RBR's Daily Morning Epaper

Volume 22, Issue 80, Jim Carnegie, Editor & Publisher

Friday Morning April 22nd, 2005

Radio News®

A vulture's-eye view of Coxquehanna
If RBR speculation is correct and Cox Radio successfully goes after Pfaltzgraff/Susquehanna's communications assets, it will add a good bit of beachfront property to the CXR portfolio. But it would not be a seamless acquisition - - there is overlap in three markets, and in at least one of them, the overlap is significant. New territory would include Cincinnati (3 FMs), Dallas (3 AMs, 3 FMS), Indianapolis (3 FMs), Kansas City (1 AM, 3 FMs) and York PA (1 AM, 2 FMs). Susquehanna also has a few more stations in small markets here and there. The problem markets include Atlanta. There may be a problem fusing Susquehanna's pair of FMs with a cluster that already includes a big AM, four FMs, an ABC-affiliated TV station and the market's top newspaper. Look for WNNX-FM and WWWQ-FM to go into the spin cycle if Cox/Susquehanna try to combine their media laundry lists. There's a different kind of problem in San Francisco. Susquehanna has a pair of AMs and three FMs, one situated in embedded San Jose. Cox is not in the radio city, but it does have a strong Fox-affiliated television station based in Oakland and a low-rated indy based in San Jose. There are lots of independent media voices in San Francisco, though, and CBS/Infinity, ABC, Clear Channel and Univision have all set a precedent with up-and-running radio/TV combinations in the far-flung DMA. The third place is Houston - - Susquehanna brings one FM, Cox has four already. There are a lot of stations in Houston. This should sail through the Media Bureau with no problem.

RBR observation: We doubt they'll have to toss the San Francisco or the Houston radio stations with the bouquet in the event of a Susquehanna/Cox wedding. So, in the final analysis, we'd guess that only the two Atlanta FMs will be subject to a forced sale.

D&T to networks: "Change or Die"
Deloitte & Touche's Technology, Media & Telecommunications group says that the clock is ticking on the battered business model long used by the big television networks. It said that "...the model of a few dominant network channels - - funded by advertising - - has long been disappearing and may soon be gone for good." D&T has put out a report called "Television Networks in the 21st Century: Critical Mass in a Fragmenting World," which warns about the imminent demise of traditional mass media but also points to new opportunities for those already in the game. The report predicts the nets will: "Offer content and programming across a variety of media channels and formats; re-package and market content - - not just as products but also services; and significantly extend the content's lifespan, by offering more digital content that can be quickly and easily packaged, and sold or rented across a wide range of media." It is also expecting big things from on-demand content, interactive content and event tie-ins. TMT groups Tony Kern concluded, "These new products and services will enhance the television networks' relationships with consumers, while at the same time providing a reliable stream of subscription revenue and repeat business."

RBR observation: Hold the phone, Chicken Little reporting, we just learned something new that network television as we know it is doomed. Well, not totally but the process of operating them will have to improve as well as the content with presentation because now TV operators it is your turn in the churn of clutter beat up. Radio has seen a few years of getting their butts kicked on clutter. The upfront of last year is gone and it is a 52 week programming game where content will be king. We can't wait for the fall schedule to be finalized and see how many Fat Losers there are and winners that should have stayed on the tube get cut because of lack of commitment which is the biggest problem the networks have - lack of longer term programming commitment. Go ahead, make our day and say - show me.

PTC slams broadcast decency efforts
Tough words from Parents Television Council's Brent Bozell: "At the National Association of Broadcasters convention this week, TV executives said that they've tried to 'take a stab' at self-regulation. But once again, they're telling the public one thing when under fire, and then turning around and laughing at the public when they return to their studios - - the utterly meaningless TV ratings system proves it." PTC recently released a report which charges that network programming ratings are highly inaccurate. In particular, after studying 638 shows totally 528 hours of run time, PTC found many of them were missing D, S, L or V descriptors (D = suggestive dialogue, S = sexual behavior, L = foul language and V = violence), which makes program blockage by a television receiver's V-chip impossible. "Broadcasters are responsible for rating their own shows, yet they are financially motivated to under-rate their programs so that they don't scare advertisers away. The descriptors are the key to the V-chip's effectiveness. When you have inaccurate content descriptors on one show, and no content descriptors on another, this invalidates the TV Ratings system. The broadcasters promised corporate responsibility with the Ratings system, and delivered a joke. TV executives are disingenuous with American families. This year's convention floats on a river of hypocrisy."

