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Welcome to TVBR's Daily Epaper
Volume 22, Issue 222, Jim Carnegie, Editor & Publisher
Friday Morning November 11th, 2005

TV News®

Cornwell staying on acquisition trail
With closing expected next month on the 180 million bucks sale of Granite Broadcasting's two WB affiliates in San Francisco and Detroit (9/9/05 TVBR #177), CEO Don Cornwell is in a buying mode. Granite is getting 177.5 million in cash and a 2.5 million equity stake in the buyer, AM Media Holdings. Of that 177.5 million, Granite says it will use 30 million for general corporate purposes, which could include acquisitions, and the remainder of the net proceeds for "expansion opportunities and/or the repayment of debt." After seeing the returns on having virtual duopolies in Ft. Wayne, IN and Duluth, MN, where Granite now provides programming, sales and other services to the Malara stations, Cornwell sounds enthusiastic about doing other similar deals. "We intend to use proceeds from the pending sales of the WB stations to substantially grow the cash flow and asset base of the company by acquiring or operating leading news-oriented stations in small- and mid-sized markets," he said in his quarterly conference call.

Pax moves toward profitability
Now that it's no longer buying any new programming, the flow of red ink is quickly being curbed at Paxson Communications (Pax). While net revenues were down 9.9% in Q3 to 59.4 million, if you exclude a one-time restructuring charge of 24.3 million to get out of no longer needed local sales contracts, Pax actually turned an operating profit of 4.9 million. Infomercial revenues in Q3 were 43.4 million, up from 40.5 million a year earlier. 16 million came from ad sales, compared to 25.4 million in Q3 of 2004.

TVBR observation: NBC Universal had complained that Pax was depleting the value of its network and stations by its decision to stop buying new programming and rerunning material from its library in prime time, with the bulk of its revenues coming from infomercials running in other time periods. But based on the low ratings and low ad revenues for Pax's prime time programming - - which, amazingly, haven't gotten much worse with no new shows airing - - it doesn't look to us like there was much worth maintaining. New CEO Brandon Burgess (11/8/05 TVBR #219) is basically starting with a stick and he might as well keep it that way until he brings on a new partner to build a real network. By the way, look for Paxson Communications to change its name soon, following Bud Paxson's exit from running the company he founded.

House gives thumbs up
to courtroom cameras

375 members of the US House of Representatives agreed that the US judiciary system should be able to function just fine while in the presence of the eyes and ears provided by the tools of the electronic media. Only 45 members voted against the proposal, which also has bipartisan support in the Senate. The bill permits the use of electronic media in federal appellate and district courts on a three-year trial basis. Meanwhile, the Senate Judiciary Committee was considering similar legislation offered by the committee's Chairman, Arlen Specter (R-PA), with a bipartisan slate of co-sponsors including Patrick Leahy (D-VT), Russ Feingold (D-NY), Charles Schumer (D-NY), John Cornyn (R-TX) and George Allen (R-VA). RTNDA, which sent President Barbara Cochran to the Senate to speak in support of the measure, noted that the White House is opposed to the presence of cameras in the courtroom. However, part of the House bill "...calls for further advisory guidelines for judges in making decisions with respect to management and administration of cameras in the courtroom." It would allow the use of obscuring technologies - - both visually and aurally - - when deemed necessary when deemed necessary.

TVBR observation: We would imagine that SAAA - - the Sketch Artist Association of America, if there is such a thing - - will oppose this legislation, and the White House has weighed in against it. However, it seems obvious that the courts should join the rest of the world in the 21st Century. One of the guiding principles of a democracy is openness. The judiciary is doing work of and for the public, and the public has a right and a need to know what it's doing and how it does it.

