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Volume 24, Issue 98, Jim Carnegie, Editor & Publisher
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Friday Morning May 18th, 2007
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Radio News ®
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 Radio One spins 10 to Main Line
Wall Street has been expecting for some time now that Radio One would sell off some of its non-core properties - and now the company is selling 10 stations in two markets. The buyer is Dan Savadove's Main Line Broadcasting, which will acquire the Radio One clusters in Louisville, KY and Dayton, OH. That will boost recently launched Main Line to 19 stations in four markets, adding to its previous acquisitions in Richmond, VA and Hagerstown, MD-Chambersburg, PA. Main Line is backed by Arlington Capital Partners, a private equity fund based in suburban Washington, DC. "This acquisition represents a significant step in Main Line Broadcasting's aggressive expansion plans in attractive medium sized markets," said Savadove. The stations he is acquiring from Radio One include WGZB-FM/B96 (Urban), WDJX-FM/ 99.7 DJX (CHR), WMJM-FM/Magic 101.3 (Urban AC), WXMA-FM/102.3 The Max (Hot AC), and WLRS-FM/New Rock 105.1 (New Rock) in Louisville and WROU-FM/92.1 WROU (Urban AC), WGTZ-FM/Z-93(CHR), WKSW-FM/Kiss Country 101.7 (Country), WDHT-FM/Hot 102.9 (Urban), and WING-AM/ESPN Radio 1410 (Sports) in Dayton.
RBR observation: Easy to see why these markets are non-core to a company that calls itself "The Urban Media Specialist." There are a lot of non-Urban stations in these clusters because they aren't big enough for a company of the size of Radio One to operate only in the Urban formats. So, Alfred Liggins and his crew at Radio One can forget about dealing with Country, Sports and such to focus on their problems in Los Angeles and on growing their other big market Urban properties.
CCU deal "gaining momentum"
With a vote still set for next Tuesday on a 39 bucks buyout bid, which faces significant shareholder opposition, the Wall Street Journal reported in yesterday's edition that a sweetened deal is "gaining momentum" with major holders, including Highfields Capital and Fidelity Investments. The enhanced deal, which was initially rejected by the CCU board, would boost the buyout to 39.20, but also offer current shareholders the option to stay in and own as much as 30% of the new Clear Channel as partners with Thomas H. Lee Partners, Bain Capital and the Mays family. The company has already delayed the shareholder vote twice and it appears that it may be delayed again. The first vote was postponed when it became clear that the original 37.60 offer would be rejected and the bid was raised to 39, then again to give shareholders more time to consider the 39 bid. Adding an extra 20 cents wouldn't be difficult, but changing the terms to facilitate the conversion of some current shares to equity in the new company is complicated enough that the vote could be delayed for a couple of months.
RBR observation: It would have been a lot simpler to have offered 40 bucks a share, which nearly everyone on Wall Street thinks would have been enough to get the job done. It will be interesting to see how a going semi-private transaction will be handled. Will the stock be officially listed, or trade over-the-counter? Will any analysts follow it?
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Another down month for the Gray Lady
The New York Times Company reported that April ad revenues from its continuing operations were down 3.6% to 196 million and that total company revenues declined 2.2% to 303 million. For the News Media division, which includes the newspapers, radio and their related websites, classified plunged 10.9%, retail fell 4.7% and national was off 1.2%. Ad revenues for the New York Times Media Group, anchored by the flagship daily, fell 3.8%, while the New England Media Group, anchored by the Boston Globe, fell 3.3%. Ad revenues for its group of regional newspapers fell 9.1%. One bright spot was Internet ad revenues for the media properties, which rose 15.6%. About.com, which is its own division, saw ad revenues rise 26.6% to 8.9 million. With the April report we also got our last look at the New York Times TV group, which was sold on May 7th. TV revenues were down 4.3% to 13.8 million.
 Food fight: What about kids
and the Internet?
A pair of watchdogs does not seem overly impressed with junk food manufacturer's efforts to rein in their own advertising aimed at children on broadcast media. That's because it seems that the effort has simply been redirected toward the internet, cell phones and other new media. The Berkeley Media Studies Group and the Center for Digital Democracy have a new report out, "Interactive Food & Beverage Marketing: Targeting Children and Youth in the Digital Age," that provides facts and figures. They claim much of this occurs "under the radar of parents." It notes a McDonald's campaign which text-messaged McFlurry coupons to young cell phone users; a "Coke Rewards Program" which places a special code on products sending youngsters to a website where they can get items like ringtones, while being profiled by Coca Cola; and campaigns by fast food companies place on YouTube and MySpace. Lori Dorfman of BMSG said, "It appears that the food and beverage industry is making minimal changes with one hand but greatly expanding its marketing to children with the other. It's not fair to families when food companies use technology to market to children out of earshot of parents." They watchdogs sent their 98-pager to the Federal Trade Commission and requested a full investigation of digital food and beverage marketing aimed at children.
