RBR's Daily Morning Epaper

Volume 22, Issue 69, Jim Carnegie, Editor & Publisher

Thursday Morning April 7th, 2005

Radio News®

FTC won't enter LPM battle
After discussions with Nielsen, the Media Ratings Council (MRC) and Local People Meter (LPM) critics, the Federal Trade Commission says it found no evidence of any deceptive or unfair practices in Nielsen's LPM rollout. In a letter to a complaining congressman, FTC chairman Deborah Platt Majoras, pictured, says her agency does not have any authority to impose quality standards on broadcast ratings. Responding to a request from Rep. Al Wynn (D-MD), Majoras said that in addition to Nielsen and the MRC, her staff had met with representatives of the Don't Count Us Out Coalition and Fox Television Stations. While the LPM audits conducted by Ernst & Young for the MRC have found some problems, she noted that Nielsen has not disputed them, but rather has been working with the MRC to correct them and win accreditation. "The staff's discussions with the MRC and others and the materials staff has reviewed do not show that Nielsen has engaged in deceptive or unfair practices in violation of the FTC Act, such as misrepresenting its ratings system or failing to disclose material facts about the system," the letter said. And she concluded, "Absent deceptive or unfair practices, it would not be within the Commission's authority to impose quality standards for accuracy in audience measurement." | Read the entire letter here. |

RBR observation: Amen. We have said time and again that Rupert Murdoch and others are making a big mistake by trying to get the US government involved in regulating broadcast ratings. These problems need to be worked out in the industry - - and they can be.

There's a new analyst in town
Mark Wienkes is out with his first stock coverage since being tapped by Goldman Sachs to handle the radio sector. But of the eight terrestrial and two satellite radio stocks he's analyzed, he only finds two worth buying right now - - Westwood One and Clear Channel - - and he's negative on Radio One and Sirius. | More... |

Latin Shopping Network busted by FTC
A company responsible for an advertising campaign offering computers over national Hispanic television has been collared by the Federal Trade Commission, and has entered into a settlement ratified by the US District Court, Southern District of Florida. The FTC did not stipulate which national Spanish-language network was running this campaign. Latin Shopping Network is the company, which is part of Crediamerica Group, which in turn also operates as America Communications Group. It's all owned by Felipe Taveras. LSN was pitching computers on TV for between 500-1K dollars, then delivered faulty or partial equipment in some cases and no equipment at all in others. It also failed to provide refunds to many dissatisfied customers. The FTC charged that LSN misrepresented its product and its ability to follow through on delivery in a reasonable manner. The settlement agreement, which provides for a certain amount of consumer redress on the part of LSN, does not constitute an admission by LSN of any wrongdoing.

RBR observation: That may be, but as a general rule, we would not want our airspace sullied by a shady operator of any kind. It would behoove any broadcaster who rents time to pitchmen to verify that they are on the up-and-up before subjecting viewers to them.

Stamp out censorship
Here are a few more details on the legislation offered by Rep. Bernie Sanders (I-VT) in an effort to beat Sen. Ted Stevens (R-AK) to the draw on the matter of program content. Stevens has threatened an attempt to extend broadcast indecency standards to cable and satellite services. Sanders is trying to codify their exemption from the same standards into law. His bill to do that is called the "Stamp Out Censorship Act of 2005." It has been referred to the House Energy and Commerce Committee. It also has a number of co-sponsors, one of whom is a member of the committee, that being Rick Boucher (D-VA). Three other Democrats are on board, Neil Abercrombie (D-HI), Jim McDermott (D-WA) and Diane Watson (D-CA), as well as one First Amendment hard-liner from the opposite side of the aisle, Ron Paul (R-TX). Paul was the only Republican to vote against Fred Upton's (R-MI) Broadcast Decency Enforcement Act of 2005. Sanders and all of the other co-sponsors also were in the small minority opposing the Upton bill.

VNRs have been
around for awhile
Sheldon Rampton, in PR Watch article, expresses his satisfaction with the relatively recent exposure given to the use of video news releases (VNRs). But he wonders why it has taken until now for the inkflow. he and John Stauber wrote a book way back in 1995 - - "Toxic Sludge Is Good For You: Lies, Damn Lies and the Public Relations Industry" - - which unveiled the practice. They trace the practice, in both radio and television, to Gray and Company back in the 80s. Gray was putting together a radio feature for its clients called "Washington Spotlight," which the old Mutual Radio Network asked to pick up. Thus were VNRs born. Before long, side-by-side productions were going out, one complete with voiceovers, etc., and the other with raw tape for stations to adapt on their own. Small, poorer stations were happy to use the intact versions, and larger stations were happy to use their own resources to personalize the items. Rampton looks at a 1991 MediaLink study which states that 92 out of 92 surveyed newsrooms used VNRs at one time or another. MediaLink's interest was close to home - - according to Rampton, it had itself distributed about half of a total of 4K released during the year.

