Radio Bus- ess ReportVoice Of The Radio Broadcasting Industry®

February 5, 2001

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Volume 18, Issue 6

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RADIO NEWS

Will Chrysler crisis affect radio? 2

Of course it will-it seems this year that when one category goesdown. another can't wait to join in-but TV should bear the brunt.

Bucking the trends with Buckley 2

Forthgoing Furchtgott-Roth leaves a hole for Bush 4

Judge re-Vokes SMR; Hanson still on board 4

CCU may get out of the stream 4

Pacing from the Big Apple to the Windy City 4

FCC considers EEO appeal B

McCain campaign finance to come up this spring B

Ad cuts go hand -in -hand with slowdown 7

Agencies: Taking advantage of consolidation 8

PROGRAMMING FOR PROFIT

State of an industry: Putting the pep in prep 9

MEDIA MARKETS a MONEY

Clear sailing for Clear Channel in 2001 12

CCU has assured Wall Street that its 2001 numbers will beon the black side of the ledger. and was duly rewarded.

Radio stocks Lynched by Street analyst 13

Via -corn back to me now: Stock buyback coming 13

One less AM at Radio One: CCU takes it in Dallas 13

Katz Interactive Salesdivision shutting down

More signs that streamingmedia is not getting enoughad buys: Katz InteractiveMarketing/Streaming MediaSales Network has been shutdown. Katz Media GroupCEO Stu Olds, en route toRAB, was able to provideRBR a statement: "As oftoday (1/31), we have de-cided to discontinue ourcurrent efforts in streamingmedia through the opera-tion of Katz Interactive Mar-keting (KIM). Our currentrevenue model does notshow Katz Interactive Mar-keting delivering positiveresults in the foreseeablefuture. At this time, we aredirecting our efforts towardour core businesses in sup-port of our radio and TVstation clients. [KIM Presi-dent] Gerry Boehme andhis team are to be com-mended for their aggressivestreaming media sales efforts ."

According to one indus-try source, the edict camedown straight from ClearChannel (N:CCU). "It's over.It's done. Clear Channel justnixed it-no money in it,

continued on page 2

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February 5 2001, Volume 18, Issue 6

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Executive Editor Jack MessmerManaging Editor Dave SeylerSenior Editor Carl MarcucciAssociate Editor Karla RobersonProduction Michael WhalenVP Administration Cathy CarnegieFCC Research Consultant Mona WargoAdministrative Assistant April Olson

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continued from page 1

bye. I got a call from someonewho got emails from MikeAgovino [Clear Channel Ra-dio Sales President] saying theywere shutting it down becauseof money."

Interep's (N:IREP) Cyberepsdivision is a direct competitorto Katz Interactive Marketing.We asked EVP GrahamKeenan as to how this mayaffect his business: "Like thedownturn in all the Internethype is being overplayed now,it was just as much as it was onthe upswing. Last year at thistime it was ridiculous-com-panies worth half a billion dol-lars that have nothing but serv-ers. And now, it's like becausea couple of these guys wentunder, the whole thing isdoomed. We're not changingour positioning, we're not clos-ing the doors. Interep bought50% of Cybereps (RBR 1/8,p.5) and these people have alot of experience on the inter-active side. We're out theredoing the presentations-you've got to give people rea-sons to develop a budget."

Katz Interactive Marketing'sbiggest client, Netradio.comcouldn't comment. OtherKIM clients includedAkoo.com, Everstream, TheLoup, HitMusic.com andAudiencebank.com.-CM

Chrysler cuttingad payments

Cost-cutting at DaimlerChrylserwill include elimination of thecompany's $50 per vehicle re-bates to local dealers foradvertising. That amountsto an estimated $450M -plus nationwide, althoughDaimlerChrysler itself won'tcomment on the price tag.

Eliminating ad payments ispart of a package of dealerpayment changes announced

It's back to basics in Buckley's view

Radio owners who didn't join the IPO parade in the 1990s maybe feeling a little less stress these days than their publiccompany counterparts.

At Buckley Broadcasting, President Rick Buckley saystoday's soft market is just a rerun of the past. "I think radio isgoing to be fine. We may have a little blip in some of theprojections. It's no different today than it was in the early '90s,when everybody was buying radio stations on projectedearnings. The difference is that in those days the banks tookthe hit and now the stocks are taking the hit."

With the economy tightening, Buckley is spared theproblem many of his fellow CEOs have of trying to stay in WallStreet's good graces. Still, he notes that the big groups havean advantage over him in terms of bulk-being able topackage together more stations (both top performers andmediocre) to appeal to cost-conscious advertisers.

Buckley says his stations never got much dot-corn adver-tising, since his New York station, WOR-AM, didn't target theprimary dot -corn demographics and his other stations were inmarkets, such as Hartford, CT, outside the top 20-which gotvirtually all of the dot-com spending. The trickle -down effecton the industry, he says, though, is that radio won't grow

The slowdown isn't all attributable to dot -corn, either."Auto is weak all over the country," Buckley said, noting thatrecent cuts by Chrysler and GM don't bode well for the USauto industry this year. "As far as advertising is concerned,they've got to figure out how to do some things differently tosell those cars."

Despite the ad market softness, Buckley says some of hismarkets will be up 5% in January. That's all due to localselling, with national spot soft everywhere. Network is alsosoft, which impacts negatively on his WOR Radio Network.Over all, though, his privately owned company is a littleahead of last January, which he notes was a record month.

"Projecting out, February doesn't look bad. It's just busi-ness back the way it was before," in Buckley's view.-JM

1/29 as the auto maker disclosedplans to eliminate 26K jobs, 20%of its workforce, to stem the flowof billions of dollars in red ink.The dealers are getting a newpackage which will pay themmore cash if they meet monthlysales targets. Those who don'tmeet those targets will face higheroverhead costs due to elimina-tion of such things as the adpayments, 15 -day interest freeloans on new vehicle inventoryand a free tank of gasoline foreach new vehicle.

www.rbr.com

According to Detroit news-paper reports, the net effect ofcutting the standard dealerpayment package while pay-ing more to top -performingbig dealers is expected to be a$600M annual reduction inDaimlerChrysler's costs.

Of course, TV gets the lion'sshare of broadcast ad dollarsby the auto industry, but radiois also feeling the impact.

"I don't think the world icoming to an end withDaimlerChrysler," Bill Burton,

2501 RBR

Iuss 411L

EARLClitEASS!!

onsEverywhere:WCDX RichmondSpring 00 Summer 00 Rank Adults 18-34

19.9 25.7 #1* also number one in all demos.

WKVS Washington D.C.Spring 00 Summer 00 Rank Adults 18-34

12.8 13.2 #1KMJJ ShreveportSpring 00 Summer 00 Rank Adults 18-34

15.9 25.0 #1* also number one in all demos

WRXZ Albany, GaSpring 00 Summer 00 Rank Adults 18-34

10.2 21.2 #2_ WDTJ Detroit

Spring 00 Summer 00 Rank Adults 18-34

3.7 6.2 #3Aribtron: summer 2000

;ragging Rights Are Earnedan quote how funny the show is or about the tremendous,nse when Russ and Olivia visit the market, but how about the facts ... Check out the1 books for mornings on WENZ 4.1, 6.8, 9.2, 9.8 ... And you don't have him on your stationuse of what?"

:e Panton,NENZ Cleveland

rr beats Joyner handsiwn in Alexandria across all demos.ie best mornings show out there, period."

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rand kept us there ... when the booksr..,e out I say' thank you Russ and

)t rl Huckaby'r. WKYS, Washington D.C.

ember oneI demos speaks for itself."

iael Tee'f:KMJJ, Shreveport

le Numberse throughke roof!ble digits baby!

