Volume 21, Issue 4, Jim Carnegie, Publisher
Thursday Morning January 8th, 2004

Radio News ®

Fratrik's forecast: Radio to grow 6% in 2004
2003 was another tough year for radio, as November figures reported this week by RAB reminded us, but forecasters are predicting better days for the new year that's just underway. At BIA Financial Network, Vice President and Chief Economist Mark Fratrik tells RBR he expects radio ad revenues to grow 6% in 2004. That upbeat outlook is in line with the views of other gurus, including Universal McCann's Bob Coen, who analysis has been featured all this week in RBR. | Full Story Click Here |

Why Bob Coen expects growth
in 2004 - Part 4 of 5
National advertising is poised for strong gains in 2004, according to the dean of forecasters. Having reviewed why Universal McCann's Bob Coen is

National forecast

Four TV Networks

+12.0%

Spot TV

+9.0%
Radio +7.0%
Newspapers +7.5%

upbeat about prospects for 2004 ad spending in the first three installments of this series, today we look at his actual forecast for spending by national advertisers.
| Full Story Click Here
| Part 1 | Part 2 | Part 3 |

Worst fears realized: XM announces local services
XM Satellite Radio announced that starting in March, via its earlier deal with TrafficPulse and The Weather Channel, "XM Instant Traffic & Weather" will launch with up-to-date road and weather conditions for 15 major metro areas. Six more cities will be added later in 2004. | Full Story Click Here |



Emmis to report this morning
Emmis Communications kicks off the next round of broadcasters' quarterly reports this morning with the numbers for its fiscal Q3, which ended 11/30/03. At SG Cowen, analyst James Marsh is expecting above average radio growth, but weak TV. He's looking for pro forma revenues to be down 1.6% to $158.5M. Goldman Sachs analyst Richard Rosenstein has a similar view. He expects revenues to be down around 2% to $158.4M.

Cumulus out to cut ratings costs
Beginning today (1/8), Eastlan is conducting audience ratings surveys in two top 100 markets for a head-to-head comparison with Arbitron by Cumulus Media. But Cumulus CEO Lew Dickey tells RBR that using Eastlan is not the only option the company is exploring to cut the bill it pays Arbitron.
RBR observation: The proof is in the ratings pudding.
| Full Story Click Here
| RBR Observation |

Circuit City sales pinpoint hot media
If the hot December items at Circuit City are any indication, American consumers seem ready to do their part in ushering in the digital revolution. As a general rule, sales of digital equipment are showing the strongest comparable growth among the electronic retailer's categories. RBR observation: The revolution is almost upon us.
| Full Story Click Here
| RBR Observation |


RBR News Analysis

Hogan caught wearing
rose-colored glasses in LA
It did not take long for Radio Business Report to get reaction from our readers on the Miller Kaplan numbers that Clear Channel's John Hogan is distributing to agency buyers on forward pacing. Turns out the numbers he is sending are for total market revenues which includes the category titled Network/Non-Traditional/Other (stuff like concert ticket sales). RBR observation: Radio looses when it overstates its case.
| Full Story Click Here
| RBR Observation |


2004 Predictions

It's all in the cards
2. The Ace of Trades: Station trading
Two factors tended to suppress station trading last year. One was natural, the other decidedly unnatural, in the capitalistic sense. The natural suppression was mostly on the radio side, as the industry demonstrated that it was basically mature in terms of ownership consolidation. The unnatural trading suppressants were the two freezes imposed by the FCC as it tried to update its hotly-contested ownership rules. This was both a completely unnatural, and a completely effective suppressant. Looking ahead, duopoly has only come to TV in limited fashion so far. Look for TV dealing to take off if the new FCC rules ever are allowed to go into effect. Small market radio deals should continue to chug along as well. And there's a slight possibility that a new radio market definition will force spin-offs. For our less-than-serious supernatural take on this issue... | Full Story Click Here |


Adbiz ©

RAB getting "re-tooled";
RAEL studies will lead to ad blitz

RAB CEO Gary Fries tells RBR the RAB's Radio Ad Effectiveness Lab (RAEL) is currently working on some studies about radio advertising - - the results of which will be part of an upcoming ad blitz (that is likely to include the Wall Street Journal and NY Times, according to one source) to educate the public about the power of radio. That same source, a group head, tells us he felt the radio industry has done a terrible job of marketing itself and that the RAB is going to be "re-tooled." | Full Story Click Here |

AdLab's Barry Cohen to speak
at Concert Industry Consortium
Pollstar Magazine, announced the schedule for the tenth annual Concert Industry Consortium. The Conference brings together performing artist's agents and promoters, in an effort to educate and improve the quality of concert promotion. Barry Cohen, principal of Clifton, New Jersey ad agency AdLab Media, has been selected to deliver a workshop at the February 4-6, 2004 event. Cohen will be one of a select few tapped to present at the Hollywood event, known for attracting the top luminaries in the field.

