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Volume 23, Issue 96, Jim Carnegie, Editor & Publisher

Tuesday Morning May 16th, 2006

Radio News ®

Jeff in showdown with Jeff
on Emmis buyout price
Did the name Noonday Asset Management ring a bell when you heard it was pressing Jeff Smulyan to raise his 15.25 per share bid to buy out the public shareholders of Emmis Communications (5/9/06 RBR #91), but you just couldn't quite place it? Try the May issue of RBR/TVBR Solutions Magazine, where Connoisseur Media CEO Jeff Warshaw (pictured) talks about his new company - and how he has been advising Noonday, a subsidiary of Farallon Capital, since selling his previous radio group. "They are my partners and I advise them on media stocks. I support them fully," was all Warshaw would say when asked about the current standoff with Smulyan. In its SEC filing regarding Emmis, Noonday says it intends to talk with officers and directors of Emmis regarding the buyout offer. It says Noonday believes the offer is inadequate and it will urge the directors "not to accept this offer at this price and to consider all appropriate courses of action to maximize shareholder value." Noonday reports owning 9.9% of the outstanding public shares of Emmis.

RBR observation: It is pretty easy to see why Noonday wants more. It was buying Emmis shares in April at prices ranging from 12.78 to 15.54 per share. We doubt that it was their objective to sell those 15.54 shares for 15.25. Emmis continues to trade above 16 bucks a share, so other folks besides Noonday are betting that Smulyan is going to raise his bid. Are you wondering what other broadcasters Noonday owns big pieces of? According to an SEC filing of March 31st, it also had stakes in Beasley Broadcast Group, Clear Channel Communications, Clear Channel Outdoor, News Corporation, Regent Communications, Saga Communications and Time Warner, plus holdings in cable giant Comcast. A few years back, Noonday made quite a profit buying up the bonds of Big City Radio prior to its liquidation. If you look at its holdings, it is clear that Noonday is not out just for companies that might be broken up or taken private. A lot of its investments appear to be stocks that it believes are simply undervalued and have future upside. We doubt it has any expectation of Time Warner or News Corporation being dissolved, nor another well-known company in which it holds a stake - Microsoft.

Analyst critical of radio...receiver
Lehman Brothers analyst Anthony DiClemente has been testing a 299 bucks Boston Acoustic Receptor Radio HD. His bottom line: "Not enough bang for the buck." Yes, he liked the sound quality - "But the digital experience was not entirely user-friendly: we experienced an irritating 2-3 second delay in reception when we first used the unit's knob to tune to certain HD stations." Worse, once he tuned in a station, there would be signal dropouts of up to five seconds, which he said the user's manual blamed on an implementation problem with HD broadcasts that is supposed to be fixed over time. As far as basic sound quality, DiClemente said HD "had modestly greater depth and virtually no static interruption and noise interference relative to the analog stations." That's good, but is it worth 299 bucks? Not compared to a 2 GB iPod nano that sells for 199. "We believe a tabletop clock HD-radio which includes a CD player could have broader consumer appeal at a lower price point below $150," was DiClemente's conclusion.

Cable looking to add a cell?
The FCC will be auctioning off spectrum of interest to companies interested in cell phone and wireless broadband suppliers at the end of June. Although it will be a blind auction, and a list of eligible bidders has not yet been released, a report suggests that cable operators will be jumping in. According to Multichannel News, Time Warner said it had an interest during a conference call last week, via a joint venture with Sprint Nextel that also includes cable operators Cox, Comcast and Bright House Networks.

RBR observation: If Paul Revere were on this story, and operating with the famous Minuteman lantern code, would he be watching the church tower for one if by wire, two if by airwave, and seeing three because the battle is over both? We seem to be heading to a world in which what we now know as telephone companies, cable companies, DBS companies and Internet companies are all going to be offering different gradations of the same services. Business conditions figure to change on the fly in utterly unpredictable ways. Smart broadcasters will do their best to make sure their business models are flexible enough to hang on no matter how sharp the whiplash effect.

Looking at radio's Q1 numbers
Ed Seeger, President and CEO of American Media Services, pointed to first quarter results of many of the country's leading publicly-traded radio companies and said the figures help bolster recent national poll findings that "commercial radio is very much alive and shoring up its business." Seeger added, "The figures are compelling, and they illustrate that American consumers, as well as advertisers, continue to hold the country's traditional radio companies in very high regard. While mainstream media continue to concentrate on much of the high-tech competition that has entered the marketplace over the last few years, the untold story is how radio is adapting to this new marketplace and developing new ways to attract listeners."
| Read More... |

Another flight in the
political/issue category
Competitive Enterprise Institute's Marlo Lewis says, "The campaign to limit carbon dioxide emissions is the single most important regulatory issue today. It is nothing short of an attempt to suppress energy use, which in turn would be economically devastating, all to avert an alleged catastrophe whose scientific basis is dubious." To get this point across, CEI will be running a pair of television ads in over a dozen cities. The ads will be unveiled at a news conference in Washington and should begin to hit the airwaves Thursday 5/18/06.

