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Volume 22, Issue 54, Jim Carnegie, Editor & Publisher
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Thursday Morning March 17th, 2005
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Radio News®
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 And the FCC Chair goes to...Kevin Martin
"I am deeply honored to have been designated as the next Chairman of the Federal Communications Commission, and I thank President Bush for this distinct privilege. I look forward to working with the Administration, Congress, my colleagues, and the FCC's talented staff to ensure that American consumers continue to enjoy the benefits of the best communications system in the world. I thank Chairman Powell for his excellent stewardship of this agency, and I look forward to continuing his efforts in bringing the communications industry into the 21st Century."
RBR observation: Kevin Martin has been one of the less vocal commissioners in recent years. He has at times shown an independent streak - - although he has generally voted with his fellow Republicans, his vote was not always guaranteed. He made waves by siding with Democratic commissioners in a key telecom vote, and recently found himself playing the role of Lone Ranger when the FCC voted on cable multicast must-carry. On that occasion, Martin said that failing to impose guarantee multicast carriage could be damaging to niche broadcast television operators. In general, look for a continuation of the general deregulatory bent of the Powell commission, with perhaps an even more aggressive stance against indecency than that adopted by Powell, who took the lead in the matter after the Super Bowl incident but was generally wary of getting into content regulation. | More... |
Martin: A compendium of early reactions
Here's what the early responders are saying about the elevation of Kevin Martin to the position of Chairman of the FCC. Included in today's batch: Colleagues Michael Powell, Kathleen Abernathy and Michael Copps, as well as the NAB, PTC and Common Cause.
| More... |
 Viacom may split itself in two
Frustrated by Wall Street's valuation of his company, CEO Sumner Redstone confirmed after the market closed yesterday that he and the other directors of Viacom are considering the idea of splitting the company into two separate companies, each of which would be publicly traded. The move, if it happens, would basically have everyone who answers to Les Moonves (CBS & UPN Television, Infinity radio, Viacom Outdoor and all of the O&O stations) in one company, and everyone who reports to Tom Freston (MTV Networks, Paramount Studios, etc.) in another. "We believe that a separation of our businesses into distinct and strong operating entities would allow us to optimize our capital structure and create unique investments that are more appealing to investors with different objectives. Separately, these new publicly-traded entities could each pursue strategic paths that would maximize their long-term potential. The separation could highlight high-growth businesses, such as our MTV Networks, which would be operated by Tom Freston, and could give us added flexibility to pursue internal growth and to enhance these operations through the creation of an attractive high-multiple currency that could be used for accretive acquisitions. Additionally, we believe the separation is likely to allow us to deliver greater value to our shareholders through a company operated by Les Moonves that would combine our leading CBS broadcast television businesses with our growing outdoor business and our high free cash flow operations, such as radio. This group of assets would also have the potential to participate in a program of stock buybacks and increased dividends," Redstone said. Word of the coming announcement leaked out before the market closed yesterday and Viacom's stock jumped in the last hour of trading.
RBR observation: How ironic. It looks like we'll go back to pretty much what the situation was before the 34.45 billion merger of CBS Inc. into Viacom in 1999. The difference is that shareholders of CBS gave up their voting stock - - something RBR said was a stupid idea - - to let Redstone have autocratic control. What do you have to show for it now?
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Salem sued over stock offering
Salem Communications is the latest broadcast company to face a class action lawsuit claiming that it misrepresented its financial situation to public investors who bought its stock in an add-on offering last April. The lawsuit was filed this month by the Pipefitters, Locals 522 & 633 Pension Trust Fund. According to Salem, in an SEC filing, "The complaint alleges that the offering documents failed to disclose that the company's financial statements overstated its fixed assets and that the company's internal controls were flawed with respect to its ability to value fixed assets and, that the offering documents contained misstatements regarding the company's fixed assets and internal controls. The complaint seeks rescission or damages in excess of five million, interest, attorneys' fees and other costs, as well as equitable and injunctive relief."