RBR observation: It's like a limp balloon - you squeeze one end and the air simply shifts over to the other side. Slow down the broadcast end and the marketing cash won't disappear, it will simply show up somewhere else. And this stuff definitely makes it through to our kids. Just as one example, although we rarely go to fast food restaurants, our children almost always seem to know what the current toy theme is at all of them. There are two operatives in that last statement: The fast food message is getting out one way or another, and our kids still don't get very much fast food, which begs the question where does the responsibility of the industry to restrict the message end and the responsibility of the parent to restrict access to the product begin? It's another gray area, and you can expect Washington to work it to death this summer.
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Ad Business Report TM
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Scarborough/RAB release Automotive Study, Part 2
Scarborough Research and the RAB have issued Part Two of their Automotive Report. The top-5 selling domestic and top-5 selling foreign vehicle brands were covered in the first edition of Scarborough and RAB's automotive study. Part Two covers five domestic vehicles (GMC, Pontiac, Buick, Cadillac, and Saturn) and five foreign (Kia, Mazda, Volkswagen, Acura, and Subaru).
| Highlights and full report |
 O&A advertiser pulls spots in protest-but not for the comments
In the wake of the recent Opie & Anthony show featuring vulgar comments from "Homeless Charlie" regular regarding Condoleeza Rice, Laura Bush and Queen Elizabeth, NashvilleCoffee.com, as of May 15 at 3:30pm ET, pulled their spots from XM Radio. But it's not over the spots, but their 30-day suspension. Says Lou Galli General Manager, Nashville Coffee Company: "We pulled our spots from both Radio Disney (Channel 115) and The Virus (Channel 202). We have done this in response to XM Radio's censoring of the Opie and Anthony Show by suspending them for 30 days. It is apparent that XM Radio is beholden to crybaby special interest groups who cannot separate humor from reality. It is also unfortunate that XM Radio executives don't have the guts to stand up for their on air talent." He added, "I have contacted other XM Radio advertisers and have asked them to pull their adverting spots. It appears that many of them already are. Please be advised that spots cannot be pulled overnight. Some are already in the "hopper" and may air for the remainder of the week. Some other sponsors are doing the right thing and are pulling their spots. Please give them time to finish the cycle this week before you actively boycott their products. Thanks for your time."
RBR observation: A free publicity stunt? Who knows, but this may be the first time an advertiser pulled spots over a broadcaster suspending talent. Interesting twist-and possibly a deal done behind the scenes to deflect advertisers from pulling ads from the show for the content itself.
Local Focus announces Canadian sales partnership
On the heels of the March announcement regarding the launch of Focus 360, a new company anchored by Radio and focused on developing multi-platform marketing programs for advertisers, and the launch in April of its first and largest division-Local Focus- formerly know as RMR-a highly niched radio rep firm, Joan Gerberding, President of Local Focus announced today that an agreement has been reached to rep over 325 stations throughout Canada by partnering with Canada's leading national radio sales company Canadian Broadcast Sales. "While in the U.S., saying we rep 325 stations would sound impressive, but, relatively speaking, that would only be about 30% of all stations," commented Gerberding. "In Canada, 325 radio stations represent 60% of all national radio sales across the country. Now that's huge." The Local Focus - Canadian Broadcast Sales (CBS) partnership offers American agencies and clients the ability to do Radio planning, review media alternatives, execute promotional add-ons, research the Canadian market and, finally, effectively place buys with only one call to a Local Focus office. Local Focus has offices in New York City, Syracuse, Boston, Atlanta, Dallas, Chicago, Detroit, and Los Angeles. Canadian Broadcast Sales has offices in Toronto, Vancouver, Calgary, Winnipeg, Montreal & Halifax.
