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Welcome to TVBR's Daily Epaper
Volume 22, Issue 151, Jim Carnegie, Editor & Publisher
Wednesday Morning August 3rd, 2005

TV News®

Nexstar sees 2005 down, upbeat on 2006
After reporting that Q2 revenues were down 5.4% to 57.9 million, Nexstar is telling Wall Street to expect full year 2005 revenues to be down in the high single digits, due to the lack of political revenues and softness in the auto sector. CEO Audio Link Perry Sook told analysts that Nexstar's stations booked three million in new local direct business in Q2 - - tying the company record - - which held the revenue decline, not including political, to 1%. Sook said there was a "spate" of auto business cancellations in June, and although some of that business was just moved to July, it's made him cautious about projecting where the auto sector is going. Meanwhile, Sook is upbeat about 2006, where his stations are already marketing the Super Bowl and the Olympics - - not to mention another round of elections. Also, he notes, his 13 NBC affiliates are going to again have NFL football to sell. Sook said there was nothing new to report regarding the Cox and Cable One systems which are not carrying Nexstar's stations on cable due to a retransmission consent dispute - - except, he says, those markets are becoming more normal each week for Nexstar's ad sales. However, Sook said Nexstar is having "more constructive conversations" with other top 10 MSOs whose retransmission consent agreements with Nexstar will expire in a few months. He said those talks began with a clear understanding by the MSOs that Nexstar would insist on cash compensation.

Alarcon defends move into TV
Spanish Broadcasting System took a hit on Wall Street last month after announcing its first move into television with a 37.5 million bucks buy of WDLP-TV Miami (7/14/05 TVBR #137), but CEO Raul Alarcon defended the move in his quarterly conference call and said SBS would be vindicated by showing how valuable the TV station will be for cross-promotion - - something several other players in Spanish media are already able to do.

Audio Link In answer to an analyst's question, Alarcon also denied that he had decided to get into TV because multiples aren't attractive in radio.

Alarcon left unanswered a related question from the same analyst - - is SBS looking to make other TV acquisitions? Meanwhile, Alarcon expressed confidence that Styles Media will be able to make its delayed closing on two of SBS' Los Angeles stations for 120 million. Asked if he'd considered just keeping the 20 million non-refundable deposit and remarketing the stations after Styles couldn't close on time, Alarcon said it would not have been in his company's best interest to blow up the deal. He confirmed that he tried, and failed, to get Styles to pay extra because of the delay, but said "there are just so many screws you can put to a buyer at one time." As reported (8/2/05 TVBR #150), Styles has to up its deposit to a total of 55 million to get to a closing date now set for the end of January.

Video game takes the 2005 indecency heat
Broadcasters have yet to receive any new fines for indecency this year, and further are generating very few protests. However, perhaps proving yet again that nature abhors a vacuum, a new candidate has filled the void, giving indecency foes something to attack. Introducing: "Grand Theft Auto: San Andreas." [Warning: groaningly, achingly obvious pun dead ahead.] And just what is the San Andreas fault? [Don't say we didn't warn you.] It was released with a rating of M, meaning for a mature, aged-17-or-older clientele, and avoiding an Adults Only rating. However, the possibility of unlocking indecent - - some say pornographic - - material was built into the game, drawing howls of protest and inspiring the Entertainment Software Rating Board to launch an investigation. The game drew the ire of the Parents Television Council and, both of which kicked their well-oiled Internet protest machines into gear. And the House of Representatives has ordered the Federal Trade Commission to look into the situation by a vote of 355-21. On the Senate side, Hillary Rodham Clinton (D-NY) has been taking a lead role in the anti-Grand Theft campaign. It's also been pulled from the shelves of leading retailers.

TVBR observation: Isn't it nice to have someone else getting the tar and feathers for a change?

