RBR's Daily Morning Epaper

Volume 22, Issue 68, Jim Carnegie, Editor & Publisher

Wednesday Morning April 6th, 2005

Radio News®

Radio One raises guidance...again
It was less than a month ago that Radio One boosted its Q1 guidance to Wall Street (3/17/05 RBR #54). Now it's done it again. Let's follow the progression. Originally, when Radio One reported its Q4 results in February (2/28/05 RBR #35), it said to expect Q1 revenues to be up in the low single digits. Last month's update took that to a gain of at least 4%. Now, with the quarter complete, Radio One says the revenue gain will be 5-6%, with station operating income up in the mid single digits. "The last two weeks of March were two of the strongest last two weeks of a month we have seen in a long, long time. Radio One saw its net broadcast revenue (before taking into account the impact of its acquisition of Reach Media) grow in excess of 10% in March, capping off a successful first quarter. We feel good about our prospects based on current business conditions," said Radio One CFO Scott Royster.

March a bright point after blah February
February may have been flat (4/5/05 RBR #67), but the word on the street for some time had been that March was pretty good. Analyst Jim Boyle at Wachovia Securities has been working to quantify that, and as a result has boosted his forecast for March radio revenues. Instead of the 5% decline he had been predicting (which was more pessimistic than most other forecasters), he's now jumped to predicting a 2% gain. "The much more upbeat tone from public and private industry execs for March is becoming quite notable," Boyle said in a note to clients. "This is a pleasant surprise to us, as March has the toughest comps of the year and was facing the early disruption of Clear Channel LIM effort." He suggested that March may have benefited from the "newly-visible discipline" by major groups in top markets to cut spot loads, which he had detailed just a day earlier (4/5/05 RBR #67). But March is already done - - it's now just a matter of tallying the numbers. What about now? "So far, April seems so-so from industry execs, while the early chatter on May, radio's biggest revenue month of the year, is very encouraging," Boyle said.

RBR observation: This is still a bit of a roller-coaster market for advertising. It would be nice to have steady, consistent growth month after month. Perhaps some day we'll get back to that, so some broadcast sellers (whom the industry could really do without) can go back to being lazy and just watch the money roll in. For now, though, you're still going to have to work for a paycheck.

Martin addresses indecency at NCTA
It will come as no surprise to FCC watchers that indecent programming was top of mind for new FCC Chairman Kevin Martin when he addressed the National Cable & Telecommunications Association (NCTA) at its convention in San Francisco. The event marked Martin's coming out party - - it was his first occasion to speak in public since being elevated to the chair. Martin did not offer any major surprises. He expresses his concerns about racy content on broadcast and cable television, and according to Reuters, he advised the cable industry to clean its own house before regulators are forced to step in. He said content blocking tools, family-oriented programming tiers and a family television hour were all items the industry could consider. He also echoed past chair Michael Powell, pointing out that much of what the FCC does is at the behest of Congress. He would not unilaterally go after cable since the law does not support such an act.

Indecent?
Do not pass Go, do not collect 200 dollars...
If you or your air staff are alleged to have engaged in the broadcast of indecent material, would you rather battle FCC fine and license revocation proceedings, or criminal court proceedings? A powerful member of the House of Representatives has suggested that perhaps the latter route is the way to go. Speaking at the NCTA convention in San Francisco, Rep. James Sensenbrenner (R-WI), chair of the House Judiciary Committee, said that making broadcast indecency a criminal matter aimed specifically at perpetrators would avoid the necessity of rewriting statutes which end up punishing all for the actions of a few. He also said he does not favor roping in cable and satellite services under the same indecency standards currently applicable to broadcasters. He did say those industries should do a better job of educating viewers on the use of program blocking tools.

RBR observation: We do not pretend to be constitutional scholars, but we would not bet a toothpick on an effort to get a law criminalizing free speech, broadcast or otherwise, past the courts.

Senators of interest to broadcasters weigh 2008
A pair of Capitol Hill denizens, each of whom has taken a particular interest in the affairs of the broadcasting industry, are said to be weighing the possibility of a presidential bid in 2008. On the Republican side is Sam Brownback (R-KS), and on the Democratic is Russ Feingold (D-WI). Until just recently, Brownback was a member of the all-important Senate Committee on Commerce, Science and Transportation, which has oversight over most industry issues which get notice on the Hill. He is the Senate sponsor of the Broadcast Decency Enforcement Act. Feingold is best known as a co-sponsor of the McCain-Feingold Bipartisan Campaign Reform Act. He has also introduced ill-fated legislation aimed at reducing broadcast ownership consolidation - - he particularly focused on vertical integration, and even more particularly on Clear Channel's integration of radio stations and concert venues.

