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Welcome to TVBR's Daily Epaper
Volume 24, Issue 188, Jim Carnegie, Editor & Publisher
Wednesday Morning September 26th, 2007

TV News ®

VNR fine leaves questions in its wake
The 4K assessment against cable giant Comcast levied by the FCC over use of material contained in an video news release without sourcing has Comcast scratching its head and a watchdog barking in triumph and looking for more of the same. And at least one FCC commissioner was pleased. "I applaud the Enforcement Bureau's decision to enforce our sponsorship identification rules, and to propose, for the first time, a forfeiture fine for the failure to disclose the sponsor of a video news release," said Jonathan Adelstein (D). " Commission rules are clear: viewers have a right to know who is trying to persuade them so they can make up their own minds about what they are presented. I applaud Chairman Martin's leadership, and look forward to quick action on the many other pending video news release complaints."

"We're pleased to see the FCC is finally waking up to the issue of fake news," said Craig Aaron, communications director of Free Press. "But the fine levied against Comcast is just the tip of the tip of the iceberg. Video news releases dressed up as real news were uncovered at more than 100 stations. We hope the FCC will soon fine those stations and issue clear guidelines to end the epidemic of fake news once and for all." Free Press noted that the CN8 item in question was cablecast in 20 markets, including New York, Philadelphia and Washington DC. Free Press partner Center for Media and Democracy said it caught Comcast doing the same thing at least four additional times, and also said that at least two broadcast stations used the same exact VNR, for "Nelson's Rescue Sleep," without ID, and is wondering if there will be additional FCC actions.

For its part, Comcast is still unconvinced that it did anything wrong. Sena Fitzmaurice, Senior Director, Corporate Communications, said, "We are perplexed by this Bureau action. The relevant statute does not cover cable programming, and even if it did, CN8's programming was entirely consistent with the statute. The segments in question were chosen by journalists in the course of reporting, and Comcast received no consideration or benefit by using the material. We will reiterate these facts in our response to this Notice."

TVBR observation: As we noted yesterday, at 4K this is a relatively inexpensive warning shot. But we cannot help but note that both sides are not fully satisfied, and we also know that this issue has an FCC 8th Floor sponsor in Jonathan Adelstein. It will be very interesting to see if this FCC VNR action is an isolated incident or the Act One of an ongoing serial.

DTV milestone, millstone
Ed Markey (D-MA) noted that 9/25/07 marked the 20th anniversary of the push toward digital television. It was in September of 1987 that he held a hearing on HDTV and spurred the FCC and Congress to move toward a digital rather than an analog future. As the project rapidly nears fruition, however, he fears lack of consumer education may put the DTV transition at risk. "In 1987," he wrote, "the debate among policymakers was about facilitating the transition from traditional TV to high definition analog TV. After spurring the FCC to endorse digital technology instead of analog for the future of broadcasting, the DTV transition is now fully underway." Expressing his worries about a seamless transition, he added, "Unfortunately, the DTV transition picture I see today is fuzzy at best. I fear that far too few consumers know about the February 17, 2009 analog cut-off and the steps they must take to watch free, over-the-air television after that date. If we are going to make sure that millions of Americans don't see their perfectly functional analog televisions go dark, Congress needs to start getting better reception from the parties who are responsible for making sure this digital transformation is a success." Markey's subcommittee has two hearings on the topic on the schedule, on 10/17/07 and 10/31/07.


