Welcome to RBR's Daily Epaper
Volume 22, Issue 31, Jim Carnegie, Editor & Publisher
Monday Morning February 14th, 2005

Radio News®

RBR Observation
RAB 2005 Atlanta presents must issues to tackle
Released its second Radio Perceptual Study Update, focusing on a lot of the accountability issues that have been dealt with repeatedly in RBR/TVBR for the past two years. We heard, as you might expect, that the view of radio's accountability is not good, particularly in such areas as running schedules as ordered and the quality and timeliness of ratings information. The study of advertisers, agencies and buyers were asked how they view accountability by the various media. In a nutshell it is a mixed bag of nuts. Some good some not so good but we will pick out the results over the next few days. RAB CEO Gary Fries - At his state of the Industry speech to open RAB2005, did discuss the Advertiser Perception Study, noting that radio is still not perceived as the most accountable medium by advertisers. "Radio people think we are," he said, but went on to clarify that in today's environment, advertisers are obligated to show their stockholders or owners that they are getting what they purchased. "But the needle is moving," according to Fries, "and radio is in front on many issues. But we haven't had the ratings systems to tell the advertiser what is going on." Indicating that a three-book average consisting of data that could be as much as a year old is no longer acceptable. "We have to become more relevant. We have to deliver more information, real-time information, and accurate information. We are moving in that direction, but we're not there yet. We need to be the most accountable medium out there."

Editor's Note: 2005 update: Radio Industry Perceptual Study - This session should have been the opening session. Unfortunately only a handful showed up to view these vital results. Guess awards are more important. RBR will have a complete detailed report and we will go slowly over the next few days so all can get the full depth of issues facing the radio business. TV pay close attention as it also applies to you.

No fireworks at Disney gathering
Friday's annual shareholders meeting for the Walt Disney Company was quite sedate - - nothing like the emotion-charged atmosphere last year when more than 47% of shareholders voted to oust CEO Michael Eisner. A preliminary count announced during the meeting showed a 92% vote in favor of re-electing Eisner and all other directors. Chairman George Mitchell repeated his promise that the board of directors will select a successor to Eisner by this June. Despite repeated questioning by one shareholder, Mitchell refused to discuss anything about potential candidates or the process of selecting a new CEO. He said the executive search firm which the board had hired made it clear that any public discussion of the search process could drive away prospective candidates. For his part, Eisner basked in the glory of the company's improving fortunes, noting improved financial performance and, in particular, the new hit shows on ABC Television. Eisner shared the state with Disney President and COO Bob Iger as the two read from a script detailing the company's various ventures. The board has stated that Iger is the only Disney insider being considered for the CEO job.

WTOP GM Oxley concerned about
HD Radio interference
A problem that could someday crop up in many markets across the country: RBR asked Bonneville DC VP/GM Joel Oxley if he was at all concerned about HD Radio interference for his top-rated WTOP-FM signal (107.7) in that market (licensed to Warrenton, VA). First adjacent is 50,000-watt WFSI-FM (107.9) Annapolis, MD. If it ever added HD Radio, the digital signals would be placed on 107.7 and 108.1, adding an interference zone to WTOP-FM's current reception-especially during morning drive tropospheric ducting in the summers. His response: "There could be some interference with us there, and us with them as well. One thing that's fortunate for us playing news with a mono signal is a little bit of interference isn't going to be as big a deal. But yes, I think that's going to be something that we might even have to take up with the FCC. We shouldn't get our signal degraded just because of that." He adds, "We've thought about it, and we're doing tests on HD/IBOC right now. We've just completed the install on WTOP-AM 1500. And by May, we hope to have 107.7, 104.1 (WWZZ) and 103.5 (WGMS) done. So, we'll know soon." You offer a 103.9 simulcast in Frederick, MD of WWZZ. Will that be affected by 104.1's HD signal and vice-versa? "At least for now, we don't plan on adding HD to 103.9, but we've thought about that, too. It's all theoretical now and our engineers are debating about all of this. Until we really get out there and test it, we really just don't know."

