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Volume 24, Issue 48, Jim Carnegie, Editor & Publisher

Friday Morning March 9th, 2007

Radio News ®

Hill action keeps on coming
Already in the brief history of the 110th Congress, the Senate has had the five FCC commissioners in for a visit, and the House has had Mel Karmazin and various other witnesses in twice. Before March segues into April, it looks like the two legislative bodies will swap guest lists. The Senate session will at least have a novel setting. Instead of the go-to Commerce Committee, it will be held 3/20/07 under the gavel of Herb Kohl (D-WI), pictured, chair of the Senate Committee on the Judiciary. The 2:15 PM session is called "The XM-Sirius Merger: Monopoly or Competition from New Technologies." The upcoming House session, on the other hand, will be in the familiar environs of the Subcommittee on Telecommunications and the Internet, and looks to be a simple rescheduling of the postponed 3/1/07 session, and which chair Ed Markey can be expected to have the five FCC Commissioners on hand as before. At Markey's Wednesday session, Karmazin's presence had the effect of focusing most of the attention on the XM-Sirius merger despite the supposed topic of the "future of radio." In his opening statement, Markey noted many areas of concern, so we can expect a more free-wheeling session when the commissioners make their appearance.

RBR observation: Look for questions about increased public interest responsibilities in the digital area and ways to increase minority and female ownership, to name just two items. Markey also expresses grave concern about the recent Internet copyright royalty decision-see related story, below.

New internet royalties draw fire on Capitol Hill
Rep. Edward Markey (D-MA), chairman of The House panel on telecommunications and the Internet, had harsh words for the U.S. Copyright Royalty Board's new internet audio royalty rates (3/7/07 RBR #46). It proposes raising the amount that commercial Internet radio broadcasters pay to labels by 30% retroactively to 2006 and through 2009. From a CNET News story: "This represents a body blow to many nascent Internet radio broadcasters and further exacerbates the marketplace imbalance between what different industries pay," Markey said in the hearing, The Future of Radio. "It makes little sense to me for the smallest players to pay proportionately the largest royalty fee." The CRB's decision has imperiled webcasters by widening the gap between what Internet radio and satellite radio services must pay, RealNetworks general counsel Robert Kimball told politicians. He was also speaking for the Digital Media Association. If the decision is not overturned, "one can easily imagine Web radio looking more and more homogenized," Kimball said. That's because the higher rates may force Internet radio operators to reduce the number of songs they carry or increase their ad prices and frequency, which could make it a less desirable place for advertisers to invest, he said. Kimball suggested the proposed merger between XM and Sirius should be put on hold until Congress "corrects the Copyright Act's bias against the Internet." NAB spokesperson Dennis Wharton told RBR: "It's a disappointing decision. If it stands, there will be less music choice for consumers and a technology would get stifled in its infancy."

RBR observation: OK NAB everyone has opened the door for you to go in for the lobbying stand up kill. RBR likes NAB's Dennis Wharton but his quote of disappointing if the decision stands does not stand very well for the NAB as radio's lobbying arm and freedom fighter in general. The movement for radio to cross market with the internet would be shut down. Don't worry about XM/Sirius be more concerned for your radio members paying dues from NYC to Minot, ND as this will affect their bottom line, being competitive with other music services and the over all internet. Does RBR need to run radio's 2007 revenue forecast again to remind all that local radio is out their slugging it out every day to be competitive. RBR said it yesterday and says it again, NAB Get a Dog in this Fight and Fight for Radio!

Will CCU say whoa to LBO?
The troubled LBO which would send Clear Channel into the hands of the Mays family, Bain Capital and Thomas H. Lee Partners may have a strategic move available to rescue the transaction. It's been suggested that moving back the shareholder vote could bring in enough brand new yeas to get an endorsement. The New York Post suggests a couple of reasons for this. First and foremost, as it is currently structured, the deal includes only shareholders of record dating to 1/22/07. Since then, "fast money hedge funds" are said to have bought into the stock, and are said to most likely favor the transaction's approval. It will also provide time to find out if some of the large institutional investors currently expressing their likely disapproval are bluffing or not. Everything, however, is speculation, with the next red letter date believed to be 3/11/07, when Institutional Shareholder Services is expected to issue an advisory on which way shareholder thumbs should be pointing. NYP says indications suggest ISS approval is in the cards, but it is by no means a sure thing.

