Radio Business. Report...Nov 13, 2000  · A report from the RAB Chicago confab STREAMING Cox unveils its virtual organization 8 WASHINGTON WRAP-UP 2000 report card for Congress and

Radio Business. ReportVoice Of The Radio Broadcasting Industry®

November 13, 2000 Volume 17, Issue 46

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RADIO NEWS

September revenues in the black, but not by much 2

A 6% gain in local revenues offset a 6% loss in national business,giving radio its 97th consecutive growth month with a 3% gain overall.

Baldwin tries to chase the Cumulus clouds away 2

Network TV ads on the sidelines for campaign 2000 2

SRI gears up to measure DAB 3

AudioSonix trolling for clients 3

Intern posts strong Q3 despite loss of CCU 4

Regional revenues for 2000 6

A report from the RAB Chicago confab

STREAMING

Cox unveils its virtual organization 8

WASHINGTON WRAP-UP

2000 report card for Congress and the FCC 1 0 - 1 1

MEDIA MARKETS & MONEY

Viacom places its bet on BET 12

Viacom has bought cable TV programming staple Black EntertainmentTelevision from Bob Johnson in an all -stock deal valued at $3B

Getgo gets the other Radio One 12

SBS drops $250N1 to get the Gospel of LA 12

Beasley says not so last on Centennial acquisition 13

Election 2000: Theresults (sort of)

Here's the scoop for broad-casters and how the results ofthe election will affect you.First, SenatorsJohnAshcroft(R -MO) and SpencerAbraham (R -MI) have beendefeated, leaving two vacantRepublican seats on the Com-munications Subcommittee.Subcommittee ChairmanConrad Burns (R -MT) barelysqueaked by, but has wonanother term in the Senate.Among other members up forre-election, Senators KayBailey Hutchison (R -TX).Bill Frist (R -TN) and TrentLott (R -MS) were returned bythe voters, but Sen. SladeGorton (R -WA) is in a racethat is still too close to call.None of the subcommittee'sDemocrats were up for re-election this year. Regardlessof the outcome of Gorton'scontest and the presidentialrace (Democratic Sen. JoeLieberman's Connecticut seatwill go to a Republican if hebecomes Vice President), theGOP will continue to controlall committee chairmanshipsin the upper chamber.

Sen. Rod Grams (R -MN),recently a hot name in LPFM,has been defeated by invest-

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Voice 01 Tho Radio Broadcasting Radio NewsNovember 13, 2000, Volume 17, Issue 46

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Executive Editor Jack MessmerManaging Editor Dave Seyler

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ment company president MarkDayton. In almost every issuesince 9/18, RBR has printed astory containing Sen. Grams'name. The introduction of his"LPFM-lite" bill started a mas-sive campaign by the NAB togarner more and more supportfor his bill. Although Gramswill be able to shepherd thebill through the lame -duck ses-sion of Congress beginningNovember 14, it still faces theiminent threat of a presidentialveto. If his bill, with 56 co-sponsors, does not get throughthis Congress, someone elsewill have to be the front man inthe next Congress.

On the House side, Repre-sentatives Mike Oxley (R -OH)and Billy Tauzin (R -LA) easilywon re-election and can nowvie for the Chairmanship of theCommerce committee, follow-ing the retirement of Rep. TomBliley (R -VA).

With a close tally in Floridaand the presidential race stilluncertain, the FCC Chairman-ship is also unknown. Rumorshave it that if Texas Gov.George W. Bush (R) wins therace, Pat Wood HI (currentlyChairman of the Texas PublicUtilities Commission) will takecurrent FCC Chairman BillKennard's place. On the otherhand, if Vice President Al Gore(D) takes the race, current FCCCommissioner Gloria Tristaniwill likely move up as Kennardalso moves up, possibly to acabinet post.-ED

Radio enters Q4 2000with 16% revenue gains

The Radio Advertising Bureau'srevenue stats for the month ofSeptember 2000 are a mixedbag. First the good news: Theradio industry has taken therecord -breaking revenues of1999 and increased them by

16% over the first three quartersof 2000. This gain in total busi-ness is built upon a solid 15% gainin local revenue, coupled with a20% surge in national business.

Now the bad news: September'sresults dragged both of thosenumbers down. Local YTD stoodat 16% before adding inSeptember's 6% gain. NationalYTD was at 24% before factoringin September's 6% loss in busi-ness. Overall business YTDdropped from 18% to 16% on acombined 3% gain for the month.

However, radio's long stringof positive revenue results con-tinued unbroken, and has nowreached 97 straight months.

The Southwest had by far themost successful month of thefive RAB regions with a 15% gainin local business. Its nationalbusiness was flat, good enoughfor a first -place tie in an overalloff month.

For complete 2000 revenueresults, see page 6.-DS

Baldwin asks for demiseof Cumulus

Baldwin Broadcasting companyhas petitioned the FCC to revokeall of the broadcasting licensesheld by Cumulus Media (O:CMLS)as well as prohibiting them fromselling 33 broadcast stations toClear Channel Communications(N:CCU).

The argument stems from apending deal in the spring of1999, when Cumulus expresseda desire to purchase Baldwin'stwo stations in the Mobile, ALmarket. The deal fell apart byJanuary of this year and Baldwinis claiming that one reason wasits concern that the buyer Cumu-lus had planned to spin one ofthe stations to, Urban Radio, wasactually a front for Cumulus. Adeal to have Urban Radio buytwo Clear Channel-AMFM mergerspin-offs in the adjacent

Pensacola, FL market also fellapart, but the company is nowback with a deal to buy a stall( m

in Starkville, MS (see

"I own and control Urban,and make all decisions con-cerning its business opera-tions," t Jrba n Radio PresidentKevin Wagner told RBR. "Cu-mulus neither owns any inter-est in Urban nor controls theseoperations."

Cumulus also denied in anFCC filing that it controlledWagner's company. The FCChas not yet acted on Baldwin'scomplaint.

RBR observation: Sincethe Mobile and Pensacola salesnever closed, it is virtuallyimpossible for Baldwin toprove its contention that Cu-mulus would have improperlycontrolled them. Cumulus andWagner can argue just as con-vincingly that they would havecarefully abided by the FCC'srules.-ED

Gore, Bush shut outnetwork TV

The campaigns of all of thepresidential candidates run-ning this year decided to com-mit media warchests to highlytargeted local buys, leavingthe top four broadcast televi-sion networks out in the cold.according to a story in TheMyers Report. As of November1, neither ABC, CBS, Fox norNBC had received so much asa penny from any of the can-didates, nor did they expect toin the week leading up toelection day.

This contrasts to a total of$34.4M spent in 1996 and$72.3M in 1992. In both ofthose elections, the lion's shareof spending came from thedeep pockets of Ross Perot.Nonetheless, the campaigns ofBill Clinton, George Bush

www.rbr.corn 11/13/00 RBR

Sr. and Bob Dole also sentmillions on network TV.

The same can not be said ofnetwork/national radio, whereaccording to a report by Interep,national buys on behalf of can-didate and issues were the #1and #2 growth categories for2000 (see story, p.6).

RBR observation: Politicaladvertising is a sweet-and-sourcategory. On the plus side, it ispaid advertising. On the otherhand, the ads must air and mustbe billed at lowest unit rate, andin a period of high demand itcould conceivably preventhigher -priced schedules fromrunning.

Regardless, we find it inter-esting that the shotgun target-ing approach of a network TVbuy has fallen so out of favor. Itseems to us that this bodes wellfor radio.. The economy andefficiency of radio, with its abil-ity to target geographically anddemographically with precision,is almost the exact opposite ofthe network TV model. If Ameri-can businesses can be persuadedto follow the lead of the candi-dates, perhaps radio can con-tinue to increase its share of themedia pie.-DS

Add XM to SRI

measurement agreementfor sat. radio

Statistical Research Inc. (SRI),which produces RADAR ratingsfor network radio, has alsocinched the satellite radio mar-ket for audience measurement.SRI added XM Satellite Radio(0:XMSR) 11/8 to the short listthat already includes Sirius Sat-ellite Radio (O:SIRI) (RBR 10/23, p.4). While no firm method -

Radio News®

ology or estimates have yet beenarrived upon, the three entities,agencies and advertisers will beworking together to developmeasurements and related ser-vices for this medium set tolaunch next year.

SRI does say it will first "at-tempt to define the universe ofsatellite radio consumers andhow they are using the service."Initial audience measures, basedon the subscriber numbers, willprovide weekly and daily cumesfor both XM and Sirius. As satel-lite radio matures, SRI says itwill work toward producingreach and frequency estimatesfor refined time periods, spe-cific demographic groups, andformat preferences.

