Welcome to RBR's Daily Epaper
Volume 23, Issue 49, Jim Carnegie, Editor & Publisher
Friday Morning March 10th, 2006

Radio News ®

Three advance for radio ratings
The Next-Generation Electronics Ratings Evaluation Team - - the new name for the multi-company team evaluating responses to Clear Channel's RFP - - has selected three finalists for a new, electronic radio ratings system. MediaAudit/Ipsos, Arbitron (PPM) and Mediamark Research are being invited to provide more details later this month, with some then to be invited to proceed to a live test stage - - with commercial implementation of a new radio ratings system still targeted before the end of this year. The three were selected from the seven semi-finalists announced in December (12/19/06 RBR #246). "The evaluation team was impressed with the ingenuity and proven track record of several of the finalists and is particularly interested in the cell phone as a measurement device," said Clear Channel Radio Sr. VP of Research Jess Hanson, who chairs the evaluation team. "I applaud Clear Channel and the industry for doing its homework before making an important investment in a tool that will be so central to the success of the industry for years to come," said Mark Kaline, Global Media Manager for Ford Motor Company. Cumulus Media CEO Lew Dickey was asked about the process in his quarterly conference call and said he wants to make sure the industry selects the optimal technology, but he also warned that the diary system isn't broken and is more accurate than the audience measurement systems used by some other major media. Radio companies represented on the evaluation team who are reviewing proposals for an electronic ratings system for radio are: ABC, Bonneville, CBS Radio, Clear Channel Radio, Cox Radio, Cumulus, Emmis, Entercom, Entravision, Greater Media, Journal, Radio One, Regent and Susquehanna. Media buyers include: CIA Media:Edge, Initiative, Mediacom and MPG. Representing advertisers is Ford Motor Company.

RBR observation: Not really any surprises here. The three finalists were the ones known last year to already have a working portable measurement device, so no one has made it through to the finals with some new wizbang proposal that no one had seen before. Hanson's comment about the evaluation team's interest in using cell phones is good news for MediaAudit/Ipsos, which is known to be using such a device, but potentially bad for Arbitron, which sees problems with using cell phones and has resisted incorporating PPM into cell phones.

The finalists react
There was clearly reason to celebrate yesterday at Mediamark Research, MediaAudit/Ipsos and Arbitron. But being selected as a finalist means there's now more work to do. "We believe we're best positioned to bring electronic measurement to radio on the short time frame that Clear Channel is asking for," said Arbitron VP of Communications Thom Mocarsky. "We have what the alternatives don't - - three real live market trials of our electronic measurement system in the United States, five years of close collaboration with the radio industry and an MRC audit. To our knowledge, none of the alternatives have any of that," Mocarsky said. Arbitron has said for months that its Portable People Meter (PPM) is ready for deployment and, if radio groups sign on, its test market in Houston will be turned into the first market for actual commercial deployment. MediaAudit Co-Chairman Bob Jordan told RBR his company was "quite happy" to be in the final three. He confirmed that MediaAudit/Ipsos is targeting being able to do a live test of its Smart Cell Phone-based system in the spring, probably late spring, with a full-market test by late summer. And, we asked, can he meet the target of deployment in 2006 if selected? "I think we can. I'm fairly confident we can do that. It probably would be toward the end of 2006, or at the latest early 2007," Jordan said. The third finalist, Mediamark Research, continues to decline to make any public comment about its entry. Its proposed system is believed to use the Eurisko Media Monitor, which was developed by a related company.

Cumulus sees pacings on upswing
After reporting a revenue decline for the final quarter of 2005, Cumulus Media CEO Lew dickey sees better days ahead. "We're guiding for Q1 revenues to be up 3%. Here's where we are so far. January finished up 5.7%, February has finished up 2.7% and March is currently pacing above February," Lew said, noting that his Q1 total guidance is on the conservative side, given the pacings. "Even looking further ahead, it's still early, but Q2 is pacing higher than Q1," he said. Lew noted that the company still has to comp against about one million bucks in Home Depot advertising in Q2 that disappeared later in the year, although he notes that the home supply retailer has recently resumed some spot radio buying.


