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Welcome to TVBR's Daily Epaper
Volume 24, Issue 167, Jim Carnegie, Editor & Publisher
Monday Morning August 27th, 2007

TV News ®

Hearst bids to take Hearst-Argyle private
Hearst Corporation has made its long anticipated move to buy out other shareholders of Hearst-Argyle Television and take the company private. The offer announced Friday afternoon would pay about 600 million bucks for the 27% of the company currently in public hands. The price of 23.50 per share is a 15% premium over the closing price on Thursday. But, with only about an hour of trading on Friday after the bid was announced, traders pushed Hearst-Argyle stock up more than 23% to a close of 25.22 on expectations that Hearst Corporation will be persuaded to increase its offer before getting the deal done. “The competitive demands of the TV broadcasting industry and changes in the broader media industry, when balanced against the pressures on a public company to deliver short-term results, have convinced us that private ownership of Hearst-Argyle is desirable and will assist Hearst-Argyle in attaining its strategic and business objectives,” Hearst Corporation President and CEO Victor Ganzi said in a letter to the directors of Hearst-Argyle. “At the time Hearst invested in Hearst-Argyle, we believed the availability of a public currency would enable Hearst-Argyle to grow through acquisitions, and the transaction where Hearst-Argyle acquired the Pulitzer stations would not have been possible without a public currency. The landscape has changed since that time, and we now believe that Hearst-Argyle should be privately owned,” the letter said.
Hearst-Argyle’s board is now expected to form a special committee of independent directors to consider the buy-out bid. They and their financial advisors may negotiate with Hearst Corporation if they don’t think the offer fairly values the company. Hearst-Argyle’s 52-week high of 28.16 was set last April, but its stock price has been beaten down since then along with many other broadcasting stocks. Hearst Corporation currently owns all of Hearst-Argyle’s Class B stock and 52% of the publicly traded Class A shares. It has regularly bought Class A shares on the open market and bought over 300,000 shares from July 31st through August 17th for a total of 6.6 million bucks. According to its most recently SEC filing, Hearst Corporation bought 275,000 shares on August 17th at 21.43 each.

TVBR observation: For a couple of years now analysts have been asking during Hearst-Argyle CEO David Barrett’s quarterly conference calls whether Hearst Corporation planned to take the company private, and he repeatedly answered that it was not up to him what Hearst Corporation did or did not do. But since Hearst Corporation had been an aggressive buyer of Hearst-Argyle stock for years and years, consistently increasing its controlling stake to an overwhelming majority stake, it was clear to many on Wall Street that the time would come when Hearst Corporation would decide to stop taking small bites and bid to swallow the remaining public float all at once. That time is now.

Candidates continue to pull Cash
The election for the next Congress, like that for the presidency, is still over a year away, but already candidates are raking in money like it's falling off trees. The combined total for just the first half of 2007 is 239M, according to the Federal Election Commission. And as in other cash comparisons, the news is good for Democrats. Total cash raised for Senate races is roughly comparable to the first six months on 2005, coming in at 84.8M. But it’s about double the amount collected the last time these particular seats were in play in 2001, when the total raised to date stood at 43M. Democrats have pulled in 47.6M to the Republican total of 33M. In the House, where all seats are in play every year, 157.8M has been raised, with 94.2M going to Democrats and 63.6M going to Republicans. Taking everything into account, a Reuters report said analysts are looking for somewhere between 2B and 3B in campaign spending this cycle, compared to 1.6B in 2006 and only 900M during the 2004, the most recent presidential cycle.

TVBR observation: Much is hanging in the air at the moment, but almost all such unknowns seem to favor the expenditure of more, not less, campaign cash. The battle for Congress figures to be just as heated as the 2006 race was, with Republicans trying to regain territory lost and Democrats trying to grow even more. In the presidential race, the increasingly truncated primary season is going to limit the amount of time candidates can spend in many states, forcing ad buys to remain competitive. It will be interesting to see how big a revenue hole opens up after the primary victor emerges, and when the serious air wars for the general election will begin. Stay tuned.

