Radio Business ReportVoice Of The Radio Broadcasting Industry®

February 12, 2001 Volume 18, Issue 7

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RADIO NEWS

Down December can't stop double-digit gains 2

After 99 consecutive months of gains, radio failed to beat itstotal take for the same month of the prior year. Bottom line: -3%.

Radio One growth spurt is result of a Blue Chip 2

Miller, Kaplan denies effort to hide pacing numbers 2

Press has first pow -wow with Powell 3

LA pacing: January was cool, future needs work 3

Radio feasting on newspaper's piece of pie 3

Big trouble for Kluge? Shareholders may revolt 3

FCC drops what apparently is a not -so -Stern fine 3

CCU grease job pumps LA revenues 8

Agencies: A Scolarly look at relationships 7

STREAMING

A royal to-do over streaming royalties 8-10

In the stream of things: News from all over 11

MEDIA MARKETS & MONEY

Entering the millennium with Entercom 12

Entercom's prospectus for 2001 tells Wall Street toexpect increasingly good results as the year goes on.

Radio One hands one over to Henderson 12

Cox has the double -digits flowing for Q4 13

Archer heads to Ft. Myers to catch a Ray 18

Premiere tightens belt

We assumed it was inevi-table: the six-month old con-solidation of Premiere andAMFM Radio Networks wouldcreate a shakeout of duplica-tive services and functions.Well, this shake out is moredue to a drop in ad revenuesand a slowing economy. Pre-miere Radio Networks is cut-ting 20 programs and ser-vices, and 10% of its staff -60people in total, mostly fromits LA offices according toRBR sources.

Premiere President/COOKraig Kitchin says he isfocusing the company's at-tentions on recent launches:Fox Sports Radio Network,

continued on page 2

repeat after me...streaming revenue...Imagine getting a website with streaming audio foryour signal and an e -commerce system for yourwallet. At a cost of next to nothing. It's all right here. situ el acornCall us at 203-929-9101. Home of the BlueDot WebSite NetWork

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February 12 2001, Volume 18, Issue 7

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Premiere's Traffic Network andfour new RADAR -rated sales net-works. "This is really focusing onwhat the marketplace wants, sta-tion -wise and advertiser -wise,"Kitchin tells RBR. "And those thatwe really have invested in a greatdeal in the last six or nine months.In the end, we've been designingour company to be much morecongruous with station owner-ship than we have for a long time.And as a result, there are manyfunctions that we can provide theindustry with far fewer people."

Kitchin says he was facedwith some programming serviceswith huge demand while otherswere consistently dropping. "Aslower advertising economymeans that the programs mostdesired by advertisers rise to thetop and they, in essence, becomerecession -proof. Other programsthat are not must -haves by na-tional advertisers fall further tothe bottom."

This isn't the first time net-work radio had to regroup. "In1990-1992, network radio wentthrough exactly the same thing. Itcame off a great year in 1990.And 1991-1992 it was just in thetoilet-big time. And the net-works at that point in time got ridof all the garbage programmingthey had added through the rah -rah days of '86-'90. And if youlook, there's been a huge prolif-eration in the past four years ofprogramming in the networkarena," former AMFM Radio Net-works CEO David Kantor tellsRBR. "It doesn't mean the sta-tions want all this stuff. Othercompanies have gotten rid ofshows too, they've just done itmore quietly. The economy willrecover and we will see a prolif-eration of new programs again."

Program categories that havebeen cut include prep services,morning drive prep services, pro-duction libraries, weekend mu-sic programming via outside part -

Radio One buys Blue Chip

for SHWARoss Love is cashing in his chips.The former Procter & Gamble ex-ecutive, who entered the radio in-dustry in 1996 with the $4M pur-chase of WIZF-FM Cincinnati, isselling most of his group for $190M.The deal will have the nation'slargest African -American -ownedradio group, Radio One (O:ROIA),acquire number three, Blue ChipBroadcasting. Love will then be-come a Radio One director.

Radio One is buying 15 of Blue Chip's 18 stations. It will LMA,but not purchase, WDBZ-AM Cincinnati, OH, which will beowned by a Love -controlled entity. WXLO-FM & WBTF-FM Lex-ington, KY will be sold separately.

The $190M price tag will consist of at least $80M in stock andthe rest in cash. Love and his investors will clearly profit hand-somely. Blue Chip Broadcasting was initially backed by Cincin-nati investor John Wyant's Blue Chip Venture Co. It later addedinvestments from former Jacor backer Sam Zell and Quetzal,the minority -targeted investment fund managed by Chase Capi-tal and funded by several major broadcasters.

Radio One said Blue Chip is expected to have approxi-mately $11.5M in 2001 broadcast cash flow (BCF), not includ-ing its Minneapolis start-up, KTTB-FM, which Radio One isvaluing at $30M. That puts the acquisition multiple just a hairunder 14 times 2001 BCF.

"Our vision has always been to own as many Urban radiostations in as many top markets throughout the country aspossible," Radio One CEOAlfred Liggins said in his an-nouncement. (See page 12 forRadio One's Q4 earningsreport.)-JM

nerships and select specialty Talkradio programs, 25 in total, accord-ing to Kitchin. "Between Premiereand MJI Broadcasting, we producemore than 36 prep services. We'retalking about the elimination orreduction of 12 of those. So we arestill two-thirds into that. We justchose to take the best two-thirds."

Premiere announced the spe-cifics 2/9-see RBR.com.

RBR observation: In Janu-ary, Premiere took a bigger hitthan Westwood and ABC. Busi-ness was down more than 20%;ABC and Westwood were downless than 20%, according to RBR

www rbr corn

sources. Premiere is just thelast to tighten its belt.-CM

Radio ends 2000 up 12%

The radio industry chalked up$19.819B in total ad sales in2000, according to the RadioAdvertising Bureau. However,December was a down month,ending a 99 -month streak ofgains just shy of a triple -digitnumber -and just shy of meet-ing RAB President/CEO GaryFries' projection that the in-dustry would break the $20Bbarrier for the first time.

2/12/01 RBR

For December, local saleswere off 2% and national dropped7%, for an overall decline of 3%from December of 1999.

For all of 2000, radio revenueswere up 12% across the board -local,national and overall. Local sales were

pegged at $15.223B and nationalspot $3.596B. The final 2000 figure of

$19.819B also includes an estimated$1B in network revenues -a gain of14% from the previous year.

"Over the long run, radio will' continue to withstand any slow-down in the economy," Friessaid as the report was releasedat RAB2001 in Dallas.-JM

Miller, Kaplan deniespacing cover-up

Radio Business Report was tar-geted at a press conference 2/2at RAB2001 in Dallas for RBR'sJanuary 29 issue, which criti-cized certain group owners fortrying to suppress financial in-formation which had previouslybeen available to Wall Street.

At the press conference, Miller,Kaplan, Arase & Co. partnerGeorge NadelRivin claimed thatrevenue pacing data was not beingmade available because thesample was not sufficient to paintan accurate picture. He portrayedRBR's criticism as resulting fromlast year's termination of Miller,Kaplan's twice -monthly inventorypacing charts, which had beenpublished in RBI?. Later, he de-nied being pressured by anyone."We get advice from the groups,we don't get pressure," he said.

Nadel Rivin and RAB Presi-dent Gary Fries announcedplans to restructure RAB'smonthly revenue reports to in-clude an index to 1998 levels.Fries denied that there was any-thing deceptive about droppingregional breakouts.

"There's nothing going on inthis industry with people trying tokeep something from anyone. Thedata's just not there," he declared..

RBRstatement: Concern overcertain radio groups suppressingpacing data and even some his-torical data came to RBR fromWall Street analysts. The termina-tion of our former relationshipwith Miller, Kaplan was only a

/12/01 RBA

Radio News®

small symptom of the diseasewhich threatens to damage theradio industry's relationship withthe investment community.

