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Welcome to RBR's Daily Epaper
Volume 23, Issue 246, Jim Carnegie, Editor & Publisher
Wednesday Morning December 20th, 2006

Radio News ®

McDowell on sidelines
despite recusal excusal

FCC Commissioner Robert McDowell has decided that his pledge to "operate under nothing less than the highest of ethical standards" precludes his participation in deliberations over the pending acquisition of BellSouth by AT&T. His prior employer, COMPTEL, was active in opposition to the transaction. McDowell noted that once he was nominated by President Bush for the Commission opening, he immediately ceased all involvement in the AT&T/BellSouth matter. Then he found efforts to justify an end-around on recusal unconvincing. "In all candor, however, I had expected a memorandum making a strong and clear case for my participation. Instead, the Authorization Memo is hesitant, does not acknowledge crucial facts and analyses, and concludes by framing this matter as an ethical coin-toss frozen in mid-air. The document does not provide me with confidence or comfort." He added, "Nonetheless, while I expected the legal equivalent of body armor, I was handed Swiss cheese...In light of these factors, I find that I have no choice but to abide by the terms of my Ethics Agreement, heed the independent advice of OGE and my personal ethics counsel, and, ultimately to follow my own personal sense of ethics. Accordingly, I disqualify myself from this matter." He urged the two sides to make the necessary compromises to get an agreement.

RBR observation: What goes around, comes around. Michael Powell occasionally found himself a vote shy, with Kevin Martin absent from the party line. Now Martin finds himself with an AWOL Republican. We had wondered about McDowell's urging that the matter be decided in advance of his having to make a recusal decision of his own, and his past employment with an opponent of the merger. It seemed to us that his participation did not necessarily signal an automatic green light. One thing's for sure: We won't know until McDowell's year of recusal is up, if ever.

FMC benefits from Spitzer payola probe
A second round of grants to music-related endeavors in the state of New York is on its way, with 218 recipients receiving a combined 19M. Governor-elect Eliot Spitzer rounded up the cash as Attorney General in the form of payments from big record companies accused of indulging in payola to get their musical releases on the air at various New York radio stations. Jessica Chao of Rockefeller Philanthropy Advisors said, "These 218 grants will go a long way toward fulfilling the Fund's mission of ensuring that people of all ages, backgrounds and interests have an opportunity to discover new and less familiar performers and artists." One of the organizations receiving a grant is frequent testifier Future of Music Coalition, which often makes the case for musicians and against media ownership consolidation before Congress or - most recently - at the FCC forum in Nashville. It's getting 250K for "...an initiative to inform New York State musicians and citizens through statewide forums and Internet resources about key arts and media policy issues related to supporting an open and fair marketplace for creativity and cultural diversity, such as payola, media consolidation, copyright and emerging technologies."

GM's Betsy Lazar
to keynote at RAB2007

Lazar, Executive Director, Advertising and Media Operations for General Motors, will deliver the marketing keynote at RAB2007 during a luncheon sponsored by Katz Media on 2/9. Lazar will share insights about how GM is approaching the changing media landscape, how media plans are evolving accordingly, and the role that Radio plays in these plans. In addition, she'll communicate some enlightening (and little-known) facts about GM, automotive marketing, and the now ubiquitous mantra, the consumer is in control.

Tribune LBO report denied
The lead independent director at Tribune Company insists that top management is not aligned with any group bidding for the company. That follows a report in Tribune's own LA Times that an LBO bid is in the works (12/19/06 RBR #245), with CEO Dennis FitzSimons and other top executives teaming up with three private equity firms to bid for the company. Not so says William A. Osborn, who is leading the committee of independent directors as they analyze bids for Tribune and its various businesses. "From the beginning, the special committee and management agreed that management would not participate as a principal in any of the strategic alternatives without the committee's authorization. Management has remained independent and has not aligned itself with any participant," Osborn said in a statement responding to the LA Times story.

