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Radio Business ReportVoice Of The Radio Broadcasting Industry®
January 22, 2001 Volume 18, Issue 4
AMERICANURBANRADIONETWORKS
THE URBANRADIO LEADER
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NETWORKS
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RADIO NEWS
Bill Kennard out to pasture 2
The now former FCC Chairman is headed for the Aspen
Institute. For now, the FCC chair is just another empty seat.
S&P 500 index left radio behind in 2000 2
Commerce study: Minority ownership up, but not much 2
Hispanic Radio Net (not HBC) links with Big City 2
Virtual wedding results in OneMediaPassage 3
Dues are on holiday at the NAB 3
ADMA merges into DMA 5
Love thine enemy: a Raff riff on the Yellow Pages 6
QUARTELY STOCKS
Y2K on Wall Street: It wasn't pretty
STATION PROFILES
8-10
Wakin' up Waco at KWH-FM 11
MEDIA MARKETS se MONEY
New gatekeeper pays S2B for the Citadel fortress 12
In a move that will essentially take Citadel's battered stock off
the market, Forstmann Little has bought all of it at $26 per share.
Shockley to watch over Duluth for buyer Northern 13
Indianapolis: Emmis concedes Urban to Radio One 13
Boston: Salem, Clear Channel buy on the senior band 14
New EEO rules
struck down
In a final farewell toFCC Chairman WilliamKennard, the US Court ofAppeals for the District ofColumbia once again struckdown the FCC's EEO rules.This is the second time thatthe EEO rules were declaredunconstitutional.
In 1998, the 30 -year -oldrules were thrown out.Kennard led the charge tobring back new rules whichwere passed in late 1999 andimplemented last year-de-spite protests from broadcast-ers that the new rules werejust as flawed as the old ones.
This most recent case wasbrought against the FCC byall 50 state broadcasting as-sociations on two counts.First, they felt that the rulescreated a large reportingburden and second, that theyviolated the Fifth Amend-ment by showing preferencetowards women and minori-ties. The court ruled thatthere was no proof on thefirst count, but the seconddoes violate the US Consti-tution. The finding said "Wehold that the rule does put
continued on page 2
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Radio Busi666,Voice Of The Radio Broadcasting Industry ° Radio News®
January 22 2001. Volume 18. Issue 4
BPA International membership
applied for September 2000
Executive Editor Jack MessmerManaging Editor Dave SeylerSenior Editor Cad MarcucciAssociate Editor Elisabeth DerewitzAssociate Editor Karla RobersonProduction Michael WhalenVP Administration Cathy CarnegieFCC Research Consultant Mona WargoAdministrative Assistant April Olson
Publisher Jim CarnegieVP/GM, Associate Publisher Ken LeeSenior Account Executive John NeffAccount Executive June BarnesAccount Executive Ann Morrone
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official pressure upon broad-casters to recruit minority can-didates, thus creating a race -
based classification that is notnarrowly tailored to support acompelling governmental in-terest and is therefore uncon-stitutional." The entire rule wasvacated because the unconsti-tutional part could not beseparated from the rest.
David Honig, ExecutiveDirector of the Minority Mediaand TelecommunicationsCouncil was disappointed withthe court's decision and saidthat "Unless reversed, the deci-sion could put a halt to 32years of progress in desegre-gating some of the nation'smost influential industries."
FCC Chairman Kennardcalled the decision a -defeatfor diversity." Agreeing withthe Chairman, FCC Commis-sioner Gloria Tristani feltthat the rejection "will makeit even more difficult toachieve a broadcast industrythat reflects America's richcultural diversity" -ED
Kennard retires
FCC Chairman WilliamKennard made his resigna-tion official and departedthe FCC last Friday 1 19).He will now serve as a Se-nior Fellow at the AspenInstitute where he will "ad-vise on leadership, commu-nications policy, program ac-tivities and operations."
Kennard will perhaps bemost remembered for LPFM,which has been the domi-nant regulatory controversyin the radio world for nearlytwo years.
Speaking on his three-yeartenure at the FCC, Kennardsaid, "I have devoted myChairmanship to meeting thetwin challenges of the Digi-tal Age. The first challenge is
to fight for a competitive mar-ketplace in which monopoly isended, innovation and entre-preneurship are cherished andconsumers have competitivechoice. The second challengeis to make sure that the ben-efits of the Digital Age reachall Americans-from the busi-ness districts to the barrios;from those with every advan-tage to those with disabilities;from the young to the old;from suburban enclaves to therural heartland."
Who wants to be a Chairman?
since President litt,h has notchosen an FCC Chairman at RBR'sdeadline, it may be up to theremaining Commissioners to de-cide who will be the acting Chair,since there is no automatic re-placement. If he so desires, Bushhas the option to cast either Com-missioner Michael Powellor Commissioner HaroldFurchtgott-Roth (assuming hewants a fellow Republican) in therole until he makes a decision.But since there is really no needfor there to be an actual chairmanright now, the seat may remainvacant until President Bush findsa suitable replacement for out-going Chairman WilliamKennard.-ED
Broadcast stocksunderperformed S&P 500
\o surprise 1,L1c. Most stocksectors fell in 2000 and broad-casting stocks fared worse thanaverage. Standard & Poor's re-ports that drug stocks performedthe best of the components inits S&P 500 Composite StockIndex for 2000. The index's drugsector rose 125% last year, com-pared to a decline of 10% forthe overall index. Of the 112sectors included in the closelywatched S&P 500 Index, broad-cast stocks ranked 95th, falling
www rbr corn
nearly 28%. (It was evenworse for the broader uni-verse of radio stocks. RBR'sRadio Index fell 51%.) TheS&P 500's worst sector, longdistance telephone compa-nies, dropped 69%.--JM
Minority ownershipon the rise
\ report released by Com-merce Secretary NormanMineta found that "Minoritieshave made small gains in own-ership of commercial broad-cast outlets." The CommerceDepartment's National Tele-communications and Informa-tion Administration (NTIA)conducted the study. Some ofthe findings were that minori-ties own 3.8% of commercialradio and television stations,up 0.9 from 1998. Minoritieswere also found to own 4% ofradio stations and only 2% ofcommercial TV stations. Minetafelt that this study was impor-tant due to the "critical role ofminority voices and culture fortelevision and radio."
Eddie Fritts. President/CEO of the NAB said thatalthough there was an in-crease in minority ownership,there is definitely room forimprovement. "NAB alsostrongly endorses Congres-sional passage of legislationthat would reinstate the mi-nority tax certificate pro-gram," Fritts added. "Broad-casters will continue to imple-ment creative initiatives toincrease opportunity for mi-norities and women in thebusiness."-ED
Big City pepping HRN
Big City Radio I \ 1.FM) has adeal to handle network salesrepresentation for HispanicRadio Network, although thepress release put out 1/18stirred up a hornets' nest. That
1 /22/0 1
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press release said that Big City"had been appointed to ex-clusively represent the 67 ra-dio station affiliates of His-panic Radio Network" andclaimed that the majority ofthose stations were owned byHispanic Broadcasting Corp.(N:HSP). In the announce-ment, Big City CEO CharlesFernandez called the networkrep deal "strategically veryimportant for us."
"HRN is not ours," HispanicBroadcasting Corp. CEO MacTichenor told RBR, althoughhe added, "We have a smallinvestment in that company."
"We hired Big City Radio torep our network only. It hasnothing to do with HBC," HRNPresident Barrett Alley toldRBR. Although he said HRN'sprograms may air on over 100stations in the US (they alsoair throughout Latin America),Alley said 67 is the maximumaffiliate count for any singleprogram, with only nine ofthem HBC's O&Os. Those pro-grams have no spot inven-tory, but rather are public af-fairs -type programs, whichAlley and HRN CEO Jeff Klinecompared to NPR, except inSpanish. What Big City's In-dependent Radio Reps will beselling are sponsorships,rather than spots.
