RBR's Daily Morning Epaper

Volume 23, Issue 42, Jim Carnegie, Editor & Publisher

Wednesday Morning March 1st, 2006

Radio News ®

CBS sues Howard Stern
for mega bucks
Howard Stern got more than 600 million bucks by moving from Infinity Radio (now CBS Radio) to Sirius Satellite Radio, but now CBS is claiming that it deserves a big chunk of that cash. It's sued Stern and his agent, Don Buchwald, in a New York state court, claiming multiple breaches of contract, fraud, unjust enrichment and misappropriation of CBS Radio's broadcast time. The announcement of the lawsuit by CBS didn't set a specific amount being sought, but a report in the New York Post said Stern's former employer wants a half billion bucks. Even before the lawsuit was filed, Stern called a press conference to fire the first volley at CBS. He disputed CBS' claim that he reached a "secret agreement" with Sirius Satellite Radio, since he disclosed it to CBS/Infinity executives and on the air. He also denied that he cost his former employer money by discussing satellite radio on his terrestrial radio show, insisting that it was a legitimate story - - and besides, it helped boost ratings. The CBS lawsuit claims the "secret" part was the more than 34 million shares of Sirius stock that Stern and Buchwald received last month (1/6/05 RBR #4) because Sirius exceeded a certain subscriber target in 2005. All of those subscriber gains came while Stern was still a CBS/Infinity employee and CBS claims he misappropriated its airtime to promote Sirius.
| Read more about the lawsuit |

RBR observation: Got to print out the legal action but there are two sides to a coin. Stern made no bones he was leaving and CBS higher ups left him on the air. CBS made money from Stern in the process even when Stern asked to be let out of his contract and said so on CBS 60-minutes. So where is the beef? Sirius is still struggling and CBS is out a bunch - No - a 'you know what' pot load of money without Stern. CBS should take a harder look at all their programming and money they are spending for current air talent because it is not working worth Jack, (cough)! Both are getting headlines and it seems that is what they need to drum up ad business. Sometime this year someone at CBS radio is going to walk the plank.

Is radio in trouble?
"No and balderdash," Ed Christian said in response to his own question on Saga Communication's conference call. He says terrestrial radio needs better PR to counter the barrage from satellite radio - - and insists terrestrial stations still have a good story to tell. "Give us some credit," he said to Wall Street. Christian pointed to ratings gains for Saga stations in many markets from the Fall Arbitron book. But he doesn't deny that radio has some problems that it needs to deal with. As an industry, Christian said radio failed to anticipate that some traditional ad categories would ever fade - - as is obviously happening right now with auto - - and didn't do enough to acquire new business. He also echoed concerns expressed last week by Radio One COO Mary Catherine Sneed about some radio companies going after market share, rather than upholding price discipline - - a short-term strategy with dire long-term consequences. But while 2006 is starting off rough, with most groups reporting soft ad demand for January and February, Christian says radio is still a good business. "We have, as an industry, caught a cold, but it is not the flu and we are certainly not suffering from H5N01 [bird flu]," Christian said.

VA helps telcos ease on down the road
The state of Virginia has taken a step toward competition in the delivery of video programming to the home. Compromise legislation allows local franchising authorities to maintain a watchful eye over use of their own rights or way, but - - when considering a proposal by a new entrant to compete with incumbent cable systems, puts the LFA on the clock and codifies the expectation that a new entrant's contract will be level with the incumbent's. Verizon Virginia President Robert W. Woltz Jr. said, "Virginians today are another major step closer to having more competitive choices for their cable television services. In July, Virginia will join Texas as a pioneer in bringing cable choice to consumers more quickly. Everyone wins when companies compete, and now Virginians will see greater innovation, better value and real choice for subscription TV." July is when the measure will go into effect, if it gets a signature from Gov. Tim Kaine.

RBR observation: In the US Senate, Commerce Committee Chair Ted Stevens (R-AK) has indicated that he'd like to see the road cleared of obstructions for telco MVPD wannabes, but seems resigned to a system that keeps LFAs in the loop at some level. The Virginia approach may be the way the nation ends up going, with state and national legislatures allowing LFAs to stand guard over their own infrastructure and receive reimbursement from the company utilizing it, under the condition that they move swiftly and fairly. This may well become a familiar model and the CATV/telco wars heat up.

