by Tom Taylor | tom@in3media.com | 609.883.3321
Monday, August 17th, 2009
The topsy-turvy Summer of 2009
 The NAB’s without a CEO, RAB is in flux, Arbitron’s under attack (but may eye television) – The world is unsettled.
Just take a 30,000-foot peek out of the cockpit window for a second – can you recall a time of more uncertainty in the radio business than right now? I’m not even throwing in potential events like the FCC tightening the screws on radio through its “Localism” directive. And the vehement campaign to force radio to pay a performance royalty to the artists and/or other rightsholders. Or the takeovers of radio groups (mostly smaller private ones, for now) by lenders and the rumored sale of parts of some larger groups (a la CBS Radio in Portland and perhaps elsewhere). A major “uncertainty” is radio’s topline revenues. The consensus from the round of Q2 conference call is that things are down 18% or 20% or maybe 25%, but they’ve stopped getting worse. Yet nobody’s brave enough to yell out “rebound.” If some of the uncertainty shakes out – the revenue, for example – there will be more returning owners like Larry Wilson at Alpha Broadcasting and former operators like Roy Laughlin taking over a deal in Riverside. You get the feeling there’s a lot of pent-up appetite to do station deals. Heck – even Nielsen’s historic monopoly on TV ratings is suddenly up for grabs -
  Nielsen could be under attack by some of its largest customers.
The Financial Times jolted the media world late last week with Kenneth Li’s story about NBC Universal, Time Warner, News Corp., Viacom, CBS, Discovery, Disney, plus advertising clients such as Procter & Gamble, AT&T and Unilever forming a new consortium. Its purpose – to produce audience measurement that does a better job than Nielsen with both TV and (particularly) digital sources like the online TV sites like Hulu. NBC Universal and Rupert Murdoch’s News Corp. were the founders of Hulu, and it’s taken off beyond their wildest dreams. But it’s also created a problem, by attracting many eyes to a medium which isn’t measured as well as content from traditional delivery systems. The Financial Times says agencies GroupM (owned by giant WPP) and Starcom MediaVest are also part of the consortium that could “be operational by September” and could be awarding contracts to do the measurement as soon as the fourth quarter of this year.
 Arbitron’s ARB-TV can do many of the tricks the renegade TV consortium wants.
Back on June 23, Arbitron very carefully didn’t pitch ARB-TV as a competitor to Nielsen, but as a kind of companion. ARB-TV’s analytical tool would “complement existing data services and offer greater insight into what constitutes their total audience, and help advertisers plan to reach that audience.” I’m not saying that the NBC-U, Time Warner, Disney, News Corp. are necessarily headed into the arms of Arbitron as the supplier for their ambitious new TV-plus-digital service. But I do point out that Arbitron’s PPM can perform many of the functions it requires. All it needs is encoded audio, and it tracks consumption, in-home or away. Arbitron’s already got a national infrastructure for electronic measurement. No doubt Michael Skarzynski wishes the reception of the radio PPM by state attorneys-general was more favorable. (Not to mention the FCC, which might investigate it, and some members of Congress aren’t fans.) But the system is there. And Steve Morris is no longer the CEO of Arbitron. After watching Arbitron slice off half its operation when it quit challenging Nielsen in the 1990s for TV ratings, Morris was almost phobic about not confronting Nielsen in TV. But Skarzynski? He doesn’t carry that history.
Meanwhile – rumors of a new electronic measurement device from Nielsen.
Very hush-hush stuff. And it’s not just for TV – that part hasn’t been a secret. But smart people in the research business tell me that #1, they’ve never believed Nielsen would enter the radio ratings business just to measure about 50 markets outside the top 100. And #2, that to crack the top 50 markets, they’d need some kind of high-tech device that can deliver electronic ratings that could be superior to the Arbitron PPM. Nielsen has alluded to such possibilities, in the most general terms. Now, #3, I’m hearing more concrete chatter about Area 51-kinds of research using an electronic detector much smaller than a PPM. You might think the no-brainer way to do this is to install software on a smart phone (maybe even give your panel members the phone). But Arbitron’s always said there are problems with that approach, and maybe Nielsen’s thinking the same way. In any case – Nielsen’s getting into Arbitron’s business and vice versa.
