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Volume 23, Issue 99, Jim Carnegie, Editor & Publisher

Friday Morning May 19th, 2006

Radio News ®

CBS Radio signs PPM contract
CBS Radio CEO Joel Hollander isn't waiting for the Next-Generation Electronics Ratings Evaluation Team to finish its comparison of competing systems for radio ratings - he has signed with Arbitron to have CBS subscribe in 35 markets where the Portable People Meter (PPM) is to be deployed under the roll-out plan that Arbitron announced in March to cover the top 50 markets by late 2010 (3/15/06 RBR #52). Arbitron had previously signed lots of ad agencies for PPM, but only Beasley and SBS among radio group owners. CBS is clearly a big catch for Arbitron. "CBS Radio is counting on the PPM to enhance the value of both our programming and the audiences we reach in the eyes of our advertisers. We're pleased to be the first major broadcaster to embrace the future by signing a contract for Arbitron's next-generation electronic audience measurement system. Radio has been searching for a more accountable method to provide advertisers with valuable information about its listeners, and I'm confident that the PPM will be supported throughout the industry," said Hollander in announcing the decision.

Arbitron CEO Steve Morris was clearly happy to have landed radio's second highest billing radio group for PPM. "We view this agreement as an endorsement of our electronic measurement technology from one of our largest and most sophisticated customers," Morris said. The move left Phil Beswick, Exec. VP of The Media Audit - which is the other company besides Arbitron still competing in the evaluation by the Next-Generation Electronics Ratings Evaluation Team - scratching his head, since CBS is a member of the group. But he is undeterred. "We've made a commitment to the radio industry and the ad agency industry to offer the Smart Cell Phone for media measurement," Beswick told RBR. He insisted that his company's proposal with partner Ipsos offers superior methodology at a lower cost. "We're going to carry forward with the broadcasters," he said.

RBR observation: Is it all over? Has PPM won? Not necessarily. CBS is a big fish, but Clear Channel is even bigger in radio. Should the remaining members of the Next-Gen group disagree with CBS and select the Media Audit/Ipsos entry for radio ratings, CBS would eventually have to go along. Arbitron's PPM is dependent on broadcasters encoding, leaving gaps where stations refuse to do so - as Cox and Radio One have demonstrated in Houston. One of the attractions of the Media Audit/Ipsos system is that it prefers encoding, but still produces ratings via sound-matching for stations that refuse to encode. We hear that a handful of other significant group owners, including some Next-Gen members, are considering signing PPM agreements as CBS has done. But the opera ain't over until the fat lady sings - and the fat lady lives in San Antonio.

Moonves says CBS
wants to sell 35 radio stations
That comment was a sidelight to this week's upfront presentation in New York where CBS rolled out its fall TV schedule. CBS - and before that Viacom - has been talking for nearly two years about selling off some non-core radio assets, but after only some small sales had pulled back from the market. Now CBS Corporation CEO Les Moonves is back in a selling mode and spelling out the numbers - 35 stations. RBR sources say those stations are in 10 markets, including some significant clusters that are likely to attract some big bucks bidders.

RBR observation: Just lopping off the smallest markets by Arbitron ranking of the 179 stations that CBS owns doesn't get you to 35. However, using BIA MediaAccess Pro, RBR sorted the CBS portfolio by market revenue rank and - voila! - the bottom 10 markets have precisely 35 stations: Hartford, CT (4), Buffalo (5), West Palm Beach (5), Memphis (3), Riverside, CA (1), Greensboro, NC (3), Fresno (7), Rochester, NY (4), Palm Springs, CA (1) and Victor Valley, CA (2). But that is just one way to get to 35. There are certainly other possibilities. We hear there might even be some larger market clusters on the auction block.