No one has demonstrated thatanything in our January 29 issuewas inaccurate. We stand byour reports.-JM

Powell meets the press

Newly appointed FCC Chairman

Michael Powell met with reporterslast Tuesday (2/6) to formally intro-duce himself as well as outline hisagenda for the FCC. The new Chair-man offered little in specifics, butindicted that he'll focus on imple-mentation and leave policy deci-sions to Congress. Powell noted that,'The most significant challenges weface as an agency are going to be theones that find us. That is, we will find

ourselves more and more often re-sponding to change, rather thandriving it as these markets driven byinnovation and technological changebring new and unforeseen issuesand challenges."

Much of Powell's speech wasdedicated to the market competi-tion that these new, emerging tech-nologies will create. At one pointduring the conference, however,Powell did address LPFM radio andhad this to say: "The biggest oppo-nents to that service, that I met,were not big radio group ownerswho almost have nothing to fearfrom this service despite the rheto-ric that is often associated with this.What you're talking about is oftenthe viability of the lower end, mar-ginal stations in local and smallermarkets who almost can't afford tolose one more advertiser or onemore listener, or it's done for."Powell concluded this topic with,"Ironic here is...sometimes whatit's about is one class of little guysversus another class of little guys.In many ways, the stresses of thatissue, to me, are more there thanthey are about big radio."

Powell summed up his vi-sion for a future Commission

www.rbr.com

with, "We need an FCC that candeal more thoughtfully, morecomfortably with uncertainty,ambiguity and confusion."-KR

Fries: Radio winningagainst newspapers

'We are winning the battle againstthe newspaper industry," RAB Presi-dent Gary Fries declared in hisannual State of the Industry speechat RAB2001. 'We are taking advan-tage of their demise," Fries said ofthe success radio groups have had,

and continue to have, in taking admarket share away from print.

Noting the current sluggisheconomy, Fries said it may be a newexperience for many in radio sales,but it should not be feared. "Many ofyour have never sold during adifficult time, when you really haveto employ your skills. It is not goingto be easy, but it will make youbetter." Fries also urged group andstation owners to invest in trainingto "raise the foundation one morelevel" and focus on marketing, notjust selling advertising.-JM

To avoid going loco, LA looks to local

Los Angeles radio has successfully broken out the black inkwellfor the month of January, according to a report by Miller,Kaplan, Arase & Company which was obtained by RBR. Thegain is based on a solid 9.1% upswing in local business, which,coupled with a 10.5% drop in national, left the market ahead4.5% with a few days still remaining in the month.

Things don't look quite so good the further down the roadone looks, but the trend we are seeing is for sales to begin tocatch up with the previous year the closer we get to air time forthe ads.

National has a lot of ground to make up, however, and at thispoint is down a whopping 60% for April. While the nationalsales force may not be able to make up that much ground, thefinal number does not figure to be that bad.

1/28 sample

Local Natl TotalJanuary +9.1% -10.5% +4.5%February -4.2% -24.0% -8.2%

March -12.2% -39.5% -18.2%April -16.7% -60.1% -23.9%

Source: Miller, Kaplan, Arase & Company

Holy Toledo, Batman!Over half a million hits in January!*

rbr.com is a Hit. Come join the parade.*Microsoft Server Analysis -actual January hits 558,208

3

Kluge faces rebellion

Dissident shareholders are meet-ing Wednesday (2/14) in NewYork to try to force the hands ofMetromedia International Group(N:MMG) Chairman John Klugeand President/CEO StuartSubotnick. The dissidents, ledby Lens Investment ManagementLLC, complain that the company'sstock price has dropped dramati-cally while Kluge and Subotnickrefuse to sell non -core assets.Lens, headed by RichardBennett, also charges that thetwo executives have refused tomeet with the dissident share-holders or to comply with a for-mal demand to examine thecompany's financial records.

Many of MMG's investmentsare in broadcasting and tele-communications in the formerSoviet Union. In a statementissued last November, Subotnicknoted that he and Kluge are thecompany's largest shareholdersand have suffered along withother shareholders as MMG'sstock price has eroded.Subotnick is also Chairman ofBig City Radio (A:YFM), which"Owns US radio stations.-JM

FCC withdrawsHoward Stern fine

It appears that Infinity (N:INF)has.won the favor of lady luck.The FCC has decided to rescindthe $6K fine assessed to WXRK-FM New York for the airing ofthree separate Howard Sternradio shows in which allegedlyindecent material was broad-cast. WXRK was fined based oncomplaints from listeners ofWBZU-FM Richmond, VA andWEZB-FM New Orleans, LAwhich were also fined.

The FCC decided to targetWXRK, where the broadcast ofStern's show originates. Ob-tained from the actual order,"...it can be assumed that if the"Howard Stern Show" materialwas broadcast by [an affiliate,] itwas broadcast by WXRK. Wepresume that the material airedby WBZU and WEZB was alsoaired by WXRK on the same datesand at the same times of day..."

Radio NewsThe airings of the shows in question took place on themornings of October 23, 1995, March 7, 1996, and June3, 1996 between the hours of 6:00 a.m. and 10:00 a.m.

The reason for the withdrawal? According tothe FCC, it was because a significant amount oftime has elapsed since the broadcasts of thequestionable material. The Commission, never-theless, stated that its decision in no way con-dones the broadcast of indecent subject matter.

RBR observation: So does this mean one canavoid an FCC fine by simply waiting for a"significant amount of time" to elapse? No. itseems more likely that the FCC found itself onsomewhat shaky ground, trying to collect from astation which failed to offend any of its own locallisteners, regardless of what those in other mar-kets thought. If in New York there was noperceived harm, then it's pretty hard to call the

RBR News Briefs

NAB adding streaming trade show; to pair with Radio Show

This year's NAB Radio Show will be complemented with a new technology conference andexposition: "NAB Xstream." Both will be held 9/5-9/7 in New Orleans. Xstream will feature sessionson streaming technologies, content development, broadband, e -commerce, encoding and howtraditional broadcasters can best leverage their websites. Radio Show registrants will have freeaccess to Xstream. NAB expects Xstream to be paired with all future Radio Shows.-CM

Cornils honored at RAB2001

The late Wayne Cornils was honored with the Kevin B. Sweeney Award for excellence in radioat RAB2001 in Dallas. "His integrity and professionalism set the standard for with it means to be aradio broadcaster," RAB President Gary Fries said of Cornils, who was active in radio and the RABright up until his death last July. The award, which was accepted by Cornils' widow, WendyGreen, was preceded by a video memorial chronicling the life of "Radio Wayne."-JM

Annual NRB begins 2/10

The 58th Annual National Religious Broadcasters Convention and Exposition began 2/10 in Dallas.More than 5,000 attendees will attend the show that features workshops on TV, radio, Internet andchurch media. One of the convention highlights is a Public Policy Breakfast that features a debatebetween conservatives and liberals on religious speech and the First Amendment. During theconvention, NRB's 90 -member board of directors will meet for business and then the members willmeet and vote on officers.-CM

Sirius problems?

Because a software glitch in Sirius Satellite Radio's (O:SIRI) system needs to be fixed to solve amuting problem in its receivers, Lehman Bros. has delayed delivering the company a $150M loan.The loan is still expected, as Sirius expects to fix the glitch shortly. Nevertheless, an actual test ofthe system must be passed for the money to arrive. More problems for the Sirius: LucentMicroelectronics is also over a year behind in manufacturing its receiver chipsets.-CM

4 www rbr corn 2/12/01 RBR

Ifoul-and make it stick-espe-cially when the FCC is draggingits feet on a court order to pub-lish its indecency rules.-KR Radio News°

Clear Channel BuysEnigma Digital

Only days after RadioWave.comannounced it had signed EnigmaDigital sites to its network affiliate roster, Clear Channel (N:CCU)announced it had purchasedEnigma. The Internet -onlywebcaster specializes in lifestylemusic sites such as Heavy MetalKNAC.com, ElectronicaGrooveRadio.com, LoungeLuxuriaMusic.comm Hip -HopCurbserver.com and ReligiousAcaza.com. The company alsobrings to CCU a proprietary inte-grated media platform that canextend its brands onto theInternet with broadcast, publi-cation, retail, community, e -com-merce and personalization ap-plications, all through multiplemedia channels.