RBR observation: Perhaps the FCC will issue a friend of the LBO brief, if only because they've already had to deal with the onerous task of processing Clear Channel's massive transaction application last December. (Come to think of it, maybe WE'LL issue a friend of the LBO brief, since we had to process it as well). Whether the deal clears or not, a spin-off bonanza is still in the cards. A lot of smaller radio market stations are going to be sold, and many already have been.

More time to yea or nay KTLA
A computer glitch in the FCC's electronic filing system delayed filing of the license renewal request for Tribune's KTLA-TV in Los Angeles until 8/11/06. The FCC says that caused some interested parties to miss the 11/1/06 deadline for petitions to deny and informal objections. It has decided to reopen the comment window to get "a full and complete record." The issue, of course, isn't so much Tribune's fitness to be a broadcast licensee - it has a long record as a respected and responsible member of the broadcasting community. The issue is owning KTLA-TV while also owning the Los Angeles Times. The cross-ownership of these and many other properties have been operating under waivers for some time, pending the FCC's ultimate completion of its long-standing media ownership rulemaking. Had the 6/2/03 ruling stood, this would be a perfectly legal combination. The Third Circuit Court slammed on the brakes, and watchdog groups have taken every opportunity since to break the pairings up.

RBR observation: The record suggests that in many cases, owners of cross-pollinated print and broadcast media have had a hard time making the combination work, although it would be fairer to test the practice during a period in which both businesses are not struggling with revenue issues. Nonetheless, the Third Circuit itself noted that oftentimes, television and newspaper combinations produce the best news in their market. It is quite possible that a better-written cross-ownership rule would receive judicial blessings. There is now more likelihood that such a rule would run into trouble on Capitol Hill, but pending a resolution one way or the other, it seems only fair that the existing waivers are allowed to stand until Washington gets its act together on this matter once and for all.

Ad Business Report TM

Dunkin' Donuts signs Rachael Ray
Dunkin' Donuts will be working with best-selling author and host of TV's highest-rated new King World-syndicated daytime show, Rachael Ray. As its new brand representative, Ray will appear in a multi-platform marketing campaign for Dunkin' Donuts. Ray will also lend her perspective to the Dunkin' Donuts culinary team in the development of new, "better for you" food and beverage options. In recent years, the company has introduced several new products that provide customers with additional on-the- go options, including Smoothies, Latte Lite and the reduced carb bagel; in addition, the company has been working since 2004 to remove trans-fats from all of its menu offerings. "We believe there is tremendous synergy between Dunkin' Donuts and Rachael Ray," said Robert Rodriguez, Dunkin' Donuts brand president. "Rachael's philosophy of creating quality meals quickly and without pretense for busy people living busy lives is the same driving force behind the Dunkin' Donuts brand." As part of the campaign, Ray will be featured in television, print, radio, online, in-store marketing and personal appearances. The first television spot is scheduled to air in April. The campaign will run through 2010.

Gadsby comments on SMG Multicultural launch
Monica Gadsby, CEO of Starcom MediaVest Group's new SMG Multicultural unit that includes the new Forty Two Degrees at MediaVest (MV42); a special division of GM Planworks and multicultural agency Tapestry, spoke to TVBR about the reorganization and her expanded role: "With the launch of SMG Multicultural and inclusion of MV42 to our current client offerings and capabilities, we are looking forward to creating a fluid and seamless integration that will further fortify Starcom and MediaVest, delivering total market solutions for our clients. Under the new SMG Multicultural brand, both general market brands will have their own dedicated team of multicultural experts to help them deliver contact solutions in the African-American, Hispanic and new/emerging market sectors. For 20 years, SMG has remained committed to the multicultural consumer segment, and we will only grow from here as New America continues to evolve and diversify." Be sure to catch an interview with Monica on the Hispanic Media Upfront in our May SmartMedia issue.

League of American theatres
to spark Broadway branding effort
The League of American Theatres and Producers (www.LiveBroadway.com) has announced the selection of three creative agencies to work together with the League to develop a new national branding campaign for the Broadway industry. The effort will reinforce efforts to promote Broadway as a national and international brand, while supporting Broadway shows running in New York, across North America, and globally. This team led by New York-based cultural marketing agency LaPlaca Cohen, will focus on strategy and media. Two West Coast agencies will also bring their expertise to the table: Trailer Park of Hollywood, CA, will provide creative services, and The Buddy Group of Lake Forest, CA, will handle electronic applications. The campaign is expected to launch in late 2007.