Single stream carriage: The constitutional argument
The FCC vote against imposing a multicast carriage requirement on cable operators was 4-1. However, a more accurate way to describe the vote would be 2-2-1, and if the timing were different, it could easily have gone 2-3 in favor of broadcasters. It is therefore instructive to take a closer look at the reasons behind the votes. Republicans Michael Powell and Kathleen Abernathy voted against the rule for what are basically technical reasons. They determined that a close reading of statutory documentation and prior court cases showed that there was not enough evidence in favor of broadcasters to sustain the imposition of further requirements on cable operators. Let Michael Powell explain (as excerpted from his written remarks): | More... |

Single stream carriage: The public interest argument
On the other hand, Democrats Michael Copps and Jonathan Adelstein made it abundantly clear that they would have happily imposed multicast must carry on cable operators if they has first gotten assurances from broadcasters, and preferable to that, statutory requirements for those same broadcasters to use the added programming capacity in the public interest. The issue is under consideration at the FCC, but both said that it should have been completed before advancing to the must carry issue. Copps described it as, "Ready, fire, aim." Adelstein in particular expressed frustration in his attempts to bring broadcasters to the table. That failure had consequences, he said, and the obvious big consequence was the loss of the Democrats' votes. Adelstein explains (as excerpted from his written remarks): | More... |

Publishers Perspective
The Long Thin Line between
Failure and Success
More relevant - More information - Real-time information - Accurate information - Where have I seen and heard this before? Answer - From a few of you at the RAB 2002. I took the advice and turned a 19 year old tabloid weekly magazine and the entire RBR company into what you see today. Why? Because I put my hurt ego aside and listened to what one of the people that said, "Jim, RBR observations are great but your news and information is not timely or relevant anymore by the time it gets to me." Hello that was three years ago people you are still stuck in the year of 2002. Fries is right because he was one of the few people that had the guts to tell Cathy Carnegie and myself the truth about RBR just and he is telling you the truth today and has been for three years about the fate of radio business. The RAB and RAEL's minds are in the right place, but actions are what the ad community is still waiting for. Diaries are not going to get new ad dollars; an antiquated spot transaction system will not; nor will EDI systems that aren't on the same page and can't deliver data such as "did my spot run first in pod?" But the industry is working on all of this and is getting there. Hopefully when all has been updated and changed for the better, the medium will still be in the hearts and minds of planners and buyers. People you have 2005 to get your act together or the business cycle will spin past you for the balance of this decade. If you have an RAB exhibit handbook from 2002 compare to the 2005 exhibitors. Who is here and who is not? Embrace and work with the technology because the line is very thin between failure and success.

Ps: TV you listening? - Because the RAB did your work for ya and Fries spoke the success words for ya. Their perception study findings apply to you since nobody in the TV business has stood up like Fries and said it so directly to your face. Get with the technology and make it a work in progress and positive business move.


Newsday latest to pull ads from Hot 97
Bowing to pressure from an Asian community group, Newsday says it is pulling its advertising from the controversial morning show on Emmis hip-hop Hot 97 (WQHT-FM) New York. The decision was announced late Thursday after Asian Media Watchdog threatened to protest outside the paper's Manhattan offices. Hot 97 have drawn intense criticism for airing a racially offensive song that mocked tsunami victims. "Newsday condemns the use of the song by Hot 97 that made light of the terrible tragedy in South Asia," the paper said in a statement, and added, "out of deep respect for everyone who was offended by this song we have decided not to air our commercials during Hot 97's morning show while station management works toward a satisfactory resolution." In the weeks since morning host Miss Jones and her team first aired the song; a coalition of Asian advocacy groups and leaders has put increasing pressure on Hot 97 and Emmis by going after advertisers. After Toyota, McDonald's and Sprint pulled their ads; two Hot 97 employees involved with the song were fired. Emmis said it would donate the pay of employees suspended for two weeks to tsunami relief efforts, and the company itself pledged an additional 1 million.

Fox names "American Idol" sponsors
Fox and FremantleMedia announced the sponsors for the fourth season of American Idol, which premiered 1/18 and 1/19--Ford Motor Company, Coca-Cola and Cingular Wireless are the official sponsors of this year's American Idol. Season four marks the return of the Ford Motor Company as a major sponsor. Ford has been a leading supporter since the show's debut in 2002, and will continue to have a strong presence again in the fourth season. Ford vehicles will again be featured during the "Idol" action, as contestants will be seen driving and riding in a variety of the automaker's cars, trucks and SUVs. | More... |

McDonald's tries new branded show with MTV
Financial Times of London reports McDonalds's formed a global music partnership with MTV Networks last week, starting with a 30-minute monthly program called MTV Advance Warning that will feature new musical talent combined with McDonald's ad imagery. The logo for the program will include the McDonald's name, its logo and the tag "I'm lovin' it." Larry Light, McDonald's global chief marketing officer, said the MTV partnership was part of a broader effort by his company to find new means and different media to promote its brand, in addition to traditional TV advertising. MTV Advance Warning has already aired in the US and Latin America. Local versions of the program will begin broadcasting on 2/19 in Europe and on 2/21 in Asia. Light said the partnership with MTV was the next step in McDonald's first global marketing campaign - "I'm lovin' it". The campaign was based on ad developed by Heye & Partner, of Unterhaching, Germany.

