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Welcome to RBR's Daily Epaper
Volume 22, Issue 240, Jim Carnegie, Editor & Publisher
Friday Morning December 9th, 2005

Radio News®

Coppola out as Westwood One
lowers guidance

Barely more than a month ago Westwood One (WW1) was telling Wall Street that Q4 revenues and operating income would be up in the low single digits (11/4/05 RBR #217). That's not going to happen and Shane Coppola has vacated the CEO office as a result. Joel Hollander, CEO of Infinity Broadcasting, which manages WW1, is serving as interim CEO at WW1 (the job he held before his current one) and said yesterday he hopes to have a permanent replacement in place by sometime in January. "There are candidates internally at Westwood One and there are candidates at other radio companies. I've already had a few calls this morning. It's a great job being the President and Chief Executive Officer of the premier content company in the United States in radio," Hollander said in a conference call with Wall Street analysts. As for the qualifications, Hollander put an emphasis on getting someone who is "very aggressive" rather than a specific resume. "We expect Westwood One to be totally on the offense, not on the defense," he said. Specifically, he cited the need to aggressively go after big-name talent for the radio network. The news fell hard on Wall Street. WW1's stock plunged 2.07, or 11.3% for the day, to close at 16.20.

RBR observation: Aggressive is one key if you also return marketing budgets. It is no secret that under the Mel Karmazin reign, in which Hollander was the major player, no dollars were ever spent in any area on Westwood One. That theme carried over into the Coppola tour of duty. Aggressive? If Hollander speaks aggressive give Westwood the budgets, tools and attitude of the man that founded the company - find another Norm Pattiz.

What happened at Westwood One?
In announcing new Q4 guidance to Wall Street, Westwood One said "the accelerated growth in advertising sales that occurred within the fourth quarter 2004 did not materialize as anticipated during the fourth quarter 2005." As a result, the company is now expecting Q4 revenues to be down in the low single digits - - a reversal from its previous guidance of up single digits - - with operating income down in the mid to high single digits. In the company's conference call with analysts, CFO Andrew Zaref was asked whether the shortfall was for the network business, traffic, or both? "Neither one is necessarily performing up to what we believe it will in the future and what our internal expectations are relative to the hurdles we set for ourself, but on a relative basis, unfortunately you are stuck comping numbers. You did see a particularly explosive fourth quarter last year on the local/regional side and that is just a tough comp and a tough hill to climb," Zaref said. Local/regional sales for WW1's Metro Networks traffic/news products in local markets across the country had been up double digits a year ago.

Menendez expected to move
into NJ Senate seat

John Corzine is now sitting behind the governor's desk in Trenton. We have a deadline to deal with so we don't know for sure, but by the time you read this it is possible that Rep. Robert Menendez (D-NJ) will be named by the new Gov to take over his seat in the US Senate. Menendez is currently leader of the Democratic Caucus in the House, so his exit will leave a few ripples there. In the Senate, the son of Cuban immigrants will be the third Hispanic legislator, along with Mel Martinez (R-NJ) and Ken Salazar (D-CO), both freshman as of the 2004 election. If Menendez takes over the entire Corzine workload, his committee assignments would not include the two which most frequently impact broadcasters - - Commerce and, to a lesser extent, Judiciary. Corzine was a member of Banking, Housing and Urban Affairs; Intelligence; Energy and Natural Resources and Budget.

RBR observation: Martinez has appeared on broadcast radar screens a few times in recent years, primarily as a vocal opponent of the merger of radio group Hispanic Broadcasting Corp. into multimedia Hispanic giant Univision. He even sponsored legislation which would have required that the Hispanic media market be treated as being separate from the mainstream market when assessing whether the resulting market concentration would be diverse enough following the merger, a measure sponsored in the Senate by Ted Kennedy (D-MA). Menendez also joined efforts to kick Rush Limbaugh off of Armed Forces radio broadcasts and to stop Sinclair Broadcast Group from airing a Vietnam documentary many felt would be critical of Democratic presidential candidate John Kerry (D-MA).

PTC calls for compromise
The Parents Television Council says that a three-pronged plan may provide a resolution to the problem of indecency on the public airwaves - - and wires. It says its compromise proposal doesn't give anybody everything they may want, but it does give everybody something. President Brent Bozell asks that first, the vastly upgraded fines for indecent broadcast, taking them from 32.5K to 500K, be enacted swiftly. Second, PTC says it will concede on a point of law - - that cable programming is not subject to the same decency requirements that broadcast programming is, and will without objection allow programmers to exercise their artistic freedom over the wires, provided that: third, cable is forced to allow a la carte channel purchases by subscribers so that those who neither want certain channels and further, do not want to subsidize them in any way, are not forced to do either. Bozell put forth the proposal in a letter to Senate Commerce Committee heads Ted Stevens (R-AK) and Daniel Inouye (D-HI). "This solution doesn't give all parties everything they want," he wrote. "But what does it give? It gives the vast majority of Americans, deeply offended by such wretched programming, the right not to have this filth pouring out of their television sets, and paid for by them. And it gives the industry the ability to continue producing and airing this material to satisfy what they say is a market demand. This is the practical solution and the right solution. Anything less would be unacceptable to us. Anything more is unnecessary to address this impasse."

