RBR's Daily Morning Epaper

Volume 23, Issue 62, Jim Carnegie, Editor & Publisher

Wednesday Morning March 29th, 2006

Radio News ®

Private capital is king
Back in the 1990s, it seemed that every broadcaster wanted to go public - - fill up the company coffers with cash from an IPO, make the founders and all of the long-time managers rich (at least on paper) and expand rapidly by acquiring smaller privately held broadcast companies - - with cash, stock or a mixture of both. But the past few years have been a tough dose of reality. Quite a few of those lucrative IPOs have degenerated into penny stocks, leaving disgruntled employees holding piles of worthless stock options and looking at severely depleted 401(k) statements. Other somewhat healthier stocks are still trading far below their highs and CEOs feel like well-used punching bags after each quarterly conference call with Wall Street analysts. As Wachovia Securities analyst Marci Ryvicker correctly pointed out at last weekend's BIA conference in Florida, private equity is the place to be in today's broadcasting world. While public companies have been buying back their own stock - - unable to buy anything else because it would be dilutive and Wall Street would, once again, beat down their stock price - - private equity funds have been the ones doing the big deals (with the exception of the Citadel/ABC Radio deal, which required a public currency for tax reasons). Privately-held Raycom bought Liberty Corp., resulting in one less pure play TV stock on Wall Street. Then, just this week, privately-held Barrington bought the biggest pile of spin-offs from the Raycom/Liberty deal. Meanwhile, in radio, Cumulus Media found a novel way to use private capital, enlisting private equity funds as partners to buy Susquehanna Radio as a private company, although managed by Cumulus, so that the acquisition wouldn't be dilutive to Cumulus' public stock.

RBR observation: We said over a year ago that many public company CEOs would prefer to be private and should be looking at ways to make that happen. No one has actually done it yet, because it takes a lot of cash to buy out a company's public shareholders. The CEO would then have a lot more flexibility for acquisitions and growing existing properties, but he/she would also have to deliver on promises made to raise that private equity backing. Those are long-term promises, rather than the quarter-to-quarter game that's played in the public market, but the goals have to be met nonetheless. Rumors persist that Emmis and/or Hearst-Argyle could move to buy out their public shareholders, so we wait and wonder. Going private isn't easy, but it can be done? RBR will continue on this subject in coming monring E-papers.

House may open national franchising to telcos and cable
It doesn't even have a bill number yet, but The Communications Opportunity, Promotion and Enhancement Act of 2006 will be on the agenda when the House Committee on Energy and Commerce sits this Thursday. It's main goal is to speed entry of telcos into competition with cable companies. Cable companies apparently have much to celebrate. All providers of MVPD service, which in this brave new world will also be trying to provide telephone service and broadband Internet access, will be eligible to bypass the patchwork quilt of local franchising authorities in obtaining licenses. The LFAs will still be able to charge for use of local right of way.
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Hut one...Hut two...HOLD
It looks like Robert McDowell, President Bush's nominee for the fifth office suite on the FCC's 8th Floor, is acquiring a distinction which he will share with sitting Democrat Jonathan Adelstein. He seems to be the latest nominee to play the role of political football. According to Reuters, Sen. Jay Rockefeller (D-WV) is the one doing the holding, apparently due to concerns over the Universal Service Fund. It subsidizes communications service to both low income and rural areas - - West Virginia has both - - and Rockefeller is said to want to make sure an accounting error is corrected before letting the nomination go through. Adelstein's nomination was held up at various times by Trent Lott (R-MS) and John McCain (R-AZ), and his renomination was delayed by the Bush Administration, many believe, to gain leverage in a number of federal judge appointments.

A plea for clemency for EB orphans
A wide-ranging coalition of petitioners, including groups large and small and some of the loudest media watchdogs, have come together to ask the FCC to allow AM stations left behind by owners taking advantage of the expanded AM band (1610-1700 kHz) to live. The original plan called for the old and new frequencies to run side-by-side for five years, at which time the old stations would be eliminated to reduce crowding in the band. They argue that the return of the stations is not really necessary, and that instead of going silent, they should be permitted to be sold to small businesses at discount prices, thus increasing diversity of broadcast ownership and providing unique programming service to their markets. Many, they say, are already providing such service, and should be allowed to continue. Among the owner-petitioners are Clear Channel, Entercom, Chisholm Trail, Fife Communications, Multicultural Radio, Mid-West Management, Starboard and Waitt. Two associations, Independent Spanish Broadcasters Association and NABOB are on the list, as are watchdogs Minority media and Telecommunications Council and Office of Communications of the United Church of Christ.

Krueger settles lawsuit
After being fired last year for his on-air remarks about the San Francisco Giants that were taken as ethnic slurs against Dominican players (8/11/05 RBR #157), Sports/Talk host Larry Krueger sued his former employer, KNBR-AM and Susquehanna Radio. That lawsuit has now been settled, but no one is disclosing the terms. The San Francisco Chronicle quoted Krueger as saying, "It's over, and I'm pleased." He now works on air at crosstown KGO-AM.