Ogilvy partner resigns after conspiracy charges
A day after the news came out that two senior execs of Ogilvy & Mather NY were charged 1/6 with conspiracy for allegedly overbilling the ONDCP for a campaign (1/7 RBR Daily Epaper #3), Ogilvy & Mather announced that senior partner and finance director Thomas Early had resigned. Early, 48, and Shona Seifert, 43, appeared before U.S. District Judge Richard Berman in Manhattan 1-7. Both are charged with one count of conspiracy and 10 counts of false claims, according to David Kelley, U.S. Attorney for Southern District of New York.


Media, Markets & Money tm

Dickey travels to Ol' Virginie
It's only a $7M deal, but Cumulus Media is moving into another Arbitron-rated market - - Blacksburg, VA - - immediately becoming the big fish in a small pond. It's buying an intact seven-station cluster from New River Valley Radio Partners and a related company, Bedford Radio Partners, headed by Stephen Garchik and Ronald Walton. RBR observation: Room to grow. | Full Story Click Here | RBR Observation |

Swaggart swaggers into Palm Springs
Jimmy Swaggart's Family Worship Center is leaping over the Rocky Mountains, grabbing its first full-power station on the western side of the Great Divide. the station, KPSH-FM, is part of the Palm Springs market. Licensed to Coachella CA, it is still a CP. However, it will be built by the seller, Shepherd Communications Inc., and then taken over by Swaggart in a cash/note deal ultimately worth $750. The Class A facility will hit the airwaves with 230 watts eminating from a 623 foot antenna from its reserved-band perch on 90.9 mHz.

WEW closing may be just the beginning
Sima Birach has taken over the keys to a St. Louis institution. WEW-AM, which many believe to be the proud owner of the second-oldest set of call letters in the United States, has entered the Birach portfolio in a $1.35M deal (9/30 RBR Daily Epaper #191). The seller was Mark Acker's Metropolitan Radio Group. The Standards format currently on the station may sit well with Birach, but according to John Pierce, who brokered the deal, the station's physical plant may not. Birach is no stranger to engineering oddities and changes, and Pierce thinks in particular that the station's current power package - - it puts out one lonely kilowatt - - may be in for an upgrade, perhaps up to 10 kW. Additionally, there may be a hole to the west for the daytimer to go 24/7. However, as a tenant on 770 kHz, WEW is forced to respect the wide net cast by channel-mate WABC out of New York.

Disney declares its independents
Utilizing its new annual review of corporate governance issues, Disney's Board of Directors has rearranged some of its key committees. The board decided that John Bryson is not an independent director, because his wife heads Lifetime Entertainment, which is 50% owned by Disney. With the coming retirement of Tom Murphy and Raymond Watson when their terms end in March, Disney will have eight independent directors and three insiders on its board of directors. | Full Story Click Here |


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Washington Beat

Commissioners out and about
It's still the slow season in Washington - - the bureaucrats are mostly back on the job but Congress is still out of town. But there will be a few opportunities to get in a sighting of an FCC Commissioner or two in the near future. Both Chairman Michael Powell and Commissioner Kathleen Abernathy, pictured, have public speaking engagements on their calendars. | Full Story Click Here |

Compromise nixes need for veto
President George W. Bush has a chance to do something no president has accomplished since the last son of a president occupied the Oval Office. #7 John Quincy Adams was the last chief executive to go through an entire term of office without using his trusty veto pen, according to the Associated Press.
| Full Story Click Here
|


Transactions

$8,000,000 KZFO-FM Fresno (Clovis CA) from Entravision Holdings LLC (Walter F. Ulloa) to HBC License Corp. (McHenry T. Tichenor Jr.), a subsidiary of Univision Communications Inc. $400K escrow, balance in cash at closing. Duopoly with KZOL-FM; crossownership with KFTV-TV Hanford CA & KTFF-TV Porterville CA. LMA since 11/21. [File date 12/4/03.]

$2,025,000 WNAW-AM/WMNB-FM North Adams MA and WSBS-AM Great Barrington MA. 100% of Berkshire Broadcasting Inc. from Donald A. Thurston, Corydon L. Thurston & Robert B. Collins to Great Northern Radio LLC, a subsidiary of Vox Media Corp. (Bruce G. Danziger, Jeffrey D. Shapiro). $101,250 escrow, balance in cash at closing. Includes non-compete. Superduopoly with WBEC AM & FM, WUHF-AM & WUPE-FM Pittsfield MA and WZEC-FM Hoosick Falls MA, forming several contour overlap markets, none with more than five total stations and three same-service stations. [File date 12/4/03.]