Russia kicks out ABC News
Russia's foreign ministry says it will not renew its authorization for ABC News to operate in the country because of the US network's recent broadcast of an interview with the head of a Chechen rebel group. Shamil Basayev, a leading Chechen warlord, is regarded as a terrorist by the Russian government. ABC's "Nightline" aired the interview despite Russian objections. The foreign ministry then made a formal protest to a top US diplomat in Moscow. That was followed by the Russian defense minister barring his country's military personnel from having any contact with ABC reporters. Now the foreign ministry says the credentials of ABC's reporters and other staffers in Russia will not be renewed as they expire. So far, the US government is standing behind ABC, with the State Department saying that ABC News and all other media outlets should have the right to report as they see fit.

Political category heating up
Congress is in recess and the President is headed for Crawford TX, and many others in Washington are headed out of town during the month of August, a time where the nation's capital reverts to its sleepy pre-WWII status. But a Supreme Court candidate and a possible 2008 presidential candidate are fueling cash infusions into the political ad category. The nomination of John Roberts to take over Sandra Day O'Connor's seat on the Supreme Court bench made a surprisingly small initial splash, but the water is slowly starting to churn as more of Roberts' background is ferreted out. Liberal watchdogs which had been content to hold their fire are now trotting out advertisements encouraging Democratic senators to be aggressive during the confirmation process. Conservative groups are expected to fire right back, and at least one of them is going to focus on the home states of Democratic Senate Judiciary Committee members up for re-election in 2006, particularly if they're from a battleground state. Meanwhile, according to the Associated Press, a group called Hillary Now, which is not affiliated with Hillary Rodham Clinton, is nevertheless buying time on cable systems in New Hampshire to push her prospects for a 2008 presidential run. It's a very limited campaign, though - - the group is getting time on cable news channels between 1AM-5AM.

Broadcasters' Foundation to honor Smulyan
Emmis Communications founder and CEO Jeff Smulyan will be honored with the 2006 Broadcaster's Foundation Golden Mike Award. "The fact that in 2005 Emmis was named by Fortune as one of the '100 Best Companies to Work For,' is just one example of why Jeff is so worthy of this honor," said Phil Lombardo, chair of the Foundation and CEO of Citadel Communications. The award will be presented to Smulyan at a black tie dinner February 27th in New York.

Conference Calls Q2 2005
Nexstar falls short of guidance
Nexstar had told investors in May to expect Q2 revenues to be down 2-3.6%, but the actual decline was 5.4% as the quarter finished with 57.9 million. "Given the current pacings in our markets and the absence of over 23 million political and Olympics-related revenue in the second half of 2005, we now see full-year reported net revenue declining in the high-single digit percentage range to approximately 220-225 million," CEO Perry Sook said yesterday. He's projecting that Q3 revenues will be down in the low double digits, which would be a decline in the mid single digits excluding political revenues. For Q2, local and national spot revenues were down 1% to 56.9 million. Political revenues dropped 81.4% from 4.3 million last year to only 800K this year.

Revenues down 3%
for Liberty Corp.
Liberty Corporation reported that Q2 revenues were down 3% to 53.3 million, while broadcast operating profit fell 7% to 20.8 million. As you would expect, those declines were due mainly to the lack of 3.4 million in political revenues from a year ago. "The Liberty stations continue to serve their communities and maintain a keen focus on the sources of revenue that are closest to home. By providing a valued outlet for local advertisers, our stations have seen local revenues, including local Internet advertising, grow over 5.5% in the quarter," said CEO Hayne Hipp. Earnings per share in Q2 shot up to 46 cents from 16 cents a year earlier due to two one-time items - - a tax reversal/refund this year and substantial write-downs a year ago.

Double digit growth for SBS
Broadcasters targeting Hispanics continue to outpace their general market brethren. Spanish Broadcasting System reported that Q2 net revenues were up 11% to 44.6 million. That's actually less impressive than some other recent quarters. CEO Raul Alarcon told analysts that Q2 revenues were hold down by the format change at KXOL-FM Los Angeles and he noted weakness in network ad revenues. That was attributed in large part to an advertising cutback by Telemundo. Operating income rose 3% in the quarter to 15.5 million, with same station operating income up 9%.


