RBR's Daily Morning Epaper

Volume 23, Issue 56, Jim Carnegie, Editor & Publisher

Tuesday Morning March 21st, 2006

Radio News ®

Sirius clears the 4M hurdle
The Howard Stern effect is continuing to drive growth faster at Sirius, as it tries to catch up with larger satellite radio rival XM. Sirius announced that it has passed the four million subscriber mark. XM recently signed its six millionth subscriber, but isn't growing as fast as its competitor. Sirius grew its subscriber base by 190% in 2005, while XM's growth was 84%. XM has projected that it will end 2006 with nine million subs, while Sirius is projecting six million.

RBR observation: We note that Sirius is now touting itself as the "original and only home of 100% commercial-free music channels," now that XM has returned ads to some of its music channels (3/9/06 RBR #48).

All divisions down at Tribune
February was a soft month pretty much across the board at Tribune Company, with advertising declines for both newspapers and broadcasting. Revenues for the broadcasting and entertainment group were down 4.8% to 94 million. TV revenues declined 5% to 89.1 million, with weakness in automotive and package goods partially offset by gains in media and education advertising. Radio/entertainment revenues were down 0.9% to 4.9 million, which was attributed primarily to lower syndication revenues at Tribune Entertainment. In the newspaper division, ad revenues were down 2.2% for the month to 248.3 million, with retail off 4.7%, national down 11.5% and classified up 7.2%. Circulation was also down, so total publishing revenues fell 2.4% to 313.6 million. Consolidate revenues for Tribune Company in February were down 3% to 407.6 million.

Two more face possible Moody's downgrades
With the New York Times Company already facing a possible debt ratings downgrade (3/20/06 RBR #55), two more companies with operations in both newspapers and broadcasting are facing possible downgrades by Moody's Investors Service. The ratings firm has placed Tribune Company's 500 billion in senior unsecured long term debt on review (but not its commercial paper), along with both the senior unsecured long term debt and commercial paper of the E.W. Scripps Company, which total 1.1 billion. The review at Tribune is based on the overall weakness of the newspaper industry and Tribune's "high debt burden." At Scripps, the trigger for Moody's review was its announced 366 million bucks acquisition of uSwitch.
| Read the comments from Moody's |

Pirates investigated in Miami;
interfering with pilot communications
Pilots flying into Miami International airport are reporting hearing hip-hop songs playing on two frequencies from a station calling itself "Da Streetz." Sometimes FM and aircraft frequencies produce signal "harmonics" that will allow the signals to be heard in each other's bands. That may have been the case here. The Miami Herald reported authorities pinpointed the source to a two-story warehouse in Opa-locka (suburban Miami north of the airport). They discovered a large radio antenna mounted on a tower next to the building: "Armed with a search warrant, they confiscated three computers, a monitor, a mixing board, a stereo compressor, a microphone, a two-deck CD player, a telephone, a DSL modem, two stereo speakers, three gray three-ring binders and 10 cases filled with CDs. But no radio transmitter. And no disc jockey." ''No arrests. This is still an open case,'' said Paige Patterson-Hughes, a Florida Department of Law Enforcement spokeswoman told the paper. Meanwhile, Da Streetz remains on the air. The music from the pirate radio station has been so troublesome over the last month that a federal engineer who specializes in frequency transmissions has arrived in Miami to help investigators locate the signal. Along with the FCC, the Florida Department of Law Enforcement is involved. The Florida anti-piracy law that went into effect last summer makes interfering with signals from licensed public or commercial stations, or broadcasting without a license, a third-degree felony. The FAA says it has launched 30 similar investigations into pirate stations interfering with airport transmissions during the past decade.

NRB: Give us some white space
National Religious Broadcasters has become the latest broadcast organization asking Congress to apply the brakes before ushering in a new era of unlicensed operation in the television portion of the spectrum. They've made their views known to the key senators in the Commerce Committee - - Ted Stevens (R-AK) and Dan Inouye (D-HI). The concerns echo those made earlier before the committee by Robert W. Hubbard of Hubbard Television Group. There is no particular reason to believe that there will be no interference to broadcast signals, particularly as the switch to DTV progresses. Yet there is no mechanism on the table to resolve such problems - - indeed, there aren't even reliable ways for consumers to determine where interference may be coming from. They are also concerned about potential interference with wireless mics - - a concern to all broadcasters and a particularly troublesome prospect for religious broadcasters who use them extensively for broadcast of their services. It argues that technologies which would supposedly shift unlicensed devices to unused frequencies are thus far untested. NRB's Frank Wright concluded, "While I understand the need to expand rural wireless broadband opportunities, such expansion should not be at the expense of the only existing free, universal wireless service - - broadcast television. Viewers of religious broadcasting services should not be forced to bear the burden of new interference caused by unlicensed devices operating on television channels."

