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RCS
Friday, December 7, 2012 Volume 1   |   Issue 23
 
“A disturbance in the Force”
Clear Channel WarsClear Channel cuts smack the big markets.
The roughly 30 largest markets were generally exempted from previous cuts, including the infamous Inauguration Day 2009 chops. Clear Channel has drawn a clear line between its most important revenue markets and the medium-to-small ones. But yesterday brought pain to markets from Tampa to L.A., and from Cincinnati to Dallas. Here’s the company line – “We are constantly looking at all aspects of our business to ensure that it reflects how the best organizations work today, taking advantage of the latest cutting-edge technology and organizational structure.” None of this was likely performance-related – it’s all about the numbers on the spreadsheet. Word of additional affected markets (“San Diego, too”) rolled around the room at the Arbitron Client Conference in Annapolis, and there was even a conspiracy theory – that Clear Channel co-owner Bain Capital purposely waited until after the November 6 election to make the year-end cuts, to avoid any embarrassment to Mitt Romney. You don’t have to believe that – but it is surprising that Bain and Thomas H. Lee Partners would execute all these cuts on the same day. Yesterday’s action – not quite a 2012 Radio Pearl Harbor Day – quickly gained notoriety in local markets. John Kiesewetter at the Cincinnati Enquirer says “maybe they should change the phone lines at WEBN to 749-ROCK and 769-HEADSROLL.”
 
JJS MEDIA, LLC
has acquired  KCKO-FM (CP) Rio Rico/Nogales, Arizona
from
COCHISE BROADCASTING, LLC
The undersigned acted as broker in this transaction and assisted in the negotiations.
Kalil & Co., Inc.
2960 N. Swan Road Suite 134 Tucson, Arizona 85712  | 520.795.1050
 

Listing some of the damage –
Clear Channel isn’t confirming any names, but there aren’t many secrets in a world of Twitter and Facebook. WEBN, Cincinnati’s Jay Gilbert started at the rocker in 1974 – and wasn’t allowed to go on his usual PM drive show yesterday. Down in Tampa, it was AM program director Steve Versnick, who’s moved many times for Clear Channel, and who won’t be replaced as the PD of talk WFLA (970), sports WDAE (620) and talk WHNZ (1250). Three other Tampa folks are out. The Houston Board of RadioDiscussions.com notes the absence of Walton & Johnson morning show at classic rock KKRW (93.7). In Minneapolis, sports KFAN-FM (100.3) morning personality and former NFL Viking Mike Morris is gone. So is WMXD, Detroit’s Frankie Darcell, after 18 years with the company. TimeOut Chicago’s Robert Feder says “at least four on-air positions and an unspecified number of jobs in other areas were eliminated in Chicago, as part of a companywide purge that’s become as familiar to employees this time of years as fruitcake and eggnog.” The cuts include “Quiet Storm” host Glenn Cosby at urban AC “V103” WVAZ, and midday host/APD/MD Effie Rolfe at gospel WGRB (1390). In Dallas, PD Josh Venable’s ousted at rock KDGE (102.1). The big Denver operation lost “Uncle Nasty” (Gregg Stone) at rock KBPI (106.7) and afternoon drive jock Keefer at alternative KBCO (97.3). “A disturbance in the force,” indeed, by the Empire. Is it over? Could there be a Day 2?

Eddie & JoboCBS has it own layoffs, in Chicago.
Morning team Eddie and Jobo are out after 20 months at CBS Radio’s classic hits WJMK (104.3). This had been their return to Chicago wakeups, after a very long enlistment at sister CHR “B96” WBBM-FM. K-Hits 104.3 programmer Todd Cavanah’s memo says “Today was Eddie and Jobo’s last day…I’d like to thank them for helping us launch K-Hits nearly two years ago. It’s been a pleasure working with them every day, and I wish them well.” There just wasn't a good match between the team's talents and the music. TimeOut Chicago says Ed Volkman and Joe Bohannon will be paid through the end of their deal in March - and they chose not to do a farewell show today.

