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Welcome to TVBR's Daily Epaper
Volume 22, Issue 217, Jim Carnegie, Editor & Publisher
Friday Morning November 4th, 2005

TV News®

CBS buys sports cable net
It only took a day for the rumor to become reality (11/3/05 TVBR #216). Viacom's CBS is buying College Sports Television Networks (CSTV) for 325 million bucks. Actually, CBS Corp. will be closing the deal post-split as its first foray into cable television. Founder and CEO Brian Bedol will stay on to run CSTV and will report to Les Moonves, in his soon-to-be role as CEO of CBS Corp. "I am very excited about this acquisition, which brings a new dimension to our efforts in sports and the digital space as well. We're not only getting hugely valuable assets here, we're acquiring a superb management team that has a proven record in building lucrative sports television franchises. College athletics and the online community it generates represent one of the biggest sectors in sports television, and CSTV has made tremendous strides in capturing this market. We think it's a natural fit for our company and we're confident that, as part of CBS, it will continue to grow and compete even more aggressively," said Moonves. The deal is not just about cable, but also the Internet. Moonves claims that by adding in the website of CSTV to those that CBS Sports and CBS SportsLine already have, CBS will have a "larger sports Web audience than any other online medium - - 19 million unique users" - - obviously taking a swipe at ESPN.com.

TVBR observation: As we said yesterday, obviously a great brand extension. It will be interesting to see what other cable ventures Moonves finds attractive for the new CBS Corp. And don't underestimate the value of the personnel being acquired in this deal - - Brian Bedol and partner Chris Bevilacqua. Bedol previously co-founded what's now ESPN Classic and sold it to Disney/ABC for a substantial profit. No doubt he has a few more ideas about how to make money off of sports content on cable and the Internet.

Senate smacks down
McCain deadline amendment

John McCain (R-AZ) amended the DTV deadline amendment he failed to get through the Commerce Committee to move the hard date for analog spectrum turn-in ahead of the 4/7/09 date proposed by committee chair Ted Stevens (R-AK). In committee, he tried to move the date ahead two years, to 4/7/07. On the Senate floor, he conceded an extra year to drum up auction results toward budget reconciliation, seeking to move the deadline ahead to 4/7/08. That proposal went down in flames by a vote of 69-30. Party line was not a huge factor in the results. Although Democrats tended to support the measure, McCain had eight Republicans and independent Jim Jeffords (I-VT) in his column. The full bill, including a three billion bucks converter box subsidy program and the 4/7/09 analog shut-off date, passed the full Senate late yesterday by a vote of 52-47. NAB's Eddie Fritts was quick to hail the amendment's defeat, saying, "Commerce Committee Chairman Ted Stevens and ranking member Daniel Inouye deserve enormous credit for their steady leadership in shepherding a 2009 'hard date' DTV bill through the Senate. Now that a firm date for ending analog TV is settled, NAB will work to ensure that all consumers have access to the full benefits of digital and high definition television." Still up for consideration is an amendment from John Ensign (R-NV) which would bring the Senate DTV set-top box subsidy in line with that passed by the House Commerce Committee, reducing it from 3B dollars to 1B dollars. Ensign has coosponsor support from McCain, Gordon Smith (R-OR), John Sununu (R-NH) and Jim DeMint (R-SC).


Univision cutting headcount
Univision may be wwaaaaaaayyy outperforming its English-language peers (11/3/05 TVBR #216), but President Ray Rodriguez is nonetheless looking for ways to cut overhead and increase profits. He's announced plans to cut the company's workforce by 6%, or about 275 people. Most of those staff reductions will be in television. In his quarterly conference call, Rodriguez called the staff reductions "a difficult but necessary step."

TVBR observation: Even the Spanish media juggernaut is felling the effects of the advertising slowdown. Guidance for Q4 is for single digit growth after Univision had gotten used to double digits. Also, Rodriguez is trying to prove himself to Univision's big Mexican and Venezuelan shareholders, who didn't support his elevation to President.

Cablevision OKs
3B special dividend

There may be some father-son squabbling from time to time, but the Dolans are clearly still running the show at Cablevision. Last week they withdrew their buyout bid and asked for approval of a special three billion bucks dividend (10/26/05 TVBR #210) and now the cable MSO's board has approved just such a dividend. Never mind that the company is already pretty well leveraged and will have to borrow all of the money for the special dividend, whose biggest recipients will be - - you guessed it - - the Dolans.

