RBR's Daily Morning Epaper

Volume 22, Issue 58, Jim Carnegie, Editor & Publisher

Wednesday Morning March 23rd, 2005

Radio News®

Jury slaps down Clear Channel for 90M
A federal jury in Chicago has slapped a 90 million bucks verdict on Clear Channel Entertainment, ruling that the company interfered with a competitor's agreement to promote dirt-track motorcycle racing. The jury found that CC Entertainment's improper conduct cost JamSports 17 million in profits - - then tacked on 73 million in punitive damages. Trying to find a silver lining in this dark cloud, Clear Channel corporate in San Antonio issued a press release pointing out that the jury did not find the company guilty of violating antitrust laws. "We are, of course, disappointed that the jury agreed with Jam Sports' other claim and failed to see this case for what it actually was - - a disgruntled competitor that could not succeed in the marketplace and so took its case to a courtroom. We intend to vigorously appeal that decision and expect the appellate court to agree that Clear Channel's actions were within the law," said Clear Channel Exec. VP and Chief Legal Officer Andrew Levin. Critics of Clear Channel were quick to leap on the verdict as evidence that the company engages in unfair business practices - - and that such conduct should weigh against renewal of its broadcast licenses.

RBR observation: Clear Channel would do well to take a page from Sumner Redstone's playbook and spin CC Entertainment off into a separate public company. That would be a clean and efficient way to get rid of a bad investment in a lousy business.

Tribune faces court order to sell station
Don't look for anything to happen quickly, but Tribune Company is now under a federal court order to sell WTXX-TV (Ch. 20, WB) Hartford-New Haven. A federal judge in Hartford agreed with a lawsuit brought by the owner of the Journal Inquirer daily newspaper in Manchester, CT that Tribune's ownership of the Hartford Courant, which it acquired as part of Times Mirror in 2000, puts it in violation of the crossownership rule. Tribune got two waivers from the FCC to continue owning the newspaper, WTXX and WTIC-TV (Ch. 61, Fox), but the most recent one expired in August 2002. The FCC has not acted on Tribune's request for a permanent waiver. Although the FCC itself agreed with Tribune's claim that it is not under any requirement to divest of a TV station in Hartford while the crossownership rule is still under review, as part of the massive ownership rule rewrite that a federal appeals court in Philadelphia sent back to the Commission, Judge Christopher Droney disagreed. He said the FCC order for Tribune to sell WTXX, alone or in combination with WTIC, is now in effect. The judge noted, however, as a practical matter, Tribune has until WTXX's license comes up for renewal in April 2007 to resolve the matter. "This order was not a ruling on the merits of the crossownership rule, and we believe the decision is wrong and seriously flawed. We will seek a stay of this ruling pending appeal, and we expect that the FCC or the Supreme Court will clarify the cross-ownership rule during the appeal process," Tribune said in a statement after the ruling.

Public confused, conflicted
about indecency
Results of a nationwide poll published in the latest issue of Time magazine finds that Americans are conflicted about broadcast indecency - - most want tighter moral controls on what is broadcast, but they also think the government went overboard in its reaction to Janet Jackson's breast flash during last year's Super Bowl halftime show. Not only did 58% of the people surveyed by Time say there was too much cursing and sexual language on TV, even more - - 66% - - said there was too much violence, an area which is not currently subject to FCC regulation. 50% said there was too much explicit sex and nudity on TV and 46% said there was too much drug and alcohol abuse. Slightly more than half of the respondents - - 53% - - said they wanted stricter FCC controls on sex and violence on TV. 51% also wanted tighter controls on radio. Only 49% said government restrictions should also be extended to basic cable channels and only 33% wanted satellite radio included. As for Janet Jackson, 68% said the saw the incident, either live or on replay. Only 31% said they were offended by it.