RBR observation: Nice try, but this compromise does nothing to clarify the vast and murky gray area that exists in the very definition of the crime of indecency - - and at a half-a-million clams a pop, it's definitely upgraded to a de facto criminal matter. It doesn't take into account the fact that while many people recognize possibly indecent content, there are other studies which show that many still don't want the government tramping about in First Amendment territory anyway. It doesn't take into account broadcasters' belief that they need for a level content playing field with basic cable. It doesn't take into account cable's firmly held belief, seconded by minority and religious groups, that a la carte could inflict serious damage on its business model and ultimately hurt small programmers and even the consumer. Bottom line: PTC would get its big fines and its a la carte, while cable gets content freedom. PTC gets two things it wants, cable gets one thing...hey, wait a minute...that it already has. Doesn't sound like much of a compromise to us.

Liberal group joins the battle over Alito
The ongoing accounting of the SCOTUS air wars by the Brennan Center for Justice at New York University School of Law and the Justice at Stake Campaign has turned up a first: a new liberal organization opposed to the Samuel Alito nomination has entered the fray and in the period between 11/21/05 and 12/4/05, almost doubled the expenditures of the only conservative group currently taking to the air in Alito's support., which Brennan says is actually a group of liberal groups, spent about 131.6K in a sharp attack on the nominee at a time when Progress for America was spending 74.4K in his defense. Still, those are relatively modest totals, but Brennan's Jeremy Creelan noted the tone is getting sharper and more spending is likely on the way. "In the last two weeks, the opposition to Judge Alito has become more pitched. As the confirmation hearings approach, we expect more Americans will be bombarded with television advertising from both sides of this debate."


Agencies chime in on
HD Digital Radio Alliance

RBR/TVBR asked a few agency folks about the recently announced HD Digital Radio Alliance (12/7 RBR #238), a coordinated industry effort to compete with the format variety of satellite radio. The alliance is the industry's means to coordinate the HD roll-out in each market, develop programming for multicast (HD-2) channels, create HD and HD-2 awareness ads (200 million bucks worth next year alone), and work to get HD manufacturers moving on multicast receivers and the automakers as well for OEM deals. Participating groups so far include Bonneville, Citadel, Clear Channel, Cumulus, Emmis, Entercom, Greater Media and Infinity.
| Read More... |

RBR observation: Indeed, it may take a while to get HD-2 in the hearts, minds and then hands, of listeners. Another issue, they've marketed a whole generation of HD receivers that didn't have the HD-2 capability. It's going to take a whole new cycle of manufacturing, retailing and purchases. It's almost like starting all over again. Thankfully, some HD receivers can be updated to HD-2 by a software download.

Internet ad spending to double share by 2010
Spending on Internet advertising will account for 10% of total U.S. ad dollars in 2010, doubling from 5% in 2004, according to "The Changing Face of Advertising in the Digital Age," a new report from Parks Associates. This increase represents a CAGR (compound annual growth rate) of 14% over the next five years. The report also finds that almost 21% of Internet users consider Internet advertising as the most relevant ad format for them, outscoring more traditional media formats such as newspapers, magazines, and radio. "In the next few years, the Internet will become a mainstream ad platform and attract top dollars from advertisers," said Harry Wang, research analyst at Parks Associates. "Because the Internet is an interactive and versatile platform and offers rich consumer usage data, advertisers can improve their ad targetability and achieve better results." Such benefits are extremely important to advertisers, who have been plagued by audience and media fragmentation and a lack of in-depth media consumption data from traditional ad formats. Many large companies with familiar brands, including Anheuser-Busch, Procter & Gamble, Verizon, and Wachovia, have been moving money out of network TV and to the Web, demonstrating advertisers' growing confidence in Internet advertising. "Traditional media companies are fully aware of this ongoing change in the advertising industry," Wang said. "The Internet has altered the standard for the entire ad world, and traditional media have to respond by making their media platforms more interactive and results-oriented." The report is based on an Internet-based survey instrument of 2,084 U.S. consumers in households with Internet access, including 270 teenagers ages 13-17.

