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Volume 24, Issue 45, Jim Carnegie, Editor & Publisher
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Tuesday Morning March 6th, 2007
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Radio News ®
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 Payola deal said to be imminent
Nobody wants to go on the record, but sources are saying that a settlement is in the offing that would send 12.5M total to the US Treasury, and further would earmark substantial airtime for music from local sources and independent producers. However, a quartet of agreements is said to remain shy of full 8th Floor approval. An FCC spokesperson said that it is not a done deal and that the Commission has no comment at this point. However, the parameters of the deal as reported by Associated Press fall in line with rumors that hit the streets early last month, which then placed the total value of the agreements north of 10M. The four companies, Clear Channel, CBS Radio, Entercom and Citadel, would likely sign off on consent decrees, under terms of which they would admit no guilt, but would institute agreed-upon corrective measures to assure that programming practices follow regulations, and would require a voluntary donation to the Treasury. The big difference between the latest rumor and the earlier is a plank between the companies and the American Association of Independent Music, which would require the companies to air 8.4K half-hour program segments made up of music from local and independently-produced talent. The earlier agreement was thought to contain a plank requiring 7M worth of airplay for locals and indies, but it was acknowledged at the time that there would be both administrative and jurisdictional problems with that approach. Typically, an agreement such as this will be made public just as soon as everybody involved signs off on it, which requires loyal readers to stay tuned.
RBR observation: The independent music promotion business sometimes gave the impression of pay-for-play, and basically defended itself as pay-for-access. Whether legal or not, it certainly didn't soar past the smell test. The mass exodus from utilization of promoters has in large part fulfilled the most important change in standard operating procedure that the FCC could ask for. Many feel the whole episode, kicked off by Eliot Spitzer back in his days as New York AG, is a prime example of a regulator bullying businesses into payments if only to head off the possibility of even larger legal bills. A consent decree which would not require the admission of guilt is the way to go if all parties want to simply get this over with, since it is highly questionable that there is any guilt to admit.
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 Wal-Mart rolls out
HD Radios
A big leg up for HD Radio: Wal-Mart and the HD Digital Radio Alliance announced HD digital radio receivers are launching in 1,989 Wal-Mart stores in 85 markets. In response to anticipated high consumer demand for in-vehicle HD radios, Wal-Mart stores will initially stock the JVC HD-W10 Mobile HD Radio receiver, which retails for less than 190 bucks. Wal-Mart has created a variety of programs and educational tools around HD Radio, leveraging the company's multiple points of interaction with consumers. "We know our customers want mobile HD digital radio products," said Tim Clark, automotive buyer for Wal-Mart. "We're thrilled to offer a high-quality unit like the JVC stereo at a competitive price that will make it easy for customers to discover the great benefits of HD Radio." The move is being heavily promoted in a major ad campaign on Alliance-member radio stations that represents the next phase of the Alliance's 250 million dollar marketing campaign. The spots will include a mix of :15s and :30s in all 85 markets. "Wal-Mart brings HD Radio to an incredible new level of reach and power and we are very grateful for their leadership," said Peter Ferrara, president and CEO of the HD Digital Radio Alliance. "This underscores that HD Radio is now within easy reach of millions of consumers nationwide and Wal-Mart is an ideal partner to make that possible. Wal-Mart customers not only get a terrific HD digital radio at a great price, but they can hear lots of new radio stations on the dial for free!"
FCC telco order hits the streets
The FCC's effort to provide telephone companies entering the MVPD business with relief from local franchising authorities (LFAs) has finally been released. It was adopted 12/20/06 on a strict party-line vote. It seeks to remove "unreasonable barrier[s]" to entry into the MVPD market, and says that its action is "both authorized and necessary." The FCC seeks to grease the wheels for telcos to come into otherwise cable-monopolized markets (there is no mention of DBS service), the FCC would require prompt LFA action, prevent "unreasonable build-out mandates," make it difficult for LFAs to exceed a 5% right-of-way compensation cap, discourage unreasonable public, educational and government channel requirements, and not allow an LFA to tie unrelated requirements to the award of a franchise. The FCC simultaneously asks for input on how this should affect up-and-running franchisees, and on "local consumer protection and customer service standards as applied to new entrants." The three Republicans supported the measure, hailing the long overdue arrival of on-the-ground competition for cable. The Democrats opposed, with Jonathan Adelstein issuing an unusually lengthy dissenting opinion. He said the that while the goals are "laudable," the item "...goes out on a limb in asserting federal authority to preempt local governments, and then saws off the limb with a highly dubious legal scheme."
