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Welcome to RBR's Daily Epaper
Volume 24, Issue 80, Jim Carnegie, Editor & Publisher
Tuesday Morning April 24th, 2007

Radio News ®

Sharpton targeting
record labels

Fresh from getting Don Imus fired for using a slur against black women, Rev. Al Sharpton is renewing his effort to clean up rap and hip-hop lyrics. This time he is targeting corporate headquarters. Sharpton told the New York Post that he plans to buy a few shares of stock in Time Warner and Universal Music Group so he can attend shareholder meetings and complain about sexist lyrics. He told the newspaper that most stockholders have no idea they are investing in companies who sell songs calling women "bitches and hos." Presumably Sharpton will do some stock market research before calling his broker with an order. Time Warner no longer owns a record company, but he could certainly buy shares of Warner Music Group, which is now a standalone, public company. Its annual meeting was in February. It is not possible to buy shares of Universal Music Group, but Sharpton can buy shares of its parent company, Vivendi. Its annual meeting was earlier this month.

RBR observation: We noticed repeated criticism of Sharpton during the Imus controversy for taking offense at what Imus said while not objecting to similar terms in rap and hip-hop music. That is not true. Sharpton was for many years aligned with the late C. Delores Tucker in campaigning against violent and sexist lyrics. We wrote about Sharpton calling for radio stations to drop violent songs from their playlists two years ago (3/28/05 RBR #61). So it is not true that this is a new cause for Sharpton. What is true is that he so far has virtually nothing to show for his efforts. Will Imus pushing the issue to the front burner change that?

Dissident shareholder renews pressure on Emmis
Noting recent rumors that Emmis has been shopping WQCD-FM New York for 200 million bucks or more, dissident shareholder Frank Martin of Martin Capital Management is again putting the screws to CEO Jeff Smulyan to return value to shareholders. Martin not only likes the idea of selling WQCD, but says Smulyan should also consider selling KMVN-FM Los Angeles and the two FMs in Chicago, WKQX and WLUP. The latest letter from Martin, which has been filed with the SEC, includes some personal attacks on Smulyan's integrity, urging him to read a book by John Bogle, founder of the Vanguard mutual fund group (a copy enclosed as a "gift" with the letter sent to Smulyan) and then "stand up for what's true and right." No doubt Martin will continue to campaign for the sale of assets and other moves that he believes will increase the Emmis stock price. "I will continue to speak out against the injustices perpetrated against the majority shareholders by the Emmis CEO and the Board of Directors which, much to the satisfaction of the silenced majority, has recently begun to demonstrate some honest-to-goodness moxie," said Martin, who owns 2.7 million shares of Emmis.
| Read the letter |


Spanish association opposes XM/Sirius
The Independent Spanish Broadcasters Association has joined the greater broadcast community in voicing its opposition to the proposed merger of XM Satellite Radio and Sirius Satellite Radio. KBNO-AM's Zee Ferrufino said it isn't about Spanish language programming per se, it's about monopolies. Ferrufino, a member of the ISBA board, told the Denver Post, "Anything that's a monopoly will affect everybody. Not only Spanish broadcasters but any radio station." He said the XM and Sirius "...are crazy. I don't believe this is going to happen. Most people are against it."

Satellite radio stock targets lowered
With merger approval looking less likely and after reassessing their standalone values, Bank of America analyst Jonathan Jacoby has cut his price targets for both XM and Sirius. Both new targets are below where the stocks have been trading. "We have scrubbed our valuation models for both companies," Jacoby said in a detailed note to investors. The main change was reducing OEM receiver sales for XM. Jacoby also reduced his merger synergy savings estimate to 3.6 million a year from his previous five million, after determining that a merged company would have to pay more under its sports contracts to offer games to subscribers of both services. And will that merger even take place? "The current stock prices seem to suggest that the probability of regulatory approval of the merger is roughly 35-40% - but our FCC contacts believe that the percentage is trending lower. Assuming that our new fair value estimates for XMSR and SIRI with or without a merger are roughly correct, we estimate that the market implied probability of obtaining regulatory approval for the merger from the DOJ and FCC is between 25% and 40%," the analyst wrote. Jacoby's new target price for XM is 12.50 per share, down from his previous 17 bucks, and for Sirius it is 2.75, down from 3.50.


