RBR's Daily Morning Epaper

Volume 22, Issue 70, Jim Carnegie, Editor & Publisher

Friday Morning April 8th, 2005

Radio News®

Sen. Burns won't take no for an answer
The Federal Trade Commission (FTC) may have found that it has no jurisdiction to jump into the dispute over Nielsen's Local People Meters (LPM) (4/7/05 RBR #69), but Sen. Conrad Burns (R-MT) isn't satisfied. He's written to FTC Chairman Deborah Platt Majoras, suggesting that she overlooked reasons why the FTC ought to get involved. Burns also said he may introduce legislation to force the government to get into regulation of broadcast ratings. Burns held hearings on LPM last summer (7/16/04 RBR #138) and said that since then he's been in contact with Nielsen, so he's hopeful the company will "make good on its public commitments to remove the differential fault rates." However, he warned, "Should the current implementation of LPMs not be found in compliance with the MRC (Media Ratings Council) on differential fault-rates and other accuracy issues, stronger regulation of Nielsen as a monopoly provider of an essential public service would clearly be justified." According to Sen. Burns, the FTC was too narrow in its assessment of LPMs, focusing only on whether any deceptive or unfair practice was involved. "I believe the FTC can and does oversee monopolies in other sectors where the public interest requires it," he wrote. | Read the entire letter. |

RBR observation: Of all of the people on Capitol Hill, Conrad Burns, a former broadcaster, should be fighting to keep the government out of regulating broadcast ratings. Instead, he's leading the charge to inflict an unnecessary and onerous burden on Nielsen, Arbitron and their broadcast clients. If you know him personally - - and many of our readers do - - you would do well to drop Sen. Burns a note and tell him just how wrong he is.

Another subpoena from Spitzer
After issuing subpoenas to record labels, then radio stations, it looks like New York Attorney General Eliot Spitzer is back to the labels. Warner Music Group revealed in an SEC filing that it has received another subpoena - - it's third - - in Spitzer's payola probe. Warner, EMI, Universal and Sony BMG all got subpoenas last fall (10/25/04 RBR #208), then by early this year they'd gone out to radio stations in New York as well (2/21/05 RBR #36). Although the anti-payola statute is a federal law, a spokeswoman for Spitzer's office told RBR that the AG is trying to build a case that payments and gifts from independent record promoters to radio stations or their employees violate New York state statutes on deceptive business practices.

Getting a sense of the Sensenbrenner
Watchdog groups at the forefront of the war against broadcast indecency have weighed in on the idea of criminalizing acts of indecency as put forth by Rep. Jim Sensenbrenner (R-WI). Bottom line: They want something to be done, but are none too sure of that particular approach. Brent Bozell at PTC wants to make better use of a modified version of the existing legal framework, emphasizing better enforcement, increased penalties and license actions. "We at the Parents Television Council believe that the existing broadcast decency law is sufficient to address the issue, so long as the law is consistently enforced. But this option must include stiffer financial penalties and potential license revocation for repeat offenders. We hope that the FCC under Chairman Martin's leadership will recognize that increasing fines to broadcasters and revoking affiliate licenses is the best way to ensure that broadcasters abide by community standards on decency. The Senate needs to act quickly to pass the Broadcast Decency Enforcement Act." Randy Sharp of the American Family Association says the problem may be too much activity on the Hill, noting moves to increase fines, to deem sexual enhancement ads as indecent and to impose a la carte cable menu provision. "There are going to be so many [bills] out there that everyone's pushing their own agenda in Washington, so nothing gets passed," he said. Bob Peters of Morality in Media agrees with Bozell. "At this moment in out nation's history, I don't think [criminalizing broadcast indecency] is the answer. I think the answer if for the [FCC] to do its job in terms of administrative enforcement of the broadcast indecency law."

