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Volume 24, Issue 54, Jim Carnegie, Editor & Publisher
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Monday Morning March 19th, 2007
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Radio News ®
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 Hollander hitting
the Exit Door?
While CBS Radio has no comment on the matter, The NY Post reported Friday that CBS Radio Chairman and CEO Joel Hollander is "quietly laying the groundwork to step down before his contract expires at year's end after a discordant relationship with CBS boss Les Moonves...Hollander...is said to be tired of the continual battles with Moonves over the radio unit's direction." "Hollander's a radio guy, and CBS doesn't understand radio nor do they like radio," a source familiar with "the tussle" told the Post. RBR is hearing things a bit differently. Some in the industry have said while at first glance, this might be seen as posturing in the press for a contract renegotiation, it looks more like the contract isn't going to be renewed and this is a way for the NY Post "sources" to make Hollander look like the innocent victim and Moonves the bad guy. Moonves likely allowed Joel to "take chances" in many moves he's made with the company-everything from not keeping Stern on board to firing a bunch of people to tapping his brother, Les, for CBS Radio SVP/Regional Manager without allowing others to interview for it. RBR heard this article may have upset Moonves greatly, perhaps enough to blow Hollander out before his upcoming Bayliss Roast this Thursday (3/22).
Said an industry source: "There is word buzzing around the company that says he is out as of today [ last Friday 3/16]. There is definitely a falling out between he and Moonves. The two of them have definitely fallen apart over the past couple of months, probably based on the performance. I think this article in The Post is basically trying to make himself look good. Everyone seems to be saying the source(s) were either him, [EVP/Eastern Region] Scott Herman, or both. While I have no grievances towards Joel, he has to take responsibility of his actions. He cleaned slate in that organization. He just came in on day one and fired everyone that was aligned with Mel. That thing goes pretty deep. It's not just the Stern thing. Personally, I think Joel is a good broadcaster, but he just aligned himself with the wrong people to get it done. I think he was a little too quick to make personnel changes. People on top shouldn't keep rolling heads on the bottom, but work with people on the bottom." Another source had a great idea: "If Hollander is indeed gone now or at the end of the year, CBS-TV should launch a reality series similar to The Apprentice where 10 or so candidates would prove how they are the best pick to run CBS Radio. Les Moonves could be Donald Trump."
RBR observation: Joel has weathered many storms at the helm of CBS Radio. We're not sure about this one. We're also not sure why this article came out-if it was the product of a conversation with Joel or not, it looks a bit like he may not make it to the end of the year. But he has surprised many before, so no surprises either way, we say. It will be an odd Bayliss Roast, that's for sure. So who would replace him, if it comes to it? We've heard in the past Moonves has been in discussions with both Jimmy deCastro and Randy Michaels (who now has a new job in TV). We imagine this past weekend may have brought at least one of those conversations back to light. We would also predict some folks might be coming back that had been previously been fired. Last deals with boss Moonves and this is no secret as he has stated in a number of conference calls about the radio side of CBS, to him it is only a Margin Business.
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Girding for battle
While some big institutions are rumored to be cutting their Clear Channel stock positions, one hedge fund has been buying more. Is Highfields Capital Management ready to lead the fight against the pending buyout? While hedge funds are famous for being publicity shy, the Wall Street Journal reported that Highfields has occasionally been an activist shareholder in the past. Highfields reported to the SEC last week that it now owns 5% of the outstanding shares of CCU, which Bank of America analyst Jonathan Jacoby says is up from around 4% at the end of 2006. The rescheduled record date and vote date, now set for April 19, may improve the chances of the 26.7 billion buyout winning the required two-thirds approval, but Jacoby thinks "core" shareholders who are opposed to the 37.60 per share price own about 25% of CCU shares. "We believe this core resistance coupled with the fact that every abstention is considered a 'no' vote makes the two-thirds threshold very difficult to achieve as typically 10-15% of the shares are not voted," Jacoby said in a note to clients.
 California's haste will influence political spending
Arnold Schwarzenegger made it official, signing a bill that will move the state's primary campaign up near the front of the Campaign 2008 schedule. The 2/5/08 date will come shortly after Iowa, New Hampshire, Nevada and South Carolina have their say, and may be mimicked by several other key states. January 22nd is the date for the initial New Hampshire vote. Also considering a move to 2/5/08 are New York, New Jersey, Florida, Illinois and Texas, and some reports speculate that the number of states getting in on the 5th could reach as high as two dozen.