TVBR observation: Abandon ship! That seemed to be the Wall Street reaction yesterday. You'd think that a special dividend of nearly 12 bucks a share would push the stock price up. Instead, Cablevision declined nearly a buck. Investors apparently fear that once the one-time dividend is paid the stock price will drop proportionately, effectively cutting the stock price by nearly half.

FCC goes into action
The Federal Communications Commission had a busy day Thursday. It opened a Notice of Proposed Rulemaking regarding the relationship between local franchising authorities (LFA) and the cable industry, including the possible entry into the business by telcos. It expanded EAS requirements to digital facilities and opened proceedings on next generation alert services and provision of service to disabled and non-English-speaking individuals. It also moved up the digital tuner deadline for television set manufacturers. The new deadline is 3/1/07, and it applies to all sets regardless of size. All sets larger than 36" should already be so-equipped, along with half of all 25"-36" sets - - and that middle group must be at 100% by next March. The franchising plank seeks information on whether those who would compete locally with cable are being unreasonably refused by LFAs. As Chairman Kevin Martin put it, "New video entrants, regardless of the technology they employ, should be encouraged - - not impeded from entry." Commissioner Jonathan Adelstein, in supporting the measure, questioned whether LFAs were really a hindrance to competition, and cautioned against the possibility of losing their up-close oversight on MVPD providers. On the EAS front, "...providers of digital broadcast and cable TV, digital audio broadcasting, satellite radio, and direct broadcast satellite services" are now bound by Commission EAS requirements, and have until 12/31/06 to come into compliance, with the exception of DBS, which gets a extra five months, to 5/31/07, and as mentioned above, opens inquiry into future development and reaching out to the disabled and non-English-speaking communities.
| LFA rulemaking items |


Conference Calls 2005
Strong quarter for Entravision
Spanish broadcasters continue to outperform their English-language peers. Entravision reported late yesterday that its Q3 revenues were up 8% to 75.5 million and broadcast cash flow (BCF) gained 11% to 31 million. "Our ongoing investment in our sales organization is continuing to pay dividends as we introduced over 100 new clients to Spanish-language advertising," CEO Victor Ulloa told analysts in his conference call. Radio revenues shot up 12% to 28.4 million and BCF gained 9% to 16.5 million. TV revenues grew 4% to 37.8 million and BCF was up 2% to 20.6 million. Outdoor revenues rose 13% to 9.3 million and BCF increased 12% to 7.5 million. Looking ahead, the company is telling Wall Street to expect Q4 TV revenues to be up 5-6%, radio up 1-2% and outdoor up 7-8%. Ulloa said he was disappointed with current radio pacings, but expected them to pick up in the New Year.

DG Q3 down 2.5 million
DG Systems' reported Q3 net revenue of 13.1 million compared to 15.6 million in the same period a year ago. Q3 '04 included over 950,000 in revenue from political advertising and approximately 210,000 of deferred revenue in DG's StarGuide division, which did not recur in Q3 '05. Said Scott Ginsburg, DG CEO: "The third quarter revenue was impacted by a competitive rate environment as well as an overall industry decline in distribution volumes, due to a change in customer advertising patterns and weaknesses in the automotive and entertainment industries. We believe that this downward shift in demand was temporary. We anticipate the fourth quarter to be seasonally strong, driven by the continued ramp up of business from several new customer acquisitions that occurred in previous quarters." Net loss for Q3 was 0.8 million, or (0.01) per share, compared to a net income of 0.5 million, or 0.01 per share, in Q3 '04. Operating expenses, excluding depreciation and amortization, in Q3 were 12.1 million compared to 12.7 million in the same period a year ago, attributable to workforce reductions. DG completed Q3 with net debt of 22.4 million and total debt of 24.8 million, attributable to recent investments in Media DVX for a back-up network solution and ConfirMedia, a subsidiary of Verance Corporation, for airplay verification and watermarking capabilities.