RBR observation: The cartbefore the horse scenario? CaratUSA's Matt Simpson men-tioned a couple weeks backthat one satellite net offeredaudience estimate numbers andmethodology for his consider-ation, while the other had not.Those numbers have since beenretracted due to the fact that itwas all speculation, at best. "Iwas told by RADAR, you mightas well put your finger in yourmouth, lick it, hold it up and saywhich way is the wind blow-ing," attests Simpson.

SRI measurements need tobe based on statistically soundXM and Sirius subscriber basesfor agency buyers to be con-vinced. And statistically soundmeans a large enough base to

sample from. We wonder howquickly that base will build,especially when 2001 auto mod-els on the lot today have yet tobe equipped with a satellitereceiver. XM announced latelast month it had just begundelivering chip sets for integra-tion into aftermarket receivercompanies. Both XM and Siriussay they are in this for the longhaul.-CM

AudioSonix testing withABC, Westwood

Not just another net -based au-dio delivery system? Olney, MD -based AudioSonix is position-ing itself as the most automatedad and audio delivery system inthe market. The company signedits first client, NYC -based NewsBroadcast Network last monthand is currently testing withABC, Citadel, Westwood/Metroand Infinity/CBS. "We are theonly completely automatedInternet -based system," VP Salesand Marketing Val Davis tellsRBR. "When I say 'automated,' Imean from the time you at thenetwork have the new CocaCola spot that you are distribut-ing to your affiliates-from thetime you create the packageand choose the destination(which can be a single click bychoosing the group) and hit thesend button, nothing else has tohappen."

AudioSonix competitors in-clude SpotTaxi, SpotTraffic, DG

Systems and others. Some, likeSpotTaxi, utilize automatedfunctionality. However, Davissays AudioSonix takes it to thenext level. "Nobody has tolaunch a browser, the clientsoftware will automatically, at apre -specified time, look for aconnection to the Internet. If itdoesn't see a connection via aLAN network or DSL, it will pickup the dial -up application anddial the appropriate dial -up ac-count with the user name andpassword that you specify. Onceit's connected to the Internet,the software connects itself toour server, looks for availabledeliveries and pulls them down.So, when you come in in themorning, everything is just sit-ting there in your box waitingfor you."

AudioSonix can deliver mul-tiple formats-WAV, MP3, MP2,Video, text, data, stock marketreports and images.

Bobb Haskitt, VP BusinessDevelopment, SpotTaxi saysAudioSonix is actually very simi-lar to his system, but does differin the automatic dial -up appli-cation functionality. "[What] he'ssaying is automated is primarilythe delivery of the file, in thatyou don't have to sit there andmanually download the file fromthe Internet. it will automati-cally drop into a predetermineddirectory at a predeterminedtime, and it's a browser -lesssystem. That's exactly what weoffer, only we go a step further

Rao RosinessReport

Voice C The RadioBroadaistinpy Industry'

Listen 4

Look out Westwood One, Premiere and ABC! The RBR Radio Network is now upto four affiliates and growing... Radio Business Report's daily newscast can now beheard at the Internet sites of these fine web affiliates:

All Access http://www.allaccess.com ("Trades" page)Impact Target Marketing http://www.itmimpact.com/Links.htmMedia Services Group http://www.mediaservicesgroup.com/SpotTaxi http://www.spottaxi.com

If you too want to be a web affiliate to our "sticky" content, just email [email protected] or give us a call at 703-719-9500.

11/13/00 RBR www.rbr.com 3

in that we not only make it apredetermined time, but youcan also set up predeterminedintervals, with the system check-ing to see if there's anythingthere and downloading it. Hissystem will automatically dialup if it's not online. Ours is onlymade for a network that's al-ways on, so it won't."

The two companies also dif-fer in the billing process.AudioSonix bills based on thesize of the file, SpotTaxi on thenumber of files.-CM

Interep posts strong Q3

Revenues were up slightly, evenafter losing Clear Channel(N:CCU) as a client, and InterepNational Radio Sales (O:IREP)cut costs to boost Q3 operatingEBITDA 66% to $6.4M. After-taxcash flow per share rose 221%to 45 cents from 14 cents. Q3commission revenue was$ 27.2M, compared to $26.8M ayear ago. On a pro forma basis,the company said that was up10% from $24.6M in Q3 1999,not including Clear Channel(which now owns Katz MediaGroup, Interep's primary corn--petrtor). Contract terminationrevenues were $1.5M, comparedto $2.6M a year earlier.

"We are extremely pleasedwith our results given the antici-pated slowdown in the dot -corncategory," said Ralph Guild,C16.irman and CEO. "Our con-tinued effort to streamline thebusiness has decreased our ex-posure to short-term adjustmentsin the market. Interep will main-tain its strategy of growing radio

. and using its sales and market-ing expertise to further pen-etrate Internet representationand enter the representation ofother new media. We are look-ing forward to a strong fourthquarter and an outstandingyear."

Guild announced that thecompany is merging its web siterep operation, Interep Interac-tive, with Cybereps, an Internetrep company based in San Fran-cisco. Guild said that willtriple the size of Interep's webbusiness. The company will

Radio News®

RBR News Briefs

Veronis Suhler tallies consolidation valuesThe assets of publicly traded radio groups grew ten -fold over the past five years (1995-1999), according to thelatest update of the Veronis Suhler Communications Industry Report. The annual report from the New York basedmedia merchant bank says, largely due to deregulation in 1996, the assets of radio groups with public stock grewfrom just over $5B in 1995 to $52.3B last year. "The growth in assets was accompanied by revenue growth,"Veronis Suhler noted. "Revenues grew 20.4% to $8.1B in 1999, and rose at a compound annual rate of 37.6%from 1995 to 1999."-JM

Frequency swap in DallasHeritage Alternative KDGE-FM Gainesville -Dallas and Rhythmic Oldies KTXQ-FM Ft. Worth -Dallas swappedfrequencies 11/9. KDGE got 102.1 MHz; KTXQ 94.5. CM

Pesos flow from Grupo Radio CentroShareholders of Grupo Radio Centro (N:RC) have approved a plan to pay themselves cash and reduce theMexican radio group's capital. The unusual move will be funded by a $35M loan from Banco Inverlat, which willbe secured by a stock pledge. Holders of the company's Mexican shares will be paid 2.06499 pesos per share(approx. 20 cents) and holders of the American Depositary Shares, which trade on the NYSE as RC and closed11/6 at $9.063, will be paid $1.93948 per share. The payments are to be made next month.-JM

Kabela calls it quitsFrank Kabela, radio and newspaper operator Greater Media's Chairman and CEO, will be stepping downon December 31. The group's chair will be taken over by John Bordes, the brother of late founder PeterBordes. Peter Smyth remains President/COO. With stations in Philadelphia, Detroit and Boston, GreaterMedia is the third largest privately -held radio group, and is #15 on BIA's latest list of group owners ranked by totalrevenues (RBR 109, p. 15).-DS

Urban Box Office declares bankruptcyUrban Box Office Network, a Hip -Hop and Latino entertainment portal has declared bankruptcy (11/3), layingoff all 300 employees. The site entered our radar screen because former AMFM Vice Chairman and RadioPresident (now Ultimate.com CEO) Jimmy de Castro told RBR in an interview (RBR 6/26, p. 10) he hadinvested $2.5M in the startup that included 15 websites.-CM

McCarthy wins PresidencyNo, this isn't a flashback to 1968 and we're not talking about the anti -war Minnesota Senator, EugeneMcCarthy. Rather, Tim McCarthy has been promoted to President and General Manager of ABC Radio'sNew York City AMs, Talk WABC and Radio Disney WOEW. He'd been Station Manager of the duo since April1999.-JM

Warp Radio 400 affilsAudio streaming provider to radio broadcasters Warp Radio announced 11/7 it had surpassed 400 affiliates.Warp passed the 300 -station milestone in July and expects 500 by 01 '01. Warp says it is testing programinsertion technology with Associated Press Radio and targeted ad insertion/replacement-both are alsoexpected to be offered to affiliates sometime in 01. CM

Katz Interactive signs RadioFreeCash.comRadioFreeCash.com, a 200 -format webcaster that claims to pay listeners by the hour, has hired Katz InteractiveMarketing as its exclusive national sales agent for streaming audio ads. RadioFreeCash's permission marketing -

based pre qualification surveys provide the vehicle for targeting the ads.-CM

GlobalMedia launches "Always On" channelGlobalMedia.com announced 11/2 "Always On," a multimedia channel and directory for its audio and videonetwork. The video channel can now be launched from Real Networks' RealPlayer. Always On is a direct link toall GlobalMedia offerings, including music, radio, talk, and video entertainment.-CM

4 www.rbr.com 11/13/00 RBR

be controlled by Interep, butrun by Cybereps' managementteam.-JM Radio NewsCatholics put out wanted

posters for Rocko &Birdsey

The confessional chapter maynot be over for WAAF-FMBoston's "Rocko & Birdsey."After getting pulled off the airfor refusing to stop airing whatthey later called "mock" re-corded confessionals from aCatholic church, PD Dave Dou-glas told RBR the issue wasresolved and wouldn't happenagain (RBR 11/6, p. 2).

