by Tom Taylor | tom@in3media.com | 609.883.3321
Wednesday, March 31st, 2010
Foolish danger ahead for radio
 April Fool’s Day is tomorrow – plan wisely.
Yes, this is T-R-I’s annual plea to morning shows, programmers and other station personnel to think twice – three times – about how a potential April 1 stunt might play out. Successful ones leave everybody feeling good. Bad ones leave local cops unhappy and some aggrieved citizen writing the FCC about the “hoax rule.” Radio’s gotten egg on its face many times for half-baked ideas that sounded great in the studio, but which had disastrous consequences out in the real world. T-R-I reader Jay Philpott sends along a link to the global “top 10 list” at the Museum of Hoaxes - and radio figures in two of them. Among radio’s less-glorious moments was the 1998 episode in Boston, where then-WAAF personalities Opie & Anthony kept doing a bit about Mayor Tom Menino being killed in a car crash. They persisted, even after the mayor’s office called and said the hoax was upsetting his family. O&A later suggested they were trying to get fired so they could take a job at WNEW, New York. That worked, but the mayor stayed mad for years. A Norfolk station once did the famous “eruption of Mount Trashmore” – a real park built on a trash dump – that earned an admonishment from the FCC. Management acted quickly to contain the damage. But it’s better to avoid it. So – plan wisely if you plan to be April Fooling.
 You saw the results of being invisible to People Meter wearers for just one week, in the recent February PPM book for markets such as New York. A judge forced SBS to put the encoders back in the audio chain, to honor a contract that's separate from the ratings pact. Now T-R-I hears that SBS may have persuaded a court to let it return to its original intent - to boycott the electronic ratings system it no longer believes in. Its rival Univision is also sitting out the PPM derby in several markets.
You thought Interep was dead and gone? Its former clients find out otherwise, as the trustee wants money back.
The demise of Interep left many radio groups in denial about the possibility that the once-dominant mega-rep had really gone bust. A March 30, 2008 Chapter 11 filing left lots of people being owed money, and then the situation got very real with the conversion to Chapter 7 (liquidation), and the naming of trustee Kenneth Silverman. Since last week (March 22), he’s filed dozens of “recovery of money/property” claims against former Interep clients and vendors, alleging that they owe money that was unjustly paid them during the latter part of 2007 and early 2008. Silverman started on March 22 naming Americom, Artistic Media Partners, Cox Radio, the Cromwell Group, Cypress Communications, Emmis, Holston Valley Broadcasting, Inner City, Nassau, North American Broadcasting, NRG Media, Oasis, Red Zebra, Renda, Riviera, Rose City, Salem, Shamrock, SBR (KCAL-FM), Sheridan, Simmons, URBan Radio, Vox and more. Some of the amounts requested by Silverman are relatively small - $64,000 from CBS Radio for airtime sold in Phillies broadcasts on WPHT, Philadelphia. But Silverman wants $1.1 million from Emmis and $1.5 million from Inner City. No doubt the companies will fight.
 Jumping-out day for CBS PDs in Chicago (Bill Gamble) and Phoenix (Bruce St. James).
It appears that even though he’d been programming Phoenix country KMLE (107.9) and “101.5 Jamz” KZON only since early January, Bruce St. James departs on his own. He posted this message on his Facebook page – "I am fine. I have a once-in-a-lifetime opportunity and I decided to take it. Details to come soon." But up in Chicago, the signs point to a less voluntary exit, maybe a pushout instead of “jumping out.” CBS issued an email yesterday that said eight-month PD Bill Gamble was no longer with the company. He came in last Fall to handle both country “US 99” WUSN and AC “Fresh 105.9” WCFS. Gamble previously programmed in Chicago for Emmis, and he can point to a #1 25-54 finish for WUSN in the latest February PPMs and to some age 6+ growth for “Fresh” – 1.4-1.7-1.8. But Fresh is still down in 24th place. His exit naturally throws some logs on the fire about CBS moving the all-sports “Score” WSCR over to 105.9. CBS is denying that, on and off the record. But it’s clearly something they’ve discussed. The Chicago Board of Radio-Info.com has more ideas about the CBS strategy. 
