RBR's Daily Morning Epaper

Volume 22, Issue 24, Jim Carnegie, Editor & Publisher

Thursday Morning February 3rd, 2005

Radio News®

Analyst sees no silver lining
in radio's dark cloud
Never one to be accused of being a pie in the sky optimist, even Wachovia Securities analyst Jim Boyle had expected more from radio than the 2% revenue decline for December that the Radio Advertising Bureau reported this week (2/2/05 RBR #23). He and other Wall Street analysts had been expecting a positive number, albeit only a 1% gain. But even that proved to be too high a hurdle. So, with such easy comps, are better times ahead? Nope, at least not soon, according to Boyle. "According to anecdotal evidence and early bookings, Q1 (estimated) '05 should also be mixed and disappointing," Boyle told clients. He's projecting a 1% revenue decline for this quarter, saying the big story is how much pain the radio industry will have to endure before getting any gain from Clear Channel's Less Is More initiative, and efforts by other groups as well, to get some pricing traction. "Radio should not get that much better in the near-term," Boyle warned. "The ongoing weakness in radio was, and is, caused by the lack of pricing power that began after the Iraq invasion, in our view." After several quarters of cutting rates to claim whatever business was available, he sees a long battle to shift the demand-supply equation back to radio's benefit this year.

Susquehanna loses move-in lawsuit
Susquehanna Media has informed the SEC that it lost a federal court case in which Bridge Capital Investors had sued for additional money it claimed was due from the 15 million bucks sale of WHMA-FM Anniston, AL in 1996, which Susquehanna subsequently succeeded in moving to the Atlanta, GA market. The move-in is now WWWQ-FM. The US District Court for the Northern District of Georgia (Atlanta) has awarded Bridge Capital 10 million, plus interest and attorneys' fees. Susquehanna says it will appeal the case.

Two Emmis employees washed out
by tsunani skit
At Emmis's WQHT-FM New York, morning show producer Rick Del Gado and air talent Todd Lynn have been sacked for their roles in the infamous tsunami parody which aired on the program last month (1/26/05 RBR #18). Other involved in the incident - - Miss Jones, DJ Envy and Tasha Hightower - - were suspended for two weeks, with their salaries going to a relief organization. Emmis Radio President Rick Cummings said, "Emmis and Hot 97 have investigated this matter thoroughly over the course of the last week. Our decision to terminate Mr. Del Gado and Mr. Lynn while suspending the other members of the morning crew sends a message that this type of insensitivity is utterly unacceptable."

Behind LA's second billion buck year
It's no surprise that Los Angeles radio revenues topped a billion bucks in 2004, moving up 1% to 1.045 billion from its first time over the billion mark in 2003. What's more interesting is how well radio in LA did compared to other media. According to the Miller Kaplan Arase LLP/TNS-CMR LA X-Ray report for January through November, local newspaper ad revenues were down 8.5% in LA, while spot TV was up 1.3% and radio 1.5%. "Radio is growing because more advertisers are understanding just how consumers use different media. People spend over one-third of their media time each day with their favorite radio stations. That's usually more time than they devote to any other medium, including TV/Cable TV," said Mary Beth Garber, President of the Southern California Broadcasters Association.

Steamed Sturm to storm Supremes
The Newspaper Association of America, like a number of prominent television station ownership groups, is keen on relaxing the rules on broadcast/newspaper cross-ownership. NAA is petitioning the Supreme Court for a review of the FCC 6/2/03 media ownership rulemaking and the Third Circuit decision. "The FCC rule changes on newspaper-broadcast cross-ownership were based on solid evidence that repealing the outdated rules will greatly serve the public interest in a way that is consistent with the commission's competition, localism and diversity goals," said NAA President/CEO John F. Sturm. "Whether it did 30 years ago or not, a total ban on cross-ownership does not make sense in the highly diverse mass media world of 2005." Sturm is especially adamant since the Third Circuit is responsible for furthering the freeze on such combinations despite the fact that it conceded that they are often beneficial to the public. "The experiences in the 40-or-so grandfathered markets over 30 years have demonstrated that newspaper-owned stations produce more local news and public affairs programming than other broadcast stations. The only thing the ban has succeeded in doing is to deny most local communities clearly established public-interest benefits."

