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Volume 22, Issue 90, Jim Carnegie, Editor & Publisher

Friday Morning May 6th, 2005

Radio News®

Interep's future debated
in Radio One conference call
After Cumulus Media CEO Lew Dickey raised the issue early this week (5/4/05 RBR #88), Wall Street analysts are now asking other radio groups whether they are dissatisfied with national sales representation by Interep - - and what's going to happen to the company. As one of the few groups with its stations split between Katz and Interep - - a deliberate move - - Radio One has a unique perspective on the national rep battle for market share. CIBC analyst Jason Helfstein wanted to know whether Interep was underperforming Katz in Radio One's large markets as it has been in the middle and smaller markets where Cumulus operates. That question led to this interesting exchange between Alfred Liggins and Helfstein, joined at one point by Radio One COO Mary Catherine Sneed. In short, the Radio One executives said Katz was outperforming Interep, although the latter had shown some improvement in Q1. Liggins said a healthy Interep would benefit the radio industry and Interep's clients need to talk about the rep firm's future. But when asked about the possibility of a client buyout, he said that didn't appear to be feasible unless Infinity, Interep's largest client, wants to be involved. A question about Interep also came up during the Spanish Broadcasting System conference call and CEO Raul Alarcon said he had been pleased with Interep's efforts from the second half of 2004 and continuing today - - and he noted that SBS has several years remaining on its contract to be repped by Interep. "Rather than deal with all these issues in a public forum, I'm dealing with each client individually. I'm going to be talking with each one privately," said Interep CEO Ralph Guild when RBR asked for comment. "We fully expect to meet each client's budget expectations for the year and based on the pacings that we've seen so far for the year, those are reasonable goals."

RBR observation: We hear from sources inside Interep that pacings are actually up so far this year for most of the firm's clients, and that it's actually been gaining market share from Katz for the past six months, so there's frustration with the perception by Wall Street that it is underperforming. Company officials recently hailed their Q1 results as a big turnaround, so they see Interep as being on an upswing. Now, though, Guild has to deliver that upbeat message to The Street, mollify clients who aren't happy, and work on recapitalizing the company - - all the while fending off the hostile takeover attempt by its biggest bondholder. Should make for an interesting year.

National surge boosts
Regent's quarter
You'll hear no complaints about national representation at Regent Communications. The company reported Q1 revenues up 7.1% to 18.6 million, with COO Bill Stakelin telling analysts that a 20% gain in national revenues lead the way. Being in smaller markets, national sales account for only a small portion of Regent's total ad sales. Still, that half-million-bucks increase in national business accounted for nearly half of the quarter's 1.2 million revenue increase. But while Stakelin is happy with the job that the Katz firms (Katz and Christal) have been doing for his stations, he said he agreed with what several other group heads have said recently - - that both Katz and Interep need to focus greater efforts on generating new business.

Dealing with details of DTV
According to reports, House Energy & Commerce Committee Chairman Joe Barton (R -TX) and the Chair of the key Telecommunications and the Internet Subcommittee Fred Upton (R-MI) are set to begin dickering with their Democratic counterparts John Dingell (D-MI) and Ed Markey (D-MA) on bringing the transition to digital television to an end. Barton has been publicly pushing for a hard deadline, with the analog side of broadcast television's current analog/digital operation being turned off, probably by 1/1/07. However, numerous lawmakers are skittish about the prospects of millions of TV screens going blank in households not equipped to receive digital broadcasts or to downgrade them back to analog. Meanwhile, the Congressional Budget Office has reportedly weighed in behind the scenes with the opinion that the longer an auction for freed spectrum is delayed, the bigger the payday will be for the US Treasury. Apparently the good old supply and demand theory is in operation - - CBO wants to avoid a one time glut of available spectrum, which would tend to drive down prices.