Handicapping the potential Univision buyers
Wachovia Securities analyst Marci Ryvicker predicts a bidding war for Univision, with the price potentially going above 40 bucks per share. But while some mega-media companies have been kicking the tires, she expects the showdown will be between two consortia of private equity firms. As previously reported, one consists of Televisa, which is Univision's main program supplier and already a major shareholder, with equity participation by Bain Capital, Blackstone, Carlyle, Bill Gate's Cascade Investment and KKR. The other, still in formation, apparently includes Texas Pacific, Thomas H. Lee Partners, Madison Dearborn and Providence Equity - and there were reports yesterday that billionaire Haim Saban may join the group. Ryvicker lists CBS, Comcast, Disney, News Corp./Fox, GE/NBC, Time Warner and Viacom as big media companies that may have looked at Univision, but, in her view, won't submit formal bids, either because of price concerns, regulatory barriers, or both. So, which equity consortium will win? "Our answer is that it doesn't really matter. As long as there is enough interest in Univision to drive up the bidding price, we believe Univision shareholders will come out ahead of the game!" Ryvicker told clients. With no end in sight to the rapid growth of Hispanic media in the US, she sees the fundamental value of Univision at 38-40 per share and thinks the bidding could move above the high end of that range.

ComCom looks at Telecom
S. 2686, the Communications, Consumers' Choice, and Broadband Deployment Act of 2006 was on the Commerce Committee agenda today, but was it a hearing or a rehashing? You'd almost expect a cop to be there saying, "Move along, folks, nothing to see here." The battle lines remain right about where they were. Here's a summary. Telcos want their entry into the video distribution business to be as easy and string free as possible. Cable doesn't think they should get a completely free ride, however, and should have to deal with the same hurdles cable has had to deal with, particularly when it comes to local franchising authorities (LFA). LFAs do not want to lose oversight over MVPDs in their jurisdiction, even if they continue to receive right of way fees as provided for in the bill, and also think that a 30-day up or down on approval is insufficient time for a proper negotiation. Consumer groups want the competition telcos may provide to cable, but they want to make sure it goes to all corners of the community, meaning no redlining out less desirable neighborhoods. Consumers, LFAs and cable all agree that the FCC is not capable of taking over oversight currently provided by LFAs. Both parties seem to think its time for national franchising. But Republicans in general are looking to grease the wheels for telcos to provide competition. John Sununu (R-NH) said that in general, failures in Telecom 1996 were due to overlegislating and failing to foresee in what direction technology was headed. Democrats in general are looking out for local authorities and consumers, and additionally want network neutrality rules with teeth. Byron Dorgan said the free market was fine, properly regulated, and that legislation had to do a better job of predicting the future than last time. Republican wrote the legislation, and are open to amendment; Democrats want more time, leading Chairman Ted Stevens (R-AK) to pointedly inform Frank Lautenberg (D-NJ) that there have been some 15 hearings on the topic already.

RBR observation: One more thing. The bill as written largely ignores broadcasting. However, Dorgan said this may be a proper vehicle for language on media ownership consolidation. He noted that the FCC was getting ready to open up another round of deregulation on cross-ownership and who knows what else as part of its court-ordered review of ownership rules. He promised to offer an amendment to this bill which would put the brakes on any further deregulatory action at the FCC.

Federal shield law introduced
A bipartisan group of senators has put forth a bill which will provide source protection for journalists. Such protection is present in a majority of states but is not part of the federal regulatory structure. Signatory to the measure, the Free Flow of Information Act of 2006, are Richard Lugar (R-IN), Arlen Specter (R- PA), Christopher Dodd (D-CT), Lindsey Graham (R-SC) and Charles Schumer (D-NY). If passed, the bill will protect both broadcast and print journalists. Newspaper Association of America President/CEO John F. Sturm commented, "More than 30 reporters have been subpoenaed or questioned about their confidential sources, their notes, and their work product over the last two years. While the bill introduced today does not provide an absolute protection for reporters from having to reveal confidential sources, we believe the legislation establishes important ground rules for confidential sources and reporters. It is a very positive step toward safeguarding the free flow of information to the public."

Ad Business Report TM

Chase launches Spanish-language TV, radio effort
Chase's Consumer Bank is launching its first-ever Spanish-language television campaign on Univision and Telemundo. The TV ads are part of a broader new Spanish-language campaign called "Confia en ti. Confia en Chase," (Confidence in yourself. Confidence in Chase.), which includes print, radio, bus shelters and other outdoor. The Spanish-language campaign includes a 60-second launch commercial and three 30-second spots, and features the song "Todo Se Transforma," (Everything Transforms) by composer Jorge Drexler. He won an Oscar in 2005 for "Al Otro Lado del Rio" ("The Other Side of the River"), which he wrote for The Motorcycle Diaries. "Todo Se Transforma" amplifies the commercial's story, which shows how consumers can benefit from using banks. The ads were developed by Chicago advertising agency Lapiz. The commercials will run through the end of the year in New York, Chicago, Phoenix and Tucson Ariz; and Dallas, Houston, San Antonio, El Paso and Harlingen, Texas. The Spanish-language ads complement Chase's new general-market campaign, which also launched this month. Both campaigns use recognizable music and slice-of-life scenarios to showcase Chase products as ideal solutions for real-world situations. The general-market ads will air in TV markets nationally in the first national campaign since all 1,900 Bank One branches were renamed Chase.