The VA Senate summary of the provision
Licensing and regulation of cable television systems. Establishes a new procedure by which cable operators may obtain authorization to operate cable systems in localities. The new procedure provides for localities to grant ordinance cable franchises as an alternative to negotiated cable franchises. Ordinance cable franchises may be requested by certificated providers of telecommunications services with previous consent to use a locality's rights-of-way, after requesting to negotiate a cable franchise agreement. Upon receipt of an application for an ordinance cable franchise, the locality shall adopt necessary ordinances within 120 days.

Rockefeller to push indecency measures?
The ever-popular Broadcast Decency Act of [insert year here] - - ever-popular in the House, that is, but ever-popular in the Senate only until such time as it comes up for a meaningful floor vote - - may well be put before the Senate Commerce Committee again this year, although it is questionable whether committee Chairman Ted Stevens (R-AK) will lift a finger to help it along. According to the Hollywood Reporter, Sen. John Rockefeller (D-WV) is planning to push a bill he co-authored with Sen. Kay Bailey Hutchison (R-TX) which would go much further than the measures crafted more tightly by Rep. Fred Upton (R-MI) in the House and Sen. Sam Brownback (R-KS) in the Senate. From Rockefeller's website, here are the highlights of his proposal: "Providing the FCC with the authority, for the first time, to address graphic and gratuitous violence on television; directing the FCC to address violence and indecency on all TV programming, including cable and satellite; increasing fines for indecent content; doubling children's programming from 3-6 hours per week; and giving greater flexibility to local broadcasters and parents to reject offensive programming." Stevens has said he will pull back from any efforts to put indecency legislation on the books until a new voluntary effort by the cable industry to provide tiers of family-friendly programming has a chance to gain traction. Stevens also indicated his belief that any such decency legislation would go straight to court, regardless of how well it is crafted.

RBR observation: There has been incredible legislative support for upping the ceiling on indecency fines to as much as 500K for an egregious offense. On the violence front, however, former Sen. Fritz Hollings pushed for a measure going back to 1993, and actually pushed such a measure through the Commerce Committee three times by overwhelming margins of by a 16-1, 19-1 and 17-1 (2/13/04 RBR #30). The result: nothing. As for imposing programming restrictions on cable and satellite, the chances of getting something like that past the courts are far slimmer a prospect than the fine increase, which may be troublesome enough. It would appear that the cable company's family tier initiative has bought some time on Capitol Hill for everyone in the programming game.

Ratings crash post-Stern
Howard Stern's move to Sirius, as many predicted, was rough on CBS Radio and other post-Stern affiliates according to January Arbitrends. At WFNY-FM NY, David Lee Roth lost some 75% of Stern's Fall audience in morning drive. Overall, the station (P12+) dropped from a 3.2 to 2.7. Spanish-language WSKQ-FM NY morning drivers Luis Jimenez and Moonshadow were up more than 50% in the same time period. Classic Rock WAXQ-FM and Dance WKTU-FM climbed more than 25% each. In LA, Adam Carolla's show on KLSX-FM pulled a 0.7 12+ share in January, the lowest-rated full-signal commercial FM in the market during for morning drive. For 18-34, Carolla debuted with a 1.5 share in January. Rover's results in Chicago on WCKG-FM were only a 0.4 12+ rating in January 12+, 0.2 in 25-54 and 0.3 share in 18-34 for the month. Making it known to the trades, the station that seemingly took the least hit from Stern's departure was Marlin Broadcasting's WCCC-FM Hartford. Said the station's Boyd Arnold: "In the Nov/Dec/Jan we took less of a hit than all the other Stern stations we've seen. 12+ WCCC went 5.1 in the fall of 05 to a 4.2. Mornings 12+ went 8.8-6.5 (2nd-4th). Persons 18-34 WCCC stayed 3rd with an 11.7-8.9 drop. Mornings went 18.1-11.9 (1st-2nd) Men 18+ WCCC went 8.2-7.0 (2nd-4th) and Sebastian went 13.9-10.6 (1st-2nd). Afternoons went 7.0-6.2 (4th -5th) Howard's loss permeates the rest of the station, but I suspect not as bad as other former Howard stations. Persons 25-54 WCCC went 6.7-5.9 (5th-6th) Mornings remain at #1 12.0-9.8 and afternoons had a drop of 4.4-4.1."