One good backlash
deserves another
Brent Bozell is asking how much the big networks paid to certain watchdog organizations in order to get their backing for the TV Watch coalition which is trying to head off government regulation of broadcast program content (5/5/05 RBR #89). "This supposed 'coalition' needs to be taken - - and dismissed - - for what it is: a collection of random citizen and public policy groups that have simply been hired and paid for by the networks to do their dirty work," said Bozell. "Some of these organizations, like the American Conservative Union and Americans for Tax Reform have never given a moment's thought to the suffocating sewage coming from the entertainment industry. That in and of itself is shameful. But now, suddenly, they care? It's a laughable proposition to think that this hired gun coalition will have any impact whatsoever on the ongoing debate over decency and the public airwaves. The question needs to be asked, and I now ask it publicly: Given that these organizations have never before participated in the debate over television indecency - - why the sudden interest now? These organizations, and this so-called coalitionw, have an obligation to disclose the level of funding they're receiving, directly or indirectly, from the networks and the entertainment industry to do their dirty work."

Meredith, NAB opposing Durbin amendment
At least one television group - - Meredith Broadcasting Corp. - - is joining the NAB at the barricades as Congress makes another attempt to pick broadcasters' pockets in the form of reduced campaign ad costs (4/28/05 RBR #84), according to a report in Roll Call. The measure would force broadcasters to offer lowest unit rate to politicians for a full year prior to an election, and would make the ads non-preemptible. "Making broadcasters provide LUC to candidates throughout the year and giving them preemptible status is a terrible idea," said Gregg P. Skall of Womble Carlyle Sandridge & Rice, PLLC last week. "It is probably unconstitutional and is tantamount to requiring illegal campaign contributions by all broadcasters. It is no different that requiring that all in the airlines and lodging industry subsidize political candidates by providing them deep discounts and bumping other passengers and guests if a politician wants a reservation." Besides costing broadcasters money and negatively impacting their bottom line, another observer told Roll Call that when politicians monopolize air time on a seasonal basis, it damages a broadcaster's normal flow of business, as it tends to squeeze out the local advertisers upon which broadcasters depend year round.

Broker Austin Walsh dead at 61
Colleagues at Media Services Group are mourning Austin Walsh, who died yesterday at age 61 after a long battle with cancer. Before his radio and TV brokerage career, Walsh had been Executive VP and Western Divisional Manager for Interep and had previously been a manager with the Sonderling, Golden West and RKO General groups.

Conference Calls Q1 2005

Q1 accelerated at Radio One
After a slow start in January, Radio One COO Mary Catherine Sneed said "the floodgates opened" in February. After raising its guidance to Wall Street twice during the quarter, Radio One still came in ahead of its guidance, with revenues up 11% to 77 million. Station operating income rose 10% to 37.5 million. Not only was the company ahead of its own guidance, but CEO Alfred Liggins said Radio One's growth outpaced its markets by about 500 basis points (five percentage points). "We are cautiously optimistic that the improving signs we saw in the radio industry during the back half of the first quarter will continue through the second quarter and, hopefully, through the remainder of 2005," said Liggins.

Double digit growth for SBS
"Hispanic America cannot be ignored," said Spanish Broadcasting System CEO Raul Alarcon as he renewed his quest to achieve ad spending parity for his stations. But even if he doesn't yet get ad spending equal to his ratings share, Alarcon had a lot to celebrate about Q1. Net revenues shot up 21% to 35.3 million, with pro forma operating income up 26% to 9.6 million. The gains came primarily from double digit growth in the company's biggest markets, Los Angeles, New York and Miami. For Q2, SBS is expecting revenues to be up in the low to mid single digits. SBS's Q1 figures do not include KZAB-FM & KZBA-FM Los Angeles, due to their pending sale to Styles Media for 120 million. That sale is now scheduled to close by the end of July. SBS is also in the midst of a refinancing which Alarcon says will cut its interest expense in half.

Regent sees more growth in Q2
After reporting a 7.1% growth in Q1 revenues to 18.6 million (5.4% same station), Regent Communications is telling investors to expect same station revenues to be up 3-5% in Q2. "We are on pace to deliver a solid second quarter. Once again, we expect to outperform the radio industry and are well positioned for the second half of the year. Our mix of start-up, developing and mature properties should enable us to deliver solid revenue, cash flow and earnings growth. We have a very strong balance sheet with the capacity to take advantage of acquisition opportunities that will enhance our long-term growth. Overall, we are off to a good start this year and look forward to a healthy 2005 and beyond," said CEO Terry Jacobs. Looking back at Q1, station operating income increased 10.9% to 4.9 million - - a gain of 12.3% on a same station basis.

