents better control over the programming that comes into their home. One way being proposed is a la carte programming, which appeals to many in government on several different levels. Just as a market issue, some such as John McCain (R-AZ) have wondered why someone should have a channel they do not forced on them, and on top of that be forced to pay for it. Since cable channels are not subject to the same regulatory indecency guidelines as broadcasters, many - - including FCC Chairman Kevin Martin - - are arguing that allowing parents to pick and choose only those channels they want is a perfect way to give them control over what their children see, without getting into any messy First Amendment free speech issues. Cable companies, on the other hand, say that such a regime would actually be more expensive than simply making use of channel blocking technologies already in place. They also cite the fact that program diversity will suffer under a la carte - - channels which fail to make the menu in a significant number of households be end up being thrown overboard.

RBR observation: And that is why free speech advocates, who think that MTV and Comedy Central should be able to do whatever the public will tolerate, are being joined by minority programmers such as Radio One/TV One, and religious groups like Trinity Broadcast Network, in lining up to oppose mandatory a la carte.

Local broadcaster advises
cautious CP bidding
An FM Auction No. 37 CP in Blue Lake CA resulted in an unclaimed stick, although not for a lack of bidders. According to The Eureka Reporter interview with local broadcaster Pattison Christensen, 33 companies signed up to bid on the Eureka-Arcata CA stick. But the dollars bid spiraled far beyond the level which the market could support, in Christensen's opinion. Christensen is CEO of Redwood Broadcasting, which has a pair of FMs in the northern California coastal market which gets TV ratings from Nielsen and radio ratings from Eastlan. Interested in adding the modestly-powered Blue Lake stick, Christensen said he performed engineering and legal due diligence and came up with a sustainable bidding value of 90K - - but knew the instant he saw the number of rival bidders that the price was doomed to go beyond reason. He said College Creek won with a 1.026M, but withdrew the offer, putting the station into the next auction cycle, FM Auction No. 62, scheduled for 1/12/06. Christensen expects similar bidding results, and bad results for whoever eventually overpays. "In an investment for a television station, radio station or newspaper, debt is not your friend," he told The Eureka Reporter, "especially in this economic environment. You need cash flow to service debt." Another area owner placed a rational bid for the Blue Lake stick in the 200K-300K range, and a third admitted to a 400K bid last time around.

RBR observation: Smart tourists who stick around a favored resort long enough learn to eat where the locals eat. If the locals think that the carpetbagger bid for a stick is, at its most optimistic, three times too high, and perhaps as much as 11 times too high, we think we'd be paying attention.

Arbitron chief downplays VNU buyout
Speaking to the UBS conference yesterday, Arbitron CEO Steve Morris noted that while lots of people have suggested that his company is a buyout prospect for Nielsen owner VNU, he doesn't see it happening. Given its current internal turmoil, he doesn't see VNU acquiring anything. Morris noted that having Nielsen do a Portable People Meter (PPM) joint venture with Arbitron would be a lot more efficient way to get access to the PPM technology than trying to buy Arbitron. "We would give them the thing that they most want, in exchange for something that we want, and they don't have to spend a billion and a half to get us," Morris noted. He also noted that Arbitron and Nielsen are already 50/50 owners of Scarborough and called a joint venture a "logical business model" for PPM.

Adbiz©

ZenithOptimedia lowers global ad outook; Online up
ZenithOptimedia has lowered its projections for ad spend in 2006, predicting U.S. spending will grow only 2.9%, compared with a 3.6% gain it predicted in October. Worldwide ad spend is now expected to grow only 4.8%, compared with its previous forecast of 5.2% growth. However, it upped its online ad spend prediction for 2005: up to 4.6% from 4.3%. It also predicted that by 2008 online will account for 6.4% of global ad spend, and from 2005-2008 inclusive, 15.8 billion new ad dollars will be created, or 17% of total global ad growth. ZenithOptimedia noted 2005's mediocre growth is related to tough comps with last year's summer Olympics, European soccer tournaments and the Presidential election here in the states. ZenithOptimedia also revised its 2006 outlook. U.S. ad spend is now projected to rise 5.1% vs. the previous 5.7%, while worldwide ad spend is set to raise 5.9% vs. the 6.2% the agency projected in October.