McDowell looks like a fifth-seat shoo-in
All you need to know about Robert McDowell's chances to ascend to the fifth Commissioner seat at the FCC is this: He was nominated by President George W. Bush, and Commerce Committee member Byron Dorgan (D-ND) said, "I think the President has made a good choice." If there is a member of the Senate who could have been expected to have problems with an FCC nomination, it most likely would be Dorgan, who invested a great amount of energy and political capital to defeat the FCC's 6/2/03 media ownership rulemaking. So if McDowell is OK with Dorgan, he figures to be OK with the full body. McDowell was introduced by George Allen (R-VA), who cited his 16 year of private sector experience in the communications industry. His experience is on the telco side. McDowell himself said he was deeply honored by President Bush's call to public service. He said his guiding principles would be a commitment to free markets and freedom of speech; his goal is to create an environment which encourages entrepreneurs, increases competition, and that a way to get there would involve "...clearing the underbrush of unnecessary government regulation." Committee Chairman Ted Stevens announced his intention to try and get the nomination on the Senate's executive session agenda for 3/16/06.

RBR observation: McDowell followed with tradition in avoiding any specifics. He said he would bring energy, impartiality and thoughtfulness to each issue placed before him, and would rely on the FCC's ethics machinery and counsel when the possibility of a conflict of interest presents itself. So people in the telco industry looking for hints as to how he might come down on the pending AT&T/Southern Bell merger largely came up empty-handed.

PAC-king it in for 2006
Indications of a banner year in the political advertising category continue to flow - - this time, it's a Federal Election Commission report on the income and outflow of political action committees. All 2005 numbers are up significantly when compared to the last off-year. For starters, receipts are up 27% to 477.4M. Perhaps more significantly, however, and a testimony to the trend toward year-in and year-out political activity, disbursements were up even more, rising 37% to 394.1M. 140.5M was donated directly to the campaign coffers of various candidates for federal office, a 33% increase over similar activity in 2003. FEC follows three general PAC categories - - corporate, union and what it calls "nonconnected" PACs. The latter exhibited the most growth, upping its receipts 52%, its spending by 65% and its campaign contributions by 60%. As a group, PACs are sitting on 330.4M in ready-to-spend cash, a 23% increase over the total at the end of 2003. FEC says contributions to both parties are up, but the Republicans are enjoying the bigger gains.
| View the Chart |

...but wait, there's more
Another factor which may increase the amount of advertising dollars spent in 2006 will be open seats in the House of Representatives. As a party, it looks like Republicans will be leaving more seats open, whether it be by retirement or in an effort to move on to the Senate or a governorship. Actually, the defense of open seats won't necessarily throw more total money into the pot, but it will likely cause much of it to be redirected. According to the Associated Press, in the 2004 elections Republicans found themselves dealing with five somewhat unexpected retirements, and the result was the reallocation of a reported 12M to defend the seats - - money the party would rather have spent on offense elsewhere. The bottom line is this: If you are in a district where an incumbent US Rep has his eyes on either a better seat in the government or a quiet seat by the fireside, get ready for an influx of national cash from both the party trying to defend and the one trying to steal.


Wall Street Media Business Report TM
Q4 Conference Calls
Cumulus misses, but guides higher
Cumulus Media reported Q4 results that were a bit below Wall Street expectations. Net revenues were down 1.8% to 82.9 million, with same station revenues down 1.6%. CEO Lew Dickey told analysts he was pleased with local ad sales, which gained 3.6%. And that momentum is continuing into 2006. "We're on our way to having another solid year of local sales," he said. The drop was all in national sales, which were down 19%, although Lew noted that would have been less excluding three million a year ago from political and Home Depot. He said the national rep transition from Interep to Katz is complete and cumulus can now concentrate on building share. As reported above, Cumulus is predicting that Q1 revenues will be up 3%. In his conference call, Lew was asked about Google's entry into radio ad sales by acquiring dMarc (1/18/06 RBR #12). The Cumulus CEO questioned whether Google would be able to achieve a level of participation by radio broadcasters sufficient to reach critical mass. "We will not be participating," he noted, saying Cumulus would have its own proprietary platform for selling radio inventory on the Internet.