AOL cuts content deal with
The latest in series of recent moves by companies to increase access to digital video programming. Nary a day after the deal with The AP and MSN was cut for news content (11/10 TVBR #221), America Online's news channel,, announced it will feature content/video on its home page., which has 3 million daily users, already offers video content from CNN, ABC, AP and Reuters. AOL offers 15- to 30-second ad avails before the video clips run video clips. Under the agreement, will offer AOL everything from breaking news from around the world to the quirky and the offbeat. The content will be integrated throughout AOL News, including on the News main page, and will include links back to for additional stories. "Joining forces with AOL confirms's commitment to provide high-quality, free broadband video to the online audience," said Betsy Lake Morgan, SVP/CBS Digital Media and GM, "This partnership also provides AOL users with the most current news and analysis from the award-winning correspondents of CBS News."

CBS's Poltrack: VOD market worth 5 billion
It pretty much happened all at once - - VOD content deals everywhere and more mainstream media channels going online. will feature content and video on its home page (see related story). Microsoft's MSN and the Associated Press announced a partnership to develop an online video network that will stream video news feeds to sites that subscribe to AP's wire service. Comcast announced it will sell hit shows from CBS such as "Survivor" and "CSI: Crime Scene Investigation" for as little as 99 cents an episode, with commercials. DirecTV announced a similar deal with NBC Universal to sell commercial-free episodes of its hit shows. Apple unveiled an iPod capable of playing videos, which will now be sold alongside songs on Apple's iTunes Music Store - - including ABC-TV and Disney Channel shows. The booming VOD market could be worth 5 billion a year to broadcast TV networks, says David Poltrack, CBS EVP/Research and Planning, based on an estimate of 50 million homes with VOD access and an average household paying 100 bucks a year to watch network programming off schedule. Ad Age quoted him saying this at the EPM Entertainment Marketing Conference 11/9. VOD's success will ride on marketing the networks' most successful shows. "The clear news from the last few weeks is that people are beginning to believe in the potential for video-on-demand," AdAge reported him saying at the conference. "The marketplace will change dramatically in the era of digital TV, but it will look more familiar than the pundits say...Some people see this as the beginning of the end for broadcast networks. I'd argue that's myopic. The system will not only survive, it will thrive."

TVBR observation: May 2004 RBR in our comment entitled 'Naples is Calling' we warned of iPods and now look at the new iPod video. TVBR/RBR also warned this past January when we covered the NATPE conference that VOD was coming fast and again here it is in your face. Content is King and Presentation is Queen - so, now what are Radio and TV head honchos going to do about it at the local level? It is like the oxygen is being sucked out of the room and there are more issues coming. You have read that advertising is going to be there so guess what - the client is going to want to have it measured and now what are you going to do? Fill out a diary? TV networks and content providers are cutting deals and there is no turning back. Both radio and television best start working together.

Kagan says public will buy into HDTV
82% of all US television households will be equipped with a high-definition digital receiver by 2010, according to a Kagan Research report. Kagan says that amounts to some 97M households, paying an average price of over 1.1K per set. Kagan's Patrick Johnson said, "At the end of 2004, there were 11M HD households; each owning an average of 1.2 HD sets. We project the average price of an HD set will decline some 38% by 2010, reducing the average price to 1,139. Rapid price declines, coupled with increasing levels of HD programming will drive the number of HD households to nearly 97 mil. in 2010, penetrating more than 82% of total TVHH." By 2015, Kagan predicts 110M sets will have been sold. Cable, which had 675K HD subs at the end of 2003, 2.3M at the end of 2004, and is projected to wind up 2005 with 3.8M, will exceed 30M HD subscribers by 2010, and both DBS and telco MVPD services will grow like wildfire up to 2015.

Conference Calls 2005
Granite's numbers look good
With the sale of its two big WB stations pending (9/9/05 TVBR #177), Granite Broadcasting no longer has to include them in its financial reports. Thus, Q3 revenues were up 7.1% to 20.8 million as increased local sales and a full quarter of revenues from its virtual duopolies with the Malara stations in Ft. Wayne, IN and Duluth, MN more than overcame the loss of last year's political ad revenues. Operating income was 372K, compared to a loss of 2.7 million a year earlier. Looking ahead, Granite CEO Don Cornwell says Q4 revenues should be up 2.5-5%. COO John Deushane noted that several ad categories were up double digits in Q3: restaurants, medical, insurance, general services, telecom, beverages, agricultural and real estate. As you'd expect, auto was soft and continues soft in Q4, although Deushane said the sector was improving from Q3.

