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Volume 23, Issue 237, Jim Carnegie, Editor & Publisher

Thursday Morning December 7th, 2006

Radio News ®

Media coalition
petitions Commissioners
"Technological and marketplace developments - especially the growth of multichannel programming distributors and the Internet - have fundamentally altered the landscape in which the Commission's ownership rules were originally adopted." This statement is from a letter to all five FCC commissioners asking for regulatory relief. In view of this, a broad cross-section of broadcast and print media companies have asked that the ownership rules be modernized so they can continue to compete, and provide vital local information services. The gist of the argument is that new competitors continue to enter the media field, but rarely are they able to provide local content, including news and, critically, emergency information. Yet the local media are hampered by regulations that do not apply to the newcomers, resulting in a slanted playing field. "Simply put, retaining severe ownership restrictions does not promote the public interest in today's digital multichannel marketplace; to the contrary, it hinders local stations' abilities to provide increasingly costly programming and other diverse, valuable services to local audiences." The NAB, NAA, all four big networks and numerous radio, television and newspaper groups both large and small are participating in the coalition.
| Text of letter here |

Analysts say end of election signals sluggish demand
Lee Westerfield at BMO Capital Markets says the abrupt end of the political advertising season has brought with it an equally abrupt softening of demand for airtime on radio stations. Pricing was up, but that may soon slide into the sluggish zone as well. BMO says commercial time dropped 1.5% in November, and says the natural drop-off in political is the explanation. It also notes that units were down 1.1%, a number which fails to support the notion of added clutter due to shorter and more numerous spots. It says rates increased 3.5% in November, but added "...we see this as the last month for many months to come, when ad rate growth will likely be in the 0%-1% range, given our calls for advertising demand downcycle in 2007." It expects pure-play radio stocks will have a tough year. Now said to be priced at ten and a half times 2007 EBITDA, BMO expects a "contraction" to 9.0x-9.5x with 10%-15% radio equity depreciation.

RBR observation: We need for a smart, innovative company to step forward with a brilliant plan and superb street smarts (as opposed to Street smarts) and prove all these analysts wrong. Any volunteers?

Tech Check: Engineer looks
at the new rules
The FCC's new regulations which purportedly make it easier to pull off a city of license change may not be as streamlined as people think, says engineer Frank McCoy of American Media Services. For one thing, language in the new rules makes it appear that almost all older FM stations which were grandfathered into a short-spaced TL are stuck there. McCoy confirmed that they are not anchored, if they can get a waiver. However, he has other concerns. Read on...
| Frank McCoy comments here |

NYT sees another challenging year ahead
Although it's expecting to experience dramatic growth in its internet business, the New York Times Company is expecting to cope with another difficult year in 2007. It will also lose most of the interest we have in the company in this corner of the virtual universe as it sells off most of its broadcast properties. The company's core newspaper properties are facing continuing problem of declining circulation along with declining advertising income. It is anticipating a 40M payday with the closing of its sale of WQEW-AM to ABC/Disney (a move that will leave its radio portfolio empty save for one New York FM). It also expects to move its entire television portfolio in the first half of 2007.

To recuse or not to recuse,
that is the question
Republican commissioners at the FCC are looking to end the stalemate over the acquisition of BellSouth by AT&T by seeking approval from the FCC Office of General Council to allow Robert McDowell to vote. His prior employment in the telco industry has thus far left him on the sidelines, leaving the other commissioners deadlocked along party lines when it comes to voting to approve the merger. House Energy and Commerce Committee Chairman Joe Barton (R-TX) and Fred Upton (R-MI), Chairman, Subcommittee on Telecommunications and the Internet, fired off a letter basically saying go for it. "The Commission's responsibility is to regulate, not frustrate, matters within its jurisdiction," they wrote. "As you mention in your letter, you have made numerous attempts to work with the other Commissioners to reach consensus on this issue. Given that the Commission appears unable to act on the applications for transfer of control by AT&T and BellSouth without Commissioner McDowell's participation, it is appropriate for the Commission's General Counsel to examine whether the Government's interest would be served by permitting Commissioner McDowell to participate." Ed Markey (D-MA), who will be switching seats with Upton when the 110th Congress kicks off, countered, "I believe that forcing a Commissioner to participate in a proceeding in which he or she would otherwise be recused is an extraordinary notion for an independent, impartial regulatory agency. Agency Commissioners must exercise independent, impartial, and unbiased judgment in matters before the Commission. I encourage FCC Chairman Martin, as well as Commissioners Copps, Adelstein, and Tate, who have been participating in the merger proceeding, to conclude it in a timely fashion and, if approved, only with significant, enforceable consumer and competitive safeguards. If the FCC General Counsel takes action to compel Commissioner McDowell's participation, I strongly urge Commissioner McDowell to announce his intention to vote to abstain as a matter of principle."

