Volume 21, Issue 93, Jim Carnegie, Editor & Publisher
Wednesday Morning May 12th, 2004

Radio News ®

New way for Clear Channel to Entertain clients
Clear Channel has opened up a new in-house shop that is designed to help clients break through clutter, and could leverage them through much of the media portfolio held by the wide-ranging media giant. The offering starts with venues and events. What is being called "branded entertainment" allows a client to become associated with a concert, a sporting event, or a broadcast program, with add-on features which carry the sponsorship well beyond the actual performance. For example, DVDs and/or CDs of the event extend the value almost indefinitely. Rebroadcast on Clear Channel's ubiquitous portfolio of radio and television stations is also part of the offering. Deals can be put together with pricetags from the low $100Ks to just under $10M. The division is called Clear Channel Entertainment Properties. RBR observation: We can see it now. They'll be putting on a summer stock production of "Romeo and Juliet" at a Clear Channel venue somewhere, and Juliet will be saying, "Wherefore art thou, Romeo?" and that Verizon guy will wander under the balcony going "Can you hear me now?" followed by Romeo showing up with a cell phone strapped onto his tights. DVD available at the gate.

Dave Magnum running for
Congress in Wisconsin

It's an uphill battle against an incumbent, but another broadcaster is making a stab at becoming a member of the US House of Representatives. After saying last month that he was interested in running (4/13/04 RBR Daily Epaper #72), Dave Magnum has made it official that he will seek the Republican nomination in Wisconsin's 2nd District, centered in Madison. "As a candidate for Congress, I bring the perspective of being a small business owner who with my late wife, Lynn, built a group of broadcast stations from scratch as well as being the dad of my two boys. In other words, someone who understands what people are up against in their everyday lives at home and work," Magnum said in announcing his political bid. Magnum Broadcasting owns eight radio stations and one television station in the La Crosse, Green Bay and Madison, WI markets. Rep. Greg Walden (R-OR) is the only broadcast station owner currently serving in Congress, although Sen. Conrad Burns (R-MT) used to own stations and a state radio farm network. If he wins the GOP nomination, Magnum will be running against three-term incumbent Rep. Tammy Baldwin (D-WI), who won with 66% of the vote two years ago.

How do you sell against cable?
The subject came up in yesterday's Nexstar Broadcasting conference call, with a Wall Street analyst asking whether cable is making inroads into broadcasters' local ad turf. Nexstar CEO Perry Sook said his company faces organized local selling efforts from cable in 75% of its markets and is taking the competition seriously. His company has developed specific material to show the so-called "cheap spots" on cable really cost more per viewer than on its broadcast TV stations. Editor's note: This is a long audio cut, but well worth a listen - - for radio sales people, as well as TV.

Small deal financing is rare,
but we found some! Part 3 of 5
So far this series has focused on deals in the millions. But, of course, some small stations available to first time buyers cost less than that, although they still need to find financing. For really small deals, financing is available from Broadcast Capital, better known as BroadCap, but only for minority-owned companies. CEO John Oxendine told us he is hoping to recapitalize BroadCap with $25 million, plus leverage from the US Small Business Administration. "So hopefully I'll have a $75M fund going by the end of the summer," he said. | Full Story |

What's up, docket? ABC, Trib try to see through seal
When Jack Ryan's divorce court records were sealed in 2000 and 2001, he wasn't running for the US Senate. Now that he is, argue a pair of broadcast companies with strong Chicago operations, these documents are a matter of public concern. Associated Press reports that ABC (WLS-TV-AM) and Tribune (WGN-TV-AM) want the records made public, although they acknowledge that certain facts may be kept confidential to protect the nine-year-old son of Ryan and his ex, actress Jeri Ryan. Both Ryans have been attempting to keep the seal intact. Some think that the contents of the file may be damaging to Ryan's campaign. The Ryans think that protecting the child is the most important thing. The next deadline in the case, a report from a retired judge acting as a referee to the presiding judge, could be about three weeks away.

Measuring the Media Moguls

Emmis Communications:
Jeff Smulyan, Chairman and CEO

2003 stock performance: +29.86
2003 CEO pay: +66.43%

Having gone without a bonus in 2002, Emmis CEO Jeff Smulyan saw his compensation jump 66.43% in 2003, more than double the 29.86% increase in share price for the company's shareholders. Other top execs, who likewise got no bonuses in '02, also saw their paychecks rise by similar margins. | Full Story |

Adbiz ©

WPP scores HSBC
Global banking and financial services company HSBC Group (originally dubbed Hongkong and Shanghai Banking Corporation) has chosen WPP's J. Walter Thompson, MindShare and Maximise and 141 to handle its $600M marketing account. WPP was chosen after a review that included Interpublic and Omnicom as well. JWT will lead creative efforts, reportedly with assistance from sister agency Red Cell.

