by Tom Taylor | tom@in3media.com | 609.883.3321

Friday, July 10th 2009

Who will guide the NAB?

Bonneville’s Bruce Reese is quarterbacking the process with search specialist Russell Reynolds and he tells the Board members that after consulting with each of them, “we have now completed a description of the job specifications.” This goes to the topic T-R-I has been taking input on – how should the NAB govern and manage itself? Is the job indeed now “too big for one person”? Reese lays out the next step in the process – “Russell Reynolds has begun its initial outreach to those who have expressed interest in the position and to those whom we believe and/or hope might be interested.” He says that will take “several weeks.” Then – “the committee will begin interviewing.” But from here on things get very hush-hush – “I’m sure that you’ll appreciate the confidentiality sensitivities as we enter this stage, so don’t be alarmed if you sense the descent of the cone of silence.”

T-R-I hears that Chuck Dreifus, CIT Group Managing Director for Broadcasting and Publishing, left the building in Livingston, NJ last week, going into the July 4th holiday weekend. I also hear that Director Ian Hodgart left a while back, and that those two aren’t the only ones. How can we say this nicely? While the lenders are getting hammered in Congress for not being sufficiently supportive of their radio and other clients in trouble – they’re getting hammered by the recession themselves.

They were staples on the 250+ O&Os of Educational Media Foundation’s contemporary Christian service, but abruptly left without explanation just over three months ago. And the reason? Jon was addicted to prescription painkillers. He now writes movingly on the K-Love website about how he had “seemingly impossible-to- treat headaches a few years ago…and for some time now I have slowly and gradually walked down a dark and deadly road.” Finally his “brave wife” and co-host Sherri intervened and got him the right kind of counseling about addiction. (In his case, spiritually-centered addiction counseling.) He says “The new Jon Rivers is committed to being a rigorously honest man. Happy, joyous and free, who confesses to you that I did not have what it took to find healing myself.” He pleads for others with addictions to get help – “real help.” He says “our quick departure from K-Love was unfortunate, but was really the only way for Sherry to fully get my attention. K-Love has stood by us and we continue to be great friends.” He knew there would be speculation – “The rumors of infidelity, or that K-Love had quickly let us go, and other terrible things, are simply not true.” So are he and Sherri coming back to their high-profile gig? Jon doesn’t say. One day at a time, right?

The big guys, too – Goldman Sachs, GE Capital, Wachovia, Wells Fargo, JP Morgan Chase, Bank of America. A cool and collected Jim Winston of NABOB (National Association of Black Owned Broadcasters) was the leadoff witness at yesterday’s Judiciary Committee hearing and he asked Congress to investigate that whole group of lenders. Why them, and not the hedge funds that are Winston’s new and more serious target? Because the banks “have allowed hedge funds into their consortiums.” And those banks are “all beneficiaries of TARP funds.” As for the hedge funds, Winston charges “they’re the new breed of lender in the broadcasting industry. Many companies are being threatened with foreclosure” unless they sell stations at fire-sale prices, or hand the group over to the hedge funds. Winston says the lenders are doing a disservice to America – especially minority broadcasters – by failing to help out the highly-leveraged companies who are particularly exposed during this recession. And – let’s get to the main bout – exposed to Arbitron’s switchover to the electronic People Meter in the top markets.

NABOB’s Jim Winston brings a sheaf of statistics to his Judiciary Committee presentation. See what you think – “minority stations have experienced a 40-60% drop in their ratings" in markets where the People Meter became operational. In New York, WSKQ is down 55% and sister WPAT-FM is off over 67%. As a result, "Spanish Broadcasting System has been forced to reduce staff by 37%." Inner City's WBLS, New York is down 58% in revenue. Stevie Wonder's KJLH, Los Angeles "has seen revenues fall 48% since the PPM, almost twice the market's 29%, and has been forced to lay off 13% of its staff." Winston asks bluntly, "Why is Arbitron putting out a product like this? The answer won't surprise you: money." For Winston, the “refusal of lenders to re-structure broadcast loans and Arbitron’s abuse” are more than the “perfect storm” that Arbitron CEO Michael Skarzynski told the committee about (and we’ll get to that). NABOB is asking the House Judiciary Committee to investigate Arbitron - and it wasn't the only such voice at today's lengthy hearings.

Public interest attorney Andy Schwartzman asks for a bunch of changes that are highly unlikely to happen, like trimming the current broadcast license term to just three years and potentially creating many more opportunities for minorities to buy. That’s closer to the system in the U.K. and other countries – though it certainly wouldn’t encourage anybody to invest heavily in their operation.