Looking ahead at Arbitron
Nobody seems to want to go out on a limb and say that the business conditions for radio are on the mend. But Arbitron President/CEO Steve Morris was willing to join the crowd that admits that there are signs that sluggishness plaguing the industry may finally be breaking up. This is of particular importance to Arbitron. When radio business is slow, operators go into cost containment mode, which tends to mean bare-bones, no-frills data purchases from Arbitron. As for a possible joint venture with Nielsen, Morris said, "We are getting pretty close, actually. We're talking about weeks and months as opposed to years." Arbitron is also still working on getting full participation from media companies for its PPM testing efforts. As for Arbitron's contemplated marketing research unit Project Apollo, Morris said the time frame is weeks rather than months - - "We're going to have to bring this to a head fast." There would be a six month lead time going into a pilot program to allow for PPM manufacture and panel building. The company is also looking at opening the door to the possibility of buying something near and dear to it - - its own stock, a procedure now impossible due to a financial covenant.

Hannity labeled a criminal
for border crossing
ABC Radio Networks'/Fox News star Sean Hannity recent visit to the civilian volunteer border-patrolling Minuteman Project included the a demonstration of how easy it is to cross the border illegally by climbing over a barbed-wire fence and then climbing back into the US. Well State Rep. Kyrsten Sinema (D-Phoenix) issued a press release 4/20 saying that the "well-paid commentator...was videotaped by ACLU observers in his stunt and that the border patrol was contacted but declined to arrest or cite Hannity. His is the very same crime that Minutemen have traveled across the country to Arizona to stop. He committed the same crime that all individuals who enter the country illegally commit."

RBR observation: We have to commend Hannity for his recent "diving in" to derisive news issues. His much-heralded support for Terri Schiavo and her parents is just another recent example. Listeners and viewers appreciate a host who doesn't just talk about the issues, but gets involved and stands behind his or her views. Glenn Beck is another example in this vein.

News Corp made us do it
After a year of denial and "so what?" statements, now the Glover Park web site openly admits and even promotes how it was approached by Fox parent News Corp, and how it initiated a campaign of dirty tricks against Nielsen. The emails and telephone calls were targeted at Nielsen executives shut down their corporate switchboard. Even has Sen. Burns (R-WY) trying to regulate a ratings services that sells nothing to a consumer. Our TVBR observation then still stands now (04/08/05 TVBR# 70)- 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 and still is. The website says it all - an extraordinary admission and something you have to see to believe so read for yourself then email it to Sen. Burns.

Conference Calls Q1 2005

Arbitron gains in Q1
Radio ratings firm Arbitron banked revenues of 79.2M in Q1 2005, a 3.4% increase over the same period in 2004. It did even better in the profit margin, taking net income from 18.1M in Q1 2004 to 19.8M this time around, an increase of 9.6%. Looking ahead, the company is expecting a 5.5%-7.5% revenue gain in Q2, and is offering guidance of 5%-7% gains for the full year. "We are starting the year on track despite a continued challenging economic environment for our largest customer segments - - radio and advertising agencies," said Arbitron President/CEO Steve Morris.

Adbiz©

Newspapers could lose 4 billion to the net
The ongoing erosion of the classified ads business may ultimately cost newspapers about 9% of its total ad revenues by 2007, execs from consulting firm McKinsey & Co. told attendees of the Newspaper Association of America's annual conference this week. The consultants warned that newspapers could lose 4 billion classified revenue by 2007, or around 20% of newspapers' 2004 classifieds revenue and about 9% of the 46.6 billion in total newspaper ad revenue if trends that afflict help-wanted classifieds spread to automotive and real-estate classifieds. Online is capturing all the growth. Why? The proliferation of online sites like monster.com and realestate.com have taken plenty of eyes away from the traditional draw of the local paper. Meanwhile, according to a study commissioned by the Carnegie Corp., the new generation of tech-savvy 18-34 year olds are abandoning traditional newspapers in droves. The survey of 18-to-34-year-old finds just 19% read a newspaper daily, 17% read it once a month or less. 12% said they "never" read a paper to get their news. However, 44% of the youngers visited an online news portal every day, and 37% watch local TV news daily. Only 14% of respondents called the newspaper their "most important" source of news. Local TV newscasts were called the most important source for news by 31% of the young adults, while another 25% cited the Internet.