RBR observation: At this point in time, we'd have to speculate that a match-up of Brownback v. Feingold in 2008 is solidly in the longshot category.

Q1 reports begin next week
Another round of quarterly reports kicks off next week, with several newspaper/broadcast companies - - Media General, New York Times, Gannett, Scripps, Journal and Tribune - -reporting their Q1 2005 results, along with Emmis, which will be reporting on its fiscal Q4, which wrapped up at the end of February. What's coming? CIBC World Markets analysts Michael Gallant and John Stewart have published previews on what to expect from three of the biggest multi-media giants - - Viacom, Disney and News Corporation. At Viacom, they say the Infinity Radio division may still have a chance of posting flat revenues for the quarter, but that EBITDA will be down. TV revenues, boosted by the Super Bowl on CBS, should be up 3% and the cable nets are expected to grow revenues by 12%. All in all, they see Viacom's revenues rising 6.2% for Q1 - - and 6% for all of 2005. At Disney, which will be reporting its fiscal Q2 results later this month, the CIBC analysts say local spot TV will be down slightly, but that local radio should be up in the low to mid single digits. In all, they're still expecting broadcasting operating income to be right where they'd previously forecast - - 56 million. But they've raised their operating income estimate for Disney's media networks (with surging ABC) by seven million to 760 million and also raised cable networks by seven million to 704 million. In all, they see Disney reporting revenues of 8.08 billion and operating income of 1.31 billion. With Fox Entertainment now rolled into News Corporation, the CIBC analysts have adjusted their numbers accordingly. Even so, they still expect fiscal Q3 earnings per share to come in at 17 cents. In the broadcast operation, they raised operating earnings expectations for the O&O TV stations by seven million to 197 million, but raised their estimate for the Fox network by four million to 31 million. They expect mid-teens revenue growth for the cable nets.

Adbiz©

Safeway launches brand re-positioning
Safeway unveiled a new brand re-positioning that highlights the quality of the perishables and proprietary brands it offers in its stores, its new store concept, and the superior service it provides to its customers. With this campaign, Safeway positions itself as not just a supermarket that sells ingredients for meals. It proudly offers "Ingredients for Life." The 100 million effort, "Ingredients for Life," will launch 4/18 with new advertising, a new slogan, a new identity, and other unique elements highlighting the new Safeway brand position. To highlight this quality-oriented strategy, Safeway has been aggressively remodeling its stores and opening new stores in what it has called its "Lifestyle" format store. These stores feature an inviting decor with warm ambiance and subdued lighting that highlights its high-quality fresh products and enhances the Safeway shopping experience. Safeway's new brand promise is captured by the phrase, "Ingredients for Life," which will be communicated through a fully integrated advertising, branding, and marketing campaign. The yearlong campaign includes TV, radio, outdoor, print and web components. Three new TV spots, developed via Dailey & Associates LA, will focus on the choices and challenges people face in everyday life, and demonstrate how Safeway has evolved to offer unique solutions and experiences. The plan includes buys on programs such as 24, Amazing Race, The Apprentice, CSI, Desperate Housewives and Lost, as well as the season finales of American Idol, Everybody Loves Raymond and Survivor.

TiVo reups DirecTV ad deal
TiVo has signed a new advertising services agreement with DirecTV, reupping prior services contract. Each company may now sell and distribute TiVo's advertising capabilities on DirecTV DVRs with TiVo service. Both TiVo and DirecTV will each retain their respective revenue generated from these sales. DirecTV has nearly 14 million subscribers.

XM, NY Yankees strike ad deal
XM Satellite Radio announced a multi-year marketing deal yesterday with the NY Yankees that will allow XM to advertise its radios and programming at Yankee Stadium, through on-site promotions and signage. Last year XM announced an 11-year deal to broadcast Major League Baseball.

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Media Markets & MoneyTM

Lotus cleared to "sup" up Vegas cluster
Most radio station superduopoly clusters are built through acquisitions. In this case, Lotus Communications is going to build rather than buy. The FCC has cleared the way for final paperwork approach in regards to the company's winning Auction No. 32 bid to construct a new AM station in Las Vegas. It has until 4/19/03 to get its final lump sum payment to the Commission - - well, it really has until 5/3/05, counting the ten day grace period. The fledgling AM station will give the group its third outlet on the senior dial, along with a pair of FMs.