RBR observation: In its recent quarterly conference call, Young Broadcasting noted that an early California primary would probably generate a major windfall of found cash, since the state has often fallen out of contention early in recent years, resulting in little national political advertising. If even more states jump in, that should rapidly accelerate campaign spending, because the candidates can't be everywhere at once, and many if not most will be spending to survive. At least one commentator noted that it won't necessarily signal the end of the primary season, either. Although there will undoubtedly be significant winnowing of the candidate herd, there is also a strong possibility that the race will continue undecided among a handful of strengthened candidates, leading to more spending prior to the post-convention general election blitz.
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Why wait? Buy now!
CL King analyst Jim Boyle is telling clients there is no time like the present to buy Arbitron stock. Noting that PPM holdouts, including radio giant Clear Channel, suddenly signed PPM contracts when the new ratings system became the radio ad buying currency in Philadelphia, Boyle is predicting more of the same when PPM becomes currency in Houston in mid-July. "CCU should sign up for a second market and another holdout, Radio One, should sign up for its first, we feel," Boyle said in a research note, noting that Radio One, which is a relatively small player in Philadelphia, gets 14% of its revenues from Houston. But Boyle knows Bob Neil too well, so he is not predicting that Cox Radio will sign a PPM contract for Houston soon. The analyst says Arbitron will start getting new revenues as each new PPM market fires up, with New York set to go live in December and LA early next year.
 TNS sees Internet growing fast
The changing media landscape was caught in a TNS Media Intelligence annual snapshot which saw TV's usual even-year growth, flat radio, declining newspaper and burgeoning internet. The advertising market as a whole was reported up by 4.1%. TGS measures five general media categories, and internet was part of "all other media," along with outdoor and free-standing inserts. The other category was up 15.9% from 2005 to 2006, with 17.3% of that generated by the internet, 8.6% from outdoor and 25.5% from FSIs. Spanish language television was the driver for that category, syndication the anchor. National spot was the only bright spot for radio. As for share, television was up 0.5% to 43.7%, Magazines down 0.1% to 19.9%, newspaper down 1.2% to 18.7%m radio down 0.2% to 7.4%, and Internet up 0.7% to 6.5%. Money spent elsewhere accounted for the remaining 3.8%, up 0.3% from the previous year.
| Here is a category-by-category breakdown: |
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| Wall Street Media Business Report TM |
Radio One reports SEC investigation
Radio One says the SEC has begun an informal investigation, after the company disclosed last month that it had identified some misdating of stock option grants and would be restating financial results for every quarter since it became a public company (2/22/07 RBR #37). In an SEC filing, Radio One said its audit committee had requested that an outside law firm be retained to assist in the review of stock option practices. To that end, Covington & Burling LLP has been hired. Radio One said its management has not come to a final conclusion about the full extent of the past accounting errors, but it is going to release preliminary results for Q4 of 2006 this Wednesday (3/21) and hold its quarterly conference call with Wall Street analysts.
RBR observation: As previously noted by analysts, the good news for Radio One is that nobody made any money from the misdating and this looks like a bookkeeping error, rather than any attempt at fraud.
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Ad Business Report TM
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 AHAA archives to
chronicle the industry
Pioneers in Hispanic advertising, marketing and broadcasting gathered to announce the formation of the AHAA Archive of Hispanic Marketing to preserve the industry's past and provide a path to the future. The archive, sponsored by the Association of Hispanic Advertising Agencies (AHAA), will be housed at the Library of American Broadcasting on the University of Maryland campus in College Park. AHAA plans to capture oral and written histories and personal records of pioneers in Hispanic broadcasting, advertising and marketing. Intended as a place for scholars, writers, students and researchers, the archive also will feature industry studies and surveys, clippings and footage of ad campaigns, photographs, articles, and more. The first contribution to the archive's collection was made by industry vet Sara Sunshine, an esteemed marketer and one of the U.S. Hispanic ad industry's trail-blazing women. Sunshine presented AHAA with a scrapbook featuring advertisements, newspaper clippings, and industry reports and research at a recent 10-year anniversary celebration for AHAA. Her collection, dating back to 1962, details her personal journey as well as industry highlights. She notes she was diligent in maintaining her records through several moves, always making sure to keep the most important materials.