PTC takes aim at MTV
"MTV is blatantly selling raunchy sex to kids. Compared to broadcast television programs aimed at adults, MTV's programming contains substantially more sex, foul language and violence - - and MTV's shows are aimed at children as young as 12. There's no question that TV influences the attitudes and perceptions of young viewers, and MTV is deliberately marketing its raunch to millions of innocent children." These are the words of Parents Television Council President, whose group conducted a week-long study of the cable channel's 2004 spring break coverage. | More... |

Conference Calls Q4 2004

A strong quarter for News Corp. and Fox
But no thanks to the Fox Television Network, whose soft ratings held down ad sales for both the network and the Fox O&O stations. TV station revenues were flat for the quarter at 571 million dollars, despite the glut of political ad buying, which was credited with helping push operating profits for the O&O group up two million bucks to 278 million. Network revenues were down two million to 858 million and the operating loss grew by 26 million to 159 million. But with ratings improving, President and COO Peter Chernin is predicting better results for the next two quarters (see TVBR - TV NEWS). Overall, Q2 revenues for News Corp. were up 18% to 6.6 billion and net income rose 80% to 386 million, with strong DVD sales the biggest driver. At the Fox Entertainment subsidiary, which News Corp. is now seeking to roll into the parent company, revenues rose 17% to 3.9 billion and net income was up 31% to 431 million.

Adbiz©

VNU Media and Marketing Guide
for Super Bowl
As Super Bowl XXXIX approaches, several VNU businesses released trends related to the big game. VNU has combined data from numerous sources, including television ratings, advertising expenditures, Internet measurement, album sales, box-office, consumer and lifestyle information, merchandise sales, consumer segmentation and targeting, comprehensive market research, and retail consumer sales for an in-depth analysis of the event. The VNU information shows that the Super Bowl reached all areas of media and marketing. | More... |

TNS Media Intelligence forecasts
strong ad spending for 2005
Ad spend is expected to increase 5.1 percent in 2005 to $150.5 billion, according to full-year forecasts released today by TNS Media Intelligence, the leading provider of strategic advertising and marketing information. This increase follows the estimated growth of 10.6% in 2004, as the U.S. economy continues to show signs of stability.
| More... |

Fake ad creators issue apology
Reuters reports the creators of a fake ad for the Volkswagen Polo car that circulated on the Internet have apologized and promised not to repeat it, Volkswagen said on Monday. The viral ad, which was not authorized by Volkswagen or its agencies, shows a suicide bomber detonating his explosives in a Polo parked outside a busy cafe, only to have the car absorb the blast. The 20-second ad ends with the Volkswagen logo and the Polo's actual advertising motto: Small but Tough. Volkswagen said in a statement that it had received sworn statements from the two creators, Dan Brooks and Lee Ford, acknowledging that they made the ad but had not intended for it to be distributed. "The creators regret the distribution of the film, will not publicize it further and apologize unreservedly for the damage caused to Volkswagen," it said, adding that the company would now drop legal action against them. Volkswagen had lodged a criminal complaint last week over the ad, which it called "an attack on Volkswagen's good name."

LA tops 1 billion again for radio
In 2004, the Los Angeles Metro Radio market (Los Angeles and Orange Counties) once again exceeded 1 Billion in revenue according to the SCBA, based on individual station reports. The 59 commercial stations on 53 formats that are home to the metro put 1.045 billion in advertising on the air in 2004. That's up slightly, by about 1%, over 2003, which marked the first time in history that a radio market exceeded 1 Billion in revenue in a year. The Los Angeles Media Market, defined as the 5 county area including Los Angeles, Orange, Riverside, San Bernardino and Ventura counties, did over 1.275 Billion. Compared to newspaper and spot TV, radio led the local media market in growth for 2004. The Jan - Nov 2004 YTD data from the Miller Kaplan Arase LLP/TNS-CMR Los Angeles X-Ray report showed Newspaper with a decline of 8.5% YTD in revenue over 2003, while spot TV was up 1.3% and Radio was up 1.5%. The X-Ray report includes 35 LA radio stations. Newspapers included are LA Times, LA Daily News, La Opinion, OC Register, Riverside Press-Enterprise, San Bernardino Sun, San Gabriel Valley News Group, Ventura County Star, Long Beach Press-Telegram, Inland Valley Daily Bulletin and Copley LA Newspaper Group. TV Stations are Channels 2, 4, 5, 7, 9, 11, 13, 34, 52 and 56.

March Radio & Television Business Report

2005 Technology Odyssey..
The Changing Landscape
Ipods, DTV, FCC, Technology, People Meters. If you are in Business to Do Business in today's New Environment, Position your Company, Technology, Programming and what you do that Radio and Television executives need to know as budgets are being put into action. The Landscape is Changing Fast - March 2005 report is ahead of the curve as first quarter is closing fast.

Advertising/Marketing Placement - Contact
Jim Carnegie - 813 909 2916
June Barnes - 803 731 5951

Not Receiving The Official Business Media Magazine? Then here is your Last Chance to a Trial - Read. Your order must be place by February 18th.