SEC won't press
Jim Cramer subpoena
Local investigators in California for the Securities and Exchange Commission didn't issue subpoenas only to Dow Jones reporters, resulting in a media outcry and castigation from their boss's, boss's boss, SEC Chairman Chris Cox. They also subpoenaed radio and TV stock commentator Jim Cramer and his company, TheStreet.com, in regards to contacts with news sources about publicly traded Overstock.com. Overstock has accused some stock short-sellers of working with journalists to drive down its stock price. "I didn't get the subpoena because I'm corrupt. I got it because I tried to get people out of a stock that we said was going lower, and went lower," Cramer said on his CNBC "Mad Money" show. According to an announcement from CNBC, the SEC has now backed down and will not pursue the subpoena at this time. SEC Chairman Cox has said that such "sensitive" subpoenas seeking material from journalists are supposed to be cleared by the SEC's top brass, not local investigators.

Wall Street Media Business Report TM

Down quarter for Saga
Saga Communications ended 2005 with Q4 revenues down 1.8%, as TV gains couldn't overcome a radio decline. The culprits: declines in auto and wireless telecom advertising. Radio revenues fell 2.6% to 31.4 million, but on a same station basis revenues were down 8.7%. Broadcast cash flow for radio was down 25.6% to 7.8 million, a drop of 27.3% same station. TV had a better quarter, with revenues up 5.1% to 4.1 million and BCF gaining 18.7% to 655K. But, as the numbers indicate, TV is a much smaller unit at Saga, compared to its much larger radio group.

Ad Business Report TM

CoverGirl signs Keri Russell
as spokesmodel
CoverGirl make-up has a new face joining its family of models. Keri Russell, soon to appear in the highly-anticipated "Mission: Impossible III," is the newest spokesmodel for the brand. Keri first captured the hearts of America in her role as Felicity Porter in the hit television series "Felicity." Joining CoverGirl's current roster of models including Christie Brinkley, Molly Sims and Queen Latifah, the 29-year-old California native's first CoverGirl ads will launch later this year. "Keri embodies the clean, fresh, natural look that defines CoverGirl," says Gina Drosos, Vice President and General Manager of Global Cosmetics, Procter & Gamble Beauty. "Her natural beauty and spirited personality shine through in everything she does." Since its introduction in 1961, CoverGirl has helped launch numerous modeling careers and was one of the first brands to link models' names and faces with a product. The long list of famous CoverGirl models includes Christie Brinkley, Cheryl Tiegs, Rachel Hunter, Tyra Banks, Niki Taylor and Molly Sims, and the brand is known for consistently signing models who embody both inner and outer beauty, such as current spokesmodel Queen Latifah.

Chrysler, GM campaigns differ in
targeting multi versus single products
This analysis of spot advertising on radio stations in top-rated North American markets is for the 7-day period of February 20-26, 2006 and based on data from Media Monitors.
| Read More... |

Arby's taps Joan Rivers, Hulk Hogan for new campaign
As part of the launch of its Chicken Naturals menu, Arby's is introducing two new television ads featuring gossip maven, Joan Rivers, and wrestling legend, Hulk Hogan. The spots, which run through 3/25, shed light on why natural is only better in Arby's chicken. One ad reveals what stand up comedienne and queen of the red carpet Joan Rivers would look like "natural" had she forgone plastic surgery. An almost unrecognizable, very wrinkled, yet bejeweled Joan quickly realizes that natural only works for chicken. In another ad, the world's most famous wrestler, Hulk Hogan, also realizes that natural only works for Arby's chicken when he is transformed into a scrawny version of himself. Decked out in red and yellow wrestling tights, the puny Hulk strains to pull off his signature move - - ripping off his t-shirt. "Chicken Naturals is a prime example of that something different something better experience Arby's has been offering for more than 40 years," said Debra Mager, SVP/Advertising, Arby's Restaurant Group. "We wanted the creative to be larger than life to match the uniqueness of our new chicken as well as take a step out from what anyone else is doing in the category."