RBR observation: And so it goes in Washington. For every letter to a top bureaucrat, there is an equal and opposite press release. It will be interesting to see how this particularly snarled process develops. Stay tuned.

Ad Business Report TM

Long time KRG client Next Media switches rep
McGavren Guild announced effective immediately, NextMedia Group has decided to switch representation of 22 additional stations in five markets to the rep firm. McGavren Guild already reps NextMedia Group in Chicago, IL; Saginaw-Bay City, MI and Kenosha-Racine, WI. It will now represent the group's stations in Dallas; Greenville- New Bern-Jacksonville, NC; Wilmington, NC; Myrtle Beach, SC; and Canton, OH. Jeff Dinetz, NextMedia President/COO, said "Based on McGavren Guild's exceptional Interep results for our stations, we have decided to move these five additional markets to the rep firm. We feel that their status as a true independent rep firm serves our stations well. This advantage, coupled their non-traditional selling techniques and new business initiatives, have truly taken our stations to the level next. I look forward to the same great results with Interep's and our expanded partnership." Added Lisa Sirotka-Sonnenklar, President/McGavren Guild Radio: "We are delighted and proud of the confidence that Jeff and the NextMedia Group have in McGavren Guild. Our strategy reaches far beyond traditional selling practices by implementing customized client station/advertiser focused solutions designed to deliver exceptional results for both parties. Clearly, our plan for success is working and we look forward to putting the strategy to work for NextMedia in the new markets that we now represent."

RBR note: Congratulations are in order when one makes a grab of this nature especially as the battle between KRG (owned by Clear Channel) and Interep has been going on for years. But RBR has to note that late last night and unconfirmed that KRG's Eastman rep firm may have, and we say may have, taken a big hit on Interep with one of their major groups. RBR attempted to contact the radio group CEO and Interep CEO Ralph Guild via phone after hours and received voice mail. RBR also sent out email and at the late hour no reply was forth coming. RBR will follow up and advise tomorrow.

Arbitron going all electronic with
RADAR spot confirmation system
Arbitron is enhancing its RADAR network radio service with the introduction of an improved spot confirmation service, a completely electronic version of the commercial affidavit verification system for its radio network ratings. In going all electronic the improved service will increase the number of stations monitored, expand the number of broadcast hours covered and deliver more frequent reports of how well the commercial affidavits provided to the networks by affiliated stations correspond to the actual broadcast of network spots. The new spot confirmation reports will now be delivered quarterly, up from one annual report. The quarterly report will give results for the most recent quarter plus a 12-month rolling result. "Confirming the affidavits that are used by RADAR networks has always been an important element in the overall accountability of network radio. By completing our transition to all electronic monitoring, we are able to devise the most comprehensive spot verification system ever used in the RADAR network radio ratings service," said Bruce Supovitz, Arbitron VP/National Radio Services. "We began the transition to all-electronic monitoring with a March 2004 agreement with Mediaguide. In 2007, we will completely retire the manual monitoring system that had been the mainstay of RADAR affidavit verification service since 1974." Here are the key improvements for the new Spot Confirmation system, RADAR's electronic verification of network affidavits: All detections will be done electronically; the manual taping system has been phased out. In addition, the number of stations monitored has been increased to 2,200; up 10% from 2,000 stations; and broadcast hours monitored has been increased to 8,800; up 47% up from 6,000 hours.