-h Russ Parr Morningihw is a one -of -a -:It', off the hookri fling show."

.aionda Williams,3E WCDX, Richmon

Get your ratings 'up to Parr' withThe Russ Parr Morning Show

Call Superadio today: 508-480-9000www.superadio.com

President of the Detroit RadioAdvertising Group, told RB!?.But he noted that the auto in-dustry had already been cuttingback on acl spending. "I don'tknow of major cutbacks on ra-dio, but [General Motors] justcut close to $500M from net-work TV campaigns."

Making money may not be aseasy in 2001 as it was in 2000, butBurton sees an opportunity forradio to expand its share of theadvertising pie as companies tryto get more bang for their bucks.(See related story, page 7.)

RBR observation: One keyfact to note from DaimlerChryslerreworking its deal with dealers isthat the most successful Chrysler,Dodge and Jeep dealers will endup with more money, whilesmaller dealers will have less.That means that radio sales-people should be pitching big-ger budgets to big dealers-showing them how a targetedout -of -home media, radio, canliterally drive customers onto theirlots. Also, look for some of thesmaller dealers to sell out ormerge-yielding a new, moreaggressive dealership that shouldbe more open to creative ideasabout how to sell cars.-JM

The Furchtgott-en FCC

FCC Commissioner HaroldFurchtgott-Roth (R) caught manyoff guard last Wednesday (1/31)when he announced that he willnot seek a second term. His firstterm expired on June 30, 2000 butwas extended to the present un-der FCC rules allowing a sittingcommissioner to serve additionaltime, no later than whenCongress recesses in the year fol-lowing said commissioner's term.

Furchtgott-Roth stated, "It has

Radio News

Polishing the Apple...

Radio's sales force is having some success whittling away at the rugged pacing numbers we'vebeen seeing, lending credence to the theory that many media buys are coming closer to run timethan last year when the dot -corns made air time a hot commodity.

Numbers for New York through 1/21 can now be compared to numbers a week fresher. Therewas marginal improvement for the month of January and significant improvement for February.March actually got even worse, but we predict those ugly negative numbers will shrink as wellas time goes by.

Local

1/21sample

Nati Total Local

1/28sample

Nati Total

January -10.6 -15.7 -11.6 -10.0 -15.5 -11.0

February -25.3 -28.0 -25.8 -18.8 -25.2 -20.0

March -24.3 -22.9 -24.0 -24.7 -29.9 -25.8

Source: Miller, Kaplan, Arase & Company

Breaking out in the Windy City

Hungerford Aldrin pacing numbers for the week ending 1/28 in Chicago have what has becomea unique feature: a positive number! Local business for January is trending 5% ahead of last year,with total business up 1%. Our source, who will remain anonymous, noted that the problem hasgone beyond the dot-coms. The slowdown in the overall comsumer environment is taking its toll,with both automotive and retail categories suffering. Chicago broadcasters are hoping eco-guruAlan Greenspan can don his cape and fly in to the rescue.

1/28 sample

Local Nall Total

January +50/0 -10% + %February -6`)/0 -27`)/0 -110/0

March -130/0 -380/0 -19°/0

April -10% -18% -110/0

Source: Hungerford, Aldrin, Nichols & Carter, PC, CPSs and Consultants

been a great honor to serve formore than three years on theFederal Communications Com-mission. However, there comesa time when every free marketadvocate in government mustfulfill his dream by returning tothe private sector. For me, thattime has arrived. Therefore, Ihave decided not to seek reap-pointment." Furchtgott-Roth'sdeparture will leave two Re-publican vacancies to be filledby the new Bush Administra-tion. The remaining three

commissioners are newly ap-pointed FCC Chairman MichaelPowell (R), Susan Ness (D),and Gloria Tristani (D).

NAB President/CEO Ed-ward Fritts declared, "It is

unfortunate that CommissionerFurchtgott-Roth has decidednot to stand for reappointment.We look forward to workingwith him for the balance of histerm, and we wish him contin-ued success in whatever arenahe next chooses."

www rbr com

Until an agreed upon "lastday" is reached by the Adminis-tration and Furchtgott-Roth, hewill continue to serve as an FCCCommissioner.-KR

Judge approves SMRbuyout plan

A federal bankruptcy judge ha,approved (1/30) the buyou(RBR 1/15, p.2) of StrategiMedia Research (SMR), namina team of managers led by SM

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SVP Amy Vokes as the officialsuccessful bidders. The currentSMR is majority owned byChartwell Capital, current SMRPresident/Founder KurtHanson is the second biggestshareholder. SMR is selling itsassets to the new company thatVokes and the investors formedfor a reported $110K. Strategicfiled Chapter 11 in early Janu-ary, paving the way for the$1M+ investment team of cur-rent and former radio execs-Jimmy de Castro, AlfredLiggins, David Kantor, JeffMcClusky, Gary Slaight andJeff Trumper-to take thereins. Each receives a seat onthe SMR board. Other managersparticipating in the managementbuyout include SMR execsDavid Becker, Paul Kaiser,Phoebe Pierson and KristenOzenbaugh-Dale.

And as to Hanson, "Our in-tentions are for me to stay onin some kind of managementcapacity. We're going to figureall of that out after closing[week of 2/51, but we're allhoping to work together.We've all agreed the right wayto do it is to close first and thendecide," he tells RBR.-CM

Uh oh...EEO

Following a federal court de-cision that struck down itsEEO rules as unconstitutional(RBR 1/22, pg. 1), the FCC hassuspended the rules while itassesses whether to appeal.That means that stations nolonger have to submit report'to the FCC on their EEO out-reach efforts.

FCC Commissioner GloriaTristani issued a separate state-ment saying, "I concur in thepre -mandate suspension of theCommission's EEO rules be-cause the filing requirementswould have occurred betweenthe court's opinion and the sub-mission of any post -opinionpetitions for rehearing." Shecontinued with, "I write sepa-rately to express that it wouldhave been more appropriate tosuspend only the filing require-ments, rather that the rules

6

Radio Newsthemselves, pending disposi-tion of any timely petition forrehearing."-KR

Campaign reform vote byEaster

It won't be the first item on theCongressional calendar as hehad hoped, but Sen. JohnMcCain (R -AZ) has been prom-ised a vote on his CampaignFinance Reform bill before theSenate's Easter recess, which islikely to begin 4/7. Floor debateon the McCain-Feingold-Cochran bill is tentatively sched-uled for 3/26.

While agreeing to give themeasure an airing, Senate Ma-jority Leader Trent Loft (R -MS) said he'd likely offer hisown alternative to the McCainbill and that others wouldlikely do the same. There arealso expected to be lots ofamendments offered. Lesslikely this year, though, is anyfilibuster by opponents tokeep campaign finance fromcoming up for a Senate vote.There is less Republican op-position to any change in thecampaign finance rules, butstill lots of disagreement overwhat changes should bemade.-JM

Clear Channel steamingabout streaming fees

In the wake of the recentCopyright Office's initial rulingin favor of RIAA allowing per-formance royalties to be chargedto broadcasters who simulcasttheir signals over the Internet,Clear Channel (N:CCU) sent anominous memo to all marketGMs the week of 1/15. "Theruling that went against us[broadcasters) we are going tocontinue to try and reverse.There was a letter from corpo-rate saying we would need toscrutinize any new streams that

go up very carefully. And wewill be making decisions aboutwhether we pull the streams ornot for the next several weeks."

