|
|
|
|
|
Volume 23, Issue 94, Jim Carnegie, Editor & Publisher
|
Friday Morning May 12th, 2006
|
|
|
Radio News ®
|
Spitzer strikes again in anti-payola crusade
Universal Music Group (UMG), the largest record label of all, is the third to settle with New York Attorney General Eliot Spitzer over what he claims are "pervasive 'pay-for-play' practices" in the radio industry. UMG has agreed to make a 12 million bucks payment to be distributed to some of Spitzer's designated charities in New York. In settlements last year, Sony BMG agreed to pay 10 million and Warner Music five million. Under terms of the latest settlement, UMG, which owns Island Def Jam, Interscope, Universal Motown Recordings Group, Uni-South, Universal Nashville and Verve, has agreed to stop making payments and providing expensive gifts to radio stations and their employees, payments and gifts which Spitzer claims were given in return for airplay of particular artists' songs, including Nick Lachey, Ashlee Simpson, Brian McKnight, Big Tymers, and Lindsay Lohan. "Consumers have a right not to be misled about the way in which the music they hear on the radio is selected. Pay-for-play makes a mockery of claims that only the 'best' or 'most popular' music is broadcast," said Spitzer, continuing to press his claim that consumers are defrauded by what he has repeatedly referred to as "corporate payola." Yesterday's announcement specifically referred to one 2003 incident in which the PD of Entercom’s WBEE-FM Rochester allegedly asked Uni-South for a 2,500 laptop computer in return for adding two songs, then provided a letter falsely stating that the computer had been part of a promotion, while the station actually kept it. That allegation was previously cited when Spitzer sued Entercom in state court. Entercom last month asked a judge to throw the case out (4/14/06 RBR #74), saying that the New York Attorney General had not alleged any action by the company that was illegal.
RBR observation: What a shakedown artist! Eliot Spitzer, candidate for Governor of New York, gets to look the hero by distributing 27 million bucks, so far, to music charities in his state – and none of it counts as a contribution to his campaign. Meanwhile, hundreds of radio stations nationwide have been denied perfectly legal and legitimate promotional support from record labels because Spitzer has bullied them to make these settlements and accept his flawed interpretation of the federal payola law.
Regent gets classy in Peoria
It is not often that a radio group will spin off three FMs to get two, especially when the two cost about 4.5 times what the threesome costs. But that is just what Regent Communications is doing in Peoria. The key is a matter of class. The two stations it is picking up, WZPW-FM and WXMP-FM are Class Bs. The three it is selling are all less powerful Class As. Broker John Pierce helped clear out the three smaller stations, WIXO-FM, WVEL-FM and WPIA-FM, which are going to Independence Media for about 2.8M. The two Bs are coming from AAA Entertainment for 12.5M. Regent will wind up with an AM and four FMs in the market. President/CEO Bill Stakelin said, "We are extremely happy to be able to upgrade our competitive position in Peoria in the continued pursuit of increased shareholder value. These transactions demonstrate our commitment to prudently strengthening our position as the leading operator of middle and small-sized market radio station clusters. This purchase not only enhances our overall position in Peoria, but also benefits our adjacent station cluster in Bloomington, Illinois. Looking ahead, Regent is very well positioned as the premiere player in this size market, and we will continue to look for opportunities to benefit our shareholders."
|
|
|
Billboard's owner warns that top brass are ready to walk
VNU, the parent company of Nielsen Media Research and such US trade publications as Billboard, The Hollywood Reporter and Adweek, issued a statement yesterday reiterating that most, if not all, of its Executive and Supervisory Board members will quit if the takeover bid by a group of equity firms is not approved. The company statement came as it became increasingly likely that the once-threatened takeover bid would be approved when the new May 19th deadline rolls around. VNU's second-largest shareholder, the Templeton funds group, started the ball rolling by indicating that it will accept the offer sweetened last week to 30.00 euros per share (5/8/06 RBR #90). Most recently, Merrill Lynch advised clients to accept the offer, saying that while it still slightly undervalued the company, it was too risky to reject the offer and have to rebuild the company. The Merrill Lynch report also detailed cost savings of 160 million being prepared by current management which, it said, would include a staff reduction of more than 7%. Another analyst who has not yet made an official recommendation told RBR/TVBR that they expect the buyout to be approved, noting that VNU would be left in a weak position if it fails and that it could take many months to rebuild the management team.