Media Business Report TM

San Francisco axes
scented billboards
Looks like scented outdoor advertising gets its first hiccup: San Francisco city officials have scrapped a "Got Milk" campaign that outfitted the city's bus shelters with cookie-scented billboards. CBS Outdoor, which holds the ad contract for the bus shelters, was ordered to remove the scented strips on Tuesday - just one day after they were installed as part of the California Milk Processor Board's "Got Milk?" campaign. While the dairy producers were aiming to initiate a craving for milk, critics of the billboards said the scented chocolate-smelling oils used on the billboards might trigger an allergic reaction in some people and unfairly make folks hungry who couldn't afford to get a bite to eat. The promotion was installed in five San Francisco bus shelters at a cost of about 30 bucks per shelter.

Airline advertisers urged to cover cost of BagChip startup
Major airline advertisers are being encouraged to sponsor the startup cost of the BagChip tag and responder system that could resolve the 29 million travelers bags lost/misplaced each year. In a strategic good-will move, advertisers are urged to create their own logo-style-BagChip with the travelers name, address, phone number and unique numeric id. When luggage affixed with an advertiser's logo BagChip at airport-check-in is misplaced by an airline, baggage handlers driving airport Tug Carts would quickly find the piece scanning baggage inventory from 50 yards away using hand held range readers. A logo BagChip is priced at 10 bucks with hand-held range readers for about 2,500 bucks each. Advertisers and Airlines can test the BagChip system from RFID, LTD. At select airports by calling 303-663-9519 for more info.

Media Markets & Money TM

Auction No. 62 CP moves
An unbuilt 99.5 MHz stick in Midland MD is going from its winning bidder to a losing Senatorial candidate in a 375K deal which is perhaps more interesting for its back-story than for the deal itself. Here's the deal. The Class A CP from Auction No. 62 is going from Radioactive LLC's Benjamin L. Homel to West Virginia Radio Corp.'s John Raese in a cash deal. Located on Maryland's panhandle in unrated territory just west of Cumberland, it'll cluster with the buyer's WDKY-FM in Ridgley WV and WKLP-AM/WQZK-FM in Keyser WV. Now for the fun stuff. Mr. Raese had his name before the entire state of West Virginia earlier this month. It was on the ballot. He went down to defeat as the Republican challenger to Sen. Robert Byrd (D-WV). It was Raese's second attempt to get into Congress - he also lost to Jay Rockefeller (D-WV) back in 1984. On the flip side of the deal, Mr. Homel is better known to the radio industry as Randy Michaels.

Washington Media Business Report TM

Big fish, little fish,
they're all fine by the FCC
They enforce the rules at the FCC. They don't care how impressive your portfolio is, or how tiny. They don't care what your coverage contours look like. The Commission just nailed three more facilities for failing to get their renewal applications in on time. And one of them was so late it picked up an unauthorized operation rap on top of it. And they don't get much bigger than the company that was hit with the double play. Viacom's Infinity Radio Holdings was untimely with the paperwork for translator W272AT in Columbus OH, and kept it going anyway, resulting in two fines totaling 7K. Also showing up in the regulatory paddy wagon were LPTV operator College Weslayan Church (WCWC-LP Marion IN) and MVB Inc., licensee of WWGC-AM Albertville AL. They filed late but got the paperwork in prior to expiration and only suffered a 1.5K fine each.

Entertainment Media Business Report TM

Mancow adds KZRC-FM
Lonestar Radio Partners has reportedly signed a two-year deal with TRN-syndicated morning show man Mancow. Lonestar is currently operating Alternative/AAA KZRC-FM Bay City, TX under an LMA and plans to debut Mancow on 1/15.

