Radio News ®
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Commissioners said to have
five thumbs up for CCU
Although Democratic FCC commissioners seem to have developed zero tolerance for even the slightest amount of additional media consolidation, Wall Street analysts are reporting that the long-pending deal to take radio giant Clear Channel private has unofficial backing from all five 8th Floor honchos. Of course, rather than create additional consolidation, this transaction would actually force spin-offs, and indeed, CCU has been selling off properties in any case. Democrat Michael Copps is said to be ready to cast the final yea vote, ahead of deadline, which was seen as a positive development for its privatization. The next step would be to obtain DoJ approval. Anthony J. DiClemente at Lehman Brothers noted, "While this unanimous vote doesn't guarantee anything with regards to the timing or approval at the DOJ, we believe it provides CCU and its sponsors with a solid case in favor of approval, and could help expedite the matter." Clear Channel has sold its television stations, and although there have been setbacks, it has also been spinning off most of its stations in the sub-100 market range. It has also placed numerous properties in the Aloha Station Trust under Jeanette Tully to expedite any spin-offs needed as grandfather clauses are swept away due to the change in ownership.
RBR observation: Most of the activity swirling around this transaction diminishes broadcast consolidation. We can think of no possible reason why any regulatory body would stand in its way. Now, whether the buyers want to go through with the deal is another matter entirely.
CBS's WWFS-FM survives license challenge
Three individuals and a college group wanted the license renewal for CBS Radio's AC WWFS-FM in New York turned down by the FCC. They say that CBS is "a serial and recidivist violator of the federal criminal statute proscribing indecent, obscene or profane broadcasts." But the problems they cite as evidence have either long since been resolved or did not occur at this station. The petitioners cited programming featuring Howard Stern and Opie and Anthony. In both cases the programs in question were stale, and regardless, CBS has already entered into a consent decree with the Commission which settled the matter. The petitioners also argued that the FCC lacked the authority to enter into consent decree agreements, and that such actions were entered into prejudicially. The FCC said the authority argument was without merit, and that situations cited involving minority licensees had nothing whatsoever to do with indecency and were not remotely applicable to the present situation. The license renewal was granted and the petitions dismissed.
RBR observation: When filing indecency complaints began to become a popular pastime, fueled by campaigns from the Parents Television Council, Morality and Media and other groups, it was a common complaint that few people had the tapes rolling to capture evidence of a breech of on-air decorum. Those days are largely over, as watchdogs and average citizens make use of an ever-growing arsenal of electronic recording devices. Many of the watchdogs make it their habit to monitor broadcasts with the virtual tape rolling. Add to that the brand new 350K top-drawer indecency fines put into effect last year, and there is plenty of indecency-related fodder for broadcasters to keep top-of-mind without citizens dredging up golden oldies from five years ago. The FCC is to be commended for recognizing this fact and brushing such complaints aside.
Disgruntled investor
throws in the towel
Remember Arnhold and S. Bleichroeder Advisers LLC, one of the big shareholders pressing Emmis to do a buyout deal to cash out public shareholders? (10/26/07 RBR #210) Well, the investment group says it no longer owns over 5% of Emmis' stock and may sell more, due to its disappointment that nothing has happened to enhance shareholder value. Bleichroeder Advisers still owns 1,434,000 Emmis shares, but no longer has to file reports on how large (or small) its stake is. It is playing close to its vest on whether or not it will sell off the rest of the shares right away. "The Reporting Person is disappointed that no actions or plans have been announced by the Board of Directors to realize for the benefit of shareholders the intrinsic value of the Issuer's assets. The Reporting Person continues to believe that the Board of Directors of the Issuer should take aggressive action to explore all options available to the Issuer to create shareholder value, including, but not limited to, a potential going private transaction with the Issuer's Chairman and CEO Jeffrey Smulyan, to the extent one is feasible in light of current industry and market conditions," Bleichroeder Advisers said in its latest SEC filing. It left the door open to sell shares, buy shares, engage in short selling or hedging, or any other actions with regard to Emmis' stock.
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Bloomberg continues
to dangle 2008 candidacy
The repeated announcements from NY Mayor and media magnate Michael Bloomberg (I) that he is not running for president in 2008 are not jibing particularly well with a polling and voter analysis project Bloomberg's peeps seem to be conducting in on the sly. His entry could mean a sudden infusion of millions of additional advertising dollars to an election season which figures to break records any way. According to the Associated Press, Bloomberg is taking the political temperature in all 50 states, and has been doing so for months now. AP notes that if Bloomberg is willing to spend so much of his own hard-earned cash on an electoral research project, it goes without saying that he would spend vastly greater amounts if he does in fact launch a third-party candidacy.