Well, in the 10/4 Boston Her-ald, a story about the CatholicLeague of Massachusetts want-ing Attorney General TomReilly to look into whether thetwo violated state privacy lawshas surfaced. While WAAF as-serts the confessions weren'treal, the Herald story says Rocko& Birdsey told friends they were.The Catholic League believesairing secret taped confessionsbreaks Massachusetts' privacylaws. That carries a punishmentof up to $10K fines and fiveyears in prison.-CM

Hispanic Broadcastinggets FCC OK for Houston

reshuffle

Hispanic Broadcasting Corp. (N:HSP) announced 11/6 it hasreceived permission from theFCC to upgrade its KOVA-FMfrom Class A to Class C3 andchange city of license, bringingmuch better coverage into Hous-ton. Currently, KOVA is licensedto Rosenberg, TX, it's moving toMissouri City, TX. KOVA'strimulcast with Class A KLTO-FM Galveston, TX, both on 104.9MHz, and Class C KOVE-FM93.3 Port Arthur, TX, will staySpanish AC, but become onesignal on 104.9. KOVE willlaunch a new format on 93.3.KLTO stays a Class A, movesfrequency to 105.3 and licenseto Crystal Beach and will simul-cast either KOVE or KOVA. "It

will depend on the kind of cov-erage I get downtown. It won'tbe a separate station," HispanicBroadcasting -Houston GMMark Masepohl tells RBR.-( \

American Toweroptimistic after another

DC setback

US District Judge Paul Fried-man has refused (11/7) to letAmerican Tower (N:AMT) con-tinue building (the constructionwas originally halted 10/5) its756 -ft DTV/TV/radio/cell towerin DC, saying he saw "no needfor emergency action in a dis-pute that could cost the DCGovernment millions."

Indeed it could. ATI is suingDC (RBR 10/16, p.3) for$250M-the tower is alreadyhalf built (280 feet), upon apermit originally issued inMarch. ATI attorneys wantedFriedman to allow constructionto continue-because if not,the company may begin losingcontracts to other entities. "Ourimplication is that there are otherprojects that we have under-way and if tenants were tobelieve that valid constructionpermits can be revoked basedupon political whims, then theymay have a problem makingcommitments to us," AT VP/GM Bob Morgan tells RBR.

Friedman's ruling did, how-ever, leave AT another con-struction opportunity-a follow-up hearing is set for 11/16.

"We went to this because it isprocedurally correct, but wewould have had to have provedirreperable harm to get this tem-porary injunction," adds Mor-gan. "The judge ruled saying hereviewed the merits of the caseand feels there is a very stronglikelihood that AT will ultimatelyprevail. His ruling was actuallya shot in the arm to us. TheAssistant Corporation Counseladmits in the transcripts that the

city screwed up. The mayor wasasking the same questions asthe judge: how something likethis could happen?"

The All suit, that includesnaming DC Mayor AnthonyWilliams, alleges he and otherDC government officials engi-neered a power play to stop thetower construction, under pres-sure from local citizens' groups.In addition, the suit says DC isviolating the Telcom Act of '96,where municipalities are sup-posed to help accommodatenew technologies.-CM

Heritage talker WWDB-FM flips to 80s Hits

Beasley Broadcasting flippedwhat is known as the first (about25 years ago) FM Talker WWDB-FM Philadelphia at 5PM 11/6.GM Dennis Begley is out andsister station WXTU-FM GMDave Donahue is in. "The Point"is targeting P25-54 with 80s hitartists such as Bryan Adams,The Cars, Steve Winwood andThe Police. Most of the WWDBstaff has been laid off, includingnews anchors Pat Farnack andEarle Bailey and hosts "Gross,""Homer," Jay Sorenson,Hilarie Barsky, Kent Voss andSteve Martorano, among oth-ers.

WWDB lost listeners over thelast two years by switching fromall Talk to News -Talk and losingDr. Laura and Rush to competi-tor WPHT-AM. Ironically, in theSummer Arbitron P12+, WWDBand WPHT were tied at 15thplace for the market.-CM

Burbank Creationssyndicates "Weekly

RearView"

Burbank Creations announcedit is once again syndicating"Gary Burbank's Weekly

RearView," a three-hour week-end version of "The GaryBurbank Show" that has airedon WLW-AM Cincinnati for 19years and running. The showoriginally launched in '94 as asyndicated weekend programin addition to Burbank's syndi-cated afternoon drive show. "Ihad left Burbank Creations in`97 and the show was trans-ferred to Jacor-Premiere. Fromwhat I understand, Premiere isunloading some of the showsthat they don't primarily rep.When I heard that I called,"Burbank Creations partner andPresident Rick Consolo tellsRBR. "Basically, it was justtransferred to Premiere for acouple of years. Now that they'vesettled down and understandwhat programs they want, theyare kind of weeding things outso that they can be a little morefocused."

Burbank Creations also syn-dicates Gary Burbank -inspiredand character -based features thatinclude "Earl Pitts, Uhmerikun,""Gilbert Gnarley," "The USSenseless Survey," "Everybody'sCooking" and "The Vegas VicShow."-CM

Fisher reports gains

Fisher Companies (O:FSCI) re-ported that Q3 income from itscontinuing operations shot up529% to $13.3M. That doesn'tinclude the company's money -losing flour milling operations,which it is in the process ofselling. Broadcasting revenuesrose 12.9%. Fisher didn't breakradio out separately for the quar-ter, but said revenues for itsSeattle radio stations were up19% for the first nine months ofthe year. For the same nine -month period, its Portland sta-tions were up 14% and its FisherRadio Regional Group of smallmarket stations gained 8%.

11/13/00 AMR www.rbr.com 5

Political ads help fuel2000 gains

Candidates and political actiongroups have been buying a greatdeal of national air time, andlead all categories in percentgain over 1999, according to anInterep study. Of course, this isnot particularly surprising giventhe fact that this is an electionyear. However, many other cat-egories have significantly uppedtheir use of national radio.

The much-discussed dot -corns are up 16.8% YTD, basedlargely on a beginning -of -the -year spending spree. Lookingjust at the months of July -De-cember, dot -corn spending is

down 52% compared to the sameperiod in 1999.

The chart below shows wherethe strengths and weaknessesof national advertising have beenfor the year, projected into De-cember based on billingsthrough 10/24. -DS

Top performers YTD

Category o gainPolitical 782.3Issues 401.9Investment 63.4Government 62.5Medical 29.7Communication 28.0Computer 26.5Auto parts/svc 18.3Education 17.3Dot -corn 16.8Travel 10.8Entertainment 10.7Food 8.5Credit 5.9Cable TV 5.2Auto (foreign) 4.5

Biggest losers YTD

Category % lossCar rental -67.1Home video -47.2Insurance -28.0Fast Food -25.0Professional -23.2Music/CDs -21.8Real Estate -19.1Mail svcs -18.7Utilities -18.5Agriculture -17.8Clothing -17.7Cosmetics -17.5Banks/Finance -16.4

Riding the 2000 radio revenue roller coaster

Radio came roaring out of the chute in 20U0, notching fabulous revenue gains over the record-

breaking results of 1999, as recorded on a monthly basis by the Radio Advertising Bureau.Numbers which just are not seen in these reports became commonplace, particularly on thenational side. Beginning in February, the West enjoyed a stringof gains in national business the like of which we have neverseen and do not expect to see again: 44%-48%-35%-49%. It isnothing less than astonishing when a monthly gain of 350clearly constitutes a slump!

Both local and national business peaked in May. Localbusiness at that point was up 18% for the year and national was35% ahead of the game.

The dot -corns, which had a large part in building theseincreases, have had just as large a part in bringing them to anend. However, although the outrageous gains of the first fivemonths came to a halt, radio business continued with stronggains through the summer. Monthly gains for June -July -Augustwere 14%-11%-10%, all built upon solid results in the bread-and-butter local category.

The following charts show regional monthly results for the year. Hats off for the Southwest.which alone has managed to put together an unbroken string of double-digit gains in localbusiness and which leads the country in YTD national business. -DS

Radio revenues: Totalbusiness % gain

Total YTDJan 20 20Feb 22 21Mar 21 21Apr 22 21May 25 22Jun 14 21Jul 11 19Aug 10 18Sep 3 16

Local revenue % gain

Total East SE MW SW WestJan 18 20 14 16 17 21Feb 17 20 12 12 18 21Mar 15 19 9 12 14 19Apr 19 20 16 21 14 21May 22 21 21 20 18 27Jun 14 17 10 9 10 20Jul 11 15 8 9 13 12Aug 11 10 10 10 18 12Sep 6 8 3 2 15 5YTD 15 16 11 12 15 17

National revenue % gain

Total East SE MW SW WestJan 25 34 15 16 30 25Feb 38 39 28 31 48 44Mar 40 44 33 28 41 48Apr 32 41 20 24 37 35May 38 35 36 27 40 49Jun 14 23 18 3 25 9Jul 9 17 12 1 7 5Aug 6 1 1 2 24 11Sep -6 -8 -8 -14 0 0YTD 20 23 16 11 27 23

Source Radio Advertising BureauSource Interep

6

.1!