RBR observation: Maybe the original rumor was totally bogus. If not, then FitzSimons has gotten himself into a jam. The way out, though, would be to quit his CEO job - which is almost certainly going to disappear in a few months anyway - and then submit a bid to buy the company. But this is just thinking out loud on our part...

Foundation books Kenny Rogers
Nashville icon Kenny Rogers will perform at the 2007 Golden Mike Award of the Broadcasters Foundation of America in honor of Ken Lowe and The E.W. Scripps Company. If you ask, "What is the connection?," then you have forgotten that Scripps owns GAC, the Great American Country cable network. The black-tie gala will be held on Monday, February 26, 2007 at The Waldorf Astoria in New York City. The Scripps Network's Gordon Elliott will be the evening's master of ceremonies.

Wall Street Media Business Report TM
Thumbs up for Saga
Small and medium market radio and television specialist Saga Communications has been upgraded by CL King analyst Jim Boyle from Neutral to Accumulate. With small and medium market radio stations currently outpacing their big market peers in ad sales growth, Boyle says the valuation of Saga's stock has "become enticing." He calculates that Saga currently trades at 8.3 times estimated 2006 EBITDA, compared to 10.5 times for the radio sector and 10.2 times for its mid-market peers.

Executive Comment
HD Radio, A Year Later
by Bob Harper, Keystone Media Research

It was last November when I conducted a series of twelve Focus Groups across the country researching radio listener reactions to various aspects of HD Radio. How are we doing a year later? The Dial. The chief issue before us last year was the design of the display; the tuning dial. Overwhelmingly, radio listeners preferred the Expanded display to the one we have now (94.7 HD-1, 94.7 HD-2, etc.). Almost 90% of your listeners would rather have all the new, HD, stations, grouped together and corralled in their own place on the dial; above 108, for example. The listeners lost that battle. What about the other fronts? Quality. The two biggest potential attractions for HD Radio revolve around its promise for improved technical quality - "FM will sound like CDs" and "Reception will improve," making hisses, clicks, fading, and dropouts a thing of the past. By most accounts, AM stations in HD do meet the challenge. But, improved FM quality and cleaner reception is dubious so far. Recently, Sean Ross shared his experiences on the Edison Research web site. Briefly: no HD reception in the Radio Shack store ... in-and-out signals ... inability to find listed HD stations ... poor and uneven reception at home and in the office ... a lack of punch from the audio quality. If you had the same experience Sean did, would you buy a second HD Radio? Would you be telling your friends to go buy one? Not good, folks. We need to do better in the things most important to the listeners: Research 101.
| Read More... |

RBR observation: You may recall that RBR raised some questions about the Cox Radio proposal for HD Radio branding/numbering last year and Harper's research. Bob, to his credit, responded with a detailed reply (12/15/05 RBR #244). What has happened since then? Not a thing. Radio stations have continued to introduce new HD channels using the default HD-2 display system and branding them that way, even if the HD-2 channel is totally out of sync format-wise with its HD-1 sister. What an abomination! We are still not sure that the Cox Radio plan, numbering new HD channels from 108.1 and up, is the best possible approach, but we are absolutely certain that HD-2, HD-3, HD-4 and etc. is the worst possible. Why is the radio industry determined to shoot itself in the foot and make it as difficult as possible for HD to succeed? It may already be too late to do the professional branding research for HD Radio implementation that should have been done about two years ago. If that research is not going to be done, then let us go ahead and adopt the Cox Radio proposal and give HD Radio half a chance of consumer acceptance. Bob Harper's research proved conclusively that it is much better than the consumer-unfriendly system in use now.