Fox to offer dynamic customized
TV ads via Visible World
Adding to the big names like Chrysler Group that are embracing Visible World's ability to target by message (4/13 TVBR #73), Fox announced it will now offer advertisers the ability to instantly and dynamically change and customize TV ads, via its own deal with the company. Visible World's technology allows a TV ad to creatively morph into different versions. A Visible World spot is planned and trafficked as a single commercial but can dynamically generate unique versions at the time of delivery. These versions, which can number in the hundreds or more, are triggered by a wide variety of factors including audience demos, program content, time of day, or even dynamic variables, such as pricing changes, inventory levels, interest rates or seasonality. Advertisers maintain total control over when and how elements change. Visible World's technology simply makes it happen automatically and immediately based on the advertiser's business rules- enhancing the freshness and relevancy of the advertising.

Media Markets & MoneyTM

Cable giants reel in Adelphia
Two big cable companies, Time Warner and Comcast, have put forth the winning offer for troubled competitor Adelphia amounting to 17.6B. 12.7B will be in cash, with the rest coming in the form of stock in entity to be Time Warner Cable Inc., which will become publicly traded at closing. Comcast will give its 21% stake in T/W back to T/W and will fork over 1.5B in cash. T/W will be adding 3.5M subs, taking it to a nationwide total of 14.4M, while Comcast gets 1.8M, growing to 23.3M, maintaining its status as the largest US cable company. T/W is #2. A bid of 17.1B from Cablevision Systems Corp. came up short. The transaction still needs regulatory and court approval.

Simmons makes a move on Mexia
Broker John Pierce tells us that Simmons Media is ready to plunk down 390K for KRQX-AM in Mexia TX, a town located to the east of Waco, where the Utah-based buyer already has an FM and a couple of AMs in its portfolio. The seller is MJ Communications.

Washington Beat

Auction No. 62 for FMs in the works
173 CPs are going on the block this fall. According to law firm Womble Carlyle Sandridge & Rice, 143 of the CPs are newbies, and 30 are leftovers from last fall's Auction No. 37. Comments on the auction are due 4/29/05. WCS&R expects most of the rules and procedures will be the same this time around. Although there are sticks scattered throughout the country, the great preponderance is once again west of the Mississippi River. There are 27 in Wyoming alone. The FCC has tipped off which ones it feels will be the hottest properties by assigning a 200K minimum bid to them. Included on this top shelf are a Class A on 95.5 mHz at Indian Springs CA; a Class A on 98.5 mHz at Satellite Beach FL; and a Class C on 105.5 mHz at Vale OR. Weighing in on the next shelf at 150K are a Class A on 106.3 mHz at Jenner CA; a Class A on 106.9 mHz at Nanakuli HI; a Class A on 99.7 mHz at Westwood KY; a Class C on 101.5 mHz at Drummond MY; a Class C1 on 92.7 mHz at Ocracoke NC; a Class C1 on 94.5 mHz at Enderlin ND; and a Class A on 100.1 mHz at Brandon SD.

Transactions

2.25M WPBS-AM Atlanta (Conyers GA) from Christ in You the Hope of Glory Church Inc. (Franklin Walden Sr.) to Pacific Star Broadcasting Inc. (Charles Kim). 112.5K escrow, balance in cash at closing. [File date 3/24/05.]

75K WWZP-FM CP Saginaw-Bay City-Midland (Freeland MI) from American Family Association (Donald E. Wildmon) to Educational Media Foundation (Richard Jenkins). Cash. CP is for Class A on 90.9 mHz with 240w @ 213'. [File date 3/23/05.]

Stock Talk

What a difference a day makes
Almost all broadcast stocks rebounded, a day after almost all fell. The fundamentals of the broadcasting business do not seem to be the issue at all; rather, the stocks are rising and sinking with the economy as a whole as the herd reacts to various macroeconomic occurrences, like disquieting inflation reports and surprisingly positive earnings reports. Only Entravision failed to join the parade, sacrificing a nickel and penny of value per share.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		42.37	+1.33	Jeff-Pilot	JP		47.80	+0.34
Beasley	BBGI		15.53	+0.20	Journal Comm.	JRN		16.47	+0.23
Citadel	CDL		13.30	+0.10	Radio One, Cl. A	ROIA		13.65	+0.17
Clear Channel	CCU		32.86	+0.51	Radio One, Cl. D	ROIAK		13.66	+0.16
Cox Radio	CXR		16.04	+0.24	Regent	RGCI		5.95	+0.34
Cumulus	CMLS		13.73	+0.14	Saga Commun.	SGA		15.15	+0.39
Disney	DIS		27.66	+1.04	Salem Comm.	SALM		21.01	+0.61
Emmis	EMMS		16.73	+0.19	Sirius Sat. Radio	SIRI		5.14	+0.04
Entercom	ETM		32.69	+0.69	Spanish Bcg.	SBSA		8.97	+0.34
Entravision	EVC		7.84	-0.06	Univision	UVN		26.20	+0.21
Fisher	FSCI		49.97	+0.36	Viacom, Cl. A	VIA		35.78	+1.24
Gaylord	GET		40.17	+1.28	Viacom, Cl. B	VIAb		35.64	+1.31
Hearst-Argyle	HTV		25.12	+0.12	Westwood One	WON		19.70	+0.33
Interep	IREP		0.45	unch	XM Sat. Radio	XMSR		27.51	+0.69
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

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Bounceback

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Readers commented on our story questioning a double standard in CC Radio's "Responsible Broadcasting Initiative" re: Rush Limbaugh
(4/21 RBR #79).