Radio One raises Q1 guidance
Things are already looking better than they did just a month ago when Radio One reported its Q4 results (2/18/05 RBR #35). Rather than Q1 revenue growth in the low single digits, Radio One is now predicting that revenues will be up at least 4% this quarter. "We have seen a marked improvement in business over the past month. Our net broadcast revenue outperformed our markets by over 300 basis points in February and we feel very good about how March is shaping up. In addition, the second quarter appears to be off to a good start and we are excited to now have Reach Media as part of the Radio One family. Our national business is improving and we have made important strategic and operational changes in some of our markets that are either starting to bear fruit or that we expect will be beneficial to us later in the year," said CFO Scott Royster. Looking further ahead, Radio One is now expecting broadcast revenues to be up in the mid single digits for Q2.
 Davis named COO
at Salem Communications
He'd already been Executive Vice president of Radio since 2003, and now Joe Davis has been elevated to COO of the entire company. That means he's not only responsible for Salem's radio stations and radio network, but also its non-broadcast operations, including Salem Publishing and Salem Web Network. "Joe has successfully championed our efforts to expand our national footprint in radio and develop our strategic formats, most recently in Contemporary Christian Music and in News Talk. Over the 15 years that I have known Joe, I have developed a tremendous regard for his ability to execute the strategies of the company, his performance in the face of tremendous challenges, and the strength of his character. His leadership will prove extremely valuable as we continue to grow Salem as a company that creates and distributes programming and content that is consistent with Christian and heartland values," said CEO Ed Atsinger.
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Adbiz©
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 BMW and Sirius will go on the road
to promote new 3-series
BMW of North America announced the company will be taking advantage of its OEM relationship with Sirius Satellite Radio to promote its new 3 Series. On 3/26, BMW will kick off a grassroots 44-day cross-country tour dubbed "3 Across America" to celebrate the launch of the new 3 Series. The "3 Across America" tour will culminate on 5/6, with an 18 hour marathon broadcast which will be aired on a special Sirius BMW Channel. The program will consist of an entertaining and continuous "travelogue" of the entire coast-to-coast tour, including local attractions and adventures experienced on the drive, unique and eccentric stories from the road, live interviews, and vignettes. The journey will be topped off by a live concert starring top name performers. A caravan of classic BMW 3 Series cars, new 330i Sedans, and the 3 Series' spiritual predecessor, the 2002ti -- representing the breadth and heritage of the 3 Series -- will depart from New York and travel across the country, ending up in LA on 5/6, which is also the official U.S. "on-sale" date for the new 3 Series. This cross-country caravan will give people across America a sneak peek at the new 3 Series before the car arrives in dealerships. "3 Across America" will allow BMW and 3 Series enthusiasts to participate in events at landmark destinations across the country, in cities such as San Francisco, Boston, Philadelphia, New Orleans, Dallas, Detroit, Seattle, Monterey, and others.
Microsoft to unveil search ad play
Microsoft previewed its keyword search advertising system, called MSN adCenter, and announced that it would test the service to advertisers in France and Singapore before its U.S. debut, which is anticipated sometime after Microsoft's deal with Yahoo's Overture ad network expires in 2006. The MSN adCenter will offer advertisers key demographic data from searches made by MSN members; CEO Steve Ballmer said, "Advertising is going to be a very important long-term source of revenue to Microsoft."
 PepsiCo makes Diet Pepsi its new flagship
PepsiCo is making Diet Pepsi the star of the company's U.S. marketing efforts -- and trimming advertising spending on sugar-sweetened Pepsi-Cola. "We are treating Diet Pepsi as the flagship brand," says Dave Burwick, chief marketing officer for Pepsi-Cola North America told the Wall Street Journal. "It's a big step for us." As part of the reordered priorities, Diet Pepsi will be marketed as a hip, cool brand for everyone, including teenagers and Baby Boomers. Meanwhile, Pepsi is narrowing its sales pitch for regular Pepsi-Cola to soda drinkers younger than 25, Latinos, African-Americans and sports fans. Pepsi says it plans to double its marketing spending on Diet Pepsi this year, while the budget for Pepsi-Cola will fall slightly. The company doesn't disclose figures, but TNS Media Intelligence says that means the company will spend more than 60 million this year on Diet Pepsi, while the budget for regular Pepsi will be below last year's 156 million. Regular Pepsi still has nearly double the U.S. market share of Diet Pepsi in volume terms, so the company isn't about to drastically cut its marketing of its main product.