Spirits take new steps to avoid the underaged
The Distilled Spirits Council (DISCUS) is taking a three-pronged approach in its attempt to make sure ads for alcohol-containing beverages are reaching an appropriate audience - - in short, where not more than 30% of the impressions are made on individuals under the age of 21. One of them involves all media, including broadcasters. It would require the results of demographic audits to be made available twice annually for any media outlet which wants to accept and run alcohol advertising. Another measure would require that magazines not using traditional demographic auditors provide a reliable third-party audit to be eligible for alcohol buys, and the third would provide for special edition copies of magazines including Newsweek, People, Sports Illustrated, Time, and U.S. News & World Report, in which any alcohol ads on the inside or back covers are removed.

Ad Business Report TM

OMD and PHD commit to PPM
The addition brings the total agency commitment to more than 90% of all national radio spot dollars: Arbitron announced OMD and PHD have signed a contract for the use of Portable People Meter-based radio audience estimates. The agreement covers the U.S.-based radio planning and buying activities for both Omnicom Media Group agencies. Arbitron will start the rollout of the PPM system as its radio ratings service in the top 50 markets, beginning with Houston in July 2006. The rollout schedule, the company has announced, would put the Portable People Meter into the top 10 radio markets by the fall of 2008, and into all of the top 50 radio markets two to three years thereafter. OMD's clients include Lowes Home Improvement, Bank of America, Pepsi, Dell, Cingular, and the US Army. PHD's clients include Daimler-Chrylser group, Dodge, Jeep, Chrylser, Gap, Old Navy, and Charles Schwab.

Arbitron announces new networks,
enhancements to RADAR 88
Arbitron announced both new networks and new enhancements to the RADAR national radio ratings service. Four additional Premiere Radio networks will be reported with the 3/27 release of RADAR 88: Premiere Morning Drive FM, Premiere Select, Premiere Spectrum and Premiere Urban Two. This brings to 56 the total number of networks measured. With the release of the RADAR 88 report, the sample size of the network radio ratings services will exceed 100,000 persons. Arbitron announced the planned sample increase in May 2005 as part of ongoing quality enhancements for the RADAR network radio ratings service. In addition, new features for RADAR Plus will enable easier estimation of combined Reach and Frequency for RADAR-rated networks and other media. The new features, available with RADAR 88, allow users to quicken the process by using the ACT 1 Import function, which enables users to transfer data directly from Act 1 into RADAR Plus.

RAB releases second white paper on HD Radio
The RAB has released its second White Paper on HD Radio, which details where we are with HD Radio and where we're heading. It lists some of the revolutionary features HD Radio holds for consumers and advertisers, including an emphasis on HD multicast channels.
| Read it here |

Newspaper industry launches
50 million dollar trade campaign
More than 700 newspapers have joined together to reinforce their value message to planners and buyers with simultaneous publication of new campaign ads in their papers and websites. The new tag reads, "Newspaper Advertising, a Destination, Not a Distraction." NAA developed the campaign with The Martin Agency of Richmond, VA. The campaign is backed by independent consumer research that shows newspaper advertising is a destination for most consumers, not a distraction to be avoided. For readers, advertising is a desired part of the content. In a way, it's the original form of branded content. In the language of the Internet, it's opt-in advertising in an opt-out world. Said Ken Hines, SVP/associate creative director of The Martin Agency: "The design of the campaign was inspired by the unique character of the newspaper brand itself. It utilizes found, archival images in a fresh, inventive way, just as newspapers have reinvented themselves from a deep heritage. The whimsical combination of old and new reflects the dynamic personality of newspapers, online and in print. The ads, like the brand, are both serious and fun." In one of the ads, a question is posed: "What made freedom of the press so important to the founders?" Answer: "Maybe it was the coupons." Another ad asks: "What kind of person is just as interested in jewelry ads as political news?" Answer: "Somebody with an anniversary next week." The campaign's print and online are also placed in targeted trade mags and online. The media placements are available at www.naa.org/advertiser

Media Markets & Money TM

Supple supplements Palm Springs cluster
Rozene Supple's R&R Radio is paying 2.3M to get a third AM and fifth radio station in Palm Springs CA. KWXY-AM Cathedral City is coming from Glen Barnett Inc. - - which will itself remain in the market with its KWXY-FM. The cash price is broken down into several elements. R&R will pay 1M for the tower, 750K for the license, 500K for the real estate and 50K for the equipment. Supple's other stations in the market include KPSI AM & FM, KGAM-AM and KDES-FM.

