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Volume 24, Issue 42, Jim Carnegie, Editor & Publisher

Thursday Morning March 1st, 2007

Radio News ®

XM/Sirius gets a Capitol Hill airing
Yesterday's hearing at the House Judiciary Committee adjunct, the Antitrust Task Force did a good job of establishing where the both the fault lines and the battle lines lie in the proposed merger of the two DARS services, XM and Sirius. It also got an early seal of approval from Rick Boucher (D-VA), who said he believed that with conditions it was in the public interest. Chairman John Conyers (D-MI) claimed an open mind, and said his questions were these: What is the relevant market, all forms of radio, or simply satellite radio? What are the implications for other markets? Is this an attempt to get the merger through before the next election? What about interoperability? Will consumers get stuck with unusable equipment? Judiciary Ranking Member Lamar Smith (R-TX) said that the FCC and DOJ should be allowed to do their jobs and review the proposal. Sirius honcho Mel Karmazin was all for the merger, of course, and got conditional support from watchdog Gigi Sohn of Public Knowledge. NAB's David Rehr was dead against the merger, and got whole-hearted support from watchdog Mark Cooper of the Consumer Federation of America. Attorney Charles E. Biggio of Wison, Sonsini Goodrich and Rosati agreed with agreed with Rep. Smith, saying the FCC and DOJ should get a crack at the proposal before Capitol Hill gets involved. The big question: Are XM and Sirius two competing companies providing a unique service, or are they just another small part of a much larger audio entertainment universe?
| Panelist testimony summaries |

Houston PPM
goes real April 5th
That's the date Arbitron says PPM will become commercialized in Houston, following the recent MRC accreditation. The Winter book will remain the ratings currency in Houston until the June PPM report is released July 18th. Here is how the switch-over from diaries will work: The April 2007 (April 5 - May 2) and May 2007 (May 6 - May 30) PPM radio ratings reports are to be released as "pre-currency" data, but only to those stations and agencies that have signed a PPM license agreement. The Winter 2007 (January 11 - April 4) diary-based ratings report, which releases on May 4, 2007 is being designated the "currency" in the market until the release of the June 2007 PPM ratings report on July 18. "Houston station and agencies need to be aware that access to the "free" PPM demonstration data will be discontinued after the release of the March 2007 PPM survey period. Starting with the April pre-currency report only those stations and agencies that subscribe to the PPM radio ratings service in Houston will receive PPM radio ratings data," said Arbitron Sr. VP of PPM marketing Jay Guyther.

RBR observation: We wait to see what Clear Channel will do, come April 5th. Will it stop encoding in Houston as PPM becomes real there? CC Radio does not encode in Philadelphia, where PPM is already the ratings currency. For that matter, will everyone who has been encoding in Houston for the PPM test - which is pretty much everyone after long-time holdout Cox Radio came onboard - or will some pull the plug on their encoders when it is no longer a test?

Blazin' in Miami
"Hot 105" WHQT-FM lived up to its name yesterday when the studios of Cox Radio in Miami were briefly evacuated due to an SUV on fire in the building's parking garage. As it turned out, the vehicle belonged to Alex Chisholm, "Big Lip Bandit," who was doing his morning show on WEDR-FM "99 Jamz" when he learned that his SUV was ablaze. All four Cox FMs were switched to automated programming while employees were evacuated from the building for less than two hours.

Red Wolf attacks
Citadel's O&A connection
Attorney Arthur V. Belendiuk of Smithwick & Belendiuk is carrying the battle between small Connecticut broadcaster Red Wolf and Citadel by attacking Citadel's ongoing relationship with XM Radio artists and former NY shock jocks Opie and Anthony. Specifically, he's citing a direct line from the broadcasts, to Opie and Anthony's website, to an x-rated site. You can see where the filing is headed on the first page, which says in all caps, "This document contains explicit sexual material which should not be viewed by minors." The document is a continuation of a petition to deny the transfer to Citadel of a number of ABC Radio stations. "In agreeing to broadcast the "Opie and Anthony Show," it says, "Citadel was well aware that it was playing with fire," saying that despite the duo's prior "outrageous and indecent on air conduct," that "Citadel chose corporate profits over public interest." Many of the links on O&A's website lead to a separate site for Foundry Music, "where explicit videos can be purchased and rented." Belendiuk also uses the occasion to challenge XM, concluding, "XM Radio for its part too is promoting and may be profiting from the sale of pornography. At a time when XM Radio is proposing to merge with Sirius, the FCC should consider its culpability in broadcasting the Opie and Anthony Show before it acts on the proposed merger."