The big draw must have beenthe combined 2M hours of onlinelistening per month that KNAC andGrooveRadio receive. The purchaseadds to Clear Channel's expandingInternet -only portfolio that includeswww.worldclassrock.com andKIISFM.com, the online sister toKIIS-FM Los Angeles (KISSFMi.com

is not controlled by CCU).Kevin Mayer, CEO, Clear

Channel Internet Group (CCIG),is expected to oversee Enigma."Enigma is very fundamental toour entire strategy. They bring acouple things. One is a suite oftechnology tools that will allowus to create much, much betteruser experiences in websitesfor all of our properties. So weplan on using their suite oftechnologies for everything thatwe do going forward on theInternet," Mayer tells RBR. "Andthey also bring some prettystrong Internet -only brands-KNAC and GrooveRadio areperennially in the Top -10Arbitron-rated webcasting sta-tions. We have an integratedstrategy going forward-a syn-ergistic mix of Internet -only stuff,radio stuff and SFX stuff."

Enigma Digital was foundedJ12/01 RBR

01111:1111 is II le 11.11111iCs1 1xllilinii 0116(1\ -t3'

Ill the (Tx11111V. briMatillex.

Clinton& Me

How eight years of a pants -free presidencychanged my nation, my family and my life

Michael Graham

Charleston talker writes Clinton lampoon

Michael Graham, syndicated columnist ("The Usual Sus-pects") and witty conservative 3-7 PM host at Clear Channel'sWSC-AM Charleston, has published his second book, "Clinton& Me: How eight years of a pants -free presidency changed mynation, my family and my life." The book may be the culmina-tion-or perhaps the ironic end result-of Graham's 1985 de-gree from Oral Roberts University and six years immediatelythereafter as a comedian, working 41 states with people likeRobin Williams, Jeff Foxworthy and Jerry Seinfeld.

"Clinton & Me" delves deep into the humor createdfrom eight years of the Clinton phenomenon. Graham paral-lels his own life story with political observations, neverforgetting to credit "President 0.J." for enriching it everystep of the way. "Why did I write the book? Because likeevery radio talk host and columnist in America, I owe BillClinton an enormous debt. He gave us eight of the mostentertaining years in the history of our experiment withdemocracy. Before Bill Clinton, talk hosts had to find ways toget people interested in the details of the federal budget.

Thanks to [him], talk hosts had to find FCC -approved ways to talk about oral sex," Graham attests.Graham also talks about his days at 50,000 -watt WBT-AM Charlotte, from whence he was fired for

making a flippant comment (RBR 4/26/99, p.7) about the Columbine tragedy. Learning from hismistake, Graham has re-emerged stronger than ever, hosting "The Clear Channel Weekend Show"from time -to -time, making regular appearances on ABC's "Politically Incorrect with Bill Maher" andNBC's "Hardball with Chris Matthews," as well as appearances on NBC's "Nightly News with TomBrokaw" and CSPAN. Tireless Graham frequently appears in Knight-Ridders' Charlotte Observer ,see (www.charlotte.com/observer/opinion/pub/mgraham0201.htm) and National Review Online.

Graham's next book, published by Warner Books, is due out 2002; his first book, "Banned fromPublic Radio" was published in 1995. "Clinton & Me" is retailing for $18.95 and can be ordered onlineat www.michaelgraham.com.-CM

in 1998. Bob Ezrin, EnigmaChairman and CEO has beennemed Vice Chairman of CCIG;Enigma President MichaelAbrams is now CCIG's Presi-dent of Operations. Both reportto Mayer.-CM

News Corp. and Hughesmerger looking

more likely

A deal could be struck with inthe "next few weeks.": RupertMurdoch's News Corp (N:NWS)is in talks with GM (N:GM) tobuy its Hughes Electronics sub-sidiary, with the idea of merg-ing it into its own Sky GlobalNetworks satellite division. Thegoal is to create a public com-pany out of the two with Hughesshareholders owning 64% of themerged company; News Corp

www.rbr.com

owning the rest. News wouldbe the largest single share-holder of the combined entity-a 36% ownership stake withoperating control.

The combined global satellitegiant would be worth an esti-mated $60-$70B: Hughes manu-factures satellites, owns DirecTVand has an 81% inerest in PanAmSat

(the world's largest owner of com-mercial satellites); Sky Global hasops in the UK and Asia.

Struggling Hughes was 'puton the auction block monthsago. Analysts said the companycould draw up to $45B, while itsworth is estimated at $36B (mar-ket cap.). Aside from News, GMhas been in talks with Comcast(N:CCZ). "GM has these subsid-iary businesses like finance andauto parts and their value isn'tbeing reflected in GM's share

price. So GM is looking to dothings to increase shareholdervalue and selling Hughes wouldbe one of them," observed oneWall Street analyst. "GM needscash now-the auto business isin the [toilet]."

According to the Wall StreetJournal, Microsoft is willing toinvest up to $4B in Hughes, cash"that will be important to GM,which desires a cash infusion of$5-8B to shore up its balancesheet," WSJ said in a 2/7 story.

The deal could affect owner-ship shares in XM Satellite Radio(O:XMSR): 16.1% is owned byHughes via DirecTV. The rest ofXM includes GM, 10.5% directlyand a total of 26.6% includingHughes' stake; Clear Channel(N:CCU), 25.2%; and MotientCorp. (Formerly AMSC, the origi-nal owner of XM), 33.8%.-CM

Clear Channel

lubes up LA

Clear Channel (N:CCU) hasscored a major cross -platform adbuy in Southern California. JiffyLube's 104 franchisees in the LosAngeles market have committedvirtually all of their 2001 market-ing dollars to Clear Channel'seight LA radio stations, Premiere/Airwatch Traffic service, Eller out-door and play-by-play broad-casts of the Lakers and Dodgers.

Clear Channel Radio MarketManager Charlie Rahilly saysthe multi -platform campaignconceived by Clear Channel isdesigned "to gain maximumconsumer mind share for JiffyLube, driving sales and reach-ing our incentive."

No one is disclosing the dol-lars involved, but Clear Channelgets even more ad spending fromJiffy Lube after reaching a speci-fied sales growth target. Termsinclude a "monthly sales/mediaaccountability review."

"We wanted to develop a trulyaccountable program where ClearChannel had a marketing respon-sibility to drive results for Jiffytube," said Jill Marx, VP/MediaDirector, Kovel/Fuller, whoseagency has the Jiffy Lube account."We feel this is the way businesswill be approached in the future,and KoveVFuller and Clear Chan-nel are ahead of the curve in thispartnership project."-JM

Radio "news update"boosts tourism

If you are in a northern US radiomarket, you've probably heardthe spots that begin "It's 82degrees..."

So, do listeners mind beingtaunted by the faux report on

life in Aruba when they're driv-ing through snow or sleet?NYMRAD reports that thecampaign's first flight, whichaired from mid -Novemberthrough December 2000,boosted the Caribbean island'snumber of tourists from the NewYork market by 15.36% in De-cember 2000 over 1999.

Derrick Ogilvie, SeniorCopy Writer at Fitzgerald+Co.in Atlanta, said the ads werewritten to get listeners to "stopand consider where they cur-rently are-versus where theycould be in just a few hours."

