RBR's Daily Morning Epaper

Good Morning - Gain a personal edge on today's business day. Are you reading this from a forwarded email?
New readers can receive our RBR Morning Epaper for the next 30 Business days!
SIGN UP HERE

Volume 22, Issue 252, Jim Carnegie, Editor & Publisher

Thursday Morning December 29th, 2005

Your Subscription Renewal is Due Today for '06!

If you haven't already done so, renew your morning read to RBR in 2006. Only 3 days left. A 1 year subscription to RBR Epaper is only $108, that's a 16% SAVINGS off the normal subscription price of $129. It is tax deductible.

Yes, I want to renew my RBR for '06

Be focused on the Business of Radio with RBR in '06 - only $108.00 -- It is going to be a wild ride.

Here's to a successful 2006 and RBR will be by your side! From your colleagues at Radio Business Report. Independently Owned for the last 23 years.

Yes, I want to renew my RBR for '06

Radio News®

RBR returns on Tuesday, January 3rd.
The RBR/TVBR offices will close at noon today and reopen on 1/3/2006.
Enjoy the New Year's holiday weekend!

No light at the end of the tunnel
RAB's report that radio revenues were flat in November was no surprise (12/29/05 RBR #251), but the issue now is figuring out when things will get better. Wachovia Securities analyst Marci Ryvicker is looking for that light at the end of the tunnel, but she doesn't see it yet. "At this point in time, we do not feel that the radio industry has a well-defined near-term catalyst as the sector's fundamentals continue to deteriorate, M&A activity has slowed, and both investors and advertisers have become increasingly more interested in new media. We suggest that investors remain selective in the radio sector," she said in a note to clients. Ryvicker's near-term picks are Univision, for monetization of its World Cup rights and strong upfront sales (both TV driven), and Clear Channel, for its easy comps from LIM and positive ratings trends. After factoring in the flat November (she'd been looking for +1%), the Wachovia analyst is now looking for radio revenues to be down 2% in Q4, worse than her previous -1% projection, with December coming in up 2%.

RBR observation: National spot continues to be the problem. Ryvicker notes that out of the past 11 months, national was down in five months and flat in three, resulting in a 2% decline year to date. Domestic auto advertising has been the biggest drag and the rep companies haven't managed yet to replace that lost revenue with new business.

CBS, New Viacom get S&P 500 slots
When CBS Corporation and New Viacom begin trading next week on the New York Stock Exchange, they'll already have spots in the prestigious Standard & Poor's 500 Index. S&P announced that the two companies being created by Friday's post-market closing split of Viacom will take the index slots currently held by (old) Viacom and auto parts maker Visteon. The latter is being removed due to low market capitalization. At the same time, Whole Foods will join the S&P 500, replacing MBNA Corp., which is being acquired by Bank of America Corp. The surprise for many market watchers was not that those three companies are being added to the S&P 500, but rather that S&P isn't adding Google, which is easily one of the nation's 500 largest corporations by market capitalization. Maybe next time. Within the S&P 500, CBS will become part of the Broadcasting & Cable TV Sub-Industry Index and New Viacom will be in the Movies & Entertainment Sub-Industry Index. The old Viacom had been in the Movies & Entertainment Sub-Industry Index.

RBR observation: Some investors try to figure out ahead of time which new stocks are going to be added to the S&P 500 and buy them, expecting a price bump up when they are actually added. That's because mutual funds based on the S&P 500 Index have to buy shares of new adds to balance their portfolios. There wasn't much way to make that play on CBS and New Viacom, since they were being split off from an existing S&P 500 stock and their inclusion - - now, or within the next few months - - was virtually assured.

Radio could be next:
Local politician threatens advertisers
Cleveland, Tennessee is the base of Republican State Senator Jeff Miller - - he's conducted the town's business in the state senate for some 11 years, according to the Associated Press. He is also going through a divorce. According to a local newspaper, the Bradley News Weekly, some of his actions in that situation are not consistent with Miller's espousal of family values, an opinion it put into print. According to AP, Miller's reaction was to send a letter to many of the paper's advertisers, warning them to steer clear of buying space in it, and which some found threatening. The newspaper says it has had no cancellations - - rather, some advertisers have actually upped their use of the paper in protest of result of Miller's action.

RBR observation: It is one thing for a public interest group to go after advertisers when it does not like the programming or stated opinions of a given media outlet. In fact, that is usually the best avenue available, much more effective than the frequently-tried and rarely successful attempt to get a regulatory agency to do something - - usually there is no legal recourse for an agency to pursue even if it wanted to. However, when an elected official, who is by definition newsworthy, starts threatening a business because he/she doesn't like what it's putting in the news, that is another thing entirely. We would surmise that Miller is treading on extremely thin ice here, and he may in fact be lucky that a free market push-back may put an end to this before it winds up in the courts.