RBR observation: We don't know if the FCC has any jurisdiction over a third-hand Internet site, but for what it's worth, Red Wolf is correct that many of the clicks on the O&A site leads directly to Foundry Music. There was no barrier to attempt to weed out underage surfers, and there was material there that would qualify for an indecency fine if it has been broadcast over the air.

2008 campaign edges Iraq
The 2008 campaign may well be very much about Iraq, but for the week of 2/18-23/07, it edged out its possible dominant topic in overall news coverage, according to the Project for Excellence in Journalism's latest survey. Radio and cable were responsible for the narrow victory, and when you add up all of the various Iraq angles PEJ measures, including the policy debate, events in Iraq, and related events here in the US, it remains the dominant story. Trouble in the mideast the week before also included coverage of Iran (7%) and Afghanistan (2%), but both were reduced this week, with Iran falling to 5% and Afganistan falling entirely off the overall top 10 chart. Surging back into double digits, however, was the Anna Nicole Smith story, once again riding a wave saturation coverage from cable TV. ANS got 10% of overall coverage, but CATV was the one and only medium that went into double digits, giving the tabloid spectacle over a quarter of its time with a 26% share. The relative silence of Mother Nature had a hand in the coverage. The biggest stories to fall off the chart were severe weather, which had 7% the previous week, and North Korea, which had 6%.
| Top ten lists here |

Foundation salutes Lowe
Ken Lowe, President and CEO of The E. W. Scripps Company, received the Broadcasters Foundation of America Golden Mike Award during a black-tie gala Monday, February 26th at The Waldorf Astoria in New York City. From left to right, Broadcasters Foundation Chair Phil Lombardo (CEO of Citadel Communications), Scripps Network's Gordon Elliott (who was the evening's emcee), Ken Lowe and Broadcasters Foundation President Gordon Hastings. The proceeds from the gala support the Broadcasters Foundation of America mission of providing financial assistance to radio and television broadcasters who are in acute personal need.

Ad Business Report TM

Just call them Macy's
A few months after rebranding most of its regional department store chains to a single national brand, Macy's, Federated Department Stores Inc. is jettisoning its corporate name as well. Assuming shareholders approve the move at their May meeting, Federated will become Macy's Group Inc., with the new name to take effect June 1st. "Macy's Group is a name that more accurately reflects the transformation of our business in recent years. Today, we are a brand-driven company focused on Macy's and Bloomingdale's, not a federation of department stores," said Terry J. Lundgren, Federated's Chairman, President and CEO. "Macy's Group is the appropriate name for our company, given that about 90% of our sales involve the Macy's brand. That said, Bloomingdale's is - and will remain - a very important part of the company. Becoming Macy's Group will in no way limit or constrict us from growing in any direction in the future," Lundgren added. The name change announcement came as Federated reported better-than-expected financial results for Q4, but gave Wall Street Q1 guidance that was short of expectations. But in a move to increase future returns for shareholders, Federated also announced a four billion bucks stock buyback authorization.

Hyundai account up for grabs
Korean automaker Hyundai has put its 600 million bucks US advertising creative account up for review. The move comes shortly after Hyundai hired Joel Ewanick away from incumbent The Richards Group to be its Vice President of Marketing. Hyundai had been the largest account at Dallas-based The Richards Group, which will not be competing to get the account back.

