lovember 23, 1998 olume 15, Issue 46 MVP... Representing the most .espected names in broadcasting! BRIAN E. COBB 202.478-3737 CHARLES E. GIDDENS 703.847-5460 ELLIOT B. EVERS 415.391-4877 GEORGE I. OTWELL 513.769-4477 RADIO and TELEVISION BROKERAGE APPRAISALS M 1V4 MEDIA VENTURE PARTNERS VOICE OF THE RADIO BROADCASTING INDUSTRY° a-1-1-177 1 1--r1-1-7-7 1111111I I i 1 x. I 1../1/1 II I-1 1 l The over -overturning of EEO focuses on outreach 2 The FCC's new approach to EEO stays clear of hire -by -race quotas. It only stipulates that extra effort must be made to notify minorities of openings. Sales pacing remains strong despite increased inventory 2 Voluntary standards seen as FCC razzle-dazzle 2 Dr. Laura: Premiere Net says nyet to vignettes 4 Arbitron sticks in a web foot 4 XM's manufacturer deals will help put OARS in cars 6 M000ve over Howard: Boob tube beckons to bovine broadcaster 6 Cuba once again AP-propos for US news service 6 Poll position: Voters approve of broadcast election coverage 6 Don deal: Geronimo's charges reduced 6 When it comes to the web, NPR just another Yahoo 6 RAB not on the dole, but Dole will be on the RAB 6 Taking it EAS-y: Broadcasters hit emergency button 74 times 6 Connoisseur's station stew made one ingredient at a time 8-10 Can Harris afford to buy Intraplex? Yes 11 Cumulus' amended 03 report nets more loss 11 Greater outdoors for Chancellor after DOJ deal 11 Otter Tail tale: Big 03 gains 11 Big City: Net income up, negative cash flow down 11 I 1-3-71-1-111 I I 1711111I . IN 171-1-1-17- I 111,'17 I I 1 1 I11:1171177 1 I.I,I1-1'11 1 1111:11,7 Il Dodge plays Rapunzel, lets down gold for Hirsch, Cox 12 American Tower Systems is making two big buys to expand its business base. It'll get OmniAmerica for $397M and Cox -backed TeleCom Towers for $185M. American Tower experiences vertical revenue growth 12 Infinity's IPO karma may include $3.4B payday 13 Spin city: Clear Channel-Jacor cast-offs indentified 13 The Eagle has landed in St. Joe, MO 13 Serving up a Connoisseur's platter of radio stations. Pages 8-10.
Transcript
lovember 23, 1998olume 15, Issue 46
MVP...Representing
the most.espected names
inbroadcasting!
BRIAN E. COBB202.478-3737
CHARLES E. GIDDENS703.847-5460
ELLIOT B. EVERS415.391-4877
GEORGE I. OTWELL513.769-4477
RADIO and TELEVISIONBROKERAGE APPRAISALS
M1V4
MEDIA VENTUREPARTNERS
VOICE OF THE RADIO BROADCASTING INDUSTRY°
a-1-1-177 1 1--r1-1-7-71111111I I i 1 x.I 1../1/1 II I-1 1 l
The over -overturning of EEO focuses on outreach 2
The FCC's new approach to EEO stays clear of hire -by -race quotas. It
only stipulates that extra effort must be made to notify minorities of openings.
Serving up a Connoisseur'splatter of radio stations.
Pages 8-10.
Jim Carnegie Publisher Cathy Carnegie VP Administration
Ken Lee Associate Publisher/GM Ronald Greene Executive Director of Production
Jack Messmer Senior Editor John Neff General Sales Manager
Dave Seyler Senior Editor Maggie Daley Account Executive
Carl Marcucci Associate Editor Beth Dell'Isola Account Executive
Frank Saxe Associate Editor Jane Morrison Admin. Assistant
Jim Allen Associate Editor April Olson Admin. Assistant
FCC resurrects EEO rules;"Outreach" overriding goalby Frank SaxeIn the wake of last April's court rulingoverturning the FCC's 30 year old EEOregulations, the agency began the pro-cess of putting new rules on the bookslast week as it opened a proceedingwhich would require broadcasters totake extra efforts to alert minoritiesand women of job openings.
While the "outreach rule" wouldrequire notification, the proposal spe-cifically says race, ethnicity and gen-der could not be taken into consider-ation when a hiring decision is made.The plan includes special exemp-tions for small market stations.
In its decision, the US Court ofAppeals ruled the FCC's require-ment that broadcasters' workforcemirror the racial composition of itsmarket was unconstitutional. Un-der the new rules, the Commissionproposes to eliminate such analy-sis. The FCC proposal would alsoallow religious stations to requireemployees to be of their faith.
Cmsr. Michael Powell (R) said thepublic interest stan-dard often leads togovernment intru-sion and mischief,although he backsan EEO application."If the public inter-est means anythingat all it can't possi-bly tolerate the use
of a government license to discriminateagainst its citizens for whom that li-cense is ultimately derived."
The plan allows the FCC to con-tinue to collect data on broadcasters'employee make-up, although that in-formation would only be used to "trackindustry trends."
'They could have been a lot worse,"reacted one official at the NAB, whichhas urged owners to continue follow-ing the defunct recruitment rules.
"We never thought the EEO ruleswere burdensome on broadcasters inthe first place, and these will be evenless so," added Andy Schwartzman,president of the Media Access Project,a public interest law firm.
The government has until nextmonth to decide whether to ask theSupreme Court to reinstate its old rules.
Pacing stays on trackForward pacing remains strong in thelatest RBR/Miller Kaplan Market Sell -Out percentage report. Although eachmonth is slightly behind year-ago levelsin percentage terms, the figures areviewed as very strong, since most mar-kets have added inventory this year.
RBR/Miller KaplanMarket sell-out
percentage report
Nov.15
1998
84.5%
1997
88.5%
Dec. 63.0% 67.2%
1998
20.2%Jan.
1999
19.2%
Furchtgott-Roth blastsvoluntary standardsby Frank Saxe
The FCC is using back door "voluntary"standards, to end -run its legislative author-ity, so said Cmsr. Harold Furchtgott-Roth (R), in a speech to the Media Institutelast week. The Commission's most conser-vative member said his agency has made ahabit out of requiring broadcasters to meetvarious unwritten rules in order to get busi-ness done at the FCC and it "frightens" him.