Donlin: GM Planworks to announce
new appointments soon; national
staying in NYC
GM Planworks CEO/President Dennis Donlin tells RBR/TVBR that after Starcom officially gets GM's buying from GM Mediaworks come 10/1, all national broadcast buying will be staying in NYC. Some had speculated it would move to Chicago or Detroit. We hear Mediaworks' Michael Rosen and his team including Suzanne Irving will be staying on board there as well.

On the spot side, says Donlin, "We are in the process of making announcements about staffing and structure in the spot area. Kevin Gallagher is running our spot broadcast buying operation out of Chicago-the macro organization. And he's announcing staff and hiring people as we speak." Spot offices will be in NYC, Chicago, Atlanta and Dallas. "So exactly who the people are that will be running those organizations, right now the focus is on LCI. And LCI is making the fourth quarter buys. We have not yet announced who is going to be in each of the spot buying organizations. It will be announced shortly." Be sure to read our OneOnOne interview with Dennis in our August print issue, mailing now.

Brian Elwarner named
GM Planworks SVP
One of those examples Donlin spoke of above is media director Brian Elwarner has been upped to a senior vice president of the agency, based in Detroit. Elwarner is responsible for leading the development of media campaigns and integrated sponsorships that capitalize on Planworks' proprietary strategic resources, in order to plan and execute GM advertising communications. Elwarner, 40, has been with GM Planworks since its inception in 2000. Upon joining the agency as a director, he was integral to building agency talent through recruitment efforts. Growing alongside Planworks, he has worked on such accounts as Hummer H2, the Cadillac CTS launch and Escalade. Over the years, he has lent his widely varied automotive marketing experience to some of Planworks most celebrated campaigns. Prior to Planworks, Elwarner broadened his automotive marketing experience as a media supervisor for Cadillac at D'Arcy Masius Benton & Bowles, where he polished his planning skills by working on the Cadillac Motor Division.

ad spend slowing faster than expected

Ad spend around the world is slowing down much faster than expected, says a report by ZenithOptimedia. Advertising for 2005 will rise by just 4.7% around the world, much slower than the 5.4% pace predicted in a previous forecast. Europe is getting hit the hardest, the report says, due to weak economic growth outlooks among EU nations. The report says the European market will see spend rise by just 3.4%, down from the previous forecast of 4.4%.

New drug ad guidelines adopted
New ad guidelines being adopted by the pharmaceutical industry will include a requirement that televised commercials clearly present drug risks and promote conversations with doctors. The new industry code guidelines say that to foster communication between patients and health care professionals, companies should spend an "appropriate time to educate health professionals" about new treatments before beginning DTC campaigns. It also said ads should be targeted to avoid audiences that are not age-appropriate for the spot. The guidelines also say that companies should submit all new TV ads to the FDA for review before they air.

Radio & Television Business Report

Radio's Important September Face Off
UpFront 2005 - will radio face the mild reception as Network TV? Top media agency buyers and network radio sellers participating so far: Kelly Cadotte, Natalie Swed Stone, ,Irene Katsnelson, Chris Fontana,Rich Russo, Matt Feinberg, Matthew Warnecke, Kim Vasey, and Lisa Opensky Greenberg.

And we go One on One with
Charles Courtier, Executive Chairman of Mediaedge:cia

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Media Markets & MoneyTM
Close encounter in the southwest
Barrington Broadcasting has closed on its 22.5M acquisition of KVII-TV Amarillo TX and its satellite KVIH-TV Clovis NM, according to brokerage Kalil & Co. The seller is New Vision Group. Both stations carry ABC, KVII over Channel 7 and KVIH over Channel 12.

Consolidation enablers
consolidate themselves
How many related brokerages are allowed to operate in one market? Well, the market is the entire USA, and as far as we know the FCC has not gotten around to regulated brokerage houses, and even if it did, Private Media Brokerage Group (PMBG) would look more like an LMA than a co-owned group, anyway. The new consortium has been set up by five separate firms to "allow collaboration between them in order to expedite the sale of listed properties." Participating in PMBG are Cox & Cox, Gammon Media Brokers, Kozacko Media Services, Satterfield & Perry and Clifton Gardiner & Company. Although the ownership of each brokerage will be unaffected, the consortium will "...allow the member firms to exchange information on radio and television stations acquisitions and divestitures." Calling the arrangement a win-win for buyers and sellers alike, founding member Dick Kozacko noted that the combined brokerage houses will be able to bring a vastly increased pool of both to the table.