Clear Channel Internet CEOKevin Mayer tells RBR, "Theruling makes things a little un-settled, no doubt about it. Andwe are going to look at any newstreams that go up very care-fully. And we are even going tostart revisiting streams that arealready up and seeing if we areoverly exposed in some ways."

RBR observation: TheCopyright ruling, which in-cludes the potential for retro-active streaming performanceroyalties to be assessed, doesnothing more than nip theprofit potential bud of onlinestreaming further. If any com-promise could be offered, wewould hope that online feeswould be a percentage ofonline profits. At this earlystage, with broadcasters stilllearning the Internet business,it is not the time to get greedy.The RIAA should not be try-ing to take blood from astone.-CM

Disney gives up onInternet group

Tired ut watching the moneyI)leed, Disney plans to scrap itsGO.com portal and convert all)utstanding shares of DisneyInternet Group common stock( N:DIG) into Disney commonstock (N:DIS) 3/20. A ratio of0.19353 is expected. If done 1/31, the DIG share price wouldbe $5.96 based on DIS $30.82/share closing price.

DIG lost $395M in '00 andexpects to lose S125M this year.While Disney plans to keep itsInternet group operating asa scaled down unit, 400 of3,600 staffers are expected tolose their jobs. The successfulABC and ESPN siteswill continue operating-ac-

www rbr corn

cording to Forrester Research,ABCNEWS.com and ESPN haveboth grown 50-75% in trafficand usage over the past yearand a half. It has been reportedthat Infoseek, which Disneyacquired for Go.com, will main-tain the search engine for acouple months and then put itup 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

JRN partners withRadioResearch.com

Jones Radio Network (JRN) andRadioResearch.com an-nounced a joint venture tolaunch (1/30) "The Jones Re-search Network," a syndicatedInternet -based music and per-ceptual research system. Avail-able for barter, the new ser-vice is aimed at medium andsmall market stations. "Eventhough Internet -based researchfor radio stations costs consid-erably less than traditionalphone or auditorium method-ologies, there are still manystations who don't have a suf-ficient cash budget to be ableto afford it," said Bill Troy,RadioResearch.com President.

Jones Research Network af-filiates receive regular weeklytesting of titles, a much largersample on a weekly basis thanis possible with call -out re-search, results from eachstation's listening audience andpure listener research (no tie-in with record labels. The sys-tem also gives stations the op-tion of referring to the weeklymusic testing as "participatingin the stations listener panel,"driving listeners to stationwebsites. The look of the prod-uct is customized to fit thestation's website.-CM 1

i2/5/01 RBR

!lough

times can opendoors

profits are but a memory -I just for dot -corns (actually,nia never had any profits), butla 11 types of businesses. The softc-iorny has made every type

.in size of business reassesshcr its money is being spent.:larding to Bill Burton, knownto nany as "Mr. Be Fabulous,"ill's opened new doors thatha previously been closed toi-so's message.

[ am the most put-upon that I122 been in years with top ex-ecives wanting to see me, in -Lilting the new marketing direc-toof K -Mart, who comes fromPsi Cola," said Burton, who isor of the true veterans of radio ad,as and in recent years has beenPi3ident of the Detroit RadioVertising Group. "I've got a pre-,Etation coming up at K -Mart.l'l just done Chevrolet. I've gotDmlerChrysler key executives-ut week. They seem to be more-eptive than at any time in thep:t five years to listening to what\',,, have to say about radio. MyJproach is, 'Hey, guys, I've got

..-14hing against you using TV and

p A to introduce your new baby-') after it's been out on the roadtil the baby looks like a lot of

o ers, radio is the vehicle to drive.ei into the showroom.' And nowtly're all caught by the short-hrs and they don't have money,scny pitch is `we might be able tos:e your fanny!'-because we'rea ch more economical."

Burton noted, however, thate!.n if he succeeds in makingtl. case for radio, not much willhDpen unless the executivesg. demanding with their agen-c s on creative that will work onr lio. "That's one of my biggestipes," he said-that an adver-kr can be convinced to put ar Ilti-million-dollar campaign onr lio, only to have it fail becausec mediocre creative and radioits blamed. "But those agenciesa! making a living off of TVf oduction," Burton com-bined-and it's up to companytecutives to be more aggres-5'e and demand that agencies) a better job on radio.-JM

2 RBR

Ad cuts likely in slowdown

Okay, is it out in the open yet? The possibility that the country is recession -bound? If the dreaded

"R" word does take hold, ad spending is one area likely to be on the chopping block.According to Fortune 500 executives from varied industries, reducing marketing and advertising expenses

would be the third most popular tactic to be executed in the event of an economic slowdown. Bain &

Company, a global strategy consulting firm, released the results of a new survey wherein 44% of the 100 senior

executives interviewed said that cuts in marketing and advertising would definitely be carried out. The

complete list of the actions that these executives are likely to perform during a recession is below.-KR

Likely reactionsto recessionReduce capital expenditures 55%Push for price cuts from suppliers 48%Reduce marketing/advertising 44%Reduce sales and earnings targets 41%Implement layoffs 39%Reduce R&D spending 30%Close facilities 24%Make stock buybacks 21%Make acquisitions in current business 20%Diversify their portfolio of business 19%

Replace senior executives 17%

Source: Bain & Company

Radio Success Stories

New York Market Radio (NYMRAD) invited advertisers and agencies to speak to memberstations about "Why We Use Radio" at a recent breakfast seminar. From L to R: Jack Cahill,

GSM, WLTW-FM; Cindy Seebeck, SVP/Assoc. Broadcast Director, The Media Edge; DickTulimieri, Director, Marketing Services, NY Presbyterian Hospital; Meredith Smulian, VP/Associate Media Director, R.J. Palmer; Mary Beth Carey, Dean of Admissions, Hofstra Univ.;Rick Kundrat, Chairman/CEO, NuVim Inc.; Mike DeLuise, VP, University Relations, Hofstra;

and Ed Keane, Regional SM, WABC/Radio Disney.-CM

www rbr com 7

SVP Amy Vokes as the officialsuccessful bidders. The currentSMR is majority owned byChartwell Capital, current SMRPresident/Founder KurtHanson is the second biggestshareholder. SMR is selling itsassets to the new company thatVokes and the investors formedfor a reported $110K. Strategicfiled Chapter 11 in early Janu-ary, paving the way for the$1M+ investment team of cur-rent and former radio execs-Jimmy de Castro, AlfredLiggins. David Kantor, JeffMcClusky, Gary Slaight andJeff Trumper-to take thereins. Each receives a seat onthe SMR board. Other managersparticipating in the managementbuyout include SMR execsDavid Becker, Paul Kaiser,Phoebe Pierson and KristenOzenbaugh-Dale.

And as to Hanson, "Our in-tentions are for me to stay onin some kind of managementcapacity. We're going to figureall of that out after closing[week of 2/5], but we're allhoping to work together.We've all agreed the right wayto do it is to close first and thendecide," he tells RBR.-CM

Uh oh...EEO

Following a federal court de-cision that struck down itsEEO rules as unconstitutional(RBR 1/22, pg. 1), the FCC hassuspended the rules while itassesses whether to appeal.That means that stations nolonger have to submit reportsto the FCC on their EEO out-reach efforts.

FCC Commissioner GloriaTristani issued a separate state-ment saying, "I concur in thepre -mandate suspension of theCommission's EEO rules be-cause the filing requirementswould have occurred betweenthe court's opinion and the sub-mission of any post -opinionpetitions for rehearing." Shecontinued with, "I write sepa-rately to express that it wouldhave been more appropriate tosuspend only the filing require-ments, rather that the rules

6

Radio News°

themselves, pending disposi-tion of any timely petition forrehearing."-KR

Campaign reform vote byEaster

It won't be the first item on theCongressional calendar as hehad hoped, but Sen. JohnMcCain (R -AZ) has been prom-ised a vote on his CampaignFinance Reform bill before theSenate's Easter recess, which islikely to begin 4/7. Floor debateon the McCain-Feingold-Cochran bill is tentatively sched-uled for 3/26.