Fitzgerald VP/Associate Me-dia Director Liz Daney andAccount Manager AngelaCocke chose radio for its reach,frequency and ability to targetbusy, affluent adults. In NewYork, the campaign ran on eightstations selected to target adults35-54 with household incomesof $75K or more.-JM

GM goes onlinewith Univision

While cutting total ad spendingfor the early months of this year(RBR 2/5,p. -4), General Motors(N:GM) has a new promotionaldeal with Univision (N:UNV) totarget Hispanics-not onUnivision's TV stations, but on itsWebsites. The one-year "strategicmarketing alliance" will have GMsponsoring several content areason Univision.com. There will alsobe information about GM's ve-hicles and links to GM websites.

"It's important for GM to bevisible among this fast-growingand important market segment,"said Tyrone Jordan, Directorof North & South America NewBusiness Development for theauto maker. "Univision.com hasa loyal and growing group ofusers and that provides a tre-mendous promotional oppor-tunity for GM."-JM

Belo launches in Mexico

The Dallas Morning News Ex-press may not sound like thename of a Mexican newspaper,but it is. Belo (N:BLC) haslaunched the new English -lan-guage daily in Mexico's majorcities in a joint venture withthree Mexican newspapers. Theeight -page, four-color daily con-tains news targeted to businesstravelers, diplomats and touristsfrom Belo's flagship, The DallasMorning News, other Belo pa-pers and newswires.--JM

TimeBuy launches for adindustry transactions

Add another to the list of onlinemedia transaction companies: LA-

based TimeBuy launched 2/1 with1,100 station affiliates. The company's

Internet -based communications plat-form enables media buyers andsellers to transact business online.The company says 20% of non -

represented stations in the US havesigned. TimeBuy will offer its ser-vice to cable nets and TV stations inlate March or early April-CM

Buyandsellitall.comlaunches "Automall"

Providing broadcasters e -com-merce NTR solutions for theirwebsites, Buyandsellitall.comhas launched "Automall," anonline consumer classifieds autosales vehicle. The system al-lows up to full page ad displaysfor dealers, all the way down toline listings for consumers. Freeto broadcasters, Automall pro-vides a venue for consumersand dealers to place and searchads, handles credit card pro-cessing, bandwidth and data-base management.-CM

IAB names Webster CEO

The Internet Advertising Bureauhas named former EVP, Associa-tion of National Advertisers (ANA)Robin Webster to the position ofCEO. She most recently was ChiefContent officer at eMarketWorld.IAB is currently expanding its NYoffice and creating new workingcommittees.-CM

Entravision growsdouble -digits

Entravision (N:EVC) postedrecord results for 2000, but itsstock price fell after manage-ment gave guidance for 2001that was below what some ana-lysts had been planning on.

For 2000, when Entravisionnearly tripled in size throughacquisitions and sold its IPO,same station net revenues grew

Radio BusinessReport 1M

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Look out Westwood One, Premiere and ABC! The RBR Radio Network isnow up to five affiliates and growing... Radio Business Report's daily

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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.comBroadcast Electronics http://www.audiovault.com/rbr.html

If you too want to be a web affiliate to our "sticky" content, just email klee@rbr.com or give us a call at 703-719-9500.

6 www.rbr.com 2/ 1 2/0 1 RBR

26% and same station broadcastcash flow was up 32%. Over all, netrevenues shot up 161% to $154Mand BCF rose 154% to $58.2M.

For Ql, Entravision is proudlypredicting that its TV ad rev-enues will rise 14%, while the TVindustry over all is expected tosuffer a 7% decline. The com-pany is predicting only a 1% Q1revenue gain for its radio andprint units, with outdoor flat."January was clearly nothing towrite home about for radio, butwe have picked up considerablysince," noted CEO Walter Ulloa.

Jeff -Pilot postsrecord year

Jefferson -Pilot Corp. (N:JP) saysits operating earnings per sharerose 13% in 2000 to a record$4.28 per share. Jeff -Pilot is pri-marily an insurance company.Earnings for Jefferson -Pilot Com-munications, its radio and TVgroups, rose 9% to $41.2M andthe company said "earningsgrowth in the Radio Divisionwas particularly strong in 2000."Broadcast cash flow rose 5%overall (radio & TV) to $89.6M.

Disney beats The Street

The Walt Disney Co. (N:DIS)beat the First Call/ThompsonFinancial consensus by a penny,posting fiscal Q1 earnings of 16cents per share.. Revenues forthe quarter, which ended 12/31/00, rose 7% to $7.3B. Revenuesfor Disney's broadcasting andcable operations rose 6% to$2.9B, but operating incomedropped 8% to $590M. That wasblamed primarily on soft ad salesfor the ABC Television Network.

' ABC Radio was not mentionedin Disney's quarterly report.

JRN announces new hires

'ones Radio Network URN) an-nounced the appointment ofRick Honea, Michelle Jaskoand Greg Allen to RegionalAffiliate Sales Managers andFrances Padilla to AffiliateRelations Specialist. Each willreport to Pat Crocker, JRNNational Sales Manager.

2/12/01 RBR

-71FiretprgliMr`

RelationshipsBy Mitchell W. Scholar

Over twenty years ago, when I was relativelynew to the media business, one of my firstbosses taught me the three principles bywhich she had guided her career:

1) - You are only as good as your last order.2) - Never believe your own press clippings.3) - Consider yourself lucky if you can count

your friends in the industry on the fingers ofone hand.

She was a tough negotiator who had fought her way up to her then current position as MediaDirector in a world in which women could not aspire to be anything higher than an ExecutiveSecretary or a Head Bookkeeper in the media industry.

I took her words to heart because I was young and not yet ripened by life experiences, butI then evolved them into my very own mantra. I, too, never believed my own press clippings(at least I tried not to do so). However, unlike my mentor, my personal creed became to treateveryone as I would want to be treated myself: with both respect and dignity. And guess what,it worked, even during those times when I might not have had any then current pending avails.

Flash forward to 2001. Contrary to what any of my sales people might say to the contrary, weare now experiencing a very soft marketplace. Conversely, this time a year ago, we experiencedthe exact opposite. At that time, even though my sales representatives were profiting from doubledigit increases from many of their clients, I reminded all of them that all of my clients were loyalto the medium of national radio and had all been there to support them in the days when themarketplace was not as strong as it was then. After many discussions, they all agreed, and weworked together to a mutually acceptable win -win situation. Likewise, this year, I did not gloat withany of my sales people over the current reversal of fortune for all of them. We worked togetherto find ways in which we both could walk away satisfied with the results of our negotiations.

The moral of this tale is that because my sales people treated me with respect when themarketplace was bullish last year, and still negotiated fairly with me under the circumstances,I offered them all the same level of respect this year when the marketplace was very soft.

Needless to say, it would take more than the fingers on both hands and the toes on bothfeet, to count the people who I have met over the past twenty-five years in our industry whoI count among my closest and most trusted of friends.

Mitchell is Director of National Radio at NY -based Horizon Media.He can be reached at mscholar@hmi-inc or 212-916-8600.

Honea joins JRN fromWestwood One where he wasRegional Format Manager. Jaskojoins JRN from M Street Journalwhere she spent the past threeyears as Associate Editor. Allenjoined Jones in '97 as Program-ming Coordinator for SuperAudioand then moved on to AffiliateRelations Specialist for JRN. Padillajoined JRN in '88 as administrative

www.rbr.com

assistant and assistant to the Pro-gram Director of the cable radionetwork, SuperAudio. She waspromoted to Music Director andthen to Operations Manager forthe Classical Collection, a 24 -hourclassical music format. She thenleft JRN and was most recently,Operations Manager for a 24 -hourstart-up network, Classical PublicRadio before returning.-CM

Arbitron hires JudyCarlough

Arbitron has appointed JudyCarlough to the newly createdposition of VP Advertiser Ser-vices for its InfoStream webcastratings unit. She was mostrecently VP Agency andAffiliate Relations atBroadcastSpots.com.-CM

7

Streaming royalties goto court

By Jack MessmerStreaming

Is radio still radio if it's beingstreamed on the Internet, ratherthan broadcast over the air-waves? That's the basic issue tobe resolved in a lawsuit thatseveral radio group owners andthe NAB have filed in US Dis-trict Court in Philadelphia (RBR1/29 special insert).