Washington Beat

Little LPTV that could
Hilltop Church's KHMP-LP Pahrump NV has won the right to be carried on the local Cable Management Associates' cable system after taking its case to the FCC. CMA failed to respond, meaning that the FCC reviewed Hilltop's complaint against statute without any opposing arguments on the table to consider. It found that KHMP-LP met all of the following five requirements for carriage. (1) It broadcasts an established minimum number of hours daily; (2) It meets FCC non-entertainment programming requirements and provide local community news/info not available from any full-power stations; (3) It complies with interference regs; (4) It's within 35 miles of the cable system headend; and (5) It's outside the top 160 Metropolitan Statistical Areas. KHMP-LP started its argument with the fact that its up and running 24/7, and easily fulfilled the other requirements. Must carry granted.

Ratings & Research

Cradle of New Wave civilization
gets rated
Athens GA, home of stalwart New Wave bands such as REM and the B-52s, has been added to the roster of rated radio markets, thanks to a deal between ratings service Eastlan and station cluster owner Southern Broadcasting. The new market will actually be called Northeast Georgia (Athens). The market isn't yet included on the Eastlan list, which includes all rated markets, including those only rated by Arbitron, and ends with #334 Kauai HI. However, Athens' total population exceeds 100K, which along with those people living in surrounding towns should put it comfortably somewhere in the 200s on the market rank chart. It's a little less than 40 miles east of Atlanta. It won't be the absolute first time that the market's been rated. Arbitron has provided numbers in the past under its Custon Servey Area Reports option.

Nielsen Monitor-Plus adds
markets for outdoor measurement
Nielsen Monitor-Plus announced an enhancement in its outdoor ad measurement service, by increasing the number of cooperating outdoor companies. This expansion will bring the total number of markets measured to over 150, giving clients a more complete view of outdoor advertising. | Chart inside Top 10 Outdoor Advertisers |

TVBR - TV News

Peter Jennings has lung cancer
It turns out that when Peter Jennings cancelled a speech to the TVB conference last week due to illness, he was sicker than anyone imagined. ABC News President David Westin informed the network's staff yesterday that Jennings has been diagnosed with lung cancer and is beginning outpatient treatment, which will cause him to miss some days anchoring the "ABC World News Tonight." Jennings is 66. "This morning, Peter Jennings told his senior staff at World News Tonight that yesterday afternoon he was diagnosed with lung cancer," Westin said yesterday in his memo to staffers. "He will begin outpatient treatment next week here in New York. It's both Peter's and my expectation that he will anchor World News Tonight during the period of treatment to the extent he can do so comfortably; but, we should also expect him to be off the broadcast from time to time, depending on how he feels. Charlie Gibson, Elizabeth Vargas, and others will be substituting for Peter as necessary and when their other responsibilities permit. All of us at ABC News have watched over the years as Peter has led us on various assignments with strength and with courage. We've done our best to support him in these endeavors. Now, Peter's been given a tough assignment. He's already bringing to this new challenge the courage and strength we've seen so often in his reporting from the field and in anchoring ABC News. I know that all of us will give him every bit of support that he needs and asks for. Peter will once again lead the way, but we will stand with him at every turn," Westin said. For his part, Jennings plans to continue working as he battles cancer. "There will be good days and bad, which means some days I may be cranky and some days really cranky," he said in an email to ABC News staffers.

Transactions

1.1M WWLZ-FM Tupelo (Aberdeen MS) and WACR-FM Columbus-Starkville-West Point MS (Columbus MS) from Capstar TX LP, a subsidiary of Clear Channel Communications (Mark Mays) to Urban Radio Licenses LLC (Kevin Wagner). 50K escrow, balance in cash at closing. Includes non-compete. Superduopoly in Columbus with WAJV-FM Brooksville and WMSU-FM Starkville. [File date 3/9/05.]

850K WBRN AM & FM Big Rapids MI from RH Communications Inc. (Robert J. Hampson Jr.) to Mentor Partners Inc. (Jeffrey J. Scarpelli). 100K escrow, balance in cash at closing. Duopoly with WBYR-FM Big Rapids. LMA 3/1/05 @ 3.5K/month. [File date 3/8/05.]

Stock Talk

Greenspan boosts the markets
Fed Chairman Alan Greenspan told a petroleum industry meeting that high oil prices are already holding down demand for crude - - which stock traders took as a signal that Greenspan isn't unduly worried about inflation. That sent stocks up for the day. The Dow Industrials gained 37 points, or 0.4%, to 10,458.