Admin using Talkers to push SS agenda
About 20 administration officials, up to and including top presidential adviser Karl Rove and Treasury Secretary John Snow met with about 30 radio Talkmeisters to discuss President Bush's proposals to overhaul Social Security. The event came in the midst of a two-month campaign called "60 Stops in 60 Days" during which the president, the VP, cabinet members and other officials are hitting the road. President Bush himself has been participating in "town hall" type events which mirror many of his campaign stops last year. Democrats, led by Rep. Henry Waxman (D-CA), are asking the Government Accountability Office to find out just how much the 60 Days campaign is costing the public. Waxman admits that the administration is free to push its policies, but wonders "whether the Bush Administration has crossed the line from education to propaganda," according to the Washington Post. The effort by Waxman mirrors other inquiries into the administration's use of VNRs and of payments to journalists/pundits to push administration policies.

RBR observation: We wonder a little about the strategy of using what we presume were mostly, if not all, conservative-leaning radio Talkers. We haven't seen a list of invitees, but it's certainly clear that nobody from Air America was invited. Air America's listeners are the ones who need convincing. Limiting the campaign to conservatives is preaching to the choir - - what's the point?

Investment needs to follow advertising
to Hispanic market
"Companies have tended to focus on marketing and advertising to the US Hispanic community. Despite the continued rapid growth of the US Hispanic market and the companies that serve this market, less than 2% of the private equity capital and fewer than a dozen funds are focused on this market." These are the words of Talbert Navia of law firm Chadbourne & Park, which is co-sponsoring a conference to look at investment opportunities in Hispanic businesses. Samuel A. Ramirez & Co., Zemi Communications and AMLA Consulting are other sponsors of the 4/12/05 event, to be held in New York. Among the featured speakers will be Jeffrey Hinson, CFO for Hispanic multimedia giant Univision. Jay C. Garcia of Ramirez & C. lists Hispanic media as an especially key sector of a generally-fast growing demographic. He said, "The Hispanic demographic is a large, loyal and growing customer base that provides a competitive edge for these companies, especially in banking, healthcare and media."

Rather, Mapes report wins Peabody Award
CBS News won a Peabody Award for a "60 Minutes II" report on prisoner abuse at Iraq's Abu Ghraib prison that aired last April, anchored by Dan Rather and produced by Mary Mapes. That high point for the news magazine show last year was just months before a September broadcast, by the same Rather-Mapes team, that was discredited for using apparently fake documents about President Bush's National Guard service. That led to Mapes' firing, the forced resignations of three CBS News executives and hastened Rather's exit from the network's primary anchor chair. This year's Peabody Awards included the first such honors ever for Univision (for a cross-platform public service campaign for health involving radio, TV and online), CNBC, Trio and Link TV. In radio, WNYC New York won two Peabodys. The awards will be presented May 16th in New York. | Heres the List |

Adbiz©

Havas, WPP to form new buying agency: 2MV
Havas announced yesterday it will form a new buying agency, dubbed "2MV," with WPP Group to increase the pair's purchasing power. The new unit will be focused in Europe and would be controlled 51% by Havas' MPG unit, with WPP's Group M holding a 49% stake. Reuters reported, however, a source in the industry said the deal was only a "one-off agreement" designed to help the two companies win the advertising budget of French automaker PSA Peugeot Citroen. Yves Del Frate, the global account director at Havas media buying division MPG, will head the new unit.

Mobile phones to "replace TV
as prime ad medium"
Financial Times reports mobile telephones and other wireless communication devices will soon become the most important medium for advertisers to reach technology-savvy consumers, according to a forecast by Andrew Robertson, BBDO CEO. The problem for advertisers is that technological developments such as the spread of digital video recorders are giving consumers the ability to avoid TV commercials. Robertson said he believed the way forward for advertisers to reach consumers would be to use wireless devices such as mobile phones, laptop computers and the Blackberry e-mail devices favored by traveling corporate execs on the go. | More... |