Greater Media celebrates 50th
Speaking of going private...Greater Media has never been anything but private - - and it intends to stay that way. The family-owned company is celebrating its 50th anniversary this Friday, March 31st. Greater Media was created March 31, 1956 by Yale classmates Peter Bordes and Joseph Rosenmiller with a single radio station in Massachusetts. It grew to include radio, cable TV, printing, publishing and telecommunications by the 1980s and trimmed down in 1999 when the company sold its cable business to focus on its radio and newspaper operations. It now owns 19 radio stations in four states and a chain of weekly newspapers in New Jersey. "I am proud of the achievements of our company over the past years," said John Bordes, Greater Media's Chairman of the Board. "My brother wanted the company to remain independent and locally based. Lee Bordes, Peter Smyth and I are going to do exactly that. We look forward to growing Greater Media in the coming years. We believe passionately in the radio business." CEO Peter Smyth added: "Greater Media is the culmination of Peter Bordes' life's work. Peter believed passionately in the strength of locally-based, creative broadcasting that serves the needs of the community."

Ad Business Report TM

Spot Runner: small, medium businesses
rank TV advertising over others
According to the results of a new survey released by Internet-based advertising agency Spot Runner, businesses that use TV advertising said they allocate almost one-third of their budget to it -- three times more than any other type of advertising. Furthermore, more than 60% who use TV advertising have increased their spending on it over the last two years.
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DOD, Ad Council launch
"America Supports You" PSAs
The Department of Defense and The Advertising Council have launched a PSA effort to encourage Americans to participate in activities that show their support of the troops and to communicate that support to military personnel serving both domestically and overseas. The PSAs, being distributed this week, are an extension of DOD's "America Supports You" initiative, which launched 11/04. Created by DeVito/Verdi New York, the new national multimedia campaign includes radio, magazine and newspaper advertising, which directs Americans and the military to visit this website where they'll find ideas and examples of how to support the troops and can post info about activities in their community that support the troops. Visitors can post messages of thanks to a service member, or download branding materials that communicate "America Supports You." Service members can log on to read about ways that the American public supports them. The PSAs are being distributed to media outlets nationwide this week. Per the Ad Council's model, all of the new PSAs will air and run in ad time and space donated by the media.

Initiative names CEO for North America
Alec Gerster, CEO, Initiative Worldwide, announced Richard Beaven has joined the company as CEO, North America. Beaven will be responsible for the US and Canada and oversee planning, buying, research and business operations. He'll be based in NYC and report to Gerster. "We are extremely pleased to add such a dynamic executive to run our key North American region," said Gerster. "Richard created, implemented and led one of the best communications planning operations in the industry and has a proven track record of success in managing client business and cultivating organic growth. He is a forward-focused nimble executive and the ideal leader for North America." Beaven was most recently EVP/Managing Director for MediaVest New York, with management responsibility for Procter & Gamble. In 2004, he led P&G's planning review process, a pitch involving multiple Publicis Groupe companies in North America.

Media Markets & Money TM

Hagan bulks up on the Gulf Coast
Lee Hagan's Gulf Coast Broadcasting Co. is snagging a radio threesome in southwest Alabama. Two of them are in the Mobile market. The one out of market, however, carries the bulk of the value. That'd be WNSI-FM Atmore, located in Alabama, not too far from Mobile or Pensacola, just about at the northwest extremity of the Florida panhandle. It's coming from Walter Bowen's Southern Media Communications for 525K. So is one of the AMs - - WBCA-AM Bay Minette, coming from the same license company and included in the deal for one dollar. The other AM, WNSI-AM Robertsdale AL, is coming from Bowen's Great American Radio Network for 25K. Hagan owns, or will own, WABF-AM Fairlawn AL and WCSN-FM Orange Beach, both attributed by BIA to Mobile.

Washington Media Business Report TM

Lights off, nobody home
So you'd like to see the public file? You're directed to the office of a nearby realtor? You're there two hours without seeing hide nor hair of a station employee. And you're an FCC field agent. The result of this regulatory recipe is a 7K fine for failure to maintain a meaningful studio presence for Alpine Broadcasting, former licensee of KWYS-AM in West Yellowstone MT. The station, since sold to Chaparral Broadcasting, was running with a sales person who occasionally showed up and a contract engineer, and was actually off air from 1/04 through 5/04. Alpine argued that the fine as "unenforceable" since the station was being sold and the license company was "...a shell entity without assets or cash." That assertion, unaccompanied by any documentation, did not go anywhere with the Commission. The FCC discussed meaningful presence, which includes having management and station personnel. "Although management personnel need not be 'chained to their desks' during normal business hours, they must 'report to work at the main studio on a daily basis, spend a substantial amount of time there and ...use the studio as a home base.'"

Transactions

975K WRML-FM Charlotte-Gastonia-Rock Hill (Pageland SC) from Robert Broadcasting Inc. (John Griffin, Wayne Haas) to Norsan Media Group of South Carolina LLC (Norberto Sanchez). 48,750 escrow, 926.5K cash at closing, credit for 4K monthly LMA payment, with adjustments as necessary. Duopoly with WGSP-AM Charlotte NC, WXNC-AM Monroe NC. [File date 3/6/06.]

