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Volume 23, Issue 50, Jim Carnegie, Editor & Publisher
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Monday Morning March 13th, 2006
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Radio News ®
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 Corporate payola: Is it even possible?
New York Attorney General Eliot Spitzer has accused Entercom and other major radio groups, not yet named, of accepting "corporate payola." Here's how "payola" is explained on the FCC's website:
| Read More... |
RBR observation: Gee, maybe Entercom should think about suing Spitzer for slander, since he has publicly accused the company of a specific criminal act, payola, which it could not possibly have committed.
Shifting metro definitions grease the deal wheels
Northeast Broadcasting (NEBCO) has been running an over-the-limit grandfathered radio cluster in Burlington VT-Plattsburgh NY, precluding its attempt to add to it via acquisition WVAA-AM. However, the creation of two new New England markets whittled down the Burlington total, enabling the WVAA deal to move ahead. The deal was filled in November of 2004, and was listed at the FCC with a value of 400K. Originally shot down, since it would take an already-larger-than-legal group, in existence thanks to grandfathering, to ten stations. It was a case of a cluster perfectly legal and sensible under contour overlap market definitions, which failed to conform to the more arbitrary media market definitions, which in the case of Burlington-Plattsburgh pulled in a great deal of mountainous territory. Arbitron carved two new rated markets encompassing much of this territory - - Montpelier-Barre-Waterbury VT and Lebanon-Rut land-White River Junction NH-VT - - which pulled four of the NEBCO stations out of Burlington-Plattsburgh. The acquisition of WVAA-AM now forms a 3-AM, 3-FM cluster, which the market is large enough to support. The FCC noted the new Arbitron market definitions, and the fact that Broadcast Investment Analysts seconded the motion, and finally, the fact that Arbitron's announcement of the new markets pre-dated the deal, in allowing the sale to go through.
RBR observation: Citadel is going through a similar situation right now. It's put 11 stations into a trust to accommodate its acquisition of ABC Radio, not because of any overlap with the incoming ABC stations, but because the structure of the deal forces it to "sell" all of its pre-owned stations to itself. Since a grandfathered cluster cannot be sold intact, Citadel is breaking up clusters in seven markets that were perfectly legal when assembled.
 Clear Channel wants its stock back
If Wall Street traders won't pay what management thinks Clear Channel's stock is worth, then the company will just keep on buying back shares. Clear Channel announced that its board of directors has authorized an additional stock buyback of 600 million bucks. That's on top of a previous one billion bucks authorization, of which 989 million has now been used up. "It is a reflection of our Board's confidence in the Company's financial strength and our overall commitment to our shareholders. We continue to believe that the purchase of our common stock at the current stock price represents an attractive opportunity to benefit the long-term interests of the Company and its shareholders," said CEO Mark Mays.
RBR observation: If you can't be with the one you love then love the one you're with. All kidding aside buying back stock does not demonstrate confidence and that is what Wall Street does not have for all of the radio business now. Does not mean it will not return but with the pace of all media business and pressures on performance radio will need something dramatic to grab headlines again.
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 House said to be prepping Telecom update
According to numerous reports, the House Committee on Energy and Commerce under Joe Barton (R-TX) is nearing completion of a Telecom Act rewrite which would attempt to pick up the pace in which telco companies go into competition with entrenched cable interests in offering MVPD service. The lever would be allowing them to bypass local franchising authorities (LFA). The cable industry, which hopes to turn the tables on the telcos and offer phone service, is adamantly opposed to such a regime. In a recent letter to key legislators in both houses of Congress, NCTA President/CEO Kyle McSlarrow (pictured) said, "Rather, it is to suggest how extraordinary it is for an industry, in which one company alone - - AT&T - - has a market capitalization greater than that of the entire cable industry, not only to ask for special favors from Congress but in fact demand free license to enter the video market while maintaining all current regulation on a much smaller cable industry." According to a report in the National Journal, the House version would have telcos pay a blanket 6% of revenue fee to LFAs to cover the use of rights of way, etc. A sticking point on finalizing the bill are talks over Internet-related items such as network neutrality.
RBR observation: The NAB has been making overtures to the telcos as leverage in the battle over multicast must-carry. And over on the Senate side, Barton's similarly-charged Commerce Committee chair Ted Stevens (R-AK) seems to have an interest in a national blanket LFA regime for telcos, but at the same time seemed to think such a blanket may be impossible to provide. Further, Senate work on companion legislation does not seem to be nearly as far along, although Stevens is said to be shooting for action before Congress's spring break. Stay tuned.