This column brought to you by...
In the case of newspaper The Philadelphia Inquirer, a column focusing on local business will actually be brought to you by Citizens Bank, itself a local business. The column, according to an article in the New York Times, will be called PhillyInc., and it'll occupy the first page of the paper's business section. The stories will come from Inquirer reporters and editors, but will contain the bank's logo and will be outlined in the green ink favored by the bank. Further, the bank will get display space on the bottom of the page and on its upper righthand corner. It's all part of a program of drastic change under new ownership to try to maintain the paper's profitability. The news media has traditionally tried to keep content and advertising separate, and according to NYT, this move is getting close scrutiny from others in the business.

RBR observation: The problem with any advertising-driven medium is keeping the newsroom free to write what consumers of news need to know, despite the fact that sometimes this means being critical of companies which also happen to be key advertisers. The potential problem is obvious: Let's say that Acme Sports buys a feature called "The Acme Sports Baseball Minute" on your radio station. Your station does a feature on Alvin Aardvark. Acme calls up and says, "Wait a minute - Aardvark uses Brand X. Why don't you do a feature on Billy Beanball - he's one of our endorsers." We understand that the Inquirer is looking for any way it can to remain a vital, ongoing concern. Consumers of news will not benefit at all if it tanks completely. And in our childhood, it seemed like full-show sponsorship concept was almost a norm for television. But those were entertainment shows. But maybe, with appropriate ground rules and cautions, the Inquirer experiment will work. Many newsers and sales execs across the media spectrum should watch with both skepticism and interest.

Trustee named for Tribune ESOP
GreatBanc Trust Company announced that it has been named Independent Trustee of the newly formed Tribune Company Employee Stock Ownership Plan (ESOP). The formation of the ESOP is an important element in Tribune's recently announced transaction to take the company private. "Acting as Independent Trustee during the transaction process, GreatBanc Trust's primary role was to assure that the transaction was fair to the employees participating in the Tribune ESOP. In our continuing role as Independent Trustee, our sole duty is to protect the interests of the ESOP participants and beneficiaries and to act in their best interests," said Marilyn Marchetti, Senior Vice President of GreatBanc Trust. In connection with the Tribune ESOP transaction, GreatBanc Trust retained Duff & Phelps, LLC as its independent financial advisor and KL Gates as its legal counsel. The newly created Tribune Company ESOP will be funded solely through company contributions. Those contributions will deliver shares of Tribune stock to eligible employees' accounts. The first allocation, for the year 2008, will be made in early 2009. The company initially anticipates an annual allocation of approximately 5%, based on employees' eligible compensation.


Wall Street Media Business Report TM
Analyst weighs in on Clear Channel vote
To take the 39 bucks per share buyout bid, or not? BMO Capital Markets analyst Lee Westerfield has been looking at the choice for Clear Channel shareholders and weighing the relative merits of voting yes or no. Westerfield notes that he has not entered the fray over the price negotiation, and is not going to jump in now. He is, however, taking Thomas H. Lee Partners and Bain Capital at their word that 39 bucks (up from 37.60) is their "best and final offer." So for any investor playing a game of brinksmanship to try and get the best buyout bid possible, Westerfield thinks the game is over and they should vote yes on May 8th. However, by valuing the assets of Clear Channel following its current round of divestitures, and projecting future EBITDA, the analyst comes up with a valuation target of 44 bucks in a late 2008/early 2009 timeframe. So that is the argument for long-term investors to hold onto their shares and vote no. Westerfield is not beating the table for either scenario. He maintains his "market perform" rating on the stock and warns of near-term risks to the downside if the buyout is rejected.


Ad Business Report TM

Bentley Commerce to buy Radio Forecast Network
Bentley Commerce announced that it has signed a letter of intent to acquire Radio Forecast Network (www.radioforecastnetwork.com) which provides weather reports to radio stations in exchange for ad inventory it sells nationwide. Radio Forecast Network currently earns over 600,000 per month in radio spot ad inventory on 216 stations in 37 states in addition to Puerto Rico and the Virgin Islands. It delivers over 40,000 "recorded-live" weather reports that air about 500,000 times each month. RFN's ManageWX software allows more than 80 announcers and meteorologists to provide stations with weather feeds specific to their coverage areas, using their call letters, a custom open and close that can include a sponsor, and a jingle, all at 100% barter. ManageWX software, allows the meteorologists and forecasters to see, in one screen shot, exactly how each affiliate station wants their weather presented, the sponsor, the length of the feed and the daypart. Once recorded, it's uploaded to RFN's website and available for download by the station.