Women's net snares 3.1M in backing
GreenStone Media has secured 3.1 million bucks in venture capital backing to grow its women-oriented talk radio network. A lot of that cash came from female celebrities, including Billie Jean King, Jane Fonda, Rosie O'Donnell and Gloria Steinem. GreenStone, which is headed by former FCC Commissioner Susan Ness as CEO, with Edie Hillard as COO, recently announced its host lineup (3/2/06 RBR #43).

More cash for Clear Channel
Banc of America Securities and Wachovia Capital Markets have placed 500 million in new five-year notes (up from the planned 350 million) for Clear Channel Communications. The bonds carry a 6.25% coupon.

Washington Media Business Report TM

Will FCC grease the wheels for telco MVPD offerings?
FCC Chairman Kevin Martin has indicated that he would be amenable to finding a way to speed the entry of telephone companies into competition with cable for the home delivery of programming. Telcos are trying to persuade whomever needs persuading that the prospect of going to each local franchising authority (LFA) one at a time, as cable has had to do for years, is onerous and will hinder deployment of their proposed services. Cable companies want either the same greased wheels that telcos get, or they want telcos to face the same licensing regimen that they face themselves. At least one proposal being considered by the Senate Commerce Committee would preserve the right of LFAs to collect appropriate fees from MVPDs for use of their right of way, and to retain local oversight, but which would at the same time instruct the LFAs to move quickly to approve the entry of bona fide competitors into the market on terms equal to those under which cable companies operate. Other proposals being kicked around would seek to find a way to assign authorizations higher up the governmental food chain, to either the state or national level.

RBR observation: Of the many communications issues active in Washington right now, this figures to be one of the more bitterly fought battles. Cable will be getting a major interloper into a field it now shares only with DBS companies. In return, it wants to offer phone service, to get back from telcos a piece of the business it figures to lose on the MVPD side. Meanwhile, cable is fighting broadcasters, trying to head off a mandate for multicast must-carry of digital TV signals when they aren't broadcasting in high-definition, which has had the result of sending broadcasters over to the telcos in search of an ally. Meanwhile, LFAs have no interest whatsoever in being cut out of the deal. Stay tuned.

Catch after 22: 26.7M for TV CPs
Round 22 of Television Auction No. 64 is in the books, wtih 26.717M on the table for ten television station CPs (the FCC is still hanging on to one). The permit for Channel 51 in Bend OR is the top earner thus far. Entravision is sitting on two top bids, as is Word of God Fellowship and George Flinn Jr. The difference? Entravision has committed over 5M; Word of God almost 3M, and Flinn less than 1M. The FCC is sitting on a Victoria TX CP. Here are the leaders thus far. * NTSC 51 Bend OR, KEZI Inc., 8.586M; * DTV 45 Greeley CO (Denver), Richland Reserve, 5.282M; * NTSC 49 Osage Beach MO (between Columbia and Springfield MO), Koplar Communications International, 2.666M; * DTV 46 Derby KS (Wichita KS), Entravision Holdings, 2.659M; * NTSC 48 Pueblo CO (Colorado Springs-Pueblo CO), Entravision Holdings, 2.659M; * DTV 51 Medical Lake WA (Spokane WA), Word of God Fellowship, 1.613M; * DTV 3 Apalachicola FL (between Tallahassee, Panama City FL), Word of God Fellowshp, 1.366M; * NTSC 22 Topeka KS, Cooper Fowler Media Co., 1.217M; * NTSC 27 Duluth MN (Duluth MN-Superior WI), George S. Flinn Jr., 404K; and * NTSC 51 Jackson MS, George S. Flinn Jr., 295K.

Internet Media Business Report TM

AirPlay Network launches
cell phone games tied to live TV
AirPlay Network (www.airplaynetwork.com), a San Francisco-based startup, unveiled its new AirPlayTV service yesterday (in beta test) which ties cell phone games tied to live television broadcasts. While watching TV, subscribers use their internet-connected cell phones in real time to compete against others by predicting sports plays, choosing winners on reality TV shows or picking answers on game shows. "AirPlay Sports" is due for release in the fall to coincide with the start of NFL season. The fee structure is expected to be announced soon. AirPlay subscribers will download game applications to their cell phones directly through AirPlay's site or through partnering with a wireless carrier. AirPlay is backed by 4 million from Redpoint Ventures and Qualcomm.