RBR observation: The speculation we've seen has been suggesting that the more centrist the candidates from the Democrats and Republicans, the less likely Bloomberg will be to enter the race. As to the viability of a third party candidacy, that remains to be seen. Such candidates clearly do not have a great track record. Often, the tendency is for the third candidate to draw votes away from the more similar of the two national party candidates, aiding the election of the least similar. And even there, speculation as to which party would most stand to benefit from Bloomberg's presence is up in the air. He recently announced himself to be an independent, but has been a member of the Democratic party and more recently was elected Mayor of New York City as a Republican. But one area of speculation is indisputable. If he does throw his hat in the ring, it will mean vast sums of cash added to the already burgeoning political advertising category.
Private equity funds raised record bucks in 2007
How's that, you ask? Didn't the credit markets collapse at mid-year and derail the private equity industry? Welcome to the new era of vulture private equity. According to Dow Jones Private Equity Analyst, a unit of the company now owned by News Corporation that tracks the private equity business, US private equity firms raised a record 302 billion bucks in 2007, up 19% over 2006. To be sure, a lot of that was raised in the first half of the year, before the credit markets tanked and private equity deals began going south. But there was a lot of action in funds focused on buying distressed properties, with nearly 45 billion raised by 22 such funds. That was almost three times the previous record for annual investment in such funds. "With creditors tightening their belts, the days of easy financing are over and private equity investors are positioning themselves to capitalize when overextended companies fall into trouble in the months and years ahead. Oftentimes, the best opportunity for investors to see sizeable returns is when overall market conditions are less favorable." said Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst.
RBR observation: Anyone want to bet on how long it will be before we see one of those vulture funds making a bid for a battered broadcasting company? There are plenty of unhappy investors, particularly in radio, who would welcome an opportunity to cut their losses and run. Interep and Regent Communications have already had encounters with such funds, but both remain independent and publicly traded.
Grilled by the bar
Does radio have a future? Saga Communications CEO Ed Christian assured the Florida Chapter of the Federal Communications Bar Association yesterday in Sarasota that it does, but that the industry is going to have to work at bringing in new advertisers. To that end, he said that Katz Radio Group has hired 40 new sellers to work strictly on new business and that he and other clients of the national rep have agreed to pay higher commission rates on national spot sales that are new to radio. For anyone looking to buy stations, broker Stan Raymond noted that sellers still seem to have high hopes based on prices from a few years ago, before the current downturn. But he insisted that operators can still succeed if they focus on local programming geared to their own community. RBR Executive Editor Jack Messmer warned that the current FCC proceeding on localism could produce the opposite of its intention - burdening the remaining Mom & Pop operators with lots of paperwork and even increased staffing costs to the point that some may decide to sell out to larger radio companies. When one member of the audience asked about the future of AM radio, Christian got excited about the possibilities from the FCC's move underway to allow AM stations to have FM translators. In small markets, where a translator will be sufficient to city-grade the entire community, he sees great potential for handicapped AMs, particularly daytimers, to become much more competitive.
Pictured (l-r) are moderator Will Cox of the Abel Band law firm, Raymond, Messmer and Christian.
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Ad Business Report TM
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Nurses unveil radio campaign
against Schwarzenegger plan
The California Nurses Association/National Nurses Organizing Committee launched a new statewide campaign featuring the voice of Sen. Barack Obama commenting on proposals to force individuals to buy insurance. Individual mandate schemes lie at the heart of the healthcare deal crafted by Gov. Arnold Schwarzenegger and Assembly Speaker Fabian Nunez-and endorsed by most California insurance corporations. Radio spots will run in major media markets across California, coinciding with Senate hearings and a vote on the ABX1.1 bill. CNA/NNOC opposes the bill which would require all Californians to buy health insurance or face substantial penalties. As the ad puts it, "Don't let the politicians force you to buy insurance you can't afford and which won't help you when you're sick."
The ad also quotes Sen. Obama noting "some folks who said that it's not possible to provide universal healthcare coverage unless there's a mandate. Their essential argument is the only way to get everybody covered is if the government forces you to buy health insurance. If you don't buy it, then you'll be penalized in some way....The reason people don't have health insurance is because they can't afford it." Under the Schwarzenegger-Nunez deal, ABX1.1, insurers would gain millions of new customers and hundreds of millions in additional profits while failing in its promise of solving the state's healthcare crisis, says CNA/NNOC. The ad also calls on Californians to join with nurses in working for genuine healthcare reform, such as SB 840, a bill that will be heard in the California Assembly later this year. The ad may also be heard at guaranteedhealthcare.org.