Media Markets & MoneyTM

Davidson springs into Springfield
Rapid expander Peter Davidson is taking his group into Springfield MA with a 6.8M deal for a pair of AM stations. According to broker Bob Biernacki, WSPR-AM and WACM-AM are doing just fine with Spanish-language programming, a format the Davidson Media Group intends to leave intact. Antonio and Helena Gois are the sellers. WSPR is the stronger of the two stations. It hails from 1270 kHz on the senior dial with 5 kW days and one at night. WACM gets to keep its strength the same day and night, but we're only talking 500 watts, delivered at 1490 kHz. According to Bienacki, Davidson frequently puts brokered Hispanic programming on his acquisitions, but in this case, he will try to maintain the strong community presence already established by the Gois family.

If football receivers curl, do bank receivers KIRL?
A Gospel station in the St. Louis market has been sold out of bankruptcy, according to broker Ray Rosenblum, who handled the deal for the sellers. Noncommercial Covenant Network will take over the KIRL-AM St. Charles MO for 730K, putting into a duopoly with WRYT-AM Edwardsville IL. If you're wondering where the football angle in the headline comes from, it's because one of the sellers - - Johnny Roland - - is a former Green Bay Packers running backs coach. Covenant, headed by John Holman, also has FM stations in Terre Haute IN and Moberly MO, as well as an AM in Taylorville IL.

Radio One selling 200 million in new bonds
Now we know how Radio One is going to pay for the redemption of its "High Tides" securities (2/2/05 RBR #23) - - its selling some new bonds. The company says it intends to issue 200 million bucks worth of 10-year senior subordinated notes in a private placement. Radio One has also pre-announced its Q4 results. It says revenues will be up 3% to 79.5 million, with operating income up 14% to 38.1 million. Part of that, the company said is due to "a reimbursement from a vendor pursuant to certain requirements of a performance-based agreement."

Washington Beat

Red Wolf tries to bring down Citadel
"If you will not sell me your station I will squash you like a bug." Those, according to Red Wolf Broadcasting Corporation owner John J. Fuller, are the words of Citadel Chairman/CEO Farid Suleman, upon being spurned as suitor for Fuller's New London CT-market station WBMW-FM. Since then, hostilities have gotten out of hand, according to Fuller's counsel, Arthur V. Belendiuk of Smithwick & Belendiuk, in a filing submitted to the FCC.

RBR observation: This is by no means the first time we've heard big v. little stories such as this. The story begs the question, should the ownership rules be such that big national groups can't bully small local owners around? Or is the free market the only answer, no matter how ugly? Your thoughts, please. | More... |

Programming

Clear Channel flips to Spanish in Orlando
The latest market to feel the impact of Clear Channel's move into Spanish radio is Orlando, where Oldies WEBG-FM flipped at mid-day yesterday to become "Caliente 100.3," playing 5,000 songs in a row to kick off the new format. "Orlando is one of the fastest growing Hispanic markets in the nation and is also one of the largest, with approximately 20% of listeners being Hispanic," declared Clear Channel Regional VP Linda Byrd.

RBR observation: Indeed, Orlando already has eight Spanish stations by our count, but most are AMs with limited signals, so Clear Channel will immediately have an advantage with its big signal and being of the FM dial. It's only FM competitor is WNUE, owned by Mega Communications, whose signal is pretty good, but no match for WEBG in coverage. Alfredo Alonso, who is running Clear Channel's Spanish radio expansion project, used to run Mega, so he may know something about the Orlando Hispanic market.

Ed McMahon on radio today
The man who spent 30 years as Johnny Carson's sidekick on NBC's "Tonight Show" is giving his first radio interview today since Carson's death. Ed McMahon is appearing on Doug Stephan's syndicated "Good Day" in the 6:00 am ET hour. Though McMahon, a personal friend of Stephan, has been a frequent guest on Good Day, the radio host said "we wanted to wait, to give Ed time to catch his breath, and reflect," before this interview. The exclusive hour-long interview will be repeated Friday in the 8:00 am ET hour of the show.