Language, censorship examined in the House
Although Don Imus was in the title of a Subcommittee on Commerce, Trade and Consumer Protection session, he was otherwise nowhere to be found in the hearing in which Bobby Rush (D-IL) hosted members of the broadcast, recording and interactive communities in a discussion of language used in their content. The First Amendment was at the core of the proceeding. Jan Schakowski (D-IL) succinctly summed up the dilemma posed by this issue, saying "Censorship of media that we find offensive is a dangerous game," but adding on the other hand that she doesn't believe that corporations should be able to profit off degrading material, and that consumers have responsibility as well. The panel included both distributors and producers of content, and all agreed that the problem, such as it is, sources from the production end of the equation. Radio One's Alfred C. Liggins III and Viacom's Phillippe P. Dauman both noted that as distributors they restrict themselves to edited versions of potentially objectionable material. In Liggins case, this was a necessity since Radio One's core business is as an FCC-regulated broadcaster. Liggins said his company will take the edited versions and edit further if necessary.
| Read More |

Clear Channel clears hurdle
The buyout of radio giant Clear Channel needed approval of 66.7% of its shareholders to go to Bain Capital Partners and Thomas H. Lee Partners, a hurdle it cleared with room to spare. Votes representing 73% of eligible shares gave thumbs up to collect 39.20 per share from the private equity firms. According to the Associated Press, 98% of shares actually voted went into the yes column. The original offer was 37.60 per share, a bid long ago sweetened. The final piece of the puzzle was the offer of so-called "stub equity," allowing some shareholders to retain an ongoing stake in the company. Next up in the process are approvals from the Federal Communications Commission and the Department of Justice, and then closing. The rough target date for closure is December. Mark May said, "We are pleased with the outcome of today's vote. We look forward to completing this transaction with T.H. Lee and Bain as quickly as possible." Clear Channel sold off its television group to a subsidiary of Providence Equity Partners Inc. last May for 1.255B. It is currently in the midst of a rather bumpy process of selling off smaller market radio stations, and with the approval to go ahead with this merger, will also be forced to market grandfathered stations in larger markets as well. A large number of potential spin-offs were placed in Aloha Station Trust under the care and feeding of Jeanette Tully last June. AP says the group will have about 675 mostly large-market stations and its billboard business going forward.

NBCU and Cox offer free on demand shows in SoCal
NBC Universal and Cox Communications announced a trial offer of five NBC primetime shows free On Demand. Featured content includes popular NBC returning series including 30 Rock, Friday Night Lights, Las Vegas, and the new series Life and Bionic Woman. This On Demand content is exclusively available to Cox Digital Cable customers in Orange County and Palos Verdes, CA. Each episode will be made available on Cox's On Demand platform the day after the shows premiere. As a part of the trial, the fast forward feature will be disabled for this content so the viewing experience will be the same as the program's primetime airing The NBC programming will be available On Demand by simply choosing Channel 1 and selecting the MyPrimetime category.


Ad Business Report TM

Coors Light to be official Beer of NASCAR
Coors Brewing and NASCAR announced a multi-year partnership, making Coors Light the official beer of NASCAR. The five-year sponsorship agreement gives Coors Brewing Company category exclusivity starting with the 2008 NASCAR season. The agreement gives Coors Light exclusive rights to NASCAR logos in advertising, packaging and promotions, as well as the right to brand the Pole Award. In addition, Coors Light will build distributor and consumer promotions.


Washington Media Business Report TM
Legislators push FCC
for minority task force

Hilda Solis (D-CA) fired off a letter to FCC Chairman Kevin Martin and his 8th Floor FCC colleagues requesting formation of "an independent task force to examine proposals to increase minority ownership" before engaging in any further rulemaking in the media ownership arena. "A minority ownership task force is needed because the number of minority media owners is shamefully low and has been neglected by the FCC for far too long," she wrote. "The FCC has simply failed in recent years to address this disparity in minority ownership According to studies conducted by the nonprofit, nonpartisan group Free Press, people of color own just 3% of all local TV stations and 8% of all local radio stations, even though they make up 35% of the U.S. population. These studies also found that minority owners are less likely to operate a station in more concentrated broadcast markets." She added, "The FCC cannot allow new media ownership rules to move forward and further potential consolidation to occur without first addressing minority ownership issues." According to reports, Solis' efforts were echoed by Sen. Bob Menendez (D-NJ) and Rep. John Conyers (D-MI).