Traffic.com and AP debut new ad network
Traffic.com announced a multi-year advertising agreement with the broadcast division of The Associated Press. The agreement provides Traffic.com with AP ten-second ad inventory for radio and TV stations across the U.S. Traffic.com is using this inventory to create an AP Advertising Network that enables advertisers to be featured adjacent to news and info programming. The addition of the AP radio station inventory extends Traffic.com radio advertisers' reach to 750 radio stations across the U.S. in 103 markets, covering 94% of the population.


Media Business Report TM
LIME launches ''Green'' ad network
LIME, a multiplatform green/healthy living lifestyle brand, launched the first-ever "green" ad network, providing advertisers with a one-stop-shopping opportunity to reach this burgeoning "green" market. The ad network, called LIME Ad Network, is comprised of a consortium of established bloggers and websites with a dedicated readership who are interested in wellness, eco-living and personal growth. "Today, the term 'green' reflects a wider and more encompassing area of lifestyle interest, including eco-home, healthy foods, wellness, mindful fitness and green technology and products," said C.J. Kettler, founder and CEO of LIME. "Increasingly, advertisers are developing brands and campaigns designed specifically to reach consumers who are interested in a healthier, greener, more balanced lifestyle. This audience has more than $230 billion in consumer spending power and until now there has been no aggregator of the green/healthy living sector. With the LIME Ad Network, we expect to amass the green audience from the grassroots and viral communities that are passionate about this emerging lifestyle." The LIME Ad Network will nearly double lime.com's current reach and will expand its footprint for advertisers interested in targeting this audience. The LIME Ad network brings together well established bloggers and websites with a strong following, such as Mongabay.com, EcoGeek.org, EcoSherpa.com TheBeautyBrains.blogspot.com, SavvyVegetarian.com and Eco-chick.com.


Media Markets & Money TM
Davidson strikes again
Peter Davidson's Hispanic radio group is getting a third station in the Charlotte NC market. It already owns WNOW-AM and WBZK-AM there and now has a deal in place for WAGI-FM, which serves the market from across the state line out of Gaffney SC. According to broker John Pierce of John Pierce & Company, the seller is Gaffney Broadcasting Inc. Davidson shed some light on his plans for the immediate future, saying his acquisition strategy will focus on properties in "...the southeast and Midwest with fulltime Hispanic broadcasting." The price for WAGI-FM was not immediately disclosed.


Washington Media Business Report TM
File under missing
Wilson Broadcasting's three-station Dothan AL cluster was the victim of an FCC triple play when it came to a public file inspection on 1/23/07. The FCC agent asked to see the three files for the stations, including WAGF AM & FM Dothan and WJJN-FM Columbia AL, and instead was presented with one file for the three stations. However, Wilson was not fined for this technical violation of the rules. When asked to produce the Issues/Programs lists, the owner of the station came up with a single file that contained only one document dating back to March 2003. The owner admitted that it hadn't been updated since then. The FCC assessed a 4K fine for on the Issues/Programs omission for each station, totally 12K. The station tried for a fine reduction, pleading that the owner was nervous and misunderstood the agent's request. Of course this would not suffice as an excuse for not having the information right there in the public file. The FCC said there was no reason for the owner not to have been able to get the information and had no reason to believe it existed. The fines stand.

RBR observation: Wilson also argued that other stations have been fined less for similar infractions, and it should only be fined once since it was being hit for the same thing three times. We'd counter that we've seen stations fined much more for similar infractions. The FCC didn't note it in the release on the fine, but it could very well have hit one station for 4K on the Issues/Program violation, and the other two for 10K apiece for having no file at all. That's 24K. It makes the actual fine look like a bargain.