Media Business Report
"Theatrical-to-Video Interval" compresses again in 2005
The window between theatrical and video will shrink by 15 days this year, in comparison to 2004, due to piracy worries, a desire to accelerate revenue and attempting to catch more theatrical marketing buzz. Kagan Research newsletter Motion Picture Investor estimates the average is 129 days from theatrical premier to video release in 2005, versus 144 days in the prior year. While the home video industry may not lament the shrinking windows, Kagan Research analyst Wade Holden believes the gap will stabilize at roughly the current 4.6 months window. "If it shrinks significantly more, it would encroach on the box office," he believes. "And that would be counter-productive to the distributors' total economic returns because what's lost in theatrical probably won't be fully made up in home video." Films with 10-29 million in domestic box office went into video on average in 115 days during 2005, no surprise given that such lackluster box office results in truncated theatrical runs. Films that grossed over 30 million in domestic theatrical box office averaged 132 days or longer to video, according to Kagan Research. Of nine film genres tracked by Kagan, action films were the fastest to go to video, averaging 119 days in 2005. The longest window was for documentaries that averaged 158 days, a result of their long theatrical runs in few theaters.

Media Markets & MoneyTM
Adding color to Double O deal
Todd Fowler, head broker at multi-service media company American Media Services, added some detail to our report of Double O Radio Corporation's acquisition of a two-market, eight station group from Encore Broadcasting. For starters, Encore's top exec is doing more than just selling some stations - - he's getting a job. Double O President Terry Bond explained, "By purchasing there two great partnerships from Encore Broadcasting and acquiring eight stations in Midland-Odessa and San Angelo, we continue to reach our goal of developing small and medium market stations. The opportunity to purchase Encore and making Tommy Vascocu, the former owner, in charge of our Southwest Region operations, is something we are very excited about and feel will build on our recent success." Out of a 12.4M bottom line, 400K went to non-competes in the acquisition. 7.7M was allocated to The Midland-Odessa stations, including KHKX-FM and KMCM-FM in Odessa and KQRX-FM in Midland. The remaining 4.3M was allocated to KGLK AM & FM and KILI-FM in San Angelo, KNRX-FM Sterling City and KKCN-FM Ballinger.

Washington Beat
Latest station totals
The FCC has put out its latest accounting of broadcast licenses. There are 4,758 AM stations and 8,841 FMs, 2,626 of which are noncommercial. Add in 3,920 FM translators and 598 LPFMs and you've accounted for all the radio sticks. On the commercial TV side, the VHF/UHF breakdown is 589/781, with a 126/253 split on the noncom side for a total of 1,749. There are 593 Class A TVs, 2,117 LPTVs and 4,503 TV translators.

RBR observation: Now take all the full power stations and, accounting for the wild new world of digital which is possibly in our near future, multiply by six. Will it be an evolutionary enhancement or a seismic disruption? Are you all ready for the CPP implications? All we can say is hang on, kids - - this should be one wild ride.

WRKO launches
"Taste of Boston Tonight"

WRKO-AM Boston is debuting "Taste of Boston Tonight," a unique program focusing on entertainment and leisure activities in the Boston area, on 12/12. Airing weeknights from 7-10 and hosted by Todd Feinburg, a veteran talk-radio host in Boston and around the country, "Taste of Boston Tonight" will feature local experts and celebrities discussing restaurants, shopping, theater, concerts, and whatever else is happening on the Boston scene. "The Michael Savage Show" remains a key part of the WRKO lineup, and will air every weeknight from 10 p.m. to 1 a.m.

Ratings & Research
No winter book for New Orleans
When will life get back to normal in New Orleans? Not soon. Due to the continuing impact of Hurricane Katrina, Arbitron has cancelled the Winter 2006 survey for the market. Arbitron said it will continue discussions with radio station clients, ad agencies and Claritas (which provides its market population estimates) "to determine the best time to resume survey operations in New Orleans."

Preparing your radio station budget
By Bill Figenshu; President; FigMedia1
Here are a few budget tips for 2006. Many of you may already know this stuff, but it's good to review. Have a tip of your own share them with us at [email protected]

Let's assume if you achieve the submitted and approved cash flow goals for next year, and you will receive additional compensation. It's usually between 30 and 50% of your annual salary for making it. Get close (within 5%) and in some companies you will get 10-15%. (your company may differ.)

Usually The Rules Are Stacked Against You!
The rules usually favor short term success, not long term performance. Over 5 years, in some cases, you will actually receive less compensation each year for providing more cash flow. (here is an actual example from my 20+ years in corporate)
| Read More... |

150K KHOL-AM Beulah ND from Two Guys Broadcasting Inc. (Richard Knaup) to Digital Syndicate Network LLC (Guy W. Giuliano). 8.5K escrow, balance in cash at closing. [File date 11/15/05.]

N/A KRLV-AM Las Vegas NV from Continental Radio Broadcasting Acquisition LLC D.I.P. (Fred M. Weinberg) to Continental Radio Broadcasting Acquisition LLC (Fred M. Weinberg). Bankruptcy reorganization. [File date 11/15/05.]