TVBR observation: Martin has advocated the leasing of DTV multicast side channels to minority programmers, and numerous proposals are out there to restore the old minority tax credit that used to apply to certain broadcast transactions. Commissioner Michael Copps (D) has often called the minority ownership situation a national disgrace. We're not sure what exactly can be done legally about this, but look for this issue to become a heat-seeker if a Democrat takes over the administration in 2009.


Entertainment Media Business Report TM
DIY taps Burt Reynolds
for latest "Celeb Rides"

The latest installment of DIY Network's automotive franchise returns with a five-episode series 10/19 with "Celebrity Rides: Burt Builds a Bandit chronicles." Reynolds and his design team at YearOne auto restoration company begin the process of restoring a select fleet of limited edition Trans Ams. DIY also knows Bandit enthusiasts will want to get behind the wheel, so one lucky fan will have a chance to win one. On 10/8, DIY also launches the Burt Builds a Bandit Contest on Heavy.com, where users can upload videos explaining why they should win the car. Reynolds will help select the most creative video, and the winner gets to drive home in a fully restored Burt Reynolds Edition Trans Am, as featured in the show.


Internet Media Business Report TM
The CW to stream premieres on
Yahoo! TV prior to airing

Full premiere episodes of The CW Network's new primetime series Aliens in America and Life is Wild will be streamed free-of-charge and without commercial interruption on Yahoo! TV (tv.yahoo.com) prior to their respective debuts. The CW is already offering the full premiere episode of its new comedy, Aliens in America, online at Yahoo! TV until it joins The CW's Monday night comedy block 10/1. The drama Life is Wild, shot on location in South Africa, will be streamed on Yahoo! TV 9/29 through its Sunday debut 10/7. Boasting an internationally diverse cast, Life is Wild is the story of a dysfunctional blended family from New York who moves to a rural South African town.


Ratings & Research
The O.J. nostalgia tour, coming to a
cable system near you

The Project for Excellence in Journalism news coverage chart for the week of 9/16/07-9/21/07 had a familiar name on top of the list. O.J. Simpson found a way to get on top of the news cycle these many years after his trial for murder back in 1994. This time he's accused of armed robbery in a dispute over some sports memorabilia. But the coverage of this event, which led the week overall with 13% of media attention, was far from even. And if you guessed that cable news outlets drove the coverage, you'd be correct -- they gave the story a full 33% of their news hole. By contrast, on radio the sordid saga was #5/4%, and it got an even bigger yawn from newspapers, at #10/2%. On the Iraq policy front there was some ongoing discussion of the Petraeus report, fueled in part by a sideshow involving a MoveOn.org ad in the New York Times, but at 5% overall, it was way down from the previous week's 36% blanket coverage.
| Top ten lists here |


RBR Radio News
Gloomy forecast for Charlotte
That's not the weather outlook, which is pretty sunny for this NAB Radio Show week, but Bank of America analyst Jonathan Jacoby sees "no sunny days for radio." The data he has gathered indicates that August sales were worse than expected in large markets, so he's expected the month industry-wide to come in down 1%, rather than his previous estimate of flat. CL King analyst Jim Boyle is even more pessimistic. He thinks August will be down 2%. Jacoby says his data comes from most of the largest radio markets, accounting for around 30% of total radio revenues. "For these markets, total revenue growth (including Internet and other non-spot sales) was down approximately 3% year over year. Spot sales slipped approximately 4%, with slightly heavier declines coming from national spot sales. Non-spot sales (led by online ads) were up again, increasing by approximately 10% by our estimate - showing an increase from the 6% growth rate seen in July," Jacoby told clients. "Smaller radio markets have tended to grow faster than larger markets in recent years, and so a 2-3% decline among the larger markets likely indicates a somewhat more moderate decline for the industry as a whole. We are keeping September at 1%, and 2007 is at negative 0.4%," he concluded.