While agreeing to give themeasure an airing, Senate Ma-jority Leader Trent Lott (R -MS) said he'd likely offer hisown alternative to the McCainbill and that others wouldlikely do the same. There arealso expected to be lots ofamendments offered. Lesslikely this year, though, is anyfilibuster by opponents tokeep campaign finance fromcoming up for a Senate vote.There is less Republican op-position to any change in thecampaign finance rules, butstill lots of disagreement overwhat changes should bemade.-JM

Clear Channel steamingabout streaming fees

In the wake of the recent USCopyright Office's initial rulingin favor of RIAA allowing per-formance royalties to be chargedto broadcasters who simulcasttheir signals over the Internet,Clear Channel (N:CCU) sent anominous memo to all marketGMs the week of 1/15. "Theruling that went against us[broadcasters] we are going tocontinue to try and reverse.There was a letter from corpo-rate saying we would need toscrutinize any new streams that

go up very carefully. And wewill be making decisions aboutwhether we pull the streams ornot for the next several weeks."

Clear Channel Internet CEOKevin Mayer tells RBR, "Theruling makes things a little un-settled, no doubt about it. Andwe are going to look at any newstreams that go up very care-fully. And we are even going tostart revisiting streams that arealready up and seeing if we areoverly exposed in some ways."

RBR observation: TheCopyright ruling, which in-cludes the potential for retro-active streaming performanceroyalties to be assessed, doesnothing more than nip theprofit potential bud of onlinestreaming further. If any com-promise could be offered, wewould hope that online feeswould be a percentage ofonline profits. At this earlystage, with broadcasters stilllearning the Internet business,it is not the time to get greedy.The RIAA should not be try-ing to take blood from astone .-CM

Disney gives up onInternet group

Tired of watching the moneybleed, Disney plans to scrap itsGO.com portal and convert alloutstanding shares of DisneyInternet Group common stock(N:DIG) into Disney commonstock (N:DIS) 3/20. A ratio of0.19353 is expected. If done 1/31, the DIG share price wouldbe $5.96 based on DIS $30.82/share closing price.

DIG lost $395M in '00 andexpects to lose $125M this year.While Disney plans to keep itsInternet group operating asa scaled down unit, 400 of3,600 staffers are expected tolose their jobs. The successfulABC and ESPN siteswill continue operating-ac-

www rbr com

cording to Forrester Research,ABCNEWS.com and ESPN haveboth grown 50-75% in trafficand usage over the past yearand a half. It has been reportedthat Infoseek, which Disneyacquired for Go.com, will main-tain the search engine for acouple months and then put itup 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

JRN partners withRadioResearch.com

Jones Radio Network (JRN) andRadioResearch.com an-nounced a joint venture tolaunch (1/30) "The Jones Re-search Network," a syndicatedInternet -based music and per-ceptual research system. Avail-able for barter, the new ser-vice is aimed at medium andsmall market stations. "Eventhough Internet -based researchfor radio stations costs consid-erably less than traditionalphone or auditorium method-ologies, there are still manystations who don't have a suf-ficient cash budget to be ableto afford it," said Bill Troy,RadioResearch.com President.

Jones Research Network af-filiates receive regular weeklytesting of titles, a much largersample on a weekly basis thanis possible with call -out re-search, results from eachstation's listening audience andpure listener research (no tie-in with record labels. The sys-tem also gives stations the op-tion of referring to the weeklymusic testing as "participatingin the stations listener panel,"driving listeners to stationwebsites. The look of the prod-uct is customized to fit thestation's website.-CM

2/5/01 RBR

1 Tough times can opendoors

Easy profits are but a memory-not just for dot -corns (actually,most never had any profits), butfor all types of businesses. The softeconomy has made every typeand size of business reassesshow its money is being spent.According to Bill Burton, knownto many as "Mr. Be Fabulous,"that's opened new doors thathad previously been closed toradio's message.

"I am the most put-upon that Ihave been in years with top ex-ecutives wanting to see me, in-cluding the new marketing direc-tor of K -Mart, who comes fromPepsi Cola," said Burton, who isone of the true veterans of radio adsales and in recent years has beenPresident of the Detroit RadioAdvertising Group. "I've got a pre-sentation coming up at K -Mart.I've just done Chevrolet. I've gotDaimlerChrysler key executivesnext week. They seem to be morereceptive than at any time in thepast five years to listening to whatwe have to say about radio. Myapproach is, 'Hey, guys, I've gotnothing against you using TV andprint to introduce your new baby-but after it's been out on the roadand the baby looks like a lot ofothers, radio is the vehicle to drive'em into the showroom.' And nowthey're all caught by the short -hairs and they don't have money,so my pitch is 'we might be able tosave your fanny!"-because we'remuch more economical."

Burton noted, however, thateven if he succeeds in makingthe case for radio, not much willhappen unless the executivesget demanding with their agen-cies on creative that will work onradio. "That's one of my biggestgripes," he said-that an adver-tiser can be convinced to put amulti -million -dollar campaign onradio, only to have it fail becauseof mediocre creative and radiogets blamed. "But those agenciesare making a living off of TVproduction," Burton com-plained-and it's up to companyexecutives to be more aggres-sive and demand that agenciesdo a better job on radio.-JM

2/5/01 RBR

Radio AdBiz

Ad cuts likely in slowdown

Okay, is it out in the open yet? The possibility that the country is recession -bound? If the dreaded"R" word does take hold, ad spending is one area likely to be on the chopping block.

According to Fortune 500 executives from varied industries, reducingmarketing and advertising expenses

would be the third most popular tactic to be executed in the event of an economic slowdown. Bain &

Company, a global strategy consulting firm, released the results of a new survey wherein 44% of the 100 senior

executives interviewed said that cuts in marketing and advertising would definitely be carried out. The

complete list of the actions that these executives are likely to perform during a recession is below.-KR

Likely reactionsto recessionReduce capital expenditures 55%Push for price cuts from suppliers 48%Reduce marketing/advertising 44%Reduce sales and earnings targets 41%Implement layoffs 39%Reduce R&D spending 30%Close facilities 24%Make stock buybacks 210/0

Make acquisitions in current business 20%Diversify their portfolio of business 19°/0

Replace senior executives 17%

Source: Bain & Company

Radio Success Stories

New York Market Radio (NYMRAD) invited advertisers and agencies to speak to memberstations about "Why We Use Radio" at a recent breakfast seminar. From L to R: Jack Cahill,GSM, WLTW-FM; Cindy Seebeck, SVP/Assoc. Broadcast Director, The Media Edge; DickTulimieri, Director, Marketing Services, NY Presbyterian Hospital; Meredith Smulian, VP/Associate Media Director, R.J. Palmer; Mary Beth Carey, Dean of Admissions, Hofstra Univ.;Rick Kundrat, Chairman/CEO, NuVim Inc.; Mike DeLuise, VP, University Relations, Hofstra;and Ed Keane, Regional SM, WABC/Radio Disney.-CM

www.rbr.com

Ryan to head 4As

FCB Worldwide CEO BrendanRyan has been nominated (andwith no one else expected to run,is pretty much a shoo-in) to bethe next Chairman of the Boardof Directors of the American As-sociation of Advertising Agencies(4As). Sitting Vice ChairmanJohnDooner chose not to make thetraditional move up, due to hisexpanded duties as Chairman/CEO of The Interpublic Group ofCompanies (N:IPG).