Media Markets & Money TM

CPR sells again
When Cincinnati Public Radio acquired a second Queen City FM from Xavier University upon which to expand its noncommercial radio stylings, it got with it a network of small-town noncoms spread through three states, including some more in Ohio and others in Indiana and Michigan. CPR has now taken a second relatively distant Michigan outpost and liquidated it. WVXM-FM Manistee MI will be going to Todd Mohr's Synergy Media for 380K. It will form a duopoly, by the barest of margins, with Mohr's WWKR-FM Pentwater - - the stations' contours are basically tangential. They occupy non-Arbitron territory on the shore of Lake Michigan, roughly halfway between Muskegon and Traverse City. The sale is contingent on getting permission to convert the license of the 97.7 mHz facility to allow commercial operation. CPR recently sold WVXA-FM Rogers City MI, on the upper east, Lake Huron side of the state's main peninsula, for 411K. Xavier flagship WVXU-FM and the network of smaller affiliates were acquired for 15M.

Washington Media Business Report TM

DNC's 2008 DNC venue hunt attracts 11 cities
Like the Republican National Committee, almost, the Democratic National Committee sent out feelers to about 30 cities to see if there was any interest in playing host to the Democratic National Convention when it next convenes in 2008. According to the Associated Press, 11 have responded to indicate interest, including Anaheim, Dallas, Denver, Detroit, Las Vegas, Minneapolis, New Orleans, New York, Orlando, Phoenix and San Antonio. The convention will be held 8/25-28/08.

RBR observation: A very public indication of no interest by Chicago Mayor Richard Daley had some in-state partisans miffed (2/17/06 RBR #34). Perhaps they will be soothed by the apparent fact that the city has no expressed interest in the DNC either.

Ratings & Research

Mancow's Morning Madhouse
Fall ratings highlights
Erich "Mancow" Muller still reigns supreme on Emmis' WKQX, Chicago, where he ranked #1 in cume for 18-34 males, and jumped his audience size yet again going from a 7.4 Share to a 10.1 Share in AQH Men 18-34, beating out Stern's final book in Chicago by more than a 2 to 1 margin. On KCXM-FM, Kansas City, Mancow jumped the former "Planet" from 15th place to 3rd place after just one book in Fall '05. Mancow's ratings jumped 259% with Men 18/34, going from a 1.7 Share to a 6.1 Share. In Men 18-49, Mancow increased an astounding 308% from a 1.3 to a 5.3. Against a heritage morning show in Norfolk, Sinclairs' WROX- FM saw a massive 311% gain in Men 25-54, jumping from an 0.9 to a 3.7 Share, Men 18-34 went from a 7.2 share to a 9.0 Share, and in Men 18-49 Mancow took his show from a 3.7 to a 5.7 Share. In Des Moines, on Saga's active rocker KAZR-FM, Mancow ranked #1 in morning drive males 18-34, with a 14.7 Share (14 in Cume). In Salt Lake City, Alan Hague, Vice President of Programming of newly launched For Simmons Talker KFMS-FM, Mancow's morning drive Cume jumped 133% in Men 12+; 78% in Persons 12+.

Transactions

13.5M KSSL-AM/KTHK-FM/KFTZ-FM & KSLJ-AM/KCVI-FM/KLCE-FM Pocatello-Idaho Falls (Idaho Falls, Blackfoot ID) from Bonneville Holding Co., a subsidiary of Bonneville International Corp. (Bruce Reese) to Riverbend Communications LLC (Frank L. Vandersloot, Belinda Vandersloot). 750K escrow, balance in cash at closing. Existing superduopoly. LMA 2/1/06. [File date 2/9/06.]

