Welcome to RBR's Daily Epaper
Volume 23, Issue 55, Jim Carnegie, Editor & Publisher
Monday Morning March 20th, 2006

Radio News ®

Binoculars trained on FCC
Sen. Byron Dorgan (D-ND) has had a keen interest in the battle over media ownership consolidation, and now that he's joined with his colleagues in the Commerce Committee in approving a fifth FCC commissioner (and third Republican), he's making sure that they remember he has a keen interest. And that's not all - - he has a posse. Along with five other senators, Dorgan fired off a letter to FCC Chairman Kevin Martin urging him to keep deliberations on the court-ordered reconsideration of media ownership rules open. "The rules governing media ownership have a significant impact on the diversity of voices and ownership in our communities," Dorgan said. "Unfortunately, the FCC does not have a good record when it comes to keeping its deliberations open to the public. We don't want to repeat the mistakes the Commission made in the past, when it shut the public out of the decision-making process. The American people have a big stake in the outcome of this debate and must be included." The other senators who signed the letter include Trent Lott (R-MS), John Kerry (D-MA), Kay Bailey Hutchison (R-TX), Maria Cantwell (D-WA) and Olympia Snowe (R-ME).

RBR observation: The ownership rulemaking, at the FCC level, has been a strict exercise in party-line politics. But on Capitol Hill, it has been anything but that. With only six signatures, the Dorgan letter manages a 50-50 party split - - which likely wouldn't hold up were this a poll of the full Senate. However, he did not have to limit his hunt for Republicans to the moderate wing of the party - - Lott's conservative credentials are in good order, nor are we aware of any suspicion that Hutchison is in danger of drifting to the left. With Dorgan on the Hill and the tandem of Michael Copps and Jonathan Adelstein across the Mall in the FCC's Portals digs giving every indication that they are quite awake at the switch, the stage is being set for a repeat of the media circus which surrounded this rulemaking in 2003.

Moody's worries about NY Times Co.
Debt ratings for the New York Times Company have been put under review by Moody's Investors Service, with an eye to a downgrade. Moody's says it is worried about high leverage and deteriorating operating margins. There was no specific mention of the broadcast operation, but the ratings agency is worried about risks in the newspaper sector and questioned the leverage increase from borrowing to acquire About.com.
| Read the Moody's statement |

FCC asks about kidvid, forms security bureau
All four sitting FCC commissioners agreed to consider modifications and clarifications in the rules on educational children's television programming. They were more than happy to do so in light of the fact that the industry and its watchdogs agreed to accept most of the FCC"s Fall 2004 requirements, particularly the increase in total weekly programming for stations using multicasting. It also established a Public Safety and Homeland Security Bureau (PSHSB) within the commission. The children's TV item, affectionately known as the "Second Further Notice of Proposed Rulemaking in the Children's Television Obligations of Digital Television Broadcasting," asks for commentary on the website rule; the host-selling rule; the promotions rule; the preemption rule; and the multicasting rule. Both Chairman Kevin Martin and Commissioner Michael Copps praised the cooperation between industry and watchdog representatives in moving the rulemaking along this far, saying it could be a model for other issues still on the table. Copps also called for further kidvid study, however, noting studies which show that as much as a quarter of programming labeled educational really isn't and that, as the Parents Television Council recently noted, there may be far too much violence mixed in. The PSHSB will take on tasks that are currently dispersed throughout the Commission.
| Duties of the Public Safety and Homeland Security Bureau |


A compendium of commentary on indecency
Opinions are like noses - - everybody has one. Let's take a look at some thoughts on the FCC's omnibus indecency ruling last week. In summary: * Industry organization TV Watch charged that in large part the FCC was caving in to a small percentage of Americans represented by very active groups, usurping from parents the right to determine what their children watch on TV. * Morality in Media and the Parents Television Council praised the action, and think the FCC could've done more. * CCA praised the moves and asked for Congress to get on the stick and approve higher fines. * CCVM, an organization representing the creative community, called the indecency rules in general and this ruling in particular vague and arbitrary.
| Read watchdog quotes |