Salem Q1 up double digits
Religious specialist Salem Communications reported that Q1 revenues rose 10.8% to 47.8 million and station operating income grew 10.8% to 17.3 million. On a same station basis, revenues were up 11% and SOI 17.5%. "Our first quarter performance, which significantly exceeded that of the overall radio industry, was driven by revenue growth of 25.5% from our national advertising business as well as 15.7% same station revenue growth at our Contemporary Christian Music radio stations. We also were able to leverage our 11.0% same station revenue growth into 17.5% same station operating income growth," said CEO Ed Atsinger.

Adbiz©

Sirius offering BMW channel
for 18-hour concert marathon
Well, they don't have spots on their music channels but...Rock group the Goo Goo Dolls will headline an unprecedented 18-hour marathon of unique programming on a special Sirius Satellite Radio BMW channel with a private concert on 5/ 6, 7:30 p.m. at the Petersen Automotive Museum, 6060 Wilshire Blvd. (at Fairfax), Los Angeles. The broadcast celebrates the 5/6 US on-sale date of BMW's New 3 Series.

Nielsen's Spring 5005 Postcard highlights
From Nielsen's TV at a Glance Postcard, produced four times a year. | View the Stats |

TWBA Chairman going it alone
Trevor Beattie has quit as chairman and creative director of TBWA London to start up his own agency, Beattie McGuinness Bungay. Beattie says his new agency will specialize in branded entertainment and sponsorship projects. He's joined by Andrew McGuinness, TBWA London CEO, and Bill Bungay, its deputy creative director. Matthew Vaughan, a film director and producer (and married to Claudia Schiffer) is also involved. Beattie said in a statement, "This is the toughest decision I've ever had to make. TBWA has been my life for the past decade. It means everything to me. But this is something I want to do. It will be a new kind of agency."

Radio & Television Business Report Magazine

June Magazine '05 Clock is Ticking-Heading for Closure

National Sales:
EDI - Electronic Data Interchange, sometimes synonymous with Electronic Invoicing
Kathy Crawford, MindShare President, Local Broadcast, speaks her mind on EDI, specifically stating what solutions she needs from the software and keying entries to get stations faster payment in an exclusive column. States straight up, "Lest you should all think that our work is done in the world of EDI. Think again!" EDI- the focus of the future of national spot dollar. Who is and who isn't involved. From the rep firms to the software companies, we get answers. The Clock is ticking on EDI. Closure in '05?

Reserve your Ad Marketing Space today. Advertising space is limited, contact:
June Barnes [email protected] ----- or ----- Jim Carnegie [email protected]

Media Markets & MoneyTM

Yoon adds on Long Island
Richard S. Yoon's Win Radio Broadcasting is expanding into its second market, executing a 2.2M contract to acquire WGSM-AM, located on the western side of Long Island in Huntington NY. The seller is Atmor Properties, who is being represented by Lee Shubert. The full amount of the purchase price is going into an escrow account - - 10% of which is being considered an escrow stake which would come into play in the event that the deal fails to close. Yoon already has WCTN-AM Potomac-Cabin John MD, in the Washington DC suburbs.

Tower companies merging
American Tower Corp. announced an agreement to acquire SpectraSite for 3.1 billion in American Tower stock and assume SpectraSite's 750 million in debt. SpectraSite shareholders will own approximately 41% of the merged company. Both companies are primarily focused on building and leasing towers for cellular telephone service, but each also owns a number of broadcast towers. In all, they will have over 22,000 wireless communications towers and over 400 broadcast towers.

Washington Beat

Commerce to take up VNRs
Ted Stevens (R-AK) and Daniel Inouye (D-HI) has announced that the Senate Commerce Committee will take up the topic of video news releases (VNRs) next Thursday, 5/12/05 at 10AM eastern. S.967, the Truth in Broadcasting Act, has been introduced by John Kerry (D-MA) and Frank Lautenberg (D-NJ), and will provide the framework for the discussion. Witnesses have not yet been named.