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| Media Business Report TM |
Talkers intensify top stories
The Libby trial was the #1 news story for the week of 3/4-9/07, according to the Project for Excellence in Journalism, eating up 13% of the available cross-media news hole. Media gabfests boiled it, simmered it and thickened it until it consumed over a quarter of their time, eventually giving it 28% of their attention. The second news story was the 2008 campaign, at 9%, and talkers bumped that up too, to 17%. The newsers/talkers began to reach parity if you look at combined coverage of Iraq story facets, with news giving it 22%, talkers 19%. There was a special focus for the talkers, however. They devoted 2% of their time attacking one another, and 3% discussing one of their frequent guests, Ann Coulter. At least Anna Nicole Smith was allowed to rest, at least in terms of the top ten stories, on both lists.
BART creates "tunnel vision" ad images
Inside Bay Area dot com reports passengers on the city's BART train system got new motion picture advertising the transit agency has installed in the tunnel between Oakland and San Francisco last week: "Thanks to a high-speed variation of the old Burma Shave advertising scheme of successive rhyming highway signs, staring at the walls of one BART tunnel just got a little more interesting...you'll see Warhol-esque multiple-screen movies in red, with images of tiny Target department store logos raining onto an attractive young man and woman who appear to be taking showers, kayaking and springing on diving boards. BART didn't need to turn its windows into a high-tech heads-up display to do this, however. This innovative form of advertising doesn't involve any computers or electronics. It's just a long succession of pictures, next to one another on the side of the tunnel, so when the viewer goes by at 29 to 35 mph, the images appear to move." Sensors illuminate the posters when a train approaches. CBS Outdoor is BART's advertising contractor on the project.
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| Media Markets & Money TM |
Christian to Christian deal
Reach Satellite Network, a wholly owned subsidiary of Salem Communications, has agreed to sell WVRY-FM Waverly, TN, in the western suburbs of the Nashville metro, to Grace Broadcasting Services. The buyer, headed by Lacy Ennis, will pay 900K cash for the 50kw Contemporary Christian outlet. Broker Ed Henson notes that Grace will soon be a bona fide group owner, since it has a deal pending to buy WQSE-AM White Bluff, TN and already owns 50% of WTRB-AM Ripley, TN.
The upside of WXJO
WXJO is an AM station on the eastern fringe of the Macon GA market, operating out of Gordon GA. It's being sold by Roberts Communications Inc. to Exponent Broadcasting Inc., a four-member ownership group headed by Randy D. Gravley and including Byron L. Dobbs, Clifton G. Moor and William G. Brown. They're getting the station for 80K, and that could wind up being quite a bargain price. That's because they have until 6/29/09 to execute a construction permit that will take the station upstate to Smyrna GA. The town of Smyrna, on our map, happens to be in the yellow part of the map surrounding Atlanta.
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| Washington Media Business Report TM |
FTC goes to bat for truthful lawyers
 Will the Louisiana State Bar Association overly restrict the ability of attorneys to advertise their services? The Federal Trade Commission thinks it's a distinct possibility, and has offered comments suggesting that the consumer will ultimately benefit if attorneys retain commercial speech rights. FTC agrees that "reasonable restrictions on advertising that are specifically tailored to prevent deceptive claims in a way that preserve competition provide the optimal level of protection for consumers." On the other hand, FTC thinks these rules should be narrowly tailored. "Rules that unnecessarily restrict the dissemination of truthful and non-misleading information are likely to limit competition and harm consumers of legal services in Louisiana." The five-member Commission voted unanimously to submit the recommendation, indicating bipartisan support for the opinion.
RBR observation: Most of the attorneys we know would never stretch the truth, and are congenial, forthright and forthcoming when they have something on their mind that they want you and everyone else to know. We must say, however, that we once played in a coed softball league featuring many communications law firms. We got used to their propensity to hire Olympic-quality summer interns just to beat up on the teams fielded by trade publications. But we never got used to the passionate and protracted litigation that ensued after every close play at first base, nor were we ever assigned a public defender when these teams showed up on our schedule. However, if we can all agree that our runner was safe, then we will agree that attorneys can advertise as much as they want.
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| Internet Media Business Report TM |
Baseball coaches flash signs, new service analyzes them
The statistically rich world of major league baseball has just slid headfirst into the world of astrology on the internet. A "renowned baseball blogger and expert astrologer" named Rev Halofan is merging baseball analysis and astrology (which he says are both mathematical disciplines) for the benefit of fantasy baseball players on an internet radio station known as Karma Air, found at www.karmaair.com. Halofan says just about every statistic under the sun is analyzed when helping fantasy enthusiasts pick their teams with the notable exception of their zodiac chart. The show is called KarmaBall, and it will be "exploiting market inefficiencies in measuring players by their zodiac chart." Halofan (and yes, Rev is short for Reverend) will be putting his own analysis to work, essentially letting the stars pick his stars.