Adbiz©

UMC's Jean Pool discusses clutter, PI problem
Most everyone realizes clutter is a big problem. While broadcasters have said they would take steps to reduce it, some have and some have not. What some may not realize, however, in the days of iPods, video iPods, satellite radio and Internet streaming and downloads, clutter reduction is more important than ever. Jean Pool, EVP/Director of North American Operations, Universal McCann and Chairman of Media Policy at the AAAAs, sees the issue, and over-saturation of product integration, as major problems for our industry: "This industry needs to suck it up and stop over-commercializing everything and destroying our business. 15-16 minutes an hour on television, in a fragmented medium, and they wonder why people channel change? Duh."
| Read More... |

More buyers comment
on Stern replacement promotions

By now, most know of Infinity buying 24 full-page ads as the sole sponsor in this week's edition of Ad Age to promote Stern replacements, including Adam Carolla, David Lee Roth, Penn Jillette and Rover. The cost for that alone was reportedly around 800,000 dollars, with 1.2 million being spent in LA alone in December to market Carolla. What was the reason for that kind of spend? Did it increase interest for the radio buyers? Was it worth it? We asked a few for yesterday and today's issue.
| Read More... |

Sirius running liquor ads
Sirius is running spots for Tanqueray gin, with a hip-hop song titled "Get Your Ice On" The spots, at two and a half minutes long, are running on Sirius channels like Cracked Up Comedy, Maxim Radio, OutQ Radio and Sports Byline. The effort began on the Internet. XM already accepts liquor advertising, via brands like Jack Daniel's Tennessee whiskey. In starting to accept commercials for distilled spirits, Sirius joins a lengthening list of media outlets. Only the six big national networks - - ABC, CBS, Fox, NBC, UPN and WB - - still refuse to run liquor spots. The NY Times reports Diageo/Tanqueray turned to Sirius because it wanted to run the song commercial for two and a half minutes; traditional radio stations and networks generally do not accept spots longer than 60 seconds. Other Tanqueray commercials of conventional length run on terrestrial stations in cities including Chicago, Los Angeles and New York. "We wanted to get the song on the radio, but we ran into a brick wall with terrestrial radio," Glenn Porter, vice president and creative director at the Tanqueray agency, Grey Worldwide in New York, told the paper. The "Get Your Ice On" commercial began on six Sirius channels 10/17 and is scheduled to run through 11/12.


Washington Beat
Saga stops KFLO ad flow, but fails to silence it
KFLO-LP is a Jonesboro AR low power FM licensed to American Heritage Media Inc. (AHM) - - and Saga Communications felt it was going over the noncommercial line and running advertisements. It asked that the license application be denied, or at least designated for hearing, and that the CP be revoked (5/13/04 RBR #94). The FCC did indeed find instances where underwriting announcements went over the line, but said they were minimal and did not warrant the "dire" remedy suggested by Saga. Essentially, Saga's charge that AHM set out to deceive the FCC and intended to run KFLO-LP as a commercial enterprise was unproven, and that the vast majority of the underwriting announcements were acceptable. As such, it didn't even fine AHM - - just hit it with an admonishment and advised it to be careful in the future.


Programming
Two-hour L&O:CI
set for November 6th

NBC is looking for a big November sweeps draw with a two-hour movie special of "Law & Order: Criminal Intent" featuring actors from both L&O:CI and its parent, "Law & Order. Detectives Goren and Eames (Vincent D'Onofrio and Kathryn Erbe) and Logan and Barek (Chris Noth and Annabella Sciorra) will all appear in the November 6th (9-11 pm ET) movie special in a story inspired by recent media headlines. On a school trip to New York City, a visiting Iowa teen disappears and the prime suspect Ethan (guest star Matt O'Leary), is a powerful judge's son. The case widens when it appears the accused's philandering father Harold (guest star Colm Meaney), is a co-conspirator who acted to protect his son - - and might be a murder suspect himself - - but he is not afraid to retaliate against the investigators. In doing so, he delves into the personal lives of the detectives who aim to catch him. Jamey Sheridan, Courtney B. Vance and Fred Dalton Thompson ("Law & Order") also star. "Law & Order: Criminal Intent" is a Wolf Films production in association with NBC Universal Television Studio and is Dick Wolf's third installment of the "Law and Order" brand, the second-longest running drama series in the history of television. Wolf, Rene Balcer, Fred Berner and Peter Jankowski are executive producers.


