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Welcome to TVBR's Daily Epaper
Volume 24, Issue 189, Jim Carnegie, Editor & Publisher
Thursday Morning September 27th, 2007

TV News ®

2008 looking very different
for TV and radio

Is 2008 "a year in the balance" for radio? Bear Stearns analyst Victor Miller asked that question at the opening for the annual Dickstein Shapiro financing session that kicked off the NAB Radio Show in Charlotte. For the first time since radio deregulation in 1996, TV stocks now trade at a higher average EBITDA multiple than radio stocks. That's come about because the average pure-play TV stock is up 35% this year, while the average radio stock (excluding Clear Channel and Cumulus, who have buyout deals to go private) is down 30%. Miller said television is benefiting from multiple revenue streams, including retransmission consent payments, and expectations that the 2008 election cycle should bring record political spending. The best Miller could say for radio, though, is that it may have to deal with fewer negatives in 2008. Satellite radio is dealing with its own problems. Mainstream operators who have seen ratings and revenues shift to radio groups focused on Hispanic and Urban formats stand to bounce back as PPM rolls out to more markets.

No immediate return to easy credit
There was optimism at the financing session in Charlotte that the current credit crunch will moderate, but no one was predicting a quick return to the type of market that we saw a few months ago before problems in the sub-prime mortgage market spread out and made credit tighter for everyone. Deutsche Bank investment banker Drew Marcus expressed confidence that the Clear Channel buyout will go to closing because the commitments are in place, but he noted that the terms for that deal are not available in the market today. "The banks are all under water. We'll lose money on that financing," he said. As one of the buyers in the Clear Channel deal, Soren Oberg of Thomas H. Lee Partners expressed the belief that the credit tightening will only be temporary. "There's no doubt the tightening of credit availability has limited the ability of equity capital as well for all transactions, including radio transactions," he noted. But with radio's strong cash flows, he suggested that it might be one of the sectors to lead the way out of the credit crunch. But while mega deals may be few for a while, there is still financing available for smaller deals and interested buyers. Garrett Komjathy of GE Commercial Finance said many of his existing clients are anxious to buy spin-offs from the Clear Channel, Cumulus and other mega deals.

TVBR observation: For those of who were around for the HLT credit crunch in the early 1990s, this credit tightening, though painful for many, is nowhere near as devastating as what happened then. No one is rushing to sell radio and TV stations for deeply discounted prices. Lenders aren't fleeing the broadcasting business. There are differences of opinion on how quickly investor money will flow back into the market to back mega deals, but for routine deals it's business as usual, with perhaps less generous terms. Life goes on.


Reps bring product
placement to the fore

The FCC's designated VNR specialist Jonathan Adelstein (D) has expressed his satisfaction with the 4K fine levied against Comcast for broadcast of an unidentified VNR (which Comcast is said to be appealing), as have the watchdogs responsible for the original complaint. Both have called for more of the same. It only took another day for these sentiments to register on Capitol Hill, although the topic isn't specifically VNRs. Key House members Ed Markey (D-MA) and Henry Waxman (D-CA) have fired off a letter to FCC Chairman Kevin Martin (R), pictured, on the related topic of product placement. "In our view," they said, "the blurring of the line between advertising and content represented by product placement and integration is unfair and deceptive if it occurs without adequate disclosures to the viewing public. In some extreme cases, it may also undermine the integrity of the television programming itself."

Markey held a hearing on the topic last May, and noted that the practice was on the increase in television due to the increase of DVR-enabled commercial skipping. "As the use of product placement and product integration in television expand, broadcasters and cable operators should comply in a meaningful way with their statutory obligation to identify what entity is behind sponsored programming and what product is being pitched." They commended Martin for planning a proceeding to look into the matter, and suggested he get on with it with all due haste.

TVBR observation: We will not be surprised if television shows soon include a list of placed products and the sponsors paying to place them along with the traditional credits -- and we suspect legislators will demand they scroll by slowly enough for below-average readers to make sense of them. You read it here first.