Katz Hispanic Media, whichrepresents the HBC stationsfor national spot sales, hadalso been repping the HRNnetwork since last Septem-ber. President Laura Hagantold RBR that Hispanic RadioNetwork had only what shetermed "news capsules" run-ning on HBC's AM stationsand some other affiliates, "sowe didn't want to representthem anymore." She called BigCity's press release "a grossmisstatement."
Fernandez, who was trav-eling, did not immediately re-turn RBR's call seeking com-ment. Despite the consterna-tion, it appears that HRN isnot dissatisfied about its con-tract with Big City-just thewording of the press re-lease.-JM
1/22/01 RBR
Radio News
Mediapassage andOneMediaPlace merge
With closing of the deal ex-pected late next month, onlinead media transaction compa-nies Mediapassage andOneMediaPlace are set to merge.The new name will be"OneMediaPassage."OneMediaPlace brings ex-panded planning and purchas-ing capabilities for all mediatypes with its "MediaStores" in-ventory marketplace a web -based Request For ProposalSystem; Mediapassage bringsextensive print and broadcastclient relationships and an onlineplanning, tracking and billingsystem. It has 3,700 radio andnetwork affiliates and has pro-cessed 300K print transactionssince '97; OneMediaPlace has3,500 registered sellers and14,000 registered buyers.BroadcastSpots.com hadmerged into Mediapassagelast September.
Woodbeck
"The primary reason for themerger is to stake out a clear,unquestionable leadership po-sition in the media e -market-place category. The combinedentity will have a complimen-tary market -dominating positionacross both ends of the mediasupply chain by merging theOneMediaPlace Web -based RFP
www rbr com
functionality and Media Storeswith Mediapassage's back endservices," OneMediaPlace SVPRadio Frank Woodbeck tellsRBR. "What this means for theworld of radio is that we willnow be able to supply a com-plete end -to -end solution thatties in to legacy systems on bothsides of the buyer/seller rela-tionship."-CM
NAB plans
dues -free holiday
The NAB's Joint Board of Di-rectors, at meetings 1/14-17,agreed that the "dues holiday"(this gives the radio members atwo -month dues -free holidayand a Radio Show attendanceincentive) would be continuedfor FY2001.
The Radio Board lent itssupport to the current way ofdefining radio markets, andwill oppose the FCC's pro-ceeding to find another way todefine the markets, such asArbitron markets.
A resolution was made tocommend the NAB's Educa-tional Foundation for "devel-oping initiatives designed tohelp minorities and womenobtain employment in broad-casting and advance their ca-reers."-ED
BroadcastAmericaauction bids due 2/8
BroadcastAmerica's (BA) fatewill soon be sealed: A US bank-ruptcy court judge in Portland,ME approved a plan to auctionoff the defunct streaming pro-vider/aggregator to pay off $4Min debts. Bids are being ac-cepted on all or part of thecompany. However, BA hopesa bidder will opt to buy theentire business and keep itintact. Meanwhile, BA com-petitors are signing away ra-
dio affiliates on a daily basis,so we're not sure what's left toconsider "intact."
BA creditors includestreaming/Internet utilitiesRealNetworks, MCI and Sprint,and SurferNetwork's investor/partner who placed $1M intothe company (via "BA Fund-ing") in an effort to combinethe entities after Chapter 11proceedings had been com-pleted (RBR 11/13/00, p.8). Atits peak, BroadcastAmerica had700 radio and 70 TV stationsstreaming under contract, how-ever had cut streaming to 148affiliates (RBR 12/4/00, p.2)and lost streaming altogetherfrom a recent court ruling (RBR12/25/00, p.4)
Supporting the BroadcastAmerica proposal, the judgeruled all bids must be submit-ted by 1/31, with winning bidspresented to the court on 2/8.The lowest acceptable bid forBA would have to beat BAFunding's $1M investment. Ifthat figure is not topped, BAFunding/SurferNetwork getsall of BA's radio station con-tracts and agrees not to fore-close on the company's tan-gible assets. If it is topped,then BA Funding gets its $1Mback and the high bidder getsthe radio contracts.-CM
The MusicBooth getssecond round of funding
The MusicBooth, another onlineaudio ad insertion technologyprovider (using patented"AdAcoustics" technology) an-nounced it has raised $2.3M insecond round funding led byPrime Ventures, Inc.
MusicBooth has signedInterep for sales representationand has relationships withUUNET (MCI WorldCom) andExcite At Home's, MatchLogicunit. The company's board in-cludes Burt Manning, Chair -
3
man Emeritus and former Chair-man and CEO of J. Walter Th-ompson Worldwide and ChrisJackson, Principal of CramerRosenthal McGlynn, LLC.-CM
BBQ Radio competes
in streaming
Former WARP Radio tech em-ployee,' Robert Payne, AndyKeeney and MarneeKoehler launched their ownstreaming and aggregatingservice for radio stations,BBQRadio.com, with CEOGeorge Ballantoni in Julylast year and have been grow-ing quickly. Currently aggre-gating 2,000 streaming US sta-tions on its website, BBQ hasso far secured 31 of its own."Basically, WARP let Robert,Andy and Marnee go. And Ihave been in the IT industryfor the last five years. A mu-tual friend of ours introducedus and we started BBQ Ra-dio," Ballantoni tells RBR.
The company's businessmodel is mainly barter, butthey'll take cash. "We take twominutes a day of terrestrial adtime and resell it throughInterep and Katz. There is noad insertion, no banner adsunless they want them, no gate-way ads, none of that," ex-plains Ballantoni. "The onlything stations have to purchaseis a standard computer, werecommend it has a
Soundblaster Live in it for op-timal sound. We also recom-mend more than a dial -up con-nection-a DSL or ISDN."
With all of the news aboutbarter and free models failing asof late, Ballantoni claims hisbusiness is good: "We're intoour sophomore year now.Things look very, very good thisyear. Right now, we're workinghard on picking upBroadcastAmerica people andothers who have been floun-dering. --CM
Tur in mayoral bid
Former KNX-AM & KCBS-TVhelicopter news guy Bob Turis running for mayor of Los
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Radio News
RBR News Briefs
Tauzin announced picks
Rep. Billy Tauzin (R -LA), newly elected Chairman of the House Energy and Commerce Committeeannounced his picks for subcommittee chairs. Rep. Cliff Stearns was the favored pick for thechairmanship of the Telecommunications subcommittee. However he is now the chair of theSubcommittee on Commerce, Trade and Consumer Protection. Chairman of the TelecommunicationsCommittee will be Rep. Fred Upton (R -M1). Last session Upton was the Chairman of the CommerceCommittee Oversight and Investigations Subcommittee.-ED
Lightningcast secures second round of funding
Targeted audio ad insertion technology network Lightningcast.com has secured its second round offunding from Nokia phones and a number of private investors. We hear the deal will build upon wirelessstreaming media delivery to cellphones via next gneration wireless technology. A media conferencecall is scheduled for today to provide the details. These days, it's almost impossible to get funding forInternet -related startups. We will be curious as to how CEO Tom Des Jardins did it, consideringthe current poor market for audio ad insertion.-CM
Milano heading CCRS National Sales
Dominick Milano has been promoted to Exec. VP and Director of National Sales at Katz MediaGroup's Clear Channel Radio Sales. He'll oversee the nine Regional VPs who lead the national spot salesefforts of the three CCRS units, Diamond, Sapphire and Emerald. Milano, who has been with Katz MediaGroup since 1986, will report to Mike Agovino, President of Clear Channel Radio Sales.-JM
Bonuses are back at Disney
Top Disney (N:DIS) executives received bonuses again in 2000, after seeing nothing extra in 1999.Unlike most media companies, who saw their stock values plunge in 2000, it was actually a recoveryyear for Disney after a dismal '99. The company's latest SEC filing shows that CEO Michael Eisnerreceived a bonus of $11.5M for 2000, with $3M deferred until January 2004. Disney President BobIger received a bonus of $5M.-JM
Angeles on a platform of fir-ing the current police chiefand standing up for the city'srank -and -file officers. An LATimes article noted that Tur islikely the first mayoral candi-date who can say he's beenshot at by some of the peoplehe's seeking to represent.Tur's helicopter drew gunfireas he shot the famous videoof a mob attacking truckerReginald Denny during the1992 LA riots. He was also thefirst airborne reporter to lo-cate O.J. Simpson's whiteBronco, leading to the tele-vised slow -speed chase.