The RAB's Annual

Advertiser Day Radio AdBiz

fr

c.

The Radio Advertising Bureau'srecent "Advertiser Day" meet-ing in Chicago featured pre-sentations from key advertis-ers in the industry as well as aroundtable discussion ofagency panelists regardingradio's future. Panelist ReynLeutz, SVP, Director of RadioNegotiations at Mindshare USA(previously Ogilvy and Matherand J. Walter Thompson's me-dia buying and planning de-partments), provides a reportfrom that meeting.

Driven by Radio

Mark Kaline, Global MediaManager of Ford Motor Com-pany, stressed that radio is criti-cal to Ford because of its abil-ity to connect with consumersone-on-one. He further high-lighted that Ford has embracedsatellite radio technology bypartnering with Sirius. Satelliteradio will be available in se-lected models some time nextYear.

When asked what hethought had changed in radioduring he past few years, Kalinevoiced some concern that therewere fewer personalities ontoday's airwaves than ten yearsago-particularly in Detroit.Kaline spoke of the ability ofradio personalities to attractloyal listeners, audiences cov-eted by advertisers like Ford.

In a word of advice to plan-ners, Kaline stressed the im-portance of making radio standout on a media flowchart. Whenthere is just a line that saysradio, it is often the first itemcut when there is a budgetreduction. Yet if the "radio"line was titled, "Summer Mar-ket Promotional Tour," it has abetter chance of remaining.

Clear Connections

Radio helps make Sprint PCSestablish clear connections ac-cording to Dave Dess, VP of

Marketing Communications forSprint. Dess spoke of thecompany's lead in the wirelessworld of phone communica-tion. He talked about radio'sunique ability to reach the verymobile Sprint consumer. Dessfurther looked forward to theday when his own companywould provide not only stockquotes, but wireless radiothrough Sprint mobile phones.

Come On Over

Sears is looking to attractyoung, hip consumers by team-ing up with both the BackstreetBoys and Christina Aguilerasaid David Selby, Senior VicePresident of Retail Marketingat Sears. Over the past twoyears, Sears has combined con-cert tour sponsorships withhighly focused radio promo-tions and in-store radio eventsto attract this young consumer.Selby said the company willembrace new technologiessuch as satellite radio and ra-dio delivered through the wire-less web. Selby also stressedthe critical importance of ra-

dio to drive Sears store traffic.Radio is a perfect medium forus said Selby, because it isvery close to the sale.

The Foxy dot -corns

Kaye Bentley, SVP of NationalMedia at Fox Broadcasting,talked of how she felt betrayedby stations who preempted Foxcommercials for other dot -cornbusiness. As a self -describedtrue believer in radio, Bentleywent on to speak of the powerof radio and its ability to suc-cessfully drive traffic to Foxprogramming.

The Agency Perspectiveof the 21st Century

After listening to client views,a group of panelists from. fourmajor agencies provided theirown views regarding radio'sfuture. Mary Hanley, SVP,Group Media Director at DDBChicago, spoke of radio's in-creased usage based onrecency theory. Phil Gerber,Director of Media Operationsat Euro RSCG Tatham, warned

the audience that increasedcommercial clutter could verywell hurt the business in fu-ture years. Kevin Gallagher,VP, Media Director of LocalInvestments at Starcomstressed his frustration thatradio competitive is nottracked with the same level ofreliability as television. This,he said, frequently representedan obstacle to some clients'usage of the medium. Andfinally, Reyn Leutz predictedthat car dashboards of the fu-ture would become verycrowded with the advent ofsatellite radio and the wirelessweb.

Reyn can be reached [email protected]

You better watch outfor holiday shoppers

The year-end holiday gift -buy-ing season is about to swinginto high gear, and with itsexcellent ratio of ad imprint topoint -of -purchase, radio shouldbe part of the media mix forretailers. Here, from the RadioAdvertising Bureau, is infor-mation on who is buying, whenand where.-DS

Family shoppersWomen 58%Men/women 20%Men 18%n/a 4%

When12/1-14 28%11/16-30 18%Throughout 18%12/15-24 13%11/24 90/0

12/24 80/0

Choice of venuePrice 40%Location 29%Selection 23%Service 8%

11/13/00 RBR www.rbr.com

Cox Radio launches

"CHRi" unit

Cox Radio unveiled a new unit,Cox Radio Interactive (OM), tohandle the group's new mediaopportunities, station websites andInternet spot inventory. Under thedirection of former President/COOof MP3radio.com Gregg Lindahl(who will serve as the unit's VP),OM will officially assume its rolein the company 1/01. Synergiesand a strategic relationship withCox Interactive Media will also beapplied in common markets. CoxInteractive builds and managescity site portals where Cox has anewspaper, cable, radio or TVpresence. Lindahl will report di-rectly to Cox Radio President/CEO Bob Neil.

Other hires for CRXi includeDirector of Sales DevelopmentCraig Hahn, Director of Opera-tions David Scott, Director ofTechnology Marie Matthews,Director of Site ServicesCraig Ashwood (all fromMP3radio.com) and Director ofSite Development Diane Hunter(former Cox Interactive Directorof Special Projects). Cox Interac-

" tive had owned a majority interestin MP3radio, but sold all but a 10%stake, ending the original jointventure relationship 4/14.

SurferNetwork.commerges with

BroadcastAmerica.com

The name of thecombined entity will beBroadcastAmerica.com withheadquarters in its currentPortland, ME offices.SurferNetwork.com (currentlybased in Mt. Olive, NJ) willsupply its targeted ad insertionand proprietary "FM -quality"streaming technology in the deal,along with a client list that in-cludes New Northwest Broadcast-ing, Nassau Broadcastingand Marathon Media.BroadcastAmerica has 750 stream-ing clients under contract and anumber of network alliances thatinclude OneOnOne Sports, TalkRadio Network and Superadio.

8

StreamingAmidst the joining of the two

companies, Broadcast Americais filing for Chapter 11

reorganization. The newBroadcast America boardincludes current BroadcastAmerica President John Brier,Chairman/CEO Alex Lauchlanand another to be named, Gor-don Bridge, Harry Emerson,Robert Landmesser and Will-iam Grywalski fromSurferNetwork. Bridge becomesthe new BroadcastAmerica CEO."We formally met each other atNAB in San Francisco and latermet in Portland, and as part of thatevent, we both realized we hadsomething really special in adreplacement and listening qualitytechnology," Bridge tells RBR. "Wesaw an opportunity to partnerwith somebody who had a lotmore experience and momentumin radio agreements than we had."

And as to the financials,Bridge says his backershave stepped forward first:"I think, influenced by thecurrent market conditions,BroadcastAmerica had run intodifficulties in continuing to raisemoney. And in fact, that's whatled their advisors to suggest goingthrough this reorganization pro-cess. Both companies are going togo out to their current investors aswell as new [ones], given thevalue proposition of the com-bined entity. It is true that our leadinvestor is the first to verballycommit to new [funding] in antici-pation [of that]."

The deal is expected to close in90-120 days, including and pend-ing upon the BroadcastAmericareorganization.

Slam Media allies withSonicbox, looking to ramp

up service

Slam Media, a software and mediacompany that recently launched anumber of unique formats, an-

nounced it has recently enteredan alliance with Sonicbox to beoffered on its IM Band network.Some of Slam's 30 formats in-clude "Modern A Capella," "World

Intensity," a mix of many styles ofworld music and "Resonant Ra-dio," a blend of Hip -Hop andElectronica. Sonicbox manufac-tures wireless Internet radio tun-ers that allow Internet radio to betransmitted over wireless signalsto home stereo receivers orboomboxes.

Slam is currently working onother alliances that will enablecontent and targeted ad insertionon its own site, as well as others."We're trying to get creative andlook outside the radio markets,because it seems like people al-ready have the 'free service tostream your radio station' kind ofalready wrapped up. So we'vecreated a couple of different prod-ucts, from software to what wecall a 'Slam Stack,' a total servingpackage for people who want todo streaming media up to 1,000streams," President BretCoffmann tells RBR. "Right now,we're working feverishly tryingto complete our business alli-ances-with a national sales repfirm, we've been talking toMediaAmerica; we've been talk-ing with the SpotTaxi people; AdOutlet and Lightningcast, tryingto figure out a really pure spotdelivery system.