Media Business Report TM

Tribune spins are done
Saying it has achieved its goal, and then some, Tribune Company has indicated that it is not planning any further spin-offs. The sale of three television stations, Time Warner stock, a printing facility in Los Angeles and, this week, two newspapers in Connecticut, have satisfied its goal of 500M cash in exchange for what it deemed to be non-core assets. Reuters reports that local management at several of Tribune's newspapers had been wondering if they were also on the block, and that some of the properties even had potential suitors waiting around to see if a for sale sign was going to be put up.

Media Markets & Money TM

Close encounter in Huntsville
Christian Voice of Central Ohio is not the typical name you expect to find buying an Alabama property, but when it's expanding out of its Ohio base, it makes more sense. Dan Baughman's group has closed on its acquisition of WTKI-AM in Huntsville, which will double up with its pending acquisition of WDPT-AM licensed to Decatur AL. According to broker Greg Guy from Patrick Communications, seller David L. Barnhardt and his Mountain Mist Media will enjoy a 475K payday in exchange for the station.

Washington Media Business Report TM

Stations, FCC agree to decree
The issue is a touchy one - the provision of vital information during an emergency. Broadcasters reveal their greatest value to their community in stressful times, staying on the job and providing important safety information to the majority of citizens who are trying to take cover or escape. However, if the information is not provided in a way that is accessible to the hearing disabled, the stations can face a fine. Midwest Television, licensee of KFMB-TV San Diego CA, was caught with its captioning down during a 2003 wildfire incident. And Waterman Broadcasting (WBBH-TV Fort Myers FL) and Montclair Communications (WZVN-TV Naples FL) had similar problems when dealing with Hurricane Charley in 2004. KFMB, rather than pay a 20K fine, will admit no wrongdoing, take corrective measures and voluntarily donate 18K to the US Treasury. Both of the Florida stations will do the same exact thing, making it a 54K payday for the United States.

RBR observation: FCC commissioners routinely say various things are the FCC's most important priority (depending what the topic is), but when it comes to public safety issues, they really mean it. However, you don't want to punish a station for behaving courageously during an emergency because its courageous behavior was less than perfect. A consent decree, which leaves no black mark on the station's record, seems to us a fair way to settle such matters.

Entertainment Media Business Report TM

WLW's Gary Burbank
to sign off
The Cincinnati Enquirer reports WLW-AM's longest-tenured personality, afternooner Gary Burbank, announced he's retiring when his contract expires 12/31. "I plan on retiring this year, for sure," says Burbank, 65, who has mulled retirement for the past 10 years. For most of his 27 years at WLW, thousands have driven home from work listening to Burbank and his crazy characters: red-neck Earl Pitts, confused Gilbert Gnarley, ill-informed Bengals insider "The Synonymous Bengal" and Eunice and Bernice, the Pisgah Siamese twins joined at the telephone. He has won two prestigious Marconi Awards, and four Billboard magazine awards, as best large-market radio personality in the country. His 3-6 p.m. show was No. 1 in its time slot in Cincy last fall and summer. His show was so popular that WLW-AM gave him a 10-year contract in 1985. A year later, he began syndicating "Earl Pitts" commentaries, now heard on 160 stations. It's the longest-running syndicated radio comedy bit. Burbank will keep his syndicated bit, however, "Rest assured, Earl Pitts lives on! As long as Gary has a voice, Earl will be on the radio - fresh and topical - as always," says Rick Consolo of Burbank Creations, Ltd.

Internet Media Business Report TM

Internet Radio Scorecard: January
JP Morgan's Internet Radio Scorecard for January says overall, unique visitors to all of internet radio grew 22% y/y in Jan 2007 to about 53.3 mil. Sequentially, unique visitors declined 9% (from Dec '06), driven by a 15% decline in unique visitors for the pure play internet operators, partially offset by a 2% sequential gain for the terrestrial operators sites. Since Jan 2006, the internet radio audience has grown at a 1.6% monthly compounded rate. The 22% YOY growth in unique visitors was driven by the terrestrial radio operators, whose unique visitors grew about 71% year over year and about 2% sequentially. Unique visitors for the internet operators grew about 4% year over year, although they experienced a 15% sequential decline. Growth is much stronger for the terrestrial operators YOY than it is for the pure play internet players, reflecting both the terrestrial operators' recent investments into their digital/online operations as well as the smaller base they are growing from. As a result, terrestrial's share of total unique visitors hit a new high. Driven by terrestrial's sequential growth in January (and the internet operators sequential decline), the terrestrial operators' share of unique visitors to internet radio grew to 37% (vs. 26% a year ago), while the internet operators' share fell to 63% (down from 74% a year ago). CBS Radio's unique visitors increased 4% sequentially to 3.1 million, while CCU's unique visitors declined about 5% sequentially to 9.2 million. Collectively, unique visitors to CCU's and CBS Radio's sites now represent more than 23% of the total internet radio audience.

