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Volume 24, Issue 243, Jim Carnegie, Editor & Publisher
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Friday Morning December 14th, 2007
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Radio News ®
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 Citadel looks to trim down
Citadel Broadcasting Corporation announced that it has retained Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. to serve as its financial advisors for the divestiture of some of its stations. Citadel isn't saying just what it wants to sell, but says these divestitures are in addition to those required to be divested as a result of its acquisition of ABC Radio. Including those required divestitures related to ABC Radio, Citadel said it expects to generate 75-175 million in gross sale proceeds over the next 12-24 months. "While Citadel has begun the process of exploring these divestitures, it has not yet determined to engage in any such transactions. There can be no assurance as to whether any such transactions will occur or, if they occur, the amount of proceeds they will generate, their timing or their other terms," yesterday's announcement cautioned.
RBR observation: Well, if the whole shooting match is only going to bring in 75-175 million, don't look for any primo beachfront property to be put up for sale. This is just a modest pruning of the group. And given that, we wonder why Citadel is bothering to involve investment bankers, especially two of them. It seems more like the type of assignment for a media broker.
'Tis the season to take potshots at the Chairman
The Teamsters remain steamed about the pending sale of Tribune Company to an ESOP headed by Sam Zell. They claim that the "employee-owned" implication is hollow, since the employees will have no say in the company's governance, and that owning broadcast properties will be illegal since Zell, not the employee owners, will be running the stations. Meanwhile, watchdogs are also lining up to oppose next week's media ownership vote. "Apparently the FCC was tuned out during its public listening tour," said James P. Hoffa, General President of the International Brotherhood of Teamsters. "In its rush to judgment, the Commission has failed to enforce its current rules or protect the public interest." Hoffa notes that Zell and "his handpicked Board of Directors and ESOP Trustee" will be controlling the company. "This third party ownership violates the FCC's requirement that stations be controlled by their owners, and undermines the public interest and the FCC's mission of promoting localism and diversity."
Meanwhile, a group of consumer groups including Free Press, Consumer Federation of America and Consumers Union filed comments on the ownership proceeding, and did not do so happily. "We meet this arbitrary deadline of Dec. 11 under protest," they wrote. "This proposal is a post-it note conclusion to one of the most complex, controversial and important public policies the Commission has made in many years. Unless Chairman Martin remedies procedural flaws, eliminates dangerous and vague exceptions, and thoroughly expands meaningful minority ownership and local programming needs, his plan will not serve the public interest or meet minimum legal fairness requirements for FCC rules. The Commission should offer a Further Notice that explains, defines and defends its new rule in a cogent and intellectually consistent manner. Only then can such a rule be expected to win the confidence of the public and stand the tests of time and judicial scrutiny."
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Martin resolute about Tuesday vote
FCC Chairman Kevin Martin had a picnic at last week's House hearing compared to yesterday's session. Just about every senator present at the Commerce Committee FCC oversight hearing asked Martin to cancel, postpone or otherwise delay next week's vote on eliminating cross-ownership restrictions in the top 20 markets. He just as frequently quoted the mandate of Congress in the Telecommunications Act of 1996 requiring the elimination of rules no longer needed due to changes in the competitive landscape and said he anticipates going ahead as planned. The question and answer period kicked off with outgoing Trent Lott (R-MS), who has worked with Byron Dorgan (D-ND) of late to head off further media consolidation. He wondered why Martin was worried about a newspaper issue. He perhaps got off the best line of the day, saying "I don't get why Republicans would be crying crocodile tears over newspapers having problems...Where I come from, we use them to wrap mullet." Lott set the tone, and even Ranking Member Ted Stevens (R-AK) said he felt the FCC was moving too fast on the issue.
 John Kerry (D-MA) was a relentless interrogator, demanding to know why Martin felt the need to rush ahead with the cross-ownership vote despite the will of both the people and Congress indicating strong opposition. Martin cited the will of Congress in 1996 and the lack of a rule modification since 1975. Martin said he was trying to strike a balance between the public interest and the needs of communications companies; Kerry said he was inviting further congressional action. The bottom line was that Martin refused a direct request from Kerry to postpone Tuesday's vote. Barbara Boxer (D-CA), who became the recipient of allegedly suppressed FCC reports and made them public during hearings on Martin's current term as commissioner, was also on the warpath. She said that it was ludicrous that the FCC's internal investigator, appointed by the Commission, let the Commission off the hook for burying information because it ran counter to the chair's policy goals. A Ken Ferree quote to that effect was cited, and Democratic Commissioner Copps and Adelstein agreed that it was curious. Martin said that the investigation failed to turn up illegal behavior, and Boxer promised to make it her business to put an independent investigator in charge of future issues.