Boyle at CL King is seeing a continuation of the trend he's tracked for months of small markets generally doing better than large ones. But he notes in his latest report that the long-time weakness in the top 25 markets seems to be spreading to mid-markets as well. Yes, the small- and mid-markets he tracks beat the big ones for the 17th time in 19 months, but the gap has almost disappeared, primarily because of weakening in the medium markets. "The last four months have seen the average mid-sized market in our sample go from up 2%, to up 0.5% for two months and then down 2% in August," Boyle noted. He continues to forecast that radio revenues will be down 1% for 2007.

RBR observation: It's not all gloom and doom. We expect to see lots of happy, prosperous small market owners in Charlotte. Those markets where the rare agency buy is pretty inconsequential have held up well as their brethren in markets where CPM-type buys occur every day have suffered. The answer, of course, is to escape from negotiations based strictly on ratings and cost-per-point and sell based on the results that your station delivers to happy advertisers. Easier said than done - and each layer of people between the station sales staff and the ultimate decision maker for the advertiser just makes it that much harder. That's why mom and pop radio is still fun and rewarding, if increasingly rare.


Stock Talk
Driving in both lanes on Wall Street
That'd be the black lane on the good side of the dividing line, and the red lane on the bad side. It seems comsumers are depressed, and when they're depressed so are stocks, oftentimes. But the consumer blues were mitigated by other factors, leading to a mixed bag generally that carried over to broadcast issues. However, on its merger approval, Clear Channel rose 29 cents and cleared the 37 dollar hurdle.


Stocks

Here's how stocks fared on Tuesday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

3.94

-0.17

Lincoln Natl.

LNC

64.33

+0.23

Belo

BLC

17.11

-0.07

LIN TV

TVL

12.83

+0.15

CBS CI. B CBS

30.81

-0.05

McGraw-Hill

MHP

48.00

-1.36

CBS CI. A CBSa

30.84

-0.02

Media General

MEG

26.83

unch

Clear Channel

CCU

37.05

+0.29

Meredith

MDP

55.91

-0.95

Disney

DIS

34.07

-0.25

News Corp.

NWS

23.06

-0.07

Emmis

EMMS

5.35

-0.20

Nexstar

NXST

10.50

+0.04

Entravision

EVC

9.42

+0.01

Ion Media

ION

1.36

+0.01

Equity Media EMDA 2.99 unch

Saga Commun.

SGA

7.26

+0.09

Fisher

FSCI

49.22

+0.44

SBS

SBSA

2.57

+0.03

Gannett

GCI

44.01

-0.57

Scripps

SSP

42.28

-0.10

Gen. Electric

GE

41.17

+0.32

Sinclair

SBGI

12.49

-0.01

Google GOOG

569.00

+0.98

SWMX

SWMX

0.09

+0.05

Gray

GTN

8.40

-0.14

Time Warner

TWX

18.11

-0.01

Gray, C1. A

GTNa

8.70

-0.07

Tribune

TRB

27.53

-0.16

Hearst-Argyle

HTV

25.65

-0.35

Wash. Post

WPO

794.00

-4.80

Journal Comm.

JRN

9.70

-0.52

Young

YBTVA

2.22

-0.04


Bounceback

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Below the Fold

Ad Business Report
Coors Light
To be official Beer of NASCAR w/ five-year sponsorship agreement ...

Washington Media Business Report
Legislators push FCC
For minority task force which Martin has advocated the leasing of DTV multicast...

Internet Media Business Report
CW to stream premieres
On Yahoo! TV prior to airing full premiere episodes of Aliens in America & Life is Wild...

Ratings & Research
The O.J. nostalgia tour
Coming to a cable system near you...


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TV Media Moves

Amy Baer named
CEO of CBS Films

CBS Corp. announced the top exec for its new CBS Films division, naming Amy Baer the President and Chief Executive Officer. In this new position, Baer will be responsible for charting the creative direction for CBS Films, overseeing the development, production, acquisition, distribution and marketing of its films. CBS officially announced the formation of CBS Films in March 7 along with the hiring of Bruce Tobey as CEO. CBS Films plans to develop and produce four to six movies a year, spanning all genres with production budgets up to 50 million per film. The films will be released domestically through a U.S. theatrical distribution unit to be established within CBS Films. Baer joins CBS from Columbia Pictures where she served as EVP/Production since 1998, overseeing the development and production of an impressive roster of films.