Limbaugh & BJ's...
This just reinforces that Limbaugh and Clear Channel are indeed a mouthpiece for George Bush and the Republican party. How convenient that Clear Channel has a separate set of rules for Limbaugh than they had for those they have already kicked to the curb.

Dave Aamodt, Yakima, WA

Rush Limbaugh and BJ
Of course we're not going to see any significant protest of Rush's "slip of the tongue." That's because these groups that constantly whine to the FCC are conservative, and they're not going to go after one of their own. Conservatives are great at telling other people how to think and act, until they get caught in their own hypocrisy. With conservatives in control of the government, there's no way that Clear Channel, or any other corporation, is going to silence one of the conservative icons, no matter what Rush says. Let's face the fact that enforcement of our laws is largely a matter of the government using any legal excuse to punish its critics. Hence Martha Stewart - a democratic contributor - goes to jail for lying, while Rush - who clearly illegally abused drugs - gets to hide behind "privacy." As long as the Republicans are in power, you'll never see stations fined by the FCC for something a conservative commentator says.

A Clear Channel employee who requested anonymity

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More News Headlines

The Snow is falling
in Spring
FOX News Radio's Tony Snow has returned full-time to the airwaves to host The Tony Snow Show beginning this Monday, April 25th. Snow took a brief hiatus for cancer treatments. We all are glad to see 'ya or hear 'ya back, Tony.

Jack shacks up in Minneapolis, too
Infinity Minneapolis launched 104.1 JACK-FM, yesterday on WXPT-FM. Like its now-numerous clones across the nation, the new format features a playlist of more than 1,200 songs from the past four decades chosen by the station's programming staff.

Radio & Television
Business Report
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Upfront looms on
the horizon

Advertising space in May is
Sold Out. Reserve your Marketing space for the June issue...
'05 Clock is Ticking -
Heading for Closure
Reserve your Ad Marketing
Space today Advertising space
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June Barnes [email protected]
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RBR Radar 2005

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

So where is CC Radio's "Zero Tolerance" policy on Limbaugh?
We all heard it in front of the Senate Commerce Committee, as CC Radio CEO John Hogan stated that any talent on his 1,200 stations that uttered another indecency will be terminated or pulled from the air permanently. All part of the company's "Responsible Broadcasting Initiative." Howard Stern was pulled, Bubba The Love Sponge was fired at 98 Rock in Tampa, along with "The Regula! r Guys" (Larry Wachs and Eric Von Haessler) on WKLS-FM Atlanta. In fact, CC Radio made talent sign pledges to the effect they understand they'll be fired if they utter an indecent phrase or perform an indecent act on-air. We gave it a week Rush Limbaugh uttered the words "blow job" a few times on his 4/12 show . And you guessed it-not a word from Clear Channel-no suspension, no pulling from stations, no nothing. Guess there's a double standard emanating from San Antonio. The rules apply when they're convenient, but not when they could do some real harm to the bottom line. 04/21/05 RBR #79

Fritts looks into his crystal ball
Expecting multicast to be part of a broader DTV bill that will come out of Congress in the next six months. He also expects Congress to pass new broadcast indecency legislation, regardless of the guidelines developed by the NAB task force on responsible programming.
04/21/05 RBR #79

Susquehanna Media
officially on the Block
Pfaltzgraff Co. Chairman Louis J.Appell, Jr. made it official - The For Sale sign is posted. Being private and family owned played a part in the Appell's decision. RBR/TVBR suspected and analyzed the sell-off is being driven by the estate settlement needs of the founding family. The company has retained UBS Investment Bank to manage the sale of 33 radio stations, cable television systems in six states, an Internet service provider and an e-business provider. RBR observation: Guess what - we were correct in our analysis of why and will stick with our original observation of Public stock, radio group, cable MSO - - can you name one company that fits the bill? Yep, that makes Cox Enterprises the most likely buyer. 04/21/05 RBR #79

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