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Volume 23, Issue 36, Jim Carnegie, Editor & Publisher

Tuesday Morning February 21st, 2006

Radio News ®

2005 fundraising: Elephants ahead, Donkeys gaining
Republican fundraisers outdid their Democratic counterparts during 2005, according to the Federal Election Commission (FEC), pulling in 248.6M in hard money donations. However that was down from the prior off-year of 2003. Meanwhile, the Democratic 2005 total of 172.4M represented a significant increase over 2003. The Dems bested a 2003 total of 122.4M. All three national fundraising organizations, the Democratic National Committee (DNC), Democratic Senatorial Campaign Committee (DSCC), and Democratic Congressional Campaign Committee (DCCC), enjoyed significant gains, led by DSCC, which grew 91% to 43.6M. The Republican total represented a slump from the 248.6M total reported in 2003, and its two of its three national groups, the Republican National Committee (RNC) and National Republican Congressional Committee (NRCC) experience slumps. The National Republican Senatorial Committee gained 34% to 35.5M. According to the FCC, the results on the senate side represent, "...the first time any Democratic national committee has exceeded the fundraising of its Republican counterpart in a non-election year since the FEC began providing summaries in 1985."

RBR observation: Get your green visors ready. A substantial percentage of the green being reported by the FEC is likely to wind in your very own cash register. And remember, this is hard money, which can be used any way the parties like without fear of recrimination - - so it'll no doubt be spent just about to the last penny.

Gentlemen, start your shoehorns
Senators from both sides of the aisle appear to be tripping over one another to get a bill on wireless broadband on its way into the law books. Although there are two bills up for consideration, they appear to share a common approach - - use of "white space" in the broadcast spectrum. On the one hand there's a bill coming from George Allen (R-VA) and John Kerry (D-MA), with co-sponsor assistance from John Sununu (R-NH) and Barbara Boxer (D-CA), called the Wireless Innovation Act of 2006 (WINN Act). The entire WINN roster belongs to the key Senate Commerce Committee which would serve as the bills conduit to the Senate floor. In a release, the group explained, "The legislation aims to facilitate the development of wireless broadband Internet access by allocating certain areas within the broadcast spectrum known as white spaces that are otherwise unassigned or unused." Sununu explained that their hopes went beyond that, however, saying, "While we may be able to guess at some of the products that might develop because of this bill, the real benefits will probably derive from those that we can't imagine today." The bill targets the wide swath of spectrum between 54 mHz and 698 mHz, making it available via the FCC within 180 days of enactment. WINN will go up against the American Broadband Communities Act of 2006, coming from none other than committee chair Ted Stevens (R-AK), which has essentially the same goal. "Allowing unlicensed operations in the broadcast band could play a significant role in bringing wireless broadband and home networking to more of our citizens by lowering costs, particularly in my home state of Alaska where connectivity is so important due to the state's remote location," said Stevens.

RBR observation: Stevens goes to pains in his version to make sure that broadcasters already resident in this spectrum are protected and "...urges the FCC to further establish an interference complaint resolution process..." There's more than one key spectrum involved in this story, and that is the political spectrum. Support for this measure is far and wide, leaving no reliable port for opponents. It will be key for broadcasters to make sure safeguards are part of any final language should either of these measures proceed.

Watchdog cites old ruling to squash violence
Morality in Media (MIM) has unearthed an 85-year-old Supreme Court ruling, presenting "...a more true-to-the-purpose of the First Amendment and a much more socially responsible Supreme Court," inspired by recent coverage of the Cheney-Whittington hunting accident. It notes that if the VP is getting so much ink for mishandling a dangerous weapon, why isn't the media getting the same scrutiny? Said MIM President Robert Peters, "But shouldn't similar principles apply when the media not only relentlessly glamorize and graphically depict deadly gun violence but recklessly and even purposefully exhibit it to children, despite evidence that children are adversely affected by media violence and do commit copycat crimes? To my knowledge, no one is demanding that the media never depict deadly violence or that the media be held strictly liable for copycat crimes. Clearly, there are legitimate First Amendment concerns at stake, in addition to concerns about public safety." The cited ruling, in 1931 case Near v. Minnesota, holds that the First Amendment addressed abuses prevalent in governments prior to the founding of the United States, but which nevertheless "...recognized that punishment for the abuse of the liberty accorded to the press is essential to the protection of the public."