RBR observation: It is no doubt only a matter of time before this same principle is applied to the stock market. And that new syndi offering you're considering - would it be better to get one piloted in early March, when Pisces is in control, or would it be better if the new show was born under the influence of Aries? The applications are potentially limitless.
NetRatings deal is looking good for Nielsen
Executives at The Nielsen Company should be happy now that they raised their bid and struck a deal to buy out other shareholders of NetRatings (2/6/07 RBR #25). As its name implies, NetRatings is an Internet media and market research company. It posted strong results for Q4, breaking just above even on the bottom line with a profit of 99K bucks. Meanwhile, revenues shot up 24% to 22 million. As a still young company in a still young industry, that is impressive. For media types, the metric of most interest is usually EBITDA. Pro forma EBITDA in Q4 was 3.3 million, up sharply from only 779K a year earlier. As it issued the Q4 results, NetRatings said the merger into Nielsen is expected to close in Q2, although that is still subject to regulatory approvals.
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| Entertainment Media Business Report TM |
Learning the ropes
 Former NBA All-Star Jamal Mashburn already has a post-basketball job as an on-air ESPN NBA analyst, but he wanted to see what life was like in the darkness of a radio control room. So, he asked to tag along for a night of "Radio Production 101" with ESPN Radio producer Mike Urrunga. "As a basketball player, you need to know the fundamentals before you get out on the court, so I want to find out what goes on with both sides of the production," Mashburn explained. The former basketball star shadowed Urrunga as he produced "The Pulse" with host Doug Gottlieb (M-F 4-7 pm ET).
RBR observation: Seems like a pretty smart guy to us. We doubt that Mashburn will ever apply for a full-time job in the control room, but any air talent is well served by learning more about what takes place on the other side of the camera or microphone. An air talent who knows how to give producers more of what they really need to work with is likely to enjoy a long career.
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| Engineering Business Report TM |
ENCO announces integral SoundExchange support
ENCO Systems, a provider of Digital Audio Delivery Systems, announced the integration of reporting for SoundExchange into their 5.1e and later versions of DAD. SoundExchange is the entity designated to collect and distribute royalties for performance of copyrighted materials from broadcasters. While traditional radio broadcasters were exempted from coverage for their over the air signals, webcasters are obligated to pay royalties and file reports to SoundExchange for these performance rights. This obligation also extends to broadcasters who are retransmitting their signal via satellite. Support for the SoundExchange reporting is a no charge feature integrated into DAD version 5.1e and higher and is available to any DAD user currently under a technical support agreement.
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| Monday Morning Makers & Shakers |
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Transactions: 1/29/07-2/2/07
Transactions in the third week of January topped 575M in value, which coincidentally was the basic value of the sale of the New York Times television group. This week, trading approached 550M, and it was a remarkable total since there was no television action at all. A big three-market swap between Bonneville and Entercom was responsible for an estimated 500M of that, and another Times transaction, the long-pending 40M LMA/acquisition of WQEW-AM New York by ABC, was finally filed at the FCC.
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Total
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Total Deals
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9
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AMs
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8
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FMs
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18
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TVs
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0
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| Value |
546.17M
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| Complete Charts |
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Radio Transactions of the Week
Swap meet affects three big markets
| More... |
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TV Transactions of the Week
Winter hibernation continues
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| Transactions |
100K WLUA-AM Belton SC from Robert Bryson to Big Fish Broadcasting LLC (Jeffrey S. Roper, J. Stanley Griffin). 5K escrow, balance in cash at closing. LMA until closing. [File date 2/22/07.]
10 FM CP Kingman AZ from American Family Association (Donald E. Wildmon) to Educational Media Foundations (Richard Jenkins). Cash. This is a confirmation of a contingency in an earlier multiple-station transaction. CP is for Class C on 91.9 MHz with 30 kw @ 2,893'. [File date 2/22/07.]
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| Stock Talk |
Inflation fears sink stocks
A bigger than expected rise in the government's Consumer Price Index dampened hopes for a cut in rates by the Fed and sent stock prices lower on Friday. The Dow Industrials were down 49 points, or 0.4%, to 12,110.
Radio stocks fell as well. The Radio Index dropped 1.051, or 0.7%, to a year-to-date low of 151.305. Radio One Class D fell 1.5%, while its Class A was down only 0.6%. Entravision dropped 1.4%.
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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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45.95
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-0.44
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Journal Comm.