RBR observation: The lion's share of the questions went to Martin, with Copps and Adelstein sharing the duties of presenting the loyal opposition's case. Deborah Taylor Tate (R) and Robert McDowell (R) could almost have phoned in their testimony and watched the rest of the show from the comfort of their living room (it was aired on C-SPAN) for all the action they received once the question-and-answer period began. However, McDowell also cited the will of Congress as expressed in 1996 which favors deregulation, so we're looking for a tight 3-2 vote Tuesday in favor of Martin's proposal to open the top 20 markets to cross-ownership. But it certainly looks like that will not be the end of the story.
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Rupert claims his prize
Dow Jones & Company employees woke up today as employees of News Corporation and a part of the Rupert Murdoch empire. The 5.6 billion bucks acquisition went to closing yesterday after Dow Jones shareholders voted in favor of the buyout. Dow Jones stockholders will receive 60 bucks in cash for each share of common stock and Class B common stock that they own, except for those who elected to receive instead 2.8681 Class B common units of Ruby Newco LLC, a News Corporation subsidiary that will own all the shares of Dow Jones. In yesterday's vote, shares representing approximately 60.3% of the outstanding voting power of Dow Jones were cast in favor of the merger. Approximately 77.6% of the outstanding shares of common stock and approximately 54.1% of the outstanding shares of Class B common stock, mostly owned by the Bancroft family, were voted in favor of the transaction. Of the shares that were voted, approximately 94.7% of the common stock and 77.7% of the Class B common stock were voted in favor of the merger, the company reported.
With News Corporation now in charge, Leslie Hinton, a veteran News Corp. executive has taken over as CEO of Dow Jones, with Richard Zannino stepping down. Former Times of London Editor Robert Thomson has been named publisher of Dow Jones and the Wall Street Journal. An ad running in major newspapers around the world today proclaims "Free People, Free Markets, Free Thinking" in announcing the merger of News Corporation and Dow Jones. While some Murdoch rivals, such as the New York Times, accepted the ad, The Financial Times and China Daily were among those who refused to print it.
 More color on the 2008 elections
We'll dig a little further into the Wachovia Capital Markets look at the upcoming election year produced by Marcie Ryvicker and staff. The battle for the House of Representatives is expected to be very hot. The Democratic Party wrestled control away from the Republicans in 2006. They are looking to grab more territory in near-miss districts. Meanwhile, the Republicans hope to reclaim their former territory by picking off vulnerable freshmen who came in last time. Wachovia expects total 2006 expenditure of 337M to be exceeded in 2008. WCM expects particularly hot races in Arizona, Connecticut, Florida, Illinois, Indiana, Kentucky, New Mexico, New York and Ohio, with at least moderate heat in Alaska, California, Colorado, Georgia, Idaho, Kansas, Maine, Michigan, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Texas, Virginia, Washington, West Virginia, Wisconsin and Wyoming. On the gubernatorial front, it'll be a limited slate in 2008. Elections are on the ballot in only 11 states. Heatseekers include Indiana, Missouri and North Carolina. The others are Delaware, Montana, New Hampshire, North Dakota, Utah, Vermont, Washington and West Virginia. WCM is expecting spending on these races to top 100M.
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Ad Business Report TM
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 NYMRAD parties
in Times Square
New York Market Radio (NYMRAD) ignited the holiday season with its 24th annual Radio-only holiday spectacular in Times Square. Member stations and agency friends celebrated a year of radio's innovation and creativity. From left: Clear Channel Radio's Rob Williams, CBS's Scott Herman, NYMRAD's Deborah Beagan, ESPN Radio's Tim McCarthy and WBLS's Deon Levingston.