Among the so-called voluntary standardslisted were waivers to broadcast owner-ship rules, deal review, EEO reporting regu-
lations and the FCC's indecency proce-dure. "The use of voluntary standardsallows administrative agencies better toskirt statutory limits on their authority. Theiruse can also more readily permit agen-cies to impose requirements violative ofthe Constitution," said Furchtgott-Roth.
One reason he said the Commissionuses the nebulous rules is that "they areharder to challenge in a court of law."
Furchtgott-Roth said the FCC shouldadopt full-fledged rules, whenever possible."We should either not act at all, or actthrough established rulemaking processes,and then defend our position," he said.
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The saga of Dr. Laura and the forgotten vignettesI w Carl Marcucci
You gotta hand it to Premiere Presi-dent / CEO Kraig Kitchin-onlymonths into his reign and he's hadthree major curves thrown at him-first Art Bell's resignation, then thenude Dr. Laura Schlessinger photosand now American View Inc.'s (AVI)impending syndication of Dr. Laura's520 "Coping" vignettes, which couldeat into Premiere's own "Dr. LauraMoment" vignette affiliations and raisemarket exclusivity issues with the " Dr.Laura" show.
The series of :60-:90 sec. vignetteswas produced by Norman Baer Pro-ductions in 1982-83 and aired onABC's Direction Network through '86.According to AVI President DaveAddington and managing director/principal partner Kent Burkhart, Baeroffered the series July 1 to then -Pre-miere President Steve Lehman, whoasked to see contracts and hear sampletapes for validation. They were sentJuly 8. After no response, a letter fromBaer's attorney Jeff Borris was sentJuly 22 worded, "since no response,we assume you are not interested."Lehman left Jacor (O:JCOR)-owned
Premiere to become Chairman of Na-tional Media (N:NM) Aug. 14.
Baer then shopped the vignettesaround and AVI agreed to syndicatethem. Said Burkhart: "I then askedfor a meeting with [Jacor CEO] RandyMichaels. We met at the NAB for 15minutes. He had no idea about this.He left the room and said [he would]get back in touch. The next thing wegot was a phone call from Kraig Kitchin10 days later."
When Kitchin called, he asked tohear the tapes. Later, according toAddington, Kitchin said the vignetteswere impressive, but Premiere did notwant them in the marketplace. A ceaseand desist letter from Premiere attor-ney Fred Fenster followed.
Kitchin told RBR he had no hint ofthe AVI contract prior to Michaels tell-ing him. "Steve [Lehman] and I did nothave a chance to discuss this. We weregiven a very very short window of timeto be able to ascertain [what to do]."
"I turned it all over to [Premiereattorney] Scott Zolke-I thought thiswas a potential legal issue. I remem-ber asking the guy 'why would some-
Arbitron takes its show onlineby Jim AllenTaking a page from its own somewhat ominous study withEdison Media Research on the Internet's impact on radio,Arbitron has booked itself on several business flights intocyberspace-entering into deals and introducing newservices utilising online technology.
Its Internet study concluded that local, over -the -air radiowill almost certainly see erosion in the wake of new media,but adds there are opportunities for radio on the Internet.
Accordingly, Arbitron announced a new partnership withMagnitude Network, Engage Technologies and RealNetworks(O:RNWK) to develop audience -measurement services forbroadcasters who use the Internet (RBR10/19,p.6). Arbitronsays it "will provide radio stations, other Internet broadcast-ers, advertisers and advertising agencies with unbiased,third party measures that will facilitate the buying andselling of online...advertising packages."
Arbitron VP GM Internet Information Services GregVerdino told RBR that through its alliance with Motorola's(N:MOT) subsidiary RadioWave.com, the first online -listening survey results of "300 webcasting radio stationswill be reported before year's end."
New tool for PDsIn the coming year, Arbitron will debut a new service called"Diary Scan", an online service through which subscriberscan access the comments sections of listener diaries.
body want 15 -year old Dr.Laura mate-rial when wedeliver a freshmini -featureevery day?' I
saw it as hav-ing no rel-evance what-soever in today's marketplace," saidLehman. "Why would a competitorpick it up to promote Laura who's onfull-time at another station? Let themrun it-if I were a Dr. Laura affiliate,hell, I'd pay a competitor to run it."
The outcome will most likely bedetermined in court. Said Kitchin:"We have a responsibility to 450 affili-ates [of] Dr. Laura and believe thatthey have market exclusivity."
Zolke tells RBR they are waiting forthe vignettes to air before acting. "Thisis an unfair competition case. Non-use for three years constitutes aban-donment of [Baer's] rights to exploither name and identity."
"We have a lot of documentation onthis," said Addington. "We think ourposition is sufficient enough that itwill become very clear quickly as towho has the rights in this thing."
However, detailed daily listening records will not be acces-sible. A couple of the more vocal consultants at Arbitron'sFall '98 Consultant Fly -In (11/11-13) were not quite surewhat to make of Diary Scan, but were reminded of the valueof perceptual data-which is how Arbitron views listenercomments.
The company's UK trials of beeper -sized "People Meter"audience measurement devices are about a month un-derway and Arbitron VP Marketing Radio Station ServicesBill Rose added, "we have our feelers out for otherinternational opportunities."
Arbitron's other recent innovations include multiple -tasked "PD Advantage" and "Media Professional" surveydata software packages available this fall and the sales -oriented merger of Tapscan and Arbitron data.
Also reviewed at the Fly -In were "Workplace Zip", whichyields new qualitative data by tracking at -work listening,and "Exit Polling," through which previous diary keepersare interviewed to extract perceptuals. Rose noted, "It isconfigured for the top 50 markets... [and is now in use] inNY, LA, San Francisco, Philadelphia, Detroit, and St.Louis...by Chancellor, Emmis, Greater Media, Inner City"and about 25 others.
All -in -all, NY -based consultant Walter Sabo charac-terized Arbitron's new array of audience -measurementwares as "filled with really useful stuff' but added itsaudience "sample size must be increased significantly inevery market [in order] to support that [more detailed]level of interpretation."