Sprint launching
$100M campaign

Sprint announced it will spend more than $100M on a wireless ad effort, "Fair & Flexible," which will use print, TV and online for two-three months. The campaign is aimed at explaining Sprint's new rate plan. The rate plan gives subscribers flexible minutes each month by allowing the user to purchase additional buckets of minutes as needed. Sprint PCS Fair & Flexible is a wireless phone plan designed to automatically adjust to a customer's month-to-month actual minutes usage rather than a set amount of minutes. The ads, created by Publicis & Hal Riney San Francisco used a group of students filmed like a documentary. In the first TV spot, "Red Ball," breaking today, a teacher explains to the students that before they play with the ball, they will have to first tell her how many minutes they will use the ball every month for the next two years. The camera then cuts to the bewildered children trying to calculate the minutes in their head.

May Solutions Digital Magazine
Complimentary Report

It's A Jungle Out there
with Naples, FL Calling.

How Radio Is Killing Itself from the Inside. By Editor & Publisher
Jim Carnegie.

Jim, You hit one out of the park Naples, Florida Is Calling. These so-called leaders either can't see it, or worse yet, don't care. What a waste. Lorrin Palagi, Zapoleon Media Strategies

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Media, Markets & Money tm

Big deal in Little Falls
Roughly $2.3M is changing hands, along with an intact three-station duopoly, in Little Falls MN. The stations include one AM, KLTF, along with KFML-FM and WYRQ-FM. The seller is Jack Hansen. If you add up all of the contract elements, he'll eventually wind up with $2,320,275. There's a $120KK escrow deposit, a $480K cash payment at closing, a $158,925 non-compete, a $11,350 consulting agreement, a $1.51M promissory note and a $40K contract for deed. The buyers, Rod and Christina Rae Grams, wind up with three stations in Little Falls, a town almost dead center in the middle of the state about halfway between Brainerd (to the north) and St. Cloud (to the south).

VSS introducing new mezzanine fund
RBR hears that Veronis Suhler Stevenson (VSS) is raising money for a new mezzanine lending fund aimed at media companies and is already talking to would-be borrowers. At least one radio company and one newspaper company are said to already have deals in the works. Although VSS has put together previous venture capital funds, this is its first aimed at the mezzanine market - - targeting loans to mid-sized companies without VSS affiliates taking an equity position. The loans are generally fixed rate and run 6-9 years, with amounts from $10 million (perhaps a little lower) to $75 million. The mezzanine strip is typically going to be 1-2 times cash flow, adding leverage to the 5-6 times generally available from senior lenders in broadcasting. The new fund is being managed by George Cole and Errol Antzis at VSS in New York.

Washington Beat

House marks up satellite bill Thursday
The House version of the Satellite Home Viewer Extension and Reauthorization Act, which was read out of the Subcommittee on Telecommunications and the Internet last month (4/29/04 RBR Daily Epaper #84), goes to the full Energy and Commerce Committee Thursday 5/13. As read out of the subcommittee, the bill includes two important provisions from a broadcaster's viewpoint: it prevents the importation of distant signals to bring broadcast network programming to a certain locality, and it requires that all broadcast signals be provided on a single receiving dish. One thing to watch for: An amendment to force satellite services to offer ala carte menu options was withdrawn during the subcommittee markup, but it may well be offered in earnest this time around.


Move over, Dick Tracy - - Wrist TV is here
Well, it's almost here. NHJ USA is coming out with "VTV-101," a fully-operational broadcast television receiver which can be worn like a watch. It picks up channels up to 62, and comes with stereo headphones which function as an antenna. Retail is expected to be "around $199.99" (that's some exercise in price-rounding), and they should be coming on the market any day now. Initial availability is from the Hammacher Schlemmer catalogue house. RBR observation: Hey, why not pack an inflatable chair and a packet of fizzies - - the world can be you living room! Personally, we can't wait until our leading imbeciles start trying to watch these things while they're driving.


$301,000 TV CP Omaha NE. 100% of Lincoln Broadcasting LLC from World Investments Inc. (William E. Conley) to CFM Communications LLC (Carol F. Miller). Cash. CFM is paying Pappas $1K to take over its option to acquire CP, which is for Channel 51 with an expiration date of 6/27/06. Pappas will run station in an LMA with buyer after closing, with a new option to purchase. [File date 4/5/04.]

$140,000 KXAA-FM CP Cle Elum WA from Michael F. & Bridget T. Andler to Wheeler Broadcasting Inc. (Verl D. Wheeler, Deanna D. Wheeler, Mark Wheeler, Nilufer Wheeler, Tonya D. Baker, Scott B. Baker). $55K for option to purchase, $85 maximum investment from Wheeler to construct station. LMA until closing. CP is for 93.7 mHz. [File date 4/5/04.]

Stock Talk

Stocks rebound slightly
Bargain hunters moved into the market Tuesday, following Monday's stock sell-off to year-to-date lows. The Dow Industrials moved back above the 10,000 mark, rising 29 points, or 0.3%, to close at 10,019. Tech stocks were even stronger, driving the Nasdaq Composite up 1.8%.