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| Media Business Report TM |
 Anheuser-Busch combats
underage drinking
Self-regulation is a must for adult-only products and services, and beer maker Anheuser-Busch is participating in a campaign to keep its products, and those of its competitors, out of the hands of teenagers, particularly as the prom and graduation season kicks off. Joining A-B are The Association of Junior Leagues International, The International Association of Fire Chiefs and the National Fatherhood Initiative. An advertising campaign is aimed at parents, reminding them that while it may be okay to spend money on prom accessories and clothes, or to lengthen curfews, it is not okay to provide alcohol to teens on these or other special occasions. The ad flight will include print, television, radio, point of purchase and Internet messages.
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| Media Markets & Money TM |
Close encounter on Narragansett Pier
The Foundation for Ocean State Public Radio has closed on its acquisition of a Providence RI FM station. According to broker Michael J. Bergner, seller Davidson Media received 2.56M for the station. John Pierce also had a hand in the sale. Eugene Mihaley heads the buyer.
Close encounter in Ohio
Noncommercial Christian Voice of Central Ohio Inc. has gone from two to five FMs with the closing of its acquisition of three stations from Cincinnati Public Radio. For 1M, it received WVXW-FM West Union, WVXR-FM Richmond and WVXC-FM Chillicothe. According to Greg Guy of brokerage Patrick Communications, the buyer already owns WCVO-FM Columbus and WCVZ-FM Zanesville.
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| Washington Media Business Report TM |
If it's broke the broker isn't responsible
There is no way the FCC is going to let a licensee shimmy out of an operational fine in an LMA situation. That's the bottom line in the case of Jerry Russell's KWRD-AM Henderson TX. It was nailed for 8K on an EAS violation, and Russell tried to get out of the fine on grounds that the station was being operated by someone else in an LMA, and failed to inform him of the problem. That didn't fly with the FCC. Russell came back, late, with further arguments that A) the equipment was operational when he turned over the station to the time-broker; and B) he had hired an individual to monitor the station, who thereupon failed to inform him of the equipment's deterioration. The FCC first noted that the late filing was grounds all by itself for denying the appeal, but stated for the record that A) it was irrelevant if the equipment ever worked if it wasn't working when the FCC came to inspect it; and B) it is still the licensee's responsibility to ensure that his station is in compliance with all rules and regulations: "...licensees... are responsible for the acts and omissions of employees or independent contractors." Russell also failed to document any financial hardship caused by the fine. The fine stands.
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| Entertainment Media Business Report TM |
 Dan Aykroyd and Dial Global celebrate opening of Dallas House of Blues
To celebrate the opening of the new House of Blues in Dallas, Dan Aykroyd and Dial Global invited network radio advertisers and stations to join them for lunch in the House of Blues' exclusive Foundation Room. Over 30 guests looked on as Dan talked about the inner city school music education program funded by Foundation Room membership. In the guise of Elwood Blues, Dan has been delivering America's best loved Blues program for over 14 years on his award winning weekly House of Blues Radio Hour and in the daily five minute House of Blues Breaks. The House of Blues Radio Hour and House of Blues Breaks are affiliated and sold by Dial Global. They're produced by Ben Manilla Productions.
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| Internet Media Business Report TM |
 Study: Males 18-24 more likely to
download podcasts via iTunes
comScore released the results of a study profiling the iTunes podcasting audience. The study, sponsored by mobile advertising enabler Ad Infuse, focused on those users who downloaded podcasts via iTunes in October 2006. An analysis of the iTunes podcasting audience revealed that males represented a significantly larger share (63%) of the audience than did females (37%). In addition, 18-24 year olds represented a substantial share of the audience (29%) and were more than twice as likely as the average Internet user to download podcasts. People between the ages of 35-54 represented about half of the podcasting audience and were also more likely than average to download podcasts. "The comScore study reveals significant advertising opportunities among several consumer segments," said Nick Tabbal, comScore SVP/media and entertainment solutions. "While the conventional wisdom says that only young, tech-savvy consumers are downloading and listening to podcasts, there is also a sizable market among 35-54 year olds, indicating that the audience is broader than previously thought." comScore also examined the household income and education levels of the iTunes podcasting audience, revealing that consumption of podcasts increased with both income and education. In particular, those individuals in households making at least 100,000 annually were 28% more likely than average to download podcasts, while college graduates were 25% more likely.