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Icy Lail MarcucciBringing Satellite DARS one stepcloser to reality, XM Satellite Radiolast week announced agreements withAlpine and Pioneer to manufactureand distribute XM-equipped after -market car stereos and Sharp forhome stereos and boomboxes. Thereceivers are expected to cost $199-$500. XM is 80% owned by AMSC(O:SKYC).
In addition, an agreement withRome -based ST Microelectronics(N:STM, formerly SGS-Thomson) willprovide chip sets for the three manu-facturers, along with XM's sister com-pany WorldSpace for its portable sat-ellite receivers.
"These agreements make this busi-ness very, very real. Doing these kindsof negotiations with Japanese com-panies, we have found they are ex-tremely thorough and have really gonethrough our business plan and tech-nology. They sort of bought into ourvision and I'm very excited about it,"said XM CEO Hugh Panero, who
kidded (Ilk 11)1111(1111M( is the first
of many mitittlacturing agreementscoming clown the road.
While aftermarket is the first lineof attack, Patter() says XM is also indiscussion with factory car stereomanufacturers. Competitor CD Ra-dio (O:XMIT) has not announced anymanufacturing deals thus far, butCEO David Margolese expects thembefore the year is up: "Right now, it'snot the long pole in the tent for us toannounce manufacturing deals, butwe're clearly pleased that major con-sumer electronics manufacturers aregoing to be contributing to the prolif-eration of satellite band radios."
Getting this close to the assemblyline raises again the FCC -mandatedinteroperability issue (RBR 10/19,p. 6). All satellite DARS receiversmust receive both services, and itstill doesn't look like that's going tohappen. Says Panero: "Right now thisequipment is going to be designedand built with the XM protocol andtechnology. We're still working withCD Radio and we hope that there canbe some agreement in the future."
Mancow TV coming
by Frank SaxeHoward Stern's late night televisionprogram may be losing affiliates andratings, but that is not discouraginga production house from launchingaTvproduct for WKQX-FM Chicago'sEric "Mancow" Muller. SantaMonica -based RTV has finishedshooting a pilot, which like Stern'sshow will set the shock jock behindthe mic.
RTV President Tom Coleman saidthe Mancow show will be differentfrom Stern's in that it will be on theair five nights a week, featuring high-lights of that morning's radio show."We're going daily, which is some-what ambitious, but we feel this is away to keep local programming veryfresh," said Coleman, who addedthey are looking at developing waysto present visuals for many of theaudio bits featured on the radio show.The program would be syndicated,and discussions with several Chi-cago TV stations are ongoing.
Coleman also said RTV needs toproduce five nights of shows a weekto cover the high cost of putting theshows on. They are also counting on
cooperationwith Mancowaffiliates. "Webelieve verystrongly in ourability to drivea rating withthese shows,because of theenormouscross -promo-tional possi-bility," he said.
RTV also believes by using alargely unknown product such asMancow, it can avoid Stern's pitfallsin that CBS (N:CBS) had built upStern's ability to pull late night rat-ings beyond expectations. He hasdeveloped an audience catering toprurient interests and that's elimi-nated his ability in getting guests,"said Coleman.
The Mancow show is part of a largerplan for RTV, which plans to launch acable channel in mid -1999 featuringa variety of radio shows. Colemansaid they are in discussions with sev-eral radio groups about investing inthe network and sharing talent, add-ing he is negotiating with a number of"nationally known" radio hosts.
RBR News Briefs
> The Cuban government has ap-proved the reopening of the Associ-ated Press bureau in Havana. AP wasforced to close its Cuban offices in1969 when its last permanent corre-spondent was expelled. CNN is theonly US -based news service with abureau in Cuba. It opened in March1997, after receiving approval from boththe Cuban and US governments.
> More than eight in ten voters polledafter the Nov. 3 elections said broad-casters gave too much or just the rightamount of time covering the campaign,according to poll sponsored by NABand RTNDA. 37% of voters listed radioand TV news and debates as "mosthelpful" in picking a candidate, althougha mere 42% listened to or watched adebate. Only 6% said paid ads were the"most helpful."
Don Geronimo, half of WestwoodOne's (O:WONE) "Don and Mike Show"duo, will not face drugged -drivingchages. Cops in Fairfax County, VA willinstead charge him with reckless driv-ing and marijuana possession. Don wasdoing 70 in a 35 mph zone when he waspulled over last August. A trial has beenset for Dec. 2.
Yahoo! Inc. (O:YHOO) and NationalPublic Radio have teamed to provideNPR newscasts on Yahoo! news pages.NPR will also host several chats eachmonth, featuring radio hosts and corre-spondents, as well as noteworthynewsmakers.
> American Red Cross President Eliza.beth Dole will give the keynote at theRAB Annual Conference next Februaryin Atlanta. Dole has also worked in theNixon, Reagan and Bush Administra-tions, and is considered a possible VPcandidate in the 2000 election.
In case it's asked on "Jeopardy,"broadcasters activated the EmergencyAlert System 74 times this year, th-roughOct. 20. Tornados and floods were themost common reasons for its use. TheFCC says the total number of EAS andEBS reported activations since 1976 is22,329.
611/23/98 RBR
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1
AggressiveConnoisseurseeks to add
to stationcollection
Jeff Warshaw
It's not easy to say just when Jeff Warshaw got into radio, sincehe literally grew up in the business. His parents and an uncleowned Universal Broadcasting-a group of niche -formattedstations (Ethnic, Religious, Gospel, etc.) in or near majormarkets-and Jeff was hanging around radio stations, work-ing at radio stations and reading radio trade publications froman early age.
"I always knew that I wanted to be in the radio business,"Warshaw said.
While still a student at Wharton, the young entrepreneurbought the CP for a daytime AM in Portage, IN, and as soon ashe graduated set out to turn the CP into an operating station."My first job was to find the money to build it, then build it andput it on the air."
Warshaw then went to work for Universal and oversaw thesale of most of the stations in 1992, leaving him with thePortage station and the desire to start a new group-Connois-seur Communications.
Beginning with the purchase of WFDF-AM & WDZZ-FMFlint, MI in 1993, Warshaw has grown Connoisseur into agroup with mostly duopolies and superduopolies in its tenmarkets from western Pennsylvania to eastern Iowa. The latestdeal announced was to enter the Saginaw, MI market with thepurchase of WTLZ-FM-giving Connoisseur an Urban outlet inthe market adjacent to its Flint superduopoly, which includesUrban WDZZ-FM.