Washington Beat
Petition to deny denied,
fines levied anyway

A disputed stock deal involving KCWY-TV Casper WY has been cleared for takeoff. Uhlman/Latshaw Broadcasting (ULB) was the permittee back in 1998 when the deal was first filed. It gave Bozeman Trail Communications Company (BTC) and its parent, Sunbelt Communications Company, 49% of the permit, an option to acquire the remaining 51%, and an LMA to handle many of the station's operations. Max Media of Montana filed to deny the deal on grounds that it constituted an unauthorized transfer of control, among other things, but was found to lack standing to so much as make the filing. In the end, the FCC found that there were no problems with the deal. There were problems, though. When ULB and BTC filed the deal back in 1998, they failed to include the Stock Purchase Agreement, a violation of the rules. Pricetag for the fine: 3K. They also failed to include the document in their ownership reports. Ring up another 3K. They further failed to put a copy in the public inspection files. That's another 10K, for a 16K total.

TVBR observation: Wow. The dealing is squeaky clean but the filing is 16K worth of dirty. We're always going through applications in the FCC deal database, and it's highly annoying when the required contracts are not included with the application. So you can be fined for not appending that information? Generally when this happens we try to contact one or both of the lawyers listed on the app to inform them of the oversight - - it's usually an unintentional electronic filing error. But if it could cost you 3K for the FCC to catch the error, we'd strongly recommend calling up your own documents to make sure they made it into the public record properly.

Norris returns for CBS movie
Chuck Norris is returning to CBS to reprise his role as Texas Ranger Cordell Walker in a made for TV movie, "Walker, Texas Ranger: Trial by Fire." No air date has been announced, but production has begun in the Dallas area. Series stars Sheree J. Wilson , Judson Mills and Clarence Gilyard also return for the movie in which Walker must try to find a teenager who is on the run from a dangerous crime syndicate after coming into possession of a missile guidance component. Walker must also clear an innocent colleague who is framed for murder. Adding in a touch of another hit CBS series, "CSI," Janine Turner plays a forensics expert. During its eight season-run from 1993 to 2001, "Walker, Texas Ranger" was Saturday's top show, peaking in the 1995-96 season with an average audience of 19.4 million viewers. "Walker, Texas Ranger: Trial by Fire" is being produced by Paramount Network Television. Chuck Norris, Aaron Norris and Leslie Grewif are the executive producers. Aaron Norris also serves as the director from a script by John Lansing & Bruce Cervi.

Da ‘King of All Media’
Yep, ‘The Howard’ Stern but not totally confirmed has said to have inked a deal with Demand to carry the TV edition of his soon to be show on Sirius. It is heard to be the raunchy version instead of the watered down version which runs on E!

Ratings & Research
Summer time, and the reruns are winning
Some of the summer reality shows are doing better in the 18-49 demo, but overall its reruns of scripted series that are dominating the ratings, with four of the CBS heavy hitters on top for the most recent week. CBS won the week with an average rating of 4.8 and a 9 share, followed by NBC at 4.2/8, ABC 3.6/7, Fox 3.3/6, UPN 1.9/3, WB 1.2/2 and i (ex-Pax) 0.5/1. Here are the top 20 primetime shows for the week of 7/25-31.
| View the Numbers |

Stock Talk
Consumer spending cheers Wall Street
A government report which showed consumer spending up 0.8% in June put traders in a buying mood. The Dow Industrials rose 61 points, or 0.6%, to 10,684.

TV stocks, however, were mixed. Nexstar plunged 9.3% as its Q2 numbers and guidance disappointed The Street. It closed a penny into penny stock territory at 4.99. The quarterly conference call and data from Spanish Broadcasting System were also not well received and it fell 4.5%. Gray Television was the day's best performer, with its common stock up 4.7% and its Class A up 3.3%. Saga gained 4.1%.