Ken Kaess. President/CEO,DDB Worldwide, has been nomi-nated to become Vice Chairman.

Both Ryan and Kaess will standfor election at the 4As annual busi-ness meeting 4/18-21 in Naples, FL.

Members will also vote onthe nominations of the follow-ing ad execs to fill ten regionaldirector seats. Fast: G. BrianGoodall, President,Hampel/Stefanides; Allan Kay,Chairman/Chief Creative Officer,Korey, Kay & Partners: Matt White.President, E. James White Co. Central: Jim Bergeson, CEO,Colle & McVoy Inc.; SteveDrongowski. CEO, Fahlgren;Mark Serrianne. PresidentCEO, Northlich South: Tim McClure, Exec.VP/Chief Creative Officer,GSD&M; Bill Fogarty. Co -Prin-cipal, Fogarty Klein & Partners

West: Agnieszlca Winkler.President. CEO, Winkler Adver-tising; Carl Kravetz, ChairmanCEO, cruz kravetz:IDEAS\11 ,Ire running unoppo,,,1

True North in play?

. Shares of True North Communi-cations (N:TNO) rose backabove S40 in late January onWall Street speculation that thead agency holding company wa'a takeover target. True Northhad been considered attractiveto potential buyers after its stockprice fell last November, following the loss of the.DaimlerChrysler account by itsFCB Worldwide agency.

Reuters reported 1/23 that ithad confirmed talks betweenTrue North and Havas Advert k-ing (O:HADV). At RBR's 2. 1

8

Consolidation, Friend or Foe?by Amy Nizich

Much has been written about the evils of radioconsolidation; less competition, higher debtservices, less format variation, etc. Well, what-ever we think, consolidation is here, and it ishere to stay.

People have questioned if we should allowgroups to consolidate. A more realistic questionmight be what could we gain from radio con-solidation? The following are some ideas:

In an age where speed is everything, having access to one group head in a market can get youinformation regarding policies, practices and help with any request faster then contactingindividual stations. It is often better working with a group head who can look at the big picture and has the powerto make better deals for all parties involved. When buying local radio on an unwired basis where turnaround time is crucial, consolidationcan make it faster than ever. The rep firm can communicate your needs to a single contact ratherthan dozens of station people. You can get "must buy stations" to do more for you by incorporating other stations in thecompany. The most desirable stations for a particular client will be forced to play harder in orderto gain a bigger share for the entire group. You can put together promotions across multiple markets and multiple stations within a marketthat will have better consistency and higher impact than working with individual stations. A "group" event within a market could be planned and sponsored by a client making a muchbigger noise then a few small promotions might be able to accomplish. Many of the companies that own multiple radio stations also own other advertising outlets, suchas outdoor companies, newspapers, Internet sites, television stations etc.- opening the door forcross -platform promotions.

As consolidation of stations continues, we may be able to look at making regional or custommarket buys that will be even more efficient and targeted for our clients.

Consolidation has not stopped us from continuing to make buys the traditional way, lookingat each station individually. On the contrary, rather than limiting us, in some ways it has expandedour options.

.4 my is DP/Director of Local Broadcast Negotiations at Initiative Media.She can be reached at 323-370-8490.

deadline, however, there wasn() d'.11 Amintincement.-JM

Email marketing elusive

It sounded so simple. the Wehwould be a marketers dream ID)making it possible to communicatedirectly with consumers via email.The reality is somewhat different.

According to a nationwide

survey by Interpublic's (N:IPG)YFO WorldGroup, 41% of con-sumers have changed their emailaddress at least once in the pasttwo years-with 15% changing atleast twice. Very few of thosepeople, however-less than a

third-bothered to go back toregister the change with theirregularly visited web sites, onlinenewsletters and Internet discus-

www rbr Corn

sion groups. Even among thosewho did make an attempt to no-tify companies of their new emailaddress, only 37% notified "regu-larly visited websites." 24% noti-fied "websites where they makeregular purchases" and a mere16% notified discussion groups.

The survey was based on asample of 1,912 Internet users,age 18 or older, nationwide.-IM

2/5/01 RBR

Show prep services: Notjust a crutch anymore

i. by Carl Marcucci

1 :t's 4:55AM and the morning showa ock is just about to start his five

lour shift. Can he (or she) beexpected to entertain and amuse

) iinglehandedly for five hours...fivelays a week? Of course not. Be-

; i muse just about every Arbitron-rated market now has a formatcompetitor (at the very least acompetitor aimed at the samedemo), thinking of a few funnylines and reading the paper prior toeach show doesn't cut it like it usedto. Therefore, for morning drive or

'any other shift for that matter,

,

personalities need and deserve theJbest ammo at their disposal. Thathammo is supplied by most of themajor program syndicators, as wellas a variety of private firms. Pay-ment is usually barter in all but thesmallest markets, but most willtake cash or a mixture of both.

The show prep industry spe-cializes in distributing the bits andbites, humor, information, factsand trivia that can turn the mostmundane jock into a superstar."It's the shows in smaller andmedium markets who most need

lj prep services. These poor guysare working mostly solo, with nobudget, who wake up at 4:00 AMfacing four or five hours on the air,followed by a couple hours ofproduction, and they're expectedto sound like a big time radioshow," says Keithilughes, Presi-dent of Critical Mass Media, whichproduces "Morning Sidekick.""We've designed 'Morning Side-kick' not to take over a show, butto enhance what the DJ is alreadydoing. We want to take the pres-sure off on the small things thatmake up a show and let him focuson the more important, local stuff."

Now in its 14th year to HotAC, Country, CHR and Oldiesstations, Morning Sidekick of-fers comedy prep daily prep viaemail and a website(MorningSidekick.com). It alsoputs out a bimonthly CD ofsong and commercial parodies,movie and TV drops.

Also delivered via email, NBGRadio Network offers six prep ser-vices. The most famous of which,

2/5/01 RBR

Programming for Profit"The Complete Sheet," is 20-25pages delivered daily by JohnnyVega and Bryan Crain-theformer producers for Rick Deesand KLOS-FM LA's Mark& Brian."A prep service has to do morethan simply give a quick over-view of everything worth talkingabout in the news. Any radiopersonality can obtain that type ofinformation if they want to takethe time to do their own prep,says Craig Whetstine, affiliaterelations for NBG Radio Network.Adds Vega: "For example, whenAl Gore announced he's conced-ing to George W. Bush, it's notenough for a show prep service tojust report on that story. There'sno value there, as the story isavailable on every major newssite. But there is value when theservice offers a wittycommentary, alongwith a few easily -deliv-ered punch lines to helpthe personality bring thestory to life."

Other NBG prep ser-vices include: Dr. Donfor Country (10-12 dailypages); Bitman (one-liners and bit starters); The DailyAardvark (a comedic take on cur-rent events); The Wireless Flash(from Fisher Entertainment); andTortilla Soup, NBG's daily eight -ten

pages of news, bit starters and one-liners for Spanish formats.

"All stations and shows needsome kind of prep, though theydon't want to all admit it. Every-one from the small market guywho has no producer, no intern,no help and no time...but wants abig -market morning show-all theway up to a top ten market guywho has all the resources andmoney and manpower he de-mands, hut still needs that oneextra thing that nobody else canget for him that will give him anedge over the competitor," saysLarry Morgan, SVP Program-ming, Premiere Radio Networks,who offers a full spectrum of prep

www rbr com

Whetstifle

to 2,000 mainstream -format affili-ates: comedy audio (parody songs,bits, characters and productionelements), written show prep, TVdrops, celebrity interview bitesand online prep access. Thecompany's featured products in-clude "The Shipper Report," "TheGirly Sheet," "Prime Time Prep,""The Scoop," "Premiere Rock,""Premiere Country," "MorningWood" and "Custom Music."