Quality, not sizeConnoisseur's markets areArbitron rated #100+ (with theexception of #91 Youngstown, OH),but Warshaw says market rankisn't the key criteria.
"We have, in all of our markets,very strong clusters in marketsthat are not overradioed," he ex-plained. "Our markets are charac-terized by not a tremendousamount of in -format competition,and [being] in areas that have tra-ditionally been strong for radio."
"Size is not as important as thequality of the market," Warshawadded. "We would feel comfort-able operating in any size market,it's just that we tend to gravitatetoward markets that we can havevery strong positions and not beworrying about changing formats
every week because of somuch competition."
To date, Connoisseur hasbeen built piece by piece, oneor two stations at a time-andthat's not likely to change.
"It would be a lot easier ifwe weren't so disciplined,"Warshaw said of how he'sstuck to the business planhe established for buildingthe group. "We haven'tbought existing groups. Wehaven't even bought existingmarket clusters. We've beenvery methodical about build-ing it brick by brick."
Finding those "bricks" isn'teasy, and Warshaw doesn'tlimit his search to only cash -flowing operations or onlyturnaround stations.
811/23/98 RBR
"Generally, we've had a mix of both.In general, we wouldn't enter into amarket with just a stick-we'd like tohave a base of operations there andacquire sticks or existingunderperforming stations to comple-ment our existing cluster," Warshawexplained. "I would say three-quar-ters or more of our deals were not forsale, where we approached the ulti-mate seller. We haven't really beeninvolved in the auctions, but ratherwe have been going after strategicacquisitions one by one. It's a lot ofhard work, but it's been very reward-ing for us."
Connoisseur was launched with abase of limited partners as investors.As the group grew, Warshaw said hewas approached by a number of ven-ture funds and investment bankersbefore meetingPeggy Koenig of ABRYPartners about two years ago. "I hadheard just tremendous things aboutABRY," he said. 'They had a greatreputation and they really knew thebusiness." Those talks led to a largeinvestment in Connoisseur by ABRYabout a year and a half ago.
Good people are hard to findIt isn't easy to combine former rivalswithin a market and it also isn't easyto manage a growing group of suchcombinations.
"It's a tremendous amount of workand we think many other companiesout there have grossly underesti-mated how much work it really takesto integrate these operations,"Warshaw said. "Everyone can seethat you can cut one or two [employ-ees] out of the back office. That, ulti-mately, is not where we think that themoney is made. We think it's reallyimportant to assimilate the cultures,the way that we do business, so thatultimately we can use the power ofradio to go after bigger market share."
"One of our areas of focus has beennewspapers," said Warshaw. "Wehave developed an initiative for us,within the stations, to get them tolearn the lingo and the terminologythat's unique to newspaper. We haveput together a way of making propos-als to newspaper clients, so that wecan highlight how, in virtually everyone of our markets, our reach isgreater than the newspaper. This isthe first time in the [radio] industry'shistory that we have been able to
CONNIII5SEURCOMMUNICATIONS PARTNERS, L.P.
make that claim. When you add thefrequency that our stations can give,along with the reach, we think it's atremendously compelling argumentfor giving radio a shot."
To concentrate on making eachcluster work and building marketshare at the expense of competingmedia, Connoisseur has each vicepresident overseeing only three orfour markets. "That enables us tohelp each of the people at the stationsto grow into their jobs, with as muchsupport as possible."
Connoisseur currently has threeVPs: Don Kidwell, Jeff Dinetz andGary Rozynek. Also working withWarshaw at corporate headquartersin Westport, CT is CFO Mike Driscoll.
With that team of experienced proson hand, Connoisseur is working togive its staffers a level of resources andtraining that was seldom, if ever, seenin 100+ markets prior to deregulation.
"We really try to give as much sup-port to the stations as possible. Weput a lot of time and effort into helpingpeople get better," Warshaw said. "It'snot just something that we talkabout-we have plans and skill setsthat we've developed for the key peopleand we really try to help them growinto their ever more difficult jobs."
With the exception of some of thehigh -profile nationally syndicatedTalk shows, virtually all program-ming on Connoisseur's stations islocal. "We have some talent in ourmarkets with great longevity that we'rereally proud of," Warshaw noted.
The joys of DOJWith the US Department of Justice(DOJ) targeting ever smaller marketsfor antitrust probes of proposed radiodeals, Connoisseur was one of thefirst groups outside the top ten mega -groups to experience a DOJ investi-
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gation. Sensitive to opening oldwounds, RBR just had to ask what itwas like to go through the probe ofConoisseur's Youngstown marketshare.
"It was tremendously disruptive,"Warshaw sighed. As for expense, henoted, "it's not just the legal fees, it'sthe toll that it takes on your organi-zation."
Having gone through the process,Warshaw said he understands whatDOJ is looking at, in terms of revenuepercentages and type of facilitieswithin radio-even if it makes nosense. "As anyone who makes a livingin the radio business knows, the be-lief that we're a unique universe andthat we're not competing with news-paper and television, or cable anddirect mail, is simply ludicrous. Ourgreatest competitors, in fact, are theother media."
Most recently, Connoisseur wasalso targeted by the FCC for one of itsfirst market share investigations-
pertaining to the purchase of a comboin Mercer, PA, just east of the Young-stown market. "I really don't under-stand that," Warshaw said. "Theseare stations that are not in one of ourmarkets. They have no ratings orrevenue in our other market and theydon't have a signal in that market. Ittook us by surprise that there wasany inquiry at all."
Nevertheless, Warshaw gets to beone of the first to experience an FCCmarket share analysis to add to hisDOJ experience. Lucky guy, huh?
Exit strategy: UndecidedAs one of the nation's youngest groupheads, at age 34, it may seem strangeto talk about exit strategies, but in-vestors do eventually want to at leasthave the option of taking some profitsout of a company. For now, though,Warshaw is keeping his options open.
"My way of looking at it has justbeen to put one foot in front of theother and not really worry about
what's going to happen tomorrow-knowing that if we just keep takingcare of our business and keep ongrowing our people and assets thatwe'll have lots of options," Warshawsaid. "At some future date we'll evalu-ate them. Our business plan is notpredicated upon any single event forliquidity anytime in the forseeablefuture."