SBS sees single-digit gains in Q1
As general market radio groups suffered through revenue declines in Q4, Spanish Broadcasting System was enjoying 2% growth to 45.8 million, in line with what Wall Street had expected. Net operating income, however, was down 21% to 12.4%, due in part to higher expenses as it prepared to launch its first TV station in Miami, with pre-launch expenses of 2.3 million in Q4. For Q1, TV is projected to post a loss of five million, while radio revenues are pacing up in the mid single digits. "We want to be conservative in what we say, but I can tell you that the first quarter looks like it's going to be very healthy for us - - and I would just say that's across the board in all markets," CEO Raul Alarcon told analysts. Anticipating the question before it was asked, Alarcon told the analysts that no, SBS has not had any talks with Univision since the Spanish media giant put itself up for sale.


Ad Business Report TM

Nielsen Monitor-Plus increases spot radio coverage
Nielsen Monitor-Plus announced a 13-market increase in spot radio coverage, bringing the total number of reported stations to almost 800 (39 markets). New markets include Charlotte, Cleveland, Kansas City, Las Vegas, Milwaukee, Pittsburgh, Portland, Providence, Raleigh-Durham, Sacramento, Salt Lake City and West Palm Beach. Now measuring almost 60% of all radio ad spend, Monitor-Plus continues to be the only national multimedia provider of brand-level detail for spot radio in the U.S. Radio airplay data is supplied by Media Monitors. According to Rob Frydlewicz, VP Director of Research for Carat USA, "We are very pleased that Monitor-Plus listens to client suggestions for enhancing its service; a deeper list of radio markets was one of the top requests on Carat's wish list. Not only will this improvement enable us to have better intelligence about local radio, but it will provide our clients with better information about how their competitors are using the medium. Most importantly, it gives us the ability to help our clients make better decisions." As a result of this radio expansion, Monitor-Plus's measurement now includes 63 Spanish-Language stations in 21 markets, nearly doubling the number of stations and markets measured last year. These 21 markets represent approximately 65% of Total Spanish-Language households. Verizon Communications was the largest Spot Radio advertiser, with 9,433 million in advertising for January 2006. Two television networks ranked within the top 10 (FOX and ABC), as did two home centers/hardware stores (Lowe's and The Home Depot). Also among the top 10 are two automobile vendors (Toyota and Chevrolet). Similarly, two television networks ranked within the top 10 among Spanish-Language Stations (Univision and TeleFutura), with Univision being the top advertiser for January 2006 with 1,846 million in expenditures. Also among the top advertisers in Spanish-Language stations are two telecommunication companies (Verizon and Sprint Nextel) and the same automobile vendors (Toyota and Chevrolet) as in the Total U.S. measured universe.

Horizon Media commits to PPM
There aren't many agencies left who haven't: Arbitron announced that Horizon Media has signed a commitment to use radio audience estimates for Houston and Philadelphia based on the Portable People Meter when Arbitron makes a decision to deploy its state-of-the-art audience measurement service in those markets. The agreement covers the radio planning and buying activities of Horizon Media, which represents leading advertisers including NBC Universal, IKEA and GEICO. "The radio industry needs to embrace PPM, as it provides us with a reliable, improved media measurement system that enhances our ability to make effective buying and planning decisions for our clients," said Bill Koenigsberg, CEO, Horizon Media. "We firmly believe that radio is an integral part of any advertising campaign and we are ready to work with broadcasters to help the transition to Portable People Meter measurement."