Premiere's show prep teamutilizes 50 contributors that pro-vide material for the 12 differentservices. Delivery is weekly CDswith audio, daily faxes, web -ac-cessible prep pages or daily au-dio from the Prepburger.corn site.

Most agree the biggest con-sumer of show prep is morningdrive. Coffee isn't enough for most

listeners to get themjazzed for the daily grind,

no pun intended.usu-

ally need prep the mostas it takes quite a whileto gather informationfrom all different sourcesto provide to your audi-ence, which is often dif-

ficult to do at 3 AM," says ABCNews Radio Director of Entertain-ment News/Programming HeidiOringer. "Our services are com-prehensive, so a radio station canlook at one of our prep servicesand have everything they need todo a complete four-hour morningshow without requiring newswires,newspapers, etc. Many of our affili-ates are the top morning shows intheir respective markets. We pri-marily work with the PDs and themorning hosts, although manytimes the prep services are used byall dayparts."

ABC has six market -exclusiveshow prep offerings, infused withup-to-the-minute entertainmentand hard news delivered eachmorning: "Morning Show Prep,""Wake -Up Call," "The 411," "Nash-ville Notes," "Talk Show Prep"and "Show Prep Today." These

services also contain jokes, com-edy bits and history files-somewith audio delivered via satellite.

ePrep is ABC's newest prepservice, Internet -delivered. Mar-ket -exclusive, e -Prep offers mu-sic, entertainment and hard news,birthdays, history and a magazinesection. Audio is delivered viaReal and MP3. Oringer, in chargeof ePrep, oversees 18 producers:"We give affiliates exclusive inter-views, cover 200 entertainmentand music events each year andoffer arrivals, backstage and partyinformation on all of them. ePrepis also pushed at 4:15am eachmorning, so the latest breakinginformation is available to themorning jock. We are the onlyprep service, to my knowledge,that has an overnight staff."

ePrep also has exclusive agree-ments with SPIN and Maximmagazines to provide interviewaudio. ePrep site formats includeCHR/Hot AC, Country, Active Rock,Classic Rock, AC and International.

Westwood One prides itself onbeing the largest show prep pro-vider in the industry, covering mostof the commercial formats. The listincludes Dennis Miller, "Holly-wood Flash," "Rock Report," "Ce-lebrity Shorts," "Country Prep," "To-

day in History," "Urban Entertain-ment," Oldies, Pop and AlternativeReports, "Health Source," "NewsYou Can Abuse," custom stationcoverage, breaking news and "Back-

stage at the Grammys." For morningshows, Westwood offers "The MTVMorning FACIS" for Alt./Rock,CHR/Pop and Urban/Hip Hopformats. "The VH1 Morning Prep"for Rock/Classic Rock and Hot AC;The "E! Radio Network" for multipleformats (25 daily sound bites fromfilm and TV stars, the latest from E!Entertainment gossip reporters);"The Fax" (the latest buzz frommusic, film and TV in an eight -pagefax for Alternative and Active Rockformats); "The CBS Morning Re-source" (provided weekdays to CBSNetwork affiliates); and Westwocx1

9

One Prep, a two -page digest forAOR/Classic Rock, Country, AC/Oldies and Alternative/CHR,exclusively for Westwood OneNetworks affiliates.

Jones Radio Network is thelargest provider of 24 -hour for-mats with more than 500 affili-ates from groups like Clear Chan-nel, Infinity, Citadel, Entercom,Saga, Radio One and more. Tothat end, JRN offers prep ser-vices to complement them: "ThePure Country Fax", "The FactsFax" and "The Rock & Roll Fax."Says Jon Holiday, Director ofContemporary Programming:"All of our prep staff has beenon -air talent at one time or an-other. So, I guess you could sayour services are written by radiopeople for radio people in anon -air 'friendly' style and formatas opposed to say the way anewspaper is written."

MediaAmerica, a sister com-pany ofjRN, offers LA -based Launch

Radio Networks product to 850affiliates. Formerly SW Networks,web -delivered Launch deliverscontent for AC, Alternative, CHR,Country, Modem AC, NAC, Old-ies/Jammin' Oldies, Classic/AlbumRock, Urban and Talk formats. Inaddition, "Launch offers a guestbooking service and 'Gossip ToGo,' Flo Anthony's personality -driven live entertainment reportsfor Urban radio," saysMediaAmerica VP Program andAffiliate Relations Frank de Santis.

Boston -based Superadio posi-tions three of its offerings some-where between prep and con-tent: "We consider ourselves ra-dio content providers as opposedto show prep," says SuperadioPresident Gary Bernstein. "Forinstance, we produce a productcalled the Mini-Mixx which iscomposed of electrifying songhooks all blended together suchthat the listener thinks it's onesong. Stations air it like a recur-rent record and it easily is themost requested feature on sev-eral leading radio stations likeWGCI-FM Chicago, WHQT-FMMiami and WJHM-FM Orlando."

Mini Mixx has three versions: The

Upper -demo targeted, Old Skool,the younger demo -targeted, NewSkool and the Classic Jam Mini Mixx

10

Programming for Profitthat is aimed at both demos.

Another Superadiooffering, "Wendy Wheaton's TheHollywood Scoop," is a hybridvignette of Hollywoodgossip and entertain-ment news targeted atthe Urban AC format.Affiliates include WALR-FM Atlanta, KJLH-FM LA

and WDMK-FM Detroit.Superadio's "The 80'sTime Capsule" is also adaily vignette. Hostedby WALR-FM Atlanta'sMelissa Sommers, content fo-cuses on 80s trivia and soundbites/clips. Says Bernstein: "Sta-tions who need programmingthat's sales as well as program-ming -driven are in dire need ofthis type of service. For instance,the 80's Time Capsule was sowell received in Middays on WALRthat it had to be added a secondtime daily just to accommodatethe sales demand."

AP Radio is successfully overcom-

ing the stigma that news is all that's on

the menu. 'The industry knows APRadio as the news and informationsource, but what the industry does not

realize is that AP Radio has probably

one of the richest content of showprep material for just about anyformat in radio," says ThomasCallahan, GM, AP Radio. "A recentgroup that I spoke torecommended APRadio baseduponthestrength, not of ournews, but of ourprepservice, which theyfelt was far superiorto anything out there.

Ourentertainmentdi-vision that feeds98% of all newspapers and 95%of all TV stations, all suppliesthat same information to us."

Offered for cash only, AP Ra-dio delivers "Watercooler," bitsof humorous information; "PowerPrep," a tailored -to -format audioand text service for morning mu-sic stations; "Prime Cuts," a live

Hol

actualities service offering bitesfrom the last 72 hours of newsand events and "Soundbank," aweb -delivered audio actualites

service leveraging ahuge archive over eightdecades deep. Deliv-ery is all via the Internet,but text -based prep canbe delivered over AP'sKu -dish satellite ser-vice.

idayShow prep and theInternet

The Internet has brought show prepto a whole new dimension of topicalchoices and timeliness of delivery.The net has also grown the businessand increased competition. And fordelivery method, fax, overnight CDand tape delivery are now comple-mented or are being replaced alltogether by the internet. Mostservices now email their show prep,making it up-to-the-minute for tal-ent, and that indudes audio cuts.Says Hughes: "From a deliverystand-

point, the Internet means goodbyefax machine and the receptionistwho forgot to replace the paper;goodbye satellite and the overnightjock who forgot to record the feed."

