Welcome to RBR's Daily Epaper
Volume 22, Issue 75, Jim Carnegie, Editor & Publisher
Friday Morning April 15th, 2005

Radio News®

Looking ahead at Emmis
One thing Jeff Smulyan would like to do at Emmis Communications is continue the practices which earned the company a berth on the FORTUNE list of America's Best Companies to Work For. He said companies which make that list - - which has rarely delved into the ranks of broadcasting - - tend to outperform their competitors. He said that has been the case for Emmis during the past year. Looking ahead, Smulyan expects the radio side will outpace the TV side. "I get nervous because we've been down this road for the last few years so none of us wants to jump up and down and say we're through the worst of it on the radio side," he admitted, "but clearly radio is doing very well." He used the phrase "death by a thousand cuts," but noted that it is overcoming numerous setbacks large and small. The TV side will have the age old problem of overcoming the loss of political revenue in an off-election year. Emmis is expecting to drop from 6M in political ad revenue in 2004 to only 500K this time around. He said the TV division is paying close attention to the battle between cable and broadcast primarily being waged by Perry Sook. We cannot continue to be the only people in American TV that do not get paid for our product," he said. Emmis is taking a go-slow approach to HD radio - - it has four digital stations up and running, with a 17 others in a two-year plan geared toward June 2007. TV digital conversion is complete with the exception of a handful of translators. Going ahead, the company will be open to any opportunities that present themselves, but will focus on building rates and reducing debt.

RBR observation: Jeff, Emmis staff and with no disrespect - just watching what Perry Sook does is not fighting the fight with him. Don't just talk about it stand tall with Nexstar, Sook and do as they did - pull the programming content, your most valuable resource and asset is your local content which the cable MSO's want because they can't produce local. Plus the MSO's also want the HDTV and not pay you a dime. If you haven't spent time pow-wowing with Sook, do so. Don't talk - do it.

FCC: No anonymous VNRs
The FCC has joined the GAO in demanding that the people or entities behind video news releases (VNRs) must be clearly identified. "Whenever broadcast stations and cable operators air VNRs, licensees and operators generally must clearly disclose to members of their audiences the nature, source and sponsorship of the material that they are viewing. We will take appropriate enforcement action against entities that do not comply with these rules." If any kind of consideration is provided to get the piece broadcast, identification is required. More to the point, if involves political or controversial content, identification is required regardless of whether or not consideration is being offered. The Commission intends to write a report on the topic, and is seeking comment on the current ways in which broadcast and cable operators are using VNRs as a preliminary data-gathering exercise.

Senate set to raise the bar on VNRs
A quartet of Democrats on the Senate Commerce Committee tried to offer an amendment to an unrelated bill concerning identification requirements for government-produced VNRs. Instead, Committee Chair Ted Stevens (R-AK) said he would allow hearings and mark-up for a standalone bill on the subject as early as next week. The measure, put forth by John Kerry (D-MA), Frank Lautenberg (D-NJ), Byron Dorgan (D-ND) and Barbara Boxer (D-CA), would require continuous source identification for every VNR produced and paid for on the taxpayer's dime. Kerry said, "In the greatest democracy in the world, the government shouldn't be writing and paying for the news. It runs counter to everything we believe in. It's unfortunate we even have to introduce legislation to stop any administration from doing this. In a time of record-budget deficits, American taxpayers have a right to know not only that they're watching fake newscasts, but they paid for them...I am very grateful to Chairman Stevens for giving us the opportunity to address this abuse of the public trust and waste of taxpayer dollars." The FCC review (see story above) is coming due to a letter from the senators on the topic. Kerry said that in response, FCC Commissioner Jonathan Adelstein noted that "...these issues are for the Administration and Congress to resolve. The Commission's role is limited to ensuring that broadcast stations and others identify sponsors when required to do so."


Study: More radio listeners than TV viewers
stay tuned during spot breaks
Half (49%) of Americans say they never change radio stations when commercials come on while listening at home. Only 6% say they never change TV channels when commercials come on while watching at home. These and other findings will be revealed when Bill Rose, Arbitron SVP/U.S. Media Services Marketing, and Joe Lenski, EVP/Edison Media Research present new data 5/4 from a new study, "Spot Load 2005: Managing Commercial Inventories for Your Advertisers and Your Listeners." The study focuses on what listeners think about, and how they react to, the number and duration of commercials that they hear on radio. In particular, the study examines how those perceptions vary by format, demographic, and listening location. It is designed to give radio stations insight that can help them manage spot loads to the maximum advantage of their listeners and their advertisers. Rose and Lenski will discuss: Whether listeners perceive spot loads to be increasing or decreasing; how spot loads affect radio listening; where and when do listeners tune out radio commercials; the relative importance of quality versus quantity of commercials and the impact of different marketing strategies related to commercials. Other new findings from the study include: --Listeners prefer commercial arrangement that gets them back to content faster. For example, 57% prefer three commercial breaks of four spots as opposed to 34% who prefer two commercial breaks of six spots. --Nearly one-quarter of all listeners and over one-third of persons age 12-24 are aware of stations with fewer commercial breaks and shorter commercial breaks.