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| Media Business Report TM |
Kerry, Markey focusing on NFL
John Kerry (D-MA) earlier this year inserted himself in the middle of a dispute over broadcast of Major League Baseball games, and now he's doing the same in over broadcasts of National League Football games. At issue is the exclusive carriage of certain games by the NFL Network, in particular an upcoming game featuring the undefeated New England Patriots v. the New York Giants scheduled for 12/29/07. The problem is the lack of a carriage agreement between the NFL and cable giants Comcast and Time Warner. Kerry has invited all concerned parties to attempt to broker a deal so that fans everywhere will be able to watch the game. The situation follows an earlier match-up between the Dallas Cowboys and Green Bay Packers, when both teams had 10-1 records and had inspired a great deal of interest among NFL fans. The baseball situation involved an exclusive arrangement between MLB and satellite service DirecTV which made a substantial number of games unavailable to cable subscribers. Kerry' colleague from the other chamber, Ed Markey (D-MA) also weighed in to make the game generally available to football fans.
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| Washington Business Report TM |
Reps say not so fast on XM/Sirius
House Judiciary Chair John Conyers (D-MI) and committee member Steve Chabot (R-OH) have fired off a letter to Attorney General Michael Mukasey urging that all due time be taken to consider the proposed merger of satellite audio services XM and Sirius. The legislators were concerned that department staff objections to the merger were being steamrolled by Assistant AG for Antitrust Thomas O. Barnett. News of the letter was damaging to both stocks. At least one analyst said that there was justification for fears of DoJ staff rejection of the merger, but that such a move could still be rejected in favor of the merger by senior lawyers there. The merger would still have to get past the FCC even if the DoJ does wave it through. Conyers and Chabot claimed to have no stated position on the merger at this point, but urged Mukasey to preserve his ability to effectively participate in the process.
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| Media Markets & Money TM |
Close encounter in Springfield
The deal sending WBEC-FM Easthampton MA from Vox Radio Group has officially gone into the books, according to broker Dick Foreman of Richard A. Foreman Associates, who handled the transaction. The price for the Springfield MA station was 5.75M. Entercom is using it to extend the reach of its Sports Talker WEEIU-AM out of Boston.
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| Ratings & Research |
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 November sales rise 5.1%
Black Friday and other holiday promotions too good to pass up as November sales show strength in consumer spending. According to the National Retail Federation, retail industry sales for November (which exclude automobiles, gas stations, and restaurants) rose 5.1% unadjusted over last year and 1.2% seasonally adjusted from October. November retail sales released by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 1.2% seasonally adjusted from last month and 6.9% unadjusted year-over-year. The strongest growth was seen by sporting goods, hobby, book and music stores where unadjusted sales grew 11.3% year-over-year and 2.2% seasonally adjusted from October. November retail sales also grew in many other areas. Eager consumers lined sidewalks at many retail establishments over Black Friday weekend to get their hands on discounted electronics and apparel items. Electronics stores sales grew 6.1% unadjusted from last year and 2.5% seasonally adjusted month-to-month; clothing and clothing accessories stores sales rose a very strong 8.2% unadjusted year-over-year and 2.6% from last month. Furniture and home furnishing stores sales also benefited from consumers stocking up on holiday items. Sales in those stores rose 2.5% unadjusted year-over-year and 1.0% seasonally adjusted month-to-month.
Hannity pitches PPM
Arbitron trotted out syndicated talker Sean Hannity to sing the praises of PPM at its consultant fly-in this week in Maryland. Otherwise, the consultants mostly got more of what they'd been hearing in the monthly PPM conference calls: that despite sample delivery problems for certain demos that have delayed further PPM currency deployment by nine months, the ratings data being generated by PPM is still valid.
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| Entertainment Business Report TM |
 Legendary jocks return to Motown
Ted "The Bear" Richards, Jones Radio Networks personality and longtime CKLW-AM (800) jock, returned to the airwaves last Sunday night (12/9) as a guest on WOMC-FM Detroit, as part of the station's Sunday parade of Detroit heritage jocks, according to The Detroit News. Richards was a jock on CKLW-AM from 1972-87, and also put in air time on Honey Radio WHND-AM in the 1980s. Richards currently does morning drive on JRN's Oldies format. Sixties jock Lee Alan, once the nighttime personality on WXYZ-AM (now WXYT), kicked off the series a few weeks ago.
|  Listen to the clip |
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| Engineering Business Report TM |
Country K95 in Richmond to power up
Cox Radio's Country WKHK-FM Richmond, VA (K95) has been granted FCC approval for a power increase from 17,500 to 47,000 watts, and antenna increase from 394 feet to 640 feet HAAT. "We are very pleased that the FCC has granted WKHK-FM this significant upgrade," said VP/Market Manager Bob Willoughby. "This improvement will greatly enhance our service to the Richmond metro and expand our coverage throughout the Central Virginia region."