A closer look at the Senate
It's early yet in the race for the US Senate, and many races which figure to heat up are as yet uncontested. For example, Mary Landrieu (D-LA) figures to be a major target for Republicans this cycle, but as yet a challenger has not stepped forward officially. Here are the states where the battle has already begun. Alaska: Incumbent Ted Stevens (R) is under investigation, but has 862K on hand. Challenger Rocky Caldero (D) is not well-funded as yet, with only 14K. Colorado: In a battle for an open seat, Mark Udall (D) has a huge lead over Robert Schaffer (R), with 2.5M compared to 683K. Georgia: Incumbent Saxby Chambliss has 3.371M on hand, three Democrats vying for the right to challenge him total less than 200K. Idaho: Incumbent Larry Craig (R) does not have a whole lot of cash with 549K in the bank, but it's a lot more than challenger Larry Larocco's (D) 44K. Iowa: Incumbent Tom Harkin (D) has 2.644M George Washingtons in his account. Challenger Steve Rathje (R) Not so much - 16K. Maine: This is a battleground, with the national Democratic party going after incumbent Susan Collins (R), who has 2.307M. Challenger Thomas Allen (D) is not far behind with 1.718M. Minnesota: Another battleground, with incumbent Norm Coleman sitting on 3.982M. Challenger Al Franken (D) has 1.952M in the bank, and another prospective challenger, Michael Ciresi (D), has 643K. Nebraska: Incumbent Chuck Hagel (R) has been critical of Iraq policy, and while there is no Democrat in the race yet, he's facing a serious primary challenge from Jon Bruning (R). Bruning's winning the cash war, 643K to 483K. Former Nebraska Sen. Bob Kerrey (D) says he may enter the race if Hagel retires. New Hampshire: Incumbent John Sununu has a target on his back. He is sitting on 2.107M. The best funded of three challengers is Katrina Swett (D) with 1.078M. New Mexico: Incumbent Pete Domenici (R) is well ahead of challenger Don Wiviott (D), 1.054M to 405K. Oregon: Incumbent Gordon Smith (R) is a target as well, but with 3.517M, his current opponent Steven Novick has a lot of ground to make up from his current total of 177K. Texas: Can the Democrats outs incumbent John Cornyn (R) If not, it will not be because of lack of funding. Cornyn has a healthy 5.347M in the bank, but challenger Mikal Watts (D) has an almost as healthy 4.898M.

CEOs leaning toward Romney, Obama
Chief Executive magazine has surveyed US CEOs to get their early read on the presidential race already in progress. For starters, the corner office gang identifies strongly with the Republican over the Democratic party by a 54%-33% margin, with 13% calling themselves independent. Looking at the Democratic race, they have determined that the most business-friendly candidate is Barack Obama (D-IL), with Hillary Clinton (D-NY) considered the worst. On the Republican side, they favor Mitt Romney (R-MA) and worry about John McCain (R-AZ). Interestingly, despite their CEO status, asked to name the biggest issue this election, they responded like citizens rather than executive-suite business operatives, with 35% picking terror/Iraq as #1 by a wide margin. However, they begin showing their stripes directly afterwards. The second issue was overall tax policy (17%), followed by health care policy (12%), fiscal policy (11%) and energy policy (10%). Rounding out the list are entitlements (9%), trade policy (3%), defense (3%) an education (1%).