Radio stocks did even better. The Radio Index moved back up 5.096, or 2%, to 255.339. Among the big gainers were Citadel, up 5.8%, Viacom's Class B, up 5.4%, and Regent, up 5.3%. Viacom's Class A shares rose 4.9%.

Radio Stocks

Here's how stocks fared on Tuesday

Company Symbol Close Change Company Symbol Close Change













Journal Comm.




Citadel CDL $16.30 +$0.90

Radio One, Cl. A




Clear Channel




Radio One, Cl. D




Cox Radio












Saga Commun.








Salem Comm.








Sirius Sat. Radio








Spanish Bcg.
















Viacom, Cl. A








Viacom, Cl. B








Westwood One








XM Sat. Radio




International Bcg.








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Upped & Tapped

Raphael joins Sirius
Sirius Satellite Radio announced the appointment of Frank Raphael as Director of News and Operations, overseeing the operationss of 50 news, talk, information and entertainment channels. He will report to Jeremy Coleman, VP/Talk, Information and Entertainment Programming. Raphael most recently was Director of News & Programming at WCBS-AM New York as well as Executive Producer of New York Yankees baseball.

Strauss Radio Strategies taps
Robert Garcia
Strauss Radio Strategies has hired former VP/GM of CNNRadio, Robert Garcia, as managing director. Garcia had spent the last eight years at the CNNRadio Network in Atlanta, the previous seven years as Executive Producer of the Washington Bureau of CBS Radio and is a former Chairman of the Radio Television News Directors Association.

Torbert joins BroadCap
Broadcast Capital (BroadCap) announced that Hank Torbert, formerly with JP Morgan Chase Bank, has joined BroadCap as Executive Vice President and COO. He will oversee BroadCap's investment activities and manage the company as it raises a new fund, Blackstar LP.

More News Headlines

Competing Media

Nielsen continues
PR offensive on
minority viewing
Attempting to blunt a campaign against its new Local People Meters (LPM) by minority group leaders in New York, which has now spread to Los Angeles and Chicago as well, Nielsen Media Research has issued a report on test data from its New York LPMs showing that African-Americans and Hispanics watch more diverse TV programming than had previously been reported by paper diaries. RBR observation: As we noted yesterday, Nielsen is going to have to convince the critics, beginning with its broadcast subscribers, that its LPM sample is valid and producing reliable numbers. This is a start, but only a start.
| Full Story

RBR Radar 2004
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RBR News Analysis
Air America - Management missteps threaten survival of liberal network
After launching to much hoopla on the last day of March, it seems that everything which could go wrong at Air America Radio has gone wrong. While the programming of the liberal talk network has been attracting millions of listeners, mostly via the Internet due to a slow rollout to actual radio stations, management bumbling has threatened to bring down the network before it gets a chance to build Arbitron ratings. Editor's note: Is it time to hit the showers or is the game going over time? 05/11/04 RBR #92

Limbaugh in the dumps
in the Rush to comply
Even iconic radio Talkmeister Rush Limbaugh is feeling the bite of the delay button leaveing no doubt that the heightened regulatory awareness and decreased regulatory tolerance of broadcast indecency is having daily effects on what goes out over the air. Editor's note: Safe Sex is like Safe Talk and RBR has it all in the coming June RBR Solutions Magazine with Talker Thoughts from: Neal Boortz, Tony Snow, and Ed Schultz to name a few. "Ever mindful of the First Amendment, the FCC does not censor. It acts in hindsight..." Rollye James 05/11/04 RBR #92

Measuring the Media Moguls -
The Walt Disney Company:
Michael Eisner, CEO

With the ongoing battling over management at Disney, which saw over 45% of shareholders vote to oust CEO Michael Eisner in March, there is a greater focus than usual on executive pay and golden parachutes. As we learned, Eisner has a pretty good parachute. The embattled CEO still saw his paycheck rise by 20.11% last year, which was still less than half the rebound of the company's stock price, which had been severely depressed. Eisner received a $1 million base salary, $6.25 million in stock grants (which are pretty much guaranteed to fully vest, so we'll count them at full cash value), $63,656 in the use of company aircraft and other perks and finally $4,775 in payments for insurance and investment plans. That's a total of $7,318,431, up from $6,092,894 in 2002. 05/11/04 RBR #92

Measuring the Media Moguls - Cumulus Media: Lew Dickey, Chairman, President & CEO
Wearing all three hats as Chairman, President and CEO at Cumulus Media is just one indication of how much Lew Dickey has at stake in Cumulus Media. The fact that he and his family have so much riding on the company's stock price may explain why his paycheck isn't remarkably larger than the other three members of the company's top management. If the team continues to drive the stock price higher, as it did last year to the tune of 48.35%, Dickey has a lot more to gain than he would ever draw in a paycheck. Dickey's base salary last year was $577,496. He also got a bonus of $288,750 and "other" compensation (auto and insurance) of $12,000. That total cash compensation of $878,246 was up 9.85% from 2002. 05/10/04 RBR #91

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