by Tom Taylor | tom@in3media.com | 609.883.3321

Friday, September 18th, 2009

Citadel wriggles

Citadel offers lenders a big debt-for-equity exchange – but will FCC rules let them accept?

Today's Wall Street Journal story headlined "Media rules complicate re-structurings" says "the issue has taken center stage at Citadel Broadcasting." That's because Citadel has reportedly offered senior lenders like J.P. Morgan Chase, GE Capital and ING "a deal that would exchange a big chunk of debt for equity." But the Journal says "talks have slowed in recent days" because that would leave those firms with attributable ownership interests and thus conflicts with cross-ownership and other FCC rules. For instance, the Chapter 11 talks at Tribune could result in J.P. Morgan being a shareholder of Tribune, which owns newspapers and TV stations in markets where Citadel's got radio stations. The same bank could also become a part-owner of newspaper/TV owner Freedom Communications. As attorney David Oxenford tells the Journal, nobody ever figured that "so many deals would be in trouble" around the same time. We also learn that Citadel had a $2 million interest payment due on Wednesday the 15th, and it's not clear what happened. Meanwhile, I'll pose this question - what was Citadel CEO Farid Suleman doing in Dallas this week, at Citadel Media (former ABC Radio Networks) offices?

“I am not in favor of a Fairness Doctrine, either through the front door or the back door.”

New FCC Chairman Julius Genachowski must be wondering how many times he has to keep repeating that – because many conservative talkers strongly suspect the Obama Administration is hell-bent on forcing some kind of “balance” on the airwaves. Not only did Genachowski give the “front door/back door” quote to a House Commerce Committee oversight hearing – the other four Commissioners, including the two Dems, agreed. Genachowski is in favor of reforming the FCC, and many influential House members have been clamoring for that. They weren’t comfortable with the Kevin Martin-run Commission and have voiced displeasure about everything from unfavorable research studies being stuffed into a drawer to indecency enforcement to the general pace of decisions. (Micro-managed, under Martin.) Genachowski and the four commissioners had a cordial conversation with the House committee – a nice beginning to their new relationship. This was the first time all five members of the new FCC have appeared “en banc” – all together – before Congress.

Enough to unanimously support removing the third-adjacent-channel protection that full-power broadcasters have long enjoyed. All five members of the Commission tell the House Commerce Committee they favor passage of the Local Community Radio Act, which contains language that would let them license hundreds and perhaps thousands of new LPFMs. Many of those would be in large markets, which are now completely full-up with signals under current rules. This T-R-I Newsletter told you on July 21 that even the U.S. Bishop’s Committee on Communications has been lobbying Congress on this one. And I’d point out that Chairman Genachowski’s choice as his press secretary is Jen Howard – who’s been the press director for the Free Press media activist group and before that on staff at the Media Access Project. With the NAB busy fending off the performance royalty bill and other assorted unwanted items, the LPFM bill isn’t getting as much attention as it would've in other years. The NAB position is that dropping lots of 100-watt FM stations in the commercial band threatens to turn it into Swiss cheese. Community radio proponents say that doesn’t happen in places like Canada – and it’s time to add some diversity following the tidal wave of consolidation.

Congress and the FCC are also concerned about emergency communications.

Broadcasters insist they’ve got a major role to play in alerting local populations about threats from hurricanes and other natural disasters. Sure, they say, it’s smart to work on the new media applications like cell phone alerts. But don’t ignore the mass media that’s already there and served so well during Hurricane Katrina in 2005 and last year’s Hurricane Ike in Texas (just before the NAB Radio Show in Austin). This is something the National Alliance of State Broadcasters Associations is working on, and it’s not headline stuff – until there’s a disaster. Broadcasters say the current EAS system reaches virtually everybody and could work much better. For instance – there’s no PEP (Primary Entry Point) station designated by FEMA in either New Jersey or Pennsylvania. NJBA executive Paul Rotella says that’s gotta get fixed for the system to reliably work during an emergency. Even so, there are screwups, sometimes –