Ad Business Report TM

Google inventory deal with CBS Radio close?
The shot in the arm Google Audio needs? MarketWatch reports that "Several news reports Monday claimed that Google is deep into negotiations to buy a large swath of airtime from CBS Radio." Echoed The International Herald Tribune: "According to one executive briefed on the matter, Google could buy a large amount of radio inventory in CBS Radio, a leading U.S. radio group, amounting to hundreds of millions of dollars of guaranteed revenue for CBS." CBS Corp. CEO Les Moonves' did recently express interest in a deal with the company (12/11/06 RBR #239). We've been hearing a deal is already done with CBS Radio-a percentage of inventory will go to Google for sales. All of the new radio sales folks Google hired will be selling the inventory. CBS Radio and Google declined comment. Meanwhile, MarketWatch reported RBC Capital Markets analyst Jordan Rohan saying Monday Google Audio has run into an unexpected snag: "it seems Google doesn't have access to enough radio airtime for would-be advertisers to thoroughly test out the initiative." Until Google can strike a deal with CBS, or some other radio giant, "there will be no significant impact until mid-2007 on Google's bottom line, or the radio industry in general," Rohan said. "We believe a critical mass of advertisers is interested in testing the platform. However, there is simply not enough radio inventory in the Google Audio system (yet) to enable buyers to run campaigns." We've also heard from sources Google was negotiating with CC Radio to do a 250 million dollar straight comp deal. It looks like Google would buy it for a rate (again, just regular inventory) and make money on the vigorish (house commission). Unfortunately, since it would be such a major conflict for Premiere nationally and Katz/CCRS locally, we heard the deal has stalled and is "going nowhere." If such a deal went through, if they ever decided to spin off Katz and/or Premiere, this could lower the value of the company and have an adverse effect on the new investor group coming in.

RBR observation: As usual, most of the news about Google and its entry into radio is still just speculation and rumor. Keeps them in the headlines - apparently they don't mind it, either.

Media Business Report TM
Another hungry mouth angles
for bigger piece of pie

PowerDirect is looking to take its medium to bigger and better places by going directly from place to place, as in door-to-door, using new and improved doorhangers. Its founder/CEO Bill Borneman claims Fortune 500 companies have become repeat clients. "Our concept was to create a totally new, high quality doorhanger that was distributed reliably and targeted using the most sophisticated pre- and post-campaign analytics," he said. It is built around a "high-quality printing of a super jumbo doorhanger," fueled by "...state-of-the-art demographic profiling, mapping and post-analysis; national distribution, real-time GPS tracking and on-site auditing." Borneman's goal? "We set out determined to move the doorhanger from a 'small-fry' media vehicle to a higher, more prominent level in the marketing mix." He says his business is doubling in growth each year, up to 20M in revenues for 2006.

RBR observation: Another day, another medium looking to shave off a piece of the advertising pie. Next thing you know someone's going to start selling antihistamine displays on salad bar sneeze guards. We will say this about doorhangers. Our dog absolutely abhors this form of advertising, along with any form that brings a stranger to our front door. And if he's out in the front yard, getting the material to the target audience is utterly impossible.

Media Markets & Money TM
Liu gets a credit card
GE Global Media & Communications is stepping up to the plate to make a multimedia player out of MultiCultural Radio Broadcasting, making available a 275M credit facility which will enable Arthur Liu's company to complete its acquisition of five E.W. Scripps television stations. In addition to funding this 170M deal, there will be cash for a refi, a shareholder loan program and general corporate expenses. It's the second time MultiCultural has tapped into GE in recent years, following establishment of a 2004 187.5M facility which helped fund its acquisition of Radio Unica. The five television stations overlap some of the group's radio properties in two markets, and is not too far away from a cluster in another. Multicultural is getting KCNS-TV in San Francisco, which clusters with KATD-AM, KIQI-AM & KEST-AM; WMFP-TV Boston, which will join WLYN-AM & WAZN-AM; and standalones WRAY-TV Raleigh-Durham NC; WOAC-TV Cleveland; and WSAH-TV Bridgeport CT, which is just outside New York, where Multicultural has five radio stations.

Washington Media Business Report TM
FCC, networks set to
duke it out in court

The Second Circuit Court in New York will be the scene of the next battle over indecent broadcasting today, and the networks try to shed responsibility for fleeting and inadvertent lapses from decent programming, and the FCC tries to reinforce its power to levy fines and other penalties in such instances. Under Michael Powell, the Commission issued guidelines which seemed to clear such occasions, but that all changed when the commissioners themselves overruled the FCC's Enforcement Bureau, which had let NBC off the hook for off-color comments from U2 frontman Bono during a telecast of the Golden Globe Awards. On the docket now are similar events involving the Billboard Music Awards and off-color remarks from Cher in 2002 and Nicole Richie in 2003. The Associated Press notes that the Second Circuit may be but a way station en route to the Supreme Court, particularly if the networks come out on the short end. But the case may go there either way. Stay tuned.