Media Business Report TM

Preaching to the preachers
Salem Communications is primarily a radio company, but this week it's been busy buying other stuff. First, it bought Xulon Press, a print-on-demand (POD) digital publisher of Christian books (5/18/06 RBR #98). Now it has announced a deal to buy American Ministry Resources LLC, the owner of "Preaching Magazine," its companion web properties - www.Preaching.com, www.Preachingnow.com, www.Ministry.org - and the National Conference on Preaching, an annual conference for pastors and clergy. Salem is acquiring AMR from Dr. Michael Duduit, who also is editor of "Preaching Magazine." Duduit will join the staff of Salem Publishing and will continue in his role as editor. Terms of the deal were not disclosed.

Media Markets & Money TM

On Top anything but with Chapter 11 spin-off
Steve Hegwood's On Top Communications filed Form 316s to put all of its stations into Chapter 11, adding the debtor-in-possession suffix to the company name. Five stations in four markets are involved, and the sale of one has already been filed as well, on a Form 314. KNOU-FM Empire LA, south of New Orleans, WWHV-FM Virginia Beach in the Norfolk/Tidewater VA market, and two Albany GA stations, WFFM-FM Ashburn and WRXZ-FM Sylvester GA are the four remaining with the company for now. WRJH-FM Bruce MS, serving the Jackson MS market is the one being sold. It's headed for Roberts Radio Broadcasting for 1.95M. It'll be going into a cross-ownership situation with WRBJ-TV Magee MS, which for now is bringing UPN fare into the market over Channel 34. According to our sister publication TVBR, the TV is signed up for the dawn of CW Network when UPN goes bye-bye.

Washington Media Business Report TM

Stevens modifies telecom schedule
Democrats are at least getting part of their wish on the telecom rewrite known as S. 2686, the Communications, Consumers' Choice, and Broadband Deployment Act of 2006. Commerce Committee Chairman Ted Stevens (R-AK) has added a third hearing on the bill and moved back the mark-up. A 5/18/06 session remains on the schedule, to be followed by a 6/13/06 hearing which will consider the bill which by then will have undergone revision. Then, on 6/20/06, the revised version will be presented for mark-up. All sessions begin at 10AM Eastern.

RBR observation: If the Committee adheres to this schedule, the bill will have to go to the floor, and then will have to be reconciled with the4 version Joe Barton (R-TX) has before the House of Representatives. When it gets into conference committee, it's anybody's guess what might come out. Stay tuned.

Entertainment Media Business Report TM

O&A interviewed
on Fox News Channel
In an interview on Fox News Channel's "Hannity & Colmes," which will run on Friday, May 19th, radio jocks Opie & Anthony talk about their dislike for Howard Stern, being surprised to hear that Bill Donohue of the Catholic league now supports them, pulling controversial stunts in the future and what it's like being back on terrestial airwaves.
| Some highlights from the interview |

Fox News Radio launches "Great American Road Trip"
Fox News Radio is kicking off a pre-memorial day special feature, "Great American Road Trip," on Monday, May 22nd to examine the impact of the high gas prices. FNR correspondents Claudia Peschiutta, who is leaving Denver for Los Angeles in a big SUV, and Robyn Walensky, who is departing Indianapolis for New York in a smaller, more fuel-efficient family car, will interview car and truck drivers, hotel employees, gas station attendants, among others, to gauge whether the American road trip experience is becoming endangered due to the high fuel prices. The correspondents will file at least two features each day on how the high gas prices have impacted the people they've met. FNR's "Great American Road Trip," which will be offered to all Fox News Radio affiliates, will conclude late Thursday with their final filed reports.