Day 2 of the Arbitron Client Conference –
Valerie ShumanThe day begins with an hour-long look at the “In-vehicle competition” for radio.
Valerie Shuman of the Connected Vehicle Trade Association says it’s the “elephant in the room” – the fight for media time in the car. Shuman says we’re further along than you may realize (even if the local Ford rep can’t quite explain the SYNC system during your test drive). The change began with GM’s OnStar (but it was 2G technology), progressed to Ford SYNC, the Toyota Entune and Cadillac Cue, and stretches into what Shuman calls “the cool stuff in the future – where every car can talk to every other car.” A lot of it’s about safety (33,000 Americans died in car crashes last year), lost productivity ($100 billion worth of traffic congestion), and getting cheaper insurance rates (you let State Farm monitor your speed and mileage). Then it’s about “dividing the dashboard dollar,” with SiriusXM, Pandora, HD Radio licensing fees and content creators jostling each other for business. What’s the destination? A virtual dashboard and software-defined radio. Not a built-in system that's obsolete by the time you do the first oil change. And about “nomadicity” – Shuman says “People expect access to their content anywhere they go.” Big implications for radio.

“Take a nice long test drive.”
Fred Jacobs (like presentation introducer Dr. Ed Cohen of Arbitron) has been attending some very non-radio meetings, devoted to in-car engineering and tech advances. The Jacobs Media principal recommends that radio pros “Go to a Ford dealership, or Toyota, and take a nice, long test drive. Experience what your audience will be experiencing. You need to understand what the consumer is going through, to be an effective programmer” in 2013 – especially when more than half of all radio is consumed in the car, in some demos. Jacobs says “by far, broadcast media are still the largest source” of music and sound for occupants of the car. But “streaming, SiriusXM, HD Radio are all coming.” Interestingly, he says HD Radio is not a lost cause among car manufacturers – “This Ford guy kept talking about HD Radio…they oftentimes put HD Radio in the mix.” Fred shares an overview about in-car listening from the latest Jacobs TechSurvey 8, and says “we as broadcasters need to step up,” to offer content that’s “comparable to Pandora and everything else they’re looking at, including iPods.” Jacobs’ advice – “make great radio, develop great content.”

Jacobs Media

Brian Lakamp“Mobile has made digital 247.”
Clear Channel President of Digital Brian Lakamp says “over 50% of iHeart’s usage is now mobile,” and says since most smartphone owners keep their gadgets within five or ten feet at all times, audio content can go from wakeup to sleepy-time. (Even after bedtime, with iHeart’s “sleep timer,” that cuts off the stream after you’re counting sheep.) Lakamp says they think about iHeart users waking up to CHR Z100, New York, driving to work with rock group Deadmau5, catching up on sports talk at the office, etc. Six years ago, Lakamp was working at a Hollywood studio, and he plainly loves great content. He says at its core, “iHeartRadio isn’t really about digital radio, it’s about radio and the relationship with consumers.” Since iHeartRadio’s offering its own Pandora-like custom radio feature, what’s the effect on listening behavior? Clear Channel research says that “custom radio users spent more time with live radio than they did two years ago…digital is ‘in addition to’, not ‘instead of’ broadcast radio.” Brian reiterates the SoLoMo phrase you read about yesterday – the Silicon Valley buzzword of Social, Local and Mobile. He says “radio’s been SoLoMo for over 50 years.”

Chris Oliviero“What can other formats learn from sports radio? The power of personality.”
That’s CBS Radio Senior VP of Programming Chris Oliviero on the 11:30 panel titled “Sports Radio’s Past, Present and Future.” Oliviero’s helped covert 11 CBS stations to all-sports, and he says it’s critical to “hire the right person and give them the opportunity to become a star in their own right.” Then the station’s got the ability to generate revenue from all those endorsements and live-reads – what he calls “the secret sauce of the format.” That’s true even if you’re not the leading sports station in a market. Panel moderator and sports nut John Snyder of Arbitron shares stats about the growth of sports radio in both number of stations and listening share. The panel (which includes ESPN Audio’s Scott Masteller and Dial Global’s Chris Corcoran) agrees that the surge in sports talk may level off, but the format won’t go into retreat. Why? It’s safe, compared to political talk, it’s got all kinds of ways to monetize the audience (hello, NTR), and clients feel passionate about it. (Masteller recalls being shown the pre-sold ads before they even launched an all-sports station in Dallas.) But sports radio could and should become more diverse, says the panel. There should be more women, and younger hosts. ESPN’s Masteller sums up the appeal of sports radio – “It’s the male soap opera.”