 The positive numbers here in early 2010 are the most positive coming from the largest markets Radio One operates in , says CEO Alfred Liggins. That's led by national business, which is consistent with what other groups have been saying. Even that 8.9% Q4 drop is better than it looks. Half of it was due to non-recurring political revenue from the heated 2008 election cycle. On the non-station side, Liggins says "Reach Media [majority-owned by Radio One] has made the transition to selling inventory inside the Tom Joyner Morning Show" with its own sales force. Citadel Media still has the bartered spot inventory outside TJMS that Reach gets from affiliate stations. Liggins says the transition will take a few months, "but the long-term effect will be to strengthen pricing and improve margins." Those margins softened somewhat in the last three months of 2009, from 42.5% to about 39% - but that's still robust by the standards of almost any U.S. business. Radio One used to get static from the analysts about waiting to develop its digital strategy. Liggins says they've now got one, and "traffic growth exceeded our expectations", with 3.3 million unique monthly visitors. Now they've got to squeeze more money of it.
 Radio One is back in compliance after a late-'09 technical default.
Seems that some subsidiaries that were identified as guarantors of loans "did not have requisite guarantees filed with the trustees." That caused a technical "non-monetary" default, and it's been fixed. But as always, there's a price. Radio One pays "certain fees and expenses of the lenders" related to the paperwork. On Tuesday, it entered into a Third Amendment of its credit agreement that gives it a $100 million revolver (revolving loan), but also some limitations on its use. Radio One now pledges its Interactive One LLC as a guarantor of the loan and some existing notes. But bottom line, the company is back in compliance with its debt covenants and expects to stay that way throughout 2010. One other balance sheet topic - in late 2008, Radio One recorded an $85.3 million impairment charge on the value of some assets and goodwill carried on the books. Now a year later, there's an impairment charge of just $17 million. That was from properties in Dallas, Houston, Philadelphia, St. Louis, Cleveland, Indianapolis, Columbus, Raleigh and Richmond.
Westwood issues an alert about Sigalerts – they’re spreading from L.A. to other big markets.
CEO Rod Sherwood oversaw the December acquisition of the Sigalert personalized-traffic info company (known as Jaytu) and he tells Tuesday’s Q4 conference call there are “plans to deploy a Sigalert product in major markets” this year. The company’s named in honor of the traffic bulletins issued by the LAPD starting in the mid-1950s, at the instigation of Golden West GM Lloyd “Sig” Sigmon. Now they’re quite sophisticated and don’t require a radio at all. You quickly call up a customized report about your expected commute on a computer or smart phone, and get color-coded info about how fast the traffic is proceeding on particular roadways. Rod Sherwood trots out the Sigalert news to buttress his claim that despite declining revenues, Westwood has been making some judicious investments in technology and people (mainly salespeople). It’s laid off a significant number of employees, but that phase seems to be done with. Sherwood didn’t talk about further layoffs or cutbacks. They’ve made a strong commitment to NFL games and the company says “Sports programming was especially strong in the fourth quarter.” Sherwood talks about the expansion of the Billy Bush evening show for CHRs, the addition of the “Peter Greenberg Worldwide” travel feature and the renewal with CNNRadio. There’s the new deal with Oprah Winfrey’s Harpo Radio. Also, the partnership with Litton News Source to help Westwood grow its list of affiliates for Metro Television. One of the most important deals took place behind the scenes, on the balance sheet –
 Westwood buys more flexibility from lenders.
Yesterday, March 30, Westwood reached agreement with lenders for the quarter that ends today, March 31. That’s cutting it close and it cost money, but CEO Rod Sherwood negotiates two years of extra oxygen to breathe with. The original debt covenant allowed leverage of no more than 4.5 times. Now it can be 6.5 times, gradually stepping down to 4.5 times by the end of 2011. Of course lenders don’t do that out of the goodness of their hearts – you pay for it. In fact last April’s re-financing means higher interest rates overall – about 14% on average. Let’s run through the numbers, painlessly, then. Westwood has two roughly equal divisions. Network Radio handles syndication of sports, entertainment and other content, and revenue there dropped from $55 million in the fourth quarter of 2008 to $52.1 million. That’s a 5.3% drop. At Metro Traffic, revenue declined at more than twice that clip, down 12.5% to $40.3 million. Westwood reports a net loss of $3.9 million, or 19 cents a share. Yesterday this T-R-I Newsletter said that Westwood briefly fell to 4 cents a share last August, and I should’ve pointed out that was the time of the 200:1 reverse stock split.