Tribune gets time, but no waiver, in Hartford
The FCC is allowing Tribune to continue operating a pair of television stations in the Hartford-New Haven DMA alongside the Hartford Courant, the market's big newspaper, which is also in the Tribune fold. However, a request for a permanent waiver was denied. The stations involved are Channel 61 Fox WTIC-TV and Channel 20 WB WTXX-TV. Tribune's waiver to run all three entities expired back in 2002. Since then it has neither been able to get a permanent waiver, nor find a suitable buyer under which it would be willing to break up the combination. The matter has been under court review since 2003. The FCC is giving Tribune more time to sell WTXX due to fears that it may go under if separated from WTIC. "Tribune is pleased that the FCC has granted its request for a temporary waiver of the newspaper/broadcast cross-ownership rule as it relates to its television station WTXX-TV and The Hartford Courant until at least April 1, 2007," said the company in a statement. "We are also pleased that the commission recognized Tribune's service to the public through its ownership of WTXX. The ruling reads in part, 'Tribune has delivered on every public interest benefit it identified in its initial application to acquire WTXX...Given Tribune's record of enhanced service to the public, and its stated plans to continue and expand such service in the future, we expect that Tribune will continue to invest in the station and expand programming and services available to viewers.'"

Looking ahead at NYT
Political is gone, but other categories are picking up, which allowed the broadcast wing of New York Times Co. to tread water in the comparison of Q1 2005 against the same period in 2004. Taking up the airtime slack were the automotive, packaged goods, furniture and insurance categories. "Looking forward," she continued, "and based on the conversations we have had with our advertisers, we expect advertising revenue growth will improve during the remainder of the year. At the same time, we are continuing to concentrate on developing new revenue streams and maximizing the reach and value of our unique branded content, while remaining disciplined on controlling expenses," said President/CEO Janet L. Robinson. The company announced that its NYC radio stations have been moved out of the broadcast heading and into the News Media Group. Classical WQXR-FM will be operating in tandem with The New York Times Media Group. Meanwhile, WQEW-AM continues to be brokered to ABC.


Conference Calls Q1 2005
Emmis picks up 5% in its Q4
"The Emmis team delivered another strong performance this year," said Chairman/CEO Jeff Smulyan, announcing a 5% gain in Q4 over the same period in 2004. The company sees that trend continuing, particularly on the radio side. Emmis marches to its own drummer, with its fiscal Q4 ending 2/28/05. During that period, it reported net revenue of 137.9 million, compared to 131.4 million for the same quarter of the prior year, an increase of 5%. On a pro forma basis, net revenue for the quarter was 137.9 million, compared to 133.9 million for the same quarter of the prior year, an increase of 3%. The company used proceeds from a station swap with Bonneville to pay down senior debt, bring the company's year-end leverage from 6.7% to 5.9%. Radio was up 9% for the quarter (4% pro forma), TV just on the black side of flat, and publishing was up 6%. The company was up 9% for the full fiscal year, to 618.5M net revenue. CFO Walter Berger said radio, and by extension, full company results would have been better but for a 1M hit to the checking account due to the song parody missteps at WQHT-FM in New York.

NYT says sometimes a flat is good
The bottom line Q1 2005 numbers at New York Times Co. looked impressive at first glance. But they were pumped up by a one-time killing in the real estate market - - the sale of the company's Manhattan headquarters. With that factored in, profits were up 76 cents a share, compared to 38 cents a share a year earlier. Take it out, and profits were up only 30 cents. The consensus target was said to be 31 cents. Sagging print advertising performance was blamed for that part of the showing. The broadcast division performed admirably, however. "Despite difficult comparisons to last yuear, when political advertising was strong, our Broadcast Media Group was able to achieve first-quarter revenues similar to those in 2004."


Adbiz©

DVR ad skipping losses to hit 27 billion over five years
AdAge reports ad skipping and on demand viewing could cost the TV industry 27 billion in lost ad revenue over the next five years, according to new research released by Accenture. The consultancy reports that 70% of ads are already being skipped by viewers with digital video recorders; that trend will only get worse as DVR penetration grows from the current 8% of homes with DVRs to a projected 40% by 2009. The report's release comes just a week after top broadcast network executives told the annual Cable & Telecommunications Association conference that DVRs pose a serious threat to their ad base. Previously, network executives publicly played down the potential impact of the ad-skipping technology. Accenture's research suggests that the impact of DVRs, VOD and interactive TV will have a much greater effect on the linear TV business than anyone previously thought. The report says such changes in viewing behavior will exert downward pressure on CPMs. Accenture's research predicts TV ad revenue growth of only 3% by 2009, compared to other industry analysts predicting 6% to 10% growth by 2009. "A difference of potentially $27 billion in TV ad growth," said the report, which puts TV ad revenue in 2004 at about $60 billion. The major media companies, however, might argue they are already exploring ways of working with advertisers in the on-demand universe. NBC Universal's Sci Fi Channel is one of many channels experimenting with video on demand in partnership with its advertisers. The broadcast networks have also worked hard to sell advertisers on product integration, weaving them into the fabric of TV shows.