Entertainment Media Business Report TM
Beasley celebrates "Christmas at Home"
Randy Sherwyn, PD of Beasley's WJPT-FM in SW Florida, will host the 7th annual "Christmas At Home", a 12 hour radio Christmas show aired mainly on Christmas Eve and Christmas Day. The show will air on Beasley's WXKB-FM in SW Florida and KSTJ-FM Las Vegas. Additionally, the show will air nationwide and in international territories including, Newfoundland/Canada, West Indies, Cayman Islands, New Zealand, Thailand and the Philippines. With the support of the American Forces Radio Network (AFRN), and the Canadian Forces Network/Europe (CFN), "Christmas at Home" has become an annual signature event for troops stationed overseas during the Holiday Season. This year the show will be heard by military personnel stationed in over 175 countries around the globe including "Freedom Radio" in Iraq.

Internet Media Business Report TM
MTV Networks creates
MTVN Mobile Media

Building its wireless initiatives and original content for mobile, MTV Networks has created MTVN Mobile Media, a new unit dedicated to growing the company's mobile entertainment business. MTVN Mobile Media will be responsible for managing mobile partnerships and content distribution for the company, and will support the teams at the individual MTVN brands in developing a portfolio of mobile content and applications--including personalization, entertainment, information and messaging products. The unit will be led by Greg Clayman, who has been promoted to Senior Vice President of MTVN Mobile Media. MTVN Mobile Media reports into MTVN Global Digital Media, led by Mika Salmi, President; and MTVN Affiliate Sales and Marketing, led by Nicole Browning, President. MTVN also announced promotions for two other mobile execs. Alice Kim, now VP/Carrier Relations and Wireless Distribution, will cultivate the company's existing distribution partnerships for all MTVN brands and will also direct distribution, marketing and business development relationships with carriers. Jeremiah Zinn, now VP/Mobile Operations and Product Development, will work with the teams at each individual brand to manage the full lifecycle of wireless products and for forging relationships with leading service and technology companies. Zinn and Kim will continue reporting to Clayman. "Connecting with our consumers on every platform they love is at the heart of our digital strategy," said Judy McGrath, MTVN CEO. "MTVN Mobile Media will help our brands take it even further in distribution and product development, and it will expand our global wireless footprint even more, so the communities around our brands can access our content anywhere."
| See the content here |

AllBusiness.com allies with CBSNews.com
AllBusiness.com, an online resource for small and mid-size businesses (SMBs), announced it is partnering with CBSNews.com by providing SMB-focused content for the business section of the CBSNews.com Web site. The new Small Business Resource Center can be found at allbusiness.cbsnews.com. The CBSNews.com Small Business Resource Center is the most recent partnership in year-long effort to provide the company's award-winning, SMB-focused content to the premier media properties on the Web. AllBusiness' team of experts is providing grassroots, useable business knowledge - including tips, advice, blogs and case studies- to CBS News' online counterpart. The alliance with CBSNews.com is part of a broader strategy employed by AllBusiness to collaborate with premier Web properties. The company's other content partners include Washingtonpost.com, BusinessWeek Online, Yahoo!, SFGate.com, Boston.com, CareerBuilder and About.com, a division of the New York Times Company.