Radio stocks were also higher. The Radio Index gained 1.641, or 0.8%, to 221.584. Spanish radio groups had a good day. Entravision rose 3.4% and SBS 2.2%. The big gainer, though, was Cumulus, up 2.6%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		43.30	-0.03	Jeff-Pilot	JP		48.95	+0.10
Beasley	BBGI		17.75	-0.05	Journal Comm.	JRN		17.00	+0.11
Citadel	CDL		13.99	+0.13	Radio One, Cl. A	ROIA		14.99	+0.27
Clear Channel	CCU		34.52	-0.02	Radio One, Cl. D	ROIAK		14.96	+0.19
Cox Radio	CXR		17.13	+0.20	Regent	RGCI		5.32	-0.02
Cumulus	CMLS		14.55	+0.37	Saga Commun.	SGA		15.99	-0.15
Disney	DIS		28.54	+0.11	Salem Comm.	SALM		19.68	-0.32
Emmis	EMMS		19.04	+0.10	Sirius Sat. Radio	SIRI		5.59	+0.14
Entercom	ETM		35.15	+0.25	Spanish Bcg.	SBSA		10.22	+0.22
Entravision	EVC		8.94	+0.29	Univision	UVN		27.65	+0.18
Fisher	FSCI		51.00	-0.11	Viacom, Cl. A	VIA		35.59	+0.35
Gaylord	GET		41.39	+0.95	Viacom, Cl. B	VIAb		35.41	+0.23
Hearst-Argyle	HTV		25.70	+0.16	Westwood One	WON		20.29	+0.23
Interep	IREP		0.50	unch	XM Sat. Radio	XMSR		31.30	+0.32
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

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On finding a new NAB CEO...

One Tall Order:
A Memo to Central Casting

Criteria for Leadership at NAB
after Eddie Fritts

A daunting task awaits our new leader. The animus against broadcasting is growing each day. It knows no ideological bounds. The Religious Right and the Intellectual Left are on the march against our most basic freedoms. And the single-issue "values" zealots are in full-throated control of the assault. Many TV execs are afraid if they don't play ball they will be visited by all kinds of economic threats and punitive legislation and regulations. And radio broadcasters sail serenely by with our new-found wealth driven by Consolidation. | More... |

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NAB Daytime Planner

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Arbitrends

More News Headlines

Live365 revives Philly's Y-100

Chic Sports Radio
announces debut lineup

May - Radio & Television Business Report
The First Real Monthly
Business Media Magazine

Upfront looms on
the horizon

May Radio & Television Business Report focuses on One-On-One interviews with the money Ad Players: David Verklin, Steve Grubbs, Harry Keeshan, Jon Mandel, Ray Warren, Ira Berger, Jean Pool and others that read TVBR religiously. They're participating because they want you to know what they need to help make informed decisions. They comment on programming that they view promising for this upfront; they examine thoroughly the real issues that affect the marketplace as all are getting busy. This is a large story already and getting bigger.

Watch for the May Issue of
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RBR Radar 2005

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

Publisher Perspective: Upfront coming - NBC's Pump and Dump can become ABC's American Dream
NBC's American Dreams airs season and possibly series finale...and brace yourself for bad Dreams news. Bad for NBC but Good Dreams for The American Broadcasting Company if new Disney CEO Bob Iger has any programming common sense. NBC Entertainment President Kevin Reilly - - you have, or had, a hit on your hands but never had the commitment or gut instinct to see it through. ABC - - the home of American Bandstand - - Pick It Up!! ABC affiliates forward this perspective to your ABC rep in Hollywood. Content is King, as history will tell. And American Bandstand is one of the binding threads found throughout American Dreams check it out.
04/05/05 RBR #67

Product Placement is Hot; Getting Hotter and pacing Up fast
Growing by leaps and bounds, accounted for 3.46B dollars in '04, a whopping 30.5% increase over the previous year and projected to surpass 4B in '05. Used in movies and other media, the category has largely been tethered to broadcast, cable and syndicated TV, where it's use is seen as a way to avoid the commercial-zapping. In particular, reality TV has provided an attractive venue for placements, especially for products seeking 18-34 year olds.
RBR observation: For the record, we stated that product placement would catch fire back in January '04. Best product placement was last November by Ford, NBC's 'American Dreams' producer Jonathan Price and J Walter Thompson. Result - ROI. If you have not viewed this film then use this link and look at your future today in a 5 minute mini-movie by Ford with Mustang and former Ford executive Rich Stoddart explains how it happened .
04/05/05 RBR #67

Less is More-everybody's doing it
Wachovia analyst Jim Boyle says it's not just Clear Channel that's taking "Less is More" to heart. By his calculations, radio spot loads are down across the board. He's expecting radio's pricing power to be revived in another 3-6 months.
RBR observation: Still too early to tell but for the chart stats see 04/05/05 RBR #67

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