And as soon as the first serviceleveraged the net's efficiencies, "It

the competitionamong servicesten -fold," Oringerexplains. "It hasmade the infor-mation muchmore readily avail-

' able to the enduser and mucheasier to deliverfor the prep pro-

ducer. MP3 audio can be loadedright into the studio board andplayed for the audience in recordtime. Also, jocks can be set up inthe studio with Internet access anduse the service while they're on theair instead of leafing through pa-pers to find the stories they want totalk about."

has increased

Ferro and Kid Rock

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its all good ricN,s lor radio-because of the net's easy accessibility,

show prep services have been forcedto become better and better to re-main essential. Confesses Morgan:"With so much access to information

at your fingertips we've really had tobecome more creative and innova-tive about what we offer."

Westwood One's show prepoperations are hubbed 24x7 inNYC, LA and Phoenix. The sys-tems are fully redundant with thedistribution controlled directly fromaffiliate relations. "We have beendelivering prep on the internet fora long time," says Westwood OneProgramming GM Thom Ferro."Starting three years ago with theGrammys, we have made selectedcomponents available on the net.In addition to net access, the Metromerge has made available theunique Metro Source platform fordistribution. All of our productswill be net and Metro Source avail-able by the Summer of 2001."

Because show prep is a braintrust of humor and information, thenet can also act as a platform forsharing-the more the merrier, soto speak. "The Internet has made itpossible for radio personalities toexchange information with eachother more easily than ever before.Elite networks of some of the bright-est and most talented air personali-ties are emerging in cyberspace,"says Whetstine. "MegaPrep (fromThe Complete Sheet) is one suchnetwork where the top personali-ties in radio converge daily to ex-change bit ideas, phone topics, andcontacts for guest bookings. Whena major event happens, such as theelection debacle in Florida, mem-bers can quickly exchange infor-mation. In the days immediatelyfollowing November 7, MegaPrepmembers had the names and tele-phone numbers of election offi-cials, politicians, so-called "votemachine" experts, and even thenumbers of pay phones outside ofthe buildings where votes werebeing recounted."

2/5/01 RBR

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Save money with ePrep's low bartercost.In fact, no other show prep service ispriced lower. So what's all the cheer-ing about you say? It's about ePrep-excellent, electronic, exclusive,easy -to -use and economical.

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Looking into LowryMays' crystal ball

.Wall Streeters breathed asigh of relief after Clear,Channel (N:CCU) issued fi=1"nancial projections for 2001which show after-tax cashflow per share rising 15% to$3.16. That was what ana-lysts wanted to hear andseveral reiterated "buy -recommendations.

As the chart, right, shows.revenues are expected torise only about 7.4% from a

pro forma S7.4B in 2000.including acquisitions anddivestitures, to $8.1B. ClearChannel did not break outits radio, TV and outdoorunits in the 1/30 guidanceto Wall Street. The com-pany won't report its final

il results for 2000 until nextweek (2/13).

12

Media arkets a onevby Jack Messme

Clear Channel's projections for 2001

Here's what Clear Channel Communications (N:CCU) has told Wall Street to expect for 2001, assuming that there areno acquisitions or divestitures (which is not very likely) to adjust for as the year goes along. RBR has included forcomparison Clear Channel's actual results for 01-3 of 2000 and estimated Q4 and full year 2000 numbers from Bancof America Securities analyst Tim Wallace. The final column has Wallace's estimate of pro forma numbers for 2000,including full year results for acquisitions such as AMFM and SFX.

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

Category Year Q1 Q2 Q3 Q4 Full Year Pro formaNet revenues 2001 $1,540 $2,241 $2,326 $1,975 $8,082 -

2000 $783 $966 $1,577 $1,831 $5,156 $7,527Cash flow 2001 $462 $811 $850 $800 $2,923

2000 $263 $403 $514 $692 $1,872 $2,605After-tax cash flow 2001 $320 $543 $576 $549 $1,988 -

2000 $193 $273 $339 $473 $1,278 $1,806Net income/(loss) 2001 ($273) ($52) ($22) ($46) ($393) -

2000 ($39) $31 $449 ($107) $333 ($501)ATCF per share 2001 $0.51 $0.86 $0.91 $0.87 $3.16

2000 $0.51 $0.73 $0.72 $0.75 $2.75 $2.85Source: Clear Channel Communications Inc. news release 1/30/01; "Broadcasting Monthly," Banc of America Securities, 1/22/0

PATRICK COMMUNICATIONS

Debt & Equity PlacementFair Market & Asset Appraisals

Station Brokerage

Larry PatrickPresident

Susan PatrickExecutive Vice President

Terry Greenwoodl'iee President

Greg GuyI'ice President

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

Clear Channel gains on2001 outlook

Investors bid up the price of ClearChannel's (N:CCU) stock follow-ing the company's release of 2001financial projections, despite someconfusion in press reports.

As the chart above shows, ClearChannel projected that its Q1 af-ter-tax cash flow (ATCF) would be51 cents per share. AP and DowJones said that fell short of the 63

ent "consensus" of analysts polledby First Call/Thompson Financial,while Reuters emphasized thatthe number was flat with last year.It turns out that the so-called con-sensus was based on a singleanalyst, since everyone else waswaiting for final 2000 numbersbefore making 2001 estimates. TheStreet was generally pleased withClear Channel's projections. Ana-lysts had generally been lookingfor full year 2001 ATCF totalingS3.15-3.16 per share-and that'sexactly what Lowry Mays andcompany set as their target.

At Deutsche Banc Alex.Brown, analyst Drew Marcusnoted that Q1 is Clear Channel'toughest comp, "due to the softad market and three cents pershare (ATCF] of seasonal dilu-tion from the SFX acquisition."

2/5/01 RBR

Marcus had been expecting ATCF of48-51 cents

Der share, so he was pleased to see the company

set its target at the high end of that range. He was

among the analystswho reiterated a "strong buy"

7 recommendation.Clear Channel's stock pricerose $2.51 to $65.21 on 1/31, the first trading day

after the 1/30 release.

Stocks fell onMerrill Lynch warning

Radio stocks had fallen 1/ 26 (before ClearChannel's guidance) along with other mediastocks, as Merrill Lynch warned of softness inad spending. In particular, analyst JessicaReif Cohen noted weakness in the autosector and said it appeared General Motors(N:GM) has cancelled up to half of theprimetime TV ads it had booked months ago.(See page seven for further confirmation.)The analyst repeated her concerns aboutbroadcasting as a guest (1/26) on PBS's "Wall$treet Week with Lewis Rukeyser." citingViacom (N:VIA, VIAb) alone as a broadcast-ing stock she's recommending.

Viacom buying back stock

Sumner Redstone and Mel Karmazin ob-viously think Wall Street is still undervaluingtheir stock. They and other Viacom (N:VIA &VIAb) directors have authorized a newbuyback of up to $2B of the company's publicstock. Viacom's most recent buyback, whichtotaled $1B, was completed in early January.

Radio One sheds Dallas AM

After acquiring a second FM in the Dallas market,Radio One (O:ROIA) CEO Alfred Liggins de-cided he didn't need an AM after all-so, thecompany is spinning KJOI-AM(formerly KLUV-AM) to Clear Channel (N:CCU) for $16M. That'sthe same price Radio One paid Infinity (N:INF)for the station just a few months ago (RBR 5/22,p. 20). An LMA began 2/1.