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JRN
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12.87
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-0.10
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Beasley
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BBGI
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9.00
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unch
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Lincoln Natl.
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LNC
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66.19
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-0.21
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| CBS CI. B |
CBS |
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30.21
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+0.17
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Radio One, Cl. A
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ROIA
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6.81
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-0.04
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| CBS CI. A |
CBSa |
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30.19
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+0.15
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Radio One, Cl. D
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ROIAK
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6.75
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-0.10
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| Citadel |
CDL |
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9.67 |
-0.04 |
Regent
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RGCI
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2.90
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-0.01
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Clear Channel
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CCU
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35.16
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-0.07
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Saga Commun.
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SGA
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9.77
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-0.08
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Cox Radio
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CXR
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13.41
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-0.03
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Salem Comm.
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SALM
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11.88
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-0.01
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Cumulus
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CMLS
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9.14
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-0.08
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Sirius Sat. Radio
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SIRI
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3.24
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-0.06
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Disney
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DIS
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33.61
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-0.18
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Spanish Bcg.
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SBSA
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4.26
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-0.10
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Emmis
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EMMS
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7.86
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-0.10
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SWMX
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SMWX
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0.90
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+0.03
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| Entercom |
ETM
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27.16
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-0.35
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Univision
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UVN
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36.05
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+0.04
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Entravision
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EVC
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8.75
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-0.12
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Westwood One
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WON
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6.20
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-0.04
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Fisher
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FSCI
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46.98
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-0.15
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XM Sat. Radio
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XMSR
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13.16
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+0.06
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Hearst-Argyle
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HTV
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25.77
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-0.19
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-
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-
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-
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-
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Media Business Report
Talkers intensify top stories
The Libby trial was the #1 news story...
Media Markets & Money
Christian to Christian deal
Reach Satellite Network has agreed to sell WVRY-FM...
The upside of WXJO
An AM station on the eastern fringe of the Macon GA...
Internet Media Business Report
NetRatings deal
Is looking good for Nielsen...
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Stations for Sale
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Mississippi AM-FM
Recently Merged, Profitable Now
Significant Upside Remains
Gordon Rice Associates
(843) 884-3590
[email protected]
 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
[email protected]
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More News Headlines
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Flinging arrows before courtroom battle
Former KJLH-FM Los Angeles General Sales Manager Reginald Thomas Jr. has sued the station, principal owner Stevie Wonder, GM Karen Slade and other staffers for at least 3.5 million, claiming he was unjustly fired after unearthing evidence of payola, plugola and sexual harassment at the station. Word of the lawsuit brought this response from Marty Singer, attorney for KJLH and Stevie Wonder: "The lawsuit filed against KJLH and Stevie Wonder by Reginald Thomas, Jr. is completely unfounded. Unfortunately, following his termination for cause after working at KJLH for five months, Mr. Thomas came forward with these meritless claims. KJLH and all of the defendants named in the lawsuit expect to be fully vindicated in court when the fictional claims made by Mr. Thomas are dismissed."
Clear Channel no longer in patent dispute
Clear Channel asked for a change in a story we ran last week (3/14/07 RBR #52) on The US Patent and Trademark Office revoking a patent on live concert recording technology originally owned by Clear Channel. The patent was related to the process used by the Instant Live unit (originally part of Clear Channel Entertainment and now part of Live Nation), which captures and mixes live music concerts and then burns them onto CD so fans can purchase them at the venue immediately following the show. Said Clear Channel: "The patent, and all other live entertainment assets, was transferred to Live Nation when it was divested by Clear Channel. That being said, Clear Channel should not be mentioned in the story...as the owner of the patent."
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TVBR - TV News
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PTC v. TV Watch; Press releases
at 15 paces
Indecency watchdog Parents Television Council says that the V-Chip doesn't work, and that the vaunted effort of the video industry to promote tools available to parents to control the content coming into their homes - the 300M TV Boss campaign spearheaded by former MPAA honcho Jack Valenti - is a failure. PTC had Zogby International conduct surveys before and after the TV Boss campaign kicked off. It found little change between September 2006 and March 2007. Most - 80% and 79% respectively - answer the question "Do you agree that there is too much sex, violence and coarse language on television?" with a yes, and most - 87% and 88% respectively - never use blocking technology. Industry defender TV Watch argues that it has numbers of its own. It says that just because parents aren't using the V-Chip or cable channel blockers, that doesn't mean that there kids are watching any old thing. Many parents take a much more active role in determining what their children may and may not watch. 75% do not want the government to have a role in determining what can be shown on television, despite the fact that they realize some of the programming may be inappropriate for children.