RBR observation: At the NAB State Leadership Conference last week, Democratic Hill staffers indicated that they were awaiting this document with great interest, and echoed Adelstein's earlier comments that the FCC was moving onto legislative turf with this one. While both parties have indicated basic support a national franchising regimen, Democrats are particularly concerned about build-out requirements, fearing that the lack of them will mean that poorer parts of the will be left behind by telcos that cherry-pick neighborhoods for service. We will be extremely surprised if Daniel Inouye (D-HI), John Dingell (D-MI) and Ed Markey (D-MA) leave this order alone as is.
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 Have opinion, will travel?
There are a lot of factors that can enter into the debate on whether or not the merger between XM and Sirius should be allowed to go forward. Former Attorney General John Ashcroft entered into the debate, sending a letter to his successor opposing approval to the deal. But according to the Wall Street Journal, he apparently was ready to argue in favor of it. An XM spokesperson is saying that Ashcroft initially offered his lobbying services to them, which they declined. The definition of the market is going to be a key, but hardly the only issue. Do the two DARS companies compete against one another, or are they just a small part of a much larger audio entertainment universe, or even a much larger entertainment universe, period? But the weekend which produced the now somewhat ambiguous attack from Ashcroft also produced another speculative attack, from Dow Jones Newswires, which wonders just how much operational efficiency the two companies could muster via a merger, when the surviving entity would be saddled with high priced entertainment contracts which were the result of the previously hot competition? Dow argues that Howard Stern, Oprah Winfrey, Major League Baseball, the National Football League and other content providers are not likely to sit still for a paycut if the merger goes through.
Univision.com has longest running
MRC accreditation of any website
Univision Online announced the Media Rating Council (MRC) has voted to fully renew its accreditation of key traffic measurements on Univision.com. Univision.com was the first Spanish-language website to be accredited by the MRC. It is now the longest-running MRC accredited website, in any language. "Univision.com has demonstrated outstanding leadership and commitment to the MRC process, measurement accuracy and full disclosure through maintaining accreditation over the past three years," said George Ivie, Executive Director of the MRC. "Additionally, Univision.com has been working constructively with us to help establish strong industry guidelines and foster trust in measurement. We greatly appreciate all their efforts."
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Ad Business Report TM
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Looking at tune-in ads and Tulsa
MediaMonitors took a look at what Television and Cable programs and channels ran ads on the radio in America along with a spotlight on a city in the state where those who woke up early and got to the land grants before anyone else are called Sooners.
They also took a look at Tulsa: Muskogee Chrysler Jeep Dodge came in #1 last week with more than 500 spots. Ford Lincoln Mercury was in the 4th position with 313 spots. Employment is on the minds of many Sooners with Tulsahelpwanted.com advertised 462 times last week to score #2 in the Tulsa Spot Ten, while Victory Energy Recruitment clocked in at #8. Casinos are big in the area with Cherokee Casino Resort winning the #3 slot with 358 commercials and the Osage Million Dollar Elm Casino pulling the #5 slot with 258 units. Turbo Tax came in #9 in our audit with 231 spots. Autozone zoomed from 16th to #10 with 220 auto part plugs.