Miller debuting new ad today
Miller Brewing debuted a TV spot today that touts pairing Miller Lite with food. The ad, via Young & Rubicam, shows beer drinkers being forced to eat their big foods with miniature, generically labeled light beers. "When it comes to food, you need a light beer that measures up," says a narrator. The campaign, which will run through the summer, will include spots on ABC's "Desperate Housewives" and NBC's "The Apprentice," as well as ESPN sports programming, according to The Wall Street Journal.


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
EMF buying program still moving forward
Educational Media Foundation is getting another foothold in the east with a deal for a stick in the unrated wilds of Massachusetts, far from the company's California digs. Friends of Radio Maria is selling the CP for WKMY-FM for 15K cash. It's licensed to be born a Class A on 91.1 mHz, with 155 W @ 207". The city of license, Winchendon, is just about on the midpoint of the state's northern border with New Hampshire.

Beasley upping guidance
Large- to mid-market radio operator Beasley Broadcast Group is expecting to outperform its earlier estimates for Q1 2005 by a considerable margin, upping its earlier prediction from 3% to 8-10% over Q1 2004. Chairman/CEO George G. Beasley said, "Revenue growth during the first quarter was consistently strong in each month of the period and benefited from continuing strength at our Philadelphia, Las Vegas and Ft. Myers station clusters. Station operating expenses will reflect approximately 1.4 million of non-recurring employee separation costs, as well as higher programming and promotional expenses. Excluding the non-recurring employee separation cost, core station operating expenses are forecast to increase approximately 8-10% over 2004 first quarter levels." The group will hold a conference call 5/2/05 to discuss results.


Washington Beat
Commerce Committee reorganizes
Ted Stevens (R-AK) has officially announced the Senate Commerce Committee's new subcommittee structure. The biggest change is the lack of a Communications subcommittee, an omission alluded to earlier this year by former committee chair John McCain (R-AZ). McCain would have been a logical candidate to chair such a subcommittee, but was unable to due to conflict with his assignments in the Armed Forces Committee. However, the old ComSubcom was almost a reiteration of the full committee roster, so its absence is unlikely to change much. However, we note that the old Science, Technology and Space Subcommittee has gotten a little more focused - - it's now just concerned with science and space. A new subcommittee, called Technology, Innovation and Competitiveness, could conceivably act as a portal for some communications issues prior to consideration before the full committee. It's chaired by John Ensign (R-NV), with John Kerry (D-MA) serving as ranking member.


Transactions
1.75M WSRF-AM Miami-Ft. Lauderdale-Hollywood (Ft. Lauderdale FL) from Urban Radio of Florida LLC, a subsidiary of Inner City Broadcasting Corporation (Pierre M. Sutton) to Niche Radio Inc. (Emmanuel Cherubin). 175K escrow, balance in cash at closing. Duopoly with WAVS-AM Davie FL. [File date 3/17/05.]

700K KBYR-AM Anchorage AK from Cobb Communications Inc./TCT Communications Inc. (Thomas C. Tierney) to KMBQ Corporation (John N. Klapperich). Cash. Buyer's Cedar Crest Estates Inc. is putting a certain parcel of land into escrow as part of seller's compensation. Combo with KMBQ-FM Wasilla. JSA 10/29/03. [File date 3/17/05.]


Stock Talk
Stocks take a dive
Stock prices plunged on Thursday as investors worried that the economy isn't all that robust, although the Fed is raising rates. (Déjà vu anyone?) Sales projections by Apple computer also failed to impress. The Dow Industrials nose-dives 125 points, or 1.2%, to a 2005 low of 10,279.

Radio stocks also fell sharply. The Radio Index dropped 3.781, or 1.7%, to a year-to-date low of 213.786. Entravision fell 3.8%, Beasley 3.7% and Salem 3.1%. Emmis, which reported results for its latest quarter, was down 1.6%.


Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

43.18

-0.30

Jeff-Pilot

JP

48.45

-0.58

Beasley

BBGI

16.25

-0.62

Journal Comm.