Mayor Richard Riordancan't run for re-election and Turis one of seven major candi-dates (out of a total of 17) who'llface off in a non-partisan April10 primary that's likely to nar-
row the field to two.Tur has been running his
own news service since he wasdropped in a 1997 round of CBScost-cutting. He has a lawsuitpending against his former em-ployer.-JM
Enco establishes directsales force
Ending its exclusive rep agree-ment with Harris' Broadcastdivision that began 2/1/99,Enco Systems has once againestablished a direct sales teamfor the US 1/15. While theannouncement was made1/15, the relationship has beendiminished since October, notlong after Enco opened itssales, support and manufac-turing facility in the UK lastSeptember. "Internationally,
www.rbr.com
that's accurate, althoughthey've been selling domesti-cally for us right up to thepresent time," Enco Directorof Sales and Marketing DonBackus tells RBR. "The con-tract required us to give them60 days notice of the termina-tion-that was given in Octo-ber. The contract was in fullforce since 12/20. The over-riding motivation behind mak-ing this move was to enhanceour ability to thrive in the in-dustry, giving us control of oursales from manufacture rightto the end user. This is no reflec-tion on Harris-nobody can tellHarris' story better than Harriscan. Equally, nobody can tellour story better than we can."
Enco now assumes responsi-bility worldwide to sell direct orthrough local dealers.-CM
1/22/01 RBR
f I
Marketingassociations merge
The Association of Direct Mar-keting Agencies (ADMA) is merg-
ing into The Direct MarketingAssociation (DMA) -a consolida-tion that DMA refers to as an"acquistion." After the merger,ADMA President WarrenHunter, who is President ofDMW Worldwide, will becomeChairman of DMA's new DirectMarketing Agency Council.
"Direct marketing advertisingexpenditures now represent morethan half -56.5% -of total US adver-tising spending, which are pro-jected to be $339.3 billion in
Radio AdBiz
2000," said DMA President &CEO H. Robert Wientzen."This acquisition will help growdirect marketing by combiningthe expertise behind the bestdirect marketing agenciesthroughout the country withDMA's information, represen-tation and educational servicesas the consumer and business -
to -business marketplace be-comes ever more dynamic."
Hunter asserted that "tradi-tional direct marketing agen-cies are disappearing" and arebeing replaced by hybrids that"combine traditional direct mar-keting methods with interactiveand database elements."-JM
Radio ads target EcstasyThe Partnership for a Drug -FreeAmerica will launch two news
radio ads entitled "Megan" and"David" which hope to educateparents on the dangers of Ecstasy.Both spots are :30 and were cre-ated by The Weightman Group.The commercials feature a parenton the phone with their childwhere they are learning that moreand more children are trying Ec-stasy. The goal is to drive parentsto the Partnership's website(www.drugfreeamerica.org) tolearn more about Ecstasy. -ED
The MeasureCast Weekly Top 25TM
(Monday, Jan. 8 - Sunday, Jan. 14, 2000)
Rank Station Format Network URL Total TSL' Cume Persons'(in hours)
1 WABC-AM(New York) Talk Radio ABC Radio www.wabcradio.com 73,183 12,245
2 MEDIAmazing(Internet -only) Listener Formatted MEDIAmazing www.mediamazing.com 58,002 15,332
3 Radio Margaritaville(Internet -only) Classic Rock Radio Margaritaville www.radiomargaritaville.com 38,759 6,132
4 WPLJ-FM(New York) CHR / Top 40 ABC Radio www.wplj.com 37,415 3,004
5 KSFOa-AM(San Francisco) Talk Radio ABC Radio www.ksfo.com 33,678 6,137
6 KQRS-FM(Minneapolis) Classic Rock ABC Radio www.kqrs.com 32,313 3,430
7 WLS-AM(Chicago) News / Talk ABC Radio www.wlsam.com 27,797 6,194
8 KGO-AM(San Francisco) News / Talk ABC Radio www.kgoam810.com 27,655 4,886
9 Star 98.7(Burbank CA) Adult Contemporary CyberAxis www.star987.com 25,354 2,432
10 The Beat LA(Los Angeles) Urban R&B CyberAxis www.thebeatla.com 25,137 3,067
11 KLOS-FM(Los Angeles) Classic Rock ABC Radio www.955klos.com 24,561 3,787
12 WBAP-AM(Dallas/Ft. Worth) News / Talk ABC Radio www.wbap.com 22,930 3,748
13 WJZW-FM(Washington DC) Jazz ABC Radio www.smoothjazz1059.com 22,193 2,020
14 HardRadio(Internet -only) Album -oriented Rock Internet America www.hardradio.com 21,510 3,047
15 WRQX-FM(Washington DC) CHR / Top 40 ABC Radio www.mix1073fm.com 20,515 1,396
16 KABC-AM(Los Angeles) Talk Radio ABC Radio www.kabc.com 18,301 3,694
17 3WK Undergroundradio(Internet -only) Alternative Rock 3WK www.3wk.com 16,411 3,105
18 Black Gospel Network(Internet -only) Gospel Oneplace www.blackgospelnetwork.com 14,465 4,141
19 KBLX-FM(San Francisco) Adult Contemporary GlobalMedia.com www.kblx.com 14,338 1,036
20 KXXR-FM(Minneapolis) Rock ABC Radio www.93x.com 12,411 1,602
21 WMAL-AM(Washington DC) News / Talk ABC Radio www.wmal.com 12,043 1,954
22 WBLS-FM(New York) Urban R&B GlobalMedia.com www.wb1s.corn 11,405 1,170
23 BluesBoyMusic.com(Internet -only) Blues The Broadcast Web.com www.bluesboymusic.com 11,009 3,955
24 WPOW-FM(Miami) CHR / Top 40 GlobalMedia.com www.power96,com 10,638 2,548
25 CKZZ-FM(Vancouver BC) CHR / Top 40 GlobalMedia.com www.z95.com 10,123 1,693
1/22/01 RBR www.rbr.com 5
IIIC GPM iiie UI
Cross -Dressing Goliath
By Franklin Raff
Love thine enemies, bless themthat curse you. Matthew, 5:44
Whether the idea is anachronisticor utopian, whether it may lead totwo bruised cheeks, this much iscertain: it is a core philosophy ofthe most highly trained, ruthlessand competitive local sales forcein the country: Yellow Pages (YP)reps. Indeed, their modus oper-andi might be translated: "Givethine enemies enough rope tohang themselves."
The YP industry was valued at$12 billion in 2000. Independent YP
publishers (those not affiliated witha telephone company) are growingat 10%-20% per year. YP publishersin new and mature markets aroundthe world are expanding at a break-neck pace and focusing (astutely, Ithink) on the effects of privatizationand deregulation. And new elec-tronic revenue streams are bothenhancing their core product andintroducing new products: Theintemet YP market alone was val-ued at $164.9 million in 2000. But asin our industry, the national reputa-tion, strength, and stability of The YPis built largely on the streets, with thelocal reps.
The YP six -week rookie trainingprogram has an affectionate pet name:
Hell. New reps are forced to memo-rize an interactive ten -page pitch -script verbatim. YP reps master ap-proximately twenty concise tech-niques for turning as many objec-tions into upsells. Bigger. With Color.