FDA orders Bextra withdrawn
Food and Drug Administration has asked Pfizer to withdraw its arthritis medication Bextra from the market, saying the "overall risk versus benefit profile for the drug is unfavorable." The move was the latest series of crackdowns by the FDA that pertain to the COX-2 class of anti-inflammatory drugs. Merck voluntarily withdrew Vioxx from the market in September, and after the FDA asked Pfizer to halt consumer marketing on Celebrex in December. Celebrex remains on the market, however. In a statement, Pfizer said it disagreed with the FDA's evaluation but agreed to suspend sales and marketing of Bextra in the U.S. pending further discussions with the FDA. Early this morning, Pfizer also agreed to a request from the European Union to stop selling Bextra there. According to TNS Media Intelligence, measured media for Bextra in 2004 was 4.8 million.

Account Action:
A run-down of this weeks' reviews and moves
* After a review, Bally Total Fitness has selected Starcom Worldwide as its general market planning and buying AOR. Initiative, the incumbent, did not participate.
* Payless ShoeSource has named Martin/Williams as its creative agency. The account is valued at 60 million. The agency bested Cramer-Krasselt Chicago and Saatchi & Saatchi NY.
* Viva Partnership has been awarded BJ's Wholesale Club's Hispanic ad account.
* Carat Americas has been awarded the 26 million media account from Rent-A-Center.
* Macy's has placed its 3.5 million Hispanic account in review. Competing for the account are Conill, Latinvox, CreativeOnDemanD, and La Agencia de Orci & Asociados.

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, Julie Roehm 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

Fleshing out Salem's Omaha deal
According to Dick Chapin of Chapin Enterprises, Salem Communications has moved quickly in the Omaha market to build its own ideal of what a station cluster should be. Unlike mainstreamers like Clear Channel or Cumulus, it basically has no desire to max out its clusters. All it wants is an FM for its Contemporary Christian "Fish" network, a home for its bread-and-butter Religion-Teaching format which relies heavily on time brokerage to local ministers, and finally, a home for its Conservative Talk format. Its 900K deal with Journal for KHLP fills out the structure perfectly. KGBI-FM, which Salem pried away from Grace University last fall for 10M (10/27/04 RBR #210), carries "Fish." KCRO-AM, which came from Eternal Broadcasting for 3.15M (1/13/05 RBR #35) carries the teaching, and KHLP will carry the Talkers. The KHLP deal takes Salem's total investment in Omaha to just over 14M. Why did Journal sell? We're not sure, but it gained some flexibility. It was a grandfathered cluster under the new market definitions, right at the eight-station limit for markets with 45 or more stations. The problem is that the new Arbitron definition deprives Omaha of overlapping Lincoln NE stations. The BIA study which accompanied the transaction contract credits the Omaha market with only 30 stations, just enough to support a seven-station cluster. The grandfathering will still come into play, however, because Journal has five FMs, one over the limit.

Correction: Details on CCU's sale of WWKZ-FM
RBR confesses it got confused reading the contract for the sale of WWKZ-FM Aberdeen MS in the Tupelo market from Clear Channel to Urban Radio Licenses, then compounded the problem by inserting a typo into a 4/6/05 Transaction Digest item (calls were listed as WWLZ). In the item, we said CCU was selling WWKZ-FM and WACR-FM, the latter of which is licensed to Columbus MS and is moving to Okolona MS. In fact, CCU is buying WACR from T&W Communications, and selling its intellectual property only to Urban.

Washington Beat

In KY, CATV 1, DBS 0
An ongoing battle between the cable industry and its chief competitor, direct broadcast satellite, concerns the levying of state taxes. Many if not most states are cash-hungry, and when one of these services gets fingered for taxation, it wants to (a) preferably head off the proposal completely; or (b) make sure it also applies to the other service. Kentucky has decided to tax both, hitting each service with a 3% excise tax on video a service along with a 2.4% tax on gross income. A sweetener is included, however - - the elimination of local franchise fees, according to an article in Multichannel News. The Kentucky Cable Telecommunications Association has been working for this result for five years. "Every time a customer chooses DBS over cable, it means lost state and local tax revenue," said KCTA's Patsy Judd. "Yet the same tax system puts cable companies at a disadvantage to attract customers. What's more, cable television companies are, by and large, local companies with local employees, and they are making sizable investments in local communities."