Transactions

1.9M WBWR-FM Roanoke-Lynchburg (Bedford VA) from Cumulus Broadcasting LLC (Lewis W. Dickey Jr.) to Centennial Broadcasting LLC (Allen B. Shaw et al). 95K escrow, balance in cash at closing. Superduopoly with WZZI-FM Vinton, WZZN-FM/WLNI-FM Lynchburg. Buyer will spin off WMNA AM & FM Gretna VA. [File date 4/8/05.]

45K WXVW-FM CP Oolitic IN from Good Samaritan Educational Radio Inc. (Keith Reising) to Spirit Educational Radio Inc. (David C. Keister). Cash. CP is for Class A on 88.9 mHz with 5.2 kW @ 256'. [File date 4/7/05.]

0 WVSO-FM CP South Vienna OH from Salt and Light Communications Inc. (Larry Durham) to American Family Association (Donald E. Wildmon). Donation. CP is for Class A on 88.3 mHz with 700 w @ 299'. [File date 4/8/05.]

Stock Talk

Auto downgrades drive down market
Stock prices fell after Standard & Poor's cut its debt ratings on both GM and Ford to junk bond status. The Dow Industrials were down 44 points, or 0.4%, to 10,340.

It was much the same for radio stocks. The Radio Index was off 1.146, or 0.6%, to 202.607. Spanish Broadcasting System was up 2.8% on a strong earnings report, while Radio One disappointed The Street with its outlook. It's Class A stock was down 3.3% and its Class D was off 3.9%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		39.55	+0.02	Jeff-Pilot	JP		50.81	-0.10
Beasley	BBGI		17.01	+0.06	Journal Comm.	JRN		16.44	+0.08
Citadel	CDL		12.58	+0.01	Radio One, Cl. A	ROIA		13.02	-0.44
Clear Channel	CCU		31.60	-0.03	Radio One, Cl. D	ROIAK		12.98	-0.53
Cox Radio	CXR		15.30	-0.26	Regent	RGCI		5.82	-0.08
Cumulus	CMLS		12.55	+0.05	Saga Commun.	SGA		14.32	+0.01
Disney	DIS		26.71	-0.08	Salem Comm.	SALM		20.37	+0.16
Emmis	EMMS		15.39	-0.38	Sirius Sat. Radio	SIRI		5.32	+0.09
Entercom	ETM		32.17	-0.10	Spanish Bcg.	SBSA		8.69	+0.24
Entravision	EVC		7.64	-0.26	Univision	UVN		27.00	-0.64
Fisher	FSCI		48.00	-0.20	Viacom, Cl. A	VIA		35.72	-0.55
Gaylord	GET		41.00	-0.70	Viacom, Cl. B	VIAb		35.54	-0.61
Hearst-Argyle	HTV		25.18	+0.30	Westwood One	WON		19.10	-0.12
Interep	IREP		0.50	+0.05	XM Sat. Radio	XMSR		28.34	+0.11
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

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Arbitrends

Upped & Tapped

SBS gets a COO
A little more than a year after being named Chief Revenue Officer, Marko Radlovic has gotten another promotion at Spanish Broadcasting System. He's now Executive Vice President and Chief Operating Officer, responsible for all operational divisions of SBS, including sales, programming, administration, promotions and marketing.

Eastman names
NY sales boss
Dan Bershad, formerly head of the Katz Radio office in Philadelphia, has been named Vice President of Sales with Eastman Radio in New York. "When Dan signed on with Eastman he brought instant credibility to our clients and our customers," said Eastman President Tucker Flood.

More News Headlines

Charlie meets Madison
The latest FM station with a first name is in Madison, WI, where Entercom yesterday launched 105-1 Charlie FM "We Play Everything!" With literally thousands of hits from the 70's through today to choose from, Entercom says Charlie FM appeals to a core audience of 30-50. "Charlie truly plays everything, from rock to ballads to pop to dance to Motown," the company said.