RBR observation: As we said before, this one is going down to the wire. Even with support building for the buyout, getting the required 80% of shares tendered is going to be quite a hurdle to clear. We wonder, what will happen if the final tally on May 19th is 79%? No matter which way the vote goes, we expect to see dramatic changes in VNU's structure over the next year. It is pretty much a given that the company's name will be changed and the headquarters moved to New York, since most of the operations are in the US and most of the revenues come from the US. It is definite that a new CEO will be taking over, since Rob van den Bergh has already announced that he is leaving once the tender process is finished. The real question to be decided on May 19th is whether it will become a privately-owned company or continue to have publicly-traded stock.
April flat for Journal Broadcast
Broadcast revenues were up 33% in April for Journal Broadcast Group to 17 million, but the gain was all due to recent TV acquisitions, so revenues were flat pro forma. Radio same station revenues were up 1.3% to 6.3 million and TV down 1.8% to 6.4 after subtracting 4.3 million in revenues for the new TV stations in Ft. Myers-Naples, FL, Tucson and Omaha acquired from Emmis.
Another weight loss reduced by FTC
Basic Research and its subsidiaries claimed, among other things, that their products would help shed 20 pounds. Instead, they themselves will shed 3M dollars for making false claims on television and in other advertising venues in a consent agreement with the Federal Trade Commission. Three of the products were skin gels which they claimed "melted away fat wherever applied, including a user's thighs, tummy, even a double chin." A pair of ephedrine pills were said to have the power to knock of 20 or more pounds. And they even had a product aimed at children called PediaLean, a weight-reducing fiber pill. Television (including infomercials), magazines and tabloids were the media of choice. The FTC says that "...the ads falsely claimed that clinical testing proved those claims for four of the challenged products and misrepresented their spokesperson as a medical doctor."
RBR observation: One of these products was actually called Tummy Flattening Gel. Ads for the gels (the FTC doesn't say which ones) ran in magazines like Cosmopolitan and Muscle and Fitness. Tummy fattening gel? Melt away that second chin? C'mon. A little healthy skepticism is necessary before companies allow this stuff on their pages or airwaves.
|
|
|
Meredith wants more of its shares back
Meredith Corporation has already bought back 1.5 million shares of its own stock during its current fiscal year, which runs through June, but its board of directors clearly thinks the stock is still cheap on Wall Street. The board has authorized an additional buyback of 2.5 million shares, boosting the current buyback authorization to 3.1 million shares. By the way, Meredith had 49.7 million shares outstanding as of the end of March. Meredith, based in Des Moines, IA, owns 25 subscription magazine titles, some 200 specialty publications, 32 Internet sites, 14 television stations and one AM radio station.
|
|
|
Ad Business Report TM
|
Media Monitors to provide Cox Media with new ad tracking service
Media Monitors announced the signing of a deal with Cox Media cable ad sales to provide spot tracking of broadcast TV commercials and its radio and print tracking services. Through its online services, Media Monitors provides customers the ability to hear, and see the creative.
"Cox Media now has the ability to view spots airing on local broadcast television as well as in the local newspaper and on the local radio stations." said Philippe Generali, President of Media Monitors. “This gives Cox a huge competitive edge in their local marketplaces.”
Cox Communications’ SVP of Ad Sales Billy Farina added, "At Cox Media, we are very excited about this new service. We are always looking for new ways to better serve our customers and support our sales teams, so we feel the timeliness and richness of Media Monitors’ data gives us a distinct advantage in this increasingly competitive business."
Universal McCann taps Stuart Bogarty
Nick Brien, worldwide CEO and president of Universal McCann, announced the appointment of Stuart Bogaty as managing partner, global accounts. Based in New York, he will lead the media services for Universal McCann on the global Intel and MasterCard accounts within the context of McCann Worldgroup’s integrated relationship. He will report to Brien. Bogaty joins Universal McCann from OgilvyOne/mOne/Neo@Ogilvy, where he served as CEO, NeoSearch@Ogilvy North America and co-managing director, Neo@Ogilvy New York.
Sara Lee names TBWA new AOR
Sara Lee Food & Beverage has picked TBWA/Chiat/Day, Los Angeles, as its new AOR for creative on the company’s flagship brand, adding to its current work for Sara Lee's Jimmy Dean, Ball Park and State Fair brands. The review also included the incumbent Publicis, New York and Element 79, Chicago. Media continues with Starcom Worldwide.
|
|
|
|
| Media Markets & Money TM |
Armada sails into the Radio Ranch
Armada Media Corporation, headed by Jim Coursolle and John Lynch, has a deal to buy a cluster of six stations in the unrated Aberdeen, SD market. It will pay 9.25 million to acquire KSDN-AM & FM, KGIM-AM & FM, KBFO-FM and KNBZ-FM Aberdeen-Redfield, SD from Aberdeen Radio Ranch in this deal brokered by Jody McCoy and Tom McKinley of Media Services Group. The trail bosses at the Aberdeen Radio Ranch are Rob, Todd and Jim Ingstad.