Ratings & Research

Philadelphia PPM data details
As the PPM survey for March (March 8-April 4) began yesterday, 51 stations are ready to be measured electronically. These stations represent 98.95 percent of the share of listening among the radio stations in the Metro. The number of stations encoding will continue to increase as additional stations in the Philadelphia market have requested and are currently installing PPM encoding equipment. The stations that have been equipped to be measured by the PPM represent all of the commercial radio groups serving Philadelphia and more than half a dozen non-commercial stations including WHYY-FM, and the University of Pennsylvania's WXPN. The radio groups and stations encoding in Philadelphia are: Beasley, CBS Radio, Citadel, Clear Channel, Delmarva Broadcasting, Equity Communications, Greater Media, Marconi Broadcasting, Matthew Braccili, Millennium Radio Group, Nassau Broadcasting, NextMedia, Radio One, Reading Eagle Company, Salem Communications and WBEB-FM (Jerry Lee). Arbitron has installed a representative panel of more than 2,040 persons age 6 and above, meeting its goal for electronic measurement in the Philadelphia market. Approximately 8 percent of the panel was recruited from cell-phone-only households.
| Read More... |

Transactions

25K AM CP Smithville GA 25K from Murphy Broadcasting System to Dan Bohanan. 5K earnest money, balance in cash at closing. CP is for Class C on 1230 kHz, 1-kw-U,ND. [File date 2/8/07.]

5K WMTT-FM Elmira-Corning NY (Tioga PA). 5% Europa Communications Inc. from Kevin M. Fitzgerald (55% to 50%) to George J. Hawras (45% to 50%). Cash. [File date 2/14/07.]

Stock Talk

Winners take the cake
Radio stocks were up on the street yesterday, with winners outweighing losers by a good margin. However, most were pennies either direction. Arbitron was up 32 cents; Hearst-Argyle was up 38 cents.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		45.04	+0.32	Journal Comm.	JRN		13.05	+0.05
Beasley	BBGI		8.80	unch	Lincoln Natl.	LNC		67.28	+0.20
CBS CI. B	CBS		30.48	-0.10	Radio One, Cl. A	ROIA		6.87	+0.05
CBS CI. A	CBSa		30.50	-0.06	Radio One, Cl. D	ROIAK		6.86	+0.04
Citadel	CDL		9.71	-0.08	Regent	RGCI		2.99	+0.04
Clear Channel	CCU		35.56	+0.06	Saga Commun.	SGA		9.85	+0.01
Cox Radio	CXR		13.51	-0.06	Salem Comm.	SALM		11.17	+0.02
Cumulus	CMLS		9.19	-0.16	Sirius Sat. Radio	SIRI		3.49	+0.08
Disney	DIS		34.69	+0.26	Spanish Bcg.	SBSA		4.27	-0.07
Emmis	EMMS		8.09	-0.01	SWMX	SMWX		1.05	+0.10
Entercom	ETM		28.00	unch	Univision	UVN		35.97	+0.07
Entravision	EVC		8.90	+0.01	Westwood One	WON		6.29	-0.11
Fisher	FSCI		45.90	+1.10	XM Sat. Radio	XMSR		13.95	-0.07
Hearst-Argyle	HTV		26.05	+0.38	-	-	-	-	-

Bounceback

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Deny the merger or have it play offense for terrestrial radio

In a recent RBR publication there was a poll asking how we would handle the XM/ Sirius merger if we were the FCC. The possible choices were:

1) Approve the merger of XM and Sirius. No problem.
2) Reject the merger of XM and Sirius flat out.
3) Allow XM and Sirius to merge, but require them to put HD Radio chips in all receivers.
4) Allow XM and Sirius to merge, but make them give back half of their spectrum to be reused for something else.

My first reaction was #2, reject the merger outright! Then after reading the other choices, I found #3 to be my preferred selection. After all, when you can't make the competition go away isn't it smart to have them work for you? I would find it appealing to ask satellite radio subscriber in my market " How do you like our HD stations on your new radio?". Satellite radio weather merged or not is hear to stay. I think it wise to use this crossroads to gain a terrestrial advantage.

Thanks,
Johnny Boswell, Boswell Media

Below the Fold

Ad Business Report
Dunkin' Donuts signs
Rachael Ray as its new brand representative...