Problem was – the California Christian teaching station is a Local Primary whose tests are picked up and re-broadcast by other stations. And on October 19, 2008, its test inadvertently transmitted some “commercial programming and an advertisement as part of an EAS test message”, says the FCC. That stuff ran on other broadcast stations and cable systems. KWVE (107.9) licensee Calvary Chapel of Costa Mesa explains that its staffer meant to run a scheduled weekly EAS test – but instead ran an “unauthorized RMT”, or Required Monthly Test. And then forgot to run the End of Message code. The board-op mis-interpreted the cart label. The FCC decides on a $5,000 fine, since this problem was less serious than not having a working EAS system, which gets you an $8,000 fine.

Just in time for the NAB Radio Show – “Radio Done Right”, from Radio-Info.com.

We thought we’d offer something positive and optimistic and helpful, after the industry’s spent the last 12 months slogging through the swamp with alligators biting at the you-know-what. So we sought out actual instances of “Radio Done Right” in the fields of management (subtitled “what we learned in the recession”), programming (Sean Ross finds ten inspiring leaders), promotion (Dana Hall kept digging for the good stuff) and engineering (including an interview with SBE president Barry Thomas). Then for good measure, I sat down with the NAB's 2009 National Radio Award winner Ed Christian of Saga Communications, and let the tape roll. Ed talks about where radio’s screwing up and how it has to change, starting yesterday. He’s also got some very funny stories and ideas any station could steal. Our brand-new 46-page convention issue is printed in shiny four-color ink for convention goers next week in Philadelphia – but available to you right now, here.

Nasdaq gives Sirius XM six months to fix the stock price, and Mel Karmazin’s got the tools in hand, thanks to the recent shareholder authorization to execute a reverse stock split of as much as 1-for-50. “SIRI” closed yesterday at 69 cents a share, and the last time it closed above $1 was literally one year ago. The Nasdaq exchange had previously suspended its listing requirements, which gave several radio-related companies some needed oxygen. But yesterday Sirius XM got the expected warning letter that its stock hadn’t closed at the $1 level for the previous 30 days, and so the reverse split will have to get done by mid-March. And yes, it’s true that Audit Integrity placed Sirius XM on a list of companies that might wind up filing for bankruptcy. But with Liberty Media’s $530 million in financing and the prospects of improving new car sales, I think that’s unlikely.

Maybe no “Second Wave” at Clear Channel?

Now I’m hearing that there’s a meeting in late October about 2010 planning, but if there’s indeed a plan for a second wave of layoffs, it’s very tightly held. So maybe they’re done with that. And on the subject of the 40 yield managers – a good source says along with promoting some existing sales executives to those positions, Clear Channel did do some hiring from outside. I don’t know if they’ve reached the originally-announced level of 40. The company’s been quiet about its selling strategy.

They’re going beyond ratings and even the Scarborough qualitative to ask about the “advertising value” that radio has, based on its relationship with listeners. Arbitron’s launched a new task force that includes some of its own folks plus outsiders such as Katz Media Group’s Gerry Boehme, Safelite AutoGlass media director Matt Johnson, Coca-Cola Director of Regional Media/East Betty Kuphal, Westwood One researcher Paul Bronstein, Inner City New York GM Deon Levingston, Radio Research Consortium’s Joanne Church, Dr. Tom Evans of ESPN Radio and Brian McElroy of Katz Marketing Solutions. That’s not a complete list, but you see the scope. The goal of the task force is to come up with a new metric for “affinity” – one that “captures audience involvement and has a lasting, balanced impact on radio planning and buying.” Arbitron’s retained the outside Sequent Partners to guide the process with the new task force.