Chicago-area Rep. Luis Gutierrez focused in on the pager-like device itself. He tells Arbitron CEO Michael Skarzynski (who inherited this PR mess just recently) that “it really is very burdensome, your technology.” He says “I can’t see an auto mechanic using this. If you’re a nurse or a doctor, are you really going to walk around with this pager all day long?” He says his own family struggled to include the PPM in their daily activities. Gutierrez (who could do standup comedy) says “I barely take my medicine when I’m supposed to, and I forget about my glasses.” He says “at the core of democracy is information” – and he’s not impressed with the information that the Arbitron PPM system is likely to generate. Why not adapt cell phones as PPM monitors? Arbitron – under previous management, Steve Morris – always pooh-poohed that idea when it was proposed by The Media Audit and Ipsos. Now let’s get to Skarzynski in the lion’s den –

Michael Skarzynski tells the House Judiciary Committee “there are three major challenges” for radio. #1, there’s the recession, which “caused a drastic decline in advertising.” #2, there’s a “precipitous decline in radio revenue” as a result. And #3, “many radio broadcasters, including black and Hispanic broadcasters, are highly leveraged and are having difficulty servicing their debt.” That very point brought an observation from Iowa Rep. Steve King, who was “surprised there’s a hearing” about minority broadcast issues, and made the point that “small business people” are in the same boat as minorities, regardless of background. Skarzynski also made the point that the pain in radio is widely spread. Among “general-market broadcasters”, CBS was down 29% in Q1, Cumulus was off 24%, Citadel dropped 23% and Clear Channel was down 22%. Among minority broadcasters, Spanish Broadcasting System was down 27%, Univision Radio slipped 26% and Radio One dropped 20%. Speaking of Radio One – its founder Cathy Hughes was quickly slammed by the American Federation of Musicians for being a no-show at yesterday’s hearing. AFM says “It is irresponsible that they have decided not to take part in a hearing on issues vital to minority-owned radio, including H.R. 848.” And that bill is?

Yes, the tone is a bit more subdued than a couple of months ago, now that the NAB has apparently secured enough signatures on its stop-H.R. 848 resolution. Kendall Minter of the Philadelphia-based Rhythm & Blues Foundation says it’s a matter of fairly compensating the performers. There was a lot of talk from Rep. Maxine Waters and others about the estimated $70-100 million in annual performance rights fees that other countries collect from their own broadcasters, but can’t pay to U.S. performers because there’s no reciprocity. Minter has some other interesting stuff. He agrees that young people often don’t want to carry a PPM. He observes that black audiences are much more likely to hear syndicated programming than whites. He believes that “corporate” owners have ordered rotations of hit songs sped up to 50 to 70 minutes. Something he doesn’t say, but might agree with, is the subject of a news announcement from Arbitron CEO Michael Skarzynski –

This wasn’t in Michael Skarzynski’s prepared remarks, so you wonder if he decided to spring it at this hearing, given the generally critical atmosphere in the hearing room. What’s the concept? There’s listening – and then there’s “engagement” with the programming. It may well be that minority audiences are more engaged than the mainstream. Perhaps that’s something (Skarzynski implies) that would especially help black and Hispanic broadcasters. Sounds like that’s coming soon. Reaction to the House hearing on minority broadcasters - the hearing John Conyers finally gave to the group - coming on Monday. I can share the top-of-mind sentiment of George Chambers of KXIT, Dalhart, TX right now - "Mr. Conyers...you or your staff have not a clue of what the local broadcaster goes through, and you keep beating the drum to hurt the local owner-operator...We are not Clear Channel, Cox or any other broadcast group...With the tax we pay to the feds, local, state, city, ASCAP, BMI and Sesac, there are days it might be easier to close the doors and make more money at Pizza Hut delivering pizza." I'm at Tom@in3media.com.

He’ll have “a full slate” of regular season games, such as UCLA at Stanford, Maryland at Indiana, Kansas at Missouri, Texas at Oklahoma, and Duke at Wisconsin. He clearly got past the front door at the Big 10, because he’s also taking the rights for the first two rounds of this coming season’s men's basketball tournament, and then all the Big 10 tourney games starting with the 2010-2011 season. And who, you may ask, has the Big 10 tournament now? Westwood One, the company Kosann ran as CEO until early 2008. So Compass is competing with Westwood on NFL games, and now college basketball. Compass Media Networks sports GM and executive producer Michelle Salvatore promises detailed schedules in the next few months.