Engineering

Mexican signals interfering with KWVE-FM in SoCal
From the station: "Despite recent efforts by the United States government, Mexican radio signals continue to interfere with the broadcasting of religious programming in southern California. This interference, coupled with the inaction of Mexican authorities, threatens California radio stations such as KWVE, an FM radio station licensed to non-denominational church Calvary Chapel. It also violates the 1992 USA-Mexico FM Broadcast Agreement." | More... |

Readers respond to Spanish stations
jamming US stations story
We received a flurry of emails yesterday after our story about Spanish-language stations overlapping US stations so much in the past few months:

"I spoke with my attorney about the possibility of retaining full power at night on our WWTK am 730 because we are on frequency with a very high power 730 am in Cuba...we are the only 730 in Florida but have 500watts day and 340 at night - - no problem day but can hear Spanish under our audio at night sometimes. More often than in the past. Our consulting engineer is sure it is the Cuban station. Perhaps this is in retaliation for us government Radio Marti from the keys 300,000 watts directional south toward Cuba"
--Peter Coughlin Cohan Radio Group Sebring, Florida | Lots More... |

Stock Talk

Stocks up, but barely
With no surprise from the Federal Reserve - - just another quarter point rate hike and a statement that indicated no change in the Fed's view of the economy - - left traders free to bid stocks up a bit, but without much enthusiasm. The Dow Industrials crept up 45 points, or 0.4%, to 10, 597.

Likewise for radio stocks. The Radio Index was up 0.140, or 0.06%, to 216.717. Most stocks were little changed. Entravision fell 2.8%. Clear Channel rose 1.3% after announcing yet another one billion buck stock buyback.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.25	+0.17	Jeff-Pilot	JP		50.97	+0.59
Beasley	BBGI		16.32	-0.02	Journal Comm.	JRN		17.10	+0.03
Citadel	CDL		14.11	+0.11	Radio One, Cl. A	ROIA		15.51	-0.11
Clear Channel	CCU		32.92	+0.42	Radio One, Cl. D	ROIAK		15.53	-0.10
Cox Radio	CXR		15.50	unch	Regent	RGCI		5.24	-0.01
Cumulus	CMLS		13.86	+0.11	Saga Commun.	SGA		17.00	+0.05
Disney	DIS		28.83	+0.03	Salem Comm.	SALM		22.21	+0.21
Emmis	EMMS		17.37	-0.06	Sirius Sat. Radio	SIRI		6.36	+0.07
Entercom	ETM		31.64	+0.34	Spanish Bcg.	SBSA		10.20	-0.06
Entravision	EVC		7.78	-0.22	Univision	UVN		26.86	+0.09
Fisher	FSCI		49.77	+0.07	Viacom, Cl. A	VIA		37.70	+0.19
Gaylord	GET		38.47	-0.77	Viacom, Cl. B	VIAb		37.35	+0.14
Hearst-Argyle	HTV		25.79	-0.07	Westwood One	WON		24.37	+0.01
Interep	IREP		0.70	+0.06	XM Sat. Radio	XMSR		32.04	+1.24
International Bcg.	IBCS		0.02	unch	-	-	-	-	-

__UNSUB__ to this email service.

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

This reader has a nominee to run the NAB.

It will be a sad day when Eddie Fritts steps down from his NAB throne! He's worked very hard over the years and has had an amazing ability to know when to use diplomacy and when to get into the mud. Who will replace him? I'd put my money on one of two candidates: NAB veteran John David would be an excellent choice and I submit a dark horse could emerge from potential candidates and that would be MAB (Michigan Association of Broadcasters) President Karole White. She has many of the same qualities as Eddie has and, like Eddie had when he became the NAB boss, she has no political (or otherwise) baggage. She should be on a short list to guide our future as she's made the MAB the overwhelming leading state broadcaster's association in the country.

William J Wertz
Executive Vice President/Co-Owner
Fairfield Broadcasting Company
Kalamazoo MI

Upped & Tapped

David does
(North) Dallas
NextMedia Group has named David Smith VP/GM for its North Dallas Region radio cluster of three stations in Sherman-Denison, TX and four in Ardmore, OK. Smith previously ran the company's Saginaw, MI cluster.

New sales chief
at Arbitron
Arbitron has appointed Carol Hanley to Senior Vice President, Sales, US Media Services. In this newly created position, Hanley will head-up all sales efforts for the US Media Services division, which now includes Radio, Advertiser/Agency, Outdoor and the Product/Customer Services groups.