The networks aiming for a big finish in the February sweeps, loaded up radio spots for their shows, networks and cable channels: In the nation, Fox TV Network was #1 in spots with 14,767 above NBC TV with 5,972 in at #2 and ABC TV ran 5801 commercials promoting their shows. CW TV (the CBS and Warner partnership network) aired 4753 spots which solidifies the top 4 positions with over-the-air networks. The top cable outlet was E! Entertainment TV with lots to talk about with the Academy Awards, they ran 4183 units. ESPN's full-court-press netted them 6th (up from 13th) airing 2004 spots. CBS TV running behind the other networks came in #7th with 1619 commercials and Harpo Productions' THE OPRA WINFREY SHOW came in #8th nationally with 1523 announcements. The 9th position was owned by Discovery Channel (1514) promoting their program with historical implications to Christians and the #10 spot was bagged by BBC America with 1293 spots. On the overall National SPOT TEN, the new champion is the HD DIGITAL RADIO ALLIANCE running 29,442 spots, VERIZON in at #2 with over 29,000 commercials and GEICO fell to #3 with 26,370 spots.
 Diet product's limited ad campaign generates media
The makers of Sugarest, MM2 Group Inc., say that its advertising flight in a selected batch of markets has had a benefit they didn't necessarily count on. The on-air time they bought seems to have mushroomed into free time in the form of broadcast news coverage. Sugarest is a "diet gum" which MM2 says "temporarily blocks and neutralizes the sweet-taste receptors in your taste buds." It calls the effect "instant will-power," and markets the product as something to pop in your mouth the next time you are facing an otherwise irresistible craving for a fatty sweet of one kind or another. The company's original buy was said to include "New York City, Boston, Philadelphia, St. Louis, Indianapolis, San Francisco, Houston, Las Vegas, Kansas City and Austin, among other cities." MM2 claims that limited flight has generated news stories from 36 stations scattered throughout the country.
RBR observation: Any advertisements for products in the diet universe should automatically raise a red flag. This is an area where the Federal Trade Commission pays close attention, and upon which it casts an extremely jaundiced eye. This product makes no special claim, however, other than an ability to distract the user from edible items best avoided. It makes none of the true red flag claims, like that it makes dieting and exercising unnecessary. Plus there apparently are at least 36 stations out there vetting the product with their own news departments. We'd guess that Sugarest ads may be run with a clear conscience.
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| Media Business Report TM |
 Emmis invests in mobile content provider
Jeff Smulyan and Emmis Communications is investing in Exponentia, a company that has been running text games on mobile phones since the end of 2004. Emmis gets a stake in the company in return for its investment, both of which were not disclosed. Smulyan sees it as "another important step in providing consumers of traditional media with new and innovative ways to connect with and enjoy our content using exciting new technology such as text gaming on mobile phones." The service invites users to compete for prizes by participating in live events, perhaps by predicting "who will score the next goal" during a hockey game (the company has a deal with the NHL) or by answering related trivia questions. It mentions sporting events, concerts and "any other real-time gathering" as suitable for its service.
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| Media Markets & Money TM |
Clear Channel spins Boise cluster
Peak Broadcasting is entering grouphood with the announcement of its second radio cluster acquisition, and the "Peak" in the company name could well refer to the radio realm in which it has been doing its shopping. It's buying from Clear Channel this time after cutting a deal with CBS before. The stations, according to broker Kalil & Co., include KFXD-AM, KTMY-FM, KCIX-FM, KIDO-AM, KSAS-FM & KXLT-FM. Peak CEO Todd Lawley has big plans for the cluster. He said, "As Peak Broadcasting's second major acquisition, we are proud to be a part of the fast growing Boise market. Peak's philosophy of quality programming, customer based advertising solutions, significant marketing, and new media innovations will enhance these already strong audio brands." Peak's earlier CBS deal was for a two-AM, five-FM cluster in Fresno, which it acquired for 90M. The price for the Boise cluster was not disclosed.