'That having been said," he added,"we consider ourselves to be a young,aggressive, growing company and weare putting ourselves in a position suchthat whatever happens in the future,we'll be able to capitalize upon it."
Whatever happens, Jeff Warshawsays he can't imagine ever not beingin radio. "I think it's the greatestbusiness in the world."
Not retiring is actually a Warshawfamily tradition. Despite selling mostof the Universal group in the earlypart of this decade, Jeff s parents stillown three large market AMs and hisuncle owns a combo in Indianapolis.
Rockford, IL
WROK-AM, WZOK-FM
WXXQ-FM
Waterloo -Cedar Falls, IA
KOEL-AM & FM
KKCV-FM, KCRR-FM
Grand Rapids, MIWMUS-AM & FM
Quad Cities, IA -IL
KJOC-AM, WXLP-FM
KBOB-FM, KORB-FM
WGEN-FM
Evansville, IN
WGBF-AM & FM
WTRI-FM, WYNG-FM
WDKS-FM (LMA)
Connoisseur's Markets
Saginaw, MI
WTLZ-FM
(purchase pending)
Flint. MI
WFDF-AM. WOAP-AM
WWCK-AM & FM
WDZZ-FM. WAHV-FM
Mercer, PA'WWIZ-FM, WLLF-FM
(purchase pending)
Youngstown, OH
WBBW-AM, WPIC-AM
VVSOM-AM, WHOT-FM
WYFM-FM. WQXK-FM
Canton, OH
WRQK-FM
*These stations appear in Arbitron'sYoungstown ratings
Harris Corp. (N:HRS) has expanded itsBroadcast Systems Division by acquir-ing Intraplex Inc., a Massachusetts -based maker of digital STLs and otherproducts for digital audio transmission.Financial terms were not revealed.
"For nearly a decade, Harris andIntraplex have collaborated not onlyin the broadcast field, but on prod-
ucts targeted for wireless networkapplications," said Bruce Allan, VP/GM, Harris Broadcast Systems.
Noting that Harris was already thelargest domestic distributor of hiscompany's products, Intraplex presi-dent and co-founder Bill Rollins said"this business combination will allowus to expand the range of productsand support available to both Harrisand Intraplex system users."
Cumulus amends 03
Cumulus Media (O:CMLS) amendedits Q3 financial report (RBR 11/2, p.14) to add a one-time non -cashcharge of $2.9M "for acceleration ofthe discount associated with theexchange of its pre-IPO preferredstock for shares of its 13 3/4%Series A Cumulative ExchangeableRedeemable Preferred Stock due2009." That increased the net lossattributable to common shares to$10.2M for the quarter, rather thanthe previously reported $7.3M. Thechange did not affect Cumulus' rev-enue or cash flow figures.
DOJ clears billboard buy
The Department ofJustice has reacheda settlement with Chancellor MediaCorp. (O:AMFM) allowing it to go for-ward with its $39.5M buy of billboardholder Kunz & Company. As part ofthe DOJ deal, Chancellor has agreedto divest faces in three Californiacounties as well as Mojave County, AZworth an estimated $5M. AssistantAttorney General Joel Klein said if itwere allowed to buy all of Kunz's bill-boards, Chancellor would have had a"virtual monopoly in some areas andmore than 60% of the market in oth-ers." Chancellor's outdoor division had$78M in outdoor ad sales in 1997.
37.750 37.875 0.125 0.33% 2505
44.625 45.625 1.000 2.24% 1168
55.062 59.250 4.188 7.61% 8863
64.562 65.937 1.375 2.13% 2533
27.812 30.843 3.031 10.90% 1450
38.125 38.375 0.250 0.66% 416
1.250 1.218 -0.032 -2.56% 30
29.125 29.750 0.625 2.15% 4953
0.406 0.656 0.250 61.58% 0
17.750 23.000 5.250 29.58% 1742
38.750 38.250 -0.500 -1.29% 94
1.625 1.875 0.250 15.38% 25
82.312 82.750 0.438 0.53% 236
41.625 42.875 1.250 3.00% 4275
6.000 6.000 0.000 0.00% 78
17.750 18.000 0.250 1.41% 80
13.687 11.500 -2.187 -15.98% 15585
16.125 17.000 0.875 5.43% 2888
0.437 0.437 0.000 0.00% 0
0.031 0.032 0.001 3.23% 510
10.750 11.000 0.250 2.33% 125
60.375 63.000 2.625 4.35% 2974
20.562 24.250 3.688 17.94% 161
18.062 21.125 3.063 16.96% 1717
29.687 28.750 -0.937 -3.16% 4566
More power for the Otter
Otter Tail Power Co. (0:OTTR) re-ported Q3 revenues up 10.1% to$112.2M. Operating income gained29.8% to $17.9M and net incomeincreased 26.9 to $9.9M. The powercompany's radio stations are includedin "other business operations," whichposted an 11.1% revenue gain to$16.1M.
Big gains for Big City
Big City Radio (A:YFM) reported Q3 netrevenues up 42% to $4.5M. The com-pany, whose station line-up still in-cludes mostly start-ups, had a broad-cast cash flow deficit of $425K -upfrom negative cash flow of $166K ayear ago, but improved from Q2's $1.3Mdeficit.
"Our performance this quarter re-flects a healthy 30% growth in same -station revenue and also includes re-sults from our first Chicago stationcluster, 103.1 FM Heart and Soul,which commenced operations earlierthis year," said CEO MichaelKakoyiannis
11/23/98 RBR 11
VV
I I i I I 1111.1/1_Li.w.11 I I I r
maiiris 11 11:1 131 IL:11W.M1 1 1 111 IkIM1 I I A 111111-11L-J&`_U I
Tower merger teams -up trio of broadcastersAll three tower companies which hadbeen backed financially by major broad-cast groups will become one underdeals announced last week (11/16).Steve Dodge's American Tower(N:AMT), which already has Clear Chan-nel (N:CCU) as a major investor, willacquire Carl Hirsch's OmniAmericaInc. (O:XMIT), backed by Hicks, Muse,Tate & Furst, in a $397M stock -swapand debt assumption deal. AmericanTower will also buy Cox Enterprises -backed TeleCom Towers LW for ap-proximately $185M in cash, stock anddebt assumption. Those values werebased on American Tower's 11/13 clos-ing stock price of $19.