Herman CainHerman Cain is into his ninth career – syndicated talk personality.
You may know him from his “Daily Show” appearances, his “9-9-9” tax plan and presidential run, and his past as head of Godfather Pizza. But he’s also done naval weapons research, been a mathematician, and was able to explain to listeners why the government’s strategic shootdown of a decaying satellite deserved more play than the media gave it. He tells me in a pre-Arbitron keynote interview that his experiences in math, science, management and the political arena equip him with more background than the guy whose spot he’s taking on January 21 – Neal Boortz. Cain credits Neal with recognizing his potential immediately after his first guest shot, and he credits WSB Atlanta owner Cox with offering more and more opportunities. Now he’s got his biggest shot yet in radio – assuming the late-morning slot in a syndication effort by Cox Media Group, with assistance from Dial Global. Cain’s keynote speech was rousing, whether you agreed with his conservative analysis of America’s declining position and his recipes for fixing it. He’s an energizing public speaker, and several savvy syndication executives – who probably hold very different political views, themselves – predicted a bright future, if he can keep delivering that mix of humor and insight every day for three hours. Cain says he’s more than ready. How well-received was Cain’s luncheon speech? He got a standing O.

Ron Rodrigues“Country is hot and getting hotter,” says Arbitron’s new edition of “Radio Today.”
Ron Rodrigues tells the Client Conference the topline age 12+ AQH shares for country radio, back to Spring 2004 – from a 12.4 share to a 12.9, 13.0, 13.1, 12.9, 13.4, 13.3, and last Fall, a 14.1. Breaking that out by markets, the country share averages a 7.4 in PPM markets, a 15.3 in diary-measured markets, and an amazing 26.2 in non-metro markets. Geographically, Ron says “country’s strength lies in the heartland,” with 15 states as its base. Vermont is also in there, but the sweet spot for country is the Midwest, and Rodrigues says “Mitt Romney won 13 of those 15 states.” The newly-available Radio Today study shows 2,861 stations doing country – though that includes HD Radio multicast signals, which didn’t exist a decade ago. Second on the format-share chart is news/talk, at a 12.1. Adult contemporary is an 8.8, and pop CHR is a 7.6. Arbitron says “CHR is resurgent in all markets.” All-sports radio has nearly doubled since 2004, from 2.0 to 3.6 – a sign of its appeal, and the increased number of stations. You can download the latest “Radio Today” report, with free registration, here.

Jenny TsaoRecycling is good at your house – and in radio.
Especially in PPM markets, it turns out. Arbitron’s Jenny Tsao crunches the numbers in search of “top performers,” and discovers that radio has the same challenges as Starbucks – how to get people coming back, sometimes more than once a day. That’s called vertical recycling, while attracting return business the next day is horizontal recycling. Arbitron says 45% of a station’s listeners do come back the next day, on average. But there are differences between diary- and PPM-measured markets. Arbitron’s Bill Rose says the traditional thinking in diary mode was about stretching out each occasion of listening as long as possible. But in PPM – the “time spent per occasion is very similar across all stations – around nine minutes.” So you focus on winning more occasions, to be a top performer. One question from the audience came close to broaching the topic that station managers and owners ask – shouldn’t the sample size be larger? It should, but who will pay for it? That’s an eternal paradox for Arbitron and its customers.

Mike McLean“Building brand loyalty the Disney way.”
Disney Institute executive Mike McLean spent 17 years in radio (Boston and Providence), then opened a kite shop on the west coast of Florida. He told Disney “no” the first time they reached out to him, then reconsidered – and these days, he preaches how to build a company that can always deliver a more than satisfying customer experience. Oddly enough, in the Disney construct, the customer is not #1 (not in the traditional way we use that phrase). Disney’s “chain of excellence” begins with “leadership excellence.” It proceeds to “cast excellence,” then “guest satisfaction” (those customers) and “financial results/repeat business.” And what is a brand, exactly? McLean variously defines it as “the stories told about you,” and something that can be damaged in a single day, by “media reports, unfriendly blogs and tweets,” and so forth. He quotes creative consultant Ted Minnini defining a brand as “not something that can be seen, touched, tasted, defined or measured. Intangible and abstract, it exists solely as an idea in the mind.” From the Disney Institute handout, the broad categories are “building relationships” with new customers, “building repeat business” and “creating a sustainable competitive advantage.”