P1 Selling adds interactive training
Online training provider P1 Selling announced its program designed exclusively for radio groups is introducing interactive sales training. "Your radio station matched with your website gives the audience sight, sound and motion like our friends in television, and further gives radio stations the ability to coupon like newspaper," said Speed Marriott, a partner and instructor for P1. Employees have access to short training sessions through any web browser. Topics include selling skills, negotiation, promotions, leadership development, HR compliance and now interactive sales training.
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Media Markets & Money TM |
AFA picks up another stick
Donald E. Wildmon's Christian America Family Association has another DIY project headed for its ample broadcast portfolio. A Class A in unrated Waverly OH (south of Chillicothe) is coming from Life Radio Ministries for a mere 10 dollars. The station is pegged for 88.5 MHz with 350 watts on a 331' antenna.
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Washington Business Report TM |
Wicker promoted; opponent recruited
Mississippi Gov. Haley Barbour (R) has reached into the state's US Congressional delegation to replace the now-retired Trent Lott (R-MS) in the US Senate. He has named Roger Wicker (R-MS), pictured, to the seat, which will be subject to a vote from citizens of the state at some point this year. Barbour has indicated that he'd like to hold a special election to finish the four years left on Lott's term on 11/4/08. Democrats, however, have challenged that in court, saying the election needs to be held within 90 days of Barbour's announcement, placing it sometime in the spring. Democrats also have a high profile candidate lined up to challenge Wicker, and achievement in a state where high profile Democrats are few and far between. Former Gov. Ronnie Musgrove (D-MS) has agreed to make a run for it. Other Democrats may be considering a run, and they won't necessarily have to challenge Wicker. The state's other member of the Senate, Thad Cochran (R-MS) is naturally up for re-election this year.
RBR observation: Lott was a somewhat surprising close ally of Byron Dorgan (D-ND) in his continuing campaign against media ownership consolidation. Although a number of Republicans have crossed the aisle to side with Dorgan on one specific or another, Lott was one of the most conservative to do so. Unless Musgrove can capture the seat, it figures to diminish Dorgan's across-aisle posse by one.
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Internet Business Report TM |
Internet radio industry and audience measurement
Ando Media President/COO Robert Maccini has written an article for us that takes a look at issues surrounding AFTRA-induced ad substitution; how Internet radio is poised to overtake radio in ad revenue, and also poised to become completely mobile to the general consumer. Certainly, PCs are about to start showing up in vehicles, allowing streaming audio, e-mail, traffic info, etc. Ford's SYNC technology is the precursor to seeing mobile internet in the dashboard, as each car will have its own IP address that will scan for WiFi, WiMax and connect to a cellular account when needed. Radio shouldn't be quite as alarmed as satellite radio, however, as folks will choose to spend any disposable income on subscriptions for car internet vs. car satellite service in a heartbeat-the streaming audio would be free with the package! And remember, someone listening to a radio station a thousand miles away would be credited as listening via systems like Ando Media. Read Maccini's full article in Monday's RBR/TVBR Intel Brief-delivered to your InBox.
| For now, here are some excerpts |
MySpace launches "MySpace Celebrity"
MySpace announced the launch of MySpace Celebrity (celebrity.myspace.com), a content channel focused on entertainment culture and related news, blogs, videos, and events. The new hub will be the online destination for celebs to communicate directly with fans and for the MySpace community to interact with their favorite stars. The announcement unveils more than 300 official celeb MySpace profiles housed within the new channel including actors, musicians, athletes, comedians and socialites. "MySpace Celebrity is Hollywood's new home page. Celebrities have been using MySpace since the site's launch and it's a natural extension for us to now offer them an aggregated channel where they can be in control of their own image," said MySpace President and Co-Founder Tom Anderson. "We want MySpace users to connect with celebrities in the same way that they do with musicians."
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Ratings & Research |
WXYT, WOMC celebrate in Detroit
Sports/Talk "97.1 The Ticket" WXYT-AM & FM Detroit reports that it improved its position in the market according to the recently released Arbitron Fall Book. Covering 9/20-12/21, the combined station's share of the audience of Men 25-54 was a 5.8, more than 120% better than its direct competitor and good enough for 2nd place in the market. The Ticket launched on the FM dial on October 1, 2007. The combined stations also rank as the #1 most listened to among Men 25-54 during PM drive (3:00-7:00PM), and are No. 2 in middays. Ratings for sister WOMC in Adult 25-54 went up to 3.7 this Fall versus a 3.1 in 2006, marking an almost 20% improvement.
