RBR's Daily Morning Epaper

Volume 22, Issue 45, Jim Carnegie, Editor & Publisher

Friday Morning March 4th, 2005

Radio News®

Murdoch sweetens offer
to buy out Fox shareholders
Disgruntled minority shareholders at Fox Entertainment have succeeded in getting News Corporation to increase its bid to buy them out. Rather than the initial offer that Rupert Murdoch made in January to roll the rest of Fox into News Corporation at 1.9 shares of News Corporation Class A stock for each share of Fox (1/11/05 RBR #7), the offer has now been boosted to 2.04 shares of News Corporation Class A for each Fox share. The tender offer, which had been scheduled to expire this Friday, has been extended to March 18th. News Corporation raised its offer after conferring with a special committee of Fox's independent directors, who had hired their own financial advisors to evaluate the offer. News Corporation is also facing more than a dozen lawsuits from shareholders who had claimed that the buyout offer shortchanged them. At CIBC World Markets, analyst Michael Gallant said the 2.04 share offer is close enough to the point where he calculates that the acquisition would become dilutive to News Corporation, 2.1, that he thinks this is Murdoch's final offer. He predicts that News Corporation will walk away from the Fox roll-up if the required 87 million Fox shares aren't tendered. News Corporation's exchange agent reported that only 1.7 million shares had been tendered as of March 1st, but that wasn't considered unusual, since the market was anticipating a sweetening of the bid.

Hollander's sales list gets noticed
Viacom officials have been talking for a year or so about selling or swapping Infinity's radio stations below the top 20 markets, but when Infinity CEO Joel Hollander started naming markets this week (3/1/05 RBR #42) people began to take notice. The Triad Business Journal ran with the headline, "Triad radio stations on the auction block," referring to Infinity's trio of stations in Greensboro, NC. Buffalo Business First was a bit more subdued, headlining "Infinity Broadcasting expected to sell Buffalo stations." The third market mentioned specifically by Hollander was Fresno, CA.

RBR observation: A decade ago, station owners tried to keep plans to sell a closely guarded secret. After all, a rumored ownership change could send top air and sales talent rushing to the competition with their resumes. But station trading became so commonplace after the 1996 Telecommunications Act that employees learned to expect to have their station sold - - and that there was no more job security anyplace else. It looks like Infinity employees outside the top 20 markets can pretty much assume that their employer will change within the next couple of years. But since most of them have probably gone through at least one ownership change in the past decade, it's no big deal to have it happen again.

FCC reaffirms Cumulus MS cluster
In response to a petition for reconsideration which relates back 4/18/02, the FCC has upheld a series of deals which resulted in a Cumulus superduopoly cluster consisting of three AMs and four FMs in the Columbus-Starkville-West Point MS Arbitron market. The petition was filed by T&W Communications Inc. T&W objected to the cluster formed as a result of four transactions: | More... |

Sinclair wants Supremes to weigh in on TV octet
Did the Third Circuit illegally overrule the DC Circuit when it ordered the FCC to continue enforcing the eight-voice test when determining the legality of proposed TV duopolies? That's what Sinclair Broadcast Group thinks, and it's planning to ask the Supreme Court to rule on the topic. Sinclair argues that the DC Circuit ordered the FCC to consider the eight-voice rule, and the FCC found it insupportable. In view of the fact that the 1996 Telecommunications Act orders the Commission to get rid of unnecessary regulation, the eight-voice rule, found to be unnecessary, should have bitten the dust. Further, SBG says the deregulatory language of Telecom should have rendered the FCC's proposed prohibition on mergers between the top four in-market television stations illegal. Sinclair further wants the Supreme Court to consider whether restrictions on in-market broadcast television co-ownership constitute an abridgement of broadcasters' First Amendment rights in the absence of similar restrictions on cable, DBS, programming content and Internet providers.

Lil' Kim accused of lying about radio shooting
While Emmis' WQHT-FM New York was the site of yet another shooting this week (3/2/05 RBR #43), a jury in Manhattan is hearing testimony in a case stemming from a shooting at the same station in 2001. Hip-hop artist Lil' Kim, whose real name is Kimberly Jones, is facing up to 10 years in federal prison if convicted of conspiracy, perjury and obstruction of justice for lying to a grand jury about the shooting. Based on press reports of the evidence presented so far, she might want to get some pointers from Martha Stewart on how to turn prison time into a career-enhancing move. Jones told the grand jury that she didn't see her manager, Damion Butler, anywhere near the station that day - - but a videotape shows them standing next to each other and Butler has pleaded guilty to firing a gun that day. She also denied knowing Suif Jackson, who has pleaded guilty to firing a machine gun in the 2001 shootout. Jackson testified in court that the two had been friends for about 10 years.