RBR observation: As an indication of just how slippery the free speech slope is, note how MIM's original argument seems to be about entertainment programming but ends up citing a ruling specifically aimed at the press. So often speech boils down to a matter of opinion, and what to one person is outrageous and should go unspoken is to another a matter of legitimate concern which must be aired. Who draws the line? At any rate, we should all thank MIM for exercising its own free speech to air its opinion on this important matter. Our opinion? As both parents of small children and strong proponents of free speech, we exercise another of our possessions: the dial. If a program is borderline, the kids can watch only if we're there to explain. If it's beyond borderline, it goes away. Teaching the difference between the good and the bad is a 24/7 exercise. Unfortunately, no law can require or replace that duty, not even a new constitutional amendment or a restriction on an old one.

NAA investing 50M
to push newspaper advertising
Not surprisingly, newspaper publishers think that newspapers are the most effective vehicle for advertisers to gain some ROI. The Newspaper Association of America is spending 50M to get that message out. NAA cites independent research saying that " * 52% of consumers say newspapers are where they go to check out the ads, five times more than any other medium. * 46% say newspapers are their preferred medium to receive ad information. TV comes in second at 10%. * 51% of consumers say newspapers are the most valuable in planning shopping, with the Internet coming in at 11%. * Newspapers lead all media in heavy usage among 'influential' and opinion leading consumers at 41% (helping advertisers harness the power of these word-of-mouth advocates.)"

RBR observation: Too bad the ads are only going into newspapers and online. Maybe they'd be more effective if they used broadcast to get the word out. We personally read the newspaper yesterday, part of it anyway (some minor travel prevented as thorough a reading as usual). Hmmmmm...(chinstroke chinstroke)... we can't remember a single ad, though. What was that on the sports page, tires? Yeah, probably - - there are usually some tires there. But we're not sure. Certainly no clue which tires, if any... Don't get us wrong - - we love the newspaper. It just doesn't often get us into a particular store to buy a particular item. How about you?

Wall Street Media Business Report TM

Time to rethink stock strategy?
Bear Stearns analyst Victor Miller is thinking that radio companies need to find a new path to financial victory. The time for buybacks is over, he says. For a clue to which fork in the road to take, look at the real estate business. Miller says that two years of the buyback strategy have returned "...nearly 13% of the equity market cap of the industry." He says this has been expensive, since the repos have cost more than current valuation. He says companies should try the REIT stuff, as in Real Estate Investment Trusts. Radio should, Miller argues, imitate REITs in pursing "...aggressive dividend-return policies..." He explained, "We believe that average radio company can pay dividend yields averaging 4% to 7%. These levels of yield should help stabilize radio stocks, bring radio a new shareholder base (income funds) and make future repurchases look more prudent."

Ad Business Report TM

Home Depot asks for votes
via online campaign
The Home Depot announced it is giving consumers an exercise in choice when it comes to what they watch on TV. The Home Depot is asking consumers to vote online to decide which one of three new commercials will promote its new tractor offerings. Consumers can view the three 30-second commercials and vote for their favorite by logging onto http://www.homedepot.com/tractorvote beginning Feb. 18 at 12:01 a.m. ET and ending Feb. 19 at 11:59 p.m. ET. The winning commercial will debut on Feb. 27 and continue to air nationwide through March. The three commercials, created by The Richards Group, are part of The Home Depot's promotion of its 2006 outdoor power equipment lineup, highlighted by the introduction of Cub Cadet and Toro lawn tractors, in addition to John Deere lawn tractors, which the retailer has carried since 2003. The Home Depot will be the only home improvement retailer to offer all three brands nationwide beginning mid-February.

Wendy's eyes 60 new products, boosts ad spend
Following its first yearly same-store sales loss in 18 years, Wendy's International is developing up to 60 new products -- including a test of breakfast items -- for its menu. It will also pump up advertising by some 25 million in hopes of improving sales and margins, reports The RAB and AdAge.
| Read More... |

Media Markets & Money TM

Far from busted, Bustos primed to bust out
In his second go-around as a radio group owner, Amador Bustos already has 25 stations in his portfolio. A local paper reports that he is primed and ready to expand in one of his more remote outposts far from his HQ in Sacramento CA. The acquisition is WDDW-FM, coming from Nextmedia for 10.2M, and the market is Milwaukee. Nextmedia had actually torpedoed a Country format to take the station into the Hispanic universe shortly before selling it to Bustos Media. According to The Business Journal of Milwaukee, Bustos is in the real estate market at the moment, and is looking for something big enough to accommodate at least two additional stations. BJM says Bustos has 100M to spend, so look for more acquisitions, and look for them in markets not unlike Milwaukee. The company's strategy is to get in ahead of the curve - - that is, ahead of the Hispanic population growth curve. It's seeking places where the Spanish-speaking demo growing but as yet has not attracted bigger Hispanic companies like Univision, SBS or Entravision, nor has it compelled companies like Clear Channel to dabble in Hispanic programming.