Stealth campaign group draws complaints
Move America Forward (MAF) does not use tons of money when it does a media buy. The conservative non-profit runs modest radio and television flights using ads which it hopes are provocative enough to get local news coverage which in turn blossoms into wide national exposure. According to the Wall Street Journal, its most recent campaign involves ads which support the idea that Saddam Hussein had WMDs and ties with Al Qaeda even while the Bush administration has long since backed off the very same claims. The group started during the California Gray Davis recall election and has been involved in other issues. It is drawing complaints from a similar organization on the other side, MoveOn.org. MoveOn is similar in that it addresses hot political issues, albeit from the other side of the political spectrum. What is dissimilar is MoveOn's tax status - - the IRS considers it to be a political action committee, which must disclose the identity of contributors who in turn cannot deduct the donations from their taxes. Since MAF in considered non-profit, it faces no such hurdles. The IRS refuses to comment on such matters. Stay tuned - - there's sure to be much more on this front as the 2006 election campaigns get going.

File this one under fined
Every broadcaster must keep a proper public file. This tale of a noncompliant Orlando TV is not of interest to radio owners for the substance of its apparent violation, but for how the violation came to pass. WFTV-TV Holdings, a subsidiary of Cox which owns and operates a pair of television stations in the Orlando DMA, has been found apparently liable for a variety of offenses at one of them. Indy WRDQ-TV 27 is the alleged guilty station (ABC WFTV-TV 9 is not mentioned by the Commission). It was acquired by Cox in February 2001, and since has gone over the children's commercial limit 59 times, mostly by 30 seconds but on occasion by as much as a three minutes. The FCC considered the frequency of the violations and bumped a base fine of 8K all the way up to 20K. It could have kept on going, but decided to limit the punishment to an admonishment for two other problems - - failure to provide children's programming info to viewer guide publishers and a limited failure to put issues/programs lists in the public file. With all this, the FCC determined that the station still adequately served the public interest and granted a license renewal.

RBR observation: Cox met one of the FCC's most basic requirements in this case: reporting with absolute candor and honesty. But look at its explanation of the lapses: "...attributes...overages to human error by the station's staff..." and "...an apparent misunderstanding by this former employee..." and "...station staff had misread Question 4 of the Children's Television Programming Act..." and "...during the transition, there was an oversight in preparing TV issues/program lists..." It is clear that station staff must be clued in to the importance of regulatory compliance in order to avoid a surcharge on operating expenses and a big or little black mark in your Washington FCC file.

Listeners sue over programming changes
Programming changes at WDET-FM Detroit (12/15/05 RBR #244) aren't being taken lightly by some listeners. They've gone to court, accusing owner Wayne State University and management of the non-commercial station with fraud, misrepresentation and breach of contract. According to the Detroit Free Press, the suit claims that the station solicited donations from listeners to its alternative music programs during its last fund drive, knowing full well that the programs were going to be cancelled. The plaintiffs in the lawsuit donated 850 bucks and now want the court to order the station to return their donations.

RBR observation: It's not the first time a non-commercial station has been hit with such a lawsuit and it's unlikely that the plaintiffs will win, since charities generally enjoy wide latitude on how to spend donations, so long as they are used for charitable purposes. Nevertheless, the legal costs for WDET will easily exceed 850 bucks, not to mention the bad PR from having to battle its own listeners in court.

Adbiz©

Car dealer pays ad fine
Arizona Attorney General Terry Goddard announced a 75K settlement with Holmes Tuttle Ford of Tucson over allegations of false advertising claims. Although the car dealer admitted no wrongdoing, it has agreed to abide by advertising guidelines to avoid misleading potential customers. The dispute arose from advertising the Ford dealer ran last January offering cars for 29 bucks down and 50% off the manufacturer's suggested retail price. The dealer offered only two vehicles at that price, but the AG's office claimed the ads implied that all cars were being offered under those terms. According to KVOA-TV, the Ford dealer is now under new management and the new general manager says he will personally scrutinize all ads to make sure they are truthful and not misleading.