AAAA partners with Arbinet
for middleman service
AAAA EVP Michael Donahue says, "The ebiz for media Registry will revolutionize the way the advertising industry conducts business. The Registry will simplify the way media buyers and sellers transact, resulting in reduced errors, lower costs and the ability to provide procurement audit trails." Arbinet-thexchange Inc. will be the company putting ebiz together, in view of its "...proven track record in building and operating powerful and scalable transaction management platforms for other digital transactions." The ebiz for media Registry system will do the following, according to AAAA: The electronic trading directory will "...facilitate two-way electronic business transactions and communications between media traffic/sales systems and media buying systems." It will "...capture and store critical financial business information provided by media companies, media buying groups and advertising agencies, allowing them to shift the media transaction lifecycle from today's manual and time-consuming paper process to a streamlined, efficient electronic model." It is expected to be up and running for both spot TV and radio by May.

Media Markets & Money TM

EMF scores troubled Georgia FMs
The bankruptcy sell-off of On Top Communications is continuing with the sale of a pair of FM stations to Educational Media Foundation. The noncommercial K-LOVE Network operator is getting WRXZ-FM Sylvester GA, in the Albany GA market, and WFFM-FM Ashburn GA, a little further to the east. According to broker Eddie Esserman of Media Services Group, the price is 615K. 500K of that is allocated to WRXZ, and the other 115K to WFFM. The contract stipulates that the deal will go though for that station and that price alone if WFFM is either taken away from On Top or if it goes off the air. The US Bankruptcy Court for the District of Maryland has signed off on the deal, but the FCC gets the final word.

Washington Media Business Report TM

When campaign contributions
and job interviews collide
Sam Fox is in line to become the US Ambassador to Belgium. The path to that plum job is through the Senate Foreign Relations Committee, and one of its members, John Kerry (D-MA), was wondering what kind of a person will donate 50K to smear a candidate for the office of President. Kerry knew, of course, that Fox had given that much to the Swift Boat Veterans for Truth, who went to great - and financially uncapped lengths - to see that Kerry was kept out of the White House in 2004. Fox told Kerry that he did not agree with Swift Boat's message, but said similar advertising was coming from the other side. According to the Washington Post, he said the ads were disgraceful, but "...that's the world we live in."

Entertainment Media Business Report TM

Bay area move-in sets debut
Pappas Radio announced that KTRB-AM, which recently relocated its 860 kHz signal from Modesto to the San Francisco market, will debut its new Talk format on March 15th after running a "Tribute to San Francisco Radio" today through the 14th. The tribute includes segments from legendary Bay Area radio performers such as Jack Webb, Dr. Don Rose, Don Sherwood, Al "Jazzbeaux" Collins, Tom Donahue, Bob Fouts, K.O. Bayley, and Bobby Mitchell. In addition, many of the Bay Area's great stations of the past and present will be featured, including KEWB, KABL, KYA, KFRC, KSFO, KMPX and KSAN. This multi-hour tribute has been produced in cooperation with the Bay Area Radio Museum. Come the 15th, the new format will return Mancow Muller and John London to the San Francisco airwaves, along with Glenn Beck and Neal Boortz.

Internet Media Business Report TM

Search engines can refuse ads
A federal judge in Delaware has ruled that there is no First Amendment right to buy ads on search engine sites. The ruling was a victory for Google, Yahoo! and Microsoft, who had been sued by Christopher Langdon, a Florida resident who runs web sites dedicated to exposing fraud by government officials in North Carolina and reporting atrocities committed by the government of China. "Defendants are private, for profit companies, not subject to constitutional free speech guarantees," US District Judge Joseph Farman ruled, rejecting Langdon's claim that search engines are public forums. The judge also threw out most of the other claims that Langdon, who represented himself without an attorney, had made against the three search engine operators. The only claim remaining to go to trial is whether Google breached a contract it had with Langdon to post his ads.

HD RADIO 2007

Shipping begins at last
After numerous production delays, Radiosophy LLC has begun shipping its MultiStream HD Radio. Retailing for 269 bucks, the innovative receiver unit can be removed from its speaker-base dock and used with other audio systems in other rooms - even in a car or boat with an optional adapter kit. A USB port allows for software updates via the Internet. "We're excited to be shipping the MultiStream HD to the loyal customers who have waited patiently with us throughout the extended design and manufacturing process. We feel this radio is well worth the wait," said Bill Billings, founder and Chief Technical Officer of Radiosophy, based in Sioux City, IA.