Media Business Report
Tribune spins are done
Saying it has achieved its goal, and then some...

Media Markets & Money
Close encounter in Huntsville
Christian Voice of Central Ohio is not the typical name you expect to find buying...

Internet Media Business Report
Internet Radio Scorecard: January
Unique visitors to all of internet radio grew 22% y/y in Jan 2007 to about 53.3M...

Arbitrends

Stations for Sale

NorthEast FM's For Sale
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781-848-4201

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Contact
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[email protected]

Radio Media Moves

iBiquity hires Monetti
iBiquity Digital has hired Fernando Monetti as Manager, Broadcast Business Development for Latin America. Monetti will help manage and develop demand for HD Radio broadcasting in Latin America, where interest in the technology continues to rise following its preliminary implementation in Brazil. Monetti joins iBiquity after serving as a Sales Manager at Thales (now Thomson Broadcast and Multimedia), where he was responsible for the promotion and sales of the Thales broadcast portfolio.

More News Headlines

Fox candidate show
gets first no-show
Democratic presidential candidate and former Senator John Edwards (D-NC) has announced that he will skip an 8/14/06 debate with his fellow Democratic candidates. It is not seen as a coincidence that the debate in question is sponsored by Fox News Network. The Edwards campaign did not say that Fox's sponsorship was the reason for the declined invitation, explaining to website Daily Kos, "We will not be participating in the Fox debate. We're going to make lots of appearances in Nevada, including debates. By the end of March, we will have attended three presidential forums in Nevada, the there are already at least three proposed Nevada debates. We're definitely going to debate in Nevada, but we don't see why this needs to be one of them." The Washington Post notes that two other leading Democratic contenders, Hillary Rodham Clinton (D-NY) and Barack Obama (D-IL) have not yet said yes or no to the session. Democratic National Committee Chairman Howard Dean said the debate was not about Fox, it was "about talking to voters."

RBR observation: We stand by our belief that debates are among the best types of coverage that the media can provide. A problem with the 2008 campaign is the fact that we're already talking about such issues when we aren't even halfway through March 2007 yet. It will be interesting to see if campaign fatigue becomes an issue this time around, with voters shutting out any further information in favor of whatever radio button produces a non-political alternative.

RBR Radar 2007

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

New internet royalty fees;
are they good for radio?
The NAB, representing radio broadcasters, has so far been silent on the new, exorbitant internet streaming royalty fees (3/7/07 RBR #46). We were told this is due to staffers being present at the proposed XM/Sirius merger hearing. Broadcasters RBR spoke to, like Entercom's David Field, mentioned they were still analyzing the new fees and deciding where to go with their streaming audio. No decision has been made yet. WBEB-FM Philadelphia's Jerry Lee told us much the same: "I haven't seen the math yet, but I've asked my people to analyze it. It sounds pretty bad. My take is if it isn't changed, at least the people that are webcasters are not going to be around. It sounds horrendous."

RBR observation: This is just the tip of the iceberg in pushing the radio medium between a rock and a growth hard place. Raising ad rates sounds nice but in reality that will not happen as many broadcasters are just now toying with the internet. These new internet royalty fees have to be stopped. Dues paying NAB members best pick up the phone and call your elected Board member and tell them to get their act together. With the Internet do not let the RIAA cut you off at the competitive knees. NAB Get a Dog in this Fight and Quick.
03/08/07 RBR #47

Definition of the market
Is going to be a huge key to the success of the proposed merger between rival DARS services XM and Sirius. DARS says it competes with all other audio services; broadcasters and consumer advocates says its much more a two-company market that wants to monopolize. Hearings on the future of radio hosted by Ed Markey (D-MA) and the Subcommittee on Telecommunications and the Internet had much in common with an earlier one hosted by John Conyers (D-MI) and the Judiciary Committee's Antitrust Task Force. The main event, Sirius honcho Mel Karmazin, Greater Media's Peter Smyth was a stand-in for NAB's David Rehr, and Consumer Union's Gene Kimmelman was a stand-in for the Consumer Federation of America's Mark Cooper.

RBR observation: The New York Times reports that FCC Chairman Kevin Martin (R) has privately expressed skepticism about the merger. Since Martin is firmly entrenched in the deregulatory wing of the Commission, this would appear to be a major hurdle to be overcome. But this one has a long way to go. Stay tuned. Statement summaries of those who spoke their words is worth a double read in this special page of RBR.
03/08/07 RBR #47

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