Which cable channel
does your demo watch?
Broadcasters on both the TV and radio side may have an interest in what their target demo is watching on cable. Thus we present the battle of the basic cable networks, with Nielsen Media Research calling TNT the clear 2005 viewership winner. It led all all comers in total viewers, won the 18-49 and 25-54 battles outright and was second only to sister TBS on the 18-34 chart. USA was in second place in the three categories won by TNT while lagging a bit in 18-34, where it was in 4th place (though only 30K away from the top slot). TNT, TBS and USA were three of only six channels to hit the top ten in all four categories, joined by ESPN, Lifetime and Spike TV.
| Top ten lists here |

Media Markets & MoneyTM

EMF adds Austin
Ever-expanding Educational Media Foundation has struck a deal for a pair of Texas FM stations, both in the unreserved band, and one of which gets into the Austin market. The proximity to the Texas capital is bringing a 6M dollar payday to seller Central Texas Radio Inc. The Austin station is KQJZ-FM, licensed to Hutto TX. Also in the deal is KQQT-FM Gonzales TX, which is south of Austin, west of Houston and east of San Antonio without being particularly close to any of them. EMF, purveyors of the non-commercial K-LOVE Contemporary Christian format, will pay 1.2M upfront and follow that with 4.8M paid over time pursuant to terms of a promissory note.

Washington Beat

"Don't fence me out"
Butterfield Broadcasting's KULE-AM in Ephrata WA had both a perimeter and a base fence, but according to an FCC field agent out of Seattle, neither was an effective barrier capable of keeping general public away from the station's tower. The outer fence had a broken gate, which Butterfield admitted. The FCC's problem with the outer gate was a bit more subtle. Its north and west faces were OK, but sloping ground on the east and south was not compensated for, leaving 12-18 inch gaps under the fence. Butterfield claimed that at worst the gap was only 11 inches, which could be breached only through extraordinary effort. The FCC, however, said that the only way Butterfield could claim 11 inches was by not considering the slope and, further, that the FCC agent himself was able to scoot under the fence. Result: Busted for a 7K fine.

RBR observation: As is often the case, Butterfield tried to get the fine reduced or, even better, tossed out entirely based on its record of overall compliance. Do not try this if your record is not clean. The FCC found a prior - - a 2K fine (which on quick inspection we believe was related to its public file) and used that piece of evidence to demand full payment.

TVBR - TV News

PTC slams Comcast family tier
As predicted, decency watchdog Parents Television Council found no more to like in the Comcast family tier than it did in the Time Warner family tier (12/27/05 TVBR #250). It has simply renewed its call for full a la carte channel selection. For starters, PTC thinks some objectionable programming may sneak through in some markets where it expects that TBS and USA may be included in the lineup, bringing certain questionable reruns with them. But the bigger problem it expects is that it's limitations may limit its effectiveness. "This offering is designed with the idea that most families would continue to opt for the expanded basic cable tier for just a few dollars more a month, not because they still want the raunchy programming, but because the family tier is so limited," said PTC's Brent Bozell. "This is more foolishness from the cable industry, another example of a major cable operator which owns the cable networks clearly working to undermine cable choice. We urge cable operators to give families real choice when it comes to cable television. The only option is to give consumers the ability to pick and choose the channels that they want, and pay for only what they want."

Stock Talk

More bad news than good
Even so, the Dow Industrials managed to gain 18 points to 10,796. The bad news was two-fold: Iran's oil minister suggested that OPEC cut production to push up prices and traders worried that an upside-down bond market might signal an economic pull-back.

Radio stocks were narrowly mixed. The Radio Index slipped 0.037, or 0.02%, to 181.927. The worst performer was Entravision, down 1.5%. Satellite radio stocks had a worse day, with Sirius down 3.4% and XM off 2.9%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		38.57	+0.07	Jeff-Pilot	JP		57.46	+0.20
Beasley	BBGI		13.50	-0.04	Journal Comm.	JRN		13.96	+0.06
Citadel	CDL		13.35	+0.12	Radio One, Cl. A	ROIA		10.74	-0.10
Clear Channel	CCU		31.49	-0.31	Radio One, Cl. D	ROIAK		10.73	-0.12
Cox Radio	CXR		14.40	+0.15	Regent	RGCI		4.57	-0.02
Cumulus	CMLS		12.46	-0.13	Saga Commun.	SGA		10.80	+0.01
Disney	DIS		24.13	-0.01	Salem Comm.	SALM		17.56	+0.24
Emmis	EMMS		19.85	+0.26	Sirius Sat. Radio	SIRI		6.75	-0.24
Entercom	ETM		29.78	+0.37	Spanish Bcg.	SBSA		5.13	-0.05
Entravision	EVC		7.03	-0.11	Univision	UVN		29.59	-0.27
Fisher	FSCI		42.59	-0.44	Viacom, Cl. A	VIA		32.55	-0.30
Gaylord	GET		43.50	+0.17	Viacom, Cl. B	VIAb		32.50	-0.31
Hearst-Argyle	HTV		23.95	+0.02	Westwood One	WON		16.27	+0.04
Interep	IREP		0.36	unch	XM Sat. Radio	XMSR		28.14	-0.85

Bounceback

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

Just a note to wish you all a very happy, healthy and prosperous New Year. Whatever the new year brings in the way of news, events and or people in the Television and Radio industries, we know you will report it vigorously and with an opinion. Always a source of good information and thought, it is great to read and be able to offer our own opinions.
Good luck and best wishes.