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| Ratings & Research |
Nielsen//NetRatings moves forward
in MRC accreditation process
NetRatings announced it will move forward in the Media Rating Council (MRC) Accreditation process of its Internet audience measurement methods. Having completed a pre-audit, NetRatings will now commence the full accreditation process, specifically for its patented metering and page-tagging technologies, while continuing to execute on the already-existing MRC research plan for its panel procedures. NetRatings shared its plans at a cross-industry discussion hosted by the IAB and attended by the AAAAs, ANA, ARF, the Online Publishers Association (OPA) and the MRC. "With today's announcement that it will be moving into the audit phase of the MRC process, NetRatings has demonstrated leadership in answering the call for increased transparency in online media measurement," said George Ivie, CEO and executive director of the MRC. "We have been pleased with NetRatings' progress through the pre-audit process, and we look forward to working with them in the full MRC audit for the collective benefit of advertisers, advertising agencies, publishers and other users of Internet audience measurements."
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| Transactions |
3.85M KEAL-FM CP/KXTT-FM CP Bakersfield (Taft, Maricopa CA) from College Creek Media LLC (Christopher F. Devine) to Lazer Licenses LLC, a subsidiary of Lazer Broadcasting Corporation (Alfredo Plascencia). 195K escrow, balance in cash at closing. Will form duopoly when built. KEAL-FM CP is for 106.5, KXTT-FM CP is for 94.9. Otherwise, stations are co-located with identical Class A facilities with 6 kw @ 37'. [File date 4/20/07.]
1M KTXV-AM CP Dallas-Fort Worth TX (Mabank TX) from JNE Investments Inc. (Jaffrey N. Eustis) to Bustos Media Holdings LLC (Amador S. Bustos). Cash. Buyer will also pay all construction costs. CP is for Class B on 890 kHz with 20 kw-D, 250 w-N, DA2. [File date 4/23/07.]
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| Stock Talk |
Day ends down
A stock market surge fizzled amid mixed economic news. In the end, the Dow Industrials, which had surpassed 13,500 in trading, closed down 11 points at 13,476.
Radio stocks were mixed. The Radio Index crept up 0.379, or 0.2%. Emmis, which has been the focus of renewed going private speculation, gained 2.9%. Cox Radio gained 1.7%
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| Radio Stocks |
Here's how stocks fared on Thursday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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48.80
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+0.17
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Hearst-Argyle
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HTV
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25.75
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+0.42
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Beasley
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BBGI
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9.00
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unch
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Journal Comm.
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JRN
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13.63
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-0.06
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| CBS CI. B |
CBS |
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32.01
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-0.03
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Lincoln Natl.
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LNC
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73.63
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-0.79
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| CBS CI. A |
CBSa |
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32.05
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unch
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Radio One, Cl. A
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ROIA
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7.21
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+0.09
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| Citadel |
CDL |
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8.13 |
-0.11 |
Radio One, Cl. D
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ROIAK
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7.19
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+0.06
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Clear Channel
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CCU
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37.79
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-0.11
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Regent
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RGCI
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3.39
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unch
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Cox Radio
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CXR
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14.53
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+0.24
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Saga Commun.
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SGA
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9.43
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+0.07
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Cumulus
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CMLS
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9.32
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+0.02
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Salem Comm.
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SALM
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11.45
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-0.16
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Disney
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DIS
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35.99
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-0.02
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Sirius Sat. Radio
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SIRI
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2.72
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+0.03
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Emmis
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EMMS
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10.45
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+0.29
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Spanish Bcg.
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SBSA
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4.12
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-0.11
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| Entercom |
ETM
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26.86
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+0.19
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SWMX
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SMWX
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0.25
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unch
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Entravision
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EVC
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9.57
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-0.03
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Westwood One
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WON
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7.20
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-0.10
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Fisher
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FSCI
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48.84
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+0.15
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XM Sat. Radio
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XMSR
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10.60
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+0.12
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
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Below the Fold
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Ad Business Report
Scarborough/RAB
Release Automotive Study, Pt 2...
O&A advertiser pulls spots
In protest, but not for the comments, NashvilleCoffee.com pulled over O&A suspension...
Washington Media Business Report
If it's broke
The broker isn't responsible...
Ratings & Research
Nielsen//NetRatings
Moves forward in MRC accreditation process...
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Stations for Sale
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NE Louisiana FM
Great stand alone market!
Offered at 6 X 2006 BCF
[email protected]
(303)758-6900
 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
[email protected]
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Radio Media Moves
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Another title for Morris
President and CEO Steve Morris was appointed Chairman as well by the newly elected board of directors, succeeding Lawrence Perlman, who had retired after six years as non-executive chairman. Luis Nogales was appointed to serve as Lead Independent Director. Filling the vacant seat, William Kerr was elected by shareholders to the Arbitron Board of Directors. He is Chairman of Meredith Corporation.