Strong attendance at the Arbitron Client Conference.
Its roots go back 20+ years, to the original Fall Consultants Fly-In, where the talk dwelled on technical issues like consent rates for diary respondents, new Arbitron software offerings, and which markets were being re-defined (Boston fought to add territory so it could hang in the top 10). Now the conference audience has grown past consultants, researchers and programmers to include more vendors, as well as a half-day Urban PD Clinic. There’s also now a charge ($249), though the Client Conference is probably a break-even proposition for the company. It’s historically been held around Arbitron headquarters in Columbia, Maryland, between Baltimore and Washington DC. Last year it was in downtown Baltimore, and this year in Annapolis. It also gives Arbitron folks (including CEO heir-apparent Sean Creamer) a chance to sit down at the round conference tables with their customers and data users, and listen. Arbitron has sounded out the community about moving the conference to a different (warmer?) locale, and no doubt the followup surveys will be asking about preferred locations for 2013. Nice of Arbitron to memorialize former comrade Bob Michaels, who died earlier this year. He was missed at this meeting. Kudos to Arbitron staffers for their work on this year’s confab, including organizers Bill Rose, Ron Rodrigues and Jon Miller.

HarrisHarris Corp. finds a buyer for its Broadcast Communications business – onetime Westwood owner The Gores Group.
Alec Gores picked a truly unfortunate time to take control of Westwood One – February 2008. Last year, the L.A.-based Gores Group sold the Metro Networks traffic wing of Westwood to Clear Channel for $119.25 million. Then it merged the networks (syndication) division into Dial Global, and it retains a minority interest in Dial. (Which, by the way, is due to disappear from the NASDAQ exchange any second now, in a voluntary de-listing.) Yesterday it was announced that Alec Gores is buying the Broadcast Communications unit of equipment giant Harris Corporation for $225 million. However, there was immediate yakking in the engineering world about the terms. Gores pays $160 million in cash, signs a $15 million subordinated note with seller Harris Corp., and agrees to an earnout of as much as $50 million. TVNewscheck notes that the current head of Broadcast Communications will likely go forward with the new ownership. His name is (somewhat confusingly) Harris Morris. While engineers are wondering about the name of the company under its new owners, the Gores Group. They're also wondering if the new private equity owner will split it up into pieces.

SiriusXMFearing a tax hike next year, SiriusXM declares a special dividend worth $325 million.
Now we have a better fix on that just-announced $1.25 billion revolving credit facility – SiriusXM declares a special dividend of a nickel a share, and will also buy back up to $2 billion worth of its “SIRI” stock. Of course, many companies never complete their stock buybacks. But the satcaster joins many companies in figuring that taxes on dividends might rise in 2013. Liberty Media will pocket much of that cash – and maybe it will use it to buy still more of the company’s stock, as it’s on the threshold of owning more than 50% of the company. SiriusXM CEO Mel Karmazin is expected to pack up his office by the end of January, and Liberty’s John Malone and Greg Maffei are searching for his successor. Just as with this week’s announcement about the new “revolver” loan, the market wasn’t moved by yesterday’s special dividend/stock buyback news. “SIRI” ended the day up two cents (less than 1%) at $2.79. There was more trading than usual, though – over 120 million shares, compared to the average of 77 million.

Glenn Beck and Vince Vaughn are “going into the reality TV business together.”
That’s from Deadline.com, which says they’ll executive-produce “Pursuit of the Truth,” pitting 20 documentary producers against each other for the prize of having their piece financed and distributed. Glenn talked about the partnership with actor Vince Vaughn (“a crazy man”) on his Premiere-syndicated radio show. “Pursuit of the Truth” will be a joint project of Beck’s TheBlaze, Vaughn’s “Wild West Picture Show Productions” and Go Go Lucky Entertainment. They’re taking applications now and the series should make it on TheBlaze next Spring. Beck’s always been interested in movies – he once led a radio audience in Philadelphia to a local theater, where he provided running commentary for a motion picture.

 
On The Block

KFNCYahoo Sports Radio operator David Gow closes on the $5,050,000 purchase of Houston-area KFNC, Beaumont (97.5). A sister company of Cumulus Media acquired and then sold two FMs that never quite made it in the Houston-Beaumont area. The onetime adult alternative KHJK, LaPorte (103.7) was dealt to Educational Media Foundation, which converted it to non-commercial operation as an affiliate for its Christian rock Air 1 network. While the former “ESPN 97.5” KFNC was awarded to local station owner and sports radio network operator David Gow, as Gow Communications. Seller in both cases is Larry Patrick-run AR Broadcast Holdings – where “AR” stands for Asset Recovery, for the lenders to that Cumulus subsidiary. David Gow owns all-sports KGOW in Houston (1560). Brokers on the sale of 97.5 – Larry Patrick and Greg Guy of Patrick Communications.