In a new heading. Because Verizonshares lists and information with AT&T
'(indys like The One Book mustpurchase this information), rookiesalso hit the streets armed with thegrowth trends (phone bill increases,new phone lines) of their prospects.YP publishers have even partneredwith school boards to teach YP use toall students as a part of a "reference"
curriculum. And should our wide-eyed fingerwalkers become dead-beat business -owners, bundling en-sures quick collections: if an adver-tiser defaults on the one -close an-nual, the Bell matriarch swiftly shutsdown their phones.
6
There is a guiding principle be-hind YP sales: Love your enemy. YPreps respond to news of clients'radio expenditures, for instance, with"Great!' YP reps are trained to
appear to love other media. Theynever acknowledge an all -encom-passing "advertising" category.Rather, they proclaim their ownselling proposition anchoring abusiness without which all otheradvertising is simply futile. Theirsaccharine approach is disarming;the heavy cloak of Ma Bell hides acrafty giant.
Sadly, this giant dominates bothhis/her category and ours. WhileYP advertising is moment -of -deci-sion advertising, radio, properlyimplemented,- is not. And thoughthe differences may seem obviousto us, it is critical that we remind ourclients, early and often, of the rela-tive strengths and weaknesses.
YP will hurt a business if it is notprepared to beat competitors' pricesor close on the first call. Accordingto The YP Publishers Association.the average YP user considers 5.4ads per reference. If a CSR is notprepared to close on a price -quotecall, the sale is usually lost to a more
aggressive competitor. YP doesn'tgenerate leads, it guides existingleads to a pool of competitors.
YP delivers a specific, unchang-ing factual message to some con-sumers (58% of consumers 18+refer to the YP in the average week)who are ready to buy. But emo-tional attachment to brands is inalmost all cases developed prior topurchase. Winning customers prior to
day-of-decision-through radio -means higher profit margins anduncontaminated leads.
Tracking efforts indicate YP rulesthe roost in response. But YP is onlya last point of reference. Prospectsreport "seeing you in the YellowPages", but prospects that becomecustomers generally do so for onlyfour reasons: emotional attachment,top -of -mind -awareness, emergency,
or price. The first (and most profit-able) reasons require preexisting
knowledge of the business: beforethe day of decision.
YP reps are upsell experts, sys-tematically pitting competitorsagainst each other for the next sizeup, the next color, the next heading.Chris Lytle calls it the "club yourneighbor" concept. And as the booksgrow and more titles emerge, anunchanging ad takes up less and lessof the total directory reference space.
One way businesses can get thebenefit of last point of referenceadvertising without the drawbacksis to mention in their radio advertis-ing that they can be found in theWhite Pages. Not only will radiorepeat the name of their business(whoopee!) with a clear call -to -action while drawing prospects to afree last -point -of -reference (man-dated as such by the FCC). it alsodraws them to a space that is freefrom competitors' advertising.
Even the most competitive YPcentered business in America, thepia delivery business, is learningthat overemphasis on Yellow Pagesand Direct leads to profit -killing and
product quality killing price -wars:59.99, then $8.99, then $5.99 largepizzas. Papajohn S, the most rapidlyexpanding Pizza chain in the UnitedStates, is spending comparatively less
on local YP, focusing instead ona high -reach, high -frequencyaudiocentric non -price positioningmessage: Wedelitertheperfectpizza...
Papajohn 's! So when time comes forlast point of reference, the decision is
already made. Indeed, customers ex-pect to pay a little more for what theyperceive as "Better Ingredients Better
Pizza" before they order! Radio makes
products and services valuable byengaging the imagination of the pros-pect. YP can only make products and
services valuable by encouraging lower
prices. Ironically, radio reaches outand touches new prospects; YP sim-ply pools competitors.
why should our clients pay for theprivilege of losing customers to priceshopping? Why should they be continu-
ally upsold for zero new reach and little
competitive advantage? YP reps makewww rbr corn
fabulous money, have gargantuancommissions and resources, are themost effective closers, and havethe most at stake. What's at stake isthe realization -en masse that their
"club your neighbor" approachproduces neighborhoods ofunderperforming businesses.
If, in a national initiative, we were
to allocate 5 seconds in every newlocal :60 to the following words:"Look us up in the whitepages, under
" we would deliver a crip-pling blow to the yellow Goliath. Ifwe were to schedule our radio clients
responsibly, keeping clients off ofstations and dayparts in which theycan't afford proper reach values (thusalso allowing us a clear upsell pathwhen they can afford to own thosestations or dayparts) we would match
Yellow Pages' phenomenal upsellrecord. If we would realize funda-mentally and universally that radioadvertising owns it's own "prior today of decision" category; if we would
train new reps to sell that categorywith the vigor they habitually ascribe
to trashing their fellow radio Davids,we would, I believe, catalyze a revo-lution in nationwide media spend-ing. This would happen at a vulner-able time for YP: a critical and fragile
phase in online product develop-ment. Think, for a moment, about$12 billion in spoils.
Until that day, our enemy will love
us to death, for better or for worse, as
radio's share of nationwide advertis-ing wanes, as the Yellow Pages grows,
and as innumerable radio rookies hitthe streets armed with new suits, new
business cards, and of course, theYellow Pages.
I am grateful for the input of amarvelous radio rep, Rae CarolFlynn at W1l41/WRQX Washing-ton. She once sold Yellow Pages butfound, at last, that she loved herenemy, radio, just that much more.
Franklin Raff is President and Execu-
tive Creative Director ofRaff Radio Marketing Group, Inc.He may be reached at (703) 925-5921
1/22/01 RBR
I 7_\ LI J _1,1_\111 _LLETArili
THE UR
N
2,009,000 Persons 12+Monday -Sunday 6AM-MidnightAverage Audience to All Commercials*
1,551,000 Persons 12+
IAN RADIO LEA
II
Tr'Monday -Sunday 6AM-MidnightAverage Audience to All Commercials*
American Urban American UrbanPinnacle Network Renaissance Network
915,000 Persons 12+Monday -Sunday6AM-MidnightAverage Audience toAll Commercials*
ABCUrban Advantage
RADAR®NEW YORK 655 THIRD AVE. 24TH FLOORNEW YORK, NY 10017(212) 883-2100 FAX: (212) 297-2571
CHICAGO 75 EAST WACKER DR.CHICAGO, IL 60601(312) 558-9090 FAX: (313) 558-9280
DETROIT 1133 WHITTIER ROADGROSSE POINTE PARK, MI 48230(313) 885-4243 FAX: (313) 885-2192
AMERICANURBAN RADIO
NETWORKS
DER
American Urban Pinnacle Networkis the #1 Network 12+ bringing newsto Urban America
American Urban Renaissance is the#2 Network serving Urban America
Over 270 Urban programs weekly
ATLANTA LOS ANGELES PITTSBURGH WASHINGTON, D.C.*Source:Radar 67 Fall 2000 - Copyright©2000 Statistical Research,Inc.
r_anou. n 'oarbest forgotten
by Jack Messmer
Broadcasters with publicstock would probably liketo forget that 2000 ever hap-pened. It was a most bizarreyear for the overall stockmarket, but especially so forradio stocks.
Despite robust growththrough the early monthsof 2000, radio stocks weregenerally on the way downfrom the sound of the start-ing gun. The Radio Indexpeaked the last trading dayof 1999 at 256.06 and neverset a new high in all of thepast year. A few radiostocks actually peaked inApril, but then joined thedownward spiral.
For The Radio Index, thedepths of despair werereached October 16 at a lowfor the year of 108.89-barely above the 100 markwhere RBR's barometer ofradio stocks began on thelast day of 1997. You couldhardly call it a recovery, butthe index ended 2000 at
'125.36 -off 51% for the year.Blame dot -corns if you
like, but they were only oneof the year's problems. Asreality began to strike thepreviously high -flying dot -
corn sector last Spring, in-vestors realized that if WallStreet was going to stoppouring money indiscrimi-nately into every so-calledtech stock IPO that askedfor it, those dot -corn start-
'ups were also going to runout of money to spend onadvertising to shout their
260
220
180
140
10012/31/99
Quarterly Stocksnewly -minted brand namesto the public.