Although the defendantnamed in the lawsuit isMarybeth Peters, the US Reg-ister of Copyrights, the casereally comes down to a powerstruggle between broadcastersand the record industry, whosecounterpart to the NAB is theRIAA-Recording Industry As-sociation of America.

Peters, to the surprise of noone who was familiar with theissue, ruled in December (RBR12/18/00, p. 4) that if a broad-caster streams the audio of anAM or FM station over theInternet, the broadcaster is thenliable to pay performance royal-ties to the record company and/or artist, as well as paying royal-ties to the composer and pub-lisher-the royalties which over -the -air broadcasters have paidfor decades to ASCAP, BMI andSESAC. The lawsuit by BonnevilleInternational, Cox Radio (N:CXR),Emmis (O:EMMS), Entercom(N:ETM), Infinity (N:INF) andSusquehanna Radio claims thatPeters exceeded her authorityunder the law and that her rulingwas "arbitrary, capricious, anabuse of discretion, and other-wise not in accordance with law,and therefore is invalid."

The broadcasters claim that ifPeters' ruling is allowed to stand,it "could profoundly affect theability of the radio broadcastingindustry to keep abreast of mod-ern technology by offering ra-dio station programming on anonsubscription basis over theInternet." The lawsuit chargesthat the Register of Copyrightsseeks "fundamentally to reorderthe legal and economic rela-tionships between the broad -

8

cast radio and recording indus-tries in a manner that couldwreak havoc with over -the -airbroadcast radio formats and stiflethe offer of streamed over -the -air radio broadcast programmingover the Internet."

Although the ruling in favorof RIAA's members and againstbroadcasters was pretty muchguaranteed, given the US Copy-right Office's history of rulingin favor of the recording indus-try (RBR 12/4/00, p. 3), somebroadcasters seemed to havebeen unaware of the issue andexpressed shock at the rulingwhich would require perfor-mance royalty payments forInternet streaming. As a result,some stations have pulled theplug on their webcasts and oth-ers are assessing whether tocontinue streaming.

How we got here

When Congress passed the Digi-tal Millennium Copyright Act in1998, streaming wasn't really onanyone's radar screen on Capi-tol Hill. Instead, the recordingindustry was seeking protec-tion from having perfect, digitalcopies of its music downloadedon the Internet without pay-ment. That fore-saw the recentNapster contro-versy, but notthe develop-ment of real-time streamingwhich wouldallow forwebcasting sta-tions whichwould soundand operatemuch like tra-ditional radiostations-except

Reese

that a serverwould be substituted for thetransmitter and no FCC licensewould be required.

When early, low -quality

streaming advanced to higherfidelity over the past couple ofyears and broadband Internetconnections became more com-monplace, ASCAP, BMI andSESAC began scrambling to de-velop Internet licenses and makestreamers aware of their legalobligation to have them. RIAAalso began offering a type oflicense on behalf of its members,although it was pending theoutcome of a proceeding by theCopyright Office to set rates-atype of blank check which itsought to get webcasters to sign.

For broadcasters, the idea ofpaying yet another copyrightroyalty, did not sit well.

"What is specifically at issue inthis lawsuit is whether the DigitalMillennium Copyright Act appliesto over -the -air broadcasters whenthey stream," explained BruceReese, President & CEO of leadplaintiff Bonneville. "Our position isthat when we are streaming on theInternet the same product that weare running on the air, that it doesn'tapply," said Reese, who is an attor-ney as well as a broadcaster.

"We believe the CopyrightOffice's decision that broadcast-ers should compensate artistsand record companies forwebcasts of AM/FM program-

ming is correctas a matter oflaw and policy,"said SteveMarks, Sr. VicePresident forBusiness andLegal Affairs atRIAA. "Broad-casters shouldnot be treateddifferentlythan otherwebcasterswho fairly com-

pensate the creators of the soundrecordings upon which theybuild their business. We arehopeful and confident that thefederal court will affirm the deci-

www rbr com

sion of the Copyright Office, andwe look forward to working withbroadcasters as they transitioninto this marketplace."

So, should we expect along, drawn-out court battle?Not necessarily.

"We think that we shouldprevail in this litigation, but wedon't think the best way to re-solve it is to fight it out in court,"said David Redd, Bonneville'sGeneral Counsel. "We're hopingthere will be an industry settle-ment with the other side whichwill be mutually beneficial. It

may or may not involve thepayment of revenues related tostreaming. So we think it is in theinterest of broadcasters to con-tinue to explore their Internetopportunities, with or withoutstreaming. We continue to ex-plore the benefits of streamingfor our radio stations with theexpectation that because of themutually beneficial relationshipbetween radio broadcasters andperformers and labels, that weshould be able to reach a mutu-ally acceptable resolution."

"It is in our interest to figureout how to sit down with theother side and resolve thesethings," agreed Reese. "I'm anex -practicing attorney and I'mconfident that litigation is gen-erally one of the very worstways to resolve anything. Weought to seek out opportunitiesto try to resolve this."

You don't have tostop streaming

Despite the unresolved issues,Bonneville's stations are continu-ing to stream on the Internet, asare many other broadcasters.Reese offered some guidelines onhow broadcasters can continue todevelop their Internet strategies,while controlling their exposureto potential royalty payments.

A. Broadcasters ought towatch the litigation and the rate -

2/12/01 RBR

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setting proceeding, which is stillgoing on at the US CopyrightOffice. "We're proceeding nowalong parallel paths," Reese noted.

B. "A second thing thatwe're doing, at least, is doinga little better job of document-ing what our revenues are andwhat our expenses are relatedto our Internet operations,"Reese suggested. "So that ulti-mately, when some of thesequestions are resolved-doesit [a performance royalty] ap-ply, if so, to which revenuestream and if so, at what rate-we'll be in a position to an-swer that a little better."

C. "I don't think weought, as a broadcasting indus-try, to back away from theInternet completely," theBonneville CEO said. "Weshouldn't say, oops, somebodyslapped my hand, so I shouldn'tplay in this sandbox anymore.This is an important new me-dium and we need to figure outhow to be there."

In short, Reese advocates cau-tion, but not fleeing in fear: "Weneed to proceed with all deliber-ate speed to develop whateverInternet strategies we've got-including streaming strategies.We ought to participate in therate -making and in the litigation.We ought to make sure thatwe've got accurate records ofwhat we're spending over thereand where the money's comingfrom-if it's coming."

RBR observation: Even aworst case scenario-retroac-tive performance royalties backto 1998 at the absurd 15% ratesought after by the RIAA-might inhibit the future devel-opment of streaming, but wouldnot amount to much in pay-ments due. Did any broadcasteractually have any Internet rev-enues in 1998? 15% of zero isstill zero, and the number didn'tget much bigger in 1999 and2000. As far as we know, everybroadcaster has been spendingmore money on implementingtheir Internet strategy thanthey've realized in Web -relatedrevenues.

Keeping careful records is vi-tal going forward. As broadcast -

Streamingers' Web revenues grow, it willbecome more important to beable to say exactly what camefrom streaming and what didn't.If RIAA proves to be both greedy

and successful in court, it couldend up collecting only a tinyrevenue check and drive broad-casters away from Internet stream-ing. That won't help sell CDs.

Webcasters speak out

Despite their decades of bicker-ing, the record industry needs theradio industry and visa versa.Everyone will be better off oncethis royalty issue is resolved.