StreamAudio signs 600thaffiliate; surpasses

BroadcastAmerica.com

Seattle -based StreamAudio, whichsupplies streaming audio for ra-dio websites, announced 11/3Shamrock Communications'WQFM Wilkes-Barre/Scrantonhas signed on as the 600th affili-ate. StreamAudio says it is nowthe largest radio streaming opera-tion in the world, providing over860,000 hours of streaming radio

www rbr com

by Carl Marcucci

in October with the average lis-tener spending 55 minutesper session. StreamAudio VP Salesand Marketing Tom O'Connortells RBI? the company has sur-passed I3roadcastAmerica.com'stop slot (700,000 in October) inhours of listening, rather thannumber of streaming clients.

He adds: "We have added an-other feature, the 'Station Man-ager.' It's software where peoplecan go to our website, type in thecall letters, put in their code andthey can pull up real-time mea-surements-the number ofstreaming listeners and time spenttuning."

Other StreamAudio radio cli-ents include Clear Channel,Entercom, Infinity [a couple ofside format channels in Portland],Jefferson -Pilot, Hispanic Broad-casting, Saga, Zimmer, Sandusky,Mega, Big City Radio, Radio Unica,Delmarva, Midwest Television andSunburst.

Coollink signs withMicrosoft for Windows

Media technology

Coollink Broadcast Network(CLBN), a turnkey streaming so-lutions provider for webcastersannounced 10/31 a relationshipwith Microsoft for optimizing itsstreaming technology. The dealincludes CLBN officially choos-ing Microsoft Windows Media asits preferred digital media plat-form and deploying the Win-dows media player across theCLBN network. In addition,Microsoft will work with CLBN insupporting the development ofCLBN's interactive and synchro-nized rich media targeted ad in-sertion technology.

CLBN has agreements withCitadel and Hispanic Broadcast-ing to stream more than 180 sta-tions and has partnerships withAkamai, Foundry Networks andNext Audit.

11/13/00 RBR

RBR Radio Partners

AudioVAULT Technology for Internet Radio!

WWW.AudioVAULT.COM8.232.32.8

WEVAULT

DIGITAL

In a move designed to helpbusy executives keep upwith the fast -changing radiobusiness, Radio BusinessReport in the Spring of 2000became the first radio tradepublication to launch anInternet radio station." Ra-dio news is breaking at an

1/13/00 REifi

RBR Radio

Streamingon Mum

Tune in to hear Valerie Geller; Pat Clarke with Americom; Bob & Shed;John Pedlow with Broadcast Electronics; George Bundy with BRS Media;Montie Montana with Buffalo Bill's Wild West Show; Tom Palmer withConvergedMedia Inc.; Michael Peterson with CoolLink; Robin Wang withDalet; Jeffrey W. Gaus with E Fusion; Don Backus with Enco; AndyMcClure and Dean LeGras with Exline; Lawrence Norjean with FMiTV;Charlie Whitaker with Forever Young; Ron Rivlin with HiWire; Bob Strublewith iBiquity; Ralph Guild with Interep; Tony Garcia with Jefferson Pilot;Tom Des Jardins with Lightningcast; Doug Fabian with Maverick Invest-ing; Glen Hamilton with MSM; Eddie Fritts with NAB; Judith Brenna withNassau Broadcasting; Birendra M. Roy with NetMedia; Kraig Kitchin withPremiere; Kevin and Jackie Lockhart with Prophet Systems Innovations;Gary Fries with RAB; Phillipe Generali with RCS; Dave Scott with ScottStudios; David Oxenford and Frank Montero with Shaw Pittman; JohnBrooks with Silicon Valley Bank; Joel Hartstone with Siteshell; Peter Barnesand Vince Werner with Spot Taxi.com; Dave Adams with Spot Traffic;Gordon Bridge with SurferNetwork.com; John Kaiser with Trafficstation;Jeff Kimmel and Pete D'Acosta with Wicks Broadcast Solutions; Elliot Kanbarwith Wild about Broadway; and Michael Zwerling with ZBS Radio.

incredibly fast pace and justcan't wait for the morningfaxes," said Ken Lee, Asso-ciate Publisher and GeneralManager.

In addition to postingnews on its Web site,www.rbr.com, RBR is alsostreaming 24 hours a day.The "format" consists of a

newscast of radio -specificbusiness and industry news,interviews and commentar-ies, plus classic radio bits,jingles and Mercury Award-winning spots (with realpaid spots to come). Veterannewscaster Jack Messmer,now Executive Editor ofRBR, is back behind themike for the audio updates.

www.rbr.com

The new RBR Web "radiostation" is still early in itsdevelopment and radio ex-ecutives are encouragedto provide input on whatthey'd like to hear. (Pleasedon't ask for Britney Spears,though!) You may [email protected] we can build the radiostation you want.

"Another excitingaspect of the Internetradio station for RBRis that we can nowoffer advertisers across -platform ve-hicle to help tomarket their prod-ucts," noted Lee.

"Advertisers can now run au-dio spots on our Internet radiostation, bundled with bannermessages on the www.rbr.comweb site, along with click -

through messages on our dailyemail service, plus traditionaladvertising with Radio BusinessReport and MBR."

What did the 2"" Session of the106" Congress and Y21( FCC do for

broadcasters?

by Elisabeth Derewitz

Let's WI lett There's been the battle overLIT\ new F.E0 rules and flip-floppingpersonal attack regulations. Most of theissues .ire not resolved, but have madesome progress, Get ready to travel back intime to find out what has happened in a R.:isof concern to broadcasters, and whewthings now stands at the inception of a newadministration.

LPFM

You love it, or you hate it. If you love it, youreally love it and if you hate it, you really,really hate it. That's the main gist of theentire battle. It began as the brainchild ofFCC Chairman Bill Kennard and turnedinto one of the biggest headaches for allbroadcasters and Congress as well. The USDistrict Court was even involved in themelee. Here is a timeline summary of theaction in the entire LPFM boxing ring.

In the first corner,the FCC

January 28, 1999: NPRM adoptedFebruary 3, 1999: NPRM released -com-ment date set for April 12, J999; reply dateset for May 12, 1999March 19, 1999: comment and reply datesextended to June 1 and July 1 respectivelyMay 20, 1999: comment and reply datesextended to Aug. 2 and Sept. 1 respectivelyAugust 31, 1999: reply date extended toSept. 17September 17, 1999: reply date extendedto Nov. 5January 20, 2000: FCC approves LPFM atmonthly meetingMarch 17, 2000: FCC releases filing win-dow scheduleMay 20- June 8, 2000: First filing windowAugust 28- Sept. 1, 2000: Second filingwindowSept. 22, 2000: FCC amends LPFM order torequire 3"' adjacent channel protection forreading services

In the second corner,the House of Representatives

November 17, 1999: Rep. Mike Oxley (R -OH) introduced Radio Broadk. .sting Preser-vation Act of 1999 in House (HR 3439) toeliminate LPFMFebruary 17, 2000: House Telecommuni-

10

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In the third corner,the US Senate

February 10, 2000: Sen. Judd Gregg(R -NH) introduces S 2068 (identical tooriginal HR 3439)May 8, 2000: Sen. John McCain (R -AZ) introduced FM Radio Act of 2000 (S2518 a pro-LPFM bill)September 7, 2000: Sen. Rod Grams(R -MN) introduces S 3020 ( identical toamended HR 3439)October 2, 2000: 51 Senators co-spon-sor either Gregg or Grams billOctober 25, 2000: 56 Senators co-sponsors signedOctober 26, 2000: Grams' bill attachedto appropriations bill for the Depart-ments of State, Justice and Commerce,Presidential veto threatenedNovember 2, 2000: Congress ad-journed until November 14

And in the fourth corner,the US District Court

February 16, 2000: NAB files a suit in theDC District Court to end LPFMFebruary 25, 2000: Greg Ruggiero filessuit against FCC in the 2nd circuit to elimi-nate automatic disqualification policy forpirate broadcastersMarch 3, 2000: 48 state associations file amotion to intervene on behalf of NABMarch 8, 2000: NAB and Ruggiero caseconsolidated in the DC US Court of Ap-pealsMarch 10, 2000: All 50 states plus theSouthern California Broadcasters supportNABMarch 16, 2000: Religious groups (UCC etal) file motion to intervene in support ofFCCMay 1, 2000: Court sets November 28 fororal argumentsJuly 7, 2000: NAB and Ruggiero file briefsAugust 11, 2000: FCC files response briefsto NABAugust 25, 2000: Churches in support ofFCC file briefsSeptember 8, 2000: NAB and Ruggiero

www rbr corn

1114 II.H\ kirkStplcmber 29, 2000 I Iu.1I 1.11.-1.. bled

Nove111lwr214,20(X)

EEO: A brief overview of anot -so -brief issue

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neW I I O 1111c,,, hop dhoping io cu' thetears that the former F.Ij) rules .ire uncon-stitutional. The new rules took etteu on

April 17, 2000. The changes are in therequirements, bookkeeping and cnI( ffec-

ment. The new requirements for IT° le -quire that "broadcasters and cable entitieswidely disseminate information about jobopenings to ensure that all qualified appli-cants, including minorities and women,have sufficient opportunities to competefor jobs in the broadcast and cable indus-tries."