Transactions

35M KFRC-AM San Francisco from UPN Stations Group Inc., a subsidiary of Viacom Inc. (Sumner Redstone) to Family Stations Inc. (Harold Camping). Combo with KEAR-FM. [File date 3/10/05.]

35M WEMG-AM Philadelphia (Camden NJ); WKDL-AM, WBPS-FM & WBZS-FM Washington DC (Alexandria VA, Warrenton VA, Prince Frederick MD); WLCC-AM & WMGG-AM Tampa-St. Petersburg-Clearwater FL (Brandon, Largo FL); WNUE-FM Orlando (Titusville FL); and WAMG-AM & WLLH-AM Boston (Dedham, Lowell MA). 17.5% of Mega Communications from George Lindemann (18% to 0.5%) to Adam Lindemann (82% to 98.5%). Promissory note. Sale of Boston stations to a third party is pending. [File date 3/10/05.]

[Note: this corrects item of 4/6/05 RBR #68]
1.1M WWKZ-FM Tupelo (Aberdeen 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. Buyer also receives intellectual property of WACR-FM (Columbus MS lic, Okolona MS CP), which Clear Channel is buying from T&W Communications. Includes non-compete. [File date 3/9/05.]

Stock Talk

Oil down, stocks up
That's been the pattern for some time, and yesterday was no exception. Oil prices declined, so the Dow Industrials rose 60 points, or 0.6%, to 10,546.

Radio stocks were slightly higher. The Radio Index rose 0.517, or 0.2%, to 222.643. Regent gained 3.7% and Univision rose 2% as the biggest movers.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		43.39	+0.09	Jeff-Pilot	JP		49.02	+0.11
Beasley	BBGI		17.71	-0.03	Journal Comm.	JRN		17.11	+0.27
Citadel	CDL		13.94	-0.09	Radio One, Cl. A	ROIA		14.54	-0.17
Clear Channel	CCU		34.73	+0.29	Radio One, Cl. D	ROIAK		14.47	-0.24
Cox Radio	CXR		17.28	-0.03	Regent	RGCI		5.86	+0.21
Cumulus	CMLS		14.11	-0.25	Saga Commun.	SGA		16.41	+0.19
Disney	DIS		28.70	+0.29	Salem Comm.	SALM		19.50	-0.24
Emmis	EMMS		18.93	+0.11	Sirius Sat. Radio	SIRI		5.47	+0.08
Entercom	ETM		35.38	+0.28	Spanish Bcg.	SBSA		10.16	+0.02
Entravision	EVC		8.87	+0.06	Univision	UVN		28.09	+0.56
Fisher	FSCI		51.80	+0.06	Viacom, Cl. A	VIA		35.54	+0.30
Gaylord	GET		42.24	+0.24	Viacom, Cl. B	VIAb		35.24	+0.13
Hearst-Argyle	HTV		25.56	+0.04	Westwood One	WON		20.65	+0.08
Interep	IREP		0.51	unch	XM Sat. Radio	XMSR		31.53	+1.30
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

__UNSUB__ to this email service.

Bounceback

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

Time for a little education. This reader provides a history lesson on how radio got from pricing :15s, :30s and :60s to selling "units."

Many radio stations dropped thirties because focus group research concluded that listeners could not tell the difference between a thirty and a sixty-second commercial. The same research also concluded that listeners would endure longer spot sets to hear longer music sweeps. The result was that most large groups, headed mainly by those coming up the ranks through sales, embraced the conclusion that commercials were "units." The outcome was longer "unit" spot sets, a seemingly fair trade for longer music sweeps. The result (during the robust economy), everything was good. So good in fact, stations suffering rating setbacks experienced revenue increases. But now, given the economic reality over the past three years, radio returns to maximizing inventory. My two 90 dollar thirties are worth more than your 140 dollar sixty - programming opinions change, but the math never does! The next step. Watch for radio programming to return a previous concept - shorter spot sets gives a station more energy. Watch for three 3 1/2 breaks to turn into four 2 1/2 minute breaks.