Nielsen plans a 2011 trip
That's trip for triple, which is what the ratings icon plans to do to its National People Meter research base. By 2011, it plans to up the current households surveyed total from 12K to 37K, with total individuals going from 35K to 100K. The sample increase is deemed necessary to deal with increasingly fragmented US viewing habits and to add "flexibility for measuring non-traditional" viewing. The move also "...supports the more granular measurement that clients are requesting," including provision of commercial minute ratings and measurement of viewing over the internet, with hand-held devices and outside the household.

"With a panel of a hundred thousand people, we can more precisely pinpoint the viewing of all demographic groups and dig deeper into the audience levels for networks of all sizes," said Sara Erichson, Executive Vice President Client Services Nielsen North America. Scott Springer, Product Leader of Audience Measurement for The Nielsen Company's Media Segment, added, "Our plans for out-of-home viewing, streaming video on the Internet, and 'third screen' devices such as cell phones and hand-held video players, are based on integrating these measurements with traditional television measurement. This much larger national sample creates the necessary foundation for an integrated measurement approach." Meanwhile, Nielsen's U.S. Hispanic service has agreed to provide ratings for basic cable service MTV Tres effective 10/1/07. The data will be derived from Nielsen's 1.3K Hispanic household subsample.


Wall Street Media Business Report TM
Dog and pony season kicking off
Act III of the 2007 revenue results show is getting set to kick off. Viacom Inc. has set its conference call for Friday, 11/2/07 to discuss its third quarter earnings. The operator of BET, MTV, Comedy Central and more will hit the wires at 8:30 AM Eastern. And its announcement will no doubt be followed by dozens of others. As always, TVBR will tune in to the calls so you don't have to.


Ad Business Report TM

Jeep set to drive into TV
"Have fun out there" is the tagline for the 2008 Jeep Liberty, in a multimedia flight which should already have made its initial foray onto the airwaves. Jeep will be pushing the vehicle over television, supported by print, interactive and live event elements. It also has a product placement arrangement in place with ABC's "Men in Trees," where it will be integrated into the story line thoughout the season. The plan is to emphasize its traditional Jeep features, while trumpeting new elements such as it's Sky Slider roof. Video commercials will be placed on various broadcast and cable programs, and will also be placed on numerous live sporting events.


Media Markets & Money TM
Cowles clears a path into California
The publisher of The Spokane Spokesman-Review also owns television properties in the inland portion of Washington State. It is now taking advantage of Providence Equity Partners' plans to respin some of the Clear Channel television properties, in Santa Barbara and Monterey, it acquired this spring. In the Santa Barbara-Santa Maria-San Luis Obispo market, Cowles is picking up full-power KCOY-TV, a Channel 12 CBS affiliate licensed to Santa Maria, along with low power K44DN-LP Paso Robles (CBS/44) and KKFX-CA, which carries Fox on Channel 24. In Montery-Salinas CA, Cowles gets KION-TV, licensed to Monterey and carrying CBS on Channel 46, along with low power KMUV-LP (Telemundo, Channel 23). The deal also includes an LMA with Seal Rock Broadcasters' KCBA-TV, carrying Fox out of Salinas on Channel 35. According to Kalil & Co., which brokered the deal on behalf of the seller, the price is 41M. Brian Cobb of CobbCorp represented the buyer. In addition to its Spokane newspaper, Cowles owns NBC/6 KHQ-TV, and has two NBC affiliates in the Yakima-Pasco-Richland-Kennewick DMA, KNDO-TV 23 in Yakima and KNDU-TV 25 in Richland.

Journal Palms one in the desert
NBC KMIV-TV in Palm Springs CA is getting a little sister. A real little sister. According to brokerage firm Kalil & Co., Multimedia operator Journal Communications is picking up a low power partner for its full power market flagship, bringing in KSPE-LP 50 from Mirage Media for an undisclosed price. The LPTV is a MNT affiliate. An LMA is expected to kick off 10/1/07.