Hofstra Professor Bob Papper conducts these annual surveys for the RTNDA and 2008 is the first time that salaries have slumped in both radio and TV. Papper says “TV news salaries fell 4.4% and radio news salaries slid by 1.8%.” The TV picture is particularly unwholesome – reporters took an average 13.3% cut. News anchors were down 11.5%. Weathercasters continue to smile while they deliver the five-day forecast, but that position on average pays 9.1% less. Sports anchors were down 8.9%. Only assignment editors and art directors held their own, though if you consider inflation – they didn’t. For radio, news directors actually saw a slight increase (and again, they were down if you count inflation-adjusted dollars). The median salary for a radio news director was $31,000, with an average of $37,100. Median salary for news reporters was $25,000. For news anchors, $30,000. For news producers, $26,000. For sports anchors, $35,000. Prof. Papper does a nice job of breaking out the data several ways, including by market size. As a rule of thumb, “the larger the market, the higher the salary.”

Sean Ross writes “When Rock records make their way across the transom to Top 40, those songs inevitably seem so obvious that you forget that they were no such thing for, say, the last six months.” His latest example – King Of Leon’s “Use Somebody”, which was #1 at alternative radio months ago. Our Executive VP of Music & Programming continues to generate timely and engrossing commentary about music and culture. Are you getting Ross On Radio every Tuesday and Thursday by email? To make sure, go here.

In Nashville – Clear Channel’s urban WUBT is beating its way to the top this month, on a 6.5 to 7.2 to 8.0 tear since the Winter book. These are all age 12+ AQH shares, by the way. South Central’s AC “Mix” WJXA is steady, 7.4 to 7.5 to 7.2. The first of Music City’s three country FMs is WSIX, ranking #5 (5.1 to 5.4). Citadel’s WKDF is on its heels (4.4 to 5.1).

OKC – Clear Channel talker KOTK comes back from its winter-book low of a 4.7 and has staged a 5.7 to 6.1 run since then. It’s just a tickle ahead of Renda’s classic hits KOMA (6.1 to 6.1 to 6.0). Clear Channel CHR KJYO thus falls out of the top spot it’s enjoyed since last Fall. KJ103’s three-month trend is 6.7 to 6.6 to 5.8.

Knoxville – The monthly game is – How big will country WIVK look, as the Citadel dominator towers over the rest of the market? Answer – it’s gone 18.9 to 18.1 to 17.6 since the Winter. Journal’s new country WCYQ has grown 1.6 to 2.2 to 2.4.

Searching for the latest ratings online, diary and PPM? They’re at Radio-Info.com. The site also lists formats and owners, and it gives you the recent history back into 2008. New PPMs for June coming next Wednesday and Thursday. New Spring diary numbers start on Monday, July 20. The Ratings Page is here.