Religious group of groups goes green
A cross-section of religious groups calling itself the Noah Alliance is going to bat for endangered species on the nation's airwaves and printing presses. Claiming to be a partnership of "Evangelical Christians, Protestants, and Jews," it is concerned about weakening of the Endangered Species Act, particularly at the hand of US Rep. Richard Pombo (R-CA), which it says puts numerous endangered animals at risk. PAX Television will be the lead venue for the television element, which will also use national cable. Radio ads are headed for targeted flights on Religious stations in Rhode Island, California, and Washington DC, and print will be used in selected markets.
RBR observation: Political, the category that just keeps on giving. You just never know from which corner it'll emerge next...
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Ad Business Report TM
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 My First impression of the AAAA Conference, Bruce Maduri,
CEO - Genesis Radio Group
Publisher note: Have stated this point for the past three years in an observation on this event. This year the day before the AAAA conference Bruce Maduri called me about business and I mentioned this event. The next day Maduri was there and it was a pleasure to introduce him to a number of executives. In his words why we in radio should follow the money and attend this event:
"Not enough key radio people attended. Sure Mark Mays and Gary Fries each were panel members but there were 1500 advertising executives there and radio should have had a more prominent role. I also expected to see many radio managers roaming the halls bonding with the agency people. That did not happen. Katz, Interep and RAB were represented, but I think that some Regional Managers, Cluster Managers and Senior radio executives would have benefited greatly by attending and participating. The bottom line is that the conference is a must attend for leaders in radio. Let's get back to the basics and service our customers and help them solve their problems."...
| More - Radio an afterthought |
Engagement measurement initiative to be unveiled
The Advertising Research Foundation (ARF) will unveil its initiative to focus the measurement of ad effectiveness on engagement at the organization's annual conference (Re:Think! 2006) 3/20-22 in NYC. ARF is set to lay out a more relatable framework of what engagement is, as well as some validation projects it is readying. ARF, working with the ANA and the AAAAs, announced the engagement effort last summer. The goal, as chatted about at the recent AAAAs, may be to settle on a single definition of engagement, rather than to set a currency for it like with GRPs or frequency. From the ARF: "Engagement is being defined as the new currency for advertising ROI. As consumer empowered media grows stronger, engagement becomes a better metric for assessing advertising effectiveness than exposure and frequency. This session showcases companies that embrace engagement and speakers who are defining the three pillars of consumer engagement-Engagement with Media; Engagement with Creative; and Engagement with Brands."
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| Media Markets & Money TM |
AM duop moves in St. Augustine
Shull Broadcasting is picking up 1M+ for its AM duopoly in the long-standing community of St. Augustine FL (founded 1565, if our memory of 7th Grade Civics is still reliable), south of Jacksonville. It's selling WFOY-AM and WAOC-AM to Geddings & Phillips Broadcasting for that amount in cash. He'll also pick up at least 30K under a six month consulting agreement at 5K per which may be extended at the buyer's discretion. Geddings & Phillips have recently sold two AMs in the Charlotte area, WXNC-AM for 1.15M and WKMT-AM for 950K, over twice what they're paying to get into St. Augustine. The WKMT deal is still pending.
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| Washington Media Business Report TM |
The FTC wants to know:
 What you want to know about Alco-Ads
The alcohol industry operates under voluntary advertising restrictions. But elements of the public (we'd guess in particular the watchdog community) want to know what they're advertising, where and for how much. Should members of the beer, wine and spirits community be required to provide such information on request? The FTC wants to know what you think, and has approved publication of a request for comment in the Federal Register. Specifically, just to make sure we get this absolutely correct, "...the FTC is seeking public comment on proposed information requests concerning the manufacturers' compliance with voluntary advertising placement provisions, sales and marketing expenditures, and the status of third-party review of complaints regarding compliance with voluntary advertising codes." Comments are due by 5/6/06.