Washington Media Business Report TM
NAB continues to press
white space opposition

The National Association of Broadcasters is continuing its effort to forestall the sudden entry of unlicensed devices into the cracks between licensed television stations. Such devices have recently failed FCC tests, but proponents are still pushing for the right to flood the market with them. IN order to protect this television space, the FCC is utilizing another medium, radio. Adds have been placed on three key Washington DC stations, Citadel's WMAL-AM and Clear Channel outlets WTNT-AM & WWRC-AM, all of which are in News and/or Talk formats. The idea is to put the case in from of regulators and legislators, and perhaps just as important, their key staff members.
| Listen Here |

TVBR observation: Most of the legislators and regulators who have weighed in on the DTV transition have expressed nothing but fear. It is therefore a continuing source of amazement that anybody in Washington would even consider experimenting with unlicensed devices right before the most critical change in broadcast spectrum infrastructure in history. For now, the official stance on white spaces should be "let's wait until the day, some time after 2/17/09, when everybody is actually receiving broadcast television on their set at home, and THEN we'll see what we can squeeze into the white spaces." Period.


Entertainment Media Business Report TM
Patrick is back
After breaking off an 18-year run with ESPN, Dan Patrick is heading back to radio next week from the production/distribution stable of The Content Factory, founded by Jimmy de Castro. Premiere Radio Networks is handling sales and representation. de Castro has plans to distribute "The Dan Patrick Show" across a broad spectrum of media platforms including radio, television, the Internet, print and mobile devices.


Ratings & Research
Existing home sales fall
to 5-year low last month

U.S. sales of existing homes fell 4.3% to a seasonally adjusted annual rate of 5.50 million in August, the lowest since August 2002, the National Association of Realtors reported yesterday. Sales in August were down 12.8% compared with August 2006. Economists surveyed by MarketWatch were expecting sales in August to fall to a 5.49 million pace. Inventories of unsold homes on the market rose by 0.4% to 4.58 million, representing a 10-month supply at the August sales rate. For single-family homes alone, the inventory represents a 9.8-month supply, the most since May 1989. The median sales price was 224,500, up 0.2% since August 2006. Single-family median prices were unchanged year-over-year at 223,900.


RBR Radio News
Ford to offer HD Radio across most product lines
Ford became the first automaker to offer HD Digital Radio across multiple product lines. The dealer-installed HD radio option is now available nationwide on nearly all 2008 model year Ford, Lincoln and Mercury vehicles. Additionally, HD Digital Radio can be installed on many earlier models from 2005, 2006 and 2007. As with SYNC, the extensive availability of HD Digital Radio furthers the company's ongoing efforts to deliver new entertainment technologies to automotive consumers. HD Radio joins other new technologies - including SYNC - being offered in Ford, Lincoln and Mercury vehicles to make driving more enjoyable and convenient than ever before. Beginning immediately, HD Digital Radio will be available as a dealer-installed option on new, pre-owned and currently-owned vehicles. Price points will vary by dealership.

Phil Cowdell, WPP's Global Media Director CEO of Ford Media Services, tells RBR about Ford's SYNC in an upcoming interview in our SmartMedia magazine: "...it will allow you to use your mobile phone through the car's hi-fi system. You can drive hands free. SYNC basically provides a software operating platform in the car that means whatever devices you've got as a consumer, when you get in your car you can use them seamlessly. For example, when you plug your iPod in you then say "play Elvis Costello--Good Year for The Roses." If somebody sends you a text message and you're driving it comes up with a sign that says "text message received" and you can say "read text message." You can even select the language you want and male or female voice to read you your text message." To support the HD Radio launch, Ford, Lincoln and Mercury dealers will benefit from an aggressive, multi-million-dollar, 13-week, on-air radio marketing campaign in partnership with the HD Digital Radio Alliance. The commercials will air in 100 markets over some 700 radio stations beginning today.

RBR observation: This is what we've all been waiting for-the last piece of the HD Radio puzzle. Hopefully the dominoes will start falling as well with GM and Chrysler. Now the real push begins against satellite's 12.95 a month price tag. Now AM stations can offer music again as well. Congratulations Radio-this is some real icing on the cake for the NAB in Charlotte.


Stock Talk
Wall Street welcomes GM pact
You could almost hear the collective sigh of relief on Wall Street when GM and UAW were able to avert a protracted strike. Traders took that excellent piece of news and then proceeded to give broadcasters very mixed results. Just about the biggest media loser wasn't really a broadcaster - it was Google.


Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

3.90

-0.04

Lincoln Natl.

LNC

64.74

+0.41

Belo

BLC

17.14

+0.06

LIN TV

TVL

12.68

-0.15

CBS CI. B CBS

31.11

+0.30

McGraw-Hill

MHP

49.73

+1.79

CBS CI. A CBSa

31.10

+0.26

Media General

MEG

27.27

+0.44

Clear Channel

CCU

37.18

+0.32

Meredith

MDP

55.94

+0.03

Disney

DIS

34.52

+0.45

News Corp.

NWS

23.53

+0.47

Emmis

EMMS

4.83

-0.52

Nexstar

NXST

10.82

+0.32

Entravision

EVC

9.53

+0.11

Ion Media

ION

1.32

-0.04

Equity Media EMDA 2.99 unch

Saga Commun.

SGA

7.40

+0.14

Fisher

FSCI

49.80

+0.58

SBS

SBSA

2.56

-0.01

Gannett

GCI

44.53

+0.55

Scripps

SSP

42.31

+0.04

Gen. Electric

GE

41.27

+0.17

Sinclair

SBGI

12.22

-0.27

Google GOOG

568.16

-0.84

SWMX

SWMX

0.08

-0.01

Gray

GTN

8.23

-0.15

Time Warner

TWX

18.05

-0.07

Gray, C1. A

GTNa

8.35

-0.35

Tribune

TRB

27.42

-0.04

Hearst-Argyle

HTV

25.88

+0.23

Wash. Post

WPO

799.97

+5.97

Journal Comm.

JRN

9.53

-0.16

Young

YBTVA

2.16

-0.06


Bounceback

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Below the Fold

Ad Business Report
Jeep set to drive into TV
"Have fun out there" is the tagline for the 2008...

Media Markets & Money
Cowles clears a path
Into California now taking advantage of Providence Equity Partners' plans to respin some of CC's TVs...

Journal Palms one in the desert
NBC KMIV-TV in is getting a little sister...

Washington Media Business Report
NAB continues to press
White space opposition, effort to forestall the sudden entry of unlicensed devices...


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TV Media Moves

Cohen
for broke

The Weiss Agency has named WOR veteran Heather Cohen Executive VP and is installing her at its New York office where she will represent talent and consult with broadcast clients. She was most recently with GreenStonie Media, after a decade with WOR.


More News Headlines

GM, union reach tentative agreement
"This agreement helps us close the fundamental competitive gaps that exist in our business,' said GM Chairman/CEO Rick Wagoner. "The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments." The tentative agreement brings a relatively rapid end to a two-day strike in what Wagoner said "...was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship." A major agreement was reached on a health care trust for retirees that will be funded by GM and administered by the union. According to reports, pay and job security issues also figured in the agreement, although details were not made available.

TVBR observation: With broadcasters already scrambling to make up revenue from sluggish automotive budgets, the last thing anybody needs is a protracted strike taking place at one of the pillars of the US economy. Here's hoping that those future investments Wagoner was talking about include a significant advertising budget.

Nielsen to report
for GolTV

The Nielsen Company and GolTV, the 24-hour soccer cable channel, announced an agreement to report program ratings in Nielsen's U.S. Hispanic cable service, known as the Nielsen Homevideo Index Hispanic (NHIH) Service. This agreement is effective 10/1. GolTV's ratings will be derived from the Hispanic sub-sample of Nielsen's National People Meter panel. About 1,300 Hispanic households are included in the Hispanic subsample. Prior to this, the network was receiving access to quarterly Nielsen Hispanic data for their internal use but was not published to the marketplace. Nielsen announced in late August it was retiring its National Hispanic People Meter (NPMH) panel, a separate Hispanic-only sample established in 1992, and that it would be using the larger National People Meter sample for all national television ratings reporting.


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

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. For its part, Comcast is still unconvinced that it did anything wrong.

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.
09/26/07 TVBR #188

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%. CL King analyst Jim Boyle is even more pessimistic. He thinks August will be down 2%. 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.

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.
09/26/07 TVBR #188

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


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