RBR observation: Our reading of the poll results is that while the Hollywood establishment may be out of touch with the morals of the average American, the Parents Television Council and Commissioner Michael Copps are just as out of touch in the opposite direction. Unfortunately, the only thing that's ever going to resolve the issue of what is and isn't indecent - - and whether broadcasters are still second-class citizens when it comes to the First Amendment - - is going to be a federal court ruling. The sooner, the better.

New troubles for Oklahoma pol/broadcaster
Not only is Gene Stipe now facing a possible FCC reversal of his deal to sell his five radio stations for 2.2 million because of his criminal conviction (2/28/05 RBR #41), he's now facing allegations that he used state funds to start one of the stations. According to a report in The Oklahoman, the state's largest newspaper, Stipe, who was then a State Senator, got Eastern Oklahoma State College to build and equip studios for KESC-FM Wilburton, OK in 2002 with some 300,000 in state funds. The deal was that Stipe would own the license, run the station and keep any profits, with the university getting educational opportunities for students to learn about broadcasting. The newspaper said the university's current vice president for administrative services, who was not at the school in 2002, couldn't explain how the deal could have gotten around state laws designed to prevent state legislators from profiting from business deals with state institutions. The Oklahoman said Stipe did not return its calls seeking comment. Earlier this month, his FCC attorneys failed in getting three of the FCC's five commissioners (although Michael Powell is now gone, anyway) to recuse themselves from the case, arguing that their judgment had been tainted by improper contacts from Stipe's opponents (3/8/05 RBR #47).

Berman jumping from Fox to Paramount
It looks like Fox Entertainment President Gail Berman is out the door. After considerable buzz yesterday that Berman was leaving the News Corporation company to take the top creative post at Paramount Pictures, which is owned by Viacom, Paramount issued this statement: "Paramount Pictures is in discussions with Gail Berman for a senior creative role at the studio. We hope to conclude the discussions shortly. Ms. Berman is one of the most talented executives in the entertainment industry, with great relationships, exceptional taste, and an amazing creative track record. She would be a great addition to the Paramount team." Berman had been in discussions with Fox to renew her contract, which runs out later this year. She joined Fox in 2000 after developing the hit "Malcom in the Middle" for the network. During her tenure at the network Berman was responsible for adding such hits as "24" and "Arrested Development." She had also been a driving force behind Fox's strategy of launching new shows throughout the year, not just in the fall - - so far with mixed results. Snaring Berman will be the first major hire for Brad Grey, who got the top job at Paramount in January.

Adbiz©

Greyhound launches new radio ads
As part of its strategy to reach out to the urban and Hispanic markets, Greyhound Lines, Inc. has launched a new nationwide radio campaign featuring the new voices of Greyhound, comedians Wanda Sykes and Adal Ramones. The ads, created by The Richards Group, touch on current issues facing the public. For example, in one of the urban ads, Sykes uses humor to talk about high gas prices. She then praises Greyhound for providing quick, comfortable and convenient service at a fraction of what it costs at the gas pump. In another ad targeting the Hispanic market, Ramones complains about how fast food service isn't fast. He then says Greyhound knows the meaning of fast and can get customers to their destinations quickly with direct service. "The messages in each of the ads reflect what type of experience customers want when traveling Greyhound: fast, enjoyable and cool," said Toby Purdy, SVP/Marketing, Greyhound Lines. "The voices are recognizable and relevant to our target consumers. These ads are one of the first steps the company is taking to change how customers perceive the brand." Sykes has performed stand-up comedy for a number of years, appeared in numerous movies and television shows and can next be seen in the New Line feature, "Monster-In-Law." Ramones is known for his satirical comments on Mexican and international social life. He hosts a Mexican television show, "Otro Rollo," which airs on Univision. Tomorrow we talk to The Richards Group Group Media Director Jim O'Rourke about the campaign.