Conference Calls Q4 2004

Radio slips for Susquehanna
Susquehanna Media reports that Q4 radio revenues were down 1% to 58.9 million, with operating income flat at 18.9 million. "Softness in the Dallas market and the loss of Oakland Raiders broadcast rights in San Francisco offset increased revenues in Atlanta, Kansas City and Cincinnati markets," the company said. Cable revenues shot up 32% to 46.9 million, with a big chunk of that coming from a recent acquisition. Cable operating income actually fell 36% to 4.5 million. On a same systems basis, cable revenues were up 5%.

Adbiz©

Sears cuts agency fees
Sears is cutting the fee it pays Y&R and Ogilvy & Mather Chicago, according to reports. The size of the fee reduction was significant enough to force Y&R to cut freelancers and a handful of employees. Sears is the biggest client at Y&R. The cut follows the completion of the merger between Sears, Roebuck & Co. and Kmart Holding Corp. Last year Sears spent about 640 million on advertising, split between Y&R and Ogilvy. Kmart spent about 175 million; its agency was Grey Global Group's G2, New York, now part of WPP.

QualiLife chooses KPC as AOR for Zestra effort
QualiLife Pharmaceuticals has selected Kupper Parker Communications as its AOR to provide PR and advertising services for the company's 20 million dollar marketing campaignfor Zestra, its non-prescription "Feminine Arousal Fluid."

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
Radio & Television Business Report. The 2005-2006 Upfront Examined.

Advertising space is limited, contact:
June Barnes [email protected]
Jim Carnegie [email protected]

Media Markets & MoneyTM

Salem goes for three in Omaha
It hasn't been long that Salem Communications has been in the Omaha market, but it's now cut a deal for its third station. Salem says it will acquire KHLP-AM from Journal Broadcasting Group for 900,000. Salem expects to operate the station, on 1420 kHz, in its News/Talk format. "The addition of KHLP supports our strategy of building radio station clusters in each of our markets allowing us to better serve our listeners and our advertisers and, at the same time, gain technical and operating efficiencies. KHLP will join KCRO-AM, our Christian Teaching and Talk-formatted station, and KGBI-FM, our Contemporary Christian Music station, providing Salem with a third format to serve Omaha and surrounding areas," said Salem Exec. VP and COO Joe Davis.

Minority report: Talk about a small stake
Clear Channel figures as a third party in a station transaction which will send a southern Mississippi AM station from Judah Broadcasting Network (JBN) to Flagship Radio Group (FRG). However, Clear Channel has no ownership stake in WZZJ-AM Pascagoula in the Biloxi-Gulfport market. The value of the transaction is only 88K dollars. That's not what seller Kevin O'Grady of JBN will actually tuck away in his wallet - - in fact, he won't immediately tuck away anything. Buyer Timothy D. Lee of FRG will proffer a promissory note to Grady valued at 51,390 dollars. Here's where CCU figures in: It seems JBN owes CCU 36,610 in rent for the tower site and equipment building it's using. FRG will negotiate a repayment schedule with CCU in a debt assumption agreement which accounts for the remaining value in the transaction.

Washington Beat

A way early look at 2008
It's crazy early for the average American to be thinking about the 2008 presidential election - - but for those special few planning a run, it's never too early to start lining up supporters and cash, and doing political good deeds now which can be cashed in as IOUs later. The Associated Press has compiled a list which combines favorites and long shots for both parties, individuals who have either indicated an interest or are being asked about their plans. It includes some who have vehemently denied any intention to run, but who are attracting speculation anyway. Here then, for your own speculating pleasure: Democrats: Indiana Sen. Evan Bayh of Indiana, Sen. Joe Biden of Delaware, Gen. Wesley Clark, Sen. Hillary Rodham Clinton of New York, ex-Sen. John Edwards of North Carolina, Sen. Russ Feingold of Wisconsin, Sen. John Kerry of Massachusetts, Gov. Bill Richardson of New Mexico, Gov. Tom Vilsack of Iowa, and Gov. Mark Warner of Virginia. Republicans: Sen. George Allen of Virginia, Sen. Sam Brownback of Kansas, Gov. Jeb Bush of Florida, Sen. Bill Frist of Tennessee, former Rep. Newt Gingrich of Georgia, former New York Mayor Rudy Giuliani, Sen. Chuck Hagel of Nebraska, Sen. John McCain of Arizona, Gov. George Pataki of New York, and Secretary of State Condoleeza Rice.

Ratings & Research

RADAR showcases national profile
of Black and Hispanic listeners
Arbitron is releasing a national profile of black and Hispanic radio listeners in order to showcase an enhanced capability of the company's RADAR ratings service. Arbitron began collecting the race or ethnicity of every Arbitron survey participant beginning with the Winter 2002 survey. Prior to Winter 2002 Arbitron asked a race/ethnicity question in only 167 markets. These markets met the black and Hispanic population thresholds that qualified a market for the additional survey treatments the company uses to help maintain the appropriate representation of blacks and Hispanics in the ratings results.
| See charts from the study |

Engineering

NPR's WFAE-FM airing
two additional HD Radio channels
The first live test of two supplemental audio channels over HD Radio took place last week at WFAE-FM Charlotte, NC. The test comes just one year after initial testing of Tomorrow Radio and follows close behind the FCC's 3/8 announcement clarifying experimental licensing of Secondary Program Services (SPS). "This is an important milestone for NPR stations that have multiple programming services in need of an outlet for transmission," commented Mike Starling, VOP/Engineering and Operations for NPR.