Internet Media Business Report TM

MLB Advanced Media strikes deal
with Interactive Television Networks
Interactive Television Networks announced a distribution agreement with Major League Baseball Advanced Media. ITVN's MLB.com programming will include next-day condensed games, daily highlights, and a selection of full-length classic games. "We are delighted to add MLBAM's content to our fast growing offering of à la carte programming which now includes on-demand feature films and TV events from NBC Universal, over 15 linear 24/7 channels and 150 movies on demand updated monthly from Starz Entertainment, thousands of music videos from leading record labels in linear and on-demand playlists, Karaoke, Setanta Sports and more," said Charles Prast, CEO of ITVN. "In addition, this agreement will help drive our European business as we will be making MLBAM content available over ITVN to the more than one million U.S. citizens living in Europe." MLB.com content will be available on ITVN starting in December of this year.

Ratings & Research

VNU to launch "In Store"
in-store measurement
With in-store advertising growing geometrically, VNU and the In-Store Marketing Institute announced a partnership to launch a global measurement service that will help marketing professionals better understand how to reach and influence consumers while they are in the store and making their final purchasing decisions. The new service will build on a development effort called P.R.I.S.M. (Pioneering Research for an In-Store Metric) conducted in early 2006 by a consortium of retailers and manufacturers led by the In-Store Marketing Institute. The P.R.I.S.M. Project created a new approach to in-store research that gives the retail industry a common language to measure in-store consumer reach. Members of the consortium include 3M, Coca-Cola, Kellogg's, Miller Brewing, Procter & Gamble and The Walt Disney Company, with support from retailers, including Albertsons, Kroger, Walgreens and Wal-Mart.
| Read More... |

Transactions

1.4M WHRY-AM Hurley WI, WUPM-FM Ironwood MI. 100% of Big G Little O from Charles H. Gervasio, Rochelle M. Gervasio, Norma T. Rigoni, James J. Gervasio, John C. Gervasio, Judy C. Gervasio to Gerald J. Hackman, John J. Nix. 1.25M cash at closing, 150K non-compete with Charles H. Gervasio. [File date 11/16/06.]

190K KZTD-AM Little Rock AR (Cabot AR) from Searcy Broadcasting Inc. (Ken Madden) to New World LLC (Joe Kaufman, Arik Lev). 9.5K earnest money, 140.5K cash at closing, 40K note. LMA 11/1/06. Lev is a citizen of Israel. [File date 11/17/06.]

Stock Talk

Down day for radio stocks
Losers took winners yesterday, paralleling the Dow and NASDAQ. Standouts included Fisher, down 1.84, Cumulus, down 0.24 and Entercom, down 0.38.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		44.30	-0.10	Hearst-Argyle	HTV		25.64	-0.17
Beasley	BBGI		7.02	-0.07	Journal Comm.	JRN		11.98	+0.05
CBS CI. B	CBS		30.72	-0.23	Lincoln Natl.	LNC		63.69	-0.10
CBS CI. A	CBSa		30.74	-0.20	Radio One, Cl. A	ROIA		6.62	-0.03
Citadel	CDL		9.75	-0.08	Radio One, Cl. D	ROIAK		6.65	-0.02
Clear Channel	CCU		35.36	-0.07	Regent	RGCI		3.04	+0.02
Cox Radio	CXR		16.56	-0.20	Saga Commun.	SGA		9.04	+0.25
Cumulus	CMLS		10.62	-0.24	Salem Comm.	SALM		11.37	-0.03
Disney	DIS		34.10	-0.10	Sirius Sat. Radio	SIRI		3.83	-0.02
Emmis	EMMS		8.25	-0.24	Spanish Bcg.	SBSA		4.18	-0.04
Entercom	ETM		27.25	-0.38	Univision	UVN		35.39	-0.04
Entravision	EVC		7.45	-0.10	Westwood One	WON		6.72	-0.12
Fisher	FSCI		42.52	-1.84	XM Sat. Radio	XMSR		14.70	+0.38
Gaylord	GET		49.37	-0.13	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
Arbitron going all electronic
With RADAR spot confirmation system...

Media Business Report
San Francisco axes billboards
Not all billboards only the ones that Smell...

Media Markets & Money
Auction No. 62 CP moves
Unbuilt 99.5 MHz stick going from winning bidder to a losing candidate...