There are two additions referred to as"Option A" and "Option B." In Option A,broadcasters are required to use two supple-mental recruitment means. First, the rulesrequire notification of the agencies thatrequest information on job vacancies, pro-vided that they distribute this informationand refers job seekers to the job vacancies.The second new measure requires broad-casters to participate in non-traditional re-cruiting such as job fairs and interactionwith community groups, over a two-yearperiod.

Option B is for broadcasters who feelthat they can do all of the things required inOption A by other means. This is acceptableas long as the broadcasters show, throughdata, that it reached all sections of thecommunity.

The record keeping section requires sta-tions with five or more full-time employeesto annually file EEO reports to he held intheir public files. They also require thefiling of a "Statement of Compliance" to hefiled every two, four and six years of thelicensing term. An "Annual EmploymentReport" must also be filed so that the FCCcan prepare reports to Congress. The newrules reinstate the "Broadcast Equal Em-ployment Opportunity Program Report,"filed with any renewal application. The"Model EEO Program" has also been rein-stated as part of the applications for aconstruction permit, assignment or transfer.

The enforcement section also allows theFCC to conduct random EEO compliancechecks as well as random audits. Stationswill either receive a certificate of compli-ance or be informed that they are not

11/13/00 RBR

2000 Washington Wrap-upcertified in the given year. Violations fornoncompliance are "admonishments, re-porting conditions, forfeitures, short-termrenewal of license or designation for hear-ing for possible revocation of license ordenial of renewal."

RBR has found that the majority of com-plaints about these new rules are that theycreate an enormous amount of paperworkand filing for broadcasters who are alreadytoo busy. The rules are also upsetting thebroadcasters who feel that they already goabove and beyond to recruit a diverseworkplace.

Personal attack andpolitical editorial rules

Even though the FCC stopped enforcing theFairness Doctrine in 1987, the personalattack and political editorial rules remaineduntil very recently. After years of banteringand continued deadlocks, the personal at-tack and political editorial rules officially bitthe dust on 10/11/00, stuck down in afederal appeals court (RBR 10/16, p.1).Despite FCC Chairman Bill Kennard's sup-port for the rules, the Court decided that theNAB and RTNDA were right in their questto rid the broadcasting world of theseoutdated rules. Both Eddie Fritts, Presi-dent/CEO of the NAB and BarbaraCochran, President of the RTNDA, calledthe Court ruling a victory for First Amend-ment rights. The actual repeal was an-nounced by the FCC as the last item in theDaily Digest on October 27th.

Digital Televisioni Since RBR is a radio publication, we haven't

reported very much on the impending switchfor television broadcasters from analog to

. digital signals. However, since it is a hot' topic in the broadcasting world, it's worth a

mention. Television stations were givenadditional spectrum to begin broadcastingin DTV and as of 12/31/06, they are re-quired to give up either their analog ordigital signals. The FCC hopes that all

1 broadcasters will give back the analog sig-n nals so that they can be reauctioned. Since

only a handful of DTV sets have been soldI, in the U.S., broadcasters are apprehensive

about going ahead with the switch. Accord-,ing to the NAB website, 160 stations in 55

markets were broadcasting in digital as of11/2. As far as the number of DTV sets sold?We would venture to guess that the numberof sets is close to the number ofstations...quite a discouraging ratio. Thecost of a DTV set now is around $2K -$4K,still too high for the majority of consumers.

Issues discussed,but saw no action

The issue of bringing back the minority taxcertificate was brought up many times inspeeches through out the year. For ex-ample, Rev. Jesse Jackson spoke to theNational Association of Black Owned Broad-casters conference (RBR9/25 p.6) asking forits revival. At the Black Broadcasters Alli-ance conference, (RBR 9/18 p. 4), a panelconsisting of broadcasting leaders such asRoNita Hawes -Saunders, President andGM of Hawes -Saunders Broadcast Proper-ties Inc., and Lindy Richman, Director ofCorporate and Community Development ofEmmis Communications discussed its re-turn. However, the issue has evaded thefront lines.

Other issues discussed were the newspa-per/broadcast cross -ownership rules, as wellas broadcast ownership rules. In a speechgiven by FCC Chairman Bill Kennard at theNABOB conference (RBR 9 /18 p.3), he wasseeking support for an NPRM to revise thelocal ownership limits adopted by Congressin the 1996 Telecommunications Act, whichwas to be released shortly thereafter. RoyStewart, the FCC's Mass Media BureauChief told a panel at the NAB Radio Show inSan Francisco that the NPRM had beendrafted and given to the commissioners.Chairman Kennard had said he wanted tomove quickly on the issue but he needsagreement from other Commissioners onwhat exactly to address so the NPRM has yetto make a public appearance. The cross -ownership rules are not quite as lucky. Theyhave really seen no action at all!

So there you have it. This session ofCongress and FCC have caused some majorheadaches for the broadcasting world. Itleaves many broadcasters asking why thereis so much more regulation for broadcastingthan for any other agency or medium in theU.S. today.

Text of Sen. Rod Grams' billS3020

Radio Broadcasting PreservationAct of 2000 Directs the FederalCommunications Commission(FCC) to modify its rules authoriz-ing the operation of low -power FMradio stations to: (1) prescribe mini-mum distance separations for third -adjacent channels (as well as co -channels and first- and second -adjacent channels); and (2) pro-hibit any applicant from obtaininga low -power FM license if suchapplicant has engaged in the unli-censed operation of any radio sta-tion in violation of FCC radio li-censing requirements. Prohibits the FCC, without spe-cific authorization by Congress,from: (1) eliminating or reducingsuch minimum distance separa-tions for third -adjacent channels;or (2) extending the eligibility forlow -power FM stations beyondthose organizations and entitiesproposed in MM Docket No. 99-25. Invalidates any previously issuedlow -power FM station license thatdoes not comply with such rulemodifications. Directs the FCC to conduct anexperimental program to testwhether low- power FM stations willresult in harmful interference to ex-isting FM radio stations if such sta-tions are not subject to the mini-mum distance separation require-ments. Requires the FCC to: (1)publish test results and allow anopportunity for public comment;and (2) report test results and FCCrecommendations on reducing oreliminating minimum distance stan-dards to specified congressionalcommittees.Source: Library of Congress

Keep yourself upto date

rbr.com11/13/00 RBR www.rbr.com 11

Radio One

Networks soldRadio One Networks has signeda letter of intent to be acquiredby Getgo Inc. (O:GTGO) in adeal worth more than $6M.

Denver -based Getgo intendson leveraging the technologiesof Radio One, a provider anddistributor of 24 hour voice -tracked formats, radio spots and

proprietary satellite and Internetaudio broadcast technologies.

"{The] large increase in au-dio consumption by Internetand Intranet users makes au-dio content production anddistribution a critical place tobe for any company interestedin the 'convergence technol-ogy play,- said DerrinSmith, CEO of Getgo.

Radio One Networks is notrelated to the Radio One.

A(O:ROIA) radio group.-CM --

Media Markets a MoneyViacom buys BET for $3B

Just a day after the previous issueof RBR went to press, Viacom(N:VIA) turned the rumors (RBR11/6, p. 3) into reality. It is buyingBET Holdings for $3B. No cash ischanging hands. BET will be pur-chased for Viacom non -votingClass B (N:VIAb) stock and debtassumption. BET founder BobJohnson will stay on as Chair-man and CEO to run the cable TVnetwork which targets the Afri-can -American audience. He'll re-port directly to Viacom Presi-dent/COO Mel Karmazin.

Although Johnson said a yearago (RBR11/1/99, p. 12) that BETwould buy stations to launch itsown radio group, BET was not a

successful bidder in the ClearChannel (N:CCU)-AMFM mergerspin-off derby and never boughta single station. To date, BET'sonly radio operation is a pro-gramming interest in two chan-nels planned for XM SatelliteRadio (O:XMSR), one Urban ACand one Jazz.

Even so, synergy with radio isone of the things that attractedKarmazin and Viacom CEOSumner Redstone to BET. In aconference call with analysts andreporters, Karmazin spoke of howwell BET's cable operationswould fit with other units ofViacom, including Infinity's(N:INF) Urban radio stations andbillboard assets. "It's a great op -

PATRICK COMMUNICATIONS

Station BrokerageDebt & Equity Placement

Fair Market & Asset Appraisals

Larry PatrickPresident

Susan PatrickExecutive Vice President

Terry GreenwoodVice President

Greg GuyVice President

(410) 740-0250, www.patcomm.com

by Jack Messmer

portunity to do some cross -sell-ing," he noted. Karmazin alsosuggested that BET would beable to draw on CBS News re-sources, along with the obviousprogramming opportunities withViacom -owned UPN.