News Corporation beats The Street
Revenues for the fiscal Q1 (July-September) were up 10% to 5.7 billion, better than the 8% rise that had been expected by analysts surveyed by Thomson/First Call. Operating income rose 19% to 909 million. On the bottom line, higher taxes drove net income (before an accounting change) down 45 million to 580 million, or 18 cents per share, but that was still two cents better than The Street had been expecting. Television revenues were down 4.4% to 1.05 billion and operating income was off 31.6% to 160 million. CFO Dave DeVoe said revenues at the Fox O&O stations were down only 1%, with the rest of the shortfall blamed on the timing of this year's fall season debuts on the Fox network. Meanwhile, it was an up quarter in the cable business, where cable network revenues rose 29.2% to 775 million and operating income gained 18.7% to 197 million. Both Fox News Channel and the Regional Sports Networks were credited with driving the increases. In his conference call, CEO Rupert Murdoch insisted that relations are good with John Malone's Liberty Media, News Corporation's biggest outside shareholder. He also defended News Corporation's recent investments in Internet companies, saying that the Web is a logical extension for the media company to expand its brands and its ability to deliver key demos to advertisers.


Political TV ad spend
sets record for off year elections

After some of the most hotly contested off year political races in history, TNS Media Intelligence/CMAG announced that 2005 political and issue advertising on television reached a record 515 million for an "off year" election season. In gubernatorial and mayoral elections from New Jersey and Virginia to New York City and LA, candidates increasingly turned to television advertising to communicate their messages and gain recognition.
| Read More... |

The Jolly Green Giant is back
After more than a decade, The Jolly Green Giant is making a comeback via Saatchi & Saatchi with a 25-foot billboard in New York City's Times Square, unveiled yesterday. The 80-year-old ad icon is being used to help promote Green Giant frozen vegetable products with low fat sauces and seasonings. The effort includes print and broadcast advertising, transportation and outdoor advertising and consumer sampling programs. Print will proposition the consumer with, "What if you ate vegetables just because you liked them?" and will feature the tag, "For the love of vegetables." The print ads will run in Better Homes & Gardens, All You, Ladies Home Journal, More, Woman's Day, Family Circle, Good Housekeeping, Quick & Simple and Eating Well through December. The :30 second spot TV commercials will run in Boston, Philadelphia, New York, Hartford, DC, Baltimore and Cincinnati leading up to the Christmas holiday. Advertising on buses and billboards in New York, Boston and Hartford will round out the campaign. Green Giant will also hit the road throughout the Northeast with a unique sampling program designed to highlight its vegetable products. A Green Giant Vegetable Love truck, a converted ice-cream truck, will be used in that effort.

Green Mountain Coffee
selects BrandBuzz as AOR

Green Mountain Coffee Roasters has selected a division of Y&R's BrandBuzz as its AOR after an extensive review. "We talked to a lot of agencies over the past year," said TJ Whalen, VP/Marketing for Green Mountain Coffee Roasters, "and we chose BrandBuzz based on their experience in customer relationship management, strong analytics, and strategic marketing insights. We look forward to working with them to further leverage our brand and continue to grow our business as we expand into new geographic markets." Green Mountain Coffee Roasters was founded over twenty years ago, and went public in 1993.

Discover Financial in review
Morgan Stanley's Discover Financial Services has initiated a creative review yesterday. The company's current agency Goodby, Silverstein & Partners San Francisco, reportedly parted ways after split after the agency began pursuing Visa USA, which causes a conflict.