Ronning Lipset commissions Dynamic Logic
to measure online campaign
Online Radio rep firm Ronning Lipset Radio, a radio network that represents America Online's AOL Radio Network, Yahoo! Music's LAUNCHcast, Live 365 and Microsoft's MSN Radio and Windowsmedia.com, released study results illustrating the effectiveness of online radio advertising for a campaign run by Travelocity. Ronning Lipset commissioned Dynamic to examine the effects of the online radio advertising campaign for Travelocity on various marketing and brand metrics. Travelocity's campaign, which was planned and bought by their media agency, OMD, ran on affiliates of the Ronning Lipset Radio Network. Dynamic Logic measured the impact of Travelocity's online radio advertising on various brand impact metrics such as aided brand awareness, unaided brand awareness, online radio ad awareness, brand impression, unaided consideration and behavior intent. Survey participants were recruited via online radio ads before the Travelocity campaign started and, then later, while the campaign was running in-market, to collect brand impact data. Responses from both the control group, or pre-wave, and the exposed group were compared to identify ad impact. As a major difference between the pre-campaign control and the exposed groups was exposure to the online radio campaign, differences are largely attributed to the online radio campaign exposure. Specific results for the campaign demonstrated that online radio advertising positively impacted key brand metrics, lifting brand impression to a 110 index, unaided consideration to a 121 index and behavior intent to a 113 index.i The research also showed that the advertising was memorable, as online radio ad awareness scored a 147 index. "We are always looking to quantify the effectiveness of our radio investments, and the study commissioned by Ronning Lipset Radio did that for us, in a very efficient, timely manner. There is increasing focus on media accountability, and the results of this study clearly justified the investment in this growing medium," said Natalie Swed Stone, US Director of National Radio Investment, OMD.

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Media Markets & MoneyTM

Duke of Earls expands near Branson
Charles Earls is getting a pair of Harrison AR stations - - KHOZ AM & FM - - from William Wheeler's Harrison Broadcasting Corporation for 3.7M dollars. Harrison is in the northest corner of Arkansas, below the portion of Missouri home to famed Country music tourist destination Branson. In fact, Earls is already operating there, with KOMC AM-FM and KRZK-FM. The Harrison stations have further contour interaction with a pair of Arkansas stations situated to the east and out of range of Branson - - they are KCTT-FM Yellville AR & KTLO-FM Mountain Home AR. At no point in the resulting daisy chain superduopoly do more than three of the FMs overlap.

Sillerman terms clarified
As with most things involving Bob Sillerman, the terms of his deal to have CKX Inc. buy 19 Entertainment Ltd. are more complicated than what we reported Monday (3/21/05 RBR #56). In payment for 19 Entertainment, Simon Fuller and his investors will receive 124.4 million in cash, 1,870,558 shares of CKX (currently worth around 44 million), and an additional 36.9 million in cash or stock "following delivery of audited results for 19 entertainment's fiscal year ending June 30, 2005."

Sirius after big money
Sirius Satellite Radio is going back to Wall Street with 250 million worth of new bonds - - 10-year senior notes. Sirius, however, says it doesn't need more cash - - that it has enough on hand to get it to cash flow break even in 2007. Rather, it says the proceeds of the bond sale will be used to buy back 63.1 million of existing bonds with high interest rates, with the rest going to "general corporate purposes."

Washington Beat

Clear Channel asks for NC move-out
Clear Channel Communications has asked the FCC for permission to change the city of license for WVBZ-FM from High Point, NC, population 85,839, to Liberty, NC, population 2,661) and downgrade from Class C to Class C0. The application notes that no special move-in analysis is required, since Clear Channel is proposing to move the station out of an urbanized area, as defined by the US Census, to a community which is outside any urbanized area. So, what's in it for Clear Channel? While Liberty is not in any urbanized area, as defined by the government, it is a heck of a lot closer to the Raleigh-Durham market than where WVBZ currently sits. As the proposed city of license change notes, signal coverage, despite the downgrade, will increase by 807,793 people to 1,419,750 potential listeners. In essence, the request is to move the station from Arbitron market #45 (Greensboro-Winston Salem-High Point) to #43 (Raleigh-Durham), while still covering the major population centers of #45.