Although Redstone said hewould have been happy to paycash for BET, no cash will changehands and Johnson will becomethe owner of about $1.5B inViacom stock-terms he insistedon. The merger into Viacom willconsist of $575M in debt assump-tion and $2.425B in non -votingClass B (N:VIAb) Viacom stock.The number of shares to bedelivered to BET owners BobJohnson and Liberty Media Corp.(O:LMGA) will be determined by aformula based on trading 20 daysprior to the deal closing.

UBS Warburg (formerlyPaineWebber) analyst ChrisDixon estimates that BET willadd approximately $150M in cashflow to Viacom in 2001, makingthe multiple on this deal 20X.Dixon calls it "a great strategicacquisition" since African -Ameri-cans comprise 13% of the USpopulation, but ads directed spe-cifically at African -Americansamount to only 1% of total adspending.

KFSG sold forrecord -breaking $250N1

It's the highest price ever paid foran LA radio station, the secondhighest price ever paid for asingle station and the most for a"stick" anywhere. RaulAlarcon'sSpanish Broadcasting System(O:SBSA) is paying $250M incash for KFSG-FM Los Angeles.The seller of the 96.3 mHz, 54kwfacility is The International Churchof the Foursquare Gospel, whichsold its only other stations (acombo in Bakersfield, CA) fouryears ago. Dr. Paul Risser saysthe church, which got into broad-casting back in the 1920s, is still

12 www rbr com 11/13/00 RBR

interested in broadcasting programs in LA,but decided that selling the valuable signalwould allow the church to make more effi-cient use of its resources. The sale wasbrokered by Randy George of Sterling Asso-ciates.

RBR observation: We're surprised it tookthis long for an LA FM to break the $200Mharrier. Alarcon had to step up to the plate, orcede dominance in the nation's largest His-panic market to Hispanic Broadcasting Corp.(N:HSP). Even so, he's put a lot on the lineand Wall Street will be watching closely to seeif he and Programming VP Bill Tanner canlaunch a new Spanish format and movequickly into positive cash flow.

Beasley re -negotiating CentennialBeasley Broadcast Group (O:BBGI) says itwon't purchase Centennial's six Las Vegasand New Orleans stations for $138M asoriginally planned (RBR 6/12, p. 6). "Eventsand valuations conspired to make this dealuntenable as originally negotiated," CEOGeorge Beasley said in a conference callwith Wall Street analysts. Beasley still hopesto renegotiate the deal and have both thestations and Centennial head Alen Shawbecome part of his company, but says hewon't overextend to do so.

Meanwhile, Beasley Broadcast Group re-ported that Q3 net revenues rose 15.3% to$28M and broadcast cash flow gained 51.2%to $9.2M. On a same -stations basis, Beasleysaid revenues were up 9.1% and cash flow32.7%. For Q4, the company is expecting tolose $1.4M in revenues from its 11/6 formatflip of WWDB-FM Philadelphia from Talk to80s Hits, although Beasley says the newformat should be positive for the company inthe second half of 2001. The company isforecasting overall revenue growth of 4-6% inQ4 and 7-9N, in 2001.

Urban Radio returnsRemember Urban Radio II was one of theminority -owned companies which was tohave bought stations from the Clear Channel(N:CCU)-AMFM merger spinoffs (RBR 3/1,

p. 7). However, Urban Radio, headed byKevin Wagner, didn't get to a final contracton its proposed buy of WMEZ-FM & WXBM-FM Pensacola, FL and the stations wereeventually sold to Pamal Broadcasting for$43.95M (RBR 10/2, p. 13). Now Wagner hasfiled at the FCC to buy WMSU-FM Starkville,MS from Charisma Broadcasting for $360K.Charisma owner Donald DePriest has a dealpending to sell his other five Columbus -Starkville, MS stations to Cumulus Media(O:CMLS), which in turn has given ClearChannel (N:CCU) an option to buy them andtwo other stations in the area for $6M (RBR9/18, p. 24). A related story appears on page 3.

Regent divestingin the desert

Mark Jorgenson's Concord Media Group isbuying three Lancaster -Palmdale, CA stationsfrom Regent Communications (O:RGCI) for$13.5M. The trio is KVOY-AM, KTPI-FM &KOSS-FM, licensed to Mojave and Tehachapi."This completes our strategic plan to divestour Southern California clusters and to ac-quire radio stations in the larger markets ofAlbany, NY and Grand Rapids, MI," saidRegent CEO TerryJacobs. Regent had tradedits Victorville-Apple Valley stations to ClearChannel (N:CCU) as part of a $92M cash/swap deal (RBR 6/19, p. 13) which includedthose Albany and Grand Rapids stations.

Regent up double& triple digits

Q3 net revenues rose 76% for Regent Com-munications (O:RGCI) to $11.7M. Broadcastcash flow was up 119% to $3.7M. On a proforma same -station basis (stations operatedin Q3 of both years), Regent said revenuewere up 11.7% and cash flow 25.9%. "We didnotice a slight slowdown [in national adver-tising] in late September, but nothing major,"said President Bill Stakelin. He said Regentwas able to overcome that with local sales.Chairman and CEO TerryJacobs noted thatwith its middle -market focus, Regent is drivenprimarily by local advertising and is "not

The RadioIndex['he Radio IndexImwas as indecisive asthe electorate, slipping0.075 for the week toclose 11/8 at 147.395.

160

140

120

100

Radio Business Report'Voice Of The Radio Broadcasting indusirli

CLOSED!

Six FM and Three AMStations

serving greaterChicago

fromPride

Communications, LLCto

NextMedia Group, LLCfor

$56,200,000.

Elliot Eversrepresented Pride.

CHARLES E. GIDDENS941.514-3375

ELLIOT B. EVERS415.391-4877

BRIAN E. COBB202.478-3737

TELECOM GROUP

GREG D. WIDROEJASON D. HILL415.391-4877

RADIO TELEVISION TELECOMM&A INVESTMENT BANKING

MEDIA VENTUREPARTNERS

10/18 10/25 11/1 11/8

1/13/00 RBR www rbr corn 13

The deals listedbelow weretaken fromrecent FCCfilings.

Transaction Digest

KnowledgeableConfidential

Brokerage Services

JorgensonBroadcasts Brokerage

Mark Jorgenson Peter Mieuli(813) 926-9260 (408) 996-0496

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HAMMETT & EDISON, INC.CONSULTING ENGINEERSRADIO AND TELEVISION

Serving the broadcast industry since 1952...

Box 280068 San Francisco 94128

HE707/996-5200202/396-5200

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TheDeerRiverGroup

by Dave Sayler & Jack Messmer

RBR's Transaction Digest reports on all deals that involve assignment of astation license (FCC Form 314) and substantial transfers of control of alicensee via a stock sale (FCC Form 315), but not internal corporaterestructurings (FCC Form 316). All deals are listed in descending order ofsales price.

$80,000,000 KLTY-FM orth(I lighland Village 'IX) and KPXI-FM TylerLongview TX (Overton TX) from InspirationMedia of Texas Inc. (Ed Atsinger, StuartEpperson), a subsidiary of Salem Communi-cations (O:SALM), to Sunburst Dallas LP, asubsidiary of Sunburst Media (John Borders,Don Turner, M/C Partners). Tax-free ex-change for KDGE-FM (below). Value esti-mated by RBR. Duopoly in Dallas -Ft. Worthwith KSKY-AM & KWRD-FM. Note: BothKLTY & KPXI are on 100.7 mHz.

$80,000,000 KDGE-FM Dallas -Ft. Worth(Gainesville TX) from Sunburst Dallas LP, asubsidiary of Sunburst Media (John Borders,Don Turner, M/C Partners), to InspirationMedia of Texas Inc. (Ed Atsinger, StuartEpperson), a subsidiary of Salem Communi-cations (O:SALM). Tax-free exchange forKLTY-FM & KPXI-FM (above). Value esti-mated by RBR.