Media Markets & Money TM
Radio One's WIFE is a Queen
A betrothal in the Queen City is in the works - - Radio One is planning to double up with an FM station currently residing in an unrated portion of Indiana. But WIFE-FM will have to be moved before it becomes a Cincinnati partner for WIZF-FM. According to broker Richard F. Blackburn of Blackburn & company, which represented seller David Rodgers, the deal is pegged at about 18M. The station is currently licensed to Connersville IN - - resident in an Arbitron-free zone which would be at the center of a triangle formed by Cincinnati, Dayton and Indianapolis. By degrading its Class B 100.3 mHz signal down to Class A, but moving it to Norwood OH - - squarely in the yellow portion of our Cincinnati road map - - it goes from being a small town station to a big city station. Radio One honcho Al Liggins said, "This is a great deal for Radio One. Cincinnati has been one of the best performing markets for us and this acquisition will further solidify our already strong position in this important midwest market." Look for developments on closing, CP construction, and call letter/format decisions as the year progresses.

Team bid for Univision?
Televisa CEO Emilio Azcárraga Jean has made no secret of his desire to own Univision. US/Israeli billionaire Haim Saban said last month he would like to own Univision (2/10/06 RBR #29). Now Reuters reports that the two have gotten together to form a bidding team to go after Univision, with backing also from Venezuela's Cisneros family and Providence Equity. Televisa and the Cisneros family each already own more than 10% of Univision and Televisa is its biggest program supplier. Their joint involvement in any bid would make it very difficult for another bidder to top them - - a point likely not lost on Saban, who owns broadcast properties overseas and is best known in the US for producing the "Mighty Morphin Power Rangers."


Washington Media Business Report TM
Consolidation, Washington style
If you're a client of law firm Swidler Berlin, or were thinking about becoming a client, you won't find the 40 lawyers in Swidler's Telecommunications, Media and Technology (TMT) Group under that shingle any longer. The firm merged into law firm Bingham McCutchen earlier this month. Bingham McCutchen is now approaching the four-digit mark with a roster of some 950 attorneys working in 25 separate disciplines in various locations. Jay S. Zimmerman, Chairman of Bingham McCutchen, commented, "Swidler provides us with very complementary practices to our national corporate, finance and litigation areas, particularly their telecommunications, media and technology; government affairs; and real estate and structured finance practices. I fully expect our new lawyers to hit the ground running."


TVBR TV News

VNU shareholders face tough decision on buyout bid
That's the analysis from Bear Stearns analyst Francesca Pierce, following an 8.9B bucks buyout offer for VNU (3/9/06 TVBR #48). "We estimate that three shareholders alone account for more than 30% of VNU, making their views critical to VNU's fate. With 95% of shares required to be tendered for a mandatory offer we believe there is a high risk of rejection," she told clients. Then Pierce had a warning: "Rejecting a bid would leave VNU without a management team in place to execute required changes and cost saving plans, which could sent the shares lower in the near term. Recruiting a new CEO will take time (no search currently underway) and could be challenging to find someone to take on a role with such a vocal and hostile shareholder base." In the analyst's view, Fidelity International's indication that it expects to oppose the bid "is most likely an opening negotiating position." VNU management is supposed to meet with Fidelity, which owns 15% of VNU's stock, in the next few days, she noted. Pierce termed the buyout bid "conservative but fair." Her own estimate of the break-up value of the company is only slightly ahead of that of VNU management, working out to 31.36 euros per share. "Although the break-up valuation could be 10% ahead of the current 28.75 euros offer, the execution is ignored," she said. The Bear Stearns analyst sees a 9% downside risk if the worst happens and VNU management is unable to deliver desired cost savings. The best case scenario, in her view, is a 9% upside to the buyout offer.


Transactions
17.375M WFNN-AM/WJET-AM/WFGO-FM/WRTS-FM, WUSE-FM & WRKT-FM Erie PA (Erie, Fairview, North East PA) from NM Licensing LLC, a subsidiary of NextMedia Group Inc. (Carl Hirsch, Steven Dinetz, Samuel Weller, Sean Stover et al) to Connoisseur Media of Erie LLC (Jeffrey D. Warshaw, Michael O. Driscoll). 875K escrow, balance in cash at closing. Existing superduopoly. [File date 2/15/06.]

3M KYLA-FM Shreveport LA (Homer LA) from NWLA Broadcasting LLC (Alfred T. Moore) to Educational Media Foundation (Richard Jenkins). 650K, cash, 2.2M note, swap of KWDF-AM Alexandria LA (Ball LA) valued at estimated 150K. [File date 2/15/06.]