More News Headlines

EchoStar makes one move, contemplates another
Satellite MVPD EchoStar, owner and operator of the Dish Network, has picked up Sling Media, known primarily as the maker of Slingbox, which allows consumers to access their own living room television set from anywhere in the world where there is internet access. The price is 380M in cash and EchoStar options. "With today's increasingly mobile lifestyle, EchoStar's acquisition of Sling Media will allow us to offer innovative and convenient ways for our customers to enjoy their programming on more displays and locations, including TVs, computers and mobile phones, both inside and outside of the home," said EchoStar's Charlie Ergen. "This combination paves the way for the development of a host of new innovative products and services for our subscribers, new digital media consumers and strategic partners." The company is also considering a split into two separate entities, with The Dish Network becoming a standalone entertainment provider while satellite and technical infrastructure businesses would be spun off. Ergen said the move would allow each segment of the business to better pursue their separate strategies. The company is said to be exploring tax implications of such a move.


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

Comcast VNR caught without its ID
A regional news channel called CN8, produced by Cable giant Comcast, aired a consumer information segment that prominently featured a video news release about Nelson's Rescue Sleep sent to it by D.S. Simon Productions. Lack of sourcing has cost the MSO 4K. The issue was brought before the Commission by watchdogs Center for Media and Democracy and Free Press.

TVBR observation: The cliché is that 4K probably wouldn't cover this year's capex on paper clips for a giant like Comcast. However, this incident serves as an inexpensive warning that the FCC is on the job and will interpret the rules in favor of levying a fine when doubt exists as in this case. It also serves as a reminder that watchdogs have their VCRs running and are eager to bring such incidents to the FCC's attention. Forewarned is forearmed.
09/25/07 TVBR #187

White spacers
claim "100% accuracy"
Microsoft and Philips Electronics are calling for the FCC to put off any decision on allowing unlicensed wireless devices to operate in white spaces of the TV spectrum so their proposed devices can be retested. As you'll recall, the original prototype devices failed the FCC tests for detecting operating TV stations to prevent interference. Now, though, the companies say all of the bugs have been worked out and their new devices "detected television signals at a level of -114 dBm or stronger with 100% accuracy." Not surprisingly, the NAB is not impressed.

TVBR observation: The original tests proved that the devices can fail to detect TV signals and, as a result, cause interference by trying to use occupied TV spectrum. So what if the new, improved devices are working now? How do we know they will not fail at some point, as the first prototypes did? And what will keep people from modifying them, boosting power levels and/or bypassing the signal detection safeguards in an attempt to "supercharge" their wireless devices?
09/24/07 TVBR #186

Harman buyout blows up
Kohlberg Kravis Roberts and GS Capital Partners VI fund say they are walking away from their eight billion bucks deal to take Harman International private. They claim the current credit crunch is not to blame, but rather that a material adverse change in Harman's business has occurred, which means they are no longer obligated to complete the buyout. Harman denies that anything has changed, so look for this to head to court post-haste. In any case, shares of the audio equipment maker plunged 24% on Friday after the deal breakup was announced.

TVBR observation: Investors have good reason to be worried about whether private equity firms will be able to make good on their buyout deals. Financing of mega deals is very tough right now and if the equity guys can find an excuse to slip out of a hard-to-finance deal, they are likely to take it. It still looks like the Clear Channel and Cumulus Media buyouts are solid, and Hearst Corporation certainly has the wherewithal to fund its proposed buyout of the public shareholders of Hearst-Argyle. But new radio or TV deals in the billions or hundreds of millions aren't likely to take place for a while.
09/24/07 TVBR #186


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