It's "RoadBoardz," not Billboardz!
Quick correction here: In our item on truckside ad placement provider "RoadBoardz" (www.roadboardz.com) yesterday, we got the name in the headline wrong. Our apologies. Here's the corrected version.
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!! ATTENTION, REVALIDATION IN PROGRESS !!
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Due to the growing readership of RBR/TVBR we have once again been forced to upgrade our mailing and delivery systems. In our effort to stay spam free we have implemented a new sign-up form to conform to nationwide spam laws and also print rules by the US Post Office for mailing label requirements on all self mail magazines.
In order to implement this system upgrade - we need you to take a few moments to fill out the new form to ensure the delivery of your favorite Morning and Afternoon E-paper(s) and Monthly RBR/TVBR Magazine. Just use the button at the top or bottom of this announcement. We will be switching to the new system April 6th 2005 and all previous signup info will become invalid. So please fill this out immediately to ensure delivery.
One particular upgrade of interest is the new "password" field. This will allow you to "log in" and change your personal information, in case you move, get a new job, or simply just want to change your email address.
I would like to extend a personal thank you, for your time and patience, by sending you the next two (2) months of RBR/TVBR Solutions Magazine for your reading  pleasure.
Success,
Jim Carnegie
Publisher & Broadcaster
[email protected]
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| Media Markets & MoneyTM |
One Mississippi, two Mississippi...
Clear Channel is spinning a pair of FMs in two Mississippi markets to Kevin Wagner's Urban Radio. The pricetag on the duo is 1.1M, which will be all paid up by closing day and which will include a covenant not to compete. Martin will be getting a standalone station, WWKZ-FM Aberdeen MS, which is in the Tupelo market. Also in the deal is WACR-FM Columbus MS, part of the Columbus-Starkville-West Point market. That station will form a new bare-bones superduopoly with WAJV-FM Brooksville and WMSU-FM Starkville.
New law delays SEC filings
We've heard quite a few public companies about the complication and additional cost of implementing the Sarbanes-Oxley law - - and now two broadcasters, Cumulus Media and Fisher Communications, are blaming it for their being late in filing their annual reports with the SEC. "The Annual Report on Form 10-K for the fiscal year ended December 31, 2004 cannot be filed within the prescribed time period because the Registrant has not yet completed the additional work required to finalize management's assessment of the Registrant's internal control over financial reporting in accordance with the Section 404 of the Sarbanes-Oxley Act of 2002. The Registrant expects to file the required report by no later than March 31, 2005," Cumulus said yesterday in a filing with the SEC. Fisher's story was much the same, saying of the new requirements, "The additional time required to complete these activities could not be eliminated without unreasonable effort or expense." Fisher also said it expects to make its filing within 15 days.
RBR observation: The burden of Sarbanes-Oxley has been particularly burdensome for smaller companies, for whom the new costs are a significant chunk of change. The good news is that 2004 was the year when the biggest costs were incurred to implement many of the new requirements, but there will certainly be ongoing costs every year from now on. It's just another reason why going private is an attractive option for those with access to the capital required to do so.