TVBR observation: Count us in the TV Watch 75%. We have children, and we don't use blocking technology because there's no need. We don't want the government telling us what is and is not appropriate for us to see and hear, and we certainly don't want PTC telling us.
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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Upset by Copyright Royalty
Board rate increases
KCRW- FM LA is the public radio station most affected by the new higher royalty rates for Internet music stations that were announced by the Copyright Royalty Board (CRB). KCRW's General Manager Ruth Seymour: "The CRB decision is truly egregious in that it treats successful non-commercial online music webcasters as if they were commercial stations. We support NPR's plans for a reconsideration of the CRB decision. KCRW believes that the record companies and artists whose music we champion deserve fair recompense. We trust that the music industry is open to good-faith negotiations.
RBR observation: The emphasis is on Concern: Do your own math and see how these new potential fees will affect your operation. The Internet is your workable asset of any radio group and operation with the marketing reach far beyond your current signal. If these fees are adopted any comparable competitive environment in today's Internet business is gone. Radio best get a Dog in this Fight. There is more conversation and concern over these proposed fees in this issue of RBR.
03/16/07 RBR #53
Zell bid for Trib losing steam
The flagship Chicago Tribune reports that the effort by Sam Zell to buy Tribune Company is losing momentum. That would apparently leave only one possibility - rebuilding from within. If the Zell plan is rejected, the board is likely to go ahead with the "self-help" plan put together by CEO Dennis FitzSimons and his management team. It would reportedly have the TV group spun off to shareholders as a separate company and then increase leverage at the remaining Tribune Company (newspaper/radio/Chicago Cubs) to pay shareholders a one-time dividend of about 20 bucks per share.
RBR observation: The remaining problem with the management plan is that it doesn't cash out the dissident Chandler family, who were pressing for the company to be sold or broken up. They would continue to be the largest shareholder - and likely continue to be a pain in the derriere for FitzSimons.
03/16/07 RBR #53
Political carried TV
to blockbuster Q4
You knew that television advertising was amazingly strong in Q4 and now the TVB has the numbers to prove it. The final tally for TVB by TNS Media Intelligence/CMR, based on estimates for the top 100 markets, shows that local broadcast television ad revenues were up 21.5% in the fourth quarter of 2006, compared to the same period in 2005. Despite all of the complaining about softness in the auto category, the largest TV advertising category for local stations was still up 13.1% in Q4. Government & Organizations (which includes political advertising), was the #2 category, up 267.6%. The gains for local stations were not duplicated at the network level in Q4.
TVBR observation: Politics is big business and estimates being tossed around are now up to 1 billion dollars will be spent. States are now adjusting their primary dates as just demonstrated by California moving their election up to February. See the numbers and print this report out and post it on your wall as a reminder where the real money is.
03/16/07 TVBR #53
CCU strategy depends on arbs
By delaying its buyout vote by about a month, Clear Channel is banking on a heavy "yes" vote by arbitrageurs who have bought shares for short-term profits. Ironically, CCU management could also build support if the company performs poorly in Q1. Trading activity since the original record date for voting on the buyout, January 22nd, has amounted to more than 50% of the outstanding shares of the company. Of course, some of those shares changed hands more than once, so there is no way to know how many are currently in the hands of the arbs, who typically buy large blocks to turn quick profits on narrow margins. They are banking on a quick sale at 37.60 so they can move on to the next opportunity.
RBR observation: Still not a slam-dunk, by any means. If only a majority vote was needed, it would probably pass easily. But CCU is a Texas company and Texas law requires two-thirds approval of all outstanding shares for acceptance of a total buyout. That means that shares not voted count as "no" votes. There could be quite a roller coaster ride ahead. If the buyout is voted down, the stock will fall - and fall dramatically - as the arbs dump and run. We would not dare to predict how much it will fall or how quickly it will recover as fundamentals regain control over panic, but it will not be a pleasant ride for the squeamish. (more RBR analysis in)
03/15/07 RBR #52
Clear Channel delays buyout vote
Amid increasing indications that the proposed 26.7 billion bucks buyout of the company will not win the required two-thirds support from shareholders, Clear Channel Communications announced that the vote has been rescheduled to April 19th, rather than (March 21). The official reason given is that the independent directors on the CCU board determined that so many shares have changed owners recently that the roster of shareholders as of the original record date no longer reflects the actual ownership.
03/14/07 RBR #51
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