What we thought would happen in 2008


We suggested that at worst the predictions we made last December could be printed out and used as a parakeet cage liner. We were right about that one, and if we add it to our other 13 guestimates dictions, it will bring our total of correct predictions to six, to balance out the six we got flat-out wrong. We were mostly but not entirely right on one, and sort of right on another. You can decide what kind of credit to award us for our partial predictions. We know that if our kids’ teachers were grading this, we’d be flunking.

1. With the strong possibility of a Democratic administration moving in come January 2009, and in any case a new President, FCC Chairman Kevin Martin will make sure his resume is in order. We expect to see an acting Chairman at the FCC before the official hand over of 1600 Pennsylvania Avenue.

Wrong. We were right about the administration shift, but although  Martin is definitely on his way out of the Chair, there is speculation that he’ll keep an 8th Floor chair for awhile.

2. Whether or not it receives regulatory approval, the XM/Sirius merger will wind up in court.

Wrong. But we weren’t the only ones who thought that would happen. Sirius XM CEO Mel Karmazin has admitted that he grabbed unfavorable terms to refinance some XM debt once the deal got regulatory approval so he could go to closing before someone got a court order to block it.

3. The FCC’s decision to ease restrictions on broadcast/newspaper crossownership in the top 20 markets will be hung up in Congress and the courts all year long.

Correct. Much of Congress was up in arms about the move, but it’s still mired in the courts.

4. At least for 2008, the lack of closure on easing crossownership restrictions won’t much matter, since few will be looking to initiate such a deal.

Correct. Most of the focus has been on keeping cross-ownership waivers intact until regulatory matters are finalized.

5. Cumulus Media will close its going private deal, one way or another.

Wrong. The Dickey family had to call off the transaction as the credit markets just got worse and worse. However, family patriarch Lew Dickey Sr. continues to buy up company shares at a rapid pace.

6. Clear Channel Communications will close its going private deal. The question is, will it be to Thomas H. Lee Partners and Bain Capital or to Sam Zell and Randy Michaels?

Correct. It took a multi-billion lawsuit to force the banks to the closing table, but Lee and Bain are now the proud owners of the nation’s largest radio company, not to mention its outdoor company as well. As far as we can tell, the Zell/Michaels rumor was only that.

7. Political advertising spending records will be broken.

Correct. And the Obama campaign’s prodigious revenue generating machine blew away the combined total of Bush and Kerry in 2004. But the political spend wasn’t as high as expected and it wasn’t nearly enough to counter other things, like the big hole in auto spend.

8. A new broadcaster will sell an IPO. We find this hard to believe, but we keep hearing it from Wall Street.

Wrong. We found it hard to believe, but a couple of Wall Street analysts insisted a year ago that there were a couple of broadcasters getting ready to go public. This turned out to be such a terrible year for broadcasting stocks that neither of those analysts is currently working on Wall Street.

9. Local TV LLC will add a sister, Local Radio LLC.

Wrong. The company has been a bidder in various auctions, but never the winning bidder. Maybe in 2009.

10. Internet revenues will grow strongly for broadcasters, while the core spot business (excluding political) remains sluggish. (You don’t need a crystal ball for this one!)

Correct. Growth in the early part of the year remained at double-digit levels. But like everything else in this economy, it slowed down toward the end, and the latest RAB off air revenue report showed a mere 1% increase for radio in November.

11. Hearst Corporation will take its ownership of Hearst-Argyle Television beyond 80% and then make a stronger bid to pick up the rest and take the TV company private.

Partially correct. Hearst Corporation now owns about 82% of the stock of Hearst-Argyle Television. It did make an offer to buy out other shareholders at $23.50 per share in August, but that was rejected as inadequate. The share price has lately been below $6.

12. NAB will lay to rest any concerns about an uninformed public with a massive DTV education campaign.

Mostly correct. Less than 7% of TV households are completely unprepared for the DTV transition per Nielsen’s last temperature-taking. Hispanic broadcasters have a bit more educating to do.

13. Retail electronics outlets will have a banner year as Americans stock up on digital television sets.

Wrong. The economy killed off what should have been a banner holiday season with electronics retailers. Far from prospering, one of the biggies, Circuit City, went into Chapter 11.