RBR observation: According to Wikipedia, other groups which agree that the global warming scare is overblown, and which help to fund CEI, are major oil and automobile companies like ExxonMobile, Texaco, AMOCO, Ford and GM. If you're looking to fill inventory, this may be a good time to contact any watchdog organizations which take the opposite side on this issue. Use of radio may be a good way for some to respond quickly and economically.

Wall Street Media Business Report TM

Q1 2006 Conference Calls
Radio up, but TV a lot more at Liberman
Q1 net revenues were up 8.3% to 22.2 million at LBI Holdings, the parent company of Liberman Broadcasting. TV led the way, up 13.9% to 12.4 million, with all of its TV stations in California and Texas credited with fueling the growth. Radio revenues rose only 2% to 9.8 million, with the increase credited to the Houston cluster. Adjusted EBITDA for the entire company rose 6.5% to 9.3 million. Net income was 1.2 million, vs. 1.8 million a year earlier. LBI has public bonds and Liberman Broadcasting has a long-pending stock IPO.

Ad Business Report TM

BMW launches campaign for pre-owned biz
Earlier this month, BMW North America launched a national television, print, radio and Internet marketing campaign for its Certified Pre-Owned (CPO) program. The "Drive with your heart. Buy with your head" campaign created by Publicis New York communicates to prospective customers that a Certified Pre-Owned BMW is more attainable and better than some new cars. The campaign has a national reach, running in national and regional media throughout the US. It includes three TV spots, four radio spots, four print ads and Internet banner advertisement. Print runs in USA Today, Wall Street Journal, Business Week, Auto Week, Money Select Edition, Sports Illustrated Select Edition, Time Top Management, Time Global Business and Roundel. Internet banners will be featured on Autotrader.com, KBB.com and Google.com. Each of the three "Drive with your heart. Buy with your head" TV spots highlight the BMW vehicle, making it clear that it is the heart of the CPO program. The tag appears in bold typeface alongside the footage of the vehicle during the last seconds of the commercial.

MasterCard launches new campaign
MasterCard International unveiled a new effort for World MasterCard, a card program that combines flexible, personalized rewards with no pre-set spending limit to appeal to today's expanding affluent market. The campaign is the most recent component of a broader MasterCard strategy to continue to increase its brand preference and card usage among affluent consumers. The campaign launched with a 30-second TV spot during the season finale of ABC's Grey's Anatomy. The spot will run through the end of September. The campaign will also include print later this year, and will be integrated into www.priceless.com, the interactive and upscale MasterCard website that delivers content to reflect the interests of today's affluent consumer. The spot, "Great Lady Golfer," features three men and a woman playing a round of golf. The woman makes a very difficult chip shot, to which the narrator responds, "There are some things in life money can't buy." The ad then flashes forward to show a series of purchases the woman makes to improve her game and satisfy her newfound passion for the sport. "For everything else, there's World MasterCard Card, the card that won't hold you back," the narrator concludes. McCann Erickson New York is handling the creative.

Media Markets & Money TM

Arlie gets a Tigard by the tail
The ranks of female ownership will be enhanced when Suzanne Arile's Churchill Communications gets the keys to KLVP-AM Tigard OR. The city of license is just south of Portland. The seller is noncommercial K-LOVE network purveyor Educational Media Foundation (which usually does not seem to have much use for stations on the AM side). The price is 1.8M. Arlie already has a trio of AMs down I-5 in the Eugene-Springfield market.

Sarasota AM sold
SRQ Radio took over an LMA/option on WIBQ-AM in Sarasota FL last September, and now they've filed to take their interest from option to owner. Principals Donald E. Murphy and Richard M. Fischer will be getting the station from Nova Broadcasting for 450K, already paid pursuant to the option agreement, and will kick in non-competition payments worth another 33K. This will be their only broadcast property.