» Arbitrons Spring Phase II Arbitrends back to top » 44. Nashville - 1,237,500 48. Oklahoma City - 1,099,900 71. Knoxville - 669,900 Click on the city to review recently released trends. View a complete list of Arbitron markets here. » Wheeling and Dealing back to top » In the Fargo market, $750,000 is the price Scott Hennen is paying for KQLX-AM/FM. The terms are interesting - $500,000 is in seller paper (a 10-year note) held by Terry and Rita Loomis of Sheyenne Valley Broadcasting. KQLX-AM is a farm-formatted daytimer at 890. The FM is a C1 at 106.1, and they’re both licensed to Lisbon, ND. Remember that the FM is the station that carries the Ed Schultz syndicated show, and it’s the one for which Scott has persuaded Schultz to do a local Fargo-only hour. This turned out to be an terribly up-and-down week for Scott Hennen – Monday, he announced the purchase of his second and third stations in the Fargo market. Tuesday, his dad, broadcaster Jerry Hennen, died at age 69. That’s reported by NorthPine.com. The $750,000 that Scott’s laying down for the KQLX combo is close to what he paid last year for his first station. That’s the current “Flag” WZFG, Dilworth, MN (1100), for which the price was $720,000. Arbitron increased the size of the Oklahoma City market, so Citadel needn't divest “Wild 104.9.” The FCC is watching for potential gameplaying re: Arbitron market re-definitions, but it’s going to let Citadel re-claim KKWD from the Last Bastion Trust, run by Elliot Evers. KWKD, Bethany, Oklahoma is a Class A that’s been held in the trust along with “ESPN Deportes 105.3” KINB, Kingfisher. They were both towed to the holding lot just before Citadel bought Disney’s ABC Radio interests, in June 2007. Since then, Arbitron’s pushed out the OKC market by four counties and that means Citadel can own eight stations. So “Wild 104.9” comes back, leaving KINB still in the trust. » Sound Bites back to top » Washington Redskins to CBS Radio’s new all-sports WJFK? Each day brings more developments and fresh rumors, and now DCRTV.com rumors a very big fish – the Redskins. The odd thing is that Skins owner Dan Snyder would be empowering his competition – he owns all-sports WTEM at 980 – but potentially doing better by his own NFL team. WJFK (106.7) had the football team for 11 seasons, until Snyder started buying his own radio stations. Governor Tim Pawlenty gets to “spew” misinformation about his political opponents on WCCO, Minneapolis, claims the Senate Majority Leader in Minnesota – so he wants some time, too. Not “equal time”, because he recognizes this isn’t a federal equal time issue. But perhaps a “periodic segment” on CBS Radio’s WCCO (830) to correct what he calls the distortions of the governor about the DFL party’s positions. Pawlenty’s a possible Republican presidential candidate in 2012 (and was considered by McCain for the veep slot in 2008). He inherited the weekly governor’s Friday morning hour-long radio show begun by Jesse Ventura, and he also occasionally fills in on the afternoon show when the legislature’s in session. The Minneapolis Star-Tribune reports the story about Senate majority leader Larry Pogemiller, who says “Tim’s got Fox News he can be on. He doesn’t need to spew his stuff on WCCO" – a Minnesota institution.   The FCC doesn’t want to drive non-com WFCO, Lancaster, Ohio out of business… so it’s lowering the fine for running prohibited commercials inside football games from $7,500 to 6 grand, mostly because of its history of good behavior. It’s also offering Lancaster Educational Broadcasting Foundation an installment plan. There’s an object lesson here for pleading poverty – don’t just submit “net income” financials, to convince the Commission you deserve a break. They want to see gross revenues. Christian teaching WFCO (90.9) pleads its case by citing low cash reserves, and says it would “most likely have to cease operations” if it was forced to pay the full amount at once. » Faces on the Radio back to top » Justin Chase is reunited with his former GM in Las Vegas – only this time, they’re at Beasley, not CBS. Justin was first the imaging director at CBS-owned KMXB and later PD. Now Tom Humm is running the Beasley cluster in Vegas, and he’s inviting Justin to program two FMs – at least for now. The stations are country “Coyote” KCYE at 104.3 and rhythmic CHR “Now” KFRH (102.7). Justin comes in understanding that Beasley is selling Ed Stolz the intellectual property of the “Now” format – but also selling him the 104.3 frequency. So Justin gets the job of transferring Coyote from 104.3 to 102.7. Veteran Sean Lynch has been juggling all three, and he’ll drop back to concentrate on classic hits KKLZ (96.3). Russ Dodge isn’t the only executive suddenly missing at Continental’s Spanish radio operation in Indianapolis – so is Stephanie Taty-Myers. Up until the last week or so, she’d been the operations manager and marketing manager for regional Mexican WEDJ (107.1) and “La Que Buena” WSYW (810). She and Russ Dodge first collaborated together at Artistic Media, then at WXLW and for the past several years at Continental. Russ Dodge, who just ended a three-year tour as GM of WEDJ and WSYW, is at RDodgeNet@aol.com and 317-850-4343. Stephanie's reachable at SMTaty@aol.com. Ed McCarthy, who was associated with CNN Radio for over 20 years, has died at a hospital in Georgia. He got his start in Florida markets such as Vero Beach, Tallahassee, Ft. Pierce and West Palm, and worked in the Hartford area. Ed latched on with CNN Radio in 1986 and was often reporting from the road, covering breaking news stories. » Classifieds back to top » ALL-STAR MANAGERS NEEDED!!! Tired of working for companies that are cutting out every expense under the sun, taking the control away from you and dictating “one-size-fits-all” policies that don'’t work locally? When was the last time your boss told you “good job”? Want to put your skill-set to work in an environment that rewards success, recognizes talent and encourages local decision-making? You need to send us your resume. We’re El Dorado Broadcasters, a privately-held company operating stations in small and medium-sized markets in the Western United States.  We’re looking for experienced, top-notch managers who want to run successful radio clusters the way radio is meant to be run: with autonomy, creativity and hard work, building community-oriented, entertaining radio that produces results for our clients and financial success for our operation. Having a little fun is a must! We are currently considering several acquisitions and anticipate needing to fill Market Manager, Sales Manager and Business Manager positions in some of these new markets. Think you can make a difference? Send resume and cover letter to: info@frcap.com All inquiries held in the strictest confidence. We are an equal opportunity employer.

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