By Carl Marcucci

We asked some Internet -only webcasters how the DMCA (Digital Millenium copyright Act) affects theirbusiness and if it's fair to charge performance royalties to broadcasters who stream. All three of therespondents are MediaAmerica Interactive clients.

Paul Bendat, Founder, bcb, inc. His company operates Internet -only radio service (www.waby.com)and builds customized services for other web sites (www.cmj.com and www.nerve.com); TroyMcConnell, Batanga.com (Streaming website); and P. Cheng, Alldanzradio.com (Streaming website).

What do you think of the US Copyright Office decision in favor of the RIAA forcingperformance royalties on radio webcasters?Bendat: If the legislation of.itself is fair, then it is fair that both radio and online broadcasters shouldpay. I subjectively believe that the online situation is only a prelude to the same principles be taken toapply to radio. Please be aware that it is my opinion that the restrictions on programming in the DMCAare inherently unfair. Without attributing any bad intentions to any party it would seem that thelegislation was created to stifle the radio medium utilizing the means of transmission that the Internetallows. The effect of this "stifling" would be to extend the status quo of the relationship between recordcompanies and existing radio broadcasters. Internet -only radio has enough problems of its own to dealwith concerning the cost of transmission and ease of reception without the DMCA adding to them.McConnell: For us, it levels the playing field between pure webcasters and re -broadcasters ofterrestrial signals.

Cheng: I believe this ruling is still in reaction to the earlier abuses. In time, I believe all legitimateparticipants of this business will come to terms with each other's proper position in this value chain.ltstoo early to judge the impact of a single event.

Do you think it's fair that radio broadcasters don't have to pay performance feeswhen both radio broadcasters and webcasters have to pay publisher and composerfees via ASCAP, BMI and SESAC?Bendat: One must bear in mind that composer fees have a different basis of copyright than that whichis covered by the DMCA. Just because one pays for composer rights is not an excuse for not payingrecording rights; provided that rights should be paid for.McConnell: Not really-it needs to be either/or. I'm a webcaster and I'm required to pay, then soshould a radio broadcaster. If they are not, then I should not be required to do so. I feel penalizedbecause I am taking the risk on a new medium

Cheng: We have always assumed a certain portion of our revenues will be sharedwith the producersand rights owners of the content. While it certainly will change the economics, we believe that areasonable compromise can be worked out between the affected parties.

What are your thoughts on the performance royalties being retroactive back to '98when the Digital Millennium Copyright Act was passed?Bendat The retroactive nature of the royalty was set out and irregardless of whether it is right orwrong, all should have been aware of it.

McConnell: Making the fees retroactive is tantamount to saying "hey, go take the risk, and if you discoversomething (which we did), then we'll go back and charge you for it." My biased (biased because the retrofees would apply to us) opinion is that the real license fee opportunity for RIM and artists is going forward,not in the last few years. And the opportunity is only there because companies like Batanga took the risk.

Cheng: I believe the retroactivity push is a bargaining tool used by the royalty rights owners to make sure theyare paid attention to. Again, in time, a normalized and fair payments model will come as the industry settles downto recognize the importance of having their content exposed to a new medium and its millions of new users.

www.rbr.corn 2/12/01 RBR10

lediaAmerica signs CLBNfor targeted streaming

ad representation

>nes MediaAmerica announced30 it has signed the Coollinkbadcast Network (CLBN) forearning ad sales representa-)n. Along with targeted ad in-

2rtion based on sex, geogra-hy, age, income and psycho-raphic profile, CLBN offers ad-L-rtisers "DemoTrak," a real-time udience and ad tracking mea-.irement tool. CLBN has signedamong others) Citadel Broad-isting and Hispanic Broadcast-ig to stream 190 stations, along'ith forging partnerships withIicrosoft, Akamai, Octiv andlext Audit (provides third partyudited measurement).

MediaAmerica Interactiveas 900 streaming news andntertainment affiliates thatlclude StreamAudio.com,udioBasket.com,DiskJockey.comnd CountryStars.com. "I have achnical staff, and we did the

f.chnical evaluation of it and it1st blew us away," sayslediaAmerica Interactive COOlichelle Jennings. "They'vebsolutely nailed it. because notnly can we remotely insert the[reaming media ad and notnly does the audio synch withle video, we are able to trackle impressions in real timelong with the associated click--II -us. So for an advertiser wholaces a schedule with us, it'sudio and video and interac-ve. As far as I'm concerned, were fair game for Internet bud-ets, national TV and radio, and)cal budgets-because we canco -target."

MediaAmerica InteractiveIvertisers include Verizon

\fireless, FTD, CompUSA anda rner-Lambert.-CM

Streamies coveringDMCA fees for affiliates

i i the wake of the recent US;opyright Office's initial rulingn favor of RIAA, allowing per-ormance royalties to be chargedo wehcasters, streaming pro-'ider StreamAudio announced/29 it will obtain and pay for01 RBR

the license for sound recordingperformances as outlined in theDigital Millennium Copyright Act(DMCA). "No matter how thisissue is settled in the courts,we've made the decision to pro-tect our radio partners from thepotential financial burden of theDMCA. By freeing radio fromthis worry, station groups canfocus their full attention on pro-viding their programming toonline listeners," said Bob Case,StreamAudio CEO/Co-Founder."All stations streaming underour [new basic] agreement arecovered by this license."

StreamAudio has 755 radio sta-tion and Internet -only affiliates.

Yahoo! Broadcast andCoollink are also picking up thefees. Michael Peterson, SVP,Streaming Media Group says hiscompany has already been pick-ing up BMI, SESAC and ASCAPcomposer and publisher fees andplans to do the same for perfor-mance royalties. "We have beencovering those costs since Au-gust for all of our traditionalbroadcast partners. And we haveescrowed a percentage of ourgross advertising revenues tocover the projected royalty feesfrom all licensing organizations,including RIAA, on behalf of ourpartners," he tells RBR. "While Iwould not say we are completelyindemnifying them of those costs,we are positioning ourselves tocover those costs should therulings come down."

Peterson tells RBR betweenBMI, ASCAP and SESAC, theyaverage 2.6% on the gross rev-enues side and about 3.5% onnet revenues. However, "RIAAcame out of the chute first at41% based on the cable modeland then rescinded and cameback at 15%. That is not eco-nomically feasible for compa-nies like ours or broadcasters tohave to incur," adds Peterson.

) I think the arbitration pro-cess and the parties representedare optimistic those fees will henegotiated somewhere south of6% as a total. A lot of traditionalbroadcasters have pulled back,saying 'this is an extreme caution-ary flag that we need to considerour efforts into streaming."

www rbr com

CLBN is a member of DiMA-the Digital Millennium Associa-tion and part of the Weil, Gotshallconsortium Law Firm in NY thathas petitioned licensing rights atthe Copyright Arbitration Roy-alty Panel (CARP) hearings atthe US Copyright Office.-CM

Hiwire signs ClearChannel webcaster,

KPIG-FM

Clear Channel's (N:CCU)"WorldClassRock.com," theonline replacement for its AAAKACD/KBCD-FM LA simulcast,has signed with Hiwire for livestream targeted audio ad replace-ment. Hiwire has been servingads for WorldClassRock since 1/31. Hiwire is also reppingWorldClassRock, registering80,000 aggregate tuning hoursper month to advertisers.WorldClassRock is actually stillon the airwaves in LA on 850 AM,KBET-AM Thousand Oaks. ClearChannel's Premiere Radio Net-works is also testing Hiwire withits "Coast To Coast AM." (ClearChannel is also adding to its web -only empire. See p. 2)

From RAB 2/2: Targetedstreaming audio ad insertionprovider Hiwire has signed topInternet streamie KPIG-FMSanta Cruz (KPIG.com) to itsaffiliate list. "Wild Bill" Gold-smith (CE) made the an-nouncement. The deal includesKPIG parent New Wave Broad-casting, with five other stationsin that market. KPIG was previ-ously streaming withGlobalMedia, but is nowstreaming with a Hiwire alli-ance partner.-CM

Global Mediacompletes assets sale

to SurferNetworkGlobalMedia, recently refocus-ing its efforts away from Internetaudio streaming services tobroadband video delivery, hascompleted the sale (2/5) of itsradio contracts and related as-sets to streaming providerSurferNetwork for $1M in cashand 1M shares of SurferNetwork

restricted common stock. Theinitial purchase price total is

estimated at $2.25M. SurferNethas indicated that price couldincrease up to $4.3M, as it mayissue up to 1.5M more shares asa result of post -closing adjust-ments. Global Media's formerboard member, Standard RadioPresident Gary Slaight, is sew-ing as GlobalMedia's represen-tative on SurferNet's board.