Here's how stocks fared on Tuesday

Company Symbol Close Change Company Symbol Close Change





Media General












Clear Channel




News Corp.
















NY Times
















Saga Commun.












Gen. Electric




















Time Warner




Gray, C1. A




















Viacom, Cl. A




Journal Comm.




Viacom, Cl. B




Liberty Corp




Wash. Post






















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Upped & Tapped

McDonald to CCE TV
Clear Channel Entertainment Television has tapped Kate McDonald as international sales executive for music and entertainment. She was previously VP of TV sales for Eagle Rock Entertainment.

RBR - Radio News

Sirius raises expectations
In yesterday's quarterly conference call of Sirius Satellite Radio, Mel Karmazin was sounding just like the Zen Master from his Infinity days,
Audio Link crowing about his company's
rapid growth and predicting great things ahead. After beating Q2 expectations, Mel Karmazin has raised the subscriber goal for Sirius Satellite Radio to three million by year-end - - the third time this year that Sirius has raised its subscriber estimate. Karmazin also expects to be free cash flow positive for all of 2007 - - maybe even in Q4 of 2006. Sirius is also preparing to put some more cash in its coffers. It is filing with the SEC to sell 400 million in new senior notes which will be due in 2013. although Sirius has been paying heavily to acquire exclusive programming, such as
Howard Stern, Karmazin insists that there is no other must have piece, so Sirius is now shopping only for programming to round out its current offerings at reasonable prices.

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TVBR Radar 2005
Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.

WMAL puts Graham on ice
President/GM Chris Berry, said that Talker Michael Graham crossed the line when he suggested all Muslims are terrorists on his show Monday 7/27/05. "We do not condone his position and believe his statements were irresponsible." Graham hinted on his website that the action came down to the station from corporate. "My radio station, 630 WMAL, has publicly announced that I've been suspended by ABC (no doubt Ted Koppel and Peter Jennings are thrilled) and I am 'under investigation' for my discussion on Islam and the tragedy of its current links to terror. What exactly is I'm being 'investigated' over, I have no idea. After all, everything I do, I do on the air in front of thousands of people. What's to investigate?"
TVBR observation: Chris Berry took the proper course of action no matter what today's tense environment is with world issues at hand. There is no place in the business of radio, TV, or any media for this type of action and putting the license care taker in harms way. Michael Graham while on vacation we suggest a career change like enrolling in an 18 wheeler truck driving school. 08/02/05 TVBR #150

Gatorade comes in first
at MLB All-Star game
One way to get your product's image before a big audience is to put that image somewhere where there are likely to be TV cameras. Such a place was Comerica Park in Detroit, site of this year's Major League Baseball All-Star game. Counting in-stadium and superimposed images, Gatorade led all comers when it came to making a lot of impressions.
TVBR observation: It is called spending advertising dollars on 'Product Placement'.
08/02/05 TVBR #150

TVBR Observation
Readers reject Burns bill
The NAB may be supporting federal regulation of TV ratings, but TVBR didn't find much support for the idea among rank-and-file broadcasters. Lots of words tossed around and name calling but in short the business of audience measurement and both commercial mediums must move forward. The phone calls and emails TVBR received would never pass FCC guidelines as mother is only one-half of a word. So our observation and advice is for Nielsen chiefs and Broadcasting chiefs including NAB -TV Executive committee members, sit down and talk face to face. Break out the ham salad sandwiches and cream sodas. TVBR will supply the ice packs for cooler heads or to position any place you like. Just start talking face to face. 08/01/05 TVBR #149

What done fishing for Commissioners?
The rumor mill continued to churn about the imminent prospect of FCC commissioner nominations coming out of the White House. Republicans who would fill the seat vacated by Kevin Martin, who moved up to the chairmanship in replacement of the exited Michael Powell, and the seat currently held by the leaver-to-be Kathleen Abernathy. Still nada. TVBR observation: The need for action could not have been made any clearer than it was by the Sunshine Notice on the Commission's August Open Meeting, scheduled for next Thursday, 8/4/05. The supposedly dry and non-controversial plank from the July meeting which would initiate the court-ordered review of the 6/2/03 media ownership rulemaking proved to be - - surprise, surprise - - controversial. Its absence from the August list would suggest that it is still controversial, and held hostage by the lack of a tie-breaking vote on the current 2-2 Commission. In other words best keep trout season open and White House change your bait and keep fishing. Maybe even try trolling for the Commish fish.
08/01/05 TVBR #149