1.1M WVLC-FM Mannsville KY from Patricia Rogers, Douglas A. Rogers, Megrae Broadcasting & John Bryan McFarland to Shoerline Communications Inc. (Alan W. Reed, Michael L. Harris, Laura Henry Harris, Elizabeth Jane Reed). 100K escrow, balance in cash at closing. Includes non-compete. Duopoly with WHVE-FM Russell Springs KY. [File date 2/7/06.]

Stock Talk

Weak home sales trump good GDP news
The government reported that Q4 GDP growth was at an annual rate of 1.6%, up from the original estimate of 1.1%. But that wasn't enough to put Wall Street traders in a buying mood. Instead, they focused on the fifth straight monthly drop in existing home sales, fearing that one area that had been keeping the economy chugging along, real estate, is starting to weaken. The Dow Industrials fell 104 points, or 0.9%, to 10,993.

Radio stocks had an even worse day, with Wall Street unenthused about what radio companies have been saying in their quarterly reports. The Radio Index fell 2.172, or 1.3%, to 165.853. Saga fell 4.1% after reporting its Q4 results. Radio One was even harder hit, with its Class D stock down 5.9% and Class A off 4.6%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		39.20	-0.17	Hearst-Argyle	HTV		23.87	-0.13
Beasley	BBGI		13.54	-0.18	Interep	IREP		0.25	+0.01
CBS CI. B	CBS		24.46	-0.37	Jeff-Pilot	JP		60.25	-0.70
CBS CI. A	CBSa		24.47	-0.33	Journal Comm.	JRN		12.31	-0.14
Citadel	CDL		11.14	-0.16	Radio One, Cl. A	ROIA		8.45	-0.41
Clear Channel	CCU		28.30	+0.03	Radio One, Cl. D	ROIAK		8.34	-0.52
Cox Radio	CXR		13.83	unch	Regent	RGCI		4.57	-0.03
Cumulus	CMLS		11.60	-0.18	Saga Commun.	SGA		9.47	-0.40
Disney	DIS		27.99	-0.39	Salem Comm.	SALM		13.98	-0.14
Emmis	EMMS		16.37	-0.29	Sirius Sat. Radio	SIRI		5.11	-0.12
Entercom	ETM		28.17	+0.06	Spanish Bcg.	SBSA		5.61	-0.09
Entravision	EVC		7.43	-0.07	Univision	UVN		33.45	-0.38
Fisher	FSCI		42.80	+0.10	Westwood One	WON		11.15	-0.05
Gaylord	GET		44.65	-1.35	XM Sat. Radio	XMSR		22.09	+0.40

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]

Who are the 1,700 investment professionals that voted Hugh Panero of XM as best CEO? (2/28/06 RBR #41) Do the voters realize Mr. Panero just wasted 200 million on advertising in the 4th quarter that accomplished nothing? How many of these "investment professionals" recommend XM over Sirius? Sounds like sour grapes to me.

Lenny Freed
Sybian Enterprises
Cleveland, Ohio

Below the Fold

Wall Street Media Business Report
Down quarter for Saga
Q4 down 1.8%, as TV gains couldn't overcome a radio decline...

Ad Business Report
Chrysler, GM campaigns differ
In targeting multi versus single products...

Media Markets & Money
CPR sells again
Taking a relatively distant Michigan outpost and liquidated it...

Arbitrends

Radio Media Moves

A promotion
with a "Kiss"
Michelle Schecht has been named General Sales Manager of Beasley's WKIS-FM "99.9 Kiss Country" Miami. She has been with the station for over eight years, most recently as Business Development Manager

Samuels gets
"The Ticket"
Sporting News Radio's KMPC-AM "The Ticket" LA announced that Keith Samuels will join the station March 15th as VP and Director of Sales. He was previously General Sales Manager of Clear Channel's KYSR-FM LA.

Ward awarded Sr. post
Timothy Ward will need new business cards to add the word "Senior" to his title. He had been VP/CFO of Univision Radio and is now Sr. VP/CFO.