RBR Stats

Broadcasters better prepared for disasters

The NAB has been surveying stations nationwide and found that local radio and TV stations are better prepared now than they were three years ago to deal with a disaster situation. "Based on our survey, we estimate there are now over 800 television stations and more than 6,000 radio stations with a written disaster recovery plan," said NAB Vice President of Research and Planning David Gunzerath. "That represents more than a 50 percent increase in the number of television stations who reported having such plans in 2003. Over the same period of time, the number of radio stations with such plans has more than tripled," he added.

Engineering Business Report TM

Univ. of Kansas to dismantle damaged 1924 tower
Because of damage caused by a wind storm Sunday, the University of Kansas will dismantle an 82-year-old radio tower next week that broadcast the university's first radio station and presently serves its KJHK-FM. High winds slammed a 10-by-30 foot section of roof from the adjacent Art and Design Building into the lower midsection of the self-supporting steel tower, bending some of the supports, Bob Rombach, university fire marshal and special projects manager for Design and Construction Management told the school paper. "The age of the tower does not make it conducive to repair." KJHK's antenna will be relocated to the Kansas Public Radio tower on west campus. The 185-foot tower was built in 1924 to broadcast KU's first radio station, KFKU, which began transmitting Dec. 15, 1924.

Transactions

1.3M WDLB-AM, WOSQ-FM & WFHR-AM Wausau-Stevens Point WI (Marshfield, Spencer, Wisconsin Rapids WI) from NRG License Sub LLC, a subsidiary of NRG Media LLC (Norman W. Waitt Jr., Mary Quass et al) to Seehafer Broadcasting Corp. (Donald Seehafer). Swap for WLRK-FM (Wausau WI), plus NRG pays 3.7M cash. Superduopoly with WXCO-AM. Total value is an RBR estimate. [File date 2/27/06.]

600K WTSZ-FM Louisville (Eminence KY) from Metro East CBC Inc. (Steven W. Newberry) to Davidson Media Station WTSZ Licensee LLC, a subsidiary of Davidson Media Group LLC (Peter Davidson). 100K option payment credit, balance in cash at closing. Superduopoly with WLOU-AM, WLLV-AM & WTMT-AM. Station was under LMA/option with L.B. Radio of Louisville since 10/1/03. [File date 2/27/06.]

Stock Talk

A flat, flat, flat day
There was virtually no movement in stock prices on Monday as investors awaited the first major policy speech by new Fed Chairman Ben Bernanke last night in New York. The Dow Industrials were down five points to 11,275, while the Nasdaq composite was up slightly and the S&P 500 was down slightly.

The Radio Index was as close to flat as you can get without being completely unchanged. It rose 0.001 to 161.654. Emmis was the day's big mover, up 2.5% as investors try to guess whether or not the group led by CEO Jeff Smulyan will win the bidding for the Washington Nationals baseball team. In satellite radio, Sirus jumped 4.5% after announcing that it had signed its four millionth subscriber.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		34.34	-0.06	Hearst-Argyle	HTV		23.61	+0.06
Beasley	BBGI		10.62	+0.08	Jeff-Pilot	JP		60.37	+0.93
CBS CI. B	CBS		24.40	-0.22	Journal Comm.	JRN		12.25	-0.01
CBS CI. A	CBSa		24.38	-0.23	Radio One, Cl. A	ROIA		7.89	-0.08
Citadel	CDL		11.49	-0.08	Radio One, Cl. D	ROIAK		7.91	+0.01
Clear Channel	CCU		29.49	+0.06	Regent	RGCI		4.43	-0.02
Cox Radio	CXR		13.38	+0.19	Saga Commun.	SGA		9.00	-0.15
Cumulus	CMLS		11.51	-0.11	Salem Comm.	SALM		13.49	unch
Disney	DIS		28.64	unch	Sirius Sat. Radio	SIRI		5.11	+0.22
Emmis	EMMS		16.98	+0.41	Spanish Bcg.	SBSA		5.07	unch
Entercom	ETM		28.75	-0.15	Univision	UVN		33.61	-0.48
Entravision	EVC		8.01	+0.14	Westwood One	WON		11.77	-0.20
Fisher	FSCI		42.78	-0.10	XM Sat. Radio	XMSR		21.47	+0.73
Gaylord	GET		44.40	-0.93	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
Total agency commitment
OMD and PHD commit to PPM...