Salem swaps AMs in Honolulu
The nation's largest Religious radio group is trading an AM station, along with a 1M cash sweetener, for KORL-AM in Honolulu. It'll give up the dough and KHCM-AM to Hochman-McCann Hawaii. KORL is on 690 kHz, and KHCM is on 1170 kHz. It'll be moving to 1180 kHz, however, to reduce interference with another Salem AM, KCBQ-AM all the way across the water in Camarillo CA. According to the contract, the call letters do not convey, so when this closes KHCM-AM will be the 690 kHz and KORL-AM will be the one on 1170/1180. The stations weren't valued, but the deal represents a nice ROI for Hochman-McCann, which paid 550K for KORL when it acquired it from New Wave Broadcasting back in 2003. Salem will be modifying the lineup of its three-AM/three-FM cluster. Hochman-McCann also holds a DP for KRUD-AM in the market, as well as other station properties elsewhere in Hawaii.
Big bucks lining up for Univision
CNBC reported late yesterday that four big equity investment groups – Carlyle Group, KKR, Bain Capital and Blackstone – are teaming up to make a bid for Univision and hope to have Univision's two big Spanish TV programming suppliers – Mexico's Televisa and Venezuela's Cisneros family – as partners in the bid. According to analysts Anthony DiClement at Lehman Brothers, the key question is whether another private equity consortium – consisting of Goldman Sachs Capital Parenters, Texas Pacific Group and Thomas H. Lee – is also working on a Univision bid, as previously reported by the Los Angeles Times. Stay tuned.
Close encounter in SW Utah
According to Media Services Group broker Jody McCoy, Cherry Creek radio has completed its 5.8M acquisition of a station group in the St. George-Cedar City area of Utah. It now owns KSUB-AM, KNNZ-AM, KXFF-FM, KXBN-FM & KMXM-FM along with a quartet of low power TVs. The seller was MB Media Group.
|
|
|
|
| Washington Media Business Report TM |
FCC discusses main studio waivers
Living Faith Ministries (LFM) owns and operates three television stations in three states. There's WLFG-TV Grundy VA (Tri-Cities TN-VA DMA), WAGV-TV Harlan KY (Knoxville TN DMA) and WLFB-TV Bluefield WV (Bluefield-Beckley-Oak Hill WV DMA). Back in the 90s, it applied to have the Bluefield station provide the main studio with the other two operating as satellites, but due to construction realities, began the operation in Grundy. When transferring the licenses in 2004, it reapplied for the satellite arrangement. The FCC granted the 1M sale (600K for Grundy, 200K apiece for the other two) but denied continuation of the satellite arrangement. In appealing that decision, LFM cites its non-com status and the FCC's more liberal policy toward non-com satellite arrangements due to the often constricted funding in the non-profit arena. However, despite LFM's manner of operating, the licenses are in fact commercial, and the FCC points out that it could at any time start selling advertising to make the two satellite wannabes financially viable and with their very own local studios. However, the FCC decided in LFM's favor. The two other towns are under 100 miles from Grundy and connected by adequate highways; further, each sparsely populated town is in an economically depressed area. LFM must do what it is already doing, which is provide a toll-free number for citizens of the two communities to contact it.
|
|
|
|
| Ratings & Research |
Social networking sites grow 47%
Nielsen//NetRatings reports April's top 10 social networking sites collectively grew 47% year over year, increasing from an unduplicated unique audience of 46.8 million last year to 68.8 million in April 2006, reaching 45% of active Web users.
MySpace, which has attracted significant media attention of late, topped the list with 38.4 million unique visitors and a remarkable year-over-year growth rate of 367%. Blogger took the No. 2 spot, garnering 18.5 million unique visitors and growing 80% year over year, followed by Classmates Online with 12.9 million unique visitors and a 10% year-over-year increase.
The interactive nature of social networking sites keeps visitors coming back.