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| Washington Beat |
 McCain ready to mirror
House DTV deadline
Rep. Joe Barton (R-TX), chair of the House Committee on Energy and Commerce, has indicated he wants to force an end to the DTV transition on 12/31/06 - - if he gets his way, on that date all analog television stations would go dark, and digital would be the sole form of over-the-air broadcast. Viewers will need either a digital receiver or a digital-to-analog converter to get any reception. It would also signal the auction of returned analog spectrum to be repurposed by new licensees, with particular emphasis on improving communications for public safety first-responders. According to Reuters, Sen. John McCain (R-AZ), long a critic of the free spectrum granted television broadcasters for side-by-side analog/digital operation, has promised to review Barton's proposal and introduce similar legislation in the Senate in hopes of greasing the wheels towards a hard date.
RBR observation: We understand why there is growing sentiment to get the transition over with, but we fail to understand why McCain thinks broadcasters are having such a swell time paying to run expensive side-by-side operations for the ad revenue of one, as is generally the case in this time of transition. We also fail to see the point of engaging in this lengthy, drawn-out and expensive transition when at the end of the day, a large number of Americans are still going to be getting their television in glorious, state-of-last-century's-art analog. If Congress wants this thing to end on 12/31/06, Congress is going to have to step in very quickly and resolve the remaining disputes in this highly complicated process. It'll take a lot more than simply setting a date.
Senators attack administration VNRs
Both Daniel Inouye (D-HI), ranking member of the key Senate Committee on Commerce, Science and Transportation, and ex-presidential candidate John Kerry (D-MA) have fired off letters to the FCC demanding a probe of broadcasters' role in the airing of unattributed video news releases from various agencies of the government. | More... |
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| Programming |
 Bandiero is back
If you've wondered whatever happened to Al Bandiero, who rode the dance music craze to big numbers on a succession of New York radio stations - - well, he's still on the radio. Bandiero is still hosting a Sunday night show on WKTU-FM, "KTU Studio 54 Clubhouse," and now he's branching out to Long Island, where "WALK Saturday Night Dance Party With Al Bandiero" will debut March 26th. Both stations are owned by Clear Channel.
Editor's note: Remember the Disco format crazy? April issue of Radio & Television Business Report - The Real Broadcaster Business Magazine - we look at: But will they buy it? Radio? How can new formats solve demo deficiencies in buys? Make sure you Revalidate your RBR read today. |
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| Engineering |
Continental Electronics gets its name
and former owner back
Good News for Continental Electronics - - the familiar name in top-quality transmitters is back. DRS Technologies, announced it has completed the sale of its DRS Broadcast Technology (Continental Electronics) and DRS Weather Systems to The Veritas Capital Fund II, L.P., a New York-based investment company, in a stock purchase transaction. So DRS will now be known once again be officially known as Continental Electronics. DRS Broadcast Technology and DRS Weather Systems were subsidiaries of Integrated Defense Technologies, Inc. (IDT), of which Veritas was the largest shareholder. IDT was acquired by DRS on 11/4/03. "The sale of these units was a strategic decision to concentrate our resources and integration efforts on our core defense technology businesses," said Mark Newman, DRS Technologies CEO. "We believe their established customer bases will continue to be well served in the transfer of these operations to a buyer that is focused on their success and very familiar with them, having been a former owner."
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| Transactions |
KAHS-AM El Dorado KS from Reunion Broadcasting LLC to SMP Communications Inc.
KKVO-FM Altus OK from Altus Educational Broadcasting Foundation to Educational Media Foundation
WXXY-FM Atlantic City-Cape May (Port Republic NJ) from In His Name Broadcasting Inc. to WXXY Broadcasting Inc.
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| Stock Talk |
Oil, cars sink stocks
Record high oil prices and a dismal forecast from General Motors sent stocks into a tailspin. The Dow Industrials fell 112 points, or 1%, to 10,633.
Radio stocks were no exception. The Radio Index fell 1.990, or 0.9%, to 218.611. Beasley fell 4.1% to lead the retreat. But Viacom's class A was up 7.9% and Class B 6.3% as work leaked out that the company was considering splitting itself in two.
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| Radio Stocks |
Here's how stocks fared on Wednesday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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41.05
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unch
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Jeff-Pilot
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JP
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48.72
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-0.20
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Beasley
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BBGI
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16.95
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-0.73
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Journal Comm.