600K WSPG-AM Greenville-Spartanburg SC (Spartanburg SC) from Fulmer Broadcasting Inc. (Matt Fulmer) to Jose Roberto & Aida Esperanza Ekonomo. 100K escrow, balance in cash at closing. [File date 3/3/06.]

Stock Talk

Stocks drop as Fed raises rates
New Federal Reserve Chairman Ben Bernanke stuck to the Greenspan course and raised rates yet another quarter percentage point, sending stocks lower as investors read the Fed's statement as indicating that still more rate hikes are ahead. The dow Industrials fell 96 points, or 0.9%, to 11,155.

Radio stocks followed the market lower. The Radio Index fell 1.624, or 1%, to 161.530. Cumulus led the retreat, falling 3.4%. Univision was one of the few gainers, up 2.9%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		33.47	-0.30	Hearst-Argyle	HTV		23.23	-0.35
Beasley	BBGI		11.20	+0.29	Jeff-Pilot	JP		58.00	-1.19
CBS CI. B	CBS		24.42	-0.36	Journal Comm.	JRN		12.30	-0.17
CBS CI. A	CBSa		24.45	-0.33	Radio One, Cl. A	ROIA		7.80	unch
Citadel	CDL		10.90	-0.14	Radio One, Cl. D	ROIAK		7.80	-0.01
Clear Channel	CCU		29.33	-0.07	Regent	RGCI		4.53	+0.02
Cox Radio	CXR		13.24	-0.29	Saga Commun.	SGA		9.04	-0.01
Cumulus	CMLS		11.21	-0.39	Salem Comm.	SALM		14.82	unch
Disney	DIS		27.09	-0.25	Sirius Sat. Radio	SIRI		4.94	-0.07
Emmis	EMMS		16.44	-0.21	Spanish Bcg.	SBSA		5.34	-0.06
Entercom	ETM		27.75	-0.59	Univision	UVN		34.42	+0.96
Entravision	EVC		8.31	unch	Westwood One	WON		11.10	-0.29
Fisher	FSCI		42.88	-0.04	XM Sat. Radio	XMSR		21.03	-0.15
Gaylord	GET		43.91	-0.50	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
Ranking the media
Those using TV allocate up to 1/3 to that medium...

Media Markets & Money
Bulking up the Gulf Coast
Lee Hagan's is snagging a radio threesome in southwest AL...

Washington Media Business Report
Lights off, nobody home
So you'd like to see the public file?

Arbitrends

Radio Media Moves

Back to
The Street
Veteran media analyst Jim Boyle has joined CL King & Associates, "a client-driven institutional research boutique," as a Media & Leisure analyst.

Upped at CBS
CBS Radio announced that Jonathan Azu, who has served as Director of Marketing since 2004, has been promoted to the newly-created position of Vice President of Strategic Music Partnerships. He will focus on developing integrated multi-media programs which link advertisers, labels and artists with CBS Radio's powerful music brands.

Back to radio
Greater Media has named Marjory Guglielmo General Sale Manager of WRAT-FM Monmouth-Ocean, NJ. She returns to the company after serving as President of the Jersey Shore Public Relations Association.

Stations for Sale

9 Station Cluster
Upstate New York
9x cash flow $6.5m
George Kimble - Kozacko Media
520-465-4302
[email protected]

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March '06 RBR/TVBR Solutions Magazine

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RBR Radar 2006

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

Mediamark Research says its device trumps cell phones, PPM
Folks at Mediamark Research are finally speaking publicly, at least a bit, about their entry in what's now a three-way race to be decided by the Next-Generation Electronic Ratings Evaluation Team to select a new ratings system for radio. As we deduced long ago, Mediamark's entry is based on the Eurisko Media Monitor developed by a related company in Europe.

RBR observation: Now this is where the fun begins and it comes down to the Next-Generation Electronic Ratings Evaluation Team but for the most part only two are the real keys to opening this lock. As for one of the keys RBR has stated from the beginning - Money - and lots of it as this quote from Jay Mattlin sums it up - "That's really up to the industry. We are not planning to fund one on our own," just as Nielsen said it was not interested in being a part of the funding or Money. (got to read this)
03/28/06 RBR #61

We cannot afford to
miss this opportunity
By, Thomas L. Bookey, Chairman & CEO Heartland Communications Group To throw off our corporate shackles to bring rate integrity and creativity back to radio. That's why private, entrepreneurial enterprises run circles around the public companies. The public companies are standing in the way of progress.
03/28/06 RBR #61

What AEs can bring to the table
By Kim Vasey
I have always thought it extremely important for our Account Executives from the stations, networks and networks to meet the planners, account managers and clients and I work tirelessly to help facilitate these introductions across all of our accounts.
03/27/06 RBR #60

Hard finding that key person to fill the important position at your organization? RBR's - Media HeadHunters is the place that key media firms use to get results. See www.mediaheadhunters.com and get results with service--Period.

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