Volume 21, Issue 94, Jim Carnegie, Editor & Publisher
Thursday Morning May 13th, 2004

Radio News ®

Saga files to silence "commercial" LPFM
A supposedly noncommercial LPFM station in Jonesboro AR has been airing announcements which sound suspiciously like commercials, a no-no for what is supposed to be a completely commercial-free broadcast service. Radio group Saga Communications is taking a stand now to make sure that the FCC enforces the legal terms of the LPFM license. Editor's note: This as a problem akin to the radio pirate problem which has been allowed to fester in certain parts of the country. Left unchallenged, the practice of putting ads on LPFMs may spread. We endorse Christian's call to arms by further urging other legitimate commercial broadcasters to follow Saga's lead and formally challenge any LPFMs engaging in practices similar to KFLO-LP. Going through channels should guarantee that the problem gets the attention it warrants. | Full Story |

Another broadcaster running for Congress
It turns out that Dave Magnum (5/12/04 RBR Daily Epaper #93) isn't the only broadcast group owner with congressional aspirations this year. In Arizona, Rick Murphy (pictured) is seeking the Republican nomination for the US House of Representatives in the state's 2nd District. That pits him against one-term incumbent Rep. Trent Franks (R-AZ), whom Murphy accuses of breaking his promises to the voters. Murphy owns five radio stations, with his company, Mad Dog Wireless, based in Lake Havasu City, AZ.

April broadcast sales jumped 13% at NY Times
The good news reported by broadcasters for March apparently continued into April. The New York Times Company reports that April ad sales for its broadcast group were up 13.3% to $15.4 million. The company said that was largely due to political advertising. The company doesn't separate revenues between its eight-station TV group and its two radio stations (one of which is LMA'd to ABC). Newspaper ad revenues were up 5.1% to $197.8 million, with national up 11% and classified up 4%, but retail down 5.2%.


Study shows campaign stretches seen as fact
The campaigns of both President George W. Bush and challenger Sen. John F. Kerry have opened up the piggy banks early and unleashed a torrent of campaign advertising, at least in 18 battleground states. Unfortunately, distorted or stretched claims tend to take hold as "fact" among those bombarded by the ads.
RBR observation: This is why we are dead set against free advertising for political candidates. Out of all the avenues available to citizens to learn about candidates and issues, political advertisements are the absolute worst. Incentivizing heightened campaign coverage, town hall meetings and face-to-face debates makes perfect sense. Giving over air time straight to the campaign managers themselves would merely constitute further abuse of the system. | Full Story |

Small deal financing is rare,
but we found some! Part 4 of 5
As tough as it is to find financing for any small broadcast deal, it's particularly tough to find a lender willing to finance a standalone radio station. "I'll look at standalones if that's part of somebody's vision that is going to be more than a standalone," said John Oxendine of BroadCap. In other words, a standalone had better be a starting point for a bigger group. | Full Story |

Beheading victim worked on broadcast towers
Nick Berg, the American beheaded by militants in Iraq, ran a tower maintenance company and had been doing work on towers in Iraq before he was taken hostage and murdered. He was also known to broadcasters in and around Pennsylvania, where his company was based in the US. According to a report in the York Daily Record, WYCR-FM VP/GM Joan McAnall recalled that Berg was careful and conscientious when his company, Prometheus Methods Tower Service, painted the station's 340-foot tower last spring.


Conference Calls, Q1 2004

Disney delivers and beats expectations
If Michael Eisner is going to keep his job, he's going to have to deliver several quarters of good financial results. He got a start on that yesterday by delivering fiscal Q2 (January-March) results that beat Wall Street expectations. Revenues were up 11% to $7.19 billion, well ahead of the Thompson One Analytics analysts' consensus of $6.85 billion. Earnings were up 71% to $537 million, or $0.26 per share. The analysts had been expecting $0.21. In his conference call with analysts, CEO Michael Eisner said a resurgence is underway at Disney and the company is benefiting from improvement on two fronts - - a better economy and great creative products. Asked about succession planning at the company, Eisner said that was being handled by the board of directors, but he insisted that it would only come into play "if I get hit by a truck." For the Media Networks segment, including TV, radio and cable, revenues for the quarter were up 7% to $2.85 billion and operating income grew 76% to $704 million. Looking ahead, CFO Tom Staggs said radio was doing well and that the ABC O&O TV station group was pacing ahead 5% in the current quarter. Problems persist with the ABC Television Network, but Disney President and COO Bob Iger insisted that things are looking better.