JRN

16.91

-0.19

Citadel CDL
13.62 -0.14

Radio One, Cl. A

ROIA

13.70

-0.28

Clear Channel

CCU

33.81

-0.34

Radio One, Cl. D

ROIAK

13.74

-0.24

Cox Radio

CXR

16.78

-0.27

Regent

RGCI

5.60

-0.11

Cumulus

CMLS

13.67

-0.16

Saga Commun.

SGA

15.50

+0.05

Disney

DIS

27.63

-0.07

Salem Comm.

SALM

19.75

-0.63

Emmis

EMMS

18.10

-0.30

Sirius Sat. Radio

SIRI

5.30

+0.01

Entercom

ETM

33.90

-0.49

Spanish Bcg.

SBSA

9.13

-0.23

Entravision

EVC

8.47

-0.33

Univision

UVN

27.29

-0.39

Fisher

FSCI

50.91

-0.66

Viacom, Cl. A

VIA

34.83

+0.10

Gaylord

GET

40.63

-0.74

Viacom, Cl. B

VIAb

34.68

+0.19

Hearst-Argyle

HTV

25.37

-0.14

Westwood One

WON

20.00

-0.20

Interep

IREP

0.65

+0.12

XM Sat. Radio

XMSR

28.34

-1.13

International Bcg.

IBCS

0.01

unch

-

-

-

-

-



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This is your column, so send your comments to [email protected]

This reader thinks talk is cheap if we're not discussing the right questions.

Can we please stop analogizing our present situation with events in the dark past of radio history? This ongoing dialogue about the concept of running less commercials is moving some well-placed deck chairs, nothing more. We'd better start facing up to the reality that our best customers, the folks who make our business run, are being effectively lured away by compelling, competing media. | More... |

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Greater Media, Detroit


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

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www.marconi.cc

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Upped & Tapped

Mark DeCloux named SM with Eastman Radio in San Francisco
"Mark has the perfect blend of passionate commitment to client radio stations combined with unrelenting service for our agency customers," said Tucker Flood, Eastman Radio President. "His experience in the Bay Area delivers huge dividends every day." DeCloux began his career as an AE with CC Radio Sales in New York in 1997. In 2000, he transferred to the San Francisco office and held the position of VP/Sales. DeCloux joined Allied Radio in 2002 as VP/ Director of Sales. In 2003, he joined McGavren Guild Radio, a division of Interep as VP/Director of Sales, his most recent position.


More News Headlines





RBR Radar 2005
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Making the case for a government thumb on Nielsen
As Nielsen Media Research prepares to roll out its Local People Meters (LPM) to two more markets - - Philadelphia and Washington, DC - - the Don't Count Us Out Coalition, which claims that LPMs undercount minority viewers, is ready with another round of anti-LPM advertising. Although Nielsen has indicated that it is receptive to instituting most of the recommendations from a Task Force chaired by former Rep. Cardiss Collins, coalition members say that not enough - - that the federal government must get into oversight of Nielsen to ensure fair and accurate audience estimates.
RBR observation: We stand by our view that getting the government involved would make matters worse, not better. Don't Count Us Out certainly has Sen. Conrad Burns (R-MT) on its side and he's planning to introduce legislation to push the government into regulating broadcast ratings. And News Corporation is certainly pushing the idea, since it is known to be providing most of the funding for the coalition. But is there any groundswell of support from broadcasters to have the government regulate their ratings currency? We asked the coalition folks whether they could name a single broadcast company other than News Corp. which is backing the idea. They couldn't name one, although they noted that several other broadcasters had voiced public concerns about LPM. True, but they're working within the industry to fix problems with LPM and deal with other issues about how Nielsen measures TV viewing. We stand by our view that getting the government involved would make matters worse, not better. 04/14/05 RBR #74

Telecom overhaul in the works
Sen. Ted Stevens (R-AK), head of the Senate Commerce Committee, said some time back that it was time to take a fresh look at the Telecommunications Act, which bears the almost quaint suffix of 1996, a reference to the year of its enactment. His sentiments have been echoed by his counterpart in the House, Rep. Joe Barton (R-TX). Telecom 1996 covered an extremely wide range of issues.
RBR observation: To say that the new rules ushered in by Telecom 1996 were dramatic would be a gross understatement. We were watching at the time, and can say that nobody - - and we mean nobody - - was predicting that local radio clusters of up to eight stations was coming, and that the national radio station ownership ceiling was going bye-bye in its entirety. Broadcast television has been waiting for its turn for deregulation ever since - - that was the major thrust of the stalled FCC ownership action of 6/2/03. Perhaps legislators will exercise an element of caution this time around - - we've heard time and time again, from people of all ideological stripes, that the dramatic and unprecedented growth of Clear Channel was an unintended consequence of the 1996 Act. Will they be more on the lookout for new unintended consequences? All we can say is that it's time to strap in, folks. 04/14/05 RBR #74


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