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Transactions |
16M KCXM-FM Kansas City MO-KS (Lee's Summit MO) from Union First Broadcasting LLC (Chad Boeger) to Educational Media Foundation (Richard Jenkins, Michael Novak). 5800K escrow, balance in cash at closing. LMA 12/1/07. [File date 12/18/07.]
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Stock Talk |
Stocks rise on buyout rumor
The Wall Street Journal reported that Bank of America was close to a deal to acquire beleaguered mortgage giant Countrywide. That, and hints from Fed chief Ben Bernanke about rate cuts, boosted stock prices in general. The Dow Industrials rose 118 points, or 0.9%, to 12,853.
Most radio stocks were higher. However, some larger percentage losses by a few pure-play radio companies caused the RBR Radio Index to decline slightly. The drop of 0.273, or 0.3%, to 80.572 sent the index to another all time low. Beasley fell into penny stock territory, a few cents below five bucks, falling 4.8% for the day. Down even more were Regent, 7.4%, Salem, 5.8%, and Citadel, 5.3%.
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Radio Stocks |
Here's how stocks fared on Thursday
Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
Arbitron*
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ARB
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40.35
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+0.35
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Google
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GOOG
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646.73
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-6.47
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Beasley*
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BBGI
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4.81
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-0.24
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Hearst-Argyle
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HTV
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19.95
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+0.04
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CBS CI. B |
CBS |
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24.59
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+0.59
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Journal Comm.
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JRN
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7.94
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+0.06
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CBS CI. A |
CBSa |
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24.66
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+0.66
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Lincoln Natl.
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LNC
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55.55
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+0.75
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Citadel* |
CDL |
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1.60 |
-0.09 |
Radio One, Cl. A
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ROIA
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1.89
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+0.12
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Clear Channel*
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CCU
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35.00
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+0.58
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Radio One, Cl. D*
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ROIAK
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1.89
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+0.10
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Cox Radio*
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CXR
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11.35
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+0.25
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Regent*
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RGCI
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1.38
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-0.11
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Cumulus*
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CMLS
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5.86
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-0.04
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Saga Commun.*
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SGA
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6.02
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+0.12
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Debut Bcg.
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DBTB
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0.99
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+0.19
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Salem Comm.*
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SALM
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4.36
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-0.27
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Disney
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DIS
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30.67
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+0.51
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Sirius Sat. Radio
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SIRI
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2.89
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+0.04
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Emmis*
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EMMS
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2.45
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-0.02
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Spanish Bcg.*
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SBSA
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1.58
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+0.04
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Entercom*
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ETM
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11.48
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+0.48
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Westwood One*
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WON
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1.53
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+0.01
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Entravision
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EVC
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7.29
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+0.02
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XM Sat. Radio
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XMSR
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10.70
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-0.07
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Fisher
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FSCI
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36.49
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+0.64
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-
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-
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-
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-
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-
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*Component of the RBR Radio Index
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Bounceback
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We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Ad Business Report
Nurses unveil radio campaign
Against Schwarzenegger plan a new statewide campaign featuring the voice of Sen. Barack Obama...
Media Markets & Money
AFA picks up another stick
DIY project headed for its ample broadcast portfolio...
Washington Business Report
Wicker promoted
Opponent recruited to replace Lott was somewhat surprising close ally of Byron Dorgan...
Internet Business Report
Internet radio industry
And audience measurement takes a look at issues surrounding AFTRA-induced ad substitution...
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Stations for Sale
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Market your Stations For Sale
in our daily epapers.
Contact
Jim Carnegie
[email protected]
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Radio Media Moves
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Katz to WFUV
Noncommercial public radio station WFUV-FM New York announced the appointment of Julie Katz as its Marketing Director, effective immediately. Prior to joining WFUV, Katz spent two years running her own marketing firm, The Bridges Group, and over a year heading JAKZ Films, her video and documentary production company.
Whitbeck to Jones
Jones Media Group and its subsidiary, Jones Radio Networks announced the addition of Jan Whitbeck to their marketing team. She comes to Jones from Clear Channel's KHOW/KKZN Denver where she served as Promotions Director for the past six years. JMG Marketing is headquartered in Denver and creates and designs the marketing materials and advertising used by Jones Radio Networks, Jones MediaAmerica, Jones TM and Jones Banana Networks.
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More News Headlines
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CBS would Rather not
But it's a swing and a miss to dismiss. Former CBS news anchor Dan Rather wants 20M in compensation and 50M in punitive damages from his former network and parent Viacom, related to events following broadcast of his story on President George W. Bush's National Guard service back in the 1970s. A New York judge said there are grounds for the suit to proceed. The dismissal sought by CBS may still be in the cards, however. Both sides were told to continue with the discovery process and prepare for a court conference 1/23/08. Rather said he was happy that the case was moving forward; CBS said it was happy that they haven't been lost the dismissal motion yet.