Activision and Nielsen Entertainment release
study on in-game ads
Activision and Nielsen Entertainment released the results of a study on the effectiveness of in-game advertising that incorporates different levels of product integration. The research is the fourth component of an ongoing joint initiative between the two companies. The study confirms earlier findings that product integration helps to drive awareness and recall, but also uncovers a new variable, pervasiveness, which contributes to driving brand awareness as well. Most important, the research shows that the combination of product integration and pervasiveness results in a high degree of persuasion -- the willingness of consumers to change their opinions of a brand and/or recommend it to others -- and establishes that video games drive persuasion.
| Read More... |

Media Business Report

Belo newspapers sign distribution deal
with Yahoo! Hot Jobs
Belo has signed a distribution agreement with Yahoo! HotJobs, a leader in online recruiting. Beginning in early 2006, employers who advertise in The Dallas Morning News and The Providence Journal or on their respective Web sites (www.dallasnews.com, www.projo.com) can automatically have those jobs posted on Yahoo! HotJobs ( www.hotjobs.com). Belo will be Yahoo! HotJobs' exclusive newspaper partner in both markets.

Media Markets & MoneyTM

Huntsville: Cumulus expands,
Clear Channel clears path
Cumulus Media has agreed to acquire a pair of FMs in the Huntsville AL market from Clear Channel, and move one it already has in the market to a Clear Channel tower - - opening a path for Clear Channel to move yet another FM into the market, pending FCC approval. Cumulus will get WWXQ-FM Trinity AL and WXWQW-FM Meridianville AL for 3.3M cash. The pair will soup up a cluster which already includes WHRP-FM Tullahoma (headed to New Market via CP), WVNN-AM/WZYP-FM Athens and WUMP-AM Madison. That leaves Clear Channel with WBHP-AM, WHOS-AM, WDRM-FM and WTAK-FM in the Huntsville market. The sale of the two FMs in contingent on Cumulus doing nothing to hinder CCU's attempt to move WLAY-FM Tuscumbia, part of the Florence/Muscle Shoals market, to Meridianville in Huntsville. Further, it will locate the new WHRP-FM antenna on Clear Channel's WDRM-FM tower.

RBR observation: And just who says the big boys can't play nice with each other when they want to?

Close encounter in the X-ownership zone
That's x-ownership as in cross-ownership. The closure of the 235M sale of three television stations from Emmis to Journal creates two new radio/TV combos, bringing its total of such clusters to four. It takes over Foxs WFTX-TV Channel 36 in Fort Myers-Naples (which will be a standalone), and ABC KGUN-TV Tucson Channel 9, which will tie-in with a one AM-three FM radio cluster. Journal has alson kicked off an LMA with CBS KMTV-TV Channel 3 in Omaha - - of which it says it has "...acquired certain assets..." - - that station also links up with a radio cluster, which may require some spin-offs before Journal can take over the license for the television station. Journal's other cross-ownership platforms are in Milwaukee and Boise.

Washington Beat

FCC, Commerce Committee let scant sunshine in
The main interest for broadcasters at the Friday 12/9/05 FCC Open Meeting for December will be saying good-bye to exiting Republican Commissioner Kathleen Abernathy. There will certainly be little to attract broadcaster attention otherwise. The Commission will be looking at wireline universal service and junk fax items (zzzzzz). The following week, the Senate Commerce Committee will take up the nomination of Republican Debi Tate and the renomination of Democrat Michael Copps - - and there has been no hint whatsoever that either will face any major hurdles. That will bring the party balance back to even. A proposal for a third Republican is expected to be left to committee chair Ted Stevens (R-AK). It should also be noted that Stevens had mentioned the possibility of holding a follow-up session on indecency on 12/12/05. An announcement concerning that date did in fact come from the committee late yesterday, but it concerned a subcommittee on an unrelated matter. We'll keep you posted if anything changes.