Radio One and Emmis (O:EMMS) havesigned a definitive contract for their reshuf-fling of Indianapolis radio (RBR 1/22, p. 13& 1/29, p. 13). The total cash changing handsis, indeed $8.5M. Radio One will pay $8M forNY/TLC-AM and the intellectual property ofWTLC-FM. Each company will then donate$500K to promote educational opportunitiesfor minority youth in the Hoosier capital.

Mid -West Family grows inSpringfield

Illinois, that is, since this group also has asuperduopoly in Springfield, MO. Mid -WestFamily, which in this case is operating asLong -Nine Inc., is paying $3M for Richard

2/5/01 RBR

& Patricia Van Zandt's WLGM-FM Peters-burg, IL. Mid -West Family already owns oneAM and two FMs in the market. Broker: H.B.

LaRue Media BrokersRBR observation: This is a Class A on

97.7 mHz which already has a CP to move10.2 km south of its current transmitter site.

That will give it city -grade coverage ofdowntown Springfield.

Another Utah buy for Devine/Buzil

Bruce Buzil and Chris Devine are con-tinuing to buy up every signal they can findthat is within spitting distance of the SaltLake City metro. This time their Mag MileMedia LLC is paying $2M for KMXU-FMManti, UT. The Class C on 105.1 is locatedsouthwest of SLC. Seller Sanpete County

Broadcasting, headed by Doug Barton,will keep its other station, KMTI-AM. Bro-ker: Greg Merrill, Media Services Group

Epperson adds an AM

Nancy Epperson's Chesapeake -Ports-mouth Broadcasting Corp. is moving upthe James River from the Norfolk market.Her $950K purchase of WHRP-AMClaremont, VA from 4M of Tidewater willtake Chesapeake -Portsmouth halfway toRichmond. The Religious group owneralready has two AMs (plus an expandedband station) in the Norfolk market andhas been LMAing WHRP since 12/29/00.Epperson is also a major shareholder ofSalem Communications (O:SALM), whichher husband co-founded.

The RadioIndex TMThe Radio IndexTM gained7.892 for the week, clos-ing 1/31 at a year-to-datehigh of 179.133.

180

170

160

150

140

Radio Business Report'Voice Of The Radio Broadcasting Industry

1/10/01 1/17/01 1/24/01 1/31/01

CLEAR CHANNELhas acquired

KGMS-FMTucson, Arizona

from

GOOD NEWS RADIOfor

$2,900,000And KCEE-AM, Tucson

The undersigned acted as exclusive brokerin this transaction and assisted in the negotiations.

Kalil & Co., Inc.3444 North Country Club Tucson, Arizona 85716 (520) 795-1050

1/1IW 13

ClosedKAFY-AM

Bakersfield, CA$1,425,000

JorgensonBroadcast OW Brokerage

Mark Jorgenson(813) 926-9260

Tampa

Peter Mieuli(408) 996-0496

San Jose

HAMMETT & EDISON, INC.CONSULTING ENGINEERSRADIO AND TELEVISION

Serving the broadcast industry since 1952...

Box 280068 San Francisco 94128

HE707/996-5200202/396-5200

engr@h-e.comwww.h-e.com

CCMMUNICATIONS TECHNOLOGIES, INC.Broadcast Engineering Consultants

Clarence M. BeverageLaura M. Mizrahi

P.O Box 1130, Marlton, NJ 08053(856) 985-0077 fax (856) 985-8124

W.John GrandyBroadcasting Broker

805-541-1900Fax 805-541-1906

Read about thesetransactions and more

at our websiterbr.com

The place forleading industry

news and information

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.

$5,000,000 WJET-FM Erie PA from NextMedia Li-

censing Inc., a subsidiary of NextMedia Group (Carl

Hirsh, Steve Dinetz, Skip Weller) to Regent Licensee

of Erie Inc. (Terry Jacobs, Bill Stakelin), a subsidiary

of Regent Communications (O:RGCI). $250K letterof credit as escrow, $5M in cash at closing.Superduopoly with WXKC-FM, WXTA-FM & WRIE-

FM. Broker: Media Venture Partners

$2,200,000 WHAI-AM & FM Sjpringfield MA(Greenfield MA) from Haigis Broadcasting Corp.(Ann Banash) to Saga Communications of NewEngland Inc. (Ed Christian), a subsidiary of SagaCommunications (A:SGA). $2.2M cash. Duopolywith WLZX-FM, but no contour overlap with Saga's

other Western Massachusetts stations.

$1,650,000 KOTB-FM Evanston WY, 100% stocksale of Rocky Mountain Radio Network Inc. fromDavid B. Smith & Jimmy Ray Carroll to EvanstonBroadcasting LLC (Bruce Buzil, Chris Devine, Robert

Neiman, Aaron Shainis, Andrew Barrett). $82.5Kescrow, balance in cash at closing. Notes: Co -owned

KEVA-AM will be transferred to a new Smith/Carroll

entity before closing. No contour overlap with thestations that the buyers have acquired in the nearbySalt Lake City, UT area. Broker: Greg Merrill, Media

Services Group

$1,750,000 KMET-AM Riverside -San Bernardino CA

(Banning CA) from Delphi Communications Inc.(Marc Tow) to World Shopping Network (O:WSHP,

headed by John Anton, John Moore, Gary Fox &Martin Bloomenstein). Exchange of assets for 7,415,254

shares of stock, valued at $1.75M. Note: Tow's 100%

owned Pelhan Associates will own 7.75% of WSNafter this transaction and Delphi will own 19.25%.

$1,250,000 KAKU-FM & KBMF-FM Springfield MO

(Springfield -High Point MO) from American Family

Association (Donald Wiildmon) to Community Broad-

casting Inc. (Richard & Sherley Bott, Charles Watkins),

part of the Bott Broadcasting group. $10Kdownpayment, balance in cash at closing.

$275,000 WXGJ-FM Apalachicola FL from John H.

Wiggins to Staton Broadcasting Inc. (Cecil StatonJr.). $50K escrow, balance in cash at closing. Broker:

BuySellRadio Online

$600,000 WXLN-AM Louisville KY (New Al-bany IN) from Cross Country CommunicationsInc. (George Zarris) to Mortenson BroadcastingCo. (Jack Mortenson). $50K escrow, balance incash at closing. Superduopoly with WLLV-AM& WLOU-AM.

$149,500 KCMC-AM Texarkana TX from KCMCInc. (Walter Hussman Jr.) to ArkLaTex LLC (Harold

Sudbury Jr., Linda Cate). $10K downpayment, bal-ance in cash at closing. Duopoly with KTFS-AM,KXAR-FM & KFYX-FM Texarkana -Hope AR.

$510 WKBF-AM & WHTS-FM Quad Cities (Rock

Island IL), 51% stock sale of Hit Radio Inc. fromWilliam Dudley III to Mercury Broadcasting Com-pany Inc. (Van Archer III), leaving Mercury as the100% owner. $510 cash.

N/A WCPN-FM Cleveland from Cleveland PublicRadio Inc. (Kathryn Jensen, Pres.) to Media Inc.(Jerrold Wareham, Pres.). Merger of Cleveland Pub-lic Radio and Educational Television Association of

Cleveland, owner of WVIZ-TV (Ch. 25, PBS), into a

single entity, Media Inc.

Media Brokers Appraisers Consultants

Ron Swanson, V.P.

570/563-0900SwansonRon0AOLCOM

14 www rbr corn 2/5/01 RBR

RBRRadio Partners

AudioVAULT Technology for Internet Radio!

www AudioVAULT.COM888.232.3268

WE bVALI LT'

AUDIX.PERFORMANCE IS EVERYTHING1

WEB

GentnerICIOUDIGITAL

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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

streamingon

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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