Ratings & Research
Nielsen: DVD players
surpass VCRs

Nielsen Media Research released findings from its 3rd Quarter Home Technology Report which show that more U.S. households now own DVD players (81.2% of all households) than VCRs (79.2% of households). Findings from this quarterly study also show ownership of most media technology trending up from previous years, which could continue to climb as the upcoming Christmas season approaches. As of third quarter 2006, DVD penetration in the U.S. is up 6% from the previous year and continues to grow, while VCR penetration has started a decline. In 1999 when Nielsen first started tracking DVD ownership in its Home Tech Report, DVD penetration was only 6.7% and was dwarfed by VCR ownership at 88.6%. Nielsen's latest report also found that DVD households now rent DVDs about twice per month, compared to VCR homes renting VHS tapes only about once per month. The frequency with which households rent video tapes has leveled off during the past six months.
| More findings |

ESPN buys a stake in Arena Football League
Why just televise the games, when you can own a piece of the action? Disney's ESPN has entered into a five year agreement with the Arena Football League (AFL) that includes buying a minority stake in the AFL. With the AFL schedule pretty much filling the gap from the Super Bowl to the NFL season kickoff in the fall, ESPN will be able to extend its Monday Night Football franchise year-round. Under the deal with the AFL, ESPN will televise a minimum of 17 regular-season games and nine playoff games -- including a minimum of three Wild Card games, three Divisional Playoff games, both Conference Championships and the ArenaBowl -- on ESPN, ESPN2 and ABC. In fact, two season openers on March 4th, a Sunday afternoon, will air on ABC, as will the title game July 29th. The AFL previously had a broadcast agreement with NBC. Under the new deal, ESPN will also have an exclusive window for weekly Monday night primetime games on ESPN2, the move to extend its Monday night franchise.

"ESPN's brand is ingrained in sports fans, who watch, read and listen to its multiple media properties. Through its equity purchase, ESPN now owns a piece of the AFL and has the ability to provide exciting football content on Monday nights for fans on a year-round basis. There is no better partner to help continue the AFL's growth as a leading global, multimedia property than ESPN," said AFL Commissioner David Baker. "We are committed to the Arena Football League and its exciting brand of football. We will help grow the league across all of our multimedia platforms. As the league grows, so will our business, and we see a bright future for us both," said John Skipper, Exec. VP, Content, ESPN. Which multimedia platforms? ESPN says 15 ESPN platforms will benefit from this new agreement, including ESPN, ESPN2, ESPN on ABC, ESPN Classic, ESPN HD and ESPN2 HD; ESPN.com; Spanish-language ESPN Deportes; ESPN360 (the company's growing interactive and customizable broadband service); Mobile ESPN Publishing (the company's wireless content licensing business); ESPN Radio, ESPN The Magazine and other ESPN-branded services (i.e., iPod, video-on-demand). ESPN also gains the right to both air and syndicate Arena Football League games through ESPN International.

TVBR observation: Arena football appears to have gained enough of a fan following to assure its long-term viability and certainly nothing could build on that growth more than this deal with ESPN. From the announcement, it looks like ESPN2 will be the primary primetime outlet, so the AFL is clearly not yet on the same level with the NFL, NBA and Major League Baseball. Nevertheless, lots of sports bars all over the country will have at least one screen tuned to ESPN2 for spring and summer football on Monday nights. This deal doesn't tie up all AFL games, so the league is still negotiating with other cable networks for additional carriage, as well as a possible satellite radio deal. The American thirst for football appears to be unquenchable, so this will likely pay off for Disney and ESPN.

125K WQLS-AM Dothan AL (Ozark AL) from Magic Broadcasting LLC (Donald G. McCoy) to Horizon Broadcasting Company (Wayne North, Robert Reynolds, Jerome Dudley, Arnold Jefferson). 25K deposit, balance in cash at closing. LMA 9/27/06. Seller retains WJRL-FM, WTVY-FM, WLDA-FM, WKMX-FM. [File date 12/1/06.]

N/A KLTB-FM Pilot Rock OR from Charles R. Nelson to Bruton Broadcasting LLC (Jeffrey A. Bruton). LMA 6/16/06 @ 4,263.82/month. No other consideration specified. [File date 12/4/06.]

Stock Talk
Back to record territory
Blue chip stocks were back up on Tuesday, despite a government report showing a jump in inflation at the wholesale level. The Dow Industrials rose 30 points, or 0.2%, to a record close of 12,471.