Legal eagle-eye view of
FCC indecency ruling

It is the considered opinion of RBR/TVBR that there is no possible way on this planet to put together a policy on indecent and profane speech that will be consistent with a society which considers free speech to be a core right. But why take our word for it? The legal eagles at Womble Carlyle Sandridge & Rice, PLLC have had a chance to sift through the ruling. Here are their thoughts. Please note that the good attorneys are offering opinions, not legal advice. (In other word, the excuse 'Womble made me do it will likely not hold up at the FCC nor in the judicial system.)
| Read the Womble Carlyle Sandridge & Rice, PLLC opinion |

WorldSpace shares crash
We don't normally pay a lot of attention to WorldSpace, since the satellite radio company, while based in Washington, DC, operates only outside the United States. But we couldn't help but notice the hit it took Friday on Wall Street. WorldSpace saw its stock price plunge more than 22% as SG Cowen downgraded the stock to "neutral" from "buy," saying it couldn't recommend the stock until it improves pricing and churn. The beating in the market came even as WorldSpace reported much improved numbers for Q4. Its loss for the quarter was 33.2 million bucks, down sharply from a loss of 418.2 million a year earlier. Revenues nearly doubled to 4.4 million. Meanwhile, its new subscriber count jumped 160% in Q4 to 40,235. As of the end of 2005, WorldSpace had 115,306 subscribers.


Wall Street Media Business Report TM
DG keeps its Nasdaq listing
DG Systems has won a reprieve from Nasdaq's proposal to drop the company's stock from the Nasdaq National Market (2/9/06 RBR #28). The Nasdaq Listing Qualifications Panel has agreed to hold off on the delisting, provided DG completes its merger with FastChannel Network, does a one-for-10 reverse stock split and gets its trading price back above a buck. DG delivers advertising and provides other services to radio and TV stations.

Here are the conditions for continued listing:
(1) That DG Systems will inform the Nasdaq Listing Qualifications Panel on or before May 31, 2006 that it has held a stockholders' meeting; that the proposed one-for-ten share reverse stock split of the issued and outstanding shares of DG Systems common stock, 0.001 par value per share has been approved; and that the closing bid price of the Company's shares is at least 1 buck per share.
(2) That DG Systems, on or before June 14, 2006 will have a closing bid price of 1 buck per share or more for a minimum of ten prior consecutive trading days.
(3) That DG Systems must be able to demonstrate compliance with all requirements for continued listing on The Nasdaq National Market.


Ad Business Report TM

Apollo Project adds Pfizer, Kraft
Arbitron confirmed that Kraft and Pfizer have joined Procter & Gamble, Unilever and SC Johnson in support of Project Apollo, Arbitron and VNU's single source, national research initiative that will collect multimedia and purchase info based on Arbitron's Portable People Meter (PPM) system and ACNielsen's HomeScan technology. While the recent split to JV PPM development between Nielsen and Arbitron was noted, Nielsen CEO Susan Whiting assured clients at their annual meeting in Orlando recently that their pulling out of PPM development with Arbitron will not affect the two companies' collaboration on Project Apollo.

RECMA's Top 100 advertisers
Here are the top 100 advertisers ranked by descending order of billings with their reference media agencies defined by RECMA-- (Research Company evaluating the Media Agency Industry). The top 100 international advertisers are ranked by descending order of global ad spending, from #1 Procter & Gamble ($7922m) to #100 Pernod Ricard ($250m). First a little explaining - - RECMA's definition of a reference agency is not determined by the media agencies or the advertisers but it is the result of a RECMA analysis. The concept is to determine which are the preferred media agencies of the top advertisers in the major countries. Several situations are considered: When an advertiser has appointed the same media agency worldwide (global alignment). When a non-US based advertiser has no international coverage and its ad spending is concentrated in one country, RECMA does not qualify its media agency as "reference agency". On the other hand, for the US-based international advertisers investing most of their ad budget in the USA, they define its US media agency as "reference" even though the advertiser works with this agency in one country only. The qualification of "reference agency" does not depend on a percentage from the worldwide ad spending or a number of countries where the agency handles the account. But it is based on an analysis of the advertiser' selection process.
| The Top 100 advertisers and their subsidiaries |