Transactions

2.1M WCCD-AM Cleveland (Parma OH) from Caron Broadcasting Inc., a subsidiary of Salem Communications (Ed Atsinger, Stuart Epperson) to New Spirit Revival Center Ministries Inc. (Darrell C. Scott et al). Up to 100K paid in option and extension fees, balance in cash at closing. LMA 9/1/04 @ 15K/month. [File date 3/9/05.]

1.125M WWBR-FM West Point VA from Winner Broadcasting LLC (Sherry L. Campana, executor of the estate of James Campana) to David Media LLC (Thomas G. Davis, Jeanne C. Gemmell, Bruce Hornsby, Kathy Hornsby, Jack Stewart, Doug Ferber, John Scher, Lyman Wood). 55K escrow, balance in cash at closing. [File date 3/9/05.]

Stock Talk

Mixed day on Wall Street
Stock prices didn't move much Wednesday, with traders waiting to see what comes as Q1 earnings reports begin. The Dow Industrials were up 28 points to 10,486. The S&P 500 was also up slightly, but the Nasdaq Composite slipped a bit.

The Radio Index moved up 0.542, or 0.2%, to 222.126. Regent, one of the smallest public groups, was the big mover, up 6%. Other stocks were only slightly changed.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		43.30	unch	Jeff-Pilot	JP		48.91	-0.04
Beasley	BBGI		17.74	-0.01	Journal Comm.	JRN		16.84	-0.16
Citadel	CDL		14.03	+0.04	Radio One, Cl. A	ROIA		14.71	-0.28
Clear Channel	CCU		34.44	-0.08	Radio One, Cl. D	ROIAK		14.71	-0.25
Cox Radio	CXR		17.31	+0.18	Regent	RGCI		5.65	+0.33
Cumulus	CMLS		14.36	-0.19	Saga Commun.	SGA		16.22	+0.23
Disney	DIS		28.41	-0.13	Salem Comm.	SALM		19.74	+0.06
Emmis	EMMS		18.82	-0.22	Sirius Sat. Radio	SIRI		5.39	-0.20
Entercom	ETM		35.10	-0.05	Spanish Bcg.	SBSA		10.14	-0.08
Entravision	EVC		8.81	-0.13	Univision	UVN		27.53	-0.12
Fisher	FSCI		51.74	+0.74	Viacom, Cl. A	VIA		35.24	-0.35
Gaylord	GET		42.00	+0.61	Viacom, Cl. B	VIAb		35.11	-0.30
Hearst-Argyle	HTV		25.52	-0.18	Westwood One	WON		20.57	+0.28
Interep	IREP		0.51	+0.01	XM Sat. Radio	XMSR		30.23	-1.07
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

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Arbitrends

Upped & Tapped

Bryant gets Bay area
Clear Channel Radio announced the appointment of Kim Bryant to Regional Vice President, San Francisco Bay Area. She will be responsible for the overall management of the San Francisco cluster in addition to the Bay Area trading zone comprising San Francisco, San Jose and Salinas/Monterey. Bryant joined Clear Channel in 2003 as Market Manager for the Salinas/Monterey cluster.

Fabian moves
to Eastman
Another former Interep exec has turned up at Katz's new Eastman Radio rep firm. Robert Fabian has been named Vice President and Regional Manager of Eastman's Dallas office. He had been VP and Director of Sales in Dallas for Interep's D&R.

The Doctor is in
Doc Holliday, formerly of Clear Channel St. Louis, has joined the RAB as Academy Training Specialist in the Radio Training Academy in Dallas. He will be an instructor for the sales and management courses at the Academy, including the foundations course for salespeople with less than two years experience, advanced courses, and sales manager courses.

More News Headlines

Mercurys booked for Cipriani

XM strikes marketing deal
with The Orioles

Sprint PCS and Mspot launch
radio over cellphones

Add another Jack!

RBR Radar 2005

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

Q1 reports begin next week
Another round of quarterly reports kicks off next week, with several newspaper/broadcast companies. CIBC World Markets analysts Michael Gallant and John Stewart expect from three of the biggest multi-media giants - 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. Disney 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. News Corporation (Fox Entertainment) broadcast operation, raised operating earnings expectations for the O&O TV stations by seven million to 197 million, raised their estimate for the Fox network by four million to 31 million. They expect mid-teens revenue growth for the cable nets. RBR observation: Now the fun begins with Up Front around the corner and we watch to see what programming is dropped and what new programming these big moguls will pump like the neighbor's cat and then dump in mid season. The Up Front buying operation will be different. 04/06/05 RBR #68

Radio One raises guidance...again
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. RBR observation: Someone is operating these stations right. Radio One must be hitting the programming bulls eye because money is not given away free. It will be interesting to see which side of the National Reps did better - Interep or Katz. Remember Al Liggins was struggling with this issue just weeks ago having his national divided into two separate camps.
04/06/05 RBR #68

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