Transactions

1.5M KQTL-AM Tucson AZ (Sahuarita AZ) from Multicultural Radio Broadcasting Inc. (Arthur S. Liu) to One Mart Corporation (Armando Zamora). 75K escrow, remainder added to escrow prior to closing with 100K placed in holdback escrow account. LMA 1/1/07. [File date 1/31/07.]

320K WJFJ-AM Tryon NC from Columbus Broadcsat Corporation Inc. (John C. Owen) to Columbus NC Radio Inc., a subsidiary of AsTraKel International Ltd. (Kelley A. Greer, Ashely A. Bordeaux, Gardner H. Altman III, Altman Family Trust, Robert A. Farris, trustee). 120K cash at closing, 200K note. [File date 1/31/07.]

Stock Talk

The sky is not falling after all
Federal Reserve Chairman Ben Bernanke talked nice and convinced Wall Street that the world economy is not collapsing. Speaking on Capitol Hill, the Fed chief said he sees "moderate growth" ahead, which apparently reassured traders who'd sold stocks in a frenzy Tuesday that began in the Shanghai stock market. By the way, the Chinese government says the rumor that it is planning to start a capital gains tax, which apparently sparked the sell-off, is false. With equilibrium restored, the Dow Industrials regained 52 points, or 0.4%, to 12,268.

Radio stocks did not recover. The Radio Index slipped 0.005, statistically flat, to 156.207. Entravision was up 3.7% and Disney gained 3.5% as the day's strong performers. Salem, which had plunged the previous day, rebounded 2.4%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		44.80	unch	Journal Comm.	JRN		13.30	-0.04
Beasley	BBGI		8.75	-0.12	Lincoln Natl.	LNC		68.23	+1.38
CBS CI. B	CBS		30.37	+0.13	Radio One, Cl. A	ROIA		7.02	-0.05
CBS CI. A	CBSa		30.40	+0.19	Radio One, Cl. D	ROIAK		7.04	-0.03
Citadel	CDL		10.16	-0.14	Regent	RGCI		2.95	-0.02
Clear Channel	CCU		36.21	+0.31	Saga Commun.	SGA		9.73	+0.24
Cox Radio	CXR		14.45	-0.55	Salem Comm.	SALM		11.97	+0.28
Cumulus	CMLS		9.83	-0.04	Sirius Sat. Radio	SIRI		3.65	unch
Disney	DIS		34.25	+1.15	Spanish Bcg.	SBSA		4.51	+0.32
Emmis	EMMS		8.22	-0.03	SWMX	SMWX		0.90	-0.15
Entercom	ETM		28.56	-0.61	Univision	UVN		35.99	+0.09
Entravision	EVC		9.03	+0.32	Westwood One	WON		6.83	+0.03
Fisher	FSCI		45.56	-0.45	XM Sat. Radio	XMSR		14.36	+0.04
Hearst-Argyle	HTV		26.04	-0.14	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
Just call them Macy's
A few months after rebranding most of its regional department store chains to a single national brand, Macy's, Federated Department Stores is jettisoning its corporate name as well.

Media, Markets & Money
EMF scores troubled Georgia FMs
On Top's bankruptcy sell-off lands two in the K-Love network.

Washington Media Business Report
2004 campaign comes back to haunt
Sen. John Kerry (D-MA) is not forgetting those who kept him out of the White House.

Entertainment Business Report
Bay area move-in sets debut
"Tribute to San Francisco Radio" begins today as KTRB-AM prepares to launch its new Talk lineup.

Stations for Sale

NorthEast FM's For Sale
Clusters, standalones, sticks
8x - 12x BCF, 950K - 7.2M
[email protected] or
781-848-4201

10 TX, AZ, NC, and GA
FM radio stations at an exceptional value offered for sale. Broker cooperation encouraged. Please visit www.toweritrust.com for complete information including pricing.

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Contact
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[email protected]

Radio Media Moves

Upped
in Big D
R. J. Lane, a nine-year employee of ABC Radio in Dallas-Fort Worth has been named General Sales Manager of WBAP-AM. He has been Local Sales Manager since March 2003. Lane started with WBAP as an account executive in October 1998 following a stint as an on-air talent, producer and imaging director at another Dallas station.