In the end, Clear Channel will own6-7% ofAmerican Tower's stock, Hicks,Muse 4-5% and Cox roughly 3%. Ex-act details of the cash/stock split forCox are yet to be determined, which
will affect all of the equity percentages.Hicks, Muse partner Jack Furst willjoin American Tower's board of direc-tors, as will Cox Enterprises VP DeanEisner. Clear Channel CFO RandallMays is already a director. Hicks, Museis the controlling investor in both Chan-cellor Media (O:AMFM) and Capstar(N:CRB), which have a merger pend-ing. Cox Enterprises is the controllingshareholder of Cox Radio (N:CXR) andalso owns the Cox TV group.
"There's so much broadcastinghorsepower here, through relation-ships and knowledge of the sector, ourassociation with these companies can'thelp but enhance our prospects in thetall tower arena," Dodge told a confer-ence call with analysts and reporters.Although all three companies ownmany times more small towers (200feet, or so), primarily for cellular and
Christopher T. Dahl, Chairman of
Children's Broadcasting Companyhas agreed to transfer the assets of
KKYD-AMDenver, CO
KCNW-AM WPWA-AMKansas City, KS Philadelphia, PA
KPLS-AM WWTC-AMLos Angeles, CA Minneapolis, MN
WAUR-AM WZER-AMChicago, IL Milwaukee, WI
$37,000,000John Lynch. Chief Executive Officer of
Catholic Radio Network
StarMediaGroup, Inc.
"Radio's Full ServiceFinancial Specialists" TM
5080 Spectrum Drive, Suite 609 East Dallas, TX 75248 (972) 458-9300
by Jack Messmer
PCS, the really big bucks come fromtowers of 1,000 feet or more, whichtypically host several TV and FM sta-tions and a plethora of other govern-ment and private sector users.
"This was a great fit," Hirsch toldRBR. "Steve Dodge is a great busi-nessman."
The OmniAmerica deal marks achange of philosophy for Dodge, whohad originally been skeptical of Hirsch'sbusiness plan to own tower construc-tion and steel fabricating interests, aswell as owning and managing towersand rooftop transmitting sites. "We'vetransitioned from being skeptics tobeing fans," Dodge said ofOmniAmerica's full -service approach.
Including the two acquisitions,American Tower now controls 3,044towers (2,475 owned/569 managed),with 843 sites under development.Dodge now expects to get to 5,000towers by 2002 and to hit 10,000before the previous target year of 2005.Pro forma for the acquisitions, thecompany will have 131M shares out-standing and $324M in debt.
Announcement of the deals sentOmniAmerica's stock soaring $6 to$23.50 (11/16). American Towergained $3.50 to $22.50. Under themerger, OmniAmerica shareholderswill receive 1.1 American Tower sharesfor each OmniAmerica share.
CS First Boston advised AmericanTower on the merger and OmniAmericawas advised by BT Wolfensohn.
Revenues, cash flow shoot higherAmerican Tower also announcedsharply higher financial results forQ3, which reflected its rapid pace ofacquiring and building towers. Netrevenues shot up to $30.5M from$4.5M a year earlier. Tower cash flowrose to $13.8M from $2.2M. On a proforma basis, including all completedacquisitions but not TeleCom Towersand OmniAmerica, American TowerCFO Joe Wynn said Q3 revenueswere $33.2M and cash flow $15.8M.
OmniAmerica also reportedsharply higher figures for the quar-ter (RBR 11/16, p. 14).
1211/23/98 RBA
Infinity IPO could top $3.4BBased on the latest amendment to Infinity Broadcasting's IPO filed with the SEC, thesale of 16.2% of CBS' (N:CBS) radio and outdoor advertising division is expected tobring in at least $2.565B-and that could run as high as $3.4155B if the underwriterspick up the entire green shoe.
With market conditions on the upswing and the enthusiastic reception Mel Karmazinhas received on the road show, CBS has projected that Infinity will fetch from $19 to $22per share for the 135M shares being offered to the public. An additional 20.25M shareshave been registered, should the underwriters need them to cover overallotments-the"green shoe," in Wall Street parlance. The IPO pricing is expected to take place in earlyDecember and Infinity will trade on the New York Stock Exchange as "INF."
If the issue is priced toward the upper end of that range, Infinity will bump the recent (RBR11/16, p. 11) $2.8B stock sale by Fox Entertainment (N:FOX) from its position as the thirdlargest IPO of all time. CBS, by the way, has a price basis of $8.33 for its 700M shares of Infinity.
For the first three quarters of this year, Infinity posted a 24% gain in net revenues to$1.32B, EBITDA (cash flow minus corporate overhead) was up 36% to $397M. Proforma to include the ARS stations for the previous year's comparison, the company saidnet revenues were up 12% and EBITDA 21%.
Investors trying to find a brokerage firm participating in the IPO shouldn't have to lookfar-the list of underwriters reads like the Wall Street yellow pages. In addition to leadunderwriter Merrill Lynch, participants include BT Alex. Brown, Goldman, Sachs & Co.,Allen & Co., CS First Boston, Donaldson, Lufkin & Jenrette, Lehman Bros., MorganStanley Dean Witter, NationsBanc Montgomery Securities, Salomon Smith Barney,Bear, Stearns & Co., Deutsche Bank Securities, ING Baring Furman Selz, Lazard Freres& Co., PaineWebber, Sanford C. Bernstein & Co., Schroder & Co., SG Cowen, ABNAMRO Rothschild, BancBoston Robertson Stephens, Chase Securities, J.P. Morgan &Co. and Wasserstein Perella Securities.
Clear Channel details spin-offs
Clear Channel (N:CCU) says it ex-pects to spin off 20 stations to clearthe way for its $4.4B stock -swapacquisition of Jacor Communications(O:JCOR). Surprisingly, the list(which is subject to change) includesmore current Clear Channel stations,14, than Jacor stations, 6. Here's thelist of proposed divestitures:Jacksonville, FL: WZNZ-AM &WBGB-FM, both Clear Channel.Cleveland, OH: WERE -AM, WNCX-FM & WENZ-FM, all Clear Channel.Louisville, KY: WFIA-AM, WVEZ-FM, WLRS-FM, WDJX-FM & WSFR-FM, all Jacor.