The never -before -seenphenomena of a brand newad sector dumping moneyinto radio advertising gavethe industry an unexpectedboost through the last twoquarters of 1999 and thefirst two quarters of 2000.Now, however, broadcast-ers are having to face thetough comps of those easy -
money days of a year ago.Meanwhile, an asleep -at -
the -switch Federal ReserveBoard kept trying to slowdown an economy that, ratherthan being in danger of over-heating, was already head-ing toward recession. HadFed Chief Alan Greenspanonly read RBR he would havebeen aware of what was hap-pening (RBR 7/24/00, p. 10& 4/24/00, p. 8). Instead,"Crazy Al" kept leaningagainst the brake and didn'twake up until early thismonth, when the Fed finallystarted lowering interest ratesinstead of raising them.
Better late than never. Al-though the nation came dan-gerously close to a reces-sion (just -check Decemberretail sales), it appears theFed acted in time to avert areal collapse. It's not thefabled "soft landing"Greenspan's fans believedhe could pull off, but bettera few bumps than a crash.
continued on page 10
The Radio Index 2000
3/31/00
Radio stock performance by category, full year 2000
12/29/00 2000 2000
Radio Companies Close Net Chg Pct Chg
Infinity 27.938 -8.250 -22.80%
Saga Commun. 14.875 -5.375 -26.54%
Cox Radio 22.563 -10.688 -32.14%
Salem Comm. 14.938 -7.688 -33.98%
Hispanic Bcg. 25.500 -20.609 -44.70%
Entercom 34.438 -31.813 -48.02%
Big City Radio 2.188 -2.563 -53.95%
Emmis 28.688 -33.633 -53.97%
Radio One, Cl. D 11.000 -19.667 -64.13%
Radio One, Cl. A 10.688 -19.979 -65.15%
Citadel 12.000 -52.875 -81.50%
Radio Unica 3.750 -25.125 -87.01%
Spanish Bcg. 5.000 -35.250 -87.58%
Cumulus 3.625 -47.125 -92.86%
Alliance Bcg. 0.012 -0.238 -95.20%
2000
Radio IPOs Close Net Chg Pct Chg
Regent 5.938 -2.563 -30.15%
Beasley 8.313 -7.188 -46.37%
Radio Rep 12/29/00 2000 2000
Company Close Net Chg Pct Chg
Interep -; o() -9.875 -73.83%
12/29/00 2000 2000
Radio Networks Close Net Chg Pct Chg
Triangle 0.017 -0.003 -15.00%
Westwood One 19.313 -18.688 -49.18%
NBG Radio Nets 1.125 -1.969 -63.64%
6/30/00 9/30/00 12/31/008 www rbr corn 12201f:43R
Media Companies
12/29/00
Close
2000
Net Chg
2000
Pct Chg $10
Disney 28.938 -0.313 -1.07%
Belo Corp. 16.000 -3.063 -16.07%
New York Times 40.063 -9.063 -18.45%
Adelphia 51.625 -14.000 -21.33%
Viacom, Cl. A 47.000 -13.438 -22.23%
Viacom, Cl. B 46.750 -13.688 -22.65% $20Hearst -Argyle 20.438 -6.188 -23.24%
Tribune 42.250 -12.813 -23.27%
Gaylord 20.875 -9.063 -30.27%
Clear Channel 48.438 -40.813 -45.73%
Ackerley 9.000 -9.125 -50.34%
Radio -related 12/29/00 2000 2000 $70
Companies Close Net Chg Pct Chg
Cir.Rsch.Labs 5.125 3.125 156.25%
Harman Intl. 36.500 8.438 30.07%
Am. Tower 37.875 7.313 23.93%
SpectraSite 13.250 2.375 21.84%
Harris Corp. 30.625 3.938 14.75%
Jeff -Pilot 74.750 6.500 9.52% $30
Ceridian 19.938 -1.625 -7.54%
Fisher 55.000 -6.750 -10.93%
Crown Castle 27.063 -5.063 -15.76%
Gentner 11.750 -2.250 -16.07%
TM Century 0.500 -0.125 -20.00%
DG Systems 2.125 -5.000 -70.18%
WinStar Comm. 11.688 -38.479 -76.70% $8
Pinnacle Hldgs. 9.063 -33.313 -78.61%
RealNetworks 8.688 -51.469 -85.56%
WarpRadio.com 0.625 -4.000 -86.49%
SportsLine USA 5.313 -44.813 -89.40%
Launch Media 1.563 -17.375 -91.75%
PopMail.com 0.188 -2.813 -93.75%
First Entertain. 0.016 -0.625 -97.56% $30Global Media ' 0.063 -4.626 -98.67%
FTM Media 0.016 -12.734 -99.88%
12/29/00 2000 2000
Media Co. IPO Close Net Chg Pct Chg
Entravision 18.375 1.875 11.36%
$40Satellite Radio 12/29/00 2000 2000
Companies Close Net Chg Pct Chg
Sirius Sat. Radio 29.938 -14.563 -32.72%
XM Sat. Radio 16.063 -22.063 -57.87%
Major Stock Market 12/29/00 2000 2000
Indices Close Net Chg Pct Chg $20The Radio Index 125.360 -130.700 -51.04%
Dow Industrials 10786.85 -710.270 -6.18%
Nasdaq comp. 2470.520 -1598.790 -39.29%
S&P 500 1320.280 -148.970 -10.14%
Beasley Broadcast Group (O:BBGI)
10/2/00 12/29/00
Citadel Communications (O:CITC)
10/2/00
10/2/00
Clear Channel (N:CCU)
Cox Radio (N:CXR)
12/29/00
12/29/00
10/2/00
Cumulus Media (O:CMLS)
12/29/00
v vwry.' V
10/2/00
10/2/00
12/29/00
Emmis Communications (O:EMMS)
Entercom (N:ETM)
12/29/00
10/2/00
Entravision (N:EVC)
12/29/00
10/2/00 12/29/001/22/01 RBR www.Mr.coni
coma ittea from pageThat bodes well for advertis-
ing in general and radio inparticular for 2001. Those toughcomps will pass in a few monthsand then growth should accel-erate nicely. Most forecastersare predicting high single -digitgrowth rates for radio ad salesthis year, with virtually all ofthat growth coming in the backhalf. Look for those projectionsto rise if the early months proveto be stronger than a point ortwo above flat.
If there's one thing WallStreet does well it is over-react. That over -reaction feltbetter when investors weredriving radio stocks upward,despite the industry's warn-ings that the dizzying growthrates of dot -corn days wereunsustainable. That, ofcourse, was followed by thepain of watching radio stocksfall to ridiculously low lev-els, indicating no growth orworse, as Wall Street playersacted like the companies ofthe beleaguered dot -corn sec-tor had been the radioindustry's only advertisers.
Through it all, there werefew bright points to recap for2000. Every radio stock wasdown, with Infinity (N:INF)losing the least, nearly 23%.Both of the year's radio IPOs,Regent (O:RGCI) and Beasley(O:BBGI), lost money.
Gold stars for 2000 go toWalter Ulloa and PhilipWilkinson, who took
$40
10/2/00
Quarterly StocksEntravision (N:EVC) public ata tough time, the end of July,at $16.50. The Spanish radio/TV/print company slipped aslow as $9.875 in October, butfinished the year in positiveterritory, at $18.375.
The year's big winner wasCircuit Research Labs(O:CRLI), which JayBrentlinger reinvigoratedwith the purchase of Orban.In a year when most CEO'swould have been pleased tohave just a positive numberfor stock price growth,Brentlinger rewarded himselfand his stockholders with atriple -digit gain-up 156%.