Conservative pundits take down XM/Sirius
J. Gregory Sidal and Hal J. Singer, writing in the conservative Washington Times, get right into the meat of the matter when discussing the proposed merger of DARS services XM and Sirius. "It is a knee-jerk reaction among conservative commentators to bless most mergers under the belief that these transactions reflect the salubrious workings of the market. But conservatives should also reject the idea of taking two unregulated competitors and creating in their place a brand-new regulated monopoly through the merger approval process." They note that some interest groups have blessed the merger, but in hopes of gaining something for themselves, rather than average consumers. For example, Public Knowledge says yes - in exchange for more NCE programming. Family Research Council says yes - in exchange for channel blocking. The duo notes the XM/Sirius claim that they compete with the entire spectrum of audio services, and that this competition assures they'll price their merged entity competitively. "Of course, if they truly believed this argument, XM and Sirius would not need to offer to freeze their prices," they point out. They conclude the matter is a choice between a competitive market calling the shots or social planners. They say competitive market hands down.

Wall Street Media Business Report TM
Tribune slips in July
Consolidated revenue for in-play multimedia icon Tribune Company for the month of July were 467M, representing a 5.9% drop from the July 2006 total of 496M. Publishing was the major culprit, falling 8.6% to 319M. Broadcasting & Entertainment operations were flat at 147M, but that was no thanks to the broadcasting part, which fell 3.7%. The bright spots were Tribune Entertainment and the Chicago Cubs, which both managed to find the black ink well.

Ad Business Report TM

Ads focus on total health at every stage of life
Kaiser Permanente has launched the fourth season of its “Thrive” campaign—via television, radio and print ads that reflect the integrated health care organization's commitment to the total health of its members and the communities it serves. This season the TV ads look at child health and dealing with serious illness, in a new way that emphasizes personal power over health. The first ad, titled Kid Wisdom—is a tongue-in-cheek delivery of some important health messages for children and parents. It appeals directly to kids, featuring a young boy sharing the lessons he has learned about healthy eating and active living. He recalls his "drinking" problem as we see images of him guzzling soda, and candidly lets us know, from the bench of a T-ball game, that he takes better care of himself "now that he's older." The second ad, titled Saturday, shows a woman with cancer scheduling her radiation treatments between lunch with friends and taking a walk. The ad is based on the experiences of Kaiser Permanente members and their physicians who understand that when faced with serious disease, what is often most important to the patient is to get back to their normal life. This ad will be complemented by print and radio ads beginning in the fall. The 40-million-dollar, multi-year Thrive Campaign was created in partnership with Warren, Michigan-based advertising agency Campbell-Ewald, which has worked with Kaiser Permanente since the roll-out of the first ads in 2004. The new television commercials will run in seven of Kaiser Permanente's eight operating regions this year: Northern and Southern California, Oregon/Washington state, Colorado, Georgia, Ohio and Hawaii.

BK boosts Homer Simpson movie
Homer Simpson would be proud that it took the allure of burgers to get audiences to see his new film, according to results by Integrated Media Measurement Inc. (IMMI), a provider of consumer behavior data. The data collected by monitoring actual consumer behavior, shows that individuals who watched the Burger King television commercial with "The Simpsons Movie" tie-in in addition to regular movie ads were 40% more likely to actually go see the film than those just exposed to the television, radio and in-theatre trailers solely touting the movie. IMMI panelists experienced either a television, radio or trailer ad an average of 6.1 times between 7/4 and 8/9, with 9.1% of those people going to see the movie. 13.3% of the IMMI panelists who saw the Burger King tie-in spot in addition to regular movie advertising during that same timeframe went to see the movie. When compared only against other advertising seen a similar number of times and in similar places, the Burger King/Simpsons combo still drew 40% more people to the theater. Further supporting the notion that movie tie-in advertising helps drive consumers into theatres is the 7-Eleven "The Simpsons Movie" tie-in radio campaign. IMMI panelists exposed to the 7-Eleven ad in addition to the regular movie campaign (July 4-August 9) were twice as likely to head to the theatres. "The Simpsons Movie" opened 7/27 and has grossed more than 165 million in the U.S.