$32,000,000 WMVO-AM, WNCO-AM & FM,WQIO-FM, WBZW-FM, WGLN-FM &WWBK-FM Ashland -Mount Vernon-Loudonville-Galion-Fredericktown OH fromAshland Broadcasting Corp. (Walter & DeanStampfli) to Clear Channel Broadcasting Li-censes Inc. (Lowry Mays), a subsidiary ofClear Channel Communications (N:CCU).$1.6M escrow, balance in cash at closing.Chain superduopolies with WMAN-AM,WYHT-FM & WSWR-FM Mansfield -ShelbyOH, WMRN-AM & FM Marion OH, WTVN-AM & WNCI-FM Columbus OH and WTAM-AM Cleveland OH. LMA since 10/1. Broker:Jorgenson Broadcast Brokerage

$7,000,000 WYAI-FM Atlanta (Bowdon, GA)from WYAI Inc. (Steven Gradick) to ClearChannel Broadcasting licenses Inc. (Lowry Mays),a subsidiary of Clear Channel Communications(N:CCU). $7M cash. Chain superduopolieswith WCOH-AM, WGST-AM & FM, WMKJ-FM,WKLS-FM & WPCH-FM in the Atlanta market,plus WGSE-AM & WMAX-FM Hogansville GA.Note: WYAI has a CP to upgrade from Class Ato Cl, which will give it city -grade coverage ofsouthwestern portions of Atlanta.

www rbr corn

$6,000,000 KGMS-FM )1) AZ (Civil)Valley AZ) from Good Music Inc. (DouglasMartin) to Capstar TX LP (Lowry Mays), asubsidiary of Clear Channel Communica-tions (N:CCU). $250K escrow, $2.9M (lessescrow) in cash at closing, plus swap ofKCEE-AM (below). Total value estimated byRBR. Superduopoly v ill) KNST-AM, KRQQ-FM & FM. Broker: Kalil & Co.

$3,100,000 KCEE-AM Tucson AZ fromCapstar TX LP (Lowry Mays), a subsidiary ofClear Channel Communications (N:CCU), toGood Music Inc. (Douglas Martin). Swap aspartial payment for KGMS-FM (above). Valueestimated by RBR. Duopoly with KVOI-AM.Broker: Kalil & Co.

$2,335,500 WKBH-FM La Crosse WI (WestSalem WI) from DN Communications Inc.(Patrick Delaney, Lee Norman) to Missis-sippi Valley Broadcasters LLC (Howard Bill,Kenneth Ramsey, Pat Smith). $50K escrow,$1,835,500 (less escro\\ ) in cash at closing,$500K note. Superduopoly with WLFN-AM, WQCC-FM. LX1(-1. \I & KQEG-FM.

$700,000 KMSR-FM Sauk Centre MN fromMain Street Broadcasting Inc. (John Linder)to BDI Broadcasting Inc. (Louis Buron Jr.).$35K escrow, $200K (less escrow) in cash atclosing, $500K note. Duopoly with KIKV-FM Alexandria MN.

$410,000 WGTA-AM Summerville GA fromTrA Broadcasting Inc. (Erie Newton) toAzteca Communications Inc. (Javier Macias).$20K escrow, additional $290K in cash atclosing, $100K note. Broker: Media ServicesGroup

$160,000 WEVA-AM Emporia VA from StoneBroadcasting Corp. (Willis Stone) to ColonialMedia Corp. ( James Vautrot, I. WayneCooper, George Sperry Jr.). $15K excrow,balance in cash at closing. Broker: MediaServices Group

more transactions @ rbr.com

Letter to RadioBusiness Report

WCLV's GM gives histake on swapping

signals

In your item about the three-way swap in Cleveland (RBR11/6, p. 13), it's hardly accu-rate of you to guess that theresult of the deal is the "dis-placement" of the Classicalformat we've had for 38 years.To the contrary, the entireidea was the preservation ofthe format in the form of a giftof the FM to a not -for-profitfoundation.

The Class A we're tradingfor-WAKS-FM, licensed toLorain, OH-has achieved 3+Metro shares in every recentbook. When it is upgraded(CP issued; constructionabout to begin), Longley-Ricepropagation studies shownearly a doubling of popula-tion coverage after the nine -mile move -in and the B1 up-grade. At that point, WAKSwill reach 1.6M within the five -county Metro, while WCLV'scurrent map shows 1.7M cov-erage today.

. It's our estimate that, fol-lowing the swap, about 90%of WCLV's existing audiencewill have at least as solid asignal from us as they havetoday. The additional signalfrom WCLV-AM-a fulltime5kw Class II, not some weakdaytimer-is simply to fill in

for the lost coverage, mostlyin the northeast of the Metroin Lake County and in Geauga(out of Metro) County. Over-all, we expect our numbers toremain constant-or perhapsslightly higher. Hardly a trash-ing of our technical coverageby any measure, I'm sure you'llagree. And hardly a "dis-placement" of our heritageformat. Just thought you oughtto have the whole story. I'mnot looking for more ink.Rich Marschner,General Manager, WCLV

11/13/00 RBR

Find up to dateindustry news

@ rbr.com

Media II arkets & Moneydependent on national advertis-ing or on the presence or ab-sence of dot -corn advertising."

Regent also reported that ithas completed about $4M inbuybacks of its own stock, or768,400 shares. The companyannounced in June that its boardof directors had authorized up to$10M in stock buybacks.

Looking to Q4, Regent said itscurrent pacings indicate that Q4revenues should come in around$13.5M and broadcast cash flowin a range of $4.4M to $4.6M. Ona same station basis, that wouldbe revenue growth of 12-13%and cash flow growth of 25-30%.

CCU adds in Yakima

Clear Channel (N:CCU) has LMA'dKREW-FM Naches, WA and filedat the FCC to buy the station fromButterfield Broadcasting Corp. for$1.3M. That would give ClearChannel a fourth FM and sixthstation in the Yakima, WA mar-ket.

"The Jock" gets religionA call letter change is likely asChrist the King Communicationsbuys Sports WJOK-AM "The Jock"in the Appleton -Oshkosh, WI mar-ket. The non-profit organizationis headed by President john Cavilof Green Bay. Seller Lyle Evanswill be paid $500K for the 1050kHz signal. An LMA will begin11/25.

Salem reports growthSalem Communications (O:SALM)says Q3 net revenues rose 28.2%to $27.7M. Broadcast cash flowgained 15.4% to $12M. On asame -station basis, revenues rose13%, but cash flow only 7%.Salem said the same -station cashflow result was negatively im-pacted by "reduced operatingefficiancies" in L.A., ColoradoSprings and Houston due to sta-tion sales. Excluding those mar-

kets, the company said its same -station cash flow would haveincreased 12%. Reshuffling its sta-tion portfolio also impactedSalem's broadcast cash flow mar-gin, which dropped to 43.3%from 48.1%. The company saidthat margin should improve againas it integrates recently acquiredstations into its existing clusters.

Looking to Q4, Salem said toexpect net revenues of $33M andBCF of $16M. The nation's largestcommercial Religious radio groupsaid October produced same sta-tion revenue growth of 15% andNovember was already 8% aheadwith four weeks to go.

More on ClevelandSalem Communications (O:SALM)has revealed some more detailsof its station swap in Cleveland(RBR 11/6, p. 13). Salem's cashpayment to Seaway Radio will be$10.5M. Salem will be getting thesuperior signal of WCLV-FM,while trading away WHK-FM toClear Channel (N:CCU) and WHK-AM to Seaway. Clear Channel willdeal WAKS-FM to Seaway.

RBR observation: A responseto RBRs 11/6 story from WCLVGM Rich Marschner appears atleft. While strictly speaking, WCLVis being "displaced" from its long -held dial position, Marschner pro-vides interesting details of theplan to swap, upgrade and main-tain the heritage Classical format.

ABC Radio helps DisneyThe ABC Radio stations and ABCRadio Networks, along with theABC TV O&O stations, were men-tioned by Disney (N:DIS) Presi-dent Bob Iger 11/9 as having"performed beyond expectations"in Q3. Disney blew away WallStreet expectations that it wouldpost net earnings of seven centsper share, compared to eight centsa year ago. In fact, Disney reported11 cents.

Even so, Disney's stock pricefell after Iger and CEO MichaelEisner acknowledged that ABCwas seeing some softness in adsales for Q4, but insisted that growthwas continuing nonetheless. 'Wedon't see this dismal looking futurethat people are talking about, be-yond this momentary softness,"Eisner said.

RBR observation: Negativismabout Disney and Fox Entertain-ment (N:FOX) sent all media stocks,induding radio, plunging again 11/9as RBRwent to press. Investors don'tseem to get it. Most radio stocks were

already priced well below levels thatwould be justified by even the mostpessimistic projections.

Hispanic shares fallHispanic Broadcasting Corp.(N:HSP) saw its stock pricedrop more than 12% on 11/3to $32.50, despite announc-ing strong Q3 results the pre-vious evening. Several ana-lysts cut their ratings on HBC,citing expectations of slowergrowth in Q4. For Q3, HBChad reported net revenuegrowth of 23.9% to $64.9M.After-tax cash flow gained24.1% to $23.7M.

DG reaches positivenet income

Scott Ginsburg can put awayhis red Bic. DG Systems(O:DGIT) moved into posi-tive net income in Q3, post-ing earnings of $739K on thebottom line, compared to anet loss of $1.8M a year ago.Revenues rose 13% to $13.8Mand EBITDA shot up 400% to$2.6M. DG Systems distrib-utes digital audio and videospots and other content toabout 7.5K radio stations and8K TV stations in the US andCanada.

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