Ratings & Research
Judge Judy ties Oprah
Here's a rarity for you - - a non-KingWorld program in the top three for syndicated television. Admittedly, "Judge Judy" did only tie for third place with the "Oprah Winfrey Show" and Paramount, like KingWorld, is owned by Viacom, but it is unusual nonetheless.
| View the Chart |


Stock Talk
Good news abounds
Wall Street celebrated as major retailers reported better than expected sales and Merck won a big drug liability lawsuit. The Dow Industrials rose 50 points, or 0.5%, to 10,553.

Good news for retailers is good news for broadcasters, so TV stocks were up. Univision jumped 5.9% a day after reporting strong Q3 results. Entravision (which reported after the closing bell) was up 1.2%.


Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

3.85

-0.05

Media General

MEG

55.15

-0.30

Belo

BLC

23.05

+0.38

Meredith

MDP

49.89

+0.09

Clear Channel

CCU

30.18

+0.03

News Corp.

NWS

15.28

+0.03

Disney

DIS

24.90

+0.08

Nexstar

NXST

4.28

-0.08

Emmis

EMMS

20.09

-0.12

NY Times

NYT

28.36

+0.33

Entravision

EVC

8.40

+0.10

Paxson

PAX

0.42

-0.01

Fisher

FSCI

48.91

+0.16

Saga Commun.

SGA

12.77

+0.22

Gannett

GCI

64.81

-0.17

SBS

SBSA

6.46

+0.02

Gen. Electric

GE

33.98

+0.17

Scripps

SSP

46.53

-0.04

Granite

GBTVK

0.24

-0.03

Sinclair

SBGI

9.02

+0.13

Gray

GTN

9.50

unch

Time Warner

TWX

17.66

-0.24

Gray, C1. A

GTNa

9.29

+0.06

Tribune

TRB

32.34

-0.01

Hearst-Argyle

HTV

24.22

+0.03

Univision

UVN

29.08

+1.62

Jeff-Pilot

JP

54.28

-0.05

Viacom, Cl. A

VIA

31.51

-0.38

Journal Comm.

JRN

14.03

-0.05

Viacom, Cl. B

VIAb

31.44

-0.29

Liberty Corp

LC

46.59

-0.11

Wash. Post

WPO

770.00

+18.00

LIN TV

TVL

12.81

-0.14

Young

YBTVA

2.56

-0.16

McGraw-Hill

MHP

50.89

+0.88

-

-

-

-

-


Bounceback

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TV Media Moves

Dunn deal
in NYC

Veteran TV sales exec. Peter Dunn, most recently President of Sales for the Viacom Television Stations Group, has been named President and General Manger of WCBS-TV (Ch. 2, CBS) New York. He fills the post left vacant when Lew Leone defected to the Fox O&Os in NYC (10/5/05 TVBR #195).


Below the Fold

Ad Biz
UMC's Jean Pool discusses
clutter, PI problem
Broadcasters have said they would take steps to reduce it, some have and some have not.

More buyers comment on Stern replacement promotions
"I think Infinity is kind of scrambling

Sirius running liquor ads
We wanted to get the song on the radio, but we ran into a brick wall...

Ratings & Research
Judge Judy ties Oprah
A rarity, a non-KingWorld
program in the top 3...


More News Headlines

Broker takes
a sabbatical

Hey, there's a first time for everything. Greg Merrill is taking two years off from Media Services Group as he and his wife, Joan, will serve as public affairs/humanitarian missionaries in London for the Mormon Church. In Merrill's absence, his business will be handled by partners Jody McCoy and Tom McKinley.

Continental Electronics signs with National City Media Finance
Continental Electronics has signed a financing deal with National City Media Finance, to provide custom financing in various broadcast and media markets for the company. Founded in 1946, Dallas-based Continental is a manufacturer and supplier of advanced RF broadcast transmission equipment, with products for broadcasting, military, and scientific applications.