Media Business Report TM
Keep your numbers. Give us some meat
The flat news coverage of during the week of 8/12-17/07 as measured by the Project for Excellence in Journalism gave almost equal weight to four stories: the 2008 campaign with 8% and, all tied with 7%, the US economy, Karl Rove's resignation and the Utah mine disaster. Talkers were happy to run with the campaign, ratcheting up its share to 15%, but they had little interest in discussing a numbers story like the economy, which sank to 4% on the talk chart. Love him or hate him, the Karl Rove story was much meatier, and moved up to 11%. Immigration, not even on the news chart this week, came in third among talkers with 7%. Talkers joined newsers in giving Iraq a week off, although the 7% of the hole granted the Iraq policy debate mildly eclipsed the 5% newsers gave to events in Iraq.

Washington Media Business Report TM

Reformers gear up for media hearing
The FCC long ago announced the next public hearing on media ownership, pegged for Chicago on 9/20/07. The pattern of these meetings has pretty much followed the template established way back in 2003 when the FCC held on meeting, former Chairman Michael Powell attended a second, and Democratic Commissioners Michael Copps and Jonathan Adelstein went on a road show to numerous others. The segment of the public that tends to show up is the segment with an axe to grind. The Illinois PIRG is taking steps to assure that the Chicago forum is no exception. It is holding an "Organizer Workshop for Chicago FCC Hearing on Media Ownership" about three weeks ahead of the main event, on 8/29/07. it will "focus on strategic conversations for developing our message, raising awareness about the FCC hearing, and turning out our communities to be sure our voice is heard at this vital event."

TVBR observation: Citizens organizing to make sure their voices are heard is engaging in a respectable and admirable democratic activity and the activists who attend this event can be commended for putting their spare time to use in an attempt to improve our nation's communications regulatory infrastructure. We would only point out that recent history is on their side. They and like-minded citizens will be likely to overwhelmingly present the views of the Illinois PIRG and its supporters whether or not they so much as lift a finger in advance.

Hollywood Media Business Report TM
But what I really want to do is write
There is a new way to get broadcast ideas and scripts before the eyes of actual producers. The Television Writers Vault is the brainchild of Scott Manville, formerly of Merv Griffin Development. His platform accepts material from writer with or without Hollywood experience, putting them in an environment that "both protects and promotes them." The site is geared toward ideas for reality programs. Manville says, "Producers love the access to new ideas, and the writers love selling concepts direct. Under the protective guidelines of our service, both sides are finding the TV Writers Vault a great source for discovering new talent and making new industry contacts." Info is available at

Internet Media Business Report TM launches advertising on its site
Broadcaster, Inc. a new site for social video networking, has begun testing various advertising placements on its website, will offer advertisers the unique option of reaching specific channels within the site, and the Company is developing a targeted communities section as well. Using this approach, advertisers can reach a highly targeted audience, providing them an optimal return on their advertising dollars. began testing its advertising concept in July of this year using both traditional and innovative marketing methods. It has been able to attract both the more traditional advertisers such as Netflix, American Express and Verizon, as well as niche market advertisers selling iPhones, ringtones and celebrity videos.

Ratings & Research
Content replaces communications as primary web use
According to the Online Publishers Association, Internet users are spending nearly half their online time visiting content, a 37% increase in share of time from four years ago. The Internet Activity Index, conducted by Nielsen//NetRatings, shows that communications accounted for 46% of consumers' time online in 2003. A dramatic shift has taken place since then, with consumers now spending 47% of their time with content and only 33% with communication, reported The Center for Media Research. OPA president, Pam Horan, said "The IAI has identified a very significant and sustained trend in where consumers are spending their online time... over the last four years, the primary role of the Internet has shifted from communications to content." And, in a recent EMarketer report, Paul Verna, eMarketer Senior Analyst, says "Some of the major players in the industry are fearful that the widespread availability of video content on the Internet will threaten traditional TV and film distribution models... (while) others see the potential to increase revenues through a variety of new business models, including ad-supported streaming, pay-to-own downloads, subscription services and online rentals." The OPA found a number of other important factors behind the changes, including: A more accessible, and much faster, Internet is driving increased overall time spent online. The increased popularity of video is leading to more time being spent with online content. The improvement in search allows consumers to more easily and quickly find the exact content they are looking for, increasing the likelihood they will engage more deeply with that content. The Web simply offers far more content than it did even four years ago, increasing content's share of time. The rise of instant messaging (IM) as a key communications tool has been a factor in communication's reduction in share of time. IM is a more efficient communications vehicle than email.