TVBR - TV News

Chernin sees Fox in battle for ratings crown
The first half of the TV season may have been dismal for Fox, but News Corporation President and COO Peter Chernin is predicting a strong finish. After admitting that the network was a "blemish" on the company's fiscal Q2 results, Chernin said the big question had been whether Fox could rebound in the second half of the TV season. "It's very obvious now that the answer to that question is a resounding yes, we can rebound. We've come roaring back with 'American Idol,' '24' and 'Simple Life' - - and added some quality shows around these perennial favorites," Chernin told analysts in the company's quarterly conference call. With this weekend's Super Bowl telecast adding to the recent ratings boost for Fox, he's looking for a rapid move up in the pack. "Today we are the 4th place network. The expectation is on Monday we will either be the first place network or tied for first place," Chernin said, referring to the 18-49 demo. "That shows you how close we are - - how much ground we've made up because of American Idol and also the enormous importance of the Super Bowl this Sunday." He's predicting that for the season as a whole, it will be Fox and CBS battling it out for #1 in the 18-49 demo. Chernin said he is determined to improve Fox's fall lineup. "I think if we could have anything with even decent performance in the fall, we could be the dominant number one network - - and we won't be satisfied with anything less than that."

January Digital
Solutions Magazine

No more political money or more Olympics advertising. In '05 you're going to have to make money the old fashioned way - earn it. Keep up on trends and figuring new ways to earn ad dollars. The need is serious for a business-oriented publication. In radio or television, many of the challenges are the same -each industry can learn from the other.
No fluff. No hype. Just business.

November Zinio Solutions Magazine
Read RBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the January Issue of RBR

RBR Radar 2005

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

What's with all the Spanish
stations jamming American
50-kWs at night?
We in Northern Virginia are now picking up WOR-AM NY better during the day than at night. Why? unknown Spanish-speaking AMs are blocking it out when the sun goes down. Same with WLS-AM Chicago at night - - it's hard to pick the station up due to these Spanish stations. In fact, It's all over the dial at night - - the same story on many 50-kW frequencies coming from the big cities. According to the FCC staffer - it could be from Cuba and that he will find out the source within two-three weeks. Editor's note: If you've had any issues of this nature you'd like to comment on, email them to [email protected] We will continue the story/investigation.
02/02/05 RBR #23

Behind the NAB Supreme challenge
The National Association of Broadcasters is not challenging the Third Circuit remand of the FCC's 6/2/03 ownership rulemaking per se - - rather, it is going after two of the planks in the original rulemaking itself. NAB is saying that the Commission overstepped its bounds when it adopted Arbitron-based radio market definitions, and when it prohibited TV duopolies among any of the top four rated stations in a DMA. RBR observation: Interesting that while NAB makes the re-regulation of radio a cornerstone of its claim that the FCC violated the 1996 Telecom Act, so far as we know not a single radio group has filed an appeal to the Supreme Court. Perhaps Clear Channel and Cumulus really are content to go forward with the entrenched advantage they have in so many markets. 02/02/05 RBR #23

Another vacancy at TiVo
Hot on the heels of Mike Ramsay announcing that he's stepping down as CEO there's another vacancy to fill in the executive suite at TiVo Inc. President Marty Yudkovitz (pictured) has resigned, citing personal reasons. TVBR observation: TiVo faces some real challenges as it attempts to market itself as the elite brand name of digital video recorders (DVR) while many cable MSOs are passing out no-name competing brands to subscribers as part of digital TV packages. Just this week TiVo announced that it was opening its platform to other developers and providing them with early-access software development kits so they can create programs using TiVo's boxes. What remains to be seen is how many people are willing to pay for a jazzed-up DVR if they're already getting one for free (at least, it appears that way in a package deal) from their cable company. That's a big marketing problem to be addressed by TiVo's next CEO and President. 02/02/05 TVBR #23

Supreme challenge:
NAB, nets pick up the flag
Just because the FCC/DOJ have abandoned any thought of a Supreme Court challenge of the Third Circuit's decision on media ownership rules does not necessarily mean there will be no challenge. The NAB, the big networks and at least two group owners are planning to petition for a hearing. RBR observation: Sooner or later, the US Supreme Court is going to have to decide the ownership concentration issue. The FCC's attempt at justifying its rules didn't make sense - - and the Philadelphia appeals court didn't really seem to understand the issues, so it punted most of them back to the FCC for another try. Unless the US Congress steps in, as it did in 1996 for radio, and writes new rules into law, we don't see any end to the current mess short of a Supreme Court ruling. Better sooner than later.
01/31/05 RBR #21

Bush back-down bad
for broadcast stocks
The decision by the Bush Administration not to take the FCC ownership rules case to the Supreme Court is mostly negative for TV and newspaper stocks, according to Harris Nesbitt analyst Lee Westerfield. However, he sees a silver lining for Univision, whose Hispanic market domination is protected from competition.
01/31/05 RBR #21

General Mgr./SalesMgr.
InterMart Broadcasting
New Atlanta signal is searching for a qualified, aggressive general manager/sales manager who can build and manage a successful sales team. Atlanta market experience preferred. InterMart Broadcasting is an EOE.

See Radio Careers for more info.

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