March Radio & Television Business Report

2005 Technology Odyssey...
The Changing Landscape
Ipods up to 4 million sold over Christmas and radio doesn't have a problem?

Perry Sook goes exclusive One-On-One and is very vocal on why he is standing alone and tall against the Cable MSO's.

Brace yourself as media top gun
Irwin Gotlieb tells all Radio & TV what he really thinks and if you don't like it - "Then change careers."

Ad / Marketing Space is still available reaching all key media decision makers in Ad Agencies, Radio, TV, and Wall Street. See www.rbr.com for circulation.

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

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

Media Markets & MoneyTM
McCombs about to cash out?
No, not out of Clear Channel Communications, the company he co-founded with Lowry Mays. But there are numerous news media reports in Minneapolis and St. Paul, MN that San Antonio, TX billionaire Red McCombs is about to sell the NFL Minnesota Vikings. KSTP-TV reported Friday that an investment group headed by Arizona businessman Reggie Fowler and Twin Cities auto dealership owner Denny Hecker have the inside track to buy the team for more than 600 million. Any sale would have to be approved by other NFL owners, but the potential buyers are seen as having an easy road to approval since Fowler, who is black, would be the first minority team owner in the NFL, and Hecker would bring local ownership to the equation. McCombs bought the NFL team for about 250 million in 1997.

Joyner mover to join Goodmon
Here's a cluster configuration you don't see too often. A two-FM, two-AM grouping has been common since late 1992, but your two-FM, two-TV cluster is a rarity. But that's what Jim Goodmon's Capitol Broadcasting Company will have when all the dust settles in his deal with Tom Joyner for WFZQ-FM. The station is moving from its digs in Chase City VA to Creedmoor NC, placing it within tuning distance of Raleigh. It'll beam in from the north, and for a duopoly with WRAL-FM. Capitol has another WRAL, that being WRAL-TV (Channel 5, CBS), and the cluster is filled out by WRAZ-TV (Channel 50, Fox). The total consideration for the deal is 8.25M dollars, 1M of which is in the form of a consulting agreement with Joyner. 250K of that will be due on closing, and the remaining 750K is due on the first business day in January of the calendar year following closing.

Close encounter in the Tidewater
The sale of WCMS-AM from Barnstable Broadcasting to Davidson Media Group has closed; according the brokers at Kalil & Co. Davidson will pay 975K for the 1050 kHz facility. Norfolk-Virginia Beach-Newport News has been home to a six-station Barnstable cluster, but not for long. This is part one of the group's exit from the market. The other four stations, WGH-AM, WGH-FM, WXMM-FM, WFOG-FM and WXEZ-FM are going to Max Media for 80M.

NY Times to redeem bonds
New York Times Company announced plans to redeem all of its 71.9 million outstanding in 8.25% debentures due in 2025. In calling the bonds early, NY Times Co. will pay holders 103.76% of the face amount of the issue. "While we anticipate the redemption will increase interest expense in the first quarter by approximately 4.7 million, due to the redemption premium and unamortized issuance costs, we expect to benefit from lower interest expense going forward," said CEO Leonard Forman.

Washington Beat
Democrats using Gannon
to keep Williams in limelight
Coming as it is fresh on the heels of the pay-for-say controversy linked to Armstrong William, Maggie Gallagher and Michael J. McManus, the controversy surrounding former Talon News White House correspondent Jeff Gannon aka James D. Guckert has fueled attacks by Capitol Hill Democrats concerning the Bush administration's relationship with the press.

RBR observation: Two of your humble servants at RBR are bona fide, active members in good standing of the Congressional Periodical Press Gallery, and while they certainly made us jump through a few hoops, we cannot say that it was all that difficult to gain acceptance. We actually dig up and report news, and we can prove it. Most of our readers who are associated with bona fide news operations probably would have little trouble getting into the Congressional Radio/Television Press Gallery. The fact that Gannon/Guckert/Talon could not tells you something. | More... |

FCC clears 15 more for takeoff
The final results of Auction No. 37 went in the books 11/23/04, and now the second wave of FCC approvals has been released, giving the go-ahead to 12 different successful bidders, to build 15 new FM stations. The latest crop of awardees, which have until the end of the month (2/28/05) to get their final payment in, has a western flavor - - the easternmost CP is for Talulah LA. The biggest name among this crop of winners is Cumulus. Here are the proud parents and their venues: Altus FM at Hollis OK; Bicoastal Holdings at Rainier OR; Chaparral Broadcasting at Honokaa HI; Cumulus Licensing at Lima MO; E-String Wireless at Lufkin TX; Eagle Communications at Chardon NE and Hershey NE; Mid South Communications Company at the aforementioned Tallulah LA; Pilot Communications at Belfield ND and Richardton ND; Todd Deneui at Guymon OK; Wagonwheel Communications at Green River WY; William C. Doleman at Poncha Springs CO; and World Radio Link at Idalia CO and New England ND.