RBR observation: Nothing like the ground floor from which to build a local business. And pursuing this strategy in the Hispanic realm seems fairly safe - - it appears to be a growth demo everywhere there is a demo.

Washington Media Business Report TM

Rep works with CATV to educate parents
Comcast has gotten an assist from US Representative Albert Wynn (D-MD) in an effort to show parents that parental tool to control the programming that enters their homes are already at their fingertips. Called the "Take Control of your Television Media Smart Families Workshop," it is going into the community, specifically to the Rosa Parks Middle School PTA in Olney MD, to teach parents how to understand ratings, how to use the V-Chip and how to use additional controls provided by the cable system. Comcast is running the program on a national basis.

RBR observation: Olney MD is not far from Washington, so getting a star witness like a congressional representative to appear at a function like this is a matter of a car ride. It's not as easy most other reps to take this message to their constituents. However, based on congressional testimony we've seen, this is one area where broadcast and cable companies agree - - promoting existing but seldom-used parental controls is far preferable to mandating brand new regulatory regimens. A few well-chosen PTAs per district, with enough name recognition on the podium to attract some local media coverage, could help make the case at the local level and keep it out of Washington.

Ratings & Research

New year predictions for radio research:
challenges and opportunities
By Dr. Tom Evans, SVP/Research, ABC Radio Networks
(from RBR/TVBR's Solutions Magazine, 12/05 issue)
The year 2006 will be a very important and pivotal year for media research in general and for radio research in particular. In 2006, the radio industry will be given the opportunity to make some important decisions regarding research. The choices will not always be easy and some will have significant financial implications.
| Read More... |

BIGresearch's February Economic and
Consumer Insights Executive Briefing
This week, we'll be taking a look at BIGresearch's monthly Economic and Consumer Insights Executive Briefing. From February, today we look at Economic insights:
| Read More... |

Engineering Business Report TM

Tom Ray on the WOR's revitalization
(from RBR/TVBR's Solutions Magazine, 12/05 issue)
The year 2005 has been very busy for me, having first moved the WOR general offices to our new location of 111 Broadway from 1440 Broadway in New York City while maintaining programming offices and studios at the old location; moving the tech facility and ironing out the bugs; building our new transmitter facility in the Jersey Meadowlands; starting the implementation of HD Radio at all of our Buckley Broadcasting stations, and being named a Corporate VP.
| Read More... |

2006 summit on EAS set
The National Alliance of State Broadcasters Associations will host the second annual National Summit on EAS and Emergency Communications on Saturday, Feb. 25, in Arlington, Virginia. The 2006 Summit is made possible by underwriting assistance from the NAB. The Summit will bring local, state and federal government officials and presidents of state broadcasters associations together to develop plans to utilize broadcasters' unique mass audience capabilities to communicate with the public in a crisis. The Summit will focus on broadcasters as the lifeline of information to the American public in times of crisis; to ensure that every state in the U.S. has a robust, operable Emergency Alert System; to expand the discussion beyond initial EAS alerts to encompass follow-on emergency communications and information dissemination; and to begin an examination of the security and reliability of the American broadcasting infrastructure.

RBR Stats

CRB and Edison Media Research unveil Country P1 study
This year's Country Radio Seminar Research Study featured the largest sample of Country P1's ever surveyed with over 30,000 country fans across the U.S.--nearly three times the number of respondents as last year's study. The study looked at attitudes of country radio partisans on everything from the state of current country product and radio's spot loads to the impact of American Idol and the sales prospects of the upcoming Dixie Chicks album. Edison Media Research found that Country listeners, who have historically been less digitally-minded than their counterparts in other formats, have shown a lot more interest in new technology over the last year, according to America¹s largest-ever study of country P1 listeners. Among the most significant findings was the dramatically increased usage of iPods and the Internet to sample and discover Country music. 28% of the sample reported iPod usage, a significant increase from last year's figure of just 15%. Among those who indicated they were listening less to Country radio, the number one reason was time spent with iPods or Internet music sources. Additionally, the percentage of respondents who turn to the Internet to hear music unavailable on the radio rose from 28% to 33%, and the percentage turning to iPods or downloadable music doubled from 8% to 16%.

Other findings include the following:
... Over 5% of the sample indicated that they were brand new to country
... Listeners are equally as passionate about today's artists as they are the stars of the past 15 years
... 58% of listeners are aware of radio's effort to reduce spot loads
... 76% of all respondents watched last November's CMA Awards on TV
... Fewer listeners are "on the fence" about satellite radio as awareness climbs to 88%
... 49% often watch cable TV channels CMT or GAC
... 57% think country music makes a positive contribution to American life

The study was conducted over the Internet in January and February of 2006 and surveyed Adults ages 12-64. Respondents were drawn from listener databases of 18 Country stations across the US, and was geographically balanced and demographically weighted to reflect the national country audience.