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JRN
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16.47
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-0.17
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| Citadel |
CDL |
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14.01 |
-0.04 |
Radio One, Cl. A
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ROIA
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13.39
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+0.07
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Clear Channel
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CCU
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34.16
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-0.04
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Radio One, Cl. D
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ROIAK
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13.38
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-0.02
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Cox Radio
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CXR
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16.70
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-0.27
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Regent
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RGCI
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5.16
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-0.11
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Cumulus
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CMLS
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14.12
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-0.30
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Saga Commun.
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SGA
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15.95
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-0.16
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Disney
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DIS
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28.65
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+0.05
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Salem Comm.
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SALM
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21.50
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+0.08
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Emmis
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EMMS
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19.47
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-0.27
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Sirius Sat. Radio
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SIRI
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5.23
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-0.10
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| Entercom |
ETM
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35.40
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-0.44
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Spanish Bcg.
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SBSA
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10.67
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+0.12
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Entravision
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EVC
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8.45
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+0.01
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Univision
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UVN
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27.74
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-0.26
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Fisher
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FSCI
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51.93
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+0.10
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Viacom, Cl. A
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VIA
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37.00
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+2.71
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Gaylord
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GET
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42.00
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-0.30
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Viacom, Cl. B
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VIAb
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36.00
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+2.13
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Hearst-Argyle
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HTV
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26.01
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+0.35
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Westwood One
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WON
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20.65
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-0.38
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Interep
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IREP
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0.50
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-0.05
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XM Sat. Radio
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XMSR
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28.99
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-0.67
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International Bcg.
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IBCS
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0.01
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unch
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-
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-
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-
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__UNSUB__ to this email service.
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We will be implementing a new system upgrade - we need you to take a few moments to fill out the new form to ensure the delivery of your favorite Morning and Afternoon E-paper(s) and Monthly RBR/TVBR Magazine. We will be switching to the new system April 6th 2005 and all previous signup info will become invalid. So please hit the Revalidate Button and fill this out immediately to ensure delivery. Just use the button at the top of this announcement.
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments to [email protected]
This reader has a point-by-point response to a previous Bounceback (3/15/05 RBR #52).
 Just read Mr. Zihlman's comments to which I take issue. To this comment : "Maybe if local radio reps and their managers learned to sell ideas and concepts to their clients, instead of 'We're Number One' and price and packages they may have better sounding spots and get better results for their clients." In all my years in local radio as a seller and now a manager I have always been taught to approach clients by uncovering their needs, challenge or opportunity. Those reps at any station that approach the client from a feature position ("we're number one" as Zihlman puts it) is just not the case in today's radio sales world... | More... |
David Di Renzo
Local Sales Manager
Clear Channel Wilmington /
Dover DE
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Upped & Tapped
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 Zako gets
the call
Eastman Radio President Tucker Flood has tapped Rhea Zako to be Manager of Eastman Radio in Detroit, overseeing the day-to-day sales operation and covering agencies in the Michigan and Ohio region. Zako had been National Sales Manager of Infinity's WWJ/WXYT Detroit after previously holding several positions at Katz Radio.
Davis programming NextMedia
NextMedia announced that Steve Davis has been named Vice President of Programming for the company's radio division. A 30-year industry veteran, Steve will spearhead programming initiatives across NextMedia's 66 stations.
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February Digital Print Magazine Now Available
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"The Pros and Cons
of Nielsen's LPM and Arbitron's
proposed PPM service"
After a rocky start, it's roll-out time of LPM & PPM. Will there be cooperation or more talk?
GM talkback: "How has LPM ratings changed selling in your market?" TV GMs say what they think-the good, bad and the ugly.
Media, Markets, and Money: Only one place tells it like it is with a run-down and overview of the biggest quarterly Radio and TV deals and outlook to 2005.