Monday Morning Makers & Shakers

Transactions: 1/3/05-1/7/05
After basically taking off the month of December, traders snapped back into action during the first week of 2005. In fact, FCC filings came within about 5.4M of matching the entire previous month. Still no TV deals, but that'll come in spades next week.



Total Deals







| Complete Charts |
Radio Transactions of the Week
Castro lights up Austin
| More...
TV Transactions of the Week
Coming soon to a Makers and Shakers
near you...

KVIQ-TV Eureka CA from Ackerley Media Group Inc. to Raul Broadcasting Company of Eureka Inc.

WFQV-FM Mackinaw City MI from Broadcast Music Ministries Inc. to Interlochen Center for the Arts.

KSIW-AM Woodward OK from Fuchs Communications Inc. to Classic Communications Inc.

| More... |

Stock Talk
Gaining ground...and holding it
Don't look now, but investors are finally showing some confidence in this market. As of Friday, the Dow Industrials were back into positive territory for the year to date, powered by a flood of late buying by big institutional investors. For the day, the Dow was up 46 points, or 0.4%, to 10,796.

The Radio Index isn't yet back above its year-end 2004 mark, but it is close. Our index rose 2.342, or 1.1% on Friday, to 221.200 - - territory it hasn't seen since January 6th. Cox Radio and Westwood One were the big gainers, with each up 3.4%.

Radio Stocks

Here's how stocks fared on Friday

Company Symbol Close Change Company Symbol Close Change













Journal Comm.




Citadel CDL
14.36 -0.13

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




International Bcg.









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Upped & Tapped

Carat's Charlie Rutman moves to MPG
MPG, the buying and planning unit of Havas, announced last week that Carat NA President Charlie Rutman is its new CEO for North America. He fills the post vacated by Jim Rose, who left MPG in November.

Stations For Sale

Saginaw/Bay City/Midland FM
WSAG-FM 104.1 Mhz Class A, Pinconning, Michigan. ARB ranked #130, revenue ranked #97, 23M. Newly on the air. New owned 350' tower. 4,600 watts ERP, new 5KW solid state transmitter, ERI 3 bay antenna. No revenue yet, no sales staff, only minimal personnel. Running oldies format with BSI computer system. New studio facility will be needed for new owner. Minimal studio equipment, with EAS equipment, STL, etc. New construction project, currently
owned by an engineering company. Operating company needed to be brought in to finish project. Priced as "stick" value. Asking $950,000.00.
[email protected]

Phoenix AM Bankruptcy Sale
KFNX 1100, 50,000 Watt AM radio station in Phoenix, AZ, will be sold for the highest and best offer on March 31, 2005 at 10:00 a.m. MST
at the US Bankruptcy Court in Phoenix, AZ. An initial bid of $3.6 million has been received. The sale of the business is "as is/where is". Please go to www.1100kfnx.com for station information, and
call 602-277-1100 x.499 for details.

Competing Media

CNN exec exits
amid controversy
CNN chief news executive Eason Jordan has resigned to spare his network any further embarrassment caused by his recent remarks. He wanted to talk about the alarming number of journalists who have been killed or wounded in Iraq when addressing the World Economic Forum 1/27/05. What came out was significantly different, however. Jordan seemed to charge that members of the American military were deliberately targeting journalists. Jordan immediately tried to explain his remarks as misspeaking, but no amount of apologizing has been able to effectively bring an end to the situation. I didn't help that Rep. Barney Frank (D-MA) was in the audience when Jordan's remarks were uttered, which Frank immediately challenged.

RBR observation: The days when a slip of the lip could be handled with an apology and the cleansing sands of time are slipping away. Any attempts by Jordan to douse the flames were counteracted by members of the blogosphere working just as hard to pour gasoline onto the conflagration. It is more important than ever to take care with your public utterances, especially when you're navigating in controversial waters. Ps: Sorry nobody can fire CNN founder Ted Turner after his remarks last month at the NATPE conference when he called the Fox television network a "propaganda voice" of the Bush administration and compared Fox News Channel's popularity to Adolf Hitler's rise in Germany before World War II. You fill the rest in or drop us a note at [email protected]

32M satellite radios by the end of this decade
Despite concerns that consumer demand appears to have softened in the past year (2/9/05 RBR #28), JP Morgan analyst Barton Crockett is still projecting strong subscriber growth for both XM and Sirius, with Sirius gradually improving its market share after launching second in the two-company race. The analyst is projecting that the two satcasters combined will have 8.5 million subscribers by the end of this year, 32.4 million by 2010 and 56 million by 2020.