Radio stocks also had an up day. The Radio Index gained 0.839, or 0.6%, to 153.826. Salem surged 6%, with no news to account for the move. Fisher was up 1.9%.

Radio Stocks

Here's how stocks fared on Tuesday

Company Symbol Close Change Company Symbol Close Change













Journal Comm.







Lincoln Natl.







Radio One, Cl. A




Citadel CDL
9.67 +0.10

Radio One, Cl. D




Clear Channel








Cox Radio




Saga Commun.








Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Westwood One








XM Sat. Radio














Send Us Your OpinionsWe want to
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Below the Fold
Executive Comment
HD Radio, A Year Later
by Bob Harper, Keystone Media Research Radio Needs Work: It was last November when I conducted a series of twelve Focus Groups...

Ad Business Report
Google inventory deal
With CBS Radio close? That is the rumor at hand...

Media Business Report
Another hungry mouth
Angles for bigger piece of pie PowerDirect is looking...

Media Markets & Money
Liu gets a credit card
GE Global Media & Communications is stepping up to the plate...


Market Results
| Buffalo |
| Dallas |
| Houston |
| Minneapolis |
| Tampa |

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Radio Media Moves

Three more years
Emmis-owned WFTK-FM St. Louis announced that attorney-turned-talk host Dave Glover has signed a new contract to continue doing afternoon drive for three more years. "Emmis is the only company I've ever worked for, and I would be perfectly happy retiring here too," Glover noted.

Interrante to Philly
Thomas Interrante has joined Clear Channel as General Sales Manager for WIOQ-FM Philadelphia. A Philly market veteran, Interrante has most recently been at WDBO-AM Orlando.

Two upped at Buckley
Buckley Radio announced that Jody Frawley has been named Local Sales Manager in Syracuse, NY and that Jennifer Bowden has been named Local Sales Manager in Bakersfield, CA. Both had previously been Account Executives for their clusters.

Upped in San Francisco
Clear Channel Radio San Francisco announced Krista Coutts as the Director of Integrated Sales, responsible for driving revenue in Clear Channel's new integrated media and on-line sales programs for the San Francisco radio group. Coutts assumes her new responsibilities starting 1/1. She's currently the GSM of KYLD-FM.

Marquez to
CBS Interactive

Michael Marquez has been named Vice President, Strategy and Corporate Development for CBS Interactive, it was announced by Quincy Smith, President of the newly-formed division. Marquez, who most recently served as Director of Corporate Development for Yahoo!, will now work with Smith to help set the division's overall strategy, as well as with Chief Development Officer Joseph Ianniello, to initiate investments and acquisitions. He will be based in San Francisco.

Musical chairs at Cox
Cox Enterprises announced that two members of its board of directors are retiring at the end of this month, to be replaced in the new year by two new members. Leaving are Carl Goss, whose long history with the company goes back to his role as VP/controller of Dayton Newspapers before being named treasurer and relocated to Atlanta when Cox Enterprises was formed in 1968, and Paul Rizzo, Chairman/partner of Franklin Street Partners. The new directors are Janet Morrison Clarke, President of Clarke Littlefield LLC, and S. Taylor Glover, President and CEO of Turner Enterprises Inc. Cox Enterprises is the privately owned parent company of Cox Radio, Cox Television, Cox Communications (cable), Cox Newspapers and other enterprises.

More News Headlines

Digital delivery
taking over

The days of record labels FedExing new CDs to break new songs simultaneously on stations nationwide is fading away. Promo Only MPE reports that its digital delivery of new music to radio stations increased by more than 100% for the second straight year, with more than 700,000 downloads this year. The number of cuts available on the system more than quadrupled, reaching 32,000.

Richard Plessinger passes
Pioneering Ohio broadcaster Richard Plessinger has died. Plessinger was involved early on with WMOH-AM Hamilton, OH, as well as in the early development of cellular phone service. Plessinger Radio Group later owned FM stations in the Cincinnati market. Just a few months ago he sold his last AM in Cincinnati to Davidson Media Group. Broker John Pierce informed RBR of his friend's passing and noted that Plessinger's son, Rick, continues to operate the family's two FMs in Apalachicola, FL.