Monday Morning Makers & Shakers

Transactions: 7/9/07-7/13/07
After an excruciatingly slow holiday week in which only four transactions for four stations were filed at the FCC, traders rebounded, striking 19 transactions that involved 50 stations, and also managed to top the 100M mark in accumulated value.



Total Deals







| Complete Charts |
Radio Transactions of the Week
Hungry like a Wolff
| More...
TV Transactions of the Week
Brisette sale tops again
| More...

here is another transaction brokered by Kalil & Co., Inc.

330M KOIN-TV Portland OR (CBS); KHON-TV, KHAW-TV & KAII-FM Honolulu HI (Honolulu, Hilo, Wailuku HI, all Fox/CW); KSNW-TV, KSNC-TV, KSNG-TV & KSNK-TV Wichita KS (Wichita, Great Bend, Garden City KS, McCook NE, all NBC); and KSNT-TV Topeka KS (NBC) from Montecito Broadcast Group LLC (George D. Lilly) to New Vision Television LLC (Jason Elkin). 24.75M esc, cash/stock (17M place in indemnity escrow). [File date 8/6/07.]

Stock Talk
Great day for television stocks
Like the Dow’s triple digit gain on Friday, we saw some hefty increases in Television stocks as well. Hearst-Argyle (see TV News) was up 4.76; Media General up 0.93 and Lincoln National 1.40


Here's how stocks fared on Friday

Company Symbol Close Change Company Symbol Close Change





Lincoln Natl.






















Media General




Clear Channel












News Corp.
















Ion Media




Equity Media EMDA 3.15 -0.09

Saga Commun.




















Gen. Electric








Google GOOG











Time Warner




Gray, C1. A












Wash. Post




Journal Comm.









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The commentary on the performance tax continues to roll in...
I find it quite interesting that everyone is in such knot over the record companies wanting to charge radio royalty fees. Once again radio forgets the power that we have, not record companies. Lets let them charge us royalties, we will charge them for air time. You want to get on my station, fine. I will treat you just like any other "client" and charge you for every minute you are on my air. I'd like to see radio band together with the strength of many and see if record companies really do want to put their dog in that fight. I would guess not.

Tom Sheldon CRMC, Director of Programming96.1 KSTR, Grand Junction, CO.

Below the Fold

Ad Business Report
Kaiser Permanente
Ads focus on total health at
every stage of life launched the
4thseason of its Thrive campaign
And Radio included…

Washington Media Business Report
Reformers gear up for
Media hearing pegged for Chicago
Citizens organizing to make sure
their voices are heard…

Ratings & Research
Content replaces
Communications as primary web
use as users are spending nearly
half their online time visiting content…

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More News Headlines

Fox Democratic debate a casualty
Last we knew, only Joe Biden (D-DE), Dennis Kucinich (D-OH) and Mike Gravel (D-AK) were signed up for a debate sponsored by the Congressional Black Caucus and booked on Fox News Channel for 9/23/07. Now word from USA Today is that the event has been canceled. John Edwards (D-NC) started the defections, complaining about the perceived right-wing slant of the network and others followed, including front-runners Hillary Clinton (D-NY) and Barack Obama (D-IL). The event is said to have been postponed, not canceled, but no new date has been set.