Programming

Mix 107.3 DC expanding format
ABC's WRQX-FM (Mix 107.3) new GM Jeffrey Boden expanded the station's Hot AC format to Jack-like proportions 3/22, to add 50s-today's hits. WRQX morning man Jack Diamond began the day with "Our hot adult contemporary music has become too boring and predictable, earning for tunes to be more random and "feisty" The "Jack" format has been cropping up nationwide....will WRQX be the latest to add the moniker? DC radio needs help...maybe this is a good start, the beginning volley of a few badly needed formats here.

Transactions

KWIE-FM Riverside-San Bernardino CA (San Jacinto CA) from KWRP-FM LLC to Styles Media Group LLC.

WGUL-AM Tampa-St. Petersburg-Clearwater FL (Dunedin FL) and WLSS-AM Sarasota-Bradenton FL (Sarasota FL) from WGUL-FM Inc. to Salem Communications Corp.

KSMQ-TV Rochester MN-Mason City IA (Austin MN) from Independent School District #492 to Southern Minnesota Quality Broadcasting Inc.

| More... |

Stock Talk

Fed scares the market
A remark from the Federal Reserve that inflation appears to be heating up sent stock prices lower. The Dow Industrials fell 95 points, or 0.9%, to 10,471.

Radio stocks fell as well. The Radio Index was down 1.938, or 0.9%, to 218.891. Clear Channel fell 2.1% after its Entertainment unit was ordered to pay a rival 90M by a federal jury. Univision fell 2.8% and Westwood One lost 2.5%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		42.29	+0.23	Jeff-Pilot	JP		47.18	-0.67
Beasley	BBGI		17.59	+0.05	Journal Comm.	JRN		16.62	-0.03
Citadel	CDL		13.85	-0.28	Radio One, Cl. A	ROIA		14.10	-0.14
Clear Channel	CCU		32.99	-0.70	Radio One, Cl. D	ROIAK		14.18	-0.08
Cox Radio	CXR		16.68	+0.08	Regent	RGCI		5.25	+0.01
Cumulus	CMLS		14.21	-0.14	Saga Commun.	SGA		15.94	-0.24
Disney	DIS		27.78	-0.40	Salem Comm.	SALM		20.99	-0.14
Emmis	EMMS		19.65	-0.12	Sirius Sat. Radio	SIRI		5.28	-0.11
Entercom	ETM		35.10	-0.51	Spanish Bcg.	SBSA		10.54	-0.03
Entravision	EVC		8.36	-0.14	Univision	UVN		26.93	-0.77
Fisher	FSCI		51.39	-0.15	Viacom, Cl. A	VIA		35.87	-0.62
Gaylord	GET		41.31	-0.14	Viacom, Cl. B	VIAb		35.50	-0.73
Hearst-Argyle	HTV		25.64	-0.10	Westwood One	WON		19.99	-0.52
Interep	IREP		0.50	unch	XM Sat. Radio	XMSR		28.04	-0.82
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

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Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

This veteran talk executive says the upstarts are claiming credit where none is due.

Jim: You have a great publication, but in the case of the following headline, I beg to differ: Progressive Talk Drives News/Talk format to all-time audience high. You must have printed it exactly as the press release said. The headline, and the accompanying story implies that the reason the News/Talk format has had such a great fall book is because of progressive talk. This is not true, even though you should give them credit for picking up a few stations. Let's take a closer look at what you reported: | More... |

Phil Boyce
VP of News/Talk Programming
WABC Radio and the ABC owned Radio Stations
The Sean Hannity Show

Upped & Tapped

Edmonds to Beasley
Chris Edmonds has joined Beasley Broadcast Group as General Manager of its Atlanta stations, WAEC-AM & WWWE-AM.