 The rumor that won’t die – Bonneville’s supposed major deal with Citadel.
This is the “Rumor Check” item I surfaced in last Wednesday’s T-R-I Newsletter (“Is Citadel pursuing a deal to sell the former ABC Radio stations?”). I didn’t identify Bonneville, but that’s the name that keeps popping up, as in “Bonneville has the resources, even in this loan-starved environment.” More than one person has said they’ve heard this deal was in the oven, but that it had recently been sped up. I’ll repeat the counter-arguments I researched for you last week – financing a deal of this magnitude would be exceedingly hard. And if Citadel sold off the 23 stations it acquired from Disney in mid-2007, it would be stripping out half of its own cash flow, money it needs to service its debt. But every now and then you get a Rumor That Won’t Die – and right now, this is one of ’em.
Can radio’s Don Imus help Fox Business Channel? Now the New York Times is a believer…
This story’s been kicking around for a week now – that the cablecast of Don’s WABC, New York-based 6-9am morning show is in serious talks to switch from RFD to News Corp.’s un-rated and thinly-carried Fox Business Channel. Imus did it for MSNBC, Fox chief Roger Ailes must figure – maybe he can do it for Fox Biz. Interestingly, the New York Times quotes former radio owner and onetime WNBC general manager (and thus former Imus boss) Bob Sherman. Bob is still a friend of Imus and says “This is a characteristically genius move by Roger Ailes. He can now bank the network’s marketing dollars.” I first saw this I-Man story on AllYourTV.com last week – and it’s cycled through most of the New York papers including (now) the Times. The Daily News added the spicy detail that RFD owes Imus “millions of dollars in back pay.” That would certainly make a claim of breach plausible and allow Imus to jump.
 Sam Zell is under pressure by Tribune’s creditors to depart. How about Randy Michaels?
Zell’s got a new deadline of November 30 to file a reorganization plan for Tribune. It’s been in Chapter 11 for much of the time he’d been leading it – and the Chicago Sun-Times quotes an insider who says if he’s pushed out “the banks will be in charge” and they may proceed to a selloff of the assets. Those include the newspaper group, the TV group and potentially, Chicago’s WGN radio (720). Tribune debt has recently been trading at only about seven cents on the dollar, with total debt of $13 billion. Beyond that – you wonder what happens to Randy Michaels, the former Clear Channel and Jacor exec whom Zell brought in to run Tribune. He’s got an interest in a separate TV management group, plus a thriving side business (as Radioactive LLC) building out and/or selling new radio construction permits. The number of former Clear Channel/Jacor people at various positions in Tribune topped 20 quite a while ago. They may also be wondering about life without Sam Zell – and perhaps Randy Michaels, too.
Clear Channel extends the “early tender” enticement on its debt buyback.
This is the $200 million worth of six different issues of bonds, for which San Antonio is offering 50 cents on the dollar or less. It originally dangled an “early tender” incentive through last Thursday, but the latest development is that any bondholder can get that that extra amount right through the expiration of the original offer – August 27. It’s not unusual to see a company offer extra time to accept the sweetener. And if Clear Channel can actually buy back some of these bonds on their own terms, it will help the debt service – at least in the short term.
 Spanish-language operator LBI Media reports Q2 radio revenues down 13.6%.
Its TV division ran into slightly more headwinds, down 20%. Executive VP Lenard Liberman says the L.A.-based owner is still “superior to our peers” in revenue, and he’s right. LBI also has some potentially good news coming on the TV side, with the September 7 national launch of its EstrellaTV network. The programming costs are already paid for, so this could be a bottom-line boost. LBI Media’s costs dropped 5.6% in the second quarter, and its EBITDA (roughly speaking, cash flow) slid about 22%. Like almost all other broadcasters, it remains profitable – just not as profitable as it used to be.
 Las Vegas talk host Heidi Harris staged her own “town meeting”, complete with puppets of politicians.
The KDWN morning host wasn’t waiting for a congressional rep to volunteer for potential humiliation and shouting - she promoted her own event last Friday night which drew what the Las Vegas Sun’s Brendan Buhler calls “900 angry Nevadans.” The stage featured empty chairs and puppet-like representations of the politicians who refused an invitation to appear (which was all of them, including the governor). Buhler says “the speakers shouted at the puppets and demanded their resignations. The [Senator] Harry Reid puppet came in for special abuse.” Reid’s potential Republican foe Danny Tarkanian was introduced by Harris to applause. He used the occasion to announce that he’ll promote his own town meetings ahead of the 2010 election.