Ratings & Research
VNU to launch "In Store"
With in-store advertising growing geometrically who else to best measure it...

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

Steve Davis back
to Zapoleon
Guy Zapoleon announced VP/Programming for NextMedia and former Zapoleon Media Strategies associate Steve Davis has been named Senior Vice President of Zapoleon Media Strategies effective 2/1. Davis served as VP/Programming for the NextMedia radio group for the past two years. Prior to joining NextMedia Davis was a consultant with Zapoleon Media Strategies from 1995 - 2004.

Ideas Working Now TM

In January's Special Journal Report
1. Media Assoc. Presidents Forecasting '07. These are your Leaders Folks this is where Your dues go to so get involved and read, learn and 'What does it mean to your business?'

2. RBR/TVBR Business News: Google: threat, savior or non-issue. Google is after your inventory.

3. One-on-One--Alan Frank, CEO Post-Newsweek Stations his view from the inside today's Media biz.

4. TV station deal making outlook, Mark Fratrik, Brian Cobb, Kalil, others with insight '07

Contact & Discuss how you can Partner with RBR/TVBR

June Barnes: 803 731-5951
Carl Marcucci: 703 492-8191 ext 202
Jim Carnegie: 813 909 2916

Ideas Working Now TM
View '07 Content Focused
Reports Calendar

RBR Radar 2006

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

2006 was a year of
Lowered Expectations
Universal McCann guru Bob Coen predicting that local radio ad revenues will be up 1% in 2007 and national radio (network & spot) up 4%, RBR looks at his track record for the current year. It is worth a Revue and print out as it is called pacing.
12/06/06 RBR #236

Serious worries for Sirius
Several Wall Street analysts had already lowered Q4 subscriber targets for Sirius Satellite Radio, but when Sirius itself made that official the move sent its stock into a dive. Bank of America Securities analyst Jonathan Jacoby says the! sluggish retail demand could be a catalyst for merging XM and Sirius, although he notes that such a combination would be difficult to achieve in the near term.

RBR observation: First, the suggestion or continued speculation or even hopeful merger will not go away but now this rumor is just oh-hum. In the consumer market place during this holiday season are hand held gadgets ruling the space. And do not forget the lines that waited for PlayStation3. Nobody is standing in line waiting in the freezing cold for a satellite radio.
12/06/06 RBR #236

Dorgan rounds up posse
to go after Martin
Sen. Byron Dorgan (D-ND) let it be known that he hasn't forgotten about media issues as the 109th Congress lame duck session winds to a close. He, and eight other senators, fired off a letter to FCC Chairman Kevin Martin, reminding him that the report from former Chairman Michael Powell's Localism Task Force was still pending, that it should be completed before moving on to the remanded ownership proceeding, and that only four of six forums have been held.
12/06/06 RBR #236

Coen sees another
lackluster year for radio
After overestimating radio growth for several years running, Universal McCann Sr. VP and Director of Forecasting Bob Coen is more conservative in his radio forecast for 2007. He is projecting that local radio ad revenues will be up 1% next year.

RBR observation: We were skeptical a year ago when Coen predicted such a strong year for radio, with local up 4.5% and national 4%. Other forecasters had generally expected much less. With the RAB reporting that local was down 1% and national up 3% for the year through October, it isn't likely the final two months of data will change that picture much. We would like to be able to say, for a change, that Coen is underestimating the year ahead, but there isn't yet any indication that 2007 will bring any more than a modest improvement from this very tough year of 2006. For Coen's Chart Forecast by Media see and suggestion to forward to your staff.
12/05/06 RBR #235

Website Director
2007 the year of Challenge and RBR-TVBR is looking for an aggressive and progressive Media Website take charge Director. Will be working side by side with all aspects of RBR-TVBR's editorial, sales, marketing and production staff in a new era of today's media business. RBR-TVBR is moving forward with a Pro-Active Strategy see what is required as RBR-TVBR begins our 24th year in the media business and independently owned.
See Radio Careers

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
See TV Careers

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