Washington Media Business Report TM

Down-sizing, Capitol Hill style
Former Minnesota Senator Rod Grams is aiming to return to Washington, but this time as a member of the House of Representatives. Standing in his way in the state's 8th Congressional District is James Oberstar (D-MN), who is on is 17th campaign for the seat. It is, to say the least, extremely unusual for a Congressional candidate to have a Senate stint on his resume. Grams also adds some experience of interest to broadcasters. According to the Associated Press, He is a former TV newsman, with a stop in Minneapolis, and in 2004 bought a trio of radio stations in Little Falls MN for just over 2.3M.

RBR observation: Grams will have a tough row to hoe, if a trend noted in Wikipedia holds. The Internet source notes that Oberstar garnered 59% of the vote, in his worst performance. And that was back in 1992. Since then, he's never been below 65%.

Internet Media Business Report TM

NBC Uni closes iVillage buy
NBC Universal has handed over 600 million bucks to acquire iVillage, after shareholders of the women-oriented website voted last week to accept the offer of 8.50 per share (3/7/06 RBR #46). "With the addition of iVillage, NBC Universal now has a significant online platform upon which to grow its digital media businesses. NBC Universal will bring its long history of creating great content to iVillage, adding programming and interactive tools that engage users' passions and interests and that grow the site as a daily destination," said Beth Comstock, President, NBC Universal Digital Media and Market Development.

Engineering Business Report TM

Klotz unveils Xenon
Klotz Digital has introduced its new Xenon standalone digital radio console, designed as a perfect mixing solution for small radio stations, small studios, which are part of large radio facilities and for outside broadcasting. Xenon is available as a 6 or 12 fader console. Each-6 fader module is in its own housing enabling the Xenon to be either a compact or split console.

Ratings & Research

Multitasking under review
Interpublic's Emerging Media Lab is cloistered away trying to figure out just how media is being used these days when many of us are using more than one medium at a time. The issues are of major importance to advertisers, who need to know what the common pairings are, and which of the pairs is attention-dominant, according to an article in the New York Times. Television is the dominant media, but when is it completely engaging a viewer, and when is it mere background noise? One researcher said the stakes could be high. If a particular television show can prove that its viewers are particularly attentive, that would make the value of its advertising spots more valuable than a competing show which may have a larger tune-in but with less attention.

RBR observation: Many writers commonly read the newspaper on Sunday morning with the national talk shows on television competing for their attention. Some focus shifts back and forth. But guess when it is most likely to be fully engaged in the newspaper? If you said during the commercials, you can pat yourself on the back. It all gets even more complicated with the Internet, iPods, cell phones and what have you in the mix. And by the time they figure something out for the current crop of media mixes, there may well be brand new items competing for our attention. This is an area radio should trumpet as loud as it can. It goes easily with driving, working, recreational activities, web-surfing, any kind of old-fashioned reading...the list is endless. At any rate, stay tuned, plugged, wired and whatever else is appropriate.

Transactions

275K KWBC-AM Bryan-College Station TX (Navasota TX) from The Raftt Corp. (Jerome Friemel) to Bryan Broadcasting Corp. (William R. Hicks, Ben D. Downs). 60K deposit, accumulated LMA fees and remainder in cash. Superduopoly with KNDE-FM, KZNE-AM & WTAW-AM. This is an amended deal; original deal filed 1/17/02; LMA 4/15/02. [File date 4/21/06.]

0 KTDA-FM CP Dalhart from Educational Opportunities Inc. (Shan Easterling) to American Family Association (Donald E. Wildmon). Donation. CP is for Class A on 91.7 mHz with 250 w @ 128'. [File date 4/21/06.]

0 KHYS-FM CP Hays KS from Salt and Light Communications Inc. (Larry Durham) to American Family Association (Donald E. Wildmon). Donation. CP is for Class A on 89.7 mHz with 250 w @ 292'. [File date 4/21/06.]

Stock Talk

Modest gains for a Monday
Slowing home sales and other news to indicate that the economy is not overheating - perhaps convincing the Fed to stop raising rates - gave a bit of optimism to traders on Monday. But for the most part they were out bargain-hunting, which gave a boost to some of the blue chip stocks. The Dow Industrials rose 48 points, or 0.4%, to close at 11,429, while other major indices were little changed.