Entertainment Media Business Report TM
CBS Radio sues KCAA for running "Best of Imus"
CBS Radio is suing KCAA-AM Riverside-San Bernardino for airing reruns of Don Imus' (4/16/07 RBR #74) since his firing for racist comments about the Rutgers University women's basketball team. The lawsuit filed last week in federal court in Riverside claims KCAA violated copyright protections. The suit seeks a temporary restraining order and 150,000 for each violation. A hearing is set for today. The AP reports CBS Radio said it asked the station to stop. The defendants "have made it clear ... that only a judicial decree will prevent them from persisting in their actions," CBS says in court filings. KCAA chairman Fred Lundgren reportedly wrote to CBS attorneys saying the station plans to continue airing the shows through 4/27 but would then destroy its Imus tapes.


Internet Media Business Report TM
IAB wants to audit ConScore,
Nielsen//NetRatings

The Interactive Advertising Bureau asked the two major Web-traffic-measurement companies, comScore and Nielsen//NetRatings, to submit to an outside audit to find out why the two companies report different audience sizes for the same websites. comScore has agreed. Nielsen//NetRatings had yet to respond, according to The Wall Street Journal. For example, U.S. visitors to NBC Universal's online women's network, iVillage, reached 15.5 million in March, according to comScore. Nielsen//NetRatings measured the audience at 12 million. IVillage says it had 26.5 million unique visitors in March. ComScore and Nielsen//NetRatings rely on audience panels, which the IAB calls archaic. IAB CEO Randall Rothenberg on Friday sent letters to ComScore and Nielsen/NetRatings asking them work with the Media Rating Council. Sheryl Draizen, senior vice president and general manager at IAB, told ComputerWorld the reason they took such an aggressive position is they have not been getting real commitment from either of the companies in terms of timing or a commitment of actually getting auditing. She noted that advertisers are looking for several online measurements, including unique visits, time spent on a page and page views, which makes it difficult to come up with a widely accepted standard. The problem is further complicated with the introduction of Asynchronous JavaScript and XML. Instead of making a round trip to the server every time a webpage needs to change information, it only receives the data that needs to be changed, thus eliminating a page refresh, she told ComputerWorld.

Sprig sprouts from Washington Post Co.
Latching onto the "green" movement, Washingtonpost.Newsweek Interactive (WPNI), a subsidiary of The Washington Post Company, today announced the launch of Sprig (sprig.com), a new online site aimed at "the sophisticated and stylish woman who also aims to integrate environmentally-friendly choices into her life." Sprig's original content is designed to enable readers who want the best for themselves and their families to easily make choices that are beautiful, stylish and eco-friendly. "There is a huge untapped market of consumers who want to become more eco- conscious and environmentally aware, but don't know how to fit it in without compromising their lives. That's one of the reasons why we recently launched a Hidden Valley Organic Ranch," said Sumona Pramanik, associate marketing manager of Hidden Valley Ranch, an advertiser on Sprig. "Going organic has hit the mainstream," she said. The site's extensive shopping-friendly database offers the latest products and services from the leading experts in green living. "Sprig helps users discover a world of products that are well-designed, accessible - and also eco-friendly," said Mark Whitaker, VP and editor-in-chief of new ventures at WPNI. Sprig is led by editor Jeanie Pyun, former editor of Organic Style, VP/GM Goli Sheikholeslami, former general manager of CondeNet; and Whitaker, former editor of Newsweek. Here is more about the new venture.
| Read More... |


HD RADIO 2007
Best Buy adds HD Radio
We got a notice that there was an incorrect model number on an earlier press release for best Buy and iBiquity Digital: "This morning we realized the HD-W10 model number for the JVC was in fact the incorrect model, which we are now proactively seeking to fix. Instead, it should read KD-HDR1. Here's the corrected version, abbreviated: Best Buy has joined forces with the HD Digital Radio Alliance and iBiquity Digital to now offer HD radios at all its 832 stores nationally. The HD Radio launch is supported by a marketing communications program that includes the latest phase of the Alliance's previously announced 250 million bucks radio campaign. Best Buy is the first national retailer to make HD Radio technology available to customers throughout its national chain. Customers will find a premium HD Radio experience in their cars with the JVC KD-HDR1 receiver and the Visteon Zoom.