Enough to make it the company’s first internally-developed custom mobile app, using Palm’s webOS operating system. Already, the Chicago-based webcaster’s new app for the Palm Pre smart phone is one of just five 4-1/2 star-rated apps in the whole Pre catalog. Kurt likes the fact that the platform lets you multi-task – listen to online radio while doing other stuff with the phone. The iPhone can’t do that. He and AccuRadio VP/programming Paul Maloney also applaud the Pre's interface. AccuRadio’s got 50+ channels of jazz, 45 of classical, 35 of Broadway, 30 of indie rock, 25 channels of country and pop standards, 10 of world music, plus niches like reggae, Celtic, classic hip-hop, French pop and more.

Think of it as a library of stellar commercials that also contains a toolkit to create even better stuff. The library's open to agencies, stations and production houses, and CEO Jeff Haley envisions it as a resource that also offers social networking. The “foundation of the site” is the RAB’s own interactive library of creative spots. But it’s not just a particular :30 or :60 spot - each ad will be accompanied by “the original campaign plan, client results, award recognitions, scripts and digital components.” If you need some quick inspiration – the Best of Radio is a great place to jump to. The site is already salted with all the Radio Mercury Awards winners plus additional quality radio spots from Arnold, BBDO, Crispin Porter + Bogusky, DDB, Goodby Silverstein & Partners, JWT, The Richards Group, TBWA\Chiat\Day and others. See “The Best” here.

Sparking concealed envy on the part of some rival talkers, no doubt. But if you’re looking at sheer power to drive the agenda about ACORN, health care and other stuff this week, Glenn Beck’s the guy. Time Magazine asks – “Is Glenn Beck bad for America?” Beck’s clearly able to motivate Tea Partyers and protesters, and he’s feeling his oats. Time mag even goes through “A day in the life of Glenn Beck”, which of course has added his new daily Fox TV show to his Premiere-syndicated radio act. On newsstands now…

In Portland, Oregon – #1-ranked AC KKCW is the picture of consistency, in age 12+ AQH shares – 6.1 to 5.9 to 5.7 to 6.1 to 6.1, since the Fall book. Salem’s regional Mexican “El Rey” KRYP holds its Phase I 4.4. share – and is basically tied for fourth place with country FMs KWJJ and KUPL, who have identical 4.5's.

New Orleans – Clear Channel’s double-digit urban combo of WQUE (12.3) and WYLD (11.4) is in the stratosphere, compared to the rest of the field, starting with #3 talk WWL-AM/FM (trending down to a 6.5).

Omaha – Clear Channel is 1-2-3, with classic hits KGOR at an 8.8, country “Kat” KXKT (8.7) and talk KFAB, trending down at an 8.4.

Read all the Arbitron diary and PPM ratings online at Radio-Info.com, where you see every station, from a 0.1 share to the ones in double digits. Keep checking it, here.