The charts accompanyingthis report show the Q4 stockprice performance of all 16components of The Radio In-dex, which is computed dailyby RBR. Although CumulusMedia (O:CMLS) ended theyear in penny stock terri-tory, we kept the stock inour index while waiting tosee if it would move backabove the $5 level. Indeed,Lew Dickey and associatesdid so 1/11, so Cumulus re-mains a part of the index.That's small comfort forstockholders, who rode Cu-mulus down nearly 93% inthe course of 2000.
Hispanic Broadcasting (N:HSP)
Infinity Broadcasting (N:INF)
12/29/00
$40
$14
$8
$20
$20
$14
$25
10/2/00
Radio One (O:ROIA)
Regent Communications (O:RGCI)
12/29/00
0/2/00
Saga Communications (A:SGA)
12/29/00
11101W
10/2/00
Salem Communications (O:SALM)
12/29/00
10/2/00
10/2/00
Spanish Broadcasting (O:SBSA)
Westwood One (N:WON)
12/29/00
12/29/00
10/2/00 12/29/0010
10/2/00www.rbr.com
12/29/001 22.01 RBR
Today's HU Music
Station: KWTX-FM
Frequency: 97.5 mHz
Web address:www.975online.comCity of License: Waco, TX
Market served:Waco, Killeen, Temple TX
Power/antenna height:100kW @ 1,480 ft.
Format: CHROwner: Clear Channel
Communications
GM: Michael Oppenheimer
PD: jay Charles
MD: John Oakes
SM: Evan Armstrong
Webmaster: Jay CharlesStreaming provider:VVM Online Services
How would you describeyour format andprogramming?
Any unique shows?
(all Jay Charles) Today's HitMusic 97.5 FM is a Main-stream CHR that leans slightlyHot AC in the midday, and atouch more rhythmic duringthe night show. We own the80s niche in CentralTexas with our WaybackWednesday's and ourWayback Lunch shows. Bothput a heavy emphasis on retrocuts, while still keeping ourcontemporary hits in the mix.
How would you describeyour listeners?
Our listeners are the most loyalwomen I've ever met! Theaverage is a 31 -year -old fe-male. When programming the
1/22/01 RBR
Station Pro esstation, I keep moms in mind.We know that the music getsthe kids, and the content andpromotions keep their moms!
Describe any eventsyou sponsor.
I will be living in a box againthis year to benefit a local home-less shelter. Last year I slept inthe box for 4 nights, raisingover $10,000. We will also beparticipating in Waco's first "Su-san G. Komen Race for a Cure"to benefit breast cancer re-search. We are excited aboutgetting in locally on the groundfloor of an event that is hugenationally. We have also beensponsors of the HeartAssociation's heart walk. Weunderstand how important it isto give back to a communitythat has given our company somuch support over the years.We have also spearheadedblood drives, and championBig Brothers/Big Sisters.
Tell us about your localadvertiser base.
40 percent local. Consisting ofeverything from car dealers torestaurants to night clubs. Tra-ditional local businesses.
Who is your national repand what percent of youradvertising is national?
Clear Channel Radio Sales. 30percent of billing is national.
What is the maximumnumber of spots youwould run in an hour
and why?
We have a strict policy of 12minutes/hour maximum. Lis-tener fatigue would be a bigconcern of mine if we were toplay more.
www.rbr.com
by Carl Marcucci
From L to R: PD/Morning Host, Jay Charles; Morning Co -Host,Chrissy Donaldson; MD/Afternoons, John (The Lama) Oakes;Night Jock, Brian Mack (not pictured - Middays, Tori Taylor)
Describe your websiteand streaming strategy.
We are still developing ourstreaming and web strate-gies. Corporate will take usinto the fold this year, andhelp us with content andupdates. We recently did asurvive it and drive it pro-motion with 10 listeners liv-ing on an island to win a car.Our website got 45,000 hitsfrom listeners followingalong at home. Website de-velopment will be a big pri-ority this year.
Tell us about thestation's imagingand on -air talent.
Our imaging is my pride andjoy! My night jock BrianMack is amazing with SAW(an editing system), and neverceases to amaze me with thestuff he can do in the prodroom. I also have a fewhired guns on the West coastthat send me some sizzlewhen asked. My staff is awe-some, because I always knowthey will get the job done.
Chrissy from my morningshow does everything fromwriting up station promos tobooking guests on the show.Tori Taylor is my middayhost. She voice tracks hershow from Star System inAustin, and does a tremen-dous job keeping in the loopto keep our sound local. Mymusic director "Lama" domi-nates afternoon drive. He hasbeen doing afternoons herefor a decade, and the stationwouldn't be the same with-out him. Brian Mack bringshis twisted humor and lis-teners through the speakersnightly, and is a great book-end to our personality -drivenmorning show. They help97.5 sound major market.
What do you think aboutyour station adding a
digital broadcast signal,should the FCC approve it?
Sounds great to me! And whodo I send that bill to? Seriously,with XM's launch this year weshould be willing to do what ittakes to compete.
11
Radio stockson upswing
Even before Citadel's LBOannouncement, radio stockshad begun moving up after acouple of analysts upgradedthe sector. First Union Securi-ties analyst Jim Boyle ad-vised clients 1/11 that pacingshad suddenly improved dra-matically in large markets. Theadvance continued 1/12 asDeutsche Banc Alex. Brownanalyst Drew Marcus up-graded the radio group to"over -weight." Marcus advisedinvestors to heavy up on thesector because radio is "re-cession resilient" and a slowfirst half of 2001 has alreadybeen built into stock prices.
Both like Clear Channel,Emmis and Radio One, whileMarcus also adds Entercom,Viacom and Westwood One.
Media Markets a Money
Citadel's going private in$28 leveraged buyout
Shares of Citadel Communica-tions (O:CITC) shot up $7.25 atthe opening bell last Tuesday(1/16) to $24.75 on news of a $26per share buyout. The ForstmannLittle leveraged buyout group isbacking Citadel CEO Larry Wil-son in buying out the company'spublic shareholders for $2B, in-cluding assumed debt.
Forstmann Little is putting up$1.5B and J.P. Morgan Chase &Co. is providing $500M inbank financing. The Citadel man-agement team will remain inplace, so going private will allowWilson to focus on operations
and acquisitions, rather than hiscompany's stock price, which fell81.5% over the course of 2000.
"Forstmann Little's investmentwill provide us with the capitalwe need to support our stationsand pursue our growth strategy,as well as to serve our audi-ences and the local communi-ties in which we operate," saidWilson in announcing the LBO.
The $26 offer was 49% higherthan the pre -announcementclosing price of $17.50, but stillwell below where the company'sstock had traded early last year(see page 13). Citadel's last pub-lic stock sale was 2/8/00, whenit sold 4.75M shares at $51.50each. CS First Boston advised
Simmons Media Group, Inc.has agreed to purchase the assets of
KFTZ-FM and KOSZ-FMIdaho Falls, Idaho
along with the stock of
Western Communicationswhich includes radio stations
KLCE-FM KCVI-FMKECN-AM and KICN-AM
Blackfoot -Idaho Falls. Idaho
$13.0 Million Cash*G. Gregory Merrill represented the parties in this transaction.
1289 North 1500 East, Logan, UT 84341Tel: (435) 753-8090 Fax: (435) 753-2980
E-mail: [email protected]
MEDIA SERVICES GROUP, INC.ACQUISITIONS VALUATIONS FINANCING CONSU TATION
San Francisco Philadelphia Dallas Kansas City Providence Salt Lake City Jacksonville Richmond St. Simons Island
*Pending FCC Approval
12 www.rbr.com
by Jack Messmer
Citadel on the LBO."Ted Forstmann's a long-
term thinker," Prudential Securi-ties analyst James Marsh toldRBR. Although he said the priceseemed like a pretty cheap mul-tiple (13.5 times Marsh's esti-mate of 2001 broadcast cashflow), Marsh said there aren'tmany radio groups in a financialposition to buy a group as largeas Citadel and there's currentlyvery little money from outsidethe radio industry chasing radiodeals. Even so, Marsh said theCitadel buyout is good news forother "beaten -down stocks," suchas Cumulus Media (O:CMLS) andSalem Communications(O:SALM), who could attempt tofollow a similar course if theirmarket valuations don't improve.