Stock Talk
Oil prices hurt stocks, Westwood plunges
Worries about oil prices hurt stock prices once again. The Dow Industrials fell 56 points, or 0.5%, to 10,755.

Westwood One's stock plunged 11.3% with its CEO resigning and the company saying Q4 revenues would be down. The day's bad news from Westwood One weighed on other radio stocks as well. The Radio Index fell 1.791, or 1%, to 183.366 - - the lowest point in all of 2005. One notable exception was Cumulus, which rose 4.4% - - its second straight big gain after saying it was out of the bidding for ABC Radio.

Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change













Journal Comm.




Citadel CDL
13.25 -0.23

Radio One, Cl. A




Clear Channel




Radio One, Cl. D




Cox Radio












Saga Commun.








Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Viacom, Cl. A








Viacom, Cl. B








Westwood One








XM Sat. Radio





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hear from you.

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

Radio Media Moves

Legal beagle for Fisher
Judith Endejan has been named Sr. Vice President and General Counsel of Fisher Communications, joining the company from its outside counsel, Graham & Dunn. Fisher's announcement notes that Endejan had a career in journalism before heading to law school back in the 1970s.

Jack gets a personality
Monique Marvez has been hired away from Emmis' WENS-FM Indianapolis to be the new morning star of Midwest Television's KFMB-FM "Jack FM" San Diego. She'll host "Monique and The Man" with Greg Simms, along with info and traffic updates from Sara Kiani.

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

NEast CapCity FM
Suburban FM, strong revenue history-less than 8.5x BCF - 2M.
[email protected] or

Below the Fold

Ad Biz
Agencies chime in on HD
Rich Russo, JL Media's SVP/Director
I'm not comfortable with the word HD...

Internet ad spending
To double share by 2010...

Washington Beat
Latest station totals
Latest accounting of broadcast licenses...

Preparing your radio station budget
Budget tips for 2006 and time to get to work...

More News Headlines

Radiosophy production pushed into 2006
HD Radio receiver maker (to be) Radiosophy reports that production of its "MultiStream HD" receiver has been delayed until February. The company says it was poised to begin production when an issue with AM sensitivity was discovered which had to be addressed. "We're all pretty disappointed here but our goal has always been to ship a low-cost, high-quality radio," said spokeswoman Sue Nail.

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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.

ABC keeps cards close to vest
No real hints yet whether Disney has decided on a sale of ABC Radio just the usual double talk. We all know that Emmis and Cumulus have said no thanks and the said to be bidders of Entercom, Citadel, and someplace KKR are buzzing around.
RBR observation: What's strange is that the only two bidders who could create in-market clusters with ABC Radio have been outbid. If Cumulus and Emmis can't go high enough to win, what's driving Entercom and Citadel? Is it just ego? Probably and also Cumulus is smart as their passing on the bidding at a multiple that will probably have your head shaking demonstrates that at some point the pay back can be extremely difficult. If ABC sells then the buyer will have a tremendous pressure to succeed as you will not be able to slice and cut a path to success and possibly and eventually have to put their company on the auction block.
12/08/05 RBR #239

HD Digital Radio Alliance launches
We pegged it (11/29 RBR #232): Finally, a coordinated industry effort to compete with the format variety of satellite radio. Orlando-based "HD Digital Radio Alliance" Peter Ferrara from Clear Channel is the President/CEO of the new alliance and will be solely dedicated to and paid by the alliance. Participating groups so far include Bonneville, Citadel, Clear Channel, Cumulus, Emmis, Entercom, Greater Media and Infinity. Staff will be hired there on an as-needed basis. RBR observation: It is vital that the radio industry speak with one voice to promote HD Radio to the US public and roll it out in an orderly manner. We don't need to remind anyone of the experience with AM stereo. While there's been a lot of talk about the programming side of the Alliance, which will provide unique programming for the new HD-2 channels, we think the more important parts are the plans to introduce HD Radio to the public and convince automakers to put the receivers in new cars. Even if your company has its own plans for programming HD-2 channels, you would do well to find out what the Alliance will be doing to make it possible for people to actually receive those new channels. Speak with One Voice. The biggest goal now is to "Get it into the cars. That's number one. More details with Peter Ferrara read
12/07/05 RBR #238

People want digital radio,
but not monthly bills
Auto industry columnist Joseph White's feature on new car options dissected a JD Powers & Associates survey of 17,000 consumers on what new car options they were most interested in - - and what they were willing to pay for them. Ranked #3 was "high-definition radio," even though HD Radio receivers are hardly even out in the market yet. The survey found that at a one-time cost of 150 bucks, people were eager to have a digital radio receiver in their car - - but didn't want to pay the monthly subscription fee for satellite digital radio. RBR observation: Speak with one voice in all areas.
12/07/05 RBR #238

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