» Arbitrends Summer Phase II back to top » 23. Portland - 2,078,300 55. New Orleans - 936,700 72. Omaha-Council Bluffs - 627,500 Click on the city to review recently released trends. View a complete list of Arbitron markets here. » Wheeling and Dealing back to top » In Waco, Simmons Media deals away its four-station cluster to Gary Moss-run M&M Broadcasters. The stations are hot AC “Star 92.9” KLRK, a C2 licensed to Marlin. “ESPN 1660” KRZI, Waco, with the usual expanded-band power of 10-kw days and 1-kw nighttime. And the Mexia-licensed country simulcast of KRQX-AM (500 watts daytime, 128 watts at night at 1590) and KRQX-FM, a Class A at 104.9. Brokers – Kalil & Co. for seller Simmons Media of Utah. John Pierce for buyer Gary Moss/M&M. In Honolulu, George Hochman sells silent KORL-AM to a California-based religious operator. Buyer is Centro Cristiano Vida Abundante of Santa Maria, and the purchase price looks like $350,000, but the terms are unusual. The ministry will have paid $50,000 in cash by closing time, and the other $300,000 shows as “a donation to CCVA along with an appraisal of the goodwill and the [value of the] station license.” You’ll notice I didn’t list a frequency in the headline, and that’s because it’s about to change. KORL has historically been a 1-kw fulltimer at 1180. But Hochman wangled a construction permit to downgrade to 330 watts daytime and 140 watts night at the new frequency of 1170. See the asset purchase agreement here. » Sound Bites back to top » “Oldies 92.5” expires in Ft. Myers, replaced by a talk station named “92.5 Fox News.” Meridian Broadcasting puts WNTY, Estero, FL into a simulcast with two AM sisters and christens the result “92.5 Fox News” – though it’s actually heavy on talk, with Hannity, Limbaugh, Beck, Levin and Laura Ingraham, plus a Fox News affiliation. The Tampa Board of Radio-Info.com has been tracking the whole thing since yesterday’s debut during Mandy Connell’s morning show. It’s also mourning the passing of Oldies 92.5 and the earlier “Oldies 95.” The two AM stations in the new “Fox” trimulcast are talk WINK, Ft. Myers (1240) and WNOG, Naples (1270). See the conversation on the Tampa Board now. It’s a niche of a niche – non-commercial Chinese-language pop music, now available from Steve Warren’s MOR Media International. Steve already produces the Chinamerica Hit Radio service for commercial stations, and figures there’s a market for the non-com version at college stations. He’s offering it at no cost, “other than the commitment to broadcast non-commercial sponsorship announcements hourly.” Warren was a veteran of the country radio scene when he glimpsed the underserved audience for Chinese-language music programming. He figures the 2010 Census will show the true level of the potential audience. And yes, like a lot of vendors, he’ll be at next week’s NAB Radio Show, at the NABEF Career Fair on Wednesday. “Badlands FM” is the Texas country/Nashville cross that just emerged in Corpus Christi, on Reina Broadcasting’s KBSO, a Class C3 at 94.7. Badlands replaces the previous adult alternative format. Stunting continues this morning at the former classic hits “Eagle 99.5” in Bloomington, IL. WDQX, Lexington, IL began stunting with TV themes yesterday and should end the format suspense this afternoon. These Golden Plains ag reports aren’t just over-the-air, says Rocking M Radio in Kansas. Christopher Miller says they’ve expanded the Golden Plains Market Reports to cover more time on the Rocking M stations in Kansas and parts of four adjoining states, and that the on-air and online reports “reach more agricultural listeners than any other Kansas network.” Rocking M has chosen content from Radio2dot0.com to run multiple times a day on-air and also online. Tony Renda’s Velocity Radio Management will offer its services to clients of CMS Station Brokerage. Tony Renda, Jr. struck out on his own a while back with Velocity, to do management, operations, consulting, assistance with financing, and workouts. Now Tony tells me he’ll be aligning with Roger Rafson’s CMS Station Brokerage, which will offer Velocity’s menu to its clients. Nashville’s heritage country WSM-AM (650) adds an Americana music program on Wednesday nights. It’s the two-hour “Music City Roots: Live from the Loveless Café.” “Opening Night” is October 14 and features Emmylou Harris, Pam Rose & Mary Kennedy and “emerging artists” Annie Crane and Robin Ainger. WSM’s walking musical encyclopedia Eddie Stubbs will emcee “Roots”, with songwriter Jim Lauderdale as guest host and artist interviews by Nashville's Craig