MySpace enjoyed the highest retention rate among the group, with 67% of all March at-home visitors returning in April. MSN Groups and Facebook also benefited from a loyal following, with 58 and 52% of visitors returning month over month, respectively. Xanga.com and MSN's new social networking site MSN Spaces rounded out the top five sites ranked by retention rate, with 49 and 47%, respectively.
|
|
|
|
| Transactions |
100K WVBG-AM Vicksburg MS from Commander Communications Corp. (Carl Haynes) to Owensville Communications LLC (Mark Jones). Cash. [File date 4/20/06.]
0 KSHW-FM CPSheridan WY from Sold Rock Broadcasting Inc. (Diane Hill) to American Family Association (Donald E. Wildmon). Transferred for buyer to build & operate. CP is for Class A on 89.9 mHz with 500 w @ -16'. [File date 4/19/06.]
|
|
|
|
| Stock Talk |
Stocks fall as retail sales disappoint
The government reported that retail sales were up last month, but not as much as Wall Street had expected. So, stocks headed lower. The Dow Industrials fell 142 points, or 1.2%, to 11,501.
Bad news on the retail sales front is bad for broadcasters, so radio stocks were lower. The Radio Index fell 3.254, or 2%, to 160.070. Cumulus fell 5.7%, Beasley dropped 4.4% and Entravision was down 3.1%.
|
|
|
|
| Radio Stocks |
Here's how stocks fared on Thursday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
|
Arbitron
|
ARB
|
|
36.35
|
+0.03
|
Hearst-Argyle
|
HTV
|
|
22.96
|
-0.29
|
|
Beasley
|
BBGI
|
|
7.80
|
-0.36
|
Journal Comm.
|
JRN
|
|
11.90
|
+0.04
|
| CBS CI. B |
CBS |
 |
25.92
|
-0.38
|
Lincoln Natl.
|
LNC
|
|
57.47
|
-1.13
|
| CBS CI. A |
CBSa |
|
25.94
|
-0.36
|
Radio One, Cl. A
|
ROIA
|
|
8.23
|
-0.24
|
| Citadel |
CDL |
|
10.37 |
-0.28 |
Radio One, Cl. D
|
ROIAK
|
|
8.24
|
-0.23
|
|
Clear Channel
|
CCU
|
|
29.84
|
-0.16
|
Regent
|
RGCI
|
|
4.20
|
-0.05
|
|
Cox Radio
|
CXR
|
|
14.79
|
-0.26
|
Saga Commun.
|
SGA
|
|
9.34
|
unch
|
|
Cumulus
|
CMLS
|
|
11.37
|
-0.69
|
Salem Comm.
|
SALM
|
|
14.94
|
-0.29
|
|
Disney
|
DIS
|
|
29.80
|
-0.31
|
Sirius Sat. Radio
|
SIRI
|
|
4.42
|
-0.12
|
|
Emmis
|
EMMS
|
|
16.20
|
-0.05
|
Spanish Bcg.
|
SBSA
|
|
5.41
|
-0.13
|
| Entercom |
ETM
|
|
28.70
|
-0.60
|
Univision
|
UVN
|
|
35.62
|
-0.07
|
|
Entravision
|
EVC
|
|
8.51
|
-0.27
|
Westwood One
|
WON
|
|
9.09
|
-0.04
|
|
Fisher
|
FSCI
|
|
42.37
|
-0.65
|
XM Sat. Radio
|
XMSR
|
|
17.14
|
-0.33
|
|
Gaylord
|
GET
|
|
46.70
|
-0.89
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
Bounceback
|
 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
Debate continues
While Scott Evans and Scott Winchell and others have been busy debating via the written word (5/10/06 RBR #92), I've been out selling local little league baseball, determining which local community affairs show to enter in the 2007 Virginia Association of Broadcasters 'Best of', talking with my local programming department about our local summer promotion and discussing with my local news division how to best approach a multi-part series on local water conservation and the Shenandoah River. I hope I didn't snag any of your clients. My biggest issue with the 'debate about the future of our industry' is that we have so forgotten that it takes 11,000 or so radio stations to make up our industry. If Scott and Scott and everyone else would forget about trying to save or reinvent our industry and instead concentrate on providing the best radio service possible for their listeners and clients at the local level, we wouldn't need to have a discussion about whether terrestrial radio will go the way of the dinosaur. I compete with Clear Channel in my market and I'd be hard-pressed to find nicer people running these local facilities. They do a pretty good job of being local. They are also in business to make money and I'm in business to make money. I can't speak for the rest of 'my industry' but I bet we're almost all in it to serve our markets, too. Whether it's West Chester, NY or West Chester, PA, Winchester, VA or Winchester, KY, if we each win our battles, the war will be won. Now I need to go find a local sponsor for my local Conservatory special and local election coverage. And yes, I'm making money...