Surfer is also awaiting the re-sults of the BroadcastAmericaChapter 11 auction, where it sub-mitted a bid. The combined ros-ter of station affiliates from Glo-bal and BroadcastAmerica maybring Surfer to the number onestreaming provider in the world.However, we wonder how manyBroadcastAmerica affiliates havesigned elsewhere since beingturned off (RRR12/25/00, p. 4).-CM

Disney gives up onInternet group

Tired of watching the money bleed,Disney plans to scrap its GO.comportal and convert all outstandingshares of Disney Internet Groupcommon stock (N:DIG) intoDisney common stock (N:DIS) 3/20. A ratio of 0.19353 is expected.The DIG share price would be$5.96 based on a recent DIS $30.82/

share closing price.DIG lost $395M in '00 and

expects to lose $125M this year.While Disney plans to keep itsInternet group operating as ascaled down unit, 400 of 3,600staffers are expected to losetheir jobs. The successfulABC and ESPN sites willcontinue operating-accordingto Forrester Research,ABCNEWS.com and ESPN haveboth grown 50-75% in traffic andusage over the past year and ahalf. It has been reported thatInfoseek, which Disney acquiredfor Go.com, will maintain thesearch engine fora couple monthsand then put it up for sale.

Disney says it will take a$790M charge for the write-off of intangible assets anda charge of $25M -$50M forseverance and fixed assetswrite-off.-CM

11

How much has adspending slowed?

"I think it has as much to dwith last year as it does thiyear. First, when we talk toour clients, we talk to agen-

_ cies, we do not hear significant cancellations, signifi-cant cutbacks. Clearlythere are nervous peopleout there, but in general thead market is just not asrobust as it was in the prior,year." -David Field,.COO, Entercom, in 2/5 Wall-

' Street conference call.

Media Markets a Moneyby Jack Messmer

Entercom's projections for 2001

Here's what Entercom Communications (N:ETM) has told Wall Street to expect for 2001, assuming thatthere are no acquisitions or divestitures (which is not very likely) to adjust for as the year goes along.RBR has included for comparison Entercom's actual results for 01-4 and the full year of 2000. The finalcolumn has an estimate of pro forma numbers for 2000 from Banc of America Securities analyst TimWallace, which were calculated before Entercom had announced its Q4 results.

Entercom Communications (N:ETM) 2001 vs. 2000(all $ in millions except after-tax cash flow per share)

Category Year 01 02 03 Q4 Full Year Pro form aNet revenues 2001 $72.8 $103.0 $101.7 $91.7 $378.7

2000 $70.9 $96.9 $92.5 $96.7 $352.0 $357.4Cash flow 2001 $24.6 $44.5 $44.7 $46.4 $106.2

2000 $24.7 $41.4 $39.0 $40.4 $145.4 $148.7After-tax cash flow 2001 $15.0 $27.0 $27.6 $28.6 $98.7

2000 $14.9 $25.2 $24.3 $25.3 $89.7 $83 7Net income/(loss) 2001 ($2.1) $10.6 $10.9 $11.9 $31.3

2000 ($0.1) $9.4 $33.2 $4.7 $47.3 $21 6ATCF per share 2001 $0.33 $0.59 $0.60 $0.62 $2.15

2000 $0.33 $0.56 $0.54 $0.56 $1.98 $1.E 5

Source: Entercom Communications Inc. news release 2/5/01; "Broadcasting Monthly," Banc of America Securities, 1/22/01

Chris Devine, President, of

Marathon Media

has agreed to transfer the assets of

KLCE-FM, KCVI-FM and KECN-AM Blackfoot, IdahoKICN-AM, KFTZ-FM, KOSZ-FM and KBLI-AM Idaho Falls, Idaho

KUNF-AM Washington, UtahKREC-FM Brian Head, Utah

for

$14,500,000to

Craig Hanson, Chief Executive Officer, of

Simmons Media

MediaGroup, Inc.

"Radio's Full ServiceFinancial Specialists" "I

5080 Spectrum Drive, Suite 609 East Addison, TX 75001 (972) 458-9300

12 www.rbr.com

Entercom pleasesThe Street

Wall Street may have been con-cerned that Entercom (N:ETM)had the most dot -corn fall -out toovercome, due to its dependenceon the Seattle and Boston mar-kets. COO David Field reportedthat even though dot -corn fellfrom 7.5% of Entercom's ad busi-ness to 4%, the company outper-formed each of its markets in Q4and posted a 44% gain in after-tax cash flow (ATCF) per share -to 56 cents, or a total of $25.3M.Q4 revenues rose 52% to $91.7M.For all of 2000, net revenuesgained 64% to $352M. ATCF pershare rose to $1.98 from a proforma $1.38 the previous year.

Looking ahead, Entercom toldWall Street to expect total rev-enues to grow 7.6% for 2001 -as detailed in the chart above.

Radio One buys big,sells small

Radio One (O:ROIA) announced amajor purchase last week. See pagetwo for details of its deal to buyBlue chip Broadcasting for $190M.

Radio One also announced asmall divestiture. The assets, but

2/12/01 RE0

)t the call letters, of WJZZ-AM Kingsley,I are being sold to Roy Henderson's)rt Bend Broadcasting for $225K.Radio One reports that its Q4 broadcast

ish flow rose 156% to $30M as net'venues rose 135% to $58M. After-taxish flow gained 102% to $11.9M, or 14±nts per share. On a same station basis,ish flow rose 15%.Looking ahead to 2001, but not includ-

ig Blue Chip, Radio One told Wall Street) expect full year net revenues of $258.1Mad BCF of $137M.

Cox Q4 up double digits

ox Radio (N:CXR) reports that its Q4roadcast cash flow (BCF) rose 29.8% to

442.7M as net revenues gained 25.7% to(4102.8M. On a same station basis, rev-unues were up 13% and cash flow 23%.

ox had full year revenues of $369.4M, up2.9%, and BCF of $147.8M, up 26.8%.

Looking ahead, the company told ana-Ists to expect revenues to grow no more'Ian 3% in Ql, 3-7% in Q2 and for the pace) pick up in the second half.

CEO Bob Neil confirmed what othersLave been saying-ad buys are being placedloser to air dates and buyers are beingnore aggressive about trying to cut rates-omething he called "a bit of buyers' re-.erige" after last year's dot-com driven)ricing."I'm a little skeptical of how useful)acing is now, other than 30 to 60 days)ut," he noted.

Van buys out Ruth

ilercury Broadcasting owner Van ArcherII is buying all. of the stock of Ruth2ommunications Corp., owner of WDRR-'M in the Ft. Myers -Naples, FL market.Teteran broadcaster Ruth Ray, who builthe station from a CP in the 1980s, is sellingler company for $2.5M to a new Archerentity, CAM Broadcasting Co.

1Z1312 observation:Yes, Clear Channel does

lave stations in the Ft. Myers -Naples market.Why do you ask? Broker: Blackburn & Co.