The wisdom of Solomon?
David Solomon, Chief of the FCC Enforcement Bureau, is following Chairman Michael Powell and Media Bureau Chief Ken Ferree out the door. He is expected to exit in May. His job, collecting fines for various infractions such as EAS violations and operating an FM station without a license has become considerably more complicated as both Do Not Call and indecency have projected high profiles. Solomon was responsible for excusing U2 frontman Bono's f-bomb slip up at the 2003 Golden Globes, as broadcast over the NBC Television Network. We were there when Solomon tried to defend that decision before the House Energy and Commerce Committee. He told the members of the Committee at that time that he had hoped for some last minute 8th Floor guidance on Bono, which he did not get. The EB ruling was overturned by the Commissioners a short time later.

RBR observation: Indecency enforcement has become a thankless task, with one side chastising the Commission for trying to become the national nanny at the expense of the First Amendment, while the other side howls that the Commission is becoming an enabler of broadcast pornography. The likely imposition of fines of up to 500K per offense should only put more pressure on the person making the call on gray-area offenses. Ferree's replacement - - Deborah Klein is currently acting in that capacity - - will be entering in the middle of the DTV transition, and will oversee the review of the 6/2/03 media ownership rulemaking even as a coalition of broadcasters tries to get a Supreme Court hearing on the topic. For the next EB chief, jumping into the middle of the indecency cauldron will be just as daunting a task.

From The AAAAs In New Orleans

Verklin: "The crackle of
change is in the air"
Yesterday at the AAAAs Media Conference in New Orleans, Carat North America CEO David Verklin spoke passionately about how "The crackle of change is in the air." (It was the buzz at numerous panel sessions throughout the day). For the media services sector, he pointed out how many have been formed in North America over just the last few years: "A group of 10 companies, many of whom did not exist six years ago now control the global business of buying advertising time and space. 75% of all the network television commercials that we've bought in this year's upfront will be bought by six companies. I argue that the media services revolution that we're all a part of began in Europe 25 years ago when the advertising business bifurcated into two disciplines: companies that made ads and companies that placed and planned them. That model swept the US in the last 48 months. The brands Mindshare, OMD, Universal McCann, MPG and Initiative did not exist in this country over four years ago. That model from Europe swept this country and caused a seismic shift in our advertising business." He cited Saatchi & Saatchi's Zenith Media; Leo Burnett's media is now purchased by Starcom; BBDO, DDB and TWBA/Chiat/Day now use OMD; Ogilvy, JWT and Y&R now use Mindshare and Mediaedge:cia. And as a byproduct, almost 70 out of the top 100 global advertisers on the planet have reviewed their media services provider in the last 48 months. Verklin also looked a bit into the future, citing "Seven changes to watch for in the next 36 months." Find them here.

Adbiz©

Ausick has the plan for Euro RSCG 4D Chicago
Branding veteran Paula Ausick has been named to the newly-created position of Senior Vice President and Director of Strategy and Planning for Euro RSCG 4D Chicago. "Today more than ever the success of a product really depends on making products relevant to the right audience, through the right channels. Throughout her career Paula has demonstrated expertise not just in understanding the consumer but in predicting how consumer-buying behavior shapes business trends," said Mark Blankenship, President of Euro RSCG 4D Chicago. Ausick had previously been Director of Brand Equities at Foote Cone & Belding Chicago.

Kuhn to drive VW/Audi account
Tom Kuhn has joined MediaCom as Senior Vice President/Group Planning Director on the agency's Volkswagen/Audi account. He had previously been Sr. VP, Account Supervisor at Gianettino & Meredith Advertising.

Good February for retailers
Major retailers reported sales boosts in February, with shoppers snapping up new spring fashions. The giant of giants, Wal-Mart, reported that its February same-store sales were up 4.1%, beating its own guidance. It now is projecting similar growth for March. JC Penney reported that its February same-store sales were up 6.1%. Sales were also good for high-end retailers. Neiman Marcus said its same store sales were up 7.7% and Nordstrom had a 7% gain.

Silestone milestone
Cosentino USA is hoping to build on the major splash it made via a Super Bowl TV buy to promote its Silestone quartz countertops. The campaign, designed by agency Freed Advertising, focused on well-known NFL and NBA personalities who were seen enjoying the products. The new follow-up campaign, earmarked for flights on HGTV and "The Oprah Winfrey Show," takes it to the next level - - the benefits the product offers for the average consumer. Three spots have been filmed, and the campaign, representing Cosentino's first foray into television, will run throughout the year.

April Radio & Television Business Report

Be sure to catch our blockbuster April NAB issue:

One on One: We interview outgoing NAB CEO Eddie Fritts.

Feature: What kind of individual would industry leaders like to see head the NAB?

AdBiz: But will they buy it?
We ask agencies and the industry about support for new, unproven formats.

Media, Markets and Money: We check the financing climate: Is financing still readily available for radio and TV deals?