 CEO Rod Sherwood didn’t want to be pinned down about the quarter that ends today, but he mentions the recent estimates by BIA/Kelsey (1.5% to 2% increase maybe) and Barclay’s (a bit more) and seems to think they’ll do better. At Network radio, the behavior of categories such as retail, auto insurance, food service/restaurants and consumer goods seems to signal “a cautious return of advertiser spending.” Pulling back to high altitude to look at year-by-year revenue – it’s dropped from $451 million in 2007 to $404 million in 2008 to $340 million in 2009. Maybe 2010 will be the turnaround that Sherwood and the owners back in L.A. at the Gores Group are counting on.
 T-R-I’s Radio 2010 – in the station trading market, “the patient is stable, but still serious.”
Dallas-based media broker Doug Ferber uses a health-care analogy to talk about the slowly-reviving market for buying and selling stations – “The patient is out of intensive care, starting to wake up from a coma, but the condition is still serious. It’s still going to be a while before things get interesting again.” Ferber’s basic mantra is this – “Today, to get something done, it takes a cash buyer and a highly-motivated seller.” That’s because of the extremely limited availability of credit (debt) to do deals, questions about sustainable revenue growth, and limited visibility regarding possible exit strategies. Ferber sees a period of very slow improvement – “It’s going to be a couple of years before conventional deal flow of any magnitude resumes.” He hears all the happy talk about a revenue recovery here in the first quarter and says that’s great. But – “the proof is really going to be in 2011, not 2010. Sustained and moderate growth is what people are interested in.” He says “we’re seeing people get very optimistic now, because it was so horrible last year.” Still – “as the business gets more predictable, you’ll see people jumping in.” But they still need access to lending, unless they’ve got wads of cash stashed under the mattress.
 The just-filed proxy for the annual meeting shows that CEO Mel Karmazin was rewarded far beyond his base salary of $1,250,000. His total compensation, including $7 million in bonus and $35 million in option awards, was $43,466,790. Last year, he made just $1,256,000 total. President and Chief Content Officer Scott Greenstein improved upon his base salary of $850,000 with a $4 million bonus and about $8 million in option awards, for a total of $10,713,285. President, Operations and Sales James Meyer started with a base salary of $950,00 and ended with total compensation of $14,876,932. His 2007 and 2008 packages were worth around $3 million each. EVP and CFO David Frear made about $3.3 million total, which was less than the $5.8 million he hauled down in 2008. EVP/General Counsel Patrick Donnelly did $2.9 million last year. And onetime XM executive Dara Altman, now EVP and Chief Administrative Officer at the combined Sirius XM, made $2,315,506 last year. Total for those six people – about $75 million. Sirius weathered a financial crisis in early 2009 by bringing in Liberty Media, which now owns 40% of the satellite radio company. Mel Karmazin tends to keep his teams together and to reward them if they perform. Last year, he was the one who got rewarded the most.
 In today’s Urban First newsletter from Radio-Info.com – new “Power” in Louisville?
Dana Hall, the executive editor here at Radio-Info.com and our urban radio/music maven, says “there’s talk that a new Urban could be on its way to Louisville at 104.3.” The station’s recently been simulcasting with the local outpost of the Christian top 40 “WAY-FM” service, at 105.9. But Dana says “that station is now running promos that the simulcast has ended” – and the Rickey Smiley syndication is listing WWPW as a new affiliate. Dana’s got much more on her mind, including Monday’s Tonight Show performance by Usher of “Lil Freak” (is it too edgy, too raw?) and Tom Joyner’s trip to support the Detroit public school system that nurtured him. If you follow urban radio, you probably already know and trust Dana Hall. To subscribe to her Urban First Newsletter, at no charge, go here.
 Latest “Stark Country” – “Take Two Aspirin and Call During Music Call Times.”