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| Washington Media Business Report TM |
 Should time change scare the daylights out of AMs?; TDGA advises
Not at all. The upcoming early adoption of Daylight Savings Time by an act of Congress does affect AM radios that have pre-sunrise (PSRA) and post-sunset (PSSA) authorizations, usually permitting broadcast at reduced power during the time around those daily events. 3/11/07 marks the new beginning of DST, and 11/4/07 marks the new end. Peter Gutmann, attorney at Womble Carlyle Sandridge & Rice PLLC has sent out a client advisory on how the FCC is handling the changes, which do affect applicable licenses. Failure to adjust for the new starting and ending times could lead a station into operation above permissible levels, so the FCC has recalculated PSRA/PSSA operating power. At the same time, it is not so notifying each affected station, but is instead posting the new authorizations on the "station search" portion of its website. It's in the "View Correspondence Folder" section under "Imported Letters. Help at the FCC can be obtained at (202) 418-2700 or, if you're a client of WCS&R, Guttman says they'd be more than happy to help you out.
Also: advice from the TDGA for traffic systems: "Traffic Directors are advised to check your new power change times and levels for notes on AM Station Program Logs beginning March 11th, (Only applies to AM Radio Stations). Your next Sunday Log (03/11/07) should reflect the change to Daylight Savings Time at 2-am (Assuming your state or Territory observes DST, and that's 98% of the US and territories.) This is the first time the DST spring forward of clocks occurs on this date. It might be a good idea to check ahead to insure not only your Computers will advance the hour properly, but also your Digital Automation units. (Needless to say, you'll also want to be certain they don't jump ahead on April Fool's Day, too, (first Sunday in April) which would have been the previous time change date. Good Luck on 03/11 this year-- it's the only 23-hour long day of the year."
Do DST reauthorizations constitute an AM hit list?
Art Sutton of GA-Carolina Radiocasting feels "whacked." He lists several AM stations which have suddenly found out they are required to reduce power in pre-sunrise and post-sunset hours, after 50 years of broadcasting at a certain power in some cases. He cites WNEG-AM Toccoa GA, shot down from 500 watts to 46 watts; WFSC-AM Franklin NC from 156 watts to 30 watts; WSNW-AM Seneca SC from 500 watts to 290 watts mornings, and nighttime power from 58 watts to 19 watts; and WRGC-AM Sylva NC, from nighttime 250 watts to 3 watts. Sutton is looking for quick action of FM translators for AM stations "...so at least a few of us can regain what they are taking away."
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| Internet Media Business Report TM |
Papa John's and GameFly partner in national campaign
GameFly, a leading online video game rental service, announced a national partnership with Papa John's Pizza in which Papa John's customers will be offered a special free GameFly trial membership and a 10 dollar Papa John's gift card through an integrated promotion both on pizza boxes and across multiple online customer touch points. The program, which launched last week, features the special offer on approximately 24 million Papa John's box tops, directing customers to a unique promotional GameFly Web page, www.gamefly.com/papajohns. On this page, customers can obtain additional information about the promotion, their free trial membership and receive a 10 dollar Papa John's gift card good for online ordering at www.papajohns.com. Papa John's will also integrate the promotional offer on their home page, and as a value added offer in emails to the Papa John's database. In March, GameFly will feature a special Papa John's pizza coupon for GameFly subscribers on envelopes in which games are shipped directly to customers.
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| Ratings & Research |
 Katz releases Fall 2006
national format averages
The latest Katz Media Group Radio National Format Averages report for all Fall 2006 markets shows how demos continue to play an increasing role in analyzing the shifts seen among formats. Katz analyzed over 4,000 stations and nearly 50 formats in 298 Arbitron markets to produce the figures for this study. 35 format classifications - some separately for AM and FM stations - are examined in detail. This year Katz sees a pattern that show more stability among broad-based formats, particularly those targeting 25-54 year-olds. Many formats with broad demographic appeal finish either higher or remain stable from a year ago. These formats include AC, Soft AC, Country, News and News/Talk. A similar trend is seen over the past five years with these same formats. These formats appeal to a wider spectrum of demographics and, as a result, seem to experience fewer peaks and valleys than more targeted formats. Growth takes on a slower, more consistent track and sudden declines or increases are less likely. The other side to this story appears to be those formats which appeal to highly targeted audiences - either by age or ethnicity. Formats such as Big Band or Adult Standards on the older end, and CHR and Alternative Rock on the younger end all show declines this Fall. Over the past five years each of these formats has shown much more inconsistency - either up or down - than their broad-based counterparts.
| Read More... |
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| Transactions |
1.15M KMCD-AM/KIIK-FM Fairfield IA from Fairfield Media Group Inc. (David Neff) to Dean Radio.TV Company-Fairfield LLC (Dean Goodman). 30K escrow, 720K cash at closing, remainder estimated 60% share of receivables. Includes non-compete. [File date 2/5/07.]