Stations For Sale

10 Station (One State) Group
Four Markets with $900K Trailing Cash Flow. Offered at 8X CF.
Excellent Management and Great Growth Upside. Located in Far Northwest.
Cliff at Clifton Gardiner & Co (303)758-6900
[email protected]

Santa Fe Market #237 FM
New market FM entrant ready to go and priced right! Santa Fe is a unique and rich market. A great opportunity for an aggressive, innovative operator!
Cliff at Clifton Gardiner & Co
(303)758-6900
[email protected]

More News Headlines

BCFM/BCCA to honor Morton

NY's Ted Brown dies

Glenn Beck suggests
'buying' Schiavo

Competing Media

Bungled contest
angers readers
The New York Daily News is trying to deal with a public relations nightmare - - while the rival New York Post is rubbing salt into the wound at every opportunity. Somehow the Daily News published the wrong winning numbers for its circulation-building "Scratch n' Match" game in Saturday's edition. As a result, tens of thousands of readers scratched their game cards and found that they had won the 100K grand prize or a 10K prize. As the happy winners lined up to collect their cash, the newspaper declared that it was all a mistake and that, under the fine print of its game rules, it didn't have to pay out for the error. To make amends, it decided to put over a million bucks into a special drawing to award 12,800 cash prizes at random to people who had winning tickets in the botched contest. As you can imagine, the prospect of maybe getting few bucks as a consolation prize isn't going over well with many of the people who are holding tickets that appeared to be worth 100K or 10K. Lawyers are lining up clients to sue the newspaper and the Post is busy running letters from disappointed contest players who are vowing never to read the Daily News again.

RBR Radar 2005

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

CNN off the hook for f-word
If Sen. Ted Stevens (R-AK) has his way, cable channels will someday be covered by the same restrictions on indecency now faced by broadcast television. But that's not the case yet, so the FCC has tossed out numerous complaints which were filed over the alleged utterance of the f-word by a convention staffer during CNN's live coverage of the Democratic National Convention. RBR observation: Although CNN is not a broadcaster and so is clearly not covered by the indecency rule, the fact that the FCC would even go so far as to look at such complaints instead of dismissing them out of hand shows precisely why broadcasters are so afraid of the Commission applying its new, harsher (and less clear than ever) indecency enforcement to live news coverage. The Democratic National Convention is clearly a news event - - in fact, broadcasters drew fire for not giving the political conventions as many hours of live, primetime coverage as many politicians thought they deserved. Certainly no one would dispute that the acceptance speech by a major party's presidential nominee is a bona fide news event. If a CNN mic did immediately thereafter pick up a convention staffer saying the f-word when the balloons didn't fall on cue (and there's some dispute about whether the word! was heard by home viewers), just how could that have been foreseen or avoided? Should Kerry's speech have been on a seven-second delay?
03/22/05 RBR #57

Guest commentary: Breaking up Viacom is no panacea
Was "synergy" the media fad of the '90s, now to be replaced by conglomerate break-ups to "unlock value"? In this guest commentary, Paul Robinson, of Emerald City Radio Partners, questions whether that alone will benefit anyone but investment bankers. He says broadcasting, and radio in particular, needs to look beyond Wall Street to get back on track. RBR observation: Makes sense to us. 03/22/05 RBR #57

Robert F.X. Sillerman buys
a piece of "American Idol"
He already owns the rights to Elvis and now he has bought a piece of "American Idol" as well. Sillerman's publicly-traded CKX Inc. has acquired Simon Fuller's 19 Entertainment Ltd. for 124.4 million in cash and 1,870,558 shares of CKX, worth 36.9 million. CKX also has a long-term agreement with Fuller to work on new projects. 19 Entertainment and FreemantleMedia, owned by European radio and TV giant RTL Group, developed "Pop Idol" in Britain and have since syndicated the talent contest show to more than 30 other countries. In the US, 19 Entertainment and Freemantle co-produce "American Idol" with Fox. 03/21/05 RBR #56

Situation Wanted
Successful GM with excellent record of revenue, ratings and community performance seeks GM or Market Manager Position with solid broadcasting company. Presently employed in Television leadership, prefer western and southern portions of the country. More information call: 720-837-0337

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!

See Radio Careers for more info.

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