Havighurst. Bruce Reese moves to the next perfect volunteer job for him – Chairman of the NAB Education Foundation. The Bonneville International CEO has been a superb ambassador for broadcasters in Washington as Chairman of the NAB Radio Board and also the Joint Board. He’s served on the board of the Radio Advertising Bureau and the AP. The non-profit NABEF addresses issues like diversity, education and training programs, community service and the First Amendment. It also presents the annual Service to America Awards, of which Bonneville’s been a major supporter. » Faces on the Radio back to top » Connie Szerszen – a.k.a. Chicago’s “Top Rock Girly Jock” – has written her autobiography, and it’s 352 pages of stories and pictures that re-create the intersection of the radio scene and rock & roll. Connie dishes about Elvis, her date with Neil Diamond, and hanging out with stars from Elton John to Stevie Nicks. Connie says she was “the first female rock jock on AM radio in Chicago" and later “the first female in America to broadcast live on HD Radio”, in 2005. She packs a lot into the autobiography (plus 200 pictures), and you can find out more about the Starbright Publishing book here. Darrell Ankarlo suffered a brain injury in an April 8 accident and has been off Phoenix talker KTAR-FM (92.3) ever since. Now the Arizona Republic says he was finally able to get back on the job Tuesday, after many hours of therapy. He tried to hop back in the saddle soon after the accident, but exhibited the symptoms of people with brain injuries – slurred speech, confusion, even hiccups. Now he tells the Republican’s Randy Cordova “I’m ready.” Jason Wituk moves from “local” to “general”, as the new General Sales Manager for Journal Broadcast Group in Wichita. Jason’s worked in newspaper (the Wichita Eagle), at Cox Media Kansas, and at Entercom radio. Since 2006, he’s been the local sales manager for Journal, for the cluster that includes country KFDI-FM (101.3). Eric McCart is VP/GM for Journal’s Wichita operations. Rush Limbaugh donates $500,000 to the Los Angeles medical institution he credits with saving his hearing in 2001. That’s the House Ear Institute, and the donation is in memory of the doctor who treated him and eventually gave him his cochlear implant, Dr. Antonio De la Cruz. The doctor just passed away from complications of lymphoma on July 31, at age 65. Celeste Headlee starts her new job Monday – as John Hockenberry’s co-host on “The Takeaway” morning show. It launched in April 2008 as a younger-niched alternative to NPR’s Morning Edition, and it’s got a lot of family relations – it’s co-produced by WNYC, New York and Public Radio International in Minnesota, with editorial collaboration with the BBC World Service, New York Times and WGBH, Boston. The show’s produced at WNYC and now has 49 affiliates and clears on Sirius and XM. Headlee, a classically-trained soprano, was most recently the Midwest Correspondent of NPR’s budget-canceled “Day to Day”, and from 2001-2006 she was a reporter with WDET, Detroit. Jeff Bolton is booked to appear on "Fox & Friends" this morning at 7:15am Eastern time, to talk about KLIF, Dallas' "Blow Out Congress" campaign - where they target a different member of the U.S. House or Senate each morning. Cumulus-owned KLIF (570) has an unbranded website link for other stations who'd like to follow suit. Penny Allegood Smith, a station owner on Opelousas, Louisiana, died Tuesday at 53, from complications of liver failure. She took over country KSLO (1230) and classic hits KOGM (107.1) in 2006, when her father Johnny Wright died in 2006. GM Chris Lamke tells the local Daily World “We miss her very much, but we plan to continue to do what Penny wanted, which was to keep the local information going.” Radio-Info.com - #1 among all radio news websites. Source: Compete.com. Check it out for yourself and see. »Radio-Info Conference Planner: NAB Radio Show, September 23-25, Philadelphia back to top » BROKERS Andy McClure, Erick Steinberg; The Exline Company, Philadelphia Marriott Downtown; Cell: Andy 415-497-3855, Erick 415-209-4890; Office: 415-479-3484; Exline@pacbell.net, ericks@esteinberg.com, www.ExlineCompany.com Elliot Evers, Brian Pryor, Bill Fanning; Media Venture Partners; Philadelphia Marriott Downtown; Cell: 415-205-7242 Office: 415-391-4877; pch@mediaventurepartners.com; www.mediaventurepartners.com Richard L. Kozacko, George Kimble; Kozacko Media Services, Philadelphia Marriott Downtown; Cell: Dick 607-738-1219, George 520-465-4302; Office: 607-733-7138; rkozacko@stny.rr.com, GeorgeWKimble@aol.com