150K KWDF-AM Alexandria LA (Ball LA) from Educational Media Foundation (Richard Jenkins) to NWLA Broadcasting LLC (Alfred T. Moore). Partial payment for seller's acquisition of buyer's KYLA-FM Sh
reveport LA (Homer LA). [File date 2/15/06.]


Stock Talk
The string continues...
Radio stocks were down again on Thursday, taking RBR's Radio Index to its sixth straight year-to-date low. The index declined 0.828, or 0.5%, to 159.562. Meanwhile, the Dow Industrials fell 33 points, or 0.3%, to 10,972 as traders fretted over the US trade deficit.

Radio One fell 2.5% as it announced an 18M station acquisition for the Cincinnati market. Two radio groups reported Q4 earnings: Cumulus fell 0.4% and SBS dropped 0.6%.


Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

34.60

-0.08

Hearst-Argyle

HTV

23.34

-0.07

Beasley

BBGI

10.67

+0.14

Interep

IREP

0.25

unch

CBS CI. B CBS

23.96

-0.18

Jeff-Pilot

JP

58.02

-0.48

CBS CI. A CBSa

23.96

-0.15

Journal Comm.

JRN

11.95

-0.06

Citadel CDL
11.57 -0.04

Radio One, Cl. A

ROIA

7.68

-0.20

Clear Channel

CCU

28.75

-0.39

Radio One, Cl. D

ROIAK

7.66

-0.20

Cox Radio

CXR

13.11

-0.14

Regent

RGCI

4.04

-0.03

Cumulus

CMLS

11.36

-0.05

Saga Commun.

SGA

9.00

unch

Disney

DIS

28.09

+0.04

Salem Comm.

SALM

12.99

-0.12

Emmis

EMMS

16.90

+0.10

Sirius Sat. Radio

SIRI

4.89

+0.12

Entercom

ETM

28.71

+0.21

Spanish Bcg.

SBSA

5.14

-0.03

Entravision

EVC

7.60

-0.05

Univision

UVN

32.92

+0.21

Fisher

FSCI

42.40

-0.33

Westwood One

WON

11.48

-0.21

Gaylord

GET

44.93

-0.15

XM Sat. Radio

XMSR

21.05

+0.44



Bounceback

Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments and
a photo to [email protected]

The problem with the payola mess is that it isn't a bare breast on live TV. It is not the lightning rod that it takes to get Congress upset enough for the FCC to take action. (The FCC rarely does anything regarding enforcement without major public outcry or being pushed, whipped or threatened by Congress. Great agency isn't it!?) I must also somewhat disagree that Spitzer is trying to grab headlines for the Governor's race (3/9/06 RBR #48). Forward think for a minute. If it were headlines within NY he wanted, he would be investigating the shady dealings in most cities and towns or with NY State Contracts where the tax payers are getting directly screwed over on a regular basis. He would then become a taxpayer hero, a NY voter hero. Now if you look at the next Presidential race and the likelihood that a Democrat will be elected, the need is there for an aggressive USAG. In that contest his actions regarding Payola and the National Headline grab would more fit the bill.

Ernie Belanger
Sales and Marketing Manager
Armstrong Transmitter




Below the Fold

Ad Business Report
Horizon Media commits to PPM
there aren't many agencies left who haven't...

Nielsen Monitor-Plus
Increases spot radio coverage seeing 13-market increase...

Media Markets & Money
Radio One's WIFE is a Queen
A betrothal in the Queen City is in the works...

Washington Media Business Report
Consolidation, Washington style

If you're a client of law firm Swidler Berlin, or were thinking about it, forget it...


Arbitrends

Radio Media Moves

Hendrich goes coastal
Bill Hendrich has been named Vice President and Market Manager of Cox Radio's Jacksonville radio stations, including WAPE, WFYV, WJGL, WMXQ and WOKV. He formerly was VP/GM for Cox Radio's WDBO and WWKA in Orlando and the lead GM for Cox Orlando's Cox Radio Interactive Web Division.