Advertisers: Don't miss this opportunity to appear in Eddie Fritts' farewell interview!
Call Today, space is limited.

June Barnes at 803-731-5951 or
Jim Carnegie at 813-909-2916

Don't miss your copy!

Media Markets & MoneyTM

KCOM going to Cherry Creek
Cherry Creek Radio is adding a fourth station in the unrated portion of Texas in the middle on the imaginary triangle formed by Dallas, Waco and Abilene. However, the deal is unlikely to cause major ripples on Wall Street, with a pricetag of 164K, as we learned from broker Bill Whitley of Media Services Group. The seller is West Texas Media, and the station is KCOM-AM Comanche. It will cluster up with KYOX-FM in Comanche, KSTV-AM Stephenville and KSTV-FM Dublin.

Washington Beat

Will Dems go to Texas to avenge Daschle?
The Washington Post is reporting surprising weakness in the voter support for Republican House Majority Leader Tom Delay (R-TX). Democrats may funnel large sums of money into Delay's district in the suburbs of Houston in an attempt to oust the controversial legislator, who is not known as "The Hammer" for nothing. The Post says that a relatively unknown Democratic opponent managed to hold Delay to 55% of the popular vote in the 2004 election. Dems may decide that Delay is vulnerable, particularly without President Bush anchoring the ticket in the 2006 midterms. Local broadcasters are on notice - - there may be a lot of money flowing into the Texas 22nd District, along with the pressure on inventory that accompanies seasonal political dollars. Democrats may be particularly anxious to draw elephant blood in the wake of the concerted and successful effort made by Republicans and resulting in the ouster of Senate Minority Leader Tom Daschle (D-SD) in 2004.

Programming

ABC sets special for Martha's release
ABC News Radio will offer a one hour special on Martha Stewart's release from prison. The special will be broadcast on Friday, March 4th at 7pm ET, and be re-broadcast that evening and on Saturday, March 5th. "Martha Stewart - - Life After Prison" will look at what's ahead for Stewart, both personally and professionally. Did her time in prison and away from the American public hurt her...or will this experience make Martha Stewart bigger than ever? The radio special will be anchored by ABC News Correspondent Gil Gross.

Transactions

WSPR-AM, WACM-AM Springfield MA (Springfield, West Springfield MA) from Antonio F. Gois and Helena R. Gois to Davidson Media.

WZMM-AM Asheville NC (Black Mountain NC) from Zybek Media Group LLC to HRN Broadcasting Inc.

| More... |

Stock Talk

Mixed news, mixed stock prices
A favorable government report on productivity and a drop in unemployment claims didn't completely counteract another increase in oil prices. The Dow Industrials rose 21 points, or 0.2%, to 10,833. The S&P 500 index was also slightly higher, but the Nasdaq Composite was down nine points.

The Radio Index was up modestly, gaining 0.712, or 0.3%, to 221.951. Univision was the big mover - - and it moved down 4.2%, giving up some of its gains from earlier in the week. Other Spanish broadcasters were higher. Entravision gained 1.8% and Spanish Broadcasting System was up 1.4% for the day.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		40.46	-0.14	Jeff-Pilot	JP		48.87	-0.08
Beasley	BBGI		17.63	+0.13	Journal Comm.	JRN		16.54	+0.10
Citadel	CDL		14.32	+0.07	Radio One, Cl. A	ROIA		13.88	+0.10
Clear Channel	CCU		33.31	-0.07	Radio One, Cl. D	ROIAK		13.87	+0.04
Cox Radio	CXR		16.54	-0.07	Regent	RGCI		5.24	-0.01
Cumulus	CMLS		14.42	+0.08	Saga Commun.	SGA		16.29	-0.06
Disney	DIS		28.57	-0.12	Salem Comm.	SALM		23.60	+0.30
Emmis	EMMS		18.96	+0.09	Sirius Sat. Radio	SIRI		5.75	-0.17
Entercom	ETM		35.40	+0.07	Spanish Bcg.	SBSA		10.54	+0.15
Entravision	EVC		8.70	+0.15	Univision	UVN		28.60	-1.25
Fisher	FSCI		50.95	-0.54	Viacom, Cl. A	VIA		35.68	+0.02
Gaylord	GET		43.39	-0.17	Viacom, Cl. B	VIAb		35.25	-0.01
Hearst-Argyle	HTV		25.32	-0.09	Westwood One	WON		21.68	-0.29
Interep	IREP		0.58	+0.01	XM Sat. Radio	XMSR		33.28	-0.61
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

__UNSUB__ to this email service.

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

This reader takes Mel Karmazin to task (3/3/05 RBR #44).