Media Markets & MoneyTM
Jefferson-Pilot merger deal in play?
Both Reuters and MarketWatch report that Prudential Financial may be preparing a buyout bid for Lincoln National Corporation, which, if it happens, could derail Lincoln's pending 7.5 billion cash/stock deal to acquire Jefferson-Pilot Corporation (10/11/05 TVBR #199), including its broadcast unit, Jefferson-Pilot Communications. Both reports cited a client note from Citigroup analyst Colin Devine, issued after Prudential, which was already heavy in cash on hand, sold another two billion in new bonds. Suggesting that there would be no reason to amass a war chest unless you're going to war, the insurance sector analyst said Lincoln would be the most logical target for Prudential to try to acquire. He also mentioned two other insurance companies as less likely possibilities. Getting out of the Jeff-Pilot deal would require Lincoln (in effect, Prudential) to pay a 300 million break-up fee, but Devine indicated that it could make financial sense for Prudential nonetheless.

Washington Beat
FEC looking to fix BCRA rules by February
The Federal Election Commission, faced with a court order to rewrite numerous new campaign finance rules in the wake of the US Court of Appeals for the D.C. Circuit in Shays v. FEC, has vowed to move aggressively to get the job done well ahead high tide in the mid-term elections of 2006. The new rules must accommodate changes called for in the Bipartisan Campaign Reform Act (BCRA), with a total of 15 separate regulations ordered rewritten. FEC says it has already gathered testimony on many of them and will try to wrap up the process early next year. "We in fact already have accomplished a good deal of work needed on the 15 regulation topics at issue," said FEC Chairman Scott Thomas last week. "The Commission has held hearings on proposals for modifying 12 of the regulations, which has moved us to the final stage of the process for those rulemakings." Two more hearings are set to occur before Thanksgiving, with a late-February target date set to wrap the entire proceeding.

Sonora AM's silence made permanent
Just as you need FCC permission to be a broadcaster, you also need FCC permission to be a broadcaster not broadcasting. KHOS-AM in Sonora TX, owned by Zacarias Serrato, seemed to be having a string of bad luck which forced it off air back in 2002. First it lost its tower site, and then was unable to locate a new one, said Serrato, because the land needed for building a new TL was too expensive. The first the FCC heard of the situation, however, was when Serrato applied for a license renewal. This is double trouble for Serrato. For starters, the FCC was never informed about the station's silence, and beyond that, a silent period cannot exceed 12 months as a matter of law. Although the FCC has discretion to grant an extension beyond that, it said "The exercise of that discretion is not warranted here. Station KHOS(AM) was taken off the air more than three years ago, and it has remained silent essentially due to a business decision on the part of the licensee not to find an alternative site promptly." The license is defunct, and the call letters have been deleted.

Romano guest-starring
on "King of Queens"

"Access Hollywood" was proudly promoting a scoop that it aired last night: that former "Everybody Loves Raymond" star Ray Romano will be making a brief return to CBS as a guest star on "The King of Queens." Romano, who won multiple Emmys for his work in front of and behind the camera on "Everybody Loves Raymond," will tape his guest shot on the sitcom this week, "Access Hollywood" reported. Romano has appeared on three previous episodes of "The King of Queens" as his "Everybody Loves Raymond" character, Ray Barone. There was no word on whether or not he is reprising that character or will be playing a new one. "Access Hollywood" is produced by NBC and distributed by NBC Universal Domestic Television Distribution. Rob K. Silverstein is the executive producer.

GAC and Grand Ole Opry enter long-term deal
Great American Country (GAC) and the Grand Ole Opry have signed a multi-year agreement which extends GAC's broadcast rights of its Grand Ole Opry Live show. The agreement provides GAC broadcast rights for an increased number of new Grand Ole Opry Live shows every year of the agreement plus plans to develop several new Opry-related programs going forward. "GAC's ability to showcase different genres of country music allows us to create new programming centered around the biggest brand in the industry, the Grand Ole Opry," said Ed Hardy, president of the network. "We already know how popular Grand Ole Opry Live is with country music fans, with viewership continuing to grow. And over the last eight weeks, the response to GAC's Opry Month programming and our joint effort with the Opry on the Hurricane Katrina benefit concert, Country Reaches Out, has proven these viewers have a strong appetite for more."