Dayton, OH: WING -AM & FM &WGTZ-FM, all Clear Channel.Tampa -St. Pete, FL: WZTM-AM,WRBQ-AM & FM, WSJT-FM, WHPT-FM & WILV-FM from Clear Channel,WDUV-FM from Jacor.
Eagle flies into St. Joe
Eagle Communications, headed bypresident Gary Shorman, is extend-ing its Great Plains group with a$4M buy of KSFT-AM & KKJO-FMSt. Joseph, MO from John Daniels'and Ted Mahn's Cardinal Commu-nications. Broker: Larry Patrick,Patrick Communications
The RadioIndexTm
Stock prices were mixed af-ter the Federal Reserve cutinterest rates again, but mostradio stocks moved higher.The Radio IndexTM closedWednesday 11/18 at 104.34,up 3.25 from a week earlier.That put the index at its high-est point since 8/26, when itwas at 106.20.
120
110
100
8010/28
THE WALL STREET JOURNAL
R ADIO N ETWORK
11/4
CLOSED!
WIBV (AM)Belleville, Illinois
fromCH Holdings, LLC
toABC, Inc.
for$2,500,000.
Elliot B. Eversand
Charles E. Giddensrepresented ABC.
ELLIOT B. EVERS415.391-4877
GEORGE I. OTWELL513.769-4477
BRIAN E. COBB202.478-3737
CHARLES E. GIDDENS703.847-5460
RADIO and TELEVISIONBROKERAGE APPRAISALS
MEDIA VENTUREPARTNERS
11/23/98 RBR 13
SoldWI,QY-AM
Miami$5,650,1100
JorgensonBroadcast IOW Brokerage
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Tampa
Peter Mieuli(408) 996-0496
San JoseKnowledgeable Confidential
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WNFT-AM, Boston, MA $5 millionMega Broadcasting, Buyer
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The deals listed below were takenfrom recent FCC filings. RBR'sTrans-action Digest reports on all deals thatinvolve assignment of a station li-cense (FCC Form 314) and substan-tial transfers of control of a licenseevia a stock sale (FCC Form 315). butnot internal corporate restructurings(FCC Form 316). All deals are listed indescending order of sales price.
$7,150,000-* KQMQ-AM & FM, KPOI-FM & KKHN-FM Honolulu (Honolulu-Waipahu HI) from Caribou Broadcasting LP(Kent Nichols, FINOVA Group) to New WaveBroadcasting LP (Jon Ferrari, Charles Cohn,Kirk Warshaw, Brad Dubow, William Dou-glas, Generation Capital Partners LP, AltaCommunications VI, Alta Subordinated DebtPartners III LP, Alta Comm S -by -S LLC).$350K escrow, balance in cash at closing.Existing superduopoly. Broker: Kalil & Co.
$6,525,000-* KMCK-FM, KBRS-FM,KZRA-AM, KAMO-FM, KR EB-A/FFayetteville (Siloam Springs -Huntsville -Springdale -Rogers AR) from HochmanCommunications Inc. (George Hochman)to Cumulus Licensing Corp. (William M.Bungeroth, Richard J. Bonick Jr., RichardWeening, Lew Dickey, Jr, et. al.), a subsid-iary of Cumulus Media (O:CMLS). $326.25Kletter of credit as escrow, $6.525M in cashat closing. Existing superduopoly. Bro-ker: Media Services Group
$6,273,667-* KPXI-FM Tyler -Longview (Mt. Pleasant TX) from East TexasBroadcasting Inc. (John D. Mitchell) toSunburst Dallas LP (Sunburst Dallas Inc.,Media/Communications Partners III LP, M/C Investors LLC, Borders Partners, Ltd.,Don L. Turner, John M. Borders, StephenF. Gormley, James F. Wade, David D. Croll,John G. Hayes, Christopher S. Gaffney,Richard H. Churchill Jr.). $3,866,667 in
by Jack Messmer & Carl Marcucci
cash at closing, $2,407,000 note.Superduopoly with KFRO-AM & FM &KYKX-FM, plus LMA of KALK-FM WinfieldTX. Broker: Whitley Media
$5,650,000-WLQY-AM Miami (Holly-wood FL) from Genesis Communications IIInc. (Bruce C. Maduri) to WZMZ Broad-casting Inc., a subsidiary of Z -SpanishMedia (Amador S. Bustos, John Bustos,Darryl B. Thompson, Mark Inglis, Cleve-land Christophe). $300K escrow, balancein cash at closing.
$4,500,000-* WFOR-AM & WHER-FM Hattiesburg MS WJWF-AM &WMBC-FM Columbus MS from RadioHattiesburg Inc. and Radio Columbus Inc.(J. W. Furr, Don L. Furr, J. W. Furr, Jr.,Dorothy Knoll, Betty Swanzy) to CumulusLicensing Corp. (William M. Bungeroth,Richard J. Bonick Jr., Richard Weening,Lew Dickey, Jr, et. al.), a subsidiary ofCumulus Media (O:CMLS). $225K letter ofcredit as escrow, $4.5M in cash at closing.Superduopoly of Columbus stations withWKOR-AM, WSSO-AM, WMXU-FM &WSMS-FM Starkville -Artesia MS. Note: Nomore than five stations overlap at any point.
Broker: Media Services Group
$4,300,000-WKRS-AM & WXLC-FMWaukegan IL from Spring Broadcasting ofIllinois LLC, part of the Broadcasting Part-ners Holdings group (Lee Simonson), to
Belvidere Broadcasting Co. LP (BruceBuzil). $350K escrow, balance in cash atclosing. An LMA is contemplated.
$4,000,000-*WBPS-AM Boston(Dedham MA) from Achievement RadioHoldings Inc., a subsidiary of Z -SpanishMedia (Amador S. Bustos, John Bustos) toMega Communications of Dedham Lic-
Immediate openings.
Sales opportunities for Radio Business Report - a northernVirginia publishing company. Seeking Account Executives with a
passion for electronic media. Past radio sales experience a plus.
Fax resume to 703-719-9509 or send to: Radio Business Report.