Transactions
104,923 WPAL-FM Charleston SC (Ridgeville SC) from Charles W. Cherry, receiver for Gresham Communications Inc. to Caswell Capital Partners LLC (Judith Aidoo). Bankruptcy proceeding; price is buyer's judgment plus interest. [File date 4/9/07.]

100K KBEX-FM CP Bryan-College Station TX (Brenham TX) from Educational Media Foundation (Richard Jenkins) to KSBJ Educational Foundation (Carol Lewis, Clay Dewees et al). Cash. CP is for Class A on 89.7 MHz with 250 w @ 404'. Seller is acquiring this CP from American Family Association. [File date 4/12/07.]


Stock Talk
Dow 13K was not to be
Rising oil prices and profit taking kept the Dow Industrials from making it to the 13,000 mark. In fact, the Dow fell back 43 points, or 0.3%, to end the day at 12,919.

Radio stocks were also lower. The Radio Index fell 1.347, or 0.8%, to 162.809. Journal Communications fell 2.2% ahead of reporting earnings today. Entravision was also down 2.2%. Both satellite radio stocks fell as BofA analyst Jonathan Jacoby lowered his price targets significantly. Sirius fell 6% and XM 3.1%.


Radio Stocks

Here's how stocks fared on Monday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

49.45

+0.05

Hearst-Argyle

HTV

27.51

-0.07

Beasley

BBGI

9.09

+0.06

Journal Comm.

JRN

12.74

-0.28

CBS CI. B CBS

31.72

+0.01

Lincoln Natl.

LNC

69.54

-0.18

CBS CI. A CBSa

31.69

-0.04

Radio One, Cl. A

ROIA

7.31

-0.14

Citadel CDL
9.71 -0.10

Radio One, Cl. D

ROIAK

7.30

-0.16

Clear Channel

CCU

35.93

+0.18

Regent

RGCI

3.68

-0.05

Cox Radio

CXR

14.87

-0.28

Saga Commun.

SGA

7.67

-0.13

Cumulus

CMLS

9.89

-0.17

Salem Comm.

SALM

13.38

unch

Disney

DIS

35.08

-0.20

Sirius Sat. Radio

SIRI

2.80

-0.18

Emmis

EMMS

10.05

+0.03

Spanish Bcg.

SBSA

3.72

+0.02

Entercom

ETM

28.85

-0.43

SWMX

SMWX

0.70

unch

Entravision

EVC

9.96

-0.22

Westwood One

WON

6.65

-0.10

Fisher

FSCI

50.10

-0.48

XM Sat. Radio

XMSR

11.13

-0.36


Bounceback

Send Us Your OpinionsWe want to
hear from you.

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

More on Imus

Dear Editor:
It is obvious some of your readers have not listened to Imus or Rush Limbaugh for that matter. The only reason liberals despise Rush and want to re-instate the Fairness Doctrine is that Rush and the new media of bloggers have taken away the Democrats/ Mainstream media's monopoly. If you want hate and racism, visit Dailykos.com and Huffpost.com or watch Rosie embarrass herself daily. There are so many media choices today we do not need a Fairness Doctrine. The Imus situation is scary on several levels...

| Read the Full Response |

Fran Gennarelli
Rutgers Class of '82
New York


Below the Fold
Ad Business Report
Bentley Commerce
To buy Radio Forecast Network...

Media Business Report
LIME launches ''Green''
Ad network a multiplatform green healthy living lifestyle brand...

Washington Media Business Report
File under missing
Wilson Broadcasting's 3 station Dothan AL cluster was the victim of an FCC triple play...

Internet Media Business Report
IAB wants to audit
ConScore, Nielsen//NetRatings



Stations for Sale

CA Coastal Class A
Rated Market $1.5M
CO Rated Market C.P.
Class C1 $400K
Brett Miller - 805.543.3466
[email protected]

OR Coastal Class A FMs
Positive Cashflow $795K
ND Small Market C.P.
Class C1 $150K
Brett Miller - 805.543.3466
[email protected]


Market your Stations For Sale
in our daily epapers.

Contact
June Barnes
[email protected]

Radio Media Moves

Early riser in Las Vegas
Heidi Harris has returned to Beasley's KDWN-AM Las Vegas, where her radio career began in 1998, to host morning drive - "Driving you to work - or driving you crazy." Harris returns to KDWN after several years at CBS Radio's KXNT-AM Las Vegas.