Internet Media Business Report TM

AOL buys Lightningcast
AOL as acquired broadband video advertising innovator Lightningcast. Founded in 1999, Lightningcast and its 34 employees - led by CEO Tom MacIsaac - will continue its current operations and work on behalf of clients as a wholly-owned subsidiary of Advertising.com of Baltimore, Maryland, which is a wholly-owned subsidiary of AOL. Lightningcast will continue to be based in DC.
| Read More... |

Transactions

1.5M WGNC-AM Charlotte-Gastonia NC-Rock Hill SC and WOHS-AM Shelby NC from KTC Broadcasting Inc. (Calvin R. Hastings) to HRN Broadcasting Inc., a subsidiary of Kentucky Fried Chicken of Lincolnton Inc. (D. Mark Boyd, W.G. Boyd, David M. Boyd). 25K deposit, 1M cash at closing, 475K note. Superduopoly in Charlotte between WGNC-AM and WLON-AM Linconlton, WCSL-AM Cherryville NC. Superduopoly in Shelby between WOHS-AM and WADA-AM Shelby, WCSL-AM Cherryville NC. LMA 2/1/06. [File date 4/26/06.]

1M WFFL-FM CP Panama City FL, KNBE-FM CP Beatrice NE, KNFA-FM CP Grand Island NE & KNHA-FM CP Hastings NE from American Family Association (Donald E. Wildmon) to Family Worship Center Church Inc. (Jimmy Swaggart). Cash. WFFL-FM CP is for Class A on 91.7 mHz with 310 w @ 207'; KNBE-FM CP is for Class C3 on 88.9 mHz with 25 kw @ 285' (it's applied for C2, 7 kw @ 459'); KNFA-FM CP is for Class A on 90.7 mHz with 250 w @ 161'; KNHA-FM CP is for Class A on 90.9 mHz with 500 w @ 148'. [File date 5/1/06.]

Stock Talk

Another down day
Continued inflation fears sent stocks lower again on Thursday. The Dow Industrials fell 77 points, or 0.7%, to 11,129.

Other than a gain by Arbitron on news of its PPM deal with CBS Radio, radio stocks had a down day as well. The Radio Index dropped 3.273, or 2%, to 157.117. Arbitron rose 5.1%. Beasley led the losers, down 3.4%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		39.73	+1.91	Hearst-Argyle	HTV		22.50	-0.07
Beasley	BBGI		7.01	-0.25	Journal Comm.	JRN		11.82	unch
CBS CI. B	CBS		25.35	-0.45	Lincoln Natl.	LNC		55.94	-0.41
CBS CI. A	CBSa		25.37	-0.46	Radio One, Cl. A	ROIA		7.97	-0.13
Citadel	CDL		10.44	-0.11	Radio One, Cl. D	ROIAK		7.97	-0.12
Clear Channel	CCU		30.35	-0.16	Regent	RGCI		4.19	-0.06
Cox Radio	CXR		14.66	-0.23	Saga Commun.	SGA		9.25	-0.05
Cumulus	CMLS		11.00	-0.09	Salem Comm.	SALM		14.98	unch
Disney	DIS		29.60	-0.16	Sirius Sat. Radio	SIRI		4.01	-0.01
Emmis	EMMS		15.86	-0.05	Spanish Bcg.	SBSA		5.32	-0.16
Entercom	ETM		27.78	-0.38	Univision	UVN		35.35	-0.10
Entravision	EVC		7.99	-0.15	Westwood One	WON		8.55	-0.06
Fisher	FSCI		42.12	-0.15	XM Sat. Radio	XMSR		16.52	-0.10
Gaylord	GET		44.40	+0.10	-	-	-	-	-

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]

It would appear that Rodney has a point here (5/16/06 RBR #96). Too many who feel free to criticize have no plan for correcting the course that radio could improve upon. There is one point however, where I would disagree - that part of the blame falls upon the Independent radio stations. They comprise less than 15% of all the stations on air and stand as a beacon to independent formats and thoughts to serve their respective markets. One only has to look to Philadelphia where WBEB FM ( B101), owned by Jerry Lee, is and has been the only beautiful music/ adult contemp format in the market for years. Jerry has also won numerous awards for his constructive input into the radio industry while making his station a huge financial and formatic success. I am sure there are many other independents who contribute as well. To lump them into the larger corporate entities who focus on the bottom line at the sacrifice of creative thinking and foster further format fragmentation is an error.