Attn: Ken Lee, PO Box 782, Springfield, VA 22150. EOE
1411/23/98 RBR
ensee LLC (George L. Lindemann Sr., AdamLindemann, Alfredo Alonso), part of theMega Communications group. $400K es-crow, balance in cash at closing. Note: Thecontract includes a three-year non -com-pete for Bustos in the Boston market. If
Bustos is unable to get a CP for a newantenna pattern by closing, the purchaseprice will be reduced $100K. Duopolywith WNFT-AM.
$3,412,500-WKWQ-FM Columbia(Batesburg SC) and WKSO-FMOrangeburg SC from Columbia ChristianRadio Inc. and Orangeburg BroadcastingInc. (Bishop L.E. Willis), part of the WillisBroadcasting Corp. group, to RainbowRadio LLC (Cara Ebert Cameron, BarrySmith, John Broomfield). $87.5K non-re-fundable deposit, additional $3.325M incash at closing.
$2,300,000-* WS00-AM & WSUE-FM Sault Ste. Marie MI from Fabiano-Strickler Communications/Sault Ste. MarieInc. (James Fabiano, William Strickler) toMartz Communications Group (Timothy D.Martz). $230K escrow, balance in cash atclosing. Superduopoly with WYSS-FM,WKMW-AM and WIHC-FM.
$1,800,000-WTLZ-FM Saginaw MIfrom WTL Inc. (Stephennoisseur Communications of Saginaw LP(Jeff Warshaw, Tinicum DCR Inc., ABRYBroadcast Partners III LP), part of theConnoisseur Communications group.$125K escrow, $1.79M (less escrow) incash at closing, $10K under non -competeagreement. Note: No contour overlap withany of Connoisseur's FMs in the Flint mar-ket. Broker: Bergner & Co.
$1,600,000-* WVLD-AM & WQPW-FM Valdosta GA from Valdosta MediaServices and Metromedia BroadcastingInc. (F. Harrison Cooper) to Al BrooksCommunications Inc. and Brooks Broad-casting Corp. Inc. (Albert L. Brooks). $75Kescrow, additional $925K in cash at clos-ing, $400K note, $200K under consultingagreement. In addition, WQPW must airfive 60 -second spots per day for 90 monthsfor the seller's E.M. Travel Inc., the value ofwhich is not stated. Duopoly with WWRQ-FM Valdosta GA.
$1,500,000-WSRF-AM Ft. LauderdaleFL from Entertainment Radio Systems Inc.(Jon J. Mark) to Gallery Broadcasting, Inc.(Carl Nelson, Michael Joseph). $100K es-crow, balance in cash at closing. Broker:Hadden & Assoc.
$1,000,000-WPTG-FM West Point VAfrom Real Radio Inc. (Gilinda Rogers) toColonial Broadcasting LLC (James E.Campana, J. Philip Goldman). $20K es-crow, $700K at closing, balance in notepayable 180 days from closing. Note:Campana and Goldman own 40% of Win-ner Broadcasting, which purchases a ma-jority of WPTG's broadcast hours.
$800,000-* KWRL-FM LaGrande ORfrom Grande Ronde Broadcasting Inc. (Ri-chard and Deborah Freeman) to KSRV,Inc. (David N. Capps, Clare M. Ferguson -Capps). $40K escrow, $360K in cash atclosing, $400K balance note to be paidmonthly over five years. Superduopolywith KUMA-FM, KWHT-FM, KCMB-FM.
$615,000-* WSMT-AM & FM &WTZX-AM Sparta TN from Austin Broad-casting Corp. (Wylie Gene Austin) to SpartaCBC, Inc., a subsidiary of CommonwealthBroadcasting Corp. (Brereton C. Jones,Steven and Vickie Newberry, Dr. CharlesM. Anderson, Elmer Whitaker, W. Markand Debbie Myers). $10K escrow, addi-tional $525K in cash at closing, $75K note,$10K under non -compete agreement. Bro-ker: Hadden & Associates; Media Ser-vices Group
$300,000-KTFI-AM Twin Falls ID fromAM 1270 Co. (Lawrence C. Johnson) toFM Idaho Co. (Wendell & Lydia Starke).$300K cash. Combo with KIKX-FMKetchum ID.
$200,000-WSRG-FM Sturgeon Bay WIfrom Fleet Broadcasting Inc. (Timothy D.Martz) to Magnum Broadcasting Inc.(David R. & Lynn E. Magnum). $17.5Kescrow, balance in cash at closing. Note:No contour overlap with WAUN-FMKewaunee WI.
$190,000-WR1C-FM Richlands VAfrom Clinch Valley Broadcasting Inc. (MaryW. Lawson) to Peggy Sue BroadcastingCorp. (Dirk D. Hall, Henry G. Beam). $40Kescrow, balance in cash at closing.
$150,000-WROM-AM Rome GA fromThe Promised Land Communications Inc.(Roy T. Taylor) to LGV Broadcasting Inc.(Mark G. Garrett, Christopher MarkLumpkin). $14K escrow, balance in cashat closing.
$80,000-* KCOU-FM Columbia MOfrom The Independent Residence HallsAssociation to The Curators of the Univer-sity of Missouri (Theodore C. Beckett,pres.). $4K annually for 20 years. Duopolywith KBIA-FM Columbia MO. The buyeralso owns KOMU-TV (Ch. 8, PBS) Colum-bia MO, but no waiver is needed since allof the stations are noncommercial.
$80,000-WCVM-FM Bronson MI fromCalvary Christian Fellowship Inc. (RonaldH. Hyre) to CSN International (Jeffrey W.Smith, Charles W. Smith, John Laudadio,Michael R. Kestler). CSN is paying by 26monthly installments of $3K, with the finalpayment of $2K to be made at closing.Note: CSN has filed CPs for 27 new non-comm FMs in 16 states.
$75,000-WKGF-AM Arcadia FL fromHall Communications Inc. (Arthur J.Rowbotham) to Heartland BroadcastingCorp. (Harold Kneller Jr., Janet Kneller,William Noel Jr.). $2.5K escrow, $22.5K(less escrow) in cash at closing, $50K note.combo with WZZS-FM Zolfo Springs FL.
N/A-KWHO-FM Mt. Shasta CA fromTristar Broadcasting Corp. (Thomas F.Erickson) to Great Western Broadcasting(Tom Huth). Assignee agrees to assumeall outstanding debt of KWHO.
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