$400,000 KIJV-AM & KZNC-FM Huron SD from Three Eagles of Huron Inc. (Rolland C. Johnson) to Dakota Communications Ltd. (Duane D. Butt, Barbara G. Butt). $20K escrow, balance in cash at closing. Duopoly with KOKK-AM/KZKK-FM. LMA since 11/5. [File date 12/4/03.]


Stock Talk

Another mixed day on Wall Street
It seems everyone is predicting a bull market year on Wall Street, but the bulls seem to be milling around instead of running. An upbeat report on Intel sent tech stocks higher Wednesday and pushed the Nasdaq Composite up 1% to its highest close in 2 1/2 years. But other broad indices were lower. The Dow Industrials fell 10 points, or 0.1%, to 10,529.

Radio stocks were slightly higher. The Radio Index rose 1.548, or 0.5%, to 288.813. Citadel led the index stocks with a 2.1% gain. Arbitron rose 1.9% and both Cox and Emmis were up 1.8%. The only significant decline was for Regent, which fell 2.1%.

Investors had anticipated strong subscriber numbers from the satellite radio companies, so when the numbers were announced on Wednesday there was a round of profit-taking. XM fell 6.5% and Sirius 5.7%.


Radio Stocks

Here's how stocks fared on Tuesday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

$43.20

+$0.15

Jeff-Pilot

JP

$49.55

-$1.01

Beasley

BBGI

$16.53

+$0.08

Journal Comm.

JRN

$18.12

+$0.15

Citadel CDL $21.55 -$0.55

Radio One, Cl. A

ROIA

$19.13

-$0.71

Clear Channel

CCU

$46.60

-$0.77

Radio One, Cl. D

ROIAK

$18.91

-$0.80

Cox Radio

CXR

$24.50

-$0.85

Radio Unica

UNCA

$0.63

unch

Cumulus

CMLS

$21.49

-$1.21

Regent

RGCI

$6.79

+$0.06

Disney

DIS

$24.20

+$0.06

Saga Commun.

SGA

$18.33

-$0.47

Emmis

EMMS

$27.18

-$0.87

Salem Comm.

SALM

$27.35

-$0.11

Entercom

ETM

$52.40

-$1.40

Sirius Sat. Radio

SIRI

$3.36

-$0.14

Entravision

EVC

$10.98

-$0.34

Spanish Bcg.

SBSA

$11.12

-$0.04

Fisher

FSCI

$49.53

-$0.52

Univision

UVN

$38.24

-$1.69

Gaylord

GET

$29.49

+$0.22

Viacom, Cl. A

VIA

$43.89

-$0.72

Hearst-Argyle

HTV

$28.01

-$0.01

Viacom, Cl. B

VIAb

$43.85

-$0.70

Interep

IREP

$1.85

+$0.35

Westwood One

WON

$33.92

-$0.74

International Bcg.

IBCS

$0.02

+$0.01

XM Sat. Radio

XMSR

$28.97

+$1.83


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Arbitrends

Market Results
| Riverside |


Competing Media

Where TV is king
According to BIA Financial Network Inc., one of the best places to own a television station, in terms of market share, anyway, is a rural area. Broad reach, achieved by piggybacking on cable and satellite services, takes the medium beyond the reach of many newspapers and most radio stations.
| Full Story Click Here
|


More News Headlines

Upped & Tapped

Mastel returns to Max
Eric Mastel is back at Max Media, this time as President of the Radio Division. Mastel had resigned last month as GM of Entercom's Norfolk cluster, which a few years back had been part of Max Media's previous radio group. He'll now run the new group - - currently 32 stations in six markets owned or under contract - - while former Radio Division Prez Larry Saunders continues with the company to work on more acquisitions.

New OM in Albuquerque
Citadel has named Eddie Haskell FM Operations Manager for its cluster in Albuquerque/Santa Fe, NM. He most recently was PD of KKAT-FM Salt Lake City.

Davis joins WBAL
Veteran TV sportscaster Steve Davis is turning to radio as the new evening Sports/Talk host on WBAL-AM Baltimore. "Sportsline with Steve Davis" will air weeknights 6-9pm. Davis was a long-time sports anchor for WBFF-TV Baltimore, but more recently worked in the same capacity for WUSA-TV Washington, DC.