Phyllis Stark has tackled some brave topics before in her Nashville-based newsletter from Radio-Info.com. She’s let the industry talk about clichés in lyrics and the human toll of downsizing. Now she pops some courage pills and asks country PDs and MDs to talk about the days when they take calls from record reps. KIIM, Tucson PD Buzz Jackson says on a Facebook page “Music calls tomorrow. I’d rather black out after doing 9.2 g’s in an F-16” jet. And “maybe I’ll oversleep or get hit by a train on my way to the office.” So that’s the main topic of today’s Stark Country, but not the only one. Phyllis has also got a chat with 16-year-old sensation Tyler Dickerson, who found out he’d be touring with Brooks & Dunn on their farewell tour, but he was sworn to secrecy – “I wasn’t allowed to tell my mom, my dad, no one.” If you care about country, sign up to start getting “Stark Country” from Radio-Info.com by email – here.
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» Buzzing on the Boards
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New York's Z100/WHTZ has been off the air - with its HD-2 channel, that is - since last Friday, per a poster on the New York Board of Radio-Info.com who misses the "New Music Channel." He wonders how much attention Clear Channel is giving HD Radio in the #1 market. More at the thread.
CBS Radio is filtering its new blog-look websites into markets such as Las Vegas, says the Nevada Board. That's reflected in the online presences for stations such as CHR KLUC (98.5). Somebody notices that "talk KXNT hasn't changed their site yet."
 Since Regent must place FM talker KPEL in the Lafayette, Louisiana market into a trust - will Regent make a format swap? There's a change of control coming up as part of the reorganization from the Chapter 11 bankruptcy, and KPEL puts Regent over the local limit. So it's going into a trust, and a poster on the Louisiana Board suggests a swap between KPEL (105.1) and rhythmic "Hot 107.9" KHXT that would keep the news/talk inside the new Regent. He's got another possibility, too, on the Louisiana Board of Radio-Info.com.
Houston's big contemporary Christian broadcaster KSBJ (89.3) will launch a "youth-targeted" HD-2 channel, to reach "the next generation of KSBJ listeners." The Religious/Contemporary Christian Board of Radio-Info.com has a link to the KSBJ Facebook page with pics of the new studios being built, and the news that they're hiring staff, etc. More about the KSBJ strategy online.
» Wheeling & Dealing
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 In Western Kansas, two FMs sell for $120,000. They’re CHR “Kiss 104.7” KXNC, a Class C1 licensed to Ness City. And classic hits “93.5 Dave FM” KKDT, another C1, this one licensed to Burdett. Seller is Lance Sayler, who will own 4% of the buyer, Post Rock Radio LLC. It’s a newly-formed company that’s 51% owned by Wichita-based My Town Media, 20% owned by Food Safety Services, and 10% owned by JTL Leasing of Dodge City.
‘Tis more blessed to give than receive, says the old proverb, and a Virginia FM is being given to One God Ministry. That’s the D.C.-area based ministry run by Dr. Johnson Edosomwan, who’s buying an AM station in the Richmond area for $1.9 million, and whose ministry is being given an FM by basically the same party. The seller/donor is Hoffman Communications. The current “Amen 820” WGGM is being sold to Dr. Edosomwan’s Radio Companion Limited Liability Company in a deal for $1,900,000 cash. WGGM, Chester, VA has 10-kw daytime and 1-kw when the stars are twinkling, and it does a combination of black gospel and Christian teaching. The FM that’s being donated is a Class A at 100.5 licensed to Goochland named WZEZ. We first heard of Dr. Edosomwan in an unrelated deal where he’s buying suburban D.C. WKDL (1250) and WKCW (1420) for $1.9 million plus another $800,000 for the associated real estate.
 BlogTalkRadio raises $1.9 million in Series B funding, as an follow-on to the original Series A funding of $4.6 million from the Kraft Group. Kraft is also one of the second-round investors, along with Howard Lindzon, Roger Ehrenberg and founder Alan Levy. BlogTalkRadio “allows individuals and companies to use a phone to conduct a live broadcast via the web.” Levy reports 4.5 million unique visitors a month, over “seven million listeners/downloads per month”, with 500,000 “episodes” archived on the site. BlogTalkRadio has partnerships with PBS, Women’s Day Magazine, Wal-Mart, the Harper Collins publisher and Sun Microsystems. Its new “micro-podcasting” platform is called “Cinch.”