Univision chief Ray Rodriguez retires.
Spanish language media used to lead a charmed life, mostly sailing above the revenue trends of mainstream media – but no more. Ray’s leaving as President and CO at age 58 and will be succeeded by two current Univision toppers. Joe Uva becomes President (not CEO), and EVP and Strategy Officer Cesar Conde becomes President of Univision Networks, as of October 1. Univision is the result of many mergers and deals, and Rodriguez has been with a predecessor company or Univision itself since 1990.
 Group heads are turning out for this year’s NAB Radio Show in Philly, including some seldom-seen faces.
Mark Mays of Clear Channel agrees to join the Thursday morning “Group Executives Super Session Breakfast” on September 24. Top Clear Channel folks have been notably absent from industry gatherings since even before the mid-2008 going-private deal. Also on the September 24 panel moderated by FlyCast CEO Dave Kennedy – SBS New York market manager and corporate exec Frank Flores, GAP’s George Laughlin, Regent’s Bill Stakelin, and ICBC’s Charles Warfield. And catch the lineup at the Show-opening Dickstein Shapiro “Broadcast Financing” seminar on Wednesday, September 23 – Lew Dickey of Cumulus, David Field of Entercom, Dan Mason of CBS, Mary Quass of NRG and Joe Schwartz of Cherry Creek Radio. That’s just the second panel. The first one (“Financing opportunities and challenges”) features money guys from Atalaya Capital (Michael Bogdan), Goldman Sachs Specialty Lending (Jeff Ferry), BIA Digital Partners (Gregg Johnson), RBS Securities (James Custer) and GE Capital (Ray Shu). There’s a separate registration for the 8-11am Dickstein Shapiro session, but if you’re registered for the NAB convention, there’s no additional charge. Longtime observer (and early Wall Street radio analyst) Drew Marcus of Sugarloaf Rock Capital will give the room something to think about with some opening research. Details about the Dickstein Shapiro event here.
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» Buzzing on the Boards
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Star & Buc Wild are orbiting back to local radio and to syndication, said last Friday’s T-R-I Newsletter – but now the Urban/Urban AC/R&B Oldies board does some speculating about what I said was a September start to a syndication effort with Access.1/SupeRadio. 
A Memphis-area thread about painfully-thin staffing at a couple of contiguous Cumulus markets (just six fulltimers into one facility?) has blossomed into a discussion about emergency communications and radio’s role. And – what should the government expect out of broadcasters, and shouldn’t it provide more funding, if radio really is a key part of emergency communications, whether it’s a toxic train spill in Minot or a hurricane? The discussion’s here.
“Oldies” is the hot new thing in some big PPM markets, and the New York Board of Radio-Info.com marvels at the comeback. See where the conversation about oldies and classic hits in PPM-land is going.
» Sound Bites
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Fired NPR Chief Executive Officer Ken Stern got a $900,000 buyout, says NPR.org’s David Folkenflik. That’s passed on by the Poynter Institute’s Jim Romenesko, who picks up this quote from Ken Stern – “when the board chose to exercise its right to change CEOs in 2008, despite the fact that NPR was exceeding every financial goal and audience growth target online and on-air, it did so with the knowledge it had the legal obligation to make good immediately on the terms my contract.” Romenesko’s headline is “Fired NPR CEO was paid $1.3M in his last year.” Former New York Times exec Vivian Schiller was the winning candidate to replace Stern, and she started in late 2008 – just as the economy tanked.
This Southwest Airlines radio spot was paid for by the flight attendants union… And the spot is unlike the typical radio ad from a union about a specific company – the flight attendants like Southwest, which is just beginning service to Logan Airport in Boston, and they want the market to know that it’s a union airline. TWU Local 556 says folks might confuse Southwest’s identity as a discount airline with being non-union – but Southwest has unions. The Boston Globe has the story.
