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Changes in the offing as AMFMRN becomes a Premiere network 2

The merged entities coming as a result of Clear Channel's acquisition of the AMFM

radio group will add three new services to RADAR and take a bite out of clutter.

Small markets packed to the gills with surfers ready to be hooked 2

Dot -corn business explodes in NYC 3

#333 can turn traffic -trapped commuters into shoppers 3

A look at the government's new 511 dial -up traffic service 3

FCC swoops down on more Gold Coast buccaneers 4Arbitron takes the measure of the Kiddies 6-11 demo 4

Not -so -Stern warning? Vegas indecency fine evaporates 4

Feed The Monster feeds new tech to clients 6

BPI formats get webcasting partners 6

WOR of the world? Net expands web offerings 6

A&E puts cable's "Biography" on radio 6

RCS releases ad -insertion software 6

Formats: News -Talk still king, CHR surges 11

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Streaming devices can add ad inventory for webcasting stations 8-10

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Cumulus crowd flips to the CCU portfolio 12

Clear Channel is buying 55 stations in 10 markets from Cumulus, and

cutting Harrisburg from its sale to Cumulus. Value of dealings now $284M.

The Morris, the merrier? Cumulus grows in Fayetteville NC 12Allen displays Dex-terity with Montana move 13Vox populates small NY, PA markets, swaps out of FL 13Eagle expands its Kansas aerie 13Raking it in: Results from Clear Channel, Citadel 13Raking it in II: Results from Saga, Cox 15Splitting headache? Emmis weighs Wall Street options 15IPO: USA Radio engages in a public stunt 15

repeat after me...no work, just checks...Imagine getting a website with e -commerce systemand content that targets your precise audience and -format. For next to nothing. Call us at 203-929-9101. site C 0M

Home of the BlueDot WutSitu NotWoik

Jim Carnegie Publisher Ken Lee VP/GM Associate Publisher

Jack Messmer Executive Editor Cathy Carnegie VP Administration

Dave Seyler Managing Editor Ronald Greene Executive Director of Production

Carl Marcucci Senior Editor John Neff General Sales Manager

Elisabeth Derewitz Associate Editor Susanna Pritchett Account Executive

Mona Wargo FCC Research Consultant April Olson Admin. Assistant

Premiere/AMFMRN detailpost -merger changes to agenciesHyping a host of new buying opportu-nities for agencies and advertisers,Premiere Radio Networks held a pre-sentation 7/24 at the Museum ofRadio and Television in NYC in frontof a number of agency execs. PremierePresident/COO Kraig Kitchin andAMFM Radio Networks PresidentDavid Kantor were presenters at theevent that reviewed changes for thecombined Premiere-AMFMRN, post-AMFM-Clear Channel merger.

New opportunities for buyers in-clude three new RADAR -rated adver-tiser networks, debuting 1/1/01(AMFMRN currently has four nets;Premiere five). They includemorning drive FM network which willcomplement the current morning driveAM net, and two new :10 second in-ventory networks-Action, targetingAdults 18-49 and Pulse, targetingAdults 25-54. These new :10 secondopportunities, made possible by thenew Starguide distribution platform,hearken back to the days radio usedto be-live DJ reads before traffic,weather or information reports. Theyare planned to be the first spotcomingout of a break. "With StarGuide, Pulseand Action will provide network radioadvertisers with a new paradigm anda new way to reach listeners with live,localized, personality -voiced commer-cials," Kitchin told RBR.

Demand on stationinventory, and there-fore clutter, is also go-ing to be reduced.Available network unitcount will drop from399 per week in 2000to 311 in 2001. "Thenew Clear Channel ra-dio stations of the fu-ture, which are theprevious AMFM stations, will be re-ducing their network inventory com-mercial load in the future to a level tobe determined and announced in thenext eight -10 weeks," says Kitchin."It's an effort to put commercial in-ventory back into the hands of thelocal broadcasters within our group,which obviously is an increased rev-enue play, and to reduce the com-mercial load on each of the radiostations."

RBR observation: Agency reac-tion was a mixed bag. Some wereconcerned that with less inventory tochoose from, in a continuing atmo-sphere of high demand, rates will goup. Some were concerned that a largerPremiere umbrella could also meanhigher rates. On the flip side, mostwere intrigued with the three newnets, especially the :10 second livereads in Pulse and Action for retailaccounts. We expect Metro/Shadow

(I -r) Kraig Kitchin, Pres./C00 Sales, Premiere Radio Networks

Lee Rosen, Planning Director, Creative Media

to follow suit. Three more RADAR -rated nets, with guaranteed place-ment, were very well received. Thebuyers all look forward to the "deli-cate dance," as Horizon Media'sMitchell Scholar puts it, for the 2001upfronts, which will really hit the fanin the next few weeks.-CM

Hey dot -corns! Good things comein small markets, too

Everyone knows that the dot -corn com-panies have discovered radio in a bigway over the past few years. Everyonein the top 25 markets, that is. To date,very little dot -corn money has trickleddown to smaller Arbitron environs