Happy birthday MMTC
"On December 17, 1986, we awoke in surprise and shock when the FCC suspended two of its three minority broadcast ownership policies." The Minority Media and Telecommunications Council was born the next day and within two years it had the policies reinstated. Led by Executive Director David Honig, it remains an active participant in broadcast regulatory matters, as well providing all sorts of services including brokerage and financial consultancy. The organization is now 20 years old.

RBR observation: Happy birthday, MMTC. (Next year you'll be able to toast the occasion with a real drink.)

Our report on the sale of KBET-AM in Las Vegas yesterday grossly underestimated its construction status. As the Billy Dee Williams character famously said in "Return of the Jedi," "That thing's operational!" Alert readers said it is playing holiday music under an STA, which according to seller Morgan Skinner, was granted 11/1/06. Beasley Broadcast Group is buying the station for 2.5M.

RBR Radar 2006
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Moving to cash on the barrelhead
Sometimes a percentage does not tell the whole tale, or at least it tends to distort it. Add to that the fact that most media report their results in hard dollar totals, and you will have two of the reasons that the RAB is going to add quarterly cash totals to its ongoing practice of calculating and releasing monthly revenue comparisons.

RBR observation: Knowledge is power, and the more of it the better. We've seen fear of knowledge in the past on occasion. For example, back when RBR was a weekly print product, it used to publish forward pacing reports. The purpose of these reports was to assist executives in managing their inventory. But when the dot-com bust started producing some ugly numbers, many saw the reports not as a tool for management but as a club to simply bash radio with, and stopped providing the accountants with the necessary raw data. The biz is poorer for this, in our opinion. And it will be richer for RAB's decision to shine its spotlight bright on the medium's raw power to attract paying customers. The caveat is that radio must do what it takes to pull those customers in. The gauntlet is thrown, and we think a strong focus on local content is the way for radio to prosper.

Publisher note: Look for our Special Report on how 8 key Association participants are confronting their issues within their medium. Read how: Jeff Haley (RAB), Chris Rohrs (TVB), Mitch Burg (SNTA), Sean Cunningham (CAB), John Sturm (NAA), Nancy Fletcher (OAAA), Sheryl Draizen (IAB) and Burtch Drake (AAAA) each confront the inevitable in 2007. This is coming in RBR-TVBR's January debut issue of SMARTMEDIA(tm) magazine, a re-branded Radio & Television Business Report publication.
12/19/06 RBR #245

Tight rein at Clear Channel;
Divestitures coming
Details have finally been filed at the FCC for the 26.7 billion buyout of Clear Channel Communications. Mark and Randall Mays will be on the board, but their new equity partners will be in control. Divestitures will be required in several large markets. (Those markets and how many in RBR.) The buyout agreement indicated that the attributable shareholders of the new Clear Channel would not have any attributable interests in any other broadcast licenses to avoid any difficulties with the FCC, but until now RBR did not know how that would be handled. It turns out the Thomas H. Lee Partners and Bain Capital will be amending the terms of their investments in Cumulus Media Partners (each 25%) and the proposed buyer of Univision (Lee 23%) so that they are not attributable as far as the FCC is concerned. Bain and Lee will each have a 50% fully attributable stake in the new Clear Channel, with no direct ownership by any member of t! he Mays family. Bain and Lee will each appoint four of the 10 board members, with Mark and Randall Mays occupying the other two seats.

RBR observation: The game is changing at Clear Channel. We know who will be running the company in 2007. But the real question is, will they still be there in 2008 or 2009? The Mays family will no longer have de facto control of a public company with No Majority shareholder. Instead, CEO Mark Mays, President/CFO Randall Mays and CC Radio CEO John Hogan will have to hit the performance marks set by their new bosses or risk being sent packing. Since the Mays brothers had previously agreed to dramatically reduce their golden parachutes, they obviously believe they are up to the new task.
12/18/06 RBR #244

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