Microsoft to spend 500 million
wooing IBM clients

Microsoft Corp. plans to spend 500 million on a new ad campaign and sales strategy to help win corporate customers from IBM, says Bloomberg. The funds, to be spent in the next year, will focus sales and marketing efforts on areas including customer management and mobile computing, Microsoft CEO Steve Ballmer said. Microsoft is under pressure to lift sales as IBM introduces similar products and invests in the Linux operating system to rival Windows.


Media Business Report TM
Cox breaks up Trader partnership
Cox Enterprises, parent company of both Cox Radio and Cox Broadcasting (TV), announced that it and 50/50 partner Landmark Communications are splitting up Trader Publishing Company. They will, however, create a new joint venture to operate the printing plants and each will help the other with circulation. The agreement calls for Cox to assume control of Trader Publishing's automobile-related publications, which include 341 automobile and light truck titles including the nationally known Auto Trader, Auto Mart and Truck Trader with a combined total circulation of 3.5 million per week. In addition, Cox will control the publication's companion websites including AutoMart.com and AutoExtra.com which together garner 4.2 million unique visitors per month. Landmark also will transfer to Cox its 26% interest in AutoTrader.com, increasing Cox's ownership to 87.9%. The website has more than 2.8 million vehicle listings from 40,000 dealers and 250,000 private owners. Landmark will assume control of Trader's non-automotive publications and websites including Cycle Trader, Boat Trader, RV Trader, Trader's real estate and employment classifieds publications including For Rent Magazine, Harmon Homes, Employment Guide and their companion websites, Dealer Specialties and Trader's automotive web services group. Landmark will be responsible for managing the distribution system for Trader's free publications. "With the addition of the Trader publications to our existing AutoTrader.com and Manheim businesses, we have powerful synergy in the automotive sector. Together these businesses will develop new and valuable services for our automotive customers, including potential collaborations with other Cox businesses like newspapers, television, radio and cable," said James Cox Kennedy, Chairman and CEO of Cox Enterprises.


Media Markets & Money TM
Boyds of a feather flock together
HRN Broadcasting, which is a subsidiary of Kentucky Fried Chicken of Lincolnton Inc., is increasing its platoon of North Carolina AM stations. It has a 350K deal to acquire WADA-AM, licensed to Shelby NC. It'll form a superduoply with WOHS-AM, also in Shelby, and WCSL-AM Cherryville. Shelby is not considered to be part of any Arbitron markets, but the Cherryville station is listed in the Charlotte-Gastonia-Rock Hill market. The Boyds - - D. Mark III, W.G. and David M. - - have two more stations in Charlotte and one which serves Asheville out of the town of Black Mountain. The seller in the WADA deal is Edwin K. Johnson.

Close encounter in Raleigh-Durham
Davidson Media Group, which went from two AMs to one in the Raleigh-Durham market, is back to two again. Broker John Pierce tells us that the 1.2M acquisition of WSRC-AM from Willis Broadcasting has come to a conclusion. It'll pair up with WTIK-AM, which Davidson picked up over a year ago from the Baker family, for about the same price - - 1.1M in that case. WTIK"s earlier duop partner went to Truth Broadcasting in a cash/swap transaction.