Programming

O'Reilly interviewing Stern
Fox News Channel's Bill O'Reilly will sit down with Howard Stern for a two-part interview to be presented on "The O'Reilly Factor" (8-9 PM/ET) Wednesday, 12/7 and Thursday, 12/8. As he signs off from the terrestrial airwaves and approaches his debut on Sirius Satellite radio, Stern will face off with O'Reilly in a cable exclusive interview where no topics are off limits. This will mark the first time the king of cable news goes one-on-one with the provocative broadcaster in what is expected to be a fiery showdown between the two very outspoken personalities.

AFN now airing Al Franken
Looks like Rush and other pro-administration talkers will no longer be exclusive to the US military's airwaves - - Air America Radio's "The Al Franken Show" has begun broadcasts on the American Forces Network (AFN). AFN Radio will distribute the first hour of the "The Al Franken Show" as part of the inventory of stateside programming it provides to its affiliates overseas. "I am absolutely thrilled that the 'Al Franken Show' will be carried on the American Forces Network, though, of course, that means I will have to stop criticizing President Bush. After all, he is our commander-in-chief," said Franken with his tongue placed firmly in his cheek. In addition to "The Al Franken Show" being aired on AFN Radio, Franken will also be making his 6th USO tour this December, which includes stops in both Iraq and Afghanistan.

TVBR TV - News

Duo to share ABC anchor chair
Elizabeth Vargas and Bob Woodruff have been named co-anchors of ABC's "World News Tonight" (WNT), effective January 3rd, jointly filling the post left vacant since the death of Peter Jennings. ABC also plans to add a live feed for the West Coast and to make more of the newscast's content available to viewers over the Internet. "Elizabeth and Bob together will be the anchors for this new broadcast and digital age of 'World News Tonight.' Their experience as journalists, their familiarity to our audiences, and their commitment to gathering and delivering the news anywhere, anytime and in every way make them the right team to take us forward for the next generation," said ABC News President David Westin. With the two anchor format, ABC is stepping up the workload for the team. Each day Vargas and Woodruff will be co-anchoring a webcast with a brief update of the day's top stories and a preview of what's going to be on the network newscast that evening. That webcast will air live on ABC News Now and ABCNews.com. The role of WNT on ABCNews.com will also be expanded, with more reporting from the network's correspondents and anchors, sometimes before the broadcast. There will also be interactive presentations, additional video and in-depth information specifically for the Internet. And unlike their colleagues at NBC and CBS, Vargas and Woodruff won't be finished after the East Coast broadcast if there's no breaking news to render a replay outdated for the western time zones. Rather, they'll anchor three feeds of WNT live every day: 6:30 pm ET, 8:30 pm ET (5:30 PT) and 9:30 pm ET (6:30 PT). "Now 'World News Tonight' will always be on," said Jon Banner, executive producer of WNT. "We are revolutionizing the way the evening news is delivered - - the broadcast will no longer be confined to the evening, no longer limited to television and now will be live to the West Coast."

TVBR observation: Will they close with "Good night Elizabeth" and "Good night Bob" as in the old days that we remember with the most successful network TV duo, Chet Huntley and David Brinkley at NBC? Other dual anchor attempts since David and Chet said good night to each other daily have mostly failed because of poor chemistry between the big egos in the shared anchor chair. Will this be different? Vargas will continue to co-anchor "20/20"and both she and Woodruff will have plenty to do to keep up with the new demands that ABC is making on its anchors. In addition to everything described above, both are also going to be expected to contribute to a daily blog for the newscast, along with other WNT producers and writers. It's a 24/7 world now for TV news.