Cumulus was able to buy back two Kansas City FMs. Those are CHR “95.7 The Vibe” KCHZ, Ottawa, Kansas and urban AC “Magic 107.3” KMJK, North Kansas City, Missouri. Like the two Houston-area FMs, they’d been part of a Cumulus-connected company, and then gone into to pre-packaged Chapter 11 bankruptcy reorganization. Cumulus didn’t exactly get them for a song – AR Broadcast Holdings held out for $16,750,000. That Cumulus subsidiary originally owed over $85 million on the term loan and the revolving credit facility for these two K.C. FMs plus KFNC/KHJK in Texas. The buyer in this case is CMP KC Corp., headed up by Lew Dickey. Broker on the double sale in Kansas City – Patrick Communications.

 
Transitions

Gary NolanClear Channel does some hiring. Veteran programmer Gary Nolan is packing the warm-weather gear and suntan lotion for a trip to Panama City, Florida as ops manager for Clear Channel. He’ll also handle afternoon drive on country WPAP (92.5). Gary says “I can’t wait to hit the beach.” He's programmed in Seattle, New York and Minneapolis, and he ended a four-year run at Denver's KOSI earlier this year. He's at GaryN72000@Yahoo.com.

 

Stuart McRae says “I’m starting a new direction next year that will not involve network radio.” He’s leaving Cumulus Media Networks under his own steam, and says “I will always be proud of the time I spent with ABC Radio Networks and Cumulus Media Networks” – 11 years in affiliate relations. He says “Dennis Green and Marcella Turk have been great to work with, and I will miss my co-workers as well as several hundred satellite affiliates I’ve been working with.” He’s at stuartmcrae@verizon.net.

Chris Moore and Brian Jones are the final links at CBS Sports Radio Network, handling evenings 6-10pm Eastern time. Chris Moore has done both play-by-play and sports talk, and former NFL pro Brian Jones is already on staff as an analyst for CBS Sports Network. The full roster debuts January 2.

Georgia State Senate Majority Leader Chip Rogers takes a new job at Georgia Public Broadcasting – an executive-level position that “will promote economic development and jobs in Georgia,” says the Marietta Daily Journal. It’s an unusual career move, for somebody who was thought to aspire to a higher office, and it may sound unusual for a state broadcasting authority to seek out a well-known Republican. But that may be good politics for both sides, as Rogers resigns from his state Senate seat. He says the role “was created in conjunction with the CEO [of Georgia Public Broadcasting] and the governor. We all three worked on this together.”

 
You Can't Make This Up

Jackson Dell WeaverPromotional support - Jackson Dell Weaver of InTown Media says "It was the summer of 1986 and at Salt Lake City’s KLRZ (Hot Rockin’, Flame Throwin’, Butt Kickin’ Z95) we did a major promotion that has seen dozens of variations. This one was, we would throw 50 keys into a pool of Jello. One lucky key would start the grand prize, a new car. The Z95 Jello Jump was promoted all summer, and created a good deal of buzz. It was about two weeks before the event when someone noted that we hadn’t figured out where we were getting the Jello necessary to fill a small pool. We were going to need a ton of Jello - not something easily accessed in those pre-Costco days. Being the creative GSM, I called a promotion guy at Kraft Foods, explained the promotion to him and asked if they’d donate about 50 pounds of Jello for our ‘jump.' There was a long pause after I explained it to him. A long pause. Then he said, 'Mr. Weaver, Jello is for eating. Not for jumping.' And that was that - no Jello for us. I think we used some colored water to about the same effect, but today someone would sue us for misrepresenting the viscous fluid in our promotion." Got your own story of promotional agony (or pleasure)? Email Tom@RTK-Media.com.

It’s December 7, when Americans heard about the Pearl Harbor attack on radio. AM radios, of course – Colonel Edwin Armstrong’s FM radio was barely born, and it would be moved after World War II to a much higher place on the dial (to the current 88.1-107.9 MHz). President Franklin Delano Roosevelt made greater use of radio than any president before him, and his grim December 7 announcement about a declaration of war on Japan was certainly more serious than any of his “Fireside Chats” about the economy. Radio served as a critical communication link all through World War II – and it started with the “day that will live in infamy.”

“Yes, my coffee also tastes better now,” says a reader at the just-concluded Arbitron Client Conference. He’s piggybacking on something another reader said last week. Thanks for all the welcome-back comments, both in-person and by email. If you like what you’re getting (very early) every morning, tell a friend or colleague. If you’re reading this as a pass-along, feel free to sign up for your own subscription, at no charge. Look for the confirmation email (check your spam filter if that doesn’t appear). Signup is here. See you Monday, and happy holiday shopping - Tom

 
 
 
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