Measuring the Media Moguls

Entercom: David Field, President & CEO

2003 stock performance: +12.87%
2003 CEO pay: +10.16%

Having assumed the position of CEO in May of 2002, when his father became merely Chairman, Entercom President and CEO David Field had his first full year at the helm in 2003. For shareholders, the company's stock went up 12.87% for the year, while the paycheck they gave David Field went up 10.16%. | Full Story |


Adbiz ©

Radio groups pow-wow with automakers this week
[Editor's note: Listen to Stu's advice at the end....remember what happened last year about this time: Most of the automotive dollars went to the big boys.]
Radio is capitalizing on TV's audience erosion more than ever-just as advertisers are primed to spend upfront dollars.
Bill Burton, President of the Detroit Radio Advertising Group (DRAG), tells RBR that the meeting with him, CC Radio CEO John Hogan, Katz CEO Stu Olds and Katz Dimensions President Bonnie Press went quite well 5/11 with the Detroit automakers. We've also heard from Infinity President Joel Hollander that Infinity EVP/Marketing David Goodman, Rich Lobel, Senior Vice President, Infinity Solutions and Beyond and Michael Weiss, Interep's Infinity National Radio Sales President were doing pretty much the same thing on the same day. We haven't heard, however, if any passed by each other while visiting the hallowed halls at Dearborn, Auburn Hills, Warren or Ren Cen. | Full Story |

Allied Domecq launches effort
for new Malibu Rum flavors
Allied Domecq and Malibu Caribbean rum with natural flavors unveiled a national TV and radio effort to show adult consumers how to take life less seriously during peak rum consumption season in the US (Memorial Day through Labor Day). The campaign launch coincides with the national availability of two new exotic Malibu flavors - Pineapple and Mango. The campaign includes two cable television spots, entitled "Bus" and "Melon," created by past agency J. Walter Thompson, and two radio spots, entitled "Interview" and "Donkey," created by current agency Publicis New York. For adult consumers burdened by the daily stresses of life, the four ads demonstrate how MALIBU's easy going character can help consumers take a break, loosen up and have fun with friends - whether when thumping melons for purchase, buying a donkey or going on a job interview. The spots will run on local radio and cable networks from May to August.

More on Susquehanna's
"Sales Performance Guarantee"

Susquehanna has released more details on its "Sales Performance Guarantee" recently issued to agencies and advertisers. Susquehanna says the guarantee is in its initial launch phase, and is a multi-part document that spells out critical elements of the responsibilities to clients that station and account managers have committed to fulfill. It goes well beyond standard delivery by providing 2-for-1 make-goods within the contracted daypart of any spots that fail to air properly.
| Full Story
|

ABCRN teams with Department of Education for PSAs
ABC Radio Networks announced today the launch of a new campaign with the U.S. Department of Education on the anniversary of the Brown v. Board of Education decision that desegregated schools 50 years ago this month. A new public service announcement featuring the voice of U.S. Secretary of Education Rodney Paige honoring public school desegregation via Brown v. Board of Education will air nationally on ABC Radio Networks beginning May 17th. The announcement, called "50 Years and Counting...," will carry a message voiced by the Secretary that heralds Brown as a first-step victory in the battle for U.S. civil rights, and offers No Child Left Behind as the tool to ensure access to high quality public education for all children. A previously produced announcement for the campaign called "Grandpa Told Me...," uses a young child's voice to demonstrate the long time now elapsed since Brown, and the urgency needed to finally fulfill the promise of Brown. That announcement began airing on ABC Radio Networks' Radio Disney on 5/3.


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

Read RBR in 2 simple steps:
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Media, Markets & Money tm

Clear Channel buying its own stock
Clear Channel Communications has been making use of the new $1 billion stock buyback program that its board approved in March (4/31/04 RBR Daily Epaper #63). As of last Friday (5/7), clear channel reported to the SEC that it had bought back 2.7 million shares for approximately $112.6 million. That works out to a little over $41 per share. The stock is lower than that now, so it's a good bet that the company is still buying.


Washington Beat

FCC heads for South Dakota
The third FCC Localism Hearing, held by the FCC's Broadcast Localism Task Force, is slated to sit in Rapid City SD next week on Wednesday, 5/26/04. The event is sandwiched in between numerous FCC events being held in both of the Dakotas throughout the week. | Full Story |

Chairman steps down
The Chairman of the Federal Trade Commission (the FTC, not the FCC) is returning to the academic world. Timothy Muris is going back to George Mason U. School of Law after three years at FTC, during which the anti-telemarketing no-call list was put into effect via efforts of both the FTC and FCC. Muris also kept a close watch on advertiser claims, particularly among pharmaceutical companies. According to the Associated Press, former DOJ lawyer Deborah Majoras has been selected to replace Muris pending Senate confirmation. Muris intends to stay on the job until that process is completed.

FEC expected to leave soft loophole intact
The Associated Press reports that the Federal Election Commission is unlikely to make a ruling on the right of certain organizations to spend "soft" money on election-related advertising until after at least three months of additional study. In effect, a decision to put off a decision will legalize the practice through the 2004 election cycle. A ruling is expected today. Democratic groups such as MoveOn.org have led the way on the practice, used more sparingly by Republican groups, which are nevertheless represented by organizations such as the Club for Growth. A non-ruling would allow Democratic groups to keep on keeping on, while additional Republican groups are said to be poised to quickly enter the fray.