Albuquerque station offers "runaway bride" talk-radio job
American General Media talker KAGM-AM Albuquerque has offered to hire Jennifer Willbanks, the so-called "runaway bride" from Georgia who ended up in New Mexico where she told police she had been kidnapped. "Of course we're looking for publicity," Doc Thompson, PD, was quoted as saying. "But we are serious about it as well." The station's offer, which Thompson said was faxed Thursday morning to Willbanks' attorney and spokesman, includes a 30,000 salary and either a talk show of her own or a co-host slot with long time morning radio talker Larry Ahrens.

Competing Media

Tribune sued
over circulation
What took so long? With other newspaper publishers facing lawsuits over inflated circulation figures, we wondered last August (8/25/04 TVBR #166) why Tribune Company, whose Newsday and Hoy were the first to disclose that they'd falsified circulation figures, had not been sued. Wonder no more. At least three purported class action suits were filed this week on behalf of Tribune shareholders seeking damages. The suits also name CEO Dennis FitzSimons and other executives as defendants.

RBR Radar 2005

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

Nexstar's Sook to CBS Moonves: Thanks, Les!
Now has a powerful ally in Nexstar Broadcasting Group's efforts to win retransmission payments from the major MSOs. big plus to have Les Moonves demanding retransmission payments for the CBS O&Os in large markets, just as Nexstar is already doing in smaller markets.
RBR observation: It looks like we'll be covering a widespread and heated battle next year. Some TV groups have managed to finesse the MSO refusal to pay for retransmission consent by making deals for related cable channels and such. To date, that has kept the O&Os of ABC, CBS, Fox and NBC from a head-to-head battle with cable. But that will change when Viacom splits and CBS no longer has any sister cable channels.
05/05/05 RBR #89

Citadel some what satisfied
with national rep
Just a year and a half ago that Citadel cancelled its contract with Interep and moved its national business to Katz. Not in the top 10 markets there is a limit to what Citadel itself could do to affect national billings, they are not satisfied with national being up only 0.5% in Q1, but also isn't satisfied with local being up more than 2%. By the way, if Cumulus tries something new on the national field and it works, look for a ditto - "we'll do the same." RBR observation: Doing this same is called treading water or that game, follow the leader whom ever it is at the time.
05/05/05 RBR #89

RBR News Analysis
NBC doesn't get it - Radio's Opportunity to Cross Platform
Here is the real kicker:
It's interesting when you look at the TV landscape and how they just move shows around and hope you find them, but what is more appalling on the marketing side in the case of something like "American Dreams". Here you have a scripted show that features a built in marketing component that is and has been grossly overlooked: Current artists redoing great songs from the 60's, how does NBC not set up a deal with every R&B station not to play Usher covering Marvin Gaye or John Legend doing Stevie Wonder? It's a built in day-after promotion on radio, or better yet, play it the day of the program to hype the show. Why NBC wouldn't cut a deal with radio, which by the way is the number one way to drive tune-in, to run these songs to promote the show? The redone songs are fantastic and radio would embrace them. Think about it, the number one show (American Idol) is amateurs covering old songs. Does it get any better than current hot artists today doing the same in a drama series? It's a marketing home run. Hopefully, somebody in the TV network business with some marketing sense picks up American Dreams and figures out how to drive viewers. Publisher observation: Remember: Coke, Fox TV, with 'American Idol' - here was that secret ingredient to the success from the start with 'Idol' - Clear Channel Radio. Now all of radio, especially Oldies and CHR personality-driven stations, this is your once in a lifetime programming shot to do as CC Radio did. You can do it locally and put the pressure on and recommendation to your local ABC or Fox affiliate to make a call to Hollywood. TV networks may never understand that content is king. 05/04/05 RBR #88

LSM-Suburban Chicago
NextMedia - Joliet, IL looking for a LSM who will keep the momentum going and build on it. Four station cluster has grown significantly if you can do the job, fit into a strong team come join us.

Details see Radio Careers

For Confidential Placement Contact: Cathy Carnegie, VP, [email protected]

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