Read RBR/TVBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the February Issue of RBR/TVBR
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RBR Radar 2005
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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Senators seek to curb
violence AND indecency
The "Indecent and Gratuitous and Excessive Violence Broadcasting Control Act of 2005" has been introduced. Kay Bailey Hutchison (R-TX) and John Rockefeller (D-WV) are the co-sponsors. Their bill seeks to accomplish five things: ( 1) Assess the effectiveness of the v-chip (2) Double children's programming from 3 to 6 hrs (3) Require new and improved content warnings (4) Up the obscene content maximum fine to 500K with a 3M 24-hour cap (5) Provide local broadcasters time to review network programming in advance RBR observation: OK NAB where are ya? Love this stuff inside the beltway comes up with like: New and Improved; Is this a laundry detergent? And the word Curb is what some of our congressional leaders can barely see over; sober, on many broadcaster issues these days. 03/16/05 RBR #53
Citadel got Spitzer payola subpoena
It appears that New York Attorney General Eliot Spitzer has cast a wide net in his investigation of the practices of independent record promoters. Citadel Broadcasting is the latest radio group owner to confirm in an SEC filing that it has received a subpoena in the payola investigation. Citadel is cooperating with the AG and says, "At this time, it is not possible to determine the outcome of this investigation." Clear Channel, Entercom and Cox Radio had previously confirmed receiving subpoenas. 03/16/05 RBR #53
The Mouse is out of the House
Disney dissidents begin campaign to fire board as RBR predicted, former Disney directors Roy Disney and Stan Gold aren't accepting the current board's vote to name Bob Iger as CEO, come September, as the final word on the subject. Instead, the dissidents are embarking on a new campaign to remove Chairman George Mitchell and the entire board of directors so a new board can start over on the CEO selection process. 03/15/05 RBR #52
Sen. Hillary calling for
standardized ratings
At the unveiling of the Kaiser Family Foundation report on age 8-18 media habits, Sen. Hillary Rodham Clinton (D-NY) announced that she would be introducing a bill to further study the effects of media on youth, including children at an even younger age. Like the Kaiser study, it will also focus on video games as well as entertainment programming. She has bipartisan support. RBR observation: Technology is breaking the speed of sound and it will be almost next to impossible for manufacturers to do anything what Hillary wants. But Hillary must remember that education begins in the home. Politicians don't have a clue not less a sense of what is reality. More on Kaiser to come, Oh Buy we can't wait.
03/15/05 RBR #52
GM puts 3 billion account
up for grabs
Mark LaNeve is wasting no time shaking things up after being but in charge of all domestic sales and marketing at General Motors early this month. He's put the company's entire US media buying account up for review. The GM account, which totaled nearly three billion bucks in ad buying last year, is apparently the largest ad contract ever put up for bid. It covers buying for both General Motors and its regional dealer groups. LaNeve is looking for new ways to boost sales for GM, whose US market share has fallen to a historic low. RBR observation: Ok you were not there at the 4A's this year when the buzz was creative and the problems agencies are having wrestling the issue under control. Reminder: LaNeve stated he wants to keep auto offers simple in the market place and be more targeted on incentives by models and regions of the country. In short: Price the car right and no incentives. LaNeve was the point on re-branding the Cadillac division so successfully he is now the man in charge of 3 billion bucks and the up front season is around the corner. So, now do you think LaNeve is going to commit all that cash at one time? 03/14/05 RBR #51
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General Manager
Needed to lead multi-station radio group in Mid-Atlantic Region. Candidate must have prior GM experience in all aspects of management with strong leadership, sales & business skills, some knowledge of programming and FCC regs. Excellent benefits & 401(k) package!
Radio Sales
Memphis, TN
Flinn Broadcasting, with a variety of radio formats, is seeking Marketing Consultants. Requires 1 year radio sales experience. Offering the highest commissions in Memphis, 20% direct, 15% agency and a relocation allowance. Flinn Broadcasting - EOE
See Radio Careers for more info.
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