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More News Headlines
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GM Marketing Chief Mike Jackson to depart
General Motors's VP/marketing and advertising for North America, Michael Jackson, is leaving to pursue other opportunities. The departure is effective 6/15 and the position he has held since March 2006 won't be filled, a spokeswoman told AdAge. The duties will be assumed by Mark LaNeve, VP-sales, service and marketing, North America. "Throughout his tenure Mike has contributed to GM's improved product image, and brought a creative approach to GM's market presence," LaNeve said in a statement. "We wish him well in his future endeavors."
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TVBR - TV News
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Nexstar on the
auction block
After winning the retrans battle and clawing back out of penny stock hell, Nexstar Broadcasting Group CEO Perry Sook and his board have retained Goldman Sachs to review strategic alternatives, including a sale of the company. Nexstar said there was no assurance that any transaction would occur and it said the company would have no further comment on the matter until the process is completed. Bear Stearns analyst Victor Miller quickly upgraded the stock to Outperform. He called it a 180-degree turn for the company, which he thinks was the "underbidder" for the Clear Channel TV group at 1.1 billion (it went for 1.2 billion). So, it appears that Sook's main investor, ABRY Partners, decided it was time to take its chips off the table. "We believe ABRY Partners began its investment in Nexstar in 1996 and believe that its 'basis' is around 12.50 a share. ABRY also owns about 55% to 60% of the 'economics' of the company. Obviously, given recent valuations of TV properties, ABRY decided to leave rather than consolidate," Miller said in his analysis. He sees the take-out value of Nexstar at 15-20 bucks per share, with a blended 2007-2008 EBITDA multiple of 11.75-13.25 implied.
TVBR observation: Private equity rules these days, so we will be shocked if the 49 stations that Nexstar owns or has virtual duopolies with end up with another public company. Likely buyers include Oak Hill's Local TV LLC, which bought the New York Times TV group, and Providence Equity Partners, which bought the Clear Channel TV group, but there are lots of other equity players chasing TV deals. Nexstar offers potential bidders a solid platform of network affiliate stations with strong positions in medium and smaller markets. Nexstar's stock bottomed out below four bucks last October. But as revenues from retransmission consent became real, not just a promise, the stock began a steady climb which took it out of penny stock status and recently into double digits.
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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What's Emmis worth?
Emmis' stock may be trading around 10 bucks a share, but Bank of America analyst Jonathan Jacoby is telling clients the company is wroth twice that. He pegs the breakup value at 20-25 bucks. He figures the US radio stations alone are worth 1.8-2 billion, plus the value of the magazines, the overseas radio investments and the one remaining TV station. But, is CEO Jeff Smulyan likely to do anything to unlock that value?
05/17/07 RBR #97
2007-08 Pre-Upfront
Programming Report
CW: The CW's main goal during year one was to generate awareness for the newly created network among its core target audience of Adults 18-34. The CW relied on the strongest programming product from the since defunct WB and UPN in order to populate its primetime schedule. Unfortunately ratings performance for The CW was unable to outperform the sum of its parts. The nascent network is in sixth place across all major demographic groups behind Spanish language network, Univision. Read More in this special page report in TVBR.
05/17/07 TVBR #97
Citadel peeved at Peak
Peak Broadcasting CEO Todd Lawley has a court battle on his hands with his former employer, Citadel Broadcasting. Citadel has sued Peak, Lawley, four Peak employees and a series of potential John/Jane Doe defendants, charging that they have engaged in a conspiracy to purloin proprietary information and trade secrets from Citadel. RBR has obtained a copy of the lawsuit. In it, Citadel charges that "At least as early as July 2006, some four months prior to his resignation and while still serving as a Regional President, unbeknownst to Citadel Broadcasting, Defendant Lawley initiated a scheme to raid the ranks of Citadel Broadcasting employees...
RBR note: There is more to this legal battle in RBR.
05/16/07 RBR #96
GoodRadio.TV paperwork filed
Clear Channel and GoodRadio.TV LLC have posted the contract for their massive deal involving numerous small market stations scattered throughout the country. GoodRadio.TV, headed by Dean Goodman and Paul Kasper, is spending 452.1M for the stations. The buyer is backed by American Securities Capital Partners LLC, and a couple of notable names appear on the ownership roster: veteran broadcaster Carl Hirsch and former NAB stalwart Eddie Fritts.
05/16/07 RBR #96
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Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.
Need assistance
contact Cathy Carnegie
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