Washington Media Business Report TM
Unlicensed devices:
MSTV says slow down

Long-time broadcaster Robert W. Hubbard, President/CEO of Hubbard Television Group, went before the Senate Commerce Committee last week on behalf of the Association of Maximum Service Television Inc. (MSTV) and all broadcasters, urging that the brakes be applied on any plans to allow rampant introduction of unlicensed wireless devices in the spectrum currently used by broadcasters. He argued that the feasibility of such a plan is still under study, and that any approval now or in the near future would be premature. "MSTV is particularly concerned given the lack of any means to prevent or even remedy interference from unlicensed devices to reception of over-the-air broadcasts or other licensed services, including wireless microphones that are used in the production of emergency news coverage, sporting events and political conventions," he argued. He said often consumers wouldn't complain of interference because they wouldn't know what was causing it, and even if they did complain, the FCC would likely be unable to find the offending device. Further, "...with an unlimited number of unlicensed devices allowed to crowd the broadcast spectrum, the quality of broadcast and other unlicensed communications over that spectrum will necessarily decline."

RBR observation: In short, contact your representatives in Congress now and tell them to beware any attempt to rush unlicensed devices into your bread and butter spectrum.


Hollywood Media Business Report TM
Viacom selling film library
Viacom is de-leveraging from December's deal to buy the DreamWorks movie studio for 1.6 billion bucks (12/13/05 RBR #242). It's now selling the DreamWorks film library to Soros Strategic Partners LP and Dune Entertainment II LLC for a total value of 900 million, from which Viacom expects to pocket 600 million "after the conversion of certain commercial agreements from debt to advances." Here's the beauty part: Viacom will still retain the rights to distribute the DreamWorks films under an exclusive five-year contract. At the end of five years, it will also have the right to buy the library back at what is then the fair market value. The deal with Soros/Dune covers the 59 DreamWorks live action films released through September 15, 2005.


Monday Morning Makers & Shakers

Transactions: 2/6/06-2/10/06
This week was close to being a carbon copy (anybody remember what a carbon copy is?) of last week. There were a couple of more transactions filed, worth about 1.5M less cash. Two television transactions led the action, but radio very much held its own.

2/6/06-2/10/06

Total

Total Deals

12

AMs

7

FMs

10

TVs

2
Value
68.993M
| Complete Charts |
Radio Transactions of the Week
Vandersloot gets Idaho six-pack
| More...
|
TV Transactions of the Week
Bahakel adds a market
| More...
|


Transactions
1.5M WBTK-AM Richmond VA from SCA License Corp., a subsidiary of Salem Communications Corp. (Stuart W. Epperson, Edward G. Atsinger III et al) to Mount Rich Meda LLC (Sun Young Joo). Cash. [File date 2/27/06.]

1.4M WBKN-FM & WMJU-FM Brookhaven MS (Brookhaven, Bude MS) from Ole Brook Broadcasting Inc. (William T. Reynolds) to Brookhaven Broadcasting Inc. (C. Wayne Dowdy). 50K escrow, 350K cash at closing, 1M note. Superduopoly with WAZA-FM Liberty MS & WAKK-AM/WAKH-FM McComb MS. LMA 2/16/06. [File date 2/27/06.]

950K WHMM-DT CP New Orleans (Hammond LA) from Pegasus Satellite Communications Inc. (Bradley E. Scher) to Mayavision Inc. (Ernesto Schweiker III). Bankruptcy sale. 47.5K earnest money, balance in cash at closing. Includes non-compete. Cross-ownership with KGLA-AM New Orleans (Gretna LA). Hammond LA is roughly equidistant from New Orleans and Baton Rouge. CP is for Channel 42. [File date 2/27/06.]


Stock Talk
More good news than bad
Bad earnings news from General Motors Friday was more than countered by falling oil prices and an upbeat Fed report on industrial production. The Dow Industrials rose 26 points, or 0.2%, to spend the weekend at 11,280.

Radio stocks joined in the advance. The Radio Index rose 0.117, or 0.1%, to 161.653.

Citadel and Westwood One led the way, rising 2%. The bigger move, though, was in satellite radio, where Sirius rose 8.4% after announcing exclusive deals with VW and Audi.