RBR - Radio News

Biggest indie bowing out
Under pressure from Capitol Hill and the FCC, most radio companies have already cut their ties to independent record promoters. But it appears that the ongoing payola probe by New York Attorney General Eliot Spitzer (6/25/05 RBR #145) is finishing off the indie business. As first reported by the New York Times, Jeff McClusky & Associates, long the biggest of the indies, has decided to drop its remaining deals with radio stations once they expire. "We're out of the budget business," GM Gary Tanner told RBR. He said the 30 or so remaining radio stations that the company has contracts with - - down from well over 150 a few years ago - - have all begin given 30 days notice of contract termination. All of those, he said, are independently owned stations, since the big groups have already dropped their contracts with the indies. McClusky, based in Chicago, had pioneered the idea of an indie having exclusive relationships with radio stations, dolling out promotional fees ("budgets") to the stations. He then billed record labels for playlist adds, while he and the stations insisted that there was no link between the fees and what got on playlists. McClusky & Associates plans to continue in business, although as a leaner, meaner company. "We don't need 50 people anymore," Tanner said, although he declined to discuss current staffing levels. McClusky himself met with the attorney who's now the compliance officer for Sony/BMG to figure out how to operate under the terms of the label's settlement with Spitzer, since McClusky expects that all other labels will soon follow suit. "We have a great relationship with a lot of radio stations," Tanner said. The company will now work for labels on a flat fee basis to promote records in its five format specialties: Top 40, Rhythmic, Hot AC, Rock and Alternative.

RBR observation: No tears here. Good riddance, we say. The indies were structured to be the "don't ask, don't tell" shield for record companies to try to manipulate airplay without having their own employees risk violating the federal payola statute. It's debatable whether the indies really had much influence, or whether they mostly pocketed fees for playlist adds that would have been added anyway. When Randy Michaels was running Clear Channel Radio, he told us that the record companies were getting absolutely nothing for the fees being sent through the indies, but that if the record companies wanted to dole out cash for no reason, he was happy to take it. The real problem was that the arrangement didn't pass the smell test. Sen. Russ Feingold (D-WI) made a ruckus about the indie payments on Capitol Hill, FCC Commissioner Jonathan Adelstein joined in and pressure grew on the big radio companies to stop taking money from the indies for any reason. If the groups had taken our advice, they'd have cut ties to the indies much earlier and been spared having to deal with Spitzer's overbroad probe and the follow-up that's apparently coming from the FCC.


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

CBS eying cable buy
Reports that Moonves is in talks to buy College Sports Television Networks (CSTN) for as much as a half billion bucks to operate in conjunction with CBS Sports. CSTN airs more than 35 collegiate sports. TVBR observation: Certainly fits the idea of a brand extension.
11/03/05 TVBR #216

Agencies comment big bucks
spent on Stern replacement promotions Infinity buying 24 full-page ads as the sole sponsor in Ad Age to promote Stern replacements at the cost of 800,000.
TVBR observation: Top guns voice their concerns as Infinity is trying to pre-sell a bill of goods. One gun said, 'It still comes down to the numbers .. ratings.' Infinity GM's just wished for 10 percent of that one time buy in Ad Age just to spend locally against current competition. Go figure as the ego needs food at the top.
11/03/05 TVBR #216

Moonves:
Stern loss is "slight concern"
future CBS CEO Les Moonves on the impact of losing 5% of Infinity's revenues, but Moonves insisted there was only "slight concern" about Stern's departure. Noting that Infinity recently announced 10 different replacements for Stern on various stations, Moonves said some will work and some won't. But he also noted that Stern's contract had gotten so expensive that Infinity wasn't making much profit on his show anyway. TVBR observation: Stop and Please listen to Moonves audio clip above and you will not believe your radio ears. It is clear why some higher ups inside Infinity are not concerned - the new boss is not concerned as Radio to Moonves is just margins game. Not programming, content, branding, marketing, people - Just Margins - swell just swell.
11/02/05 TVBR #215

NBC Nightly News
now streaming on MSNBC.com
Beginning 11/7, free of charge, online at MSNBC.com as this is the next logical step for 'Nightly' and NBC News. TVBR observation: And probably in all network evening news in general. This is worth saying again - Technology waits for no one. Not diary, not LPM, but the consumer is in charge. It would not surprise us to report next that 'Nightly News' will not be on your local affiliate but only on MSNBC and streaming etc. Makes sense to us just like it made sense for TVBR to stop printing a weekly news magazine in 2002 and go electronic and delivering to your desk top to blackberry.
11/02/05 TVBR #215


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