First, terrestrial radio is a growth business if done creatively, correctly. Also it would help if both terrestrial and satellite play by the same rules (this alone would all but kill satellite). Secondly, satellite has no place to go but up, if they were to go down they would be out of business. Third, what happened to the pie in the sky talk of satellite being ad free? Finally, both Karmazin and Stern can't make it happen in the world of Radio anymore, so they have turned to biting the hand that fed them for years.

Jeff Harvey, General Manager
WCOW/WJLK
Sparta, WI

Arbitrends

Upped & Tapped

Reeder leaves
RAB for AMS
David Reeder, who had been Director of Advertising for the Radio Advertising Bureau, has joined American Media Services and will open AMS' Dallas office as Regional Broker. | More U&T |

Stations For Sale

3 station cluster
Well managed smaller market 3 station cluster in beautiful northern California. Positive cash flow. Includes newer equipment and real estate. $2.25 million. The Exline Team, Andy McClure, Dean LeGras,
415-479-3484, [email protected]

Santa Fe Market #237 FM
New market FM entrant ready to go! Santa Fe is a unique and rich market with a great opportunity for an aggressive, innovative operator!
Cliff at Clifton Gardiner & Co
(303)758-6900
[email protected]

More News Headlines

Verizon chief to keynote NAB2005

XM signs racing deal

NBC Uni wants all of MSNBC

February Digital Print Magazine Now Available

"The Pros and Cons
of Nielsen's LPM and Arbitron's
proposed PPM service"
After a rocky start, it's roll-out time of LPM & PPM. Will there be cooperation or more talk?

GM talkback: "How has LPM ratings changed selling in your market?" TV GMs say what they think-the good, bad and the ugly.

Media, Markets, and Money: Only one place tells it like it is with a run-down and overview of the biggest quarterly Radio and TV deals and outlook to 2005.

November Zinio Solutions Magazine
Read RBR/TVBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the February Issue of RBR/TVBR

RBR Radar 2005

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

Mel Karmazin disses
terrestrial radio-talks ads
Now a satellite guy and in his first public comments since becoming CEO of Sirius Satellite Radio told a Bear Stearns investor conference unlike satellite radio, there's not much growth left in terrestrial radio. "It's a very mature business." Karmazin suggested that terrestrial radio companies might be good targets for leveraged buyouts, since they produce lots of free cash flow, but he insinuated that radio will never again see the type of growth it had when he was building Infinity. Karmazin also touts ad revenues for satellite and stated satellite radio may have built its reputation on offering commercial-free music channels, but says advertising sales are going to be increasingly important as the company rolls out exclusive non-music content like NFL Football.
RBR observation: Can you imagine the local outcry if a pro sports team exits free radio to make its fans subscribe to a pay radio service in order to hear play-by-play? It's also hard to see how anyone could book more ad dollars for a service with 2% local market penetration than for one with nearly 100%, which is the only way that Sirius can pay more for the rights than a local broadcaster would. Even if getting exclusive play-by-play rights makes that 2% jump to 5%, we still don't see how the numbers could work. 03/03/05 RBR #44

"Total Communications Planning - Where Do All The Media Fit?"
The major panel session explored the value of planning and buying across a broad spectrum of available media. With more and more options available, success is based-and measured-on the right choices at the right times for the right reasons. About DVR, TVB Pres. Chris Rohrs noted two changes that are 100% predictable. "We will see more irregular length spots and breaks. And that will raise the quality level of the commercials. We'll see better and better creative, because it will have to be in order to keep the consumer from moving on." He added, "Television is tee-ing up a spectacular opportunity for the advertiser to make a more vivid connection with the consumer-HDTV. It is a game-changer of the highest order. There is very little advertising going on in HD so far, but I would suggest it is a huge upside opportunity to connect with the consumer." Editor's note: FYI TV and TVB board members President Chris Rohrs represented your interests exceptionally well. If TV was looking for attention you got it. 03/03/05 RBR #44

TVB hails first
"open standards" EDI orders
Taking a significant step forward toward achieving a paperless process, open-standards electronic orders were sent for the first time from an ad agency to a collection of television stations. The orders were sent by Horizon Media and received by Viacom TV stations; the project was done under the auspices of the TVB EDI Committee. The trading partners used the TVB open-standards schema, the industry-endorsed hub transport based on web services, a non-proprietary architecture and the AAAA's electronic registry - all publicly available. Powering the project was Microsoft, Spot Buy Spot and Strata Marketing. 03/03/05 RBR #44

Deal Maker
W.B. Grimes & Company is seeking a "deal maker" to head up its Broadcast Brokerage Division. You must have passion for sales, solid broadcast background, and an active rolodex. Commission-based position with exceptional earnings potential. Relocation not required.

News Director
WLPO/WAJK/WKOT, LaSalle, IL - Established stations in the Midwest looking for the journalist of integrity and understands what local means to a news department with experience to encourage others on staff. LaSalle is a great market and excellent company benefits. EOE.

See Radio Careers for more info.

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