Radio Stocks

Here's how stocks fared on Friday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

34.40

-0.30

Hearst-Argyle

HTV

23.55

+0.12

Beasley

BBGI

10.54

+0.01

Jeff-Pilot

JP

59.44

+0.13

CBS CI. B CBS

24.62

+0.40

Journal Comm.

JRN

12.26

unch

CBS CI. A CBSa

24.61

+0.40

Radio One, Cl. A

ROIA

7.97

+0.09

Citadel CDL
11.57 +0.24

Radio One, Cl. D

ROIAK

7.90

unch

Clear Channel

CCU

29.43

-0.07

Regent

RGCI

4.45

+0.09

Cox Radio

CXR

13.19

+0.12

Saga Commun.

SGA

9.15

-0.04

Cumulus

CMLS

11.62

+0.03

Salem Comm.

SALM

13.49

+0.05

Disney

DIS

28.64

-0.04

Sirius Sat. Radio

SIRI

4.89

+0.38

Emmis

EMMS

16.57

-0.43

Spanish Bcg.

SBSA

5.07

+0.03

Entercom

ETM

28.90

-0.01

Univision

UVN

34.09

+0.33

Entravision

EVC

7.87

+0.07

Westwood One

WON

11.97

+0.23

Fisher

FSCI

42.88

-0.05

XM Sat. Radio

XMSR

20.74

+0.57

Gaylord

GET

45.33

+0.14

-

-

-

-

-


Bounceback

Send Us Your OpinionsWe want to
hear from you.

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

More on the accuracy of radio ratings (3/16/06 RBR #53).

One of the first things we learned in engineering school is how to take measurements and the accuracy of instruments. The instrument must be at least an order of magnitude greater accuracy than the measurement. If Arbitron followed the same standard, there would be no decimal points in their reports. Perhaps it is a good thing that Arbitron is in the audience measurement business and not building bridges, designing airplanes, etc. Look at any Arbitron report - - it is pages and pages of collated data, followed by several pages of legal disclaimer as to why it isn't accurate. As a former GM of mine once told me, "Arbitron is the agreed upon lie."

Mario Hieb, P.E.
Consulting Engineer




Below the Fold

Wall Street Media Business Report
DG keeps its Nasdaq listing
Won a reprieve from Nasdaq's proposal to drop the company's stock...

Ad Business Report
Apollo Project adds more
Confirmed that Kraft and Pfizer have joined in...

Media Business Reprot
Cox breaks up
Trader partnership however, create a new venture to operate the printing plants...

Media Markets & Money
Boyds of a feather flock together
HRN Broadcasting, a subsidiary of KFC, increasing its platoon of NC, AM stations...

Washington Media Business Report
Unlicensed devices
MSTV says slow down...


Radio Media Moves

MAB honors David
Robert David has been honored with the first-ever "MAB Associate of the Year" award from the Michigan Association of Broadcasters for his service as Vice Chairman and Chairman of the MAB Foundation. David is President and GM of Handyman Productions LLC, which syndicates the "Handyman Show with Glen Haege."

From one watchdoghouse
to another

Ex-FCC Commissioner Gloria Tristani will continue to keep a close eye on media regulatory issues, but she'll be doing it from a different venue. She'll exit the Office of Communication of the United Church of Christ and move over to the Benton Foundation. The title on her business card will get a major upgrade, going from managing director to president.

Dial-Global promotes Terrance Colter
Dial Communications-Global Media has promoted Terrance Colter to National Account Executive. Prior to his promotion, Colter was Manager of Affiliate Sales at X Radio. Colter will be selling Dial-Global's lineup of talk personalities and networks.

Salem gets dirty
"Dirt Doctor" Howard Garrett has taken his "The Natural Way" weekend gardening program to Salem Communications' KSKY-AM Dallas after many years at ABC's WBAP-AM. The plan is to have his show syndicated nationally by Salem Radio Network.