Transactions

51K WMEK-AM Chase City VA from West Mecklenburg Broadcasting (Wayne L. Payne) to Stephen C. Battaglia Sr. & Janis G. Battaglia. 1K deposit, 16K upon FCC approval, 34K note. [File date 11/14/05.]

50K AM CP Cameron SC from Murphy Broadcasting System (Ronald Matheny) to Glory Communications Inc. (Alex Snipe). 5K earnest money, balance in cash at closing. CP is for 1490 kHz. [File date 11/14/05.]

Stock Talk

Inflation and oil...again
You've heard this before. Worries about inflation and higher oil prices sent stock prices lower on Monday. The Dow Industrials were off 43 points, or 0.4%, to 10,835.

Radio stocks joined the retreat. The Radio Index declined 2.273, or 1.2%, to 187.576. Emmis had the worst day, falling 3.3% on worries about its CFO's resignation.

In their first official day of trading on a "when issued" basis on the NYSE, CBS Corporation closed at 34.48 and New Viacom at 42.85. Add together and divide by two to get 38.67, which is a premium to the price for "old" Viacom.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		39.16	-0.61	Jeff-Pilot	JP		55.85	-0.30
Beasley	BBGI		13.72	-0.34	Journal Comm.	JRN		13.64	-0.01
Citadel	CDL		13.65	-0.16	Radio One, Cl. A	ROIA		11.18	-0.01
Clear Channel	CCU		33.08	+0.06	Radio One, Cl. D	ROIAK		11.18	-0.03
Cox Radio	CXR		15.09	+0.04	Regent	RGCI		4.87	-0.06
Cumulus	CMLS		12.10	-0.20	Saga Commun.	SGA		11.91	-0.20
Disney	DIS		25.01	+0.13	Salem Comm.	SALM		19.10	-0.06
Emmis	EMMS		20.30	-0.69	Sirius Sat. Radio	SIRI		7.14	+0.02
Entercom	ETM		31.88	-0.40	Spanish Bcg.	SBSA		4.42	-0.13
Entravision	EVC		7.25	-0.05	Univision	UVN		30.29	-0.13
Fisher	FSCI		45.15	-0.29	Viacom, Cl. A	VIA		34.45	-0.05
Gaylord	GET		43.15	-1.45	Viacom, Cl. B	VIAb		34.48	+0.01
Hearst-Argyle	HTV		24.10	-0.02	Westwood One	WON		18.15	-0.06
Interep	IREP		0.37	unch	XM Sat. Radio	XMSR		28.90	-0.66

Bounceback

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This is your column, so send your comments and
a photo to [email protected]

Arbitrends

Radio Media Moves

Two upped at
CBS Radio News
Aliah Git has been named Executive Editor of CBS Radio News, putting her in charge of all facets of the editorial department, effective January 2nd. Effective immediately, Craig Swagler has been named Special Events Director for CBS Radio News.

Point-to-Point
appoints new Sr. VP
Tim Bronsil will become Sr. VP of the marketing firm on 1/1/06. Bronsil was at Clear Channel's Critical Mass Media and will remain based in Cincinnati and brings a ton of marketing experience to Point-to-Point since 1995 he has been designing and implementing successful direct marketing programs to some of Americas top radio stations and all formats.

Below the Fold

Ad Biz
ZenithOptimedia lowers
global ad outook
Spending will grow only 2.9%, compared with a 3.6% gain it predicted in October...

Media Markets & Money
Huntsville: Cumulus expands
Agreed to acquire a pair of FMs in the Huntsville...

Media Business Report
Belo signs distribution
deal with Yahoo!
HotJobs, a leader in online recruiting...