Stan Elgart
Felsgart Communications

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'Today's Perspective'
New Media 2006
What is so new about the phrase "New Media" and what is new? Nothing - PERIOD!
www.jimcarnegie.com

Below the Fold

Ad Business Report
Chase launches Spanish-language
TV, radio effort ads are part of a broader new campaign called...

Media Business Report
Preaching to the preachers
Salem primarily a radio, this week it's been busy buying...

Media Markets & Money
On Top anything but
With Chapter 11 spin-off 5 stations in 4 markets are involved, to a TV owner...

Washington Media Business Report
Stevens modifies telecom
Getting part of their wish on the telecom rewrite...

Internet Media Business Report
AOL buys Lightningcast
Broadband video advertising innovator

More News Headlines

Kennedy to be honored
NAB announced that David Kennedy, formerly President and CEO of Susquehanna Media, will receive the NAB National Radio Award on September 20th during the NAB Radio Show in Dallas. "Throughout his career, David has exemplified a tremendous commitment to the business of radio. NAB salutes David Kennedy for his many contributions to radio, and we are proud to include him in this prestigious group of radio broadcast icons," said NAB President and CEO David Rehr.

WBAB-FM
LI signal hijacked
The morning show on Cox Radio's AOR WBAB-FM Long Island was hijacked Wednesday, according to the station, by someone who broke in on its broadcast, likely with an illegal STL, and played an offensive song that repeated a racial slur several times. The pirate broke in the broadcast at 7:15 a.m., interrupting "Hey You" by Pink Floyd and playing part of a Country-sounding song that in addition to using the "n word" suggests killing blacks, and more. After the pirate's song ended, several seconds of dead air followed until the main signal resumed, playing end of the Floyd tune. The station is also already dealing with in controversy over the Roger and JP morning show's airing last week of a "Wetback Steakhouse" fake commercial.

Sirius to launch
blog show
Sirius Satellite Radio will launch a daily music show hosted by some of America's top music bloggers. The new program, Blog Radio, will debut May on Monday, May 29 on Left of Center channel 26, the commercial-free SIRIUS music channel that plays the best in college, indie and alternative rock music. Each weeknight at 10 pm ET, Blog Radio will be hosted by a blogger who will showcase his or her favorite music and provide views and insights into the indie rock music scene.

RBR Radar 2006

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

Bye, bye ratings books
If your idea of a good time is curling up in the evening with an Arbitron Radio Market Report, you're going to have to find something else to fill your leisure time. The printed books are no more. The upcoming Spring 2006 survey will mark the debut of the Arbitron eBook. You'll need to sit in front of a computer to read it and you won't be able to dog-ear the pages. One bit of good news is that you will get the info faster. In fact, if your station has been paying for Advances, you will save that expense.

RBR observation: Just the question of when the books would go bye bye. RBR knows as we have an entire room filled with Arbitron books some for 19 years. WOW. Glad Arbitron joined the ranks of eBook like RBR E-paper.
05/18/06 RBR #98

Cumulus begins stock tender
Has launched the Dutch auction tender offer seeking to buy back up to 200 million bucks of its own stock. If enough shares are tendered within the range of 11.00-12.50, Cumulus will buy back 11.5 million shares at the lowest price offered that would allow it to acquire the entire 11.5 million - paying the same amount to all selling shareholders. If fewer than 11.5 million shares are tendered, Cumulus will buy them all.

RBR observation: We noted one little tidbit in the latest release that was, indeed, mentioned in the original Dutch auction announcement, but didn't get much attention. The top management and directors of Cumulus say they won't be tendering any shares for the buyback. They've all elected to retain all of the Cumulus shares they own, presumably in anticipation of future growth.
05/18/06 RBR #98

Moody's turns negative on Emmis
In the wake of the bid by CEO Jeff Smulyan to buy out public shareholders and take Emmis Communications private, Moody's Investors Service has changed the company's outlook to negative, while affirming its current debt ratings. Moody's said it was concerned that the post-buyout entity could have higher leverage than anticipated by the firm's current ratings. For the ratings see
05/17/06 RBR #97

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 but you just couldn't quite place it? Try the May issue of RBR/TVBR Solutions Magazine, where Connoisseur Media CEO Jeff Warshaw talks about his new company - and how he has been advising Noonday, a subsidiary of Farallon Capital, since selling his previous radio group.
05/16/06 RBR #96

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