Reach ups Talkington
Reach Media announced the promotion of Melody Talkington to Senior Director, Affiliate Relations. Talkington, who works on securing and maintaining affiliations for the Tom Joyner Morning Show, will have her responsibilities expanded to include seeking affiliates for the new Syndication One talk radio network that launched 1/20.

Changing money men
Harris Corporation, which among other things is a major maker of broadcasting equipment, announced that Sr. VP & CFO Bryan Roub will retire from the company June 30th. Effective today, March 1st, Gary McArthur, who had been VP/Finance & Treasurer, is promoted to VP & CFO.

Zebra stripes
for Johnson
Stephen Johnson has been named VP of Sales for the new Red Zebra Washington, DC radio cluster. The 22-year sports marketing, sales and management pro was most recently with CBS Radio.

Stations for Sale

Alaska Gold Mine!
13 Stations with excellent cash flow - 8X Trailing BCF!
Cliff at Clifton Gardiner & Co
(303)758-6900
[email protected]

Power Increased...
Price Reduced!
Nevada C1. Booming economy, expanded market, growing sales.
MCH Enterprises, Inc.
[email protected]
(805) 237-0952 Direct

More News Headlines

SESAC vet
Al Altman passes
SESAC announced the passing of 23-year SESAC veteran Al Altman on 2/22. As SESAC's Regional Manager, Broadcast Licensing, Altman developed a reputation for unparalleled customer service and was a well-loved figure in the broadcasting community. A longtime music industry veteran, Altman worked in music publishing with Chappell Music, April Blackwood Music and as a record producer and songwriter. He is credited with pitching the hit song "Brandy" to the band Looking Glass, and he produced recordings released on the Buddha label. One of his co-written compositions appeared on a recording by rock legend Del Shannon. Altman also spent time working in independent record promotion.

Free radio sales workshop set for Denver
RAB announced another free radio sales training workshop - - "Breaking The Daily Habit: Winning New Radio Dollars From Print" - - this time in Denver on March 16th. The RAB workshop, sponsored by Media Monitors, is also endorsed by the Colorado Broadcasters Association. It will be free to the first 50 radio sales managers and account executives in the area to register at 1-800-67-MEDIA, extension 274, or [email protected].

RBR Radar 2005

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

Citadel bondholders
claim default over ABC deal
Has notified the SEC that an attorney claiming to represent holders of 31% of one of its bond issues has sent the company a letter claiming that its deal to acquire ABC Radio constitutes a default. Citadel denies that's the case and says it will fight the claim that the ABC deal constitutes a "fundamental change."
02/28/06 RBR #41

Radio news lags
behind other sources
News is an important facet of radio programming, but it is not the source of first choice for most Americans. 54% of Americans have a daily local broadcast TV news habit, and more than three out of four go there for news, if not every day, then several times a week. More details on local news see

RBR observation: Use the stats in your sales and programming departments.
02/28/06 RBR #41

Finding young males where they live
Double Fusion has a job to do - - it's going to be selling ads for video gamemaker Midway Games. The ads will not be permanent - - they'll be built into on-line versions of games mostly in development, and one that's already out, called "Stranglehold." There are all sorts of options, starting with a one that nods to one of the most primal forms advertising still in use - - the billboard.

RBR observation: It's the missing demo - - young males. Manufacturers would love to find them, figuring that this is exactly the time to establish brand habits that may well last a lifetime. Broadcasters often seem to have trouble finding these guys, but they're right there in front of the TV - - it's just that they'd rather hold a controller than a remote; they don't want to watch, they want to do it.
02/27/06 RBR #40

A reader writes in with a poser
Q: When Citadel takes over the ABC stations, do they have to get new call letters for the stations? A: to the best of our knowledge it's a matter of negotiation. There is nothing saying that the calls can't stay with the radio and the TV stations at the same time, even though they are no longer co-owned, and for all we know, Disney might like the idea of keeping the ABC name out there on the radio dial.
02/27/06 RBR #40

Companies Looking
1. Arbitron Account Manager
2. Sales Rep in Washington, DC
3. Sales Manager for Reno Reps

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