New media seminar scheduled
"The 'anywhere, anytime, anyhow' characteristics of new media are driving consumer demand for personalization and, as we've seen with the phenomenal growth in iPods, iPhones and other portable media devices, mobile video is the latest and hottest platform for meeting this demand." So says Mary M. Collins, President and CEO of BCFM and its Broadcast Cable Credit Association (BCCA) subsidiary. To that end, the organization is holding a seminar next month in New York teaching electronic media practioners how to tap in. "Anytime, Anyplace Making Money from the Growth in Personalized Media," will be held Wednesday, 9/19/07, 12 Noon-5:00 PM at the Penn Club in Manhattan. Info is available from Kristine Davison at [email protected]

Fox cancels “Anchorwoman” after one airing
The debut of the reality show about Lauren Jones' attempt to turn herself into a news anchor for a Texas TV station drew only an estimated 2.7 million viewers last Wednesday, according to Nielsen. Jones one of the prize fluff girls on "The Price Is Right," Miss New York and featured WWE Diva before the series put her into the newsroom of KYTX Channel 19 in Tyler, TX. Unaired episodes will be available on Fox's website through Fox on Demand.


Watchdogs object to Shrek
It turns out that the battle over marketing food to children is being waged the world over. Kellogg's and McDonald's are using Shrek in Australia, and have been cleared to do so by that country's Advertising Standards Bureau (ASB) over the loud protest of the Parents Jury. According to Australia's Herald Sun, new prohibitions on using such high-profile celebrities for the purpose of promoting "pester-power in children" did not kick in because the green ogre never specifically suggests any actions to children. In other words, they aren't asked to ask their parents for any product. A third target of Parents Jury, a supermarket chain which prominently displays Shrek in-store, was untouched by ASB since its regulations do not pertain to that type of promotion.

TVBR Radar 2007
Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.

Martin defends a la carte
to minority critics

FCC Chairman Kevin Martin fired off a letter defending his concept of cable a la carte program menus to seven representatives of minority organizations. Although minority and other niche programmers, not to mention cable operators, are opposed, Martin believes it will be ultimately beneficial to programmers and consumers.

TVBR observation: These arguments for a la carte get stranger all the time. Let's look closer. Hispanic customers aren't going to have to worry about getting English-language channels they don't want; if they live in an area where they number less than 10% of the total population, they can instead worry that they won't get any channels at all - if 90% of the market is by definition going to ignore Spanish language programming, the cable operator may well be forced to drop it from the menu. We also fail to see how a la carte makes it easier for a niche operation to establish itself; to the contrary, the time it takes to build an audience may kill it off before it gets a chance to take root. This whole issue is not about making it easier for minority and niche programming services, and it is not about saving consumers money. It's about edgy programming on certain cable channels, and the! desire of some in government and the watchdog community to turn the FCC into the national nanny. Parents have blocking technology which can prevent children from watching undesirable channels. The FCC should push that and take the small cable programmers' word that a la carte will be devastating to their business model.
08/24/07 TVBR #166

Big streamers deal, small streamers do not
Large audio streamers are said to have come to an agreement with SoundExchange which would affect their operations through 2010. in a closed door session, big internet streamers would have royalty liability capped at 50K per year and would not be forced to use any particular technology to prevent tune ripping by consumers. Meanwhile, SoundExchange has offered to give a royalty payment discount to internet audio streamers that bring in less than 1.25M per year.

RBR observation: Apparently progress has been made in this parallel issue to recording companies seeking the upheaval of the age-old content/promotion symbiotic relationship between themselves and broadcasters. It's hard to see what benefit the recording industry expects to gain from not being aired on defunct internet music services. You would think that producers would treasure an armada of small music sites each of which can gather together base of serious, like-minded music fans, expose them to music which otherwise may be difficult to find, and in many cases offer a chance to buy that music instantaneously. Instead, music producers seem dead set on driving these companies out of business. Unbelievable.
08/24/07 RBR #166


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