Stations For Sale

Radio Station Equipment,
AM FCC license
The University of North Dakota is accepting sealed bids for the sale of certain Radio Station Equipment, and transfer of the FCC license, for AM Station KUND at Grand Forks, North Dakota. Interested parties should contact the University of North Dakota Purchasing Office to request a bid form at 701-777-2132 or [email protected]


RBR Radar 2004
Click on these issues for Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

RBR Exclusive
Miller Kaplan forward pacing numbers out
Distributed by Clear Channel Radio CEO John Hogan, we wonder if Coen's estimates might be a bit low. RBR observation: Read the Miller Kaplan according to Clear Channel and Mr. Hogan. RBR appreciates receiving and sharing this information and we highly encourage other groups to do the same by providing Forward Pacing. For once forget the short traders and get ahead of the game. It is time for radio to control the boards and fast break down court. 01/7/04 RBR #3

Why Bob Coen expects growth in 2004 - Part 3 of 5
Big categories, Coen sees signs of increasing ad spending by secondary categories, which could indicate a broader recovery. Signs of increasing ad spending by secondary categories, which could indicate a broader recovery. Editor’s Note: See Part 1 &2 below and file them. 01/7/04 RBR #3

2004 Predictions: It's all in the cards -- Card #1 -- King of Clusters Broadcast Ownership
It you are dealt this card in a reading, and it is crossed by The Chairman card, the King may well hold eight audio towers, two video towers, cable wires and - - just to top it all off - - he'll even be holding a scroll, like the Gotham Times. If, on the other hand, this card is crossed by The Senator card, the King can forget about adding any new towers or scrolls - - in fact, he may well lose some of the towers he already has! Editor’s Note: Most trade magazines, when it comes time to look ahead to 2004, will trot out the same old so-called gurus. Not RBR! We have traveled to the corners of the earth looking for a special deck of media tarot cards, which have the profound and mystic ability to predict the future.
01/7/04 RBR #3

Why Bob Coen expects growth in 2004 - Part 2 of 5
By all accounts, ‘04 should be a good year for advertising-supported media. Part 1, below we looked at the ‘04 economic expectations underlying the year's advertising forecast. Now a look at category-by-category growth in ‘03 and what Coen thinks that means for 2004. Editor’s Note: See Part 1 below and file them.
01/06/04 RBR #2

Why Bob Coen expects growth
in 2004 -- Part 1 of 5
The 2004 advertising forecast of Universal McAnn's Bob Coen, who sees a good year ahead for both radio and TV. But as the year actually begins, let's go back and look behind the forecast numbers to see why Coen is optimistic. Total Advertising +6.9%. Editor's Note: Radio make sure you CYA on Cable. Question now is, “How will lead radio in the Marketing and Selling of our medium and get us above the 7%?”
01/05/04 RBR #1

RBR Investigative Analysis
Crystal Media Network accused of deception--Part 1
That is exactly what happened as the headline stated "Crystal Not Clear With Net" ...'stations won't clear Prestige network because of 'Dishonest' setup'. RBR was queried by numerous executives to investigate those claims..Why? RBR Observation: Because TV is set for double digits and watch out for Cable. Radio is still forecasted for single digit growth. 01/05/04 RBR #1

RBR Investigative Analysis
Part 2 - 'The Letter'
Deception or Better Mouse Trap

That reporton Crystal Media Network says it bought up inventory on a bunch of stations, without informing them the inventory was to be used to form a network. Someone saw what seems to be an effective 25-54 female-skewing niche-filler, a better network mouse trap, and that buzz word: Accountability. 01/05/04 RBR #1

RBR Investigative Analysis
Part 3 - 'The Players'
Nothing But The Facts
RBR questioned Infinity Pres./COO Joel Hollander, who confirmed the letter was about Crystal Media Network not Christal Radio (rep firm). Westwood One CEO Shane Coppolla: "Infinity stations work with a lot of different products and companies, but the letter speaks for itself..." Crystal Media Network CEO Nick Krawczyk stated "There is so much inaccuracy that's being spewed around in this marketplace right now… Editor's Note: Follow the Money! 01/05/04 RBR #1

RBR Investigative Analysis
Part 4 - 'The Polygraph Test'
One-on-One with Krawczyk
So what's really going on here? Is this a case where Infinity's public stance is to protect the network, but the stations, operating independently, do what they want? RBR posed five point blank questions at CMN's Krawczyk.. 01/05/04 RBR #1




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EDITORIAL
Executive Editor, Jack Messmer
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Managing Editor, Dave Seyler
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Senior Editor, Carl Marcucci
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Reporter, Bob DeCarlo
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