At UBS Warburg, analystLeland Westerfield issued aresearch note which said thedeal, which he estimated at 14times BCF, "underscores theradio sector regaining ad mo-mentum and sets the stage forClear Channel (N:CCU) to buypieces of Citadel later on."
"For a company likeForstmann to essentially set thefloor at 15 times [his estimate] isreally an endorsement of theindustry," said Tim Wallace atBanc of America Securities.
Due to the buyout announce-ment, Standard & Poor's has putCitadel Communications'(O:CITC) bond and bank debtratings on S&P's CreditWatchlist with negative implications."The CreditWatch placement isbased on concern that Citadel'salready high financial risk mayincrease depending on theamount of incremental debt ordebt -like preferred securities thatwill be used to finance the trans-action," S&P said.
RBR observation: Who'snext? If the public markets won'tgive radio stocks the value theydeserve, the logical move is totake them private. Mel
1/22/01 RBR
_Al
1t Karmazin was first, although Infinity'si (N:INF) parent company, Viacom (N:VIA)
will still have public stock. Now Larry Wil-
son. If the financial backing is out there andthe current upswing in radio stock pricesfizzles out, others will likely try to follow.
Shockley sells group
Terry and Sandy Shockley are selling theircompany, although they aren't getting out ofbroadcasting completely. In a tax -advantageddeal with Northern Communications Acqui-sition Corp., the Northern investment groupheaded by Roger Ohlrich will buy all of thestock of Shockley Communications, thenbegin selling off the assets.
Quincy Newspapers, a long-establishednewspaper, TV and radio (WGEM-AM & FM
Quincy, IL) group owner, is buying Shockley'sfive ABC-TV affiliates in Wisconsin. The
other TV station, KXLT-TV (Ch. 47, Fox)Rochester, MN, is being bought back by theShockley family. That leaves the six radiostations in the Duluth, MN -Superior, WI
market, which the Shockleys will continue tooversee for Northern. This complicated multi-stage deal was brokered by Kalil & Co.
RBR observation: Look for the radiostations to be sold soon as well, sinceNorthern is not in this deal for the long haul.
Radio One claims Urban in IndyRadio One (O:ROIA) is consolidating all
formats in Indianapolis aimed at African -Americans in an unusual deal with EmmisCommunications (O:EMMS). Radio One has
a non -binding letter of intent to buy theintellectual property of Emmis' Urban ACWTLC-FM and will move the calls, format
continued on page 15
Citadel's three and a half year stroll down Wall Street
Larry Wilson took Citadel Communications (O:CITC) public 6/30/98 at $16per share and saw the stock go to $20 the first day of trading (RBR 7/6/98,p. 6). Things were going well as Citadel and the rest of the radio industrywere Wall Street sweethearts through the early months of 2000. Citadel hita closing high of $64.88 the last day of 1999, but after another peak of $45
6/2/00 began a slide. When the company reported disappointing Q3 resultsin late October the stock price plunged into single digits (RBR 10/30/00, p.13) and had recovered only modestly until last week's surprise announce- .ment that Forstmann Little was taking the company private for $2B.
$70
SO
Citadel Communications (O:CITC)
6/30/98 12/30/98 6/30/99 12/30/99 6/30/00 12/30/00
The RadioIndex-rmRadio stocks got a boostfrom analysts' upgradesand the Citadel LBO. TheRadio Index"' shot up33.343 for the week toclose 1/17 at 176.159.
Radio Business Report'180
160
140
12012/27
Voice 01 The Radio Broadcasting industry'
1/3 1 / 1 0 1/17
For Sale!
2 SouthwestSmall Market
Network AffiliatesCash Flow
for
$7.5 million
For MoreInformation Contact:
Norman & Terrill FischerSouthwest
(512) 476-9457
Bernie FuhrmannEast
(610) 317-2424
STATION BROKERAGEAPPRAISALS
EXPERT WITNESSTESTIMONY
Norman Fischer
Associates, Inc.
2520 Longview St, Ste. 313Austin, TX 78705
(512) 476-9457
www.nfainc.com
t 1/22/01 RBR www.rbr.com
ClosedExcalibur
station group in Vermont
$5,850,000
JorgensonBroadcast 110( Brokerage
Mark Jorgenson(813) 926-9260
Tampa
Peter Mienli(408) 996-0496
San Jose
Radio Acquisition SeminarLearn how to get financing and buy right. Six hours,one-on-one. Topics: 2001 industry update, search,values, negotiation, market and station due diligenceand others you choose from experienced owner.For details call Robin Martin - 202/939-9090
TheDeerRiverGroup
HAMMETT & EDISON, INC.CONSULTING ENGINEERSRADIO AND TELEVISION
Serving the broadcast industry since 1952...
Box 280068 San Francisco 94128
HE707/996-5200202/396-5200
APPRAISALSRadio and Televison
Every type of appraisalExpert witness services
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MOLTMedia Group
New Listings
OH 2 FM's and AM w/ real estate $2mNY upstate AM - $1.1m.
Philadelphia suburban AM - $2.7m.Richmond, VA AM - $400,000.
Call Bruce HoustonBlackburn & Company
Transaction Digestby Dave Sevier & Jack Messmer
The deals listed below were taken from recent FCC filings.RBR'sTransaction Digest reports on all deals that involve assignment of a station license (FCC Form
314) and substantial transfers of control of a licensee via a stock sale (FCC Form 315), but not internal
corporate restructurings (FCC Form 316). All deals are listed in descending order of sales price.
$7,500,000 WTZY-AM, WMXF-AM,WQNS-FM & WQNQ-FM Asheville NC(Fairview -Waynesville -Old Fort NC) fromWTZY-AM Inc. & Blue Dolphin Communi-cations of NC LLC (Edward Seeger) to ClearChannel Broadcasting Licenses Inc. (LowryMays), a subsidiary of Clear Channel Com-munications (N:CCU). $7.5M cash.Superduopoly with NX/WNC-AM & WKSF-FM in the Asheville market and WESC-FM &WMYI-FM in the Greenville SC market. LMAsince 12/19/00. Broker: Jorgenson Broad-cast Brokerage, American Media Services
$3,600,000 WLDR-FM Traverse City MI,100% stock sale of Great Northern Broad-casting System from Donald Wiitala (90%)and Dave Maxson (10%) to Fort BendBroadcasting Co. (Roy Henderson). $75Kescrow, balance in cash at closing.
$3,000,000 WANN-FM CP (102.1 mHz) Nor-folk VA (Virginia Beach VA) from VirginiaFaith Broadcasting Inc. (Bishop L.E. Willis) toOn Top Communications of Virginia Inc.(Steve Hegwood). $200K nonrefundabledownpayment, balance in cash at closing.
$2,000,000 WCFR-FM Springfield VT andWMXR-FM Woodstock VT fromConnRiver Broadcasting LLC (KirkWarshaw, Richard Sharpe) to Clear Chan-nel Broadcasting Licenses Inc. (LowryMays), a subsidiary of Clear Channel Com-munications (N:CCU). $2M cash. Broker:Biernacki Broadcast Brokerage
$575,000 K.SEr-AM & KLOI-FM '111)((100% stock sale of Proctor -Williams Inc. fromGerald Proctor to William Hill. $100K foroption, additional $475K in cash at closing.