Walet on the Main Line
Taylor Walet has been named Market Manager for Main Line Broadcasting's four-station cluster in Richmond, VA. He had been Citadel's market Manager in Wilkes-Barre/Scranton, PA.

deCastro to Philly
Ron deCastro, formerly General Sales Manager of Clear Channel's WPPR-FM NYC is heading back to CC Radio's Philadelphia cluster as VP of Sales for its six stations.

Promotion at WW1
Westwood One has upped David Hillman to the newly created post of Exec. VP, Business Affairs and General Counsel. He will continue to be General Counsel, but now also be responsible for business development, business affairs and strategic initiatives.

...and another
Westwood One announced David Halberstam has assumed the newly created role of EVP/General Manager of Westwood One Sports, overseeing production, programming, sponsorship sales and strategy related to play-by-play sports and sports talk programming. Halberstam will continue to be based in Miami and report directly to Westwood One President & CEO Peter Kosann.


Stations for Sale

Houston 50 kW AM
New transmitter site &
transmitting equipment
John W. Saunders
(713) 789-4222 or e-mail
[email protected]

Exclusive Listing
FM Radio Station in South
Florida. Great start-up opportunity
for a radio entrepreneur or a great addition for a radio group.
Please contact Joel B. Day
202-478-3737 (x3)


More News Headlines

RBR Radar 2006
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Spitzer hits Entercom
with payola lawsuit
NY-AG Eliot Spitzer has filed his 1st lawsuit alleging corporate payola, resulting from his probe of record companies and radio stations in NY State. Entercom accused of: Trading air time for gifts and other payments, trading air time for promotional items and operating corporate programs directed by senior management to sell air time to labels in order to manipulate music charts.

RBR observation: This suit is a bunch of Bull.The Beat Goes On like an American Popular Song. Hold on as if Entercom can take any more bad news.
03/09/06 RBR #48

Second shareholder revolt
threatens 8.9B buyout of VNU

It looks like VNU CEO Rob van den Bergh won't be able to leave the company without enduring a second shareholder revolt. Trouble maker in this pot - Fidelity International which owns over 15% of VNU.

RBR observation: Now let's see if a consortium can run all these horses in a straight line? TVBR anticipates the knives will be brought out as slicing and dicing will begin. But with trouble from Fidelity VNU appears to be in suspended animation. This one TVBR will follow closely as it affects your business and Ad Dollars.
03/09/06 RBR #48

Moody's disses Entercom dividend
Entercom cheered shareholders last month by announcing that it would start paying a quarterly dividend. But now Moody's has designated the company's outlook "negative"

RBR observation: Not a good sign seeing the word 'negative' pop up with radio companies.
03/08/06 RBR #47

Mandel comments
more on Nielsen debate
Point for radio: "I think you will see that there will be people, primarily in the cable business-and network television could do better than cable-stepping forward. And the same thing holds with radio. It is unconscionable to me in radio that if you're a program director you can get weekly numbers or in PPM you can get daily numbers...and we get quarterly?! They've got the same situation."
03/08/06 RBR #47

Quiet steps toward
dereg not going unnoticed
Rep. Fred Upton (R-MI) did not exactly make national headlines however it didn't go unnoticed in San Antonio, where the San Antonio Business Journal (SABJ) has a front row seat for the actions of Clear Channel Communications. And SABJ has made it clear that another group has taken note: the watchdogs who helped derail, at least temporarily, the dereg efforts of the FCC back in 2003.

RBR observation: It remains to be seen what tack FCC Chairman Kevin Martin will take when he engages the Commission in the court-ordered redo of the 6/2/03 media ownership rulemaking, now that he is just days and/or weeks away from his first Republican majority. Look for loud noises from the FCC.
03/07/06 RBR #46

Like it or not, the times
they are a changing
At the AAAAs Media Conference Yahoo! COO Daniel Rosensweig said agencies and content providers need to rethink the rules of the business in order to be successful. Yahoo! sees a massive shift - - the consumer is now in charge.
03/06/06 RBR #45


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