XM raises expectations
After beating its own guidance for adding satellite radio subscribers in Q2 adding 647,226 for a total of 4.4 million - - XM is now telling Wall Street it will have six million subs by the end of this year, up from its previous target of 5.5 million. CEO Hugh Panero declared that consumer adoption of satellite radio is outpacing new products of the past. RBR observation: OK, so they've forgotten that four million subscribers was supposed to be the magic number to go cash flow break even. Investors apparently don't care that the target has now been moved closer to 10 million. We continue to be the only ones who see churn as already a big problem for the satellite radio guys. XM insists that churn remains "low" at 1.4% per month, or nearly 17% a year - - already higher than the 15% they promised investors for a mature business, which is still several years away. Amazingly, XM said yesterday that six out of 10 people who buy new cars with XM receivers installed are continuing to buy the service once the trial period built into the sticker price expires. That's a 40% churn rate for OEM sales! And XM is pitching that as a good thing? We don't get it. 08/01/05 TVBR #149

NAB TV Board chair
presses for Burns bill

It may be unusual for the NAB to invite more government regulation of the TV industry, but NAB TV Board Chairman Ben Tucker, acting CEO of Fisher Communications, insists that the association had no choice when it came to backing Sen. Conrad Burns' (R-MT) bill to regulate TV ratings by making accreditation by the Media Rating Council (MRC) mandatory for TV ratings services. "Nielsen is an out of control monopoly that pays only lip service to their biggest client. For them to say that the NAB action was based on greed is only slightly less out of touch than your supporting them," Tucker said, referring to TVBR's strong stance in opposition to the legislation.
TVBR observation: As previously noted, we're not supporting Nielsen nor fighting the NAB. We are, however, opposing legislation that won't accomplish what its proponents want (higher broadcast ratings under LPM measurement), but will lead to higher costs and could have dire consequences down the road for the very broadcasters who are backing the bill today. Given that not a single Senator besides Burns showed up for Wednesday's hearing on his bill - - not even his three co-sponsors - - it seems unlikely that S.1372 is going to be high on the priority list of the Republican leadership this session. Getting Nielsen to sign onto an MRC code of conduct, which it has agreed to in principle (ah, but the devil is in the details) seems like a much more likely course for progress than banking on congressional action.
07/29/05 TVBR #148

Barrett sees "struggle"
for rest of year
Hearst-Argyle CEO David Barrett told investors the second half of this year will be a "struggle" against last year's tough comps. With last year's political spending gone, Hearst-Argyle's stations were unable to replace all of that missing revenue in Q2, and the political numbers were even bigger last year in Q3 and Q4. Noted that Hearst-Argyle stations have gained market share this year in 11 of their 16 markets. That makes him look forward to next year, since stations with the strongest local news positions tend to get the lion's share of political spending.
TVBR observation: What's the saying if you don't win the championship, 'Wait until Next Year'. Ok we will wait but do not think the entire media and advertising world of business will wait until next year. TV get in touch with reality or reports like this make for good network programming like 'The Apprentice' - you're fired. Get real and move forward. We are hearing the say every conference blaming other factors except one self. It will be a struggle for the rest of this year for the TV business and it reminds us of what happened to radio and it was not pretty. 07/29/05 TVBR #148

National lagging local for TV groups
Two more TV groups have confirmed that national sales remain soft, despite strong performance by their station sales forces at the local level. At this point, Meredith says it expects same station revenues for the current quarter to be down in the low to mid single digits. LIN Television also expects Q3 same station revenues to be down in the mid single digits. TVBR observation: TV get used to it as radio did and still faces this issue. It doesn't get any better until you confront your content and presentation. You have a long road ahead of ya. (See June radio TVBR observation below) 07/28/05 TVBR #147

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