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International
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Russian government proposes tobacco ad ban
Russia's Cabinet on Thursday called for a total ban on tobacco advertising in the country, where smoking is one of the worst public health problems, The AP reported. The Cabinet approved a draft law which, if accepted by the parliament, would allow Russia to ratify the World Health Organization Framework Convention on Tobacco Control. All signatories to that pact are obliged to ban all tobacco advertising and tobacco company sponsorships of events within five years of signing. Russia's main public health agency, Rospotrebnadzor, said last year that more than 60% of Russian men and 30% of its women are smokers. There were no immediate indications of when the proposed law would be sent to the parliament nor how soon the ban might take effect. The Cabinet's press office declined to comment on reports by the RIA-Novosti, Interfax and ITAR-Tass news agencies that the draft law had been approved.
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RBR Radar 2008
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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Emmis meets radio expectations - and that ain't good
"I think this is probably the bottom," Emmis Communications CEO Jeff Smulyan told analysts after calling this the worst point in the history of the radio industry.
RBR observation: Emmis is no longer typical of the entire radio industry, due to its heavy dependence on the big three markets, which have been suffering greatly. Nevertheless, don't expect to see other radio companies report rosy results when the quarterly report cycle begins in earnest in a few weeks, since Emmis is out of sync with calendar year reporting. As bad as fiscal Q3 was, at least Emmis didn't miss the admittedly low expectations of analysts, while some other radio companies are believed to be in danger of missing their Q4 targets. CFO Walsh also assured analysts that Emmis that the company is confident that it will remain in compliance with its loan covenants, even after those leverage covenants tighten at the end of fiscal Q1. But if conditions deteriorate further, he said the company is aware of ways to remedy any potential covenant violations.
01/10/08 RBR #6
Goldman Sachs
predicts 2008 recession
Wall Street powerhouse Goldman Sachs told clients that it expects the US economy to drop into recession this year. Its prediction is that unemployment will rise to 6.5% and that the fed will cut rates by an additional 1.75 percentage points to try to spur growth. Goldman Sachs Sr. Economist Ed McKelvey expects, though, that the recession, which may have already arrived, will be relative short. "The recession is likely to last two to three quarters and should be relatively mild by historical standards,..
01/10/08 RBR #6
Globes cancellation costing big bucks; what about Academy Awards?
With cancellation of the Golden Globe Awards on 1/13 because of the WGA strike and plans to picket, the loss will reportedly cost NBC between 10 and 15 million in ad revenue, even with the show's replacement with alternative coverage announcing the winners (the show was expected to bring in 25 million for the net). Last year's Oscars ceremony pulled in 40 million viewers, with NBC charging an estimated 1.7 million for a 30 second ad. We wanted to know how much it may cost ABC if the 80th Annual Academy Awards, scheduled for 2/24, gets scrapped as well. A separate agreement, a la Worldwide Pants and UA, is most likely being negotiated, but no guarantees. It depends on how many units they have to sell, multiplied by the average cost per unit. One buyer said that cost per unit is probably well over 1 million this year. It's likely the second most expensive show to buy after the Superbowl. The American Idol finale may have surpassed it as numero dos.
01/10/08 TVBR #6
Radio stocks could fall
15-30% this year
That's the warning to investors from analyst Lee Westerfield at BMO Capital Markets. After seeing the RAB report that November radio ad revenues were down 7% (down 6% including NTR), Westerfield has lowered his Q4 revenue and EBITDA estimates for Emmis, Clear Channel and CBS Radio. And he isn't stopping there - also cutting his expectations for 2008 and 2009. He is projecting that radio ad sales will drop 2% in 2008. He also doesn't see any more bids to take out public radio companies and go private in the current lending environment. Furthermore, he notes that Emmis and Regent are both in danger of breaching senior debt covenants. Each can sell assets to remedy that, but Westerfield warns that such sales would be at "fire sale" levels. With all those negatives, he sees a danger that radio stocks, which already fell! significantly in 2007, could drop another 15-30% in 2008.
RBR observation: Just look at Citadel if you want to see what happens when a selling frenzy feeds on itself. The stock was down 72.5% last year - and has fallen even more this month. A potential US recession and continued bad reports on radio ad sales could send radio stocks tumbling even more than they have already. Is there any good news on the horizon to counter this trend?
01/09/08 RBR #5
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RBR Classifieds
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Hard finding that key person
to fill the important position at your organization? RBR Classifieds, Results with Service. Contact April McLynn at [email protected]
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