Radio stocks had a mixed day. The Radio Index slipped 0.536, or 0.3%, to 158.288. The best and worst were Salem, up 1.8%, and Beasley, which dropped 5.7%.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		37.90	+0.49	Hearst-Argyle	HTV		22.95	+0.08
Beasley	BBGI		7.22	-0.44	Journal Comm.	JRN		11.88	+0.01
CBS CI. B	CBS		25.66	unch	Lincoln Natl.	LNC		58.18	+0.94
CBS CI. A	CBSa		25.63	-0.06	Radio One, Cl. A	ROIA		8.15	+0.11
Citadel	CDL		10.34	-0.09	Radio One, Cl. D	ROIAK		8.13	+0.07
Clear Channel	CCU		30.06	+0.28	Regent	RGCI		4.20	unch
Cox Radio	CXR		14.59	-0.01	Saga Commun.	SGA		9.17	-0.09
Cumulus	CMLS		11.02	+0.05	Salem Comm.	SALM		15.13	+0.26
Disney	DIS		29.99	+0.09	Sirius Sat. Radio	SIRI		4.24	-0.10
Emmis	EMMS		16.10	-0.08	Spanish Bcg.	SBSA		5.36	unch
Entercom	ETM		28.30	+0.09	Univision	UVN		35.69	-0.23
Entravision	EVC		8.42	-0.08	Westwood One	WON		8.83	-0.17
Fisher	FSCI		42.25	-0.06	XM Sat. Radio	XMSR		16.96	-0.13
Gaylord	GET		45.54	+0.03	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]

Several of you want to join this debate (5/10/06 RBR #92) begun by Scott Evans.

Scott...Quit Your Bitching! I have heard enough. If you have worked for Clear Channel and you are carrying a grudge, then you need to come to terms with it and move on. If you haven't worked for Clear Channel then you are void of first-hand experience with the company infrastructure and internal programs that would, at the very least, surprise you...
| Read More |

Rodney H. Rainey
RadioMetrix Solutions

Below the Fold

Wall Street Media Business Report
Radio up, but TV a lot more
At Liberman Q1 net revs were up 8.3%...

Media Markets & Money
Arlie gets a Tigard by the tail
Ranks of female ownership will be enhanced...

Washington Media Business Report
Down-sizing, Capitol Hill style
Former MN Sen, Rod Grams is aiming to return to DC, but this time...

Internet Media Business Report
NBC Uni closes iVillage buy
Has handed over 600 million bucks...

Rating & Research
Multitasking under review
Interpublic's Emerging Media Lab is cloistered away figuring out just how...

Radio Media Moves

New ePrepper at ABC
James Hunter Kelly has joined ABC Radio Networks as Country Producer for its ePrep morning prep services. He was previously a producer for Premiere Radio Networks Country today prep service.

Criqui returns
to Notre Dame
Westwood One announced that Hall of Famer Don Criqui is back to do play-by-play of Notre Dame football, succeeding Tony Roberts, who had held the position since 1980. Criqui's previous stint in the booth was 1974-76.

More News Headlines

Pol sees Clear Channel as cash cow
In the wake of Clear Channel's WWPR-FM New York firing Troi Torain ("Star") from its morning show after he made comments on air about wanting to molest the 4-year-old daughter of a rival, an NYC City Councilman wants Clear Channel to cough up five million bucks for a local foundation that fights pedophilia. Why five million? According to the New York Post, that is how much Councilman John Liu figures Clear Channel had paid on Star's 17 million bucks contract prior to his firing. The former morning host, meanwhile, is out on bail after being charged with threatening the young girl.

RBR observation: We are trying to follow the Councilman's logic. Is there any? Clear Channel fired Torain because he went out of bounds. If the company has any liability, it would seem to be to the family of the young girl, should they want to sue. It might be good PR to make an anti-pedophilia donation, but not an obligation - and the figure of five million seems totally arbitrary.

RBR Radar 2006

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

Univision floodGates:
A marriage made in...Seattle?
Mexican telecommunication giant Televisa is serious about its play for US Hispanic media giant Univision. One of the main things holding it back is its Mexican heritage, which limits it to a 25% stake in US broadcast licenses. However, it has decided to sign up some partners.

RBR observation: Cascade Investment can be translated into two relatively small words that further translate into big bucks. The two words are "Bill" and "Gates." We will leave it to each of you out there in cyberspace to imagine just what might happen when the world's richest man gets a major foothold in the broadcasting business. But just to get things started: Battle lines are being drawn between broadcast, cable, telco and satellite interests. One of the big issues on the table is broadband deployment. More in
05/15/06 RBR #95

RBR Observation
Guilty until proven innocent
To read the general press accounts of New York Attorney General Eliot Spitzer's latest record company settlement, you'd think that the radio industry is rife with payola violations. That's because Spitzer has been spinning that yarn for over a year now and no one in the so-called mainstream media has bothered to investigate whether there is any truth to what Spitzer has been saying. Nor has anyone except RBR questioned his motives - More RBR Observation in
05/15/06 RBR #95

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.

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.
05/12/06 RBR #94

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.
05/12/06 RBR #94

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