RADIO TELEVISION

Sheridan adds in Pittsburgh

Ron Davenport's Sheridan Broadcasting ispicking up its fourth station in the Pitts-burgh market. This time Sheridan's McL/McM Inc. subsidiary is paying $625K forWPGR-AM, licensed to Monroeville, PA.The seller is Jack Mortenson's MortensonBroadcasting.

RBRobservation: This station, on 1510 kHz, is

cunently a 1kw daytimer, but it has a CP to increase

to 5kw day, with 2.5kw during critical hours.

Perry adds KGTO

Russell Perry's KJMM-FM Tulsa, OK is get-ting an AM sister. Perry will pay Cox Radio(N:CXR) $455K for KGTO-AM. An LMA be-gan 2/1. The AM is currently simulcastingUrban KJMM, but look for a new "old school"R&B format soon. Perry Publishing & Broad-casting will grow its Oklahoma radio groupto six with this deal. It also publishes TheBlack Chronicle, a weekly with both Okla-homa City and Tulsa editions. As if thatdoesn't give him enough to do, Russell Perryis also Secretary of Economic Development(an unpaid position) in the cabinet of Okla-homa Governor Frank Keating (R). Broker:Jody McCoy, McCoy Broadcast Brokerage

Shockley price revealedShockley Communications has filed its salewith the FCC and the price turns out to be$160.35M (not the $200M figure specu-

lated elsewhere). That's $117M in pay-ment (mostly in cash, but with an $8Mnote secured by the radio stations) for100% of the company's stock and as-sumption of $35.35M in debt. BuyerNorthern Communications AcquisitionCorp. is an investment trust managedby Roger Ohlrich of Bethesda, MD.Northern won't be a long-term playerin broadcasting. It already has deals tosell all six TV stations (RBR 1/22, p.13), although those haven't yet beenfiled at the FCC. It's also expected tosell the six radio stations in short order.Broker: Kalil & Co.

Slone deal reworked

When Citadel Communications(O:CITC) cut its December deal to buythe Slone family's five Tucson stations(RBR 1/1, p. 12), $2M of the $63M pricewas supposed to be paid in Citadel'spublic stock. That was before Citadelagreed to be taken private by ForstmannLittle (RBR 1/22, p. 12) at $26 pershare-well above the $12 mark whereCitadel closed out 2000. Citadel andthe Slones have now revised their con-tract. If the Forstmann Little deal closesbefore the station transfers, the Slones

than 181,820 shares. That reflects thedifference between Citadel's stock priceat the time the Tucson contract wassigned, $11, and the $26 buyout price-a quick 136% gain for the Slones.

The RadioIndex TMBattered by nervousnessover slow ad sales, TheRadio IndexTM slumped12.752 for the week to close2/7 at 166.381.

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Transaction Digestby Dave Seyler & 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.

$11,000,000 WROL-AM Boston from CarterBroadcasting Inc. (Kenneth Carberry) toSCA License Corp. (Ed Atsinger, StuartEpperson), a subsidiary of Salem Commu-nications (O:SALM). $10M in cash at clos-ing, additional $1M one year after closing.Broker: John Pierce & Co.

$3,400,000 WKKD-AM & FM Aurora ILfrom WFVR Inc. (Robert Rhea) to NextMediaLicensing Inc., a subsidiary of NextMediaGroup (Carl Hirsch, Steve Dinetz, Skip Weller& others). $170K letter of credit as escrow,$3.4M in cash at' closing. Duopoly withWJOL-FM Joliet IL. LMA in place. Broker:Media Services Group, YorkStreet Partners

$3,250,000 WWLO-AM & WTMG-FMGainesville -Ocala FL (Gainesville -WillistonFL) from Connecticut Broadcast Media ofGainesville Inc. and Karisma Communica-tions Southeast Inc. (Hilda Dawson). $162.5Kescrow, balance in cash at closing.Superduopoly with WLUS-AM, WKZY-FM& WTMG-FM. Broker: Doyle Hadden,Hadden & Associates

$3,000,000 WLGM-FM Springfield IL (Pe-tersburg IL) from LUJ Inc. (Richard & PatriciaVan Zandt) to Long -Nine Inc. (ThomasKushak, William Walker, Charles Mefford,Ben Fisher, Gayle Olson, Richard Record,Thomas Walker), part of the Mid -West Fam-ily group. $100K escrow, balance in cash at

closing. Superduopoly with WMAY-AM,WQLZ-FM & WNNS-FM.

$2,500,000 WDRR-FM Ft. Myers -NaplesFL (San Carlos Park El ). 100% stock sale ofRuth Communications Corp. from Ruth Rayto CAM Broadcasting Co. Inc. (Van ArcherIII). $100K escrow, balance in cash at clos-ing. Broker: Blackburn & Co.

$950,000 WHRP-AM Norfolk VA(Claremont VA) from 4M of Tidewater Inc.(Charles Milkis) to Chesapeake -PortsmouthBroadcasting Corp. (Nancy Epperson).$150K downpayment, balance in cash atclosing. LMA since 12/31/00. Note: Nocontour overlap with WPMH-AM, WTJZ-AM or WHKT-AM.

$625,000 WPGR-AM Pittsburgh PA

(Monroeville PA) from Mortenson BroadcastingCo. (Jack Mortenson) to McUMcM-Inc. (RonaldDavenport and family members), a subsidiaryof Sheridan Broadcasting Corp. $50K escrow,balance in cash at closing. Double duopolywith WAMO-AM & FM & WSSZ-FM.

$500,000 WAJV-FM Columbus MS (BrooksvilleMS) from Radio Columbus Inc. U.W. Furr) toUrban Radio Licenses LLC, a subsidiary ofUrban Radio Communications LLC (KevinWagner). $500K cash. Note: Cumulus Mediaassigned its right to purchase this station toUrban. Broker: Media Services Group

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In a move designedto help busy execu-tives keep up withthe fast -changing ra-dio business, RadioBusiness Report inthe Spring of 2000became the first ra-dio trade publica-

tion to launch an Internet radio sta-tion." Radio news is breaking at anincredibly fast pace and just can'twait for the morning faxes," saidKen Lee, Associate Publisher andGeneral Manager.

In addition to posting news on itsWeb site, www.rbr.com, RBR is alsostreaming 24 hours a day.

The "format" consists of a newscastof radio -specific business and industry

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rbr.comNew Interviews on RBR Radio include:

Stu Chapin of Activate John Dame of Dame Gallagher Ramon Esparolini of Klotz George Lange of Spottaxi Gary Crowder of Gentner David Seaberg of Direct Air Michael Jahnl of Mediatron Roger Morgan of Carson Feltz Charlie Colombo of United Stations Jorgen Jensen of Nautel Bill Hampton of Dave Ramsey Kris Bobo of Comrex Jeff Kimmel of Wicks Broadcast George Bundy of BRS Rob Drucker of MediaAmerica Jeff Keith of Telos

news, interviews and commentaries,plus classic radio bits, jingles and Mer-cury Award -winning spots (with realpaid spots to come). Veteran news-caster Jack Messmer, now ExecutiveEditor of RBR, is back behind the mikefor the audio updates.

The new RBR Web "radio station" isstill early in its development and radioexecutives are encouraged to provideinput on what they'd like to hear. (Pleasedon't ask for Britney Spears, though!)You may email klee@rbr.com so wecan build the radio station you want.

"Another exciting aspect of theInternet radio station for RBR is that wecan now offer advertisers a cross -plat-form vehicle to help to market theirproducts," noted Lee.

"Advertisers can now run audio spots

on our Internet radio station, bundledwith banner messages on thewww.rbr.com web site, along with click -through messages on our daily emailservice, plus traditional advertisingwith Radio Business Report and MBR."

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