Ratings & Research
Oprah battles back
After a tie with "Judge Judy" the previous week, "The Oprah Winfrey Show" was back in sole possession of third place in syndicated TV for the most recent week, according to Nielsen data from the Syndicated Network Television Association (SNTA). KingWorld programs claimed the top three spots and six of the top 10.
| View the Chart |

Stock Talk
Treasury auction cheers market
Strong demand in a US Treasury auction encouraged Wall Street traders, who hope it signals that inflation is under control. Also, oil prices were lower. The Dow Industrials rose 94 points, or 0.9%, to 10,640.

TV stocks were slightly higher. McGraw-Hill rose 2.9%. Spanish Broadcasting System recovered 2.7% from its recent decline. LIN rose 2.4%


Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change





Media General












Clear Channel




News Corp.
















NY Times
















Saga Commun.












Gen. Electric




















Time Warner




Gray, C1. A




















Viacom, Cl. A




Journal Comm.




Viacom, Cl. B




Liberty Corp




Wash. Post






















Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments and
a photo to [email protected]

As I read into this Howard Stern suspension (11/8/05 RBR #219) it becomes more apparent that Infinity is acting like a spoiled infant. Consider this...

They "suspend" him for a day because he is "saying too many things about Sirius on his show." We hear, constantly, the major honchos in our industry saying "nah, we aren't worried about's not here yet!" but Howard is suspended for making comments on his show about Sirius...whose combined all-channel daily cume is LESS than what any single major market AM talker has for a single day. Howard seems to be smart enough to know if he steps on the proverbial line, he'll end up getting back door publicity much the way he has...and we have seen the incredible amount of PR this small event has generated...all for Sirius! Mel must be laughing every day he sees this happening!

What this does to hurt us all who have investments in terrestrial radio is when Wall Street neophyte investors and money managers see all this industry hubub about how "sensitive" Infinity is about Howard, it gives rise to the question, "Hmmm...I wonder if there is something bigger about this satellite radio business than what we really know?" So questions are planted. Seeds of doubt are given credence to conventional radio's "demise" since these actions are seen as more than just "knee jerk."
Where are the true, solid pros in the business who know what a publicity stunt is and where to really be concerned? It's not very evident in what Infinity has shown in the childish way they react to Howard's every word. Let him "be Howard,"...let him rant, let him rave...let him go out in class and concentrate on keeping our strong and vibrant medium moving upward, not going for the stupid seriousness that may do more harm than Howard ever could by himself.

Lowell Homburger, VP
Abernat Roxben, & Boggs
Broadcast Division
Charlotte, NC

Below the Fold

Media Markets & Money
Jefferson-Pilot merger deal in play?
Prudential Financial may be preparing a buyout bid...

Ad Biz
Political TV ad spending sets record for off year elections
After some of the most hotly contested off year political races...

Ratings & Research
Oprah battles back
After a tie with "Judge Judy"

Washington Beat
Sonora AM's silence
made permanent
Just as you need FCC permission to be a broadcaster

TV Media Moves

Fox Sports International ups Raul Palma and Fausto Ceballos
Fox Sports International announced the promotions of Raul Palma and Fausto Ceballos to the newly created positions of Vice President of Production and Vice President of Creative Services, respectively. Palma will oversee all day-to-day program production activities for Fox Sports en Espanol, Fox Sports Latin America and Fox Soccer Channel. Ceballos will be responsible for developing and implementing FSI's creative strategies and on-air promotions. He also will provide creative support to the advertising and affiliate sales teams for Fox Sports en Espanol, Fox Sports Latin America and Fox Soccer Channel.