Sales

All Urban stations are not the same
By Edward C. Evans
(from RBR/TVBR's Solutions Magazine, 12/05 issue)

When I first began a career in radio sales some 20 years ago, it was at a declining AM R&B station, which changed its format when I was there to Classic Soul. Excited about the change, I went out to pitch the station to the agencies. As I went to a well-known downtown ad agency and met with the media buyer, I told her our story. I showed her the adult audience we hoped to reach and I went on to say that we strive to achieve similar aspects as other oldies formatted stations. At that point she said, "How can you say that...you're Black." There it was, plain and clear. Regardless of your format, if you have a majority black audience, it's a black radio station period.
| Read More... |

Transactions

185K KNAK-AM Delta UT from Sam Bushman to Accent Radio Inc. (Jedidiah Harrison). 100K escrow released to seller at closing, 85K note. [File date 2/2/06.]

50K WXOL-AM Delaware GA. 100% of The Fifteen Fifty Corp. from Patricia Casagrande to Robert G. Casagrande. Debt assumption. [File date 2/2/06.]

Stock Talk

US Stock Markets were closed Monday in observance of Presidents Day.
Below are Friday's closing numbers.

Radio Stocks

**Here's how stocks fared on Friday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		38.62	-0.13	Hearst-Argyle	HTV		24.16	+0.39
Beasley	BBGI		13.99	+0.26	Interep	IREP		0.24	+0.09
CBS CI. B	CBS		25.83	+0.68	Jeff-Pilot	JP		59.37	-0.18
CBS CI. A	CBSa		25.78	+0.64	Journal Comm.	JRN		12.77	+0.32
Citadel	CDL		11.67	-0.13	Radio One, Cl. A	ROIA		9.95	-0.25
Clear Channel	CCU		28.10	-0.09	Radio One, Cl. D	ROIAK		10.05	-0.14
Cox Radio	CXR		13.73	-0.01	Regent	RGCI		4.60	-0.05
Cumulus	CMLS		11.81	+0.09	Saga Commun.	SGA		9.98	-0.02
Disney	DIS		26.89	-0.16	Salem Comm.	SALM		14.20	-0.02
Emmis	EMMS		17.01	+0.05	Sirius Sat. Radio	SIRI		5.26	-0.39
Entercom	ETM		28.28	-0.22	Spanish Bcg.	SBSA		5.88	-0.03
Entravision	EVC		7.22	-0.03	Univision	UVN		33.66	-0.19
Fisher	FSCI		42.99	-0.26	Westwood One	WON		14.32	+0.01
Gaylord	GET		43.95	-0.09	XM Sat. Radio	XMSR		21.57	-2.41

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]

Below the Fold

Ad Business Report
Home Depot asks for votes
But via online campaign...

Wendy's eyes 60 new eats
New products, boosts ad spending...

Media Markets & Money
Far from busted
Bustos primed to bust out...

Washington Media Business Report
Rep works with CATV
Effort to show parents that parental tool to control the programming...

More News Headlines

Sportscaster
Curt Gowdy Dies
One of the legendary voices of sports for a generation died Monday at 86 after a long battle with leukemia. Gowdy was known for many broadcast accomplishments working with all three major television networks, but he was best known as the voice of the Boston Red Sox. Our condolences to the Gowdy family and friends.

If Ya Need One,
Just For Laughs

Sent to the editors of RBR/TVBR a song all about the FCC. So we share, if you need a laugh this morning, FCC Family Guy
| Watch It Here |

RBR Radar 2005

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

Hedge funds are changing the broadcasting lending landscape
They're the new kids in town - - and these are big kids with lots of money. Over the past year or two, hedge funds have discovered the radio and television station business. They've become aggressive players in the lending market and have made other lenders become more competitive as well. All in all, it's been good news if you've needed to borrow money for a broadcast acquisition or refinancing.

RBR note: If you did not see this special report read issue
02/20/06 RBR #35

RBR Close-Up
Upton wants to loosen radio caps
Believes its time to loosen the local caps on radio station ownership, he's written a letter the FCC Chairman Kevin Martin to make his point. He also delivered substantially the same message in an address before the Media Institute. Where is the logic? But wait, there's more so read back to see the details.