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| Entertainment Media Business Report TM |
 Gingrich gets a network
Newt Gingrich, who as a (R-GA) was a prominent member of the House of Representatives back in the 90s - - indeed, as many of you recall, he was the Speaker of that institution - - is getting a radio web. Matrix Media of Chicago is distributing the show, and already has 350 radio stations set to air the :90 second daily Monday-through-Friday feature. It's called "Winning the Future with Newt Gingrich," and today is scheduled to be its official launch date. Conservative Gingrich said, "Using talk radio and the Internet, I hope Winning the Future with Newt Gingrich will help begin the dialogue we need as a country to confront these challenges together. I'm looking forward to discussing the ideas and solutions America needs to win the future in this fun and interesting new format." The Internet facet of the program will be a downloadable iPod collection of each week's five-pack of broadcasts, made available after they've debuted on the air.
RBR observation: Gingrich has frequently been mentioned as a possible contender for the Republican presidential nomination in 2008. If that happens, this show will need to pull a disappearing act. Let's get real - put some lipstick on it and see if the program gets off the ground. RBR does not play the political game just good programming that betters radio.
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| Ratings & Research |
Study: "Key Drivers to Mobile Media Downloads"
Usable Products Company, a leading source of usability design and research for wireless, released results from its six month study, "Key Drivers to Mobile Media Downloads." Study insights reveal keys to success in the media download market, including: music, ringtones, event tickets, wallpapers, games, video, etc., and answers the ultimate question, "What makes them buy?"
| Read More... |
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| Engineering Business Report TM |
 Should your station go HD or not?
By Bert Goldman
It's been about 15 years since the idea of digital broadcasting first was uttered in connection with US broadcasting. During that time we have struggled with new band options, a number of in-band options but at long last, we have closed in on a standard to be used for digital broadcasting in the United States. Many stations have converted to HD Radio both for AM and FM and many are in the process, but as uncomfortable as it may be to admit, while certainly the right thing for most stations, a conversion to HD Radio at this time may not be in the best interest of some stations. While there has been significant testing and analysis of the interference from a new digital transmitter to an analog station, there is not as much information on what to expect from a digital receiver in the presence of other analog and digital interfering stations. In many cases, there just isn't much information available yet. This article is meant to look at what you might expect from your digital station so that you won't be let down when you flip the switch and only pertains to FM IBOC. I have also kept the text purposely non-technical for those who don't spend all their time on engineering matters.
| First, let's identify who should consider converting: |
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| TVBR TV News |
Goodbye 2005, Now let the good times roll
You knew this was coming, but the numbers are still jarring. TVB reports that revenues for local TV stations (local and national spot combined) were down 10.9% in Q4. It wasn't just political, though. In fact, it wasn't just political and automotive. TVB notes that revenues were down in seven of the ten largest advertiser categories for both the quarter (see TVBR Stats) and the year. But while business at the station level was down in Q4, things ere looking up in both syndicated TV and network TV. So, overall, Q4 revenues for the television business as a whole were down only 0.5% to 12.88 billion. You must print out to appreciate the information and plan your pacings for the balance of this year.
| View the Charts |
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| Monday Morning Makers & Shakers |
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Transactions: 1/30/06-2/3/06
Telemundo's move to upgrade in Denver put some oomph into the station trading total as January segued into February, accounting for about 64% of the total volume. A couple of radio deals hovering on either side of the double-digit threshold accounted for most of the remainder.
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Total
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Total Deals
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13
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AMs
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11
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FMs
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5
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TVs
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1
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| Value |
70.448M
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| Complete Charts |
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Radio Transactions of the Week
AM has its sights on Atlanta
| More... |
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TV Transactions of the Week
NBC's Telemundo upgrades in Denver
| More... |
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| Transactions |
1.2M KRSY-AM/KNMZ-FM & KRSY-FM Alamagordo NM (Alamagordo, La Luz NM) from Linda S. Bloom, Trustee for Runnels Broadcasting System LLC to WP Broadcasting LLC, a subsidiary of Westburg Media Capital Inc. (David Westburg). Bankruptcy sale. Partial satisfation of seller's debt to Westburg. Existing duopoly. LMA until closing. [File date 2/15/06.]
565K KNFT AM & FM & KPSA-FM Bayard NM (Bayard, Lordsburg NM) from Linda S. Bloom, Trustee for Runnels Broadcasting System LLC to Skywest Licenses New Mexico LLC (Ted Tucker Jr.). 100K deposit, balance in cash at closing. Superduopoly with KSCQ-FM Silver City NM. LMA until closing. [File date 2/15/06.]