Keane gets Interactive
CBS Interactive has named Patrick Keane its Chief Marketing Officer. Keane, a former Google executive, will oversee CBS' online research, reporting and analytics, as well as competitive research, sales training and search engine optimization.

Burk to Danagger
Danagger Audio Works has named Kevin Burk as its Director of Sales, bring him back to the world of radio where he began as a copywriter, announcer and operator in 1982. More recently, he served as Territory Manager with Diageo Canada, representing major brands including Guinness, Smirnoff, Johnnie Walker, and Sterling Vineyards.

RBR Radar 2007

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

Moonves comfortable
with radio portfolio
After selling 39 radio stations in the company's smaller markets, CBS Corporation CEO Les Moonves says he is satisfied with the current portfolio - although he would never refuse to listen to a good offer.

RBR observation: The tough comps are gone now. CBS Radio has lapped the departure of Howard Stern to Sirius, so Q1 results will be measured against the first post-Stern quarter. While radio revenues were down 8% in Q4 to 498.2 million, that reflected both the lack of Stern, which required the reprogramming of 27 stations a year ago, and not counting several of the divested stations, which were already being operated under LMAs by their owners-to-be. On a same station basis, CBS said radio revenues were down 6% for the quarter, but that still includes the former Stern stations. Operating income before depreciation and amortization was down only 2% to 211.3 million for the quarter, so CBS Radio appears to be getting back on track.
02/28/07 RBR #41

Mixed quarter for Clear Channel
Radio revenues were up 7% in Q4 for Clear Channel Radio to 966.8 million, but that was less than Wall Street analysts had expected. Also, it was barely ahead of the revenues of 964.5 million booked in Q4 2004, before CC Radio took a deliberate hit for a year with its Less is More (LIM) program. For the full year, CC Radio even finished behind pre-LIM 2004. Meanwhile, CC Outdoor surged 13% to 830.7 million in Q4, even better than Wall Street had expected, and "other" rose 25% to 179 million.

RBR observation: The Q4 data cuts both ways for shareholders trying to decide whether to approve the buyout bid, with votes due by a March 21st special meeting. Radio growth going forward is still a question mark, which argues in favor of taking the cash offer. But opponents of the buyout have complained that they are being shortchanged for the value of CC Outdoor. There growth is even better than anticipated and the entire outdoor industry is on a growth spurt. With two-thirds approval required for the 26.7 billion buyout to go to closing, it could be a cliffhanger vote.
02/26/07 RBR #39

Global online ad revenue
to reach 81.1 billion by 2011
Piper Jaffray & Co. Internet Media and Marketing research team published an in-depth, comprehensive research report titled, "The User Revolution," discussing the new advertising ecosystem and the rise of the Internet as a mass medium. In the report, the team outlines its expectations that global online advertising revenue will reach 81.1 billion by 2011, representing a 21% compound-annual-growth-rate (2006-2011). If you missed or did not print it out you can do so by reading here at RBR this report page.
02/26/07 RBR #39

Radio One review not a scandal
Wall Street analysts say the stock option accounting review at Radio One is not the same as the backdating practice that several high tech firms are in trouble for. Rather, they say, it appears to be a bookkeeping issue, not unethical behavior.
02/23/07 RBR #38

Hub-bub over the merger
Scott Cason from LaGrange, KY writes RBR - I don't understand the hub-bub over the merger of XM and Sirius. In every interview I have seen with various radio execs over the last couple of years, they all say they are not worried about the impact of satellite radio on their over the air stations. Judging from the programming I hear out of these same stations, I would say that's true. (More of Scott's observation in RBR)
02/23/07 RBR #38

eBay Media Marketplace
set to launch
The much-anticipated eBay Media Marketplace for automated TV buys is set to launch 3/15 in beta. While no networks are officially on board as of yet, agencies and advertisers are. The Q2 cable scatter market will be the first marketplace the system will tackle, assuming networks decide to put some inventory in the fray.
02/22/07 RBR #37

Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.

Need assistance
contact Cathy Carnegie

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