Smith heads east
Matthew Smith has been named General Sales Manager of Beasley's recently acquired WJBR-FM Wilmington, DE. He had been GSM for the New Business Development Team at Beasley's Las Vegas cluster.




More News Headlines

A million an hour
for Limbaugh

No, that's not his salary. The Leukemia & Lymphoma Society announced that its annual Cure-a-thon last Friday on Premiere's "Rush Limbaugh Show" raised more than three million bucks. Since the event runs only for the three hours of the regularly scheduled Limbaugh show, that's over a million bucks an hour. Over 18 years, the Cure-a-thon has raised in excess of 19 million.

Imus prepares
for legal battle
BusinessWeek reports that Don Imus has hired major league litigator Martin Garbus as his attorney. Imus still had several years remaining on his 10 million bucks a year contract when his show was cancelled by CBS Radio. Litigation may also be possible with MSNBC, which also axed the TV simulcast of the radio show.




RBR Radar 2007
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

39 is the bid, what are the odds?
Just how much have Thomas H. Lee Partners and Bain Capital improved their odds of winning Clear Channel Communications with their increased bid of 39 bucks a share? Even if the vote had been held last Thursday at the original bid price of 37.60, it no doubt would have been endorsed by a majority of Clear Channel shareholders. But that is not enough.

RBR observation: Lee and Bain have protection written into their latest bid that will pay them 200 million if Clear Channel is sold to someone else within a year of the bid being voted down, but that is just CYA. If the 39 bucks bid is rejected, Clear Channel will then become a public company with activist, disgruntled, large shareholders putting the screws to management to sell more assets, cut costs, sell more assets and pay out more to its shareholders. Mark and Randall Mays will likely start buying Maalox or Tums by the case. (For RBR extensive analysis see RBR and also review Clear Channel moves TV group sale)
04/23/07 RBR #79

RBR Observation
No longer "the beer guy"
The former beer industry lobbyist had only been in his new role as President and CEO of the National Association of Broadcasters for a short time. Convention attendees were duly impressed with the enthusiasm and obvious intelligence of "the beer guy" and generally wished him well in the new job. After 1 year on the job we saw a very confident and aggressive David Rehr - exactly the kind of bulldog that the NAB Joint Board had sought to lead the association. We got a chance to see a master advocate (Rehr doesn't like the term lobbyist) at work. With so many major issues facing broadcasters in Washington, it should be reassuring for people in radio and TV to know that he is representing their interests. No longer "the beer guy," David Rehr is now a broadcaster. (for RBR's complete Observation view this issue)
04/23/07 RBR #79

CCU bidders say offer is final
Don't go saying "please, sir, may I have some more" to Bain Capital Partners and Thomas H. Lee Partners. They upped their offer for Clear Channel to 39 dollars a share, and that's as high as they're going to do. But it looks like two big stakeholders aren't going to budge from their opposition to the offer.

RBR observation: So you the bump and run is turning to the poker game of bluffing. No matter what is being thought out at CCU in Texas in control are the shareholders. The shoe is on the other foot as the shareholders are calling the shots as time has a way of catching up. There is more in this issue of RBR.
04/20/07 RBR #78

Pittman: Follow the consumer
Forget about radio and TV being on the way out In a speech to NAB2007 on where to invest venture capital, MTV founder and former AOL President Bob Pittman, now heading the Pilot Group investment fund, noted the "continuing dominance of TV and radio" in consumer media usage. The three venture capital fund partners in the panel that followed Pittman on the same stage did not fully endorse his upbeat view of radio and TV investments. (more from Pittman and NAB in RBR)
04/19/07 RBR #77

On a Clear day,
you can see more money
Thomas H. Lee Partners and Bain Capital Partners have adopted a new tactic in their battle to take media giant Clear Channel private. Apparently, the addition of non-monetary incentives to the deal has done little to erode shareholder opposition to the buy-out, so the bidders have elected to up the ante. The new offer is for 39 dollars a share, up from 37.60, taking the total value of the deal by about half a billion dollars to 19.5B.
04/19/07 RBR #77




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