Carl Strandell
WPGA-FM Mix 100.9
Macon, GA

NAB Daytime Planner

The following brokers will be attending the NAB. Call or email to make your appointment in advance.

Todd Fowler/David Reeder
American Media Services-
Brokerage, LLC
843-972-2200/903-640-5857
Bellagio,
americanmediaservices.com

Cliff Gardiner, Clifton Gardiner & Company, 303-758-6900,
Bellagio,
[email protected]

Andy McClure/Dean LeGras,
The Exline Company, Bellagio,
Office 415-479-3484

Frank Boyle,
Frank Boyle & Co., LLC,
Venetian Hotel,
203-969-2020,
[email protected]

John L. Pierce, John Pierce & Company LLC,
Mirage Hotel,
859-647-0101, cell 859-512-3015, [email protected]

Jamie Rasnick, John Pierce & Company LLC,
Mirage Hotel,
859-647-0101, cell 513-252-1186, [email protected]

Dick Kozacko/George Kimble,
Kozacko Media Services,
Bellagio,
office 607-733-7138, cell 607-738-1219, [email protected]

Bob W. Mahlman/Bob O. Mahlman, The 2 Bobs, Mahlman Co.,
914-793-1577, Hilton
Broadcast Foundation Hole in One Golf Tournament Sponsor.

Chuck Lontine,
Marconi Media Ventures, Inc.,
303-382-1000, cell 720-341-4722, [email protected]
www.marconi.cc

Elliot Evers, Media Venture Partners, LLC, 415-391-4877,
[email protected]

Larry Patrick/Greg Guy,
Patrick Communications,
Bellagio, 410-740-0250, [email protected]

Arbitrends

More News Headlines

Arbitron Council focuses
on PPM, cell phones

Brad Pitt joins Bono in campaign to fight poverty, AIDS

Taricani receives early release

EWTN offering free Vatican coverage

"Bill Bennett's Morning in America" alters format clock

RBR Radar 2005

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

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. | 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. 04/07/05 RBR #69

There's a radio new analyst in town
Mark Wienkes is out with his first stock coverage since being tapped by Goldman Sachs to handle the radio sector. Eight terrestrial and two satellite radio stocks he's analyzed, he only finds two worth buying right now, Westwood One and Clear Channel. He's negative on Radio One and Sirius. "Radio is a traditional advertising revenue-driven industry and pricing power in radio is weak, so sector fundamentals are subpar, valuations are full, and catalysts are lacking," seeing terrestrial radio as mired in a single-digit growth mode and is looking for revenues to grow only 2% this year. If you've guessed that the new analyst is a big fan of satellite radio - - you're wrong. 04/07/05 RBR #69

Byron Allen sets his
sights on Paxson
Comedian/entertainer/producer/ entrepreneur Byron Allen is trying to raise money to buy out Paxson Communications and turn it into the first broadcast TV network aimed at the African-American audience. But while Allen has had preliminary talks with Paxson, it appears a lot of hurdles remain before any transaction gets to the contract stage - - let alone closing. TVBR observation: First of all, Allen is talking about needing about 2.2 billion to acquire the company - - paying off lenders and preferred stock holders for around two billion, with 200 million left for Bud Paxson and other shareholders. But according to the company's latest 10-K, just the debt and two preferred issues total 2,216,993 - - so the entire 2.2 billion would be used up before paying common equity holders a cent. Under the 1999 deal that brought NBC in as an investor, NBC would have to pay more than 170 million to Bud Paxson to exercise its right to buy his super-voting Class B shares and take control of the company. That's obviously not going to happen, but we doubt that Bud would settle for a payment of only 25 million or so if NBC is getting 471 million. 04/07/05 TVBR #69

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