Stations for Sale

KWAM 990AM Memphis
Heritage full-time station with great coverage. Station and transmitter site for sale by owner.
Mark Jorgenson
Concord Media Group, Inc.
(828) 859-6982
[email protected]

Scranton-Wilkes-Barre
AM daytimer with excellent coverage of entire metro. Low operating costs, no revenue. Asking $495K. Details, [email protected]
or 781-848-4201.

More News Headlines

Broadcasters' Foundation assisting Katrina victims
The Broadcasters' Foundation says by the end of this month it will have distributed aide to more than 250 broadcasters whose families suffered from the onslaught of Hurricane Katrina. Foundation Chair Phil Lombardo says each family received an initial one thousand bucks emergency grant. "Situations that warrant continuing assistance will be reviewed," he said. The people who have been helped run the gamut of radio and TV staffers, including anchors, news directors, engineers, salespeople, DJs and office staffers.

VNU names
head of Marketing Information Group
VNU announced that Steven Schmidt has been appointed president and chief executive officer of its Marketing Information (MI) group, effective 1/1. In his new role, Schmidt will be responsible for the entire MI organization, which includes such leading brands as ACNielsen, BASES, Spectra, Claritas and ACNielsen HCI. Previously, Schmidt was president and CEO of ACNielsen and executive vice president of the MI group. He will continue to be accountable for the global ACNielsen business, in addition to leading the MI group.

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December '05 RBR/TVBR Solutions Magazine

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RBR Radar 2005

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

Analyst sees Radio flat, TV down
RAB's reported 7% October drop in radio revenues has made it impossible to have a positive number for Q4, Harris Nesbitt analyst Lee Westerfield is projecting that radio revenues will be flat for 2005 and then rise 3% in '06. For spot TV, a big impact from the two-year cycle of elections and Olympics, with '05 down 7%, then up 9% with next year's political/Olympic spending. For all of television (network, spot and syndication combined), ad revenues could be up 8.5% next year.
RBR observation: Bottom line - if you do not have your, ah, stuff together now you are in deep.
12/05/05 RBR #236

Internet advertising:
A place for convergence?
eMarketer says advertising using video on the Internet will rake in 225M this year, and will nearly triple - - to 640M - - by the end of 2007, on its way to 1.5M annually by the end of the decade. RBR observation: This advice applies to radio broadcasting just as much as it does to television, in our opinion. Broadcasters - - like everyone else in America - - are obviously taking the world wide web into account. It's a rare station or company which is operating without a website. The fact is, many companies, not the least of which is the one whose primary product you are now reading, have had their core business model utterly transformed by the Internet. (Paper? Ink? Printing press? Big Postage? What are those?). The key piece of advice here is to stay on top of developments daily, and make sure the Internet is your partner, not the 800-pound gorilla that has you for lunch.
12/05/05 RBR #236

Clear Channel sets CCE spinoff
December 21st Clear Channel Communications will be out of its unhappy venture into the concert business. The spin-off of Clear Channel Entertainment will be completed by distributing stock of CCE Spinco to existing Clear Channel shareholders. RBR observation: Get your calculators ready. Come December 22nd we'll have a Wall Street valuation of what the Entertainment unit is worth - - and how much of Clear Channel's 4.4 billion investment has simply vanished into thin air.
12/05/05 RBR #236

Citadel move working - Nope
After falling out of favor with Wall Street as growth stocks, public radio and TV companies have been trying to reposition themselves as a value proposition - - delivering big rewards to investors by using their cash flow for dividends and stock buybacks. Is it working? Not so far.
RBR observation: It's almost unbelievable that you can buy Citadel stock for around 13.70 and get 72 cents a year in dividends - - and Wall Street isn't biting. A yield of 1.6-2% for CBS, depending on how post-split trading goes, isn't nearly as enticing. It will be interesting to see whether Sumner Redstone's gamble pays off. He could be left with a New Viacom that doesn't get valued any higher than the old Viacom - - and a CBS that drops even lower.
12/02/05 RBR #235

Account Executive - Suburban, NYC
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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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