» Sound Bites
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 Here’s the agenda for the 35th Conclave Learning Conference in mid-July. Six “topic tracks", with separate Management and Programming tracks, along with tracks for Technology, Life Skills, the Conclave College and the Promotion Summit. The opening event is the Thursday morning, July 15 “Jacobs Media Summer School – a first-time collaboration between Jacobs Media and the Minneapolis-based Conclave. This year’s agenda co-chairs are Harv Blain of Vallie-Richards-Donovan Consulting and consultant Bob Taylor, a Conclave Board member. Tuition is $299, with a cheaper “Gang of Ten” offer that expires in literally a matter of hours. More about this valuable learning and networking event, July 15-17, at the Conclave website here.
New Generation Programming enters “suspended animation” for now, says partner Chuck Geiger. He says “the time is not right for something like this”, meaning a daypart format service such as the “Nuts & Bolts Mainstream CHR” they announced earlier this year. Chuck Geiger and Chip Miller announced New Generation Programming in January and Chuck says for now, “I’m working in the print and online sales world” and “still pondering on what to do with my country programming blog, Full Throttle Country.”
 The Atlanta Braves radio network will be distributed by Skyview Networks, in a new deal with Dickey Broadcasting. Separate from the Dickey-run Cumulus Media and Cumulus Media Partners, Dickey Broadcasting has the rights to the 134-affiliate Braves Radio Network – the largest in Major League Baseball. They’re selecting Arizona-based Skyview Networks to handle distribution starting with the season opener on Monday. The advantage? More localization and more regional possibilities for advertisers. Skyview also offers time-shifting, storage and forward programming. In Atlanta, the Braves games air on Dickey-owned WCNN “Fan 680” and Cumulus Media’s rock WNNX (100.5). The games went to the Dickey brothers and Cumulus after Clear Channel passed on renewing what a money-losing contract.
“How to give your national superstars home-court advantage” is the self-explanatory title of a free April 8 webinar moderated by Radio America talk host Roger Hedgecock and co-presented by news/talk consultant Kipper McGee. And to give a bit more color to the title, it’s for programmers looking to “get the best performance from any network radio program” on your local station. They’ll also provide “tips and techniques to attain maximum revenue from each show.” For more info about the webinar (Thursday, April 8 at 2pm Eastern) call Kipper at 312-402-4667.
» Faces on the Radio
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 Pandora Yeargin-Johnson brings her sales and marketing experience from McDonald’s, Gallup, Clear Channel, Infinity, and Citadel Media to her new gig at Sun Radio Network. She’s the new Vice President of Network Sales & Marketing, working with Sun properties like “Your Weekend with Jim Brickman” and “The Long Drive with Motor Trend’s Bob Long.” Pandora starts at the Florida-based Sun Radio Network on March 29, and she’s reachable at 800-871-6163, extension 9478. Jason Bailey is the CEO of Sun Radio.
» Classifieds
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| Broadcast Traffic Manager |
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Opportunity for independent, detail oriented person to manage traffic/AR/ collections/commissions for two out of state radio stations managed from a small Uptown area office in Dallas. Duties include reviewing and entering sales orders, preparing and reconciling daily commercial logs, resolving any related sales/production/programming issues, producing sales and management reports, manage Accounts Receivable including billing and collections.
Requirements include previous experience with radio, TV or cable traffic systems (preferably Marketron/Visual traffic) and have ability to multitask and work independently in a fast paced environment. Successful candidate will also possess strong computer skills, be analytical with good attention to detail, and have strong time management attributes in order to meet daily deadlines.
Immediate opening. Competitive salary based on previous experience and past earnings. Full benefits. Free parking. Please email a detailed resume including salary history at recent positions to HR@firstventures.com, fax to 214.273.6441 or mail to Mighty Media Group, LP, 3710 Rawlins St, Suite 150, Dallas, TX 75219 |
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