Andrew Shearer, President
Royal Broadcasting, Inc.�
|
|
|
Below the Fold
|
Media Markets & Money
Armada sails into the Radio Ranch
A deal to buy a cluster of 6 stations
in the unrated Aberdeen market...
Salem swaps AMs in Honolulu
Group is trading an AM station, along with
a 1M cash sweetener, for KORL-AM...
Washington Media Business Report
FCC discusses main studio waivers
Living Faith Ministries has numerous
issues facing them...
Ratings & Research
Social networking sites grow
April's top 10 social networking sites
collectively grew 47%...
|
|
|
Radio Media Moves
|
Fruge gets a Star
Charese Fruge has been named Program Director of Clear Channel's KYSR-FM "Star 98.7" Los Angeles. She was previously PD at Entercom's KALC-FM Denver.
|
|
|
More News Headlines
|
BMI renews scholarship sponsorship
For the 5th straight year, BMI is sponsoring the FastStart to Radio Success Minority Scholarship Program, which provides full tuition for 25 minority students to attend the recently renamed Gary Fries Radio Advertising Bureau Radio Training Academy. Winning applicants are selected on the basis of various criteria including ethnicity, overall need, enthusiasm toward a career in radio sales and recommendations from the applicant's professional associates. Application forms may be found on the RAB website and are due June 30th.
|
|
|
RBR Radar 2006
|
|
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
|
On online ad auction test
Get to understand this quickly
Wal-Mart VP/Marketing Communications Julie Roehm spoke to RBR/TVBR regarding the RFP and call for an online auction system to buy and sell TV ads unveiled at the ANA Management Conference. The whole idea of an online ad buying/auction system - does it cut out any function of the media agency?
"I don't think it cuts anybody out. I think it potentially changes the expertise level or the skill set at the agencies, but some of the biggest proponents for it are agency people on our panel - Ray Warren at Carat, Steve Grubbs at PHD. Bill Cella from Magna Global wasn't there but he supports it. I don't think they would be standing up and cheering this on if they felt like it was going to be hurting their business."
RBR observation: Better understand this method of business because it is coming to the media business quickly. RBR has been pounding hard on this phrase and it is reality, ‘Technology Waits For No One.’
05/11/06 RBR #93
Cumulus sets mega stock buy-back
This is reminiscent of what Emmis did last year when it bought back what was then 39% of all outstanding stock. Cumulus Media will conduct a Dutch auction, beginning next week, to buy up to 11.5 million shares (24.1% of Class A) of its stock within a range of 11.00-12.50. It will also buy back some Class B shares from Bank of America Capital Investors, which was one of its founding investors nine years ago, so the total buyback could hit 200 million bucks and cash out around 30% of the stock that Cumulus has outstanding.
RBR observation: With a cap of 12.50 per share, only an 8.1% premium to Tuesday's closing price, it remains to be seen how much stockholder interest there will be in this tender. But then, you can never tell what shareholders will do. We remember a few years ago that some shareholders of Heftel Broadcasting actually tendered shares to Clear Channel for less than what was by then the price they could have gotten on the public market. Go figure.
05/11/06 RBR #93
|
|
|
|
 |
Director of Sales
Step Up to a Great Cluster and Market with NextMedia's top-rated 9-station cluster in Coastal Carolina, Greenville/New Bern/Jacksonville looking for an outstanding DOS. If you're a proven leader with a solid track record, we want to talk to you.
See Radio Careers
Affiliate Relations
Talk Radio Network is expanding and we are looking for someone with great phone techniques who is enthusiastic about joining our successful team.
See Radio Careers
TV Media Sales Executive
TVBR needs just one (1) person that has the closing contacts in the Television & Cable business to bring in the Ad dollars to TVBR with our Monthly Solutions Magazine and earn 6 figures. NO Relocation necessary. Contact me in Confidence: [email protected] EOE
See TV Careers
|
 |
|
|
|
|
Help Desk
|
Having problems with our epapers?
Please send Questions/Concerns to:
[email protected]
If you wish to remove your name completely from our database use this link __UNSUB__
RBR Epaper -- 108 annual
or just 9 a month
|
|
|
|
©2006 Radio Business Report, Inc. All rights reserved.
Radio Business Report -- 2050 Old Bridge Road, Suite B-01, Lake Ridge, VA 22192 -- Phone: 703-492-8191
|
|