452K WWPR-AM Sarasota-Bradenton FL (Bradenton FL) from Greenrose Broadcasting Services Inc. (Raymond F. Green) to Vidify Media Inc. (Daniel Silver). 5K cash at cloaing, credit for deposits/applicable LMA payments, remainder via promissory note. LMA/option 2/22/05. [File date 2/5/07.]
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| Stock Talk |
Butterflies on Wall Street
A myriad collection of concerns spooked the herd on Wall Street yesterday, and every attempt to buck up and head toward positive territory seemed to meet with other, stronger attempts to hold things down in the red. The problems - mortgage concerns, Japanese money valuations and other stock markets - had nothing to do with broadcasting, but you're favorite broadcasting stock probably was punished along with most everyone else anyway. See below to find out.
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| Radio Stocks |
Here's how stocks fared on Monday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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44.66
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+0.54
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Journal Comm.
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JRN
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12.76
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-0.26
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Beasley
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BBGI
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9.04
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+0.19
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Lincoln Natl.
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LNC
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67.19
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-0.47
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| CBS CI. B |
CBS |
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29.62
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+0.30
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Radio One, Cl. A
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ROIA
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6.76
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-0.11
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| CBS CI. A |
CBSa |
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29.55
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+0.18
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Radio One, Cl. D
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ROIAK
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6.75
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-0.09
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| Citadel |
CDL |
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9.66 |
-0.32 |
Regent
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RGCI
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2.95
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-0.02
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Clear Channel
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CCU
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35.75
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-0.26
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Saga Commun.
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SGA
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9.75
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-0.01
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Cox Radio
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CXR
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13.46
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-0.44
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Salem Comm.
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SALM
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11.19
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+0.35
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Cumulus
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CMLS
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9.54
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-0.21
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Sirius Sat. Radio
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SIRI
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3.37
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-0.18
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Disney
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DIS
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33.72
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-0.23
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Spanish Bcg.
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SBSA
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4.42
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-0.03
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Emmis
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EMMS
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7.88
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-0.23
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SWMX
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SMWX
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1.20
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+0.19
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| Entercom |
ETM
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27.81
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-0.80
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Univision
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UVN
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35.92
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-0.06
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Entravision
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EVC
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9.01
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-0.05
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Westwood One
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WON
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6.50
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-0.09
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Fisher
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FSCI
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44.41
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-0.44
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XM Sat. Radio
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XMSR
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13.47
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-0.51
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Hearst-Argyle
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HTV
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25.42
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-0.66
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-
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Ad Business Report
Diet product's
Limited ad campaign generates media...
Media Business Report
Emmis investing in mobile
Content provider Exponentia, running text games on mobile phones...
Internet Media Business Report
Papa John's & GameFly
Partner in national campaign...
Ratings & Research
Fall '06 national format averages
A pattern that show more stability among broad-based formats...
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Stations for Sale
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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.
 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
[email protected]
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More News Headlines
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Youth vote still spotty
In the 2004 presidential election, 63.8% of all eligible voters actually voted, according to the Census Bureau. 66.3% above the age of 25 did so, and 73.3% in the 65-74 age block did so. And the number for voters 18-24? 46.7%.
RBR observation: You'd think candidates would do something about this. We understand the attraction of the engaged, politically-aware audience of News and Talk stations, but that is not where you'll find the kids. They're out there, though. The first candidate who starts using young-skewing formats may get a bonus turnout at the polls, something your sales staff should point out ASAP.