Chio gets Wired
Timothy Acosta, known on air as "Chio," has joined Beasley's WRDW-FM "Wired 96.5" as morning host. He'll be teamed with co-host Ryan Motts and morning show producer Justice.

Leone takes the gavel
The New York State Broadcasters Association named Lew Leone, VP/GM of WNYW-TV & WWOR-TV NYC Chairman of the association to fill the vacancy of Dennis Lamme who left New York State to become Regional VP Market Manager of Clear Channel Radio in St. Louis. Leone served as Vice Chairman of the NYSBA before being named Chairman. Tim McCarthy President and General Manager of WABC/WEPN in New York City remains Vice Chairman, Radio.


More News Headlines

IDT's WMET-AM DC to go brokered
WMET-AM DC announced it will be changing its format from talk radio to paid-ethnic programming beginning 3/24. "The Greaseman Show" will continue to headline mornings, but all others including G. Gordon Liddy, Tony Snow and John Gibson will be off. "It's a hybrid solution and a unique opportunity to reach emerging and affluent ethnic groups," said Dennis Israel, the new GM of WMET. "Not only am I excited about running a station that is going to reach diverse ethnic groups, I am confident that the new format will draw in a larger audience, bringing in Latin American, Mexican, Asian and Eastern European listeners."

Audi, Volkswagen
go solo with Sirius

Sirius Satellite Radio and Audi of America announced that Audi will offer Sirius as its exclusive satellite radio provider for Audi vehicles sold in the U.S., beginning with model year 2007 through 2012. Today, the installation rate of satellite radio in Audi models is approximately 50%. Sirius and Volkswagen also announced that Volkswagen will offer Sirius as its sole satellite radio provider for vehicles sold in this country through 2012. Volkswagen will exclusively offer Sirius beginning with the introduction of its 2007 model year vehicles, and expects to equip approximately 80% with Sirius satellite radio receivers. Additionally, Volkswagen will offer three months of complimentary service.





RAB to provide tools, training for Germany's Radiozentrale
The RAB has entered into an agreement with Radiozentrale, Germany's radio marketing association, to give their members full access to RAB sales and marketing materials, as well as training and consulting services. This "privileged partnership" is a major development in RAB's accelerated global outreach. The arrangement allows the newly-formed Radiozentrale to ramp up quickly by immediately providing proven research tools and training programs to its membership. Germany's largest radio private ownership groups have joined with public radio and numerous smaller, independent private stations in a common effort to increase radio's share of total ad revenue. RAB material will be translated into German and repurposed to reflect the nuances of the radio business as it pertains to radio broadcasters in German-speaking countries in Europe.


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

Dickeys eye baseball
The latest radio guys to want to own a baseball team are the Dickey brothers. who have been approved by Major League Baseball to bid on the Atlanta Braves.

RBR observation: The greater fool theory is always in effect when talking about pro sports franchises. They're a big headache and they don't make much money, if any, but eventually you get to sell it to another newly rich guy who wants to be able to brag about owning a pro sports team. That said, the brothers are to be applauded for not trying to drag their public company shareholders into the transaction, which would likely be a drag on Cumulus' stock - - as Jeff Smulyan's bid for the Washington Nationals is for Emmis. Only thing RBR knows is the brothers are just trolling for the Braves.
03/17/06 RBR #54

Ford has a better idea: PPM now
"What are you waiting for?" asked Mark Kaline, Global Media Manager of Ford Motor Company as he made a pitch for radio to implement Arbitron's Portable People Meter (PPM). Kaline argued that "Radio cannot afford to wait for the perfect solution,"

RBR observation: Kaline is correct in his observation of 'good research also important and MRC accreditation "a must." Radio executives 'Stop trying to Re-Invent the Wheel.' Radio is already looked at as a 3rd class medium and this is not a limbo contest to see how Low Can You Go.
03/16/06 RBR #53


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