Transactions

$14.55 Million WWRX-FM Providence RI (Westerly RI) from FNX Broadcasting of Rhode Island LLC (Stephen M. Mindich) to Entercom of Providence LLC, a subsidiary of Entercom Communications Corp. (David J. Field et al). $950K escrow, balance in cash at closing. LMA since 4/16/04. [File date 4/6/04.]

$4.750 Million KRGI AM & FM/KMMJ-AM & KRGY-FM Grand Island NE; and KIMB-AM Kimball NE from Steckline Communications LLC (Gregory R. Steckline) to Legacy Communications LLC (Jay Vavricek). $400K escrow, $3.35M cash at closing, $1M note. Existing duopoly in Grand Island; Kimball NE is a separate market. LMA since 3/29/04 ($35K on first of month, April, May, June 2004; $40K on first of month thereafter until closing). [File date 4/7/04.]


Stock Talk

Stocks closed mixed
What looked like another down day, with traders focused on rising oil prices and interest rates, ended mixed as bargain hunters moved back into the market. The Dow Industrials finished with a gain of 26 points, or 0.3%, at 10,045. However, the Nasdaq Composite was down 0.3%.

Radio stocks finished slightly lower. The Radio Index fell 1.716, or 0.7%, to 253.683. The spread ran from a decline of 3.1% by Cumulus to a gain of 3.6% for Regent.


Radio Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

$37.40

+$0.08

Jeff-Pilot

JP

$49.02

+$1.41

Beasley

BBGI

$14.79

-$0.15

Journal Comm.

JRN

$17.96

-$0.01

Citadel CDL $16.00 -$0.30

Radio One, Cl. A

ROIA

$17.84

-$0.36

Clear Channel

CCU

$40.31

+$0.36

Radio One, Cl. D

ROIAK

$17.79

-$0.29

Cox Radio

CXR

$19.65

-$0.25

Regent

RGCI

$6.64

+$0.23

Cumulus

CMLS

$19.38

-$0.62

Saga Commun.

SGA

$19.46

+$0.06

Disney

DIS

$23.00

+$0.02

Salem Comm.

SALM

$30.00

unch

Emmis

EMMS

$22.36

-$0.33

Sirius Sat. Radio

SIRI

$3.17

+$0.02

Entercom

ETM

$41.61

-$0.97

Spanish Bcg.

SBSA

$9.88

-$0.12

Entravision

EVC

$8.12

unch

Univision

UVN

$32.02

+$0.18

Fisher

FSCI

$50.96

+$0.54

Viacom, Cl. A

VIA

$39.30

+$0.32

Gaylord

GET

$29.09

-$0.26

Viacom, Cl. B

VIAb

$39.20

+$0.33

Hearst-Argyle

HTV

$25.55

-$0.32

Westwood One

WON

$27.34

-$0.27

Interep

IREP

$2.10

-$0.07

XM Sat. Radio

XMSR

$22.76

-$0.64

International Bcg.

IBCS

$0.02

unch

-

-

-

-


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Upped & Tapped

Foate heading Travis
Former Saga Champaign, IL market manager Kristine Foate has been named President and CEO of Travis Broadcasting, heading its six-station cluster in Fort Wayne, IN. She succeeds Karen Travis, who is no longer involved in day-to-day management.


More News Headlines

Competing Media

The deal is done - -
meet NBC Universal

General Electric is now a much bigger media player. Its deal to merge NBC with Vivendi Universal Entertainment closed yesterday, creating a new entity called NBC Universal with projected 2005 revenues of $15 billion. The closing comes just in time for the upfront, where NBC's cable universe now includes USA Network and SciFi Channel, in addition to CNBC, Bravo, Trio and its 50/50 venture with Microsoft, MSNBC. NBC Universal will also be making the upfront pitches for the NBC Television Network, Telemundo, which it owns, and Pax, with whom it recently signed a new programming agreement. | Full Story |


Stations For Sale

+/- Market #100
50 kW AM Powerhouse
Tremendous Upside
in Dynamic Market!
Cliff at Clifton Gardiner & Co (303)758-6900
[email protected]

Tennessee/Alabama AM
Profitable Small Market AM with nearby rated market coverage
Cliff at Clifton Gardiner & Co (303)758-6900
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RBR Radar 2004
Click on these issues for Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Clear Channel to Entertain clients
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. 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.
05/12/04 RBR #93

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 Perry Sook had answers. Editor's note: This is a long audio cut, but well worth a listen - - for radio sales people, as well as TV.
05/12/04 RBR #93

Measuring the Media Moguls - Emmis Communications: Jeff Smulyan, Chairman and CEO
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. Smulyan's salary last year was $624,800, plus a bonus of $820,749 for a total of $1,445,549, up from $868,547 in 2002..While Smulyan's paycheck is not extraordinary for a public company CEO, his real payoff comes in driving the company stock price. He owns all of the company's super-voting Class B stock, giving him voting control and a huge financial stake in the company. He owns 5.2 million shares outright and has options for 560,000 more, for a total value at the start of 2004 of over $115 million.
05/12/04 RBR #93

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, 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. TVBR 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. 05/12/04 TVBR #93

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


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