RBR overview: It is no wonder that analyst after analyst forecasts anemic growth for broadcast radio for the foreseeable future.
02/20/06 RBR #35

XM director quits,
warns of "crisis" looming
Saw its stock take a hit yesterday on Wall Street. It wasn't because of any surprise in the company's Q4 numbers, which were pretty much what analysts had expected, but because the company announced the resignation of a member of its board of directors who disagrees with how the company is being run. In his letter of resignation, Pierce J. "Jack" Roberts Jr., a former Bear Stearns official, said he did not believe XM was being run in the best interests of the company's shareholders and that he had decided to resign rather than "just go along" with the current course.

RBR observation: RBR has forecasted consistently that word 'Churn' and seems 'Jack' Roberts agrees. Churn has to get under control as being a public company has responsibilities to the public not just a free ticket to do as they please. RBR means all public media companies - Period.
02/17/06 RBR #34

Howard Stern tipped
XM's hand on spending
XM CEO Hugh Panero says the company spent more on promotion than it had planned in Q4 to counter the media blitz surrounding Howard Stern as he prepared to launch in early January on rival Sirius. But that wasn't a negative.

RBR observation: The number we're most focused on is EBITDA. If XM is really going to achieve cash flow break even sometime in 2006, you'd think that its EBITDA loss would be decreasing. But, just as in the previous quarter, the EBITDA loss increased in Q4 - - from 139.7 million a year ago to 199.4 million in Q4 of 2005. We wait to see whether XM can actually achieve cash flow break-even this year.
02/170/6 RBR #34

K Street runs two ways
Lobbyists have found themselves in an unwelcome spotlight lately, joining the ranks of professions often held in disdain by the general public. But a recent article in (BWO) points out that oftentimes it is not a case of lobbyists tossing cash at politicians in return for some favor; rather it is politicians passing the hat amongst the lobbyists...
02/15/6 RBR #33

Shareholders said to favor
bust-up of VNU
As VNU management continues to evaluate a buyout bid from a consortium of private equity firms, the Wall Street Journal reports that several of the company's biggest institutional shareholders aren't satisfied with the 8.8 billion bucks offer. Instead, they're said to favor breaking VNU up into three companies and then selling the pieces.

RBR observation: Having already derailed VNU's proposed seven billion bucks acquisition of IMS Health, causing VNU CEO Rob van den Bergh to announce his resignation, VNU's big shareholders obviously have a lot of clout. The company's directors aren't likely to cross them again and approve a buyout bid that they won't like. After all, they might well have the votes to reject it anyway. Selling three companies will be more difficult than selling one, but then that's essentially what the equity consortium plans to do - - selling off unwanted pieces and then building up the remainder of VNU for a sale or IPO. The big shareholders apparently think they might as well do that themselves and eventually pocket the profits.
02/15/06 RBR #32

HDRadio.com launches
Complementing the new HD2 multicast formats launching in 28 markets, the HD Digital Radio Alliance announced the launch of HDRadio.com (www.hdradio.com) the new consumer info site for HD Radio. The site helps consumers. - But, this reader has been checking out the new website to promote HD Radio, I just listened to the demo on hdradio.com. I wonder who the genius was who decided to promote current AM and FM analog as mediums that sound terrible.

RBR note: For first reaction and comment read....
02/14/06 RBR #31

Feingold seeks
Senate hearing on payola
Has asked both Chairman Stevens (R-AK) Dan Inouye (D-HI) to put one of his pet issues on the committee's agenda. He cited his bill, the Radio and Concert Disclosure Act of 2005 (S.2058) as a starting point.

RBR observation: They say that the most common flaw of military leaders throughout the centuries is the use of tactics appropriate for the last war in the books, rather than new tactics appropriate for the war in front of them. Feingold seems guilty of fighting the last war. It is the observation of RBR to raise a flag of victory over the carcass of the old pay-for-play system and start looking ahead to the newer concerns - - pay-for-say, un-attributed fake news releases, undisclosed product placements, and false product endorsements from allegedly independent expert reviewers.
02/13/06 RBR #30

RBR First
GM share deals to be cancelled
Stations to monitor pod violations as GM Planworks SVP/Local Investment Director Kevin Gallagher made the announcement to all in the Television Business. Reps were called to a meeting and told that GM share deals would all be cancelled from Q2 on and that stations, not buyers, would then monitor pod violations. Said one industry source: "These moves lose GM multiple millions of ad time at a time when they need every dime they can get. In the local community the reps are out celebrating as are the stations."

RBR observation: This is good for radio so read the details
02/10/06 RBR #29

Companies Looking
1. Clear Channel RSM in Twin Cities
2. Arbitron Account Manager
3. Sales Rep in Washington, DC
4. Sales Manager for Reno Reps

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