Stan Elgart
President
Felsgart Communications

Below the Fold

Ad Biz
Car dealer pays ad fine
75K settlement with Holmes Tuttle Ford of Tucson...

Washington Beat
"Don't fence me out"
Butterfield tried to get the fine reduced...

Media Markets & Money
EMF adds Austin
Struck a deal for a pair of Texas FM stations...

Arbitrends

Radio Media Moves

Higgins moves up at USRN
United Stations Radio Networks has upped Jim Higgins (top) to President and COO as founder and CEO Nick Verbitsky (bottom) takes the title of Chairman to make room for Higgins to become prez. Higgins had been Exec. VP/GM of USRN for the past four years. He was part of the original United Stations team when the company created by Verbitsky and Dick Clark became Unistar and is now part of Westwood One.

Stations for Sale

NEast CapCity FM
Suburban FM, strong revenue history-less than 8.5x BCF - 2M.
[email protected] or
781-848-4201

More News Headlines

Judge quashes Letterman restraining order
CBS "Late Show" host David Letterman is no longer under a restraining order which bars him from sending coded messages on his show to a New Mexico woman who claims he is out make her his wife and co-host (12/22/05 RBR #249). The local judge quashed his previous order after Letterman's lawyer argued that "Celebrities deserve protection of their reputation and legal rights when the occasional fan becomes dangerous or deluded." For her part, the woman told the judge "I will break their legs" if Letterman or anyone he sends shows up in New Mexico.

RBR Radar 2005

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

National red ink
flattens radio's November
local revenue registered a modest 1% gain over the same month in 2004, but the month came in flat when a 5% decrease in national revenue and a 1% decrease in non-spot revenue were factored in. Flat is the story for YTD. RBR observation: Up until recently, the two- and four-year political cycles were much more obvious in television than radio. It seems to us that the bigger problems were the overall weakness in advertising in general and the growing pains of Clear Channel's LIM initiative. Everyone is looking forward to the natural leveling effect of comparing LIM numbers with new LIM numbers in 2006. Plus political will be working in everyone's advantage. There should be no excuses for continued red ink in 2006, barring the usual forced considerations like someone just plain screwing up.
12/28/05 RBR #251

Back to the future for Clear Channel
It took most of '05 to complete the process, but the big restructuring that Clear Channel Communications (CCU) announced back in the spring has been completed. A few weeks after the IPO of Clear Channel Outdoor as a 90% owned subsidiary of CCU with its own stock (CCO), CCU divorced itself from Clear Channel Entertainment by passing out shares of a new company, Live Nation (LYV), to shareholders - one share of LYV for each eight shares of CCU owned. RBR observation: Don't look for any more spin-offs from Clear Channel. The TV group and Katz Media Group are too small to be viable as stand-alone public companies (as Katz already proved once). And it would make no sense to create a separate stock for Clear Channel Radio (although the ticker LIM, Less is More, comes to mind), since radio is CCU's main business. Rather, it's time to hunker down and improve operating performance. With the easy comps from 2005 resulting from LIM, there can be no excuses for not delivering growth in 2006.
12/27/05 RBR #250

Local Sales Manager
WB58-KQCA-TV seeks dynamic LSM to train and motivate talented group of AE's. Must have passion for helping people solve problems and pass on the knowledge and experience. California's most livable markets is Sacramento.
See TV Careers

TVBR Searching for 2 Pros
To join the best TV business publication in the media B2B today. Searching for one (1) Top flight Editor that does not need direction and one (1) Top Experienced Sales person that knows how to Sell/Market quality and wants to make money. Team work expected. Only the pros need apply as TVBR's expansion is now. Confidentiality honored by TVBR publisher Jim Carnegie (813 909 2986) Email qualifications to [email protected]

Other Links

State Associations

Contact Us

Publisher question:
Reading RBR from a friend?
Receive your own morning copy at www.rbr.com

Help Desk

Having problems with our epapers?
Please send Questions/Concerns to:
[email protected]

If you wish to remove your name completely from our database use this link __UNSUB__

RBR Epaper -- 108 annual
or just 9 a month