Start the bulldozers, quick – Andy Skotdal wins a judge’s permission to build a new 1520 north of Seattle. The Skotdal family already went through enough classic NIMBY (Not in my backyard) objections to stop a nuclear reactor and two toxic waste dumps on the 50-kw buildout of their existing station, KRKO, Everett at 1380. They persisted and got that one going, despite no fewer than 16 objections at the FCC (not to count numerous local forums). But instead of resting on their laurels, they pushed to build a completely new AM at 1520 licensed to Snohomish, and (among other things) ran into an order to stop last Fall by a local hearing examiner. Now, says the Everett Herald, King County Superior Court Judge Douglass North “upheld a February land-use decision by the Snohomish Council” and further says “construction could begin [today].” The towers would be at the same site as the sticks for KRKO. But the paper notes the NIMBY naysayers could still challenge Friday’s decision in the state appeals court. Andy Skotdal’s truly staying busy – he just accepted appointment to a seat on the NAB Radio Board. See what the Seattle-Tacoma Board’s saying about the new 1520 and the Skotdal family’s trials and tribulations.
Outside of Dallas, one of the stations that Cumulus Media Partners is selling to Alpha Horne just changed formats. That’s the AM station in Greenville, Texas, talk and sports KGVL at 1400. The Dallas Board of Radio-Info.com reports it dropped the talk programming Friday night to go classic country – and in this case, “back to classic country” would be accurate, since that’s what it was doing prior to December 2007. That makes it a simpatico combo with its FM sister, country “KIK FM” KIKT at 93.5. T-R-I wrote about the $600,000 sale (three-quarters of it in seller paper held by CMP) on June 19. See the Dallas-board commentary online now.
New NPR app for the iPhone offers “a simultaneous reading and listening experience.” National Public Radio says it’s “the first news-oriented app that offers iPhone and iPod touch users” the option to read, browse and/or listen to NPR content. That works for NPR news and other programming. The free downloadable app also functions as a gateway to NPR staples like Morning Edition, All Things Considered, Car Talk and Wait, Wait Don’t Tell Me – selected from whichever of the 600 NPR member stations is running them at that point. You can also customize the playlist and do timeshifting. The NPR.org site has a video of Weekend Edition host Scott Simon demoing the new app.
» Faces on the Radio
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Scott Mahalick is on the loose, after resigning (says FullThrottleCountry.com) as the PD at Entercom’s country “Wolf” outlets in San Francisco (KBWF at 95.7) and Seattle (KKWF at 100.7). Several folks over the weekend had the obvious speculation – is Scott the latest former Citadel exec to join Larry Wilson, at his new Alpha Broadcasting, now putting down roots in Portland, Oregon?
Ben Maller is re-hired by Fox Sports Radio. He tells LARadio.com “back on January 20, I was part of the Clear Channel company wide layoffs after nine years on the air at Fox. I was on the beach for 206 days, with fill-ins at Boston’s WEEI, Tony Bruno’s syndicated show” and the Angels-related KLAA (830). Ben’s going to be hosting the weekend overnight show on FSN, which is mostly based at Clear Channel-owned KLAC (570) in Los Angeles.
Les Paul definitely rates a mention in a radio publication, and I should’ve covered that territory in Friday’s T-R-I. His restless mind and musical creativity were first evident during lots of appearances at Chicago’s WLS and WJJD in the late 1930s, well before he started fooling around with amplifying the standard guitar and then the revolutionary solid-body guitar. In various radio bands, the New York Times says Les was billed as the Wizard of Waukesha (his home town), Hot Rod Red and Rhubarb Red. A big break came when Les was drafted into World War II in 1942 and he joined of the star-studded Armed Forces Radio Service in Los Angeles, where he was exposed to a national audience behind such stars of the day as Kate Smith. In 1943 he started working for NBC Radio. So radio played a big part in Les Paul’s career – just as his experiments like multi-track recording and his hit-making ability contributed to radio.
Sins - in the August 10 T-R-I story about “Kixx Country” CFDR at 780 being succeeded by FM-band “Lite” CFLT in Halifax, Nova Scotia, I said that the 780 was the last AM in the province. Not so. It’s the last AM in Halifax, Canada’s 13th largest metro. But there still exist other AMs, elsewhere in Nova Scotia. Got a newstip to share? I'm at Tom@in3media.com. See you back tomorrow with the first Phase I Summer Arbitrends (Cleveland, Providence, Hartford) and the news - Tom Taylor.
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