$325,000 WLOH-AM LancasterOH from WLOHInc. (Mark Bohach) to Frontier Broadcasting LLC
#3 (Thomas Pierce, Ban, Julie Ann & G. EdwinJohnson). $20K escrow, additional $65K in cashat closing, $260K note. LMA since 6/1/99.
$325,000 KLHK-FM CP ( 97.9 mHz) GreatFalls MT (Dutton MT) from Shelby MediaAssociation (David Stout) to CommonwealthLicense subsidiary LLC, a subsidiary ofCommonwealth Communications LLC (DexAllen, Alta Communications). $20K escrow,balance in cash at closing. Superduopolywith KMON-AM & FM, KLFM-FM & Knil -
FM. Broker: Media Services Group
$120,000 KIND -AM & FM Independence KS,100% stock sale of Central Broadcasting Inc.from Frances Rupard and The Estate of NelsonRupard to CBI Holdings Company Inc. (BillKurtis, John DeFever, Jon Viets). $12K for 60%stock interest owned by the Estate, $28K todischarge debt owed to two banks, $80K notefor 40% stock interest owned by FrencesRupard ($8K) and corporate debt owed to theRupards ($72K). LMA since 11/28/00.
$52,000 WHLB-AM Virginia MN from Vir-ginia Broadcasting Co. (Frank Befera) toFull Armor Ministries Inc. (Kirby, Jessica &Marcia Young). $5K downpayment, bal-ance in cash at closing.
Media Brokers Appraisers Consultants
Ron Swanson, V.P.
570/563-0900SwansonRoncAOL. corn
14 www rbr corn ;;BR
1continued from page 13
and staff to 106.7, currently occu-pied by Urban Oldies WBKS-FM.Radio One is also buying GospelWTLC-AM. Financial details ofthe transaction weren't immedi-ately revealed, although the two
p companies said they will jointlydonate $1M to promote educa-tional opportunities for minorityyouth in the Indianapolis area.
"While it is personally painfulto part with WTLC, we felt thisdecision was in the best interest
of both companies," Emmis CEOJeff Smulyan said in hiscompany's announcement.
"We will now be able to offeradvertisers a one -stop shop forreaching the Urban consumerin this very attractive radio mar-ket," noted Radio One CEOAlfred Liggins.
WTLC employees going toRadio One will also be guaran-teed at least one year of em-ployment. In the end, RadioOne will have Urban -leaningCHR WHHH-FM, Smooth JazzWYJZ-FM and the WTLC combo.Emmis has not announced whatformat it will launch on theformer WTLC frequency. 105.7.
Salem doubles onBoston AM band
Salem Communications (O:SALM)has an $11M deal to acquireWROL-AM Boston, adding to itsownership of WEZE-AM. The salecontinues Ken Carter's piece -by -piece sell-off of Carter Broad-casting after a $15M sale of theentire group to Catholic FamilyRadio fell through. Broker: JohnPierce, John Pierce & Co.
Also buying in Boston:Clear Channel
Clear Channel (N:CCU) is takingout the last remnant of FairbanksBroadcasting with a $10M buy ofWKOX-AM Boston. The 1200kHz facility, licensed toFramingham, MA, is currently10kw day/1 kw night, but has aCP to go to 50kw day and night.
RBR observation: The new,more competitive signal will takeWKOX's city -grade contour allthe way to Boston Harbor. That's
1/22/01 RBR
Media Markets a Money
gotten the grapevine speculat-ing that Clear Channel willlaunch a Talk format.
Goodstar brings $5M
Bain Capital is cutting its losses andselling off its last radio properties.
Goodstar Broadcasting, thenheaded by veteran broadcastersAlan Goodman and MichaelStarr, teamed with Bain in 1997to buy 12 unrated-market Kan-sas stations that were spun offfrom Great Empire's acquisitionof Lesso Inc. Goodstar paid$8.5M for the dozen (RBR 2/3/97,p. 14). Over the past fouryears, two more small stationswere added, Bain parted wayswith Goodman and Starr androlled management of Goodstarinto 62nd Street Broadcasting.Now that 62nd Street has fin-ished selling off its portfolio of
stations, the 14Kansas stations are being soldto Norman Waitt's Waitt Radiofor $5M. Broker: Dick Chapin,Chapin Enterprises
Pamal adds two inGainesville
Pamal Broadcasting is addingsome heft to its Gainesville -Ocala,FL superduopoly. In recentmonths, James Morrells Pamalhas acquired two AMs and threeFMs in the market, but they wereall small purchases, with theexception of a $2M buy of WRKS-FM (RBR 1/8, p. 12). Now Pamalis getting down to business witha $4M buy of WWLO-AM &WTMG-FM. The seller is HildaDawson's Connecticut Broad-casting Media. Broker: DoyleHadden, Hadden & Associates
New owner enters Virginia
\ new company is launchingwith a small market purchase inVirginia. Magnum Communica-tions, based in Gallatin, TN and
www.rbr.com
headed by Howard Espravnik,is paying $180K for WHHV-AMHillsville, VA. The station is cur-rently owned by a local church,the New Life Church & Ministries.Broker: Snowden Associates
CRL beats
own projections
As far as we know, there are noWall Street analysts who activelytrack Circuit Research Labs Inc.(O:CRLI), so there's no Street esti-mate to judge the company against.But the thinly traded over-the-counter stock was one of thestellar performers of 2000, up 156%.
Now CFO Jim Seemiller saysCRL beat its own internal projec-tions with Q4 earnings of $431Kon net revenues of $3.4M. A yearearlier, before acquiring Orban,the company had posted a lossof $500K on revenues of $2.8M.
"With our new managementteam, strong demand for ourproducts, and new productsabout to launch, 2001 should bea banner earnings year for Orban/CRL," said CEO Jay Brentlinger.
Unica expects Q4improvement
Radio Unica (O:UNCA) says WallStreet should expect its Q4 rev-enues to come in about 42%ahead of a year earlier at roughly$7.3M. The Spanish Talk groupalso reduced its EBITDA loss toabout $ 2.2M. Looking to Ql,Radio Unica says to expect rev-enues of $6.4M-slightly aheadof last year-and negativeEBITDA of $4M. CEO JoaquinBlaya says the company is fo-cused on controlling costs.
Clear Channel sellsLamar shares
Clear Channel Communications(N:CCU) has reduced its stake inLamar Advertising (O:LAMR).Following a recent rise in stock
prices, Clear Channel 1/12 soldoff 5M of its Lamar shares throughDeutsche Banc Alex. Brown. TheWall Street firm also has access toan over -allotment of 750K shares,if needed. Lamar closed down $2for the day at $44, but had re-cently been as low as $35.25.
Under an agreement with DOJ(RBR 9/4/00, p. 2), Clear Channelhas until the end of 2003 to finishdisposing of the Lamar stake itinherited from AMFM Inc. WallStreet sources say Clear Channel'sstock sales and a recent publicstock offering by Lamar havereduced Clear Channel's stakefrom around 30% to only 20% ofLamar's outstanding shares. Evenafter the latest sale, Clear Channelstill owns around 14M shares ofLamar. Clear Channel was re-quired to divest its stake in Lamar,an outdoor advertising company,due to Clear Channel's owner-ship of its own outdoor com-pany, Eller Media.
American louversells new stock
American Tower Corporation(N:AMT) priced an add-on offeringof 10M shares last Thursday (1/18).The offering, through GoldmanSachs & Co., is expected to netapproximately $310M for the com-pany. Strangely, the exact price ofthe offering wasn't immediatelydisclosed, but it appears to be nearthe 1/17 closing price of $39.25.
Also last week, American Towerannounced plans fora private place-ment of $350M in senior notes.That is expected to close by theend of this month.
Crown Castle sells stock
Tower giant Crown Castle Inter-national (O:TWRS) priced an of-fering of 12M new shares of stockat $26.25 per share. Crown Castlewill use the $315M for "generalcorporate purposes." Lead un-derwriter: Goldman Sachs & Co.
15
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