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| Stock Talk |
Finally, radio stocks stop falling
After six straight down sessions, radio stocks were slightly higher on Friday. The Radio Index crept up 0.928, or 0.6%, to 160.490. The broader market was up even more on good news in government job statistics. The Dow Industrials rose 104 points, or 1%, to 11,076.
Among radio stocks, the big gainer was Univision, which rose 3.8% on rumors that Televisa, Haim Saban and others were preparing a buyout bid. Saga rebounded 3% from recent losses.
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| Radio Stocks |
Here's how stocks fared on Friday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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34.69
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+0.09
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Hearst-Argyle
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HTV
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23.65
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+0.31
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Beasley
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BBGI
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10.72
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+0.05
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Interep
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IREP
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0.25
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unch
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| CBS CI. B |
CBS |
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23.95
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-0.01
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Jeff-Pilot
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JP
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58.43
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+0.41
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| CBS CI. A |
CBSa |
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23.98
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+0.02
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Journal Comm.
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JRN
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11.98
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+0.03
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| Citadel |
CDL |
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11.70 |
+0.13 |
Radio One, Cl. A
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ROIA
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7.74
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+0.06
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Clear Channel
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CCU
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28.83
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+0.08
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Radio One, Cl. D
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ROIAK
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7.70
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+0.04
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Cox Radio
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CXR
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13.21
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+0.10
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Regent
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RGCI
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4.29
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+0.05
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Cumulus
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CMLS
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11.41
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+0.05
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Saga Commun.
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SGA
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9.27
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+0.27
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Disney
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DIS
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28.16
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+0.07
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Salem Comm.
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SALM
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12.99
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unch
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Emmis
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EMMS
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17.00
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+0.10
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Sirius Sat. Radio
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SIRI
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4.78
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-0.11
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| Entercom |
ETM
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28.67
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+0.34
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Spanish Bcg.
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SBSA
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5.07
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-0.07
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Entravision
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EVC
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7.80
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+0.20
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Univision
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UVN
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34.18
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+1.26
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Fisher
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FSCI
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42.85
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+0.45
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Westwood One
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WON
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11.40
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-0.08
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Gaylord
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GET
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44.69
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-0.24
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XM Sat. Radio
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XMSR
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20.85
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-0.20
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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]
 What in the name of God is Cumulus Media CEO Lew Dickey smoking? The radio diary system isn't broken (3/10/06 RBR #49). OK, to paraphrase Billy Crystal as kvetching Miracle Max in the movie "Princess Bride," it's only slightly broken. But it's still broken, it's archaic and there is technology available now to provide better, more accurate data. So please Lew, give me a break. Why don't you, Joel Hollander and the rest of the obfuscating radio station owners stop with The Dance of the Seven Veils, this faux minuet of selecting the optimal technology. Spot radio needs good research now, before the Internet totally eats your lunch.
John Maher
Sr. VP, Director of Planning
US International Media
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Below the Fold
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Ad Business Report
Impression of the 4A's
Expected to see many radio exces
but did not happen...
Media Markets & Money
AM duop moves in
Where? St. AugustineShull Broadcasting is picking up 1M+...
Washington Media Business Report
FTC wants to know
What you want to know
about Alco-Ads...
Entertainment Media
Business Report
Gingrich gets a network
Let's get real but put some
lipstick on it...
Engineering Business Report
Should your station
Go HD or not?...
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Radio Media Moves
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 O'Brien back to earth
Former WCBS-FM New York jock Steve O'Brien, most recently heard on Sirius Satellite Radio, is back on terrestrial radio as of today. He's the new morning host for Greater media's WMGQ-FM "Magic 98.3" in the Middlesex-Somerset-Union, NJ market.
Alice, meet Marty
CBS Radio's KLLC-FM "Alice @ 97.3" San Francisco has hired Marty Whitney as Imaging Director. He was most recently PD of Wilks' KURK-FM & KRZQ-FM Reno, NV.
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Stations for Sale
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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)
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RBR Radar 2006
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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3 advance for CC 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....Cumulus Media CEO Lew Dickey was asked about the process 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.
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. Bottom line seems it is just going through the process like reading a book and someone has already told you the ending first. It all comes down to Technology, Marketing, Acceptability by the end user meaning where the ad bucks come from and Money to do the measurement. Last - More Money to keep it going. Radio has tired before and RBR means this topic of another ratings service has been on going for 30 years. Radio should fix all its problems first.
03/10/06 RBR #49
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? RBR 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 RBR 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
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