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SmartMedia Magazine
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Coming in April's Issue:
Multiplatforming: CBS Corp.'s R.I.O.T. team: the multiplatform sell
Branding: Michael Keller, chief brand officer for International Dairy Queen
OneonOne: George Beasley celebrates 45 years in the biz
AdBiz: Michael Bologna-- Mediaedge:cia Senior Partner, Director of Emerging Communications writes on VOD Advertising
Quarterly Stocks report
3M: Financial Roundtable Part II
Eng. & Tech: HD-2 equipment glitches Bonneville—Phoenix study
If you missed the
March issue...
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So you Don't miss
April's issue
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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Thumbs up for buyout
One of the major advisors to institutional investors is recommending acceptance of the 37.60 per share buyout offer for Clear Channel Communications. Even so, Proxy Governance says it has some reservations about whether the price is adequate. With the clock ticking down to the March 21st shareholders vote on the 26.7 billion bid by Thomas H. Lee Partners, Bain Capital and Mays Family to take Clear Channel Communications private, the opinion of advisory firms such as Proxy Governance may hold the key to whether or not CCU's large shareholders vote to take the buyout.
RBR observation: The suspense builds. Will CCU be able to sell the deal to two-thirds of its shareholders, despite the opposition of its largest shareholder, the Fidelity mutual funds group? With a 10% no vote a given and at least 10% of the shareholders likely to not bother to vote - which puts them in the no column as well - it will be challenging for the would-be buyers to keep that 20% from creeping up past 33% and nixing the deal.
03/05/07 RBR #44
Clear Channel signs for
PPM in Philadelphia
Holdout Clear Channel has changed its mind-it will now encode its stations and subscribe to Arbitron's PPM system in Philadelphia. This, after massive pressure from the agency and advertiser community, and after the system was recently accredited by the Media Rating Council for use in Houston (Arbitron has not yet received formal accreditation for the system in Philly).
RBR observation: Yes, Clear Channel had no choice in Philly and will likely have no choice in other PPM rollout markets as well. CCU and some other broadcasters are still funding the Houston test for an alternative audience measurement system from Media Audit/Ipsos. If the numbers look good on that test, we're sure the RFP Committee will push hard for its accreditation. A lower price for service is a major driver. But accreditation takes time and meanwhile, PPM will continue to get established, market by market. Last and most important to remember is Media Audit/Ipsos is not scheduled for results until early 2008.
03/05/07 RBR #44
3% gain! Don't touch that dial
Leave it right there, at 3%. That's where local business stands for 2007 compared to 2006, based on Radio Advertising Bureau/Miller Kaplan Arase & Co. numbers for the month of January. It wasn't that long ago that a 3% gain would have been cause for major snoring, but lately, any number that is curly and black looks good. Of course, this tale of a silver lining comes with a black cloud, and that is national business, which sported the same curly number as local, but colored red. However, the combination was good for a 2% gain in overall spot revenue, and non-spot revenue was up a hefty 13%. Non-spot remains, however, a small portion of total business, and the double-digit performance did not bring the bottom line any higher than the aforementioned 2%.
RBR observation: 2% may be a modest step forward, but it is a step forward nevertheless. And perhaps we can build on it. The crystal ball readers all seem to think we're in for another tough year, but they've predicted recoveries before and been wrong. Maybe this time they predicted slow and were wrong again. It's time for radio to rise up and make them look foolish by wildly exceeding expectations.
03/02/07 RBR #43
A call to action for
Communications Leadership
GroupM CEO North America/AAAAs Media Policy Committee Chairman Marc Goldstein spoke about four critical issues affecting the media business at the annual 4A's conference in Las Vegas. He asked for a call to action for the media community to fulfill the promise of this meeting's theme: 1. A new commercial ratings system. 2. Trumpet the benefits of a career in media investment management (in other words finding good people). 3. Continue to develop original creative and compelling content. 4. Get on board with e-biz-which calls for industry standards in handling media transactions. 5. Collaborate and stop arguing over control.
RBR observation: In short these points are not new but rather a consistent re-enforcement of those that were stated in the 2006 conference. Especially Collaboration instead of Arguing. For complete details see this report page in RBR.
03/02/07 RBR #43
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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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