RBR Poll Results

Universal McCann's Bob Coen may think that radio is going to grow revenues 5% this year, but he overshot the mark with his forecast in 2004 and our readers think he's overly optimistic again this year. Our gurus in the trenches say revenue gains will be more modest. More than a third say they'll be up 1-2% and nearly a quarter say 3-4%. Only 17% agree with Coen.

How will radio
revenues finish 2005?

1 - Flat or down
- 20.00%
2 - Up 1-2%
- 38.18%
3 - Up 3-4%
- 24.55%
4 - Up 5% or more
- 17.27%

RBR Radar 2005
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

FCC nixes multicast must carry
The FCC took a big stand with the cable industry over broadcasters, reaffirming an earlier finding that CATV operators do not have to provide dual analog/digital carriage during the remainder of the DTV transition phase by a 5-0 vote, and reaffirming cable's responsibility to carry only one and only one broadcast programming stream, regardless of whether or not the broadcaster is multicasting.
02/11/05 RBR #30

NAB responds
NAB President/CEO Eddie Fritts wasted no time reacting to the FCC's decision on multicast must carry. "In Washington, there are no final victories and no final defeats,"
RBR observation: There is no way on this earth to call this a victory for broadcasters. However, Fritts does have a valid point. Members of both parties on Capitol Hill asked the FCC to support multicast must carry, or at a minimum, delay a vote on it. In their remarks, several of the Commissioners noted that ultimately, the FCC's job is to interpret and carry out the mandates of Congress. If the NAB can get legislators to put something in writing and vote affirmatively on it, broadcasters might yet get their way. 02/11/05 RBR #30

Another broadcaster claims it was fouled by Citadel
Ed Levine's Galaxy Communications says Citadel Broadcasting Company went out of bounds in its effort to stop Galaxy from building an FM translator in Fulton NY, which Galaxy was seeking to bolster its coverage of the Syracuse market. Similar charges have come from Red Wolf Broadcasting in the New London CT market. 02/11/05 RBR #30

Congressional indecency
effort clears first hurdle
There was twice as much opposition to the Broadcast Decency Enforcement Act in 2005 as there was in 2004. That brought the opposition all the way to two votes, as an essentially clean bill sailed through the House Energy and Commerce Committee as predicted. The vote was 46-2, compared to last year's 49-1 tally. The bill, if enacted into law, will raise the FCC's maximum indecency fine from 32.5K to 500K and put in a 3rd strike rule ordering the FCC to consider license revocations for thrice-cited owners.
RBR observation: The bill sailed through the full House last year with only token opposition, but was done in by the Senate, which included amendments dealing with broadcast ownership consolidation and violent content, among other things. That will no doubt happen again, putting the ball squarely in Sen. Ted Steven's (R-AK) court. Will he be able to get an equally clean bill through his Senate Committee on Commerce, Science and Transportation? Stay tuned. 02/10/05 RBR #29

Revise and shine?
The goal of keeping government activities transparent requires that when ever more than two commissioners meet, it must be in an open forum observable by the public, a provision of the Sunshine Act. Commissioners from both parties serving at the FCC want the rules revised, saying it hampers their ability to deal with the complex issues which are regularly brought before them. The Commissioners say they still communicate, via memos, staff members, round-robin one-on-one meetings etcetera.
RBR observation: Neither Powell nor Copps has been at all shy about explaining themselves to the public. Where Powell has run into icebergs is his distaste for letting the public tell him what they think.
02/10/05 RBR #29

Spectrum tax proposal back again
In what is becoming an annual event and traces back to the Clinton White House, the administration is attempting to slip a spectrum tax on broadcasters who are running parallel stations in the pending phase of the DTV transition. The tax would apply to unreturned analog spectrum beginning in 2006, and would shoot for a government payday of a half billion dollars. The congruent annual event is the successful effort by the National Association of Broadcasters to blow the spectrum tax out of the water. RBR observation: NAB is alive and doing its job but the industry knows the leader is leaving. When can the radio and television business expect to see 'white smoke?' There are issues that need addressed and nobody in our business wants to get blind sided. NAB needs a leader that has knowledge but also has the youth to lead for the next ten years. 02/09/05 RBR #28

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