RBR - Radio News

ABC Radio bidding
in final phase

The Walt Disney Company had already indicated that it would have a decision by around Thanksgiving on whether or not it would sell ABC Radio (10/26/05 RBR #210), so it's clearly time to get down to the nitty gritty. The Drudge Report, which claims to have a source close to the bidding, says final bids are due this week, with Disney then having 15 days to decide which, if any, to accept. RBR sources say that's pretty much in line with what they're hearing as well. As was already known, Emmis, Entercom and Cumulus are chasing the prize, with Drudge saying that one is close to meeting the asking price of Disney CEO Bob Iger. As Entercom CEO David Field described in his Q3 conference call, any deal for ABC Radio will have to be structured as a reverse Morris Trust transaction to spare Disney a big tax bill, with Disney shareholders ending up as the owners of at least half of the merged radio entity. Disney officials have stated that the ESPN Radio and Radio Disney networks and their O&Os won't be included in any transaction. Just what would happen to the ABC Radio Networks hasn't been discussed publicly, although Westwood One has expressed an interest if they're offered for sale by the merged radio company.

RBR observation: This could end up even being more complicated than you imagine. In addition to the tax-avoiding structure of any deal, we hear that Disney is also considering some swap options with other radio owners that could give the merged entity bigger clusters in some markets, while exiting others.

November RBR/TVBR Digital Magazine

GM Talk
What plans do you have in effect for potential natural disasters?

Cumulus VP Engineering Gary Kline tells us how his Mobile and Beaumont, TX stations fared in Hurricane Katrina--the good, the bad and the ugly, along with how they prepared.

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

Interep jumps into TV...Spanish TV
Making its first foray into television in a deal with Una Vez Mas (UVM), the largest affiliate group for the Azteca America network. Azteca America Television Sales (AATS), will handle the 12 existing UVM stations and another dozen to be added in the next 18 months. Interep veteran Bob Turner, is in charge. TVBR observation: This deal should be good for both companies. We understand that UVM had talks with other potential reps, but saw Interep as being hungry to open a new growth avenue - - something that's been lacking at the radio rep firm in recent years.
11/10/05 TVBR #221

Microsoft and AP team for "AP Online Video Network"
The deal is the first time MSN Video player technology will be syndicated to sites outside its network. will continue to be the exclusive video news content partner for MSN's network of sites. AP will provide approximately 50 video clips per day covering national, international, entertainment, technology and business news. TVBR observation: Think bad news? Maybe for the Network dinner hour evening news but - No, this will open local sales opportunities for TV as local advertising is used to hit the consumer when they are ready to make key purchases. Re-read the above as no place does it mention - Local news Content.
11/10/05 TVBR #221

Yager argues that
telcos must carry, too
The Cable Act of 1992 needs to be extended into this new era, to new delivery platforms. The critical role broadcast stations play in providing content of local interest, particularly in an emergency situation. To preserve local service, protections already on the book for cable need to be extended. TVBR observation: Didn't pay attention to it worth a re-read.
11/10/05 TVBR #221

Bush moves to fill FCC
Meet Deborah Taylor Tate. She is a Director and former Chairman of the Tennessee Regulatory Authority and President George W. Bush's nominee to fill the vacant Republican seat on the FCC. He also renominated Democrat Michael Copps to another term. TVBR observation: We can't say much about Tate, since we'd never even heard her name until last night. She is yet another telephone regulator who will need to be brought up to speed on the other areas that the FCC regulates, including broadcasting. Although Copps is always a source of good copy for us, his re-nomination is unfortunate for broadcasters, in particular, since he has never bothered (or wanted) to learn just which aspects of broadcasting the FCC has jurisdiction over, and which it doesn't.
11/10/05 TVBR #221

Alarcon skewered for move into TV
One irate money manager suggested that SBS should walk away from the 37.5 million bucks purchase, saying it had cost the company some 300 million in market capitalization on Wall Street. "You've gone in my book from a free cash flow generator after your refinancing really to an entity with unknown spending habits and potentially more spending down the road - - a real black hole,"
TVBR observation: "...unknown spending habits and potentially more spending down the road - - a real black hole," Ouch! - That had to hurt. Trust SBS's solid board will deliver the guidance to Alarcon before he has to report his fourth quarter earnings as the words said above by financial critics will be even harsher. Next year is the year that Wall Street will also have to be held accountable - time to get tough. Guess What? Watch for more of this action with all public media companies in 2006.
11/09/05 TVBR #220

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