Newspaper spending 50M
700 papers joined together
to reinforce their what...

Media Markets & Money
More cash for Clear Channel
Banc of America Securities & Wachovia Capital Markets in...

Washington Media Business Report
Will FCC grease the wheels
For telco MVPD offerings?...

RBR Condolences: Chester Coleman

Chester Coleman, who was both a station owner and media broker passed away last Friday in San Francisco. Many remember Chester as a fun-loving guy, who always had a joke to tell and smile on his face. And as we can attest from many conversations with him over the years, Chester had passion for our radio business. RBR was informed of his passing by our friend, Bob Fuller.

Radio Media Moves

Promotion at Univision
Jorge Plasencia has been named to the newly created post of Vice President and Operating Manager, AM Stations/RadioCadena, Univision Radio. He will continue some of his previous responsibilities in marketing, corporate communications and public affairs as Vice President, Corporate Relations, Univision Radio.

Butler honored at ABC
Elston Howard Butler, Local Sales Manager of KABC-AM Los Angeles, has been chosen the ABC Inc. Black Achiever in Industry for 2006. He will receive the award Thursday, March 23rd, during ceremonies in New York. The Black Achiever in Industry awards program, presented by the Harlem branch of the YMCA of Greater New York since 1971, annually honors African-American men and women in supervisory, managerial and professional positions.

Stations for Sale

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More News Headlines

Another encoder
signs on
Since Clear Channel started the whole RFP process, it's not really big news that its Houston stations will encode for The Media Audit/Ipsos test. Four of the seven groups participating in the RFP review who have Houston stations have now agreed to encode. So far, Radio One, Cox Radio, CBS Radio and Clear Channel have said they will encode for The Media Audit/Ipsos to conduct the first US test of their radio audience measurement system, based on Smart Cell Phones, this spring in Houston. The other three members of the Next-Generation Electronics Ratings Evaluation Team who have stations in the Houston market are Cumulus, Susquehanna and ABC Radio (although it only has a Radio Disney AM). We expect announcements from them to follow soon.

Jeff-Pilot merger
gets thumbs-up
The vote was never in doubt, but shareholders of Jefferson-Pilot Corporation yesterday gave their approval to merging the company with Lincoln National Corporation. More than 85% of the shares voted were in favor of the merger. There was no immediate word on when the merger will go to closing.

RBR Radar 2006

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

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.

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. Watch out as this guy is not giving up being a pain.
03/20/06 RBR #55

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

Iger gets a thumbs-up from Moody's
Rewarding the company for improving its performance and its balance sheet. The ratings service also praised new CEO Bob Iger and his Pixar deal which added Steve Jobs to the Disney board. "The upgrade and stable outlook reflect Disney's sustained improvement in operating performance over the last two years and the stronger resulting financial position.

RBR observation: RBR agrees with the thumbs-up on Iger as we too were skeptical but seeing his moves with ABC Radio and the best one is getting to iPod first. Iger is following the video.
03/16/06 RBR #53

'06 as tough year for radio
The quarterly round of radio company conference calls is complete, and Goldman Sachs analyst Mark Wienkes didn't find much that sounded encouraging for 2006. "Subpar fundamentals and uncompelling valuations keep us on radio's sidelines, as stronger pricing power is needed to lift revenue growth, investor perception, and valuations. Of terrestrial radio operators, we rate only Clear Channel outperform, on superior fundamentals and discount valuation," Given radio's "anemic revenue growth," the analyst thinks pricing increases will be held to 3% in 2006. On the M&A front, he says to look for only a few private groups to sell.
03/15/06 RBR #52

Arbitron hits the
radio-only accelerator
With a Nielsen joint venture off the table, Arbitron says it will begin commercial deployment of its Portable People Meter (PPM) for radio in Houston this July, converting the current test into a real ratings currency. The plan then is to roll out PPM into all top 10 markets by fall 2008 and all top 50 markets by late 2010.

RBR observation: Which comes first, the chicken or the egg?
03/15/06 RBR #52

Radio One OKs
Smart Cell Phone test
Which has refused to encode for Arbitron's PPM test in Houston, has become the first radio company to agree to encode for a test of the Smart Cell Phone-based ratings system proposed by Media Audit/Ipsos. As it happens, Media Audit is based in Houston.
03/14/06 RBR #51

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