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| Transactions |
900K WMEJ-FM Charleston-Huntington WV (Proctorville OH) and WZWA-FM Morgantown-Clarksburg-Fairmont WV (Clarksburg WV) from Maranatha Broadcasting Inc. (Paul A. Warren) to Educational Media Foundation (Richard Jenkins, Michael Novak). 45K escrow, 405K cash at closing, 450K note. [File date 11/28/07.]
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| Stock Talk |
Inflations worries again
A jump in the governments report on wholesale prices had Wall Street worrying about inflation. However, other government reports showed good news for retail sales and on the jobs front. So, the market closed mixed. The Dow Industrials rose 44 points to 13,518. The S&P 500 was up slightly and the Nasdaq Composite down slightly.
Radio stocks were among the winners. The Radio Index gained 2.015, or 2.1%, to 99.559. Beasley soared, with no explanation for the move. The stock was up 21.5%. Emmis was also a big mover, up 7.5%.
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| Radio Stocks |
Here's how stocks fared on Thursday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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42.20
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+0.98
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Google
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GOOG
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694.05
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-5.30
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Beasley
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BBGI
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7.40
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+1.31
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Hearst-Argyle
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HTV
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22.17
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+0.73
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| CBS CI. B |
CBS |
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26.58
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+0.32
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Journal Comm.
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JRN
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8.86
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+0.08
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| CBS CI. A |
CBSa |
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26.54
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+0.25
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Lincoln Natl.
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LNC
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58.60
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-0.02
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| Citadel |
CDL |
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2.10 |
+0.03 |
Radio One, Cl. A
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ROIA
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2.22
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+0.04
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Clear Channel
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CCU
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34.36
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-0.13
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Radio One, Cl. D
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ROIAK
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2.23
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+0.05
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Cox Radio
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CXR
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11.73
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+0.19
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Regent
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RGCI
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1.56
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-0.03
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Cumulus
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CMLS
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7.23
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-0.31
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Saga Commun.
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SGA
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6.54
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-0.37
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Debut Bcg.
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DBTB
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0.55
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-0.05
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Salem Comm.
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SALM
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7.01
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+0.07
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Disney
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DIS
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32.76
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+0.48
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Sirius Sat. Radio
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SIRI
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3.41
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+0.12
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Emmis
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EMMS
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4.46
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+0.31
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Spanish Bcg.
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SBSA
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1.83
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-0.02
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Entercom
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ETM
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14.90
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-0.05
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SWMX
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SMWX
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0.01
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unch
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Entravision
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EVC
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7.37
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-0.02
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Westwood One
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WON
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2.14
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unch
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Fisher
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FSCI
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37.46
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-0.01
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XM Sat. Radio
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XMSR
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13.99
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+0.78
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Media Markets & Money
Close encounter in Springfield
The deal sending WBEC-FM has officially gone into the books...
Washington Business Report
Reps say Not so fast on XM/Sirius
and as they say, it ain't over...
Ratings & Research
November sales rise 5.1%
Black Friday and other holiday promotions too good to pass up see what is hot for you sales...
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Stations for Sale
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Silver City, NM
Powerful Hispanic FM
Lovington, NM
Heritage AM/FM Combo
Explorer Communications
E-mail: [email protected]
Seller Financing Available
Mississippi FM
Buy or Lease Studios, Tower
Gordon Rice Associates
(843) 884-3590
or E-mail Gordon Rice
 Market your Stations For Sale
in our daily epapers.
Contact
Jim Carnegie
[email protected]
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Radio Media Moves
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Dearing joins
Sovereign City
Sovereign City Communications announced Joel Dearing has joined the company as its new VP/programming. Dearing will oversee the day-to-day programming operations for the new syndicator and will first focus on refining Sovereign City's new Adult Contemporary (AC) format. "Joel Dearing has made success a habit and we plan on encouraging that trait in his new leadership role with our company," said Joseph Giganti, SCC's president and COO. "As we move ever closer to launching our new hybrid AC format in the New Year, it is important to have such a strong broadcaster on board for the maiden voyage. Sovereign City product lines include syndicated music and talk-radio formats and shows; web-based commerce solutions and educational tools.
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More News Headlines
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Tribune buyout may close next week
Sam Zell is quoted in the Chicago Tribune as saying that next Thursday is the target date for closing the going private buyout that will make him and an Employee Stock Ownership Plan the only owners of Tribune Company. The complicated two-part buyout would become even more complicated if delayed into 2008. If the closing does not take place by the end of this month, the buyers will have to start paying interest at an annualized rate of 8% beginning New Year's Day, in addition to the 34 bucks per share buyout price, until the closing takes place.
CCU deadline
extended to June
Clear Channel had already indicated that its going private buyout would not close until 2008 (12/5/07 RBR #236). The deadline for closing is now nearly six months away. Clear Channel announced yesterday that "it has, in accordance with the terms of the merger agreement providing for the acquisition of Clear Channel by CC Media Holdings, Inc., a corporation formed by private equity funds sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P., extended to June 12, 2008, the date on which a party may terminate the merger agreement if the merger has not occurred as of that date."
RBR observation: Although Clear Channel's stock has been trading about five bucks below the 39.20 buyout price, Wall Street fears that this deal might collapse seem to be overblown. If the folks at Bain and Lee wanted out, they could have done so now instead of moving the termination date ahead to June.
Honors for Osgood
Charles Osgood, anchor of CBS News' "Sunday Morning" on TV and of CBS Radio Network's "The Osgood File," will be honored with the NAB Distinguished Service Award during the NAB Show. The award will be presented during the All Industry Opening Keynote Monday, April 14th in Las Vegas.
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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Sinclair fights
payola/plugola charge
Television group owner Sinclair Broadcast Group is fighting an FCC Notice of Apparent Liability related to an appearance by pundit Armstrong Williams on at least one of its stations. Williams was found to have accepted cash from agencies in the Bush administration to use his television appearances to plug the No Child Left Behind program. The television show in question, says Sinclair, is not one of theirs, but rather is a program they aired via a syndication arrangement. They actually paid the producer of "America's Black Forum," Uniworld Group Inc., for the rights to air the program. That would be the opposite of benefiting from Williams' arrangement with the government.
12/13/07 RBR #242
'Tis the season to CYA
Technically, it's always the season to CYA in Washington, but the looming DTV transition is making some of the natives inside the Beltway very nervous. Ed Markey (D-MA) went viral today with news of a new Government Accountability Office report on the FCC/NTIA preparations for the DTV transition in which it "...found no comprehensive plan or strategy to measure progress or results," he said. The FCC fired right back with a 99-page report noting that it has "been planning for the DTV transition for more than 20 years."
12/12/07 RBR #241
Fidelity cuts Clear Channel stake
Once the largest institutional shareholder of Clear Channel Communications, FMR Corp., parent of the Fidelity Mutual Funds group, has been selling off most of its shares. Once the owner of 9.8% of Clear Channel, FMR reported to the SEC Monday, 12/10/07, that it has cut that to 13.4 million shares, or 2.7%. That puts FMR below the 5% threshold for having to report further Clear Channel stock sales. FMR had been one of the leaders of the resistance to the initial going private offer for Clear Channel, helping push the bid up to the eventual 39.20 per share. The stock has been trading well below that, but with the closing dragging on into 2008, the mutual fund giant has apparently decided to take a lot of cash off the table now and move on.
12/11/07 RBR #240
Imus clicks with People Meters
The return of Don Imus to the New York airwaves showed up big time in the market's PPM test sample. Arbitron reports that WABC-AM's AQH estimated 6+ listenership for the December 3rd debut show were up an average of 87% over the previous programming on the station. For the 6:00 am launch, the number of meters reporting exposure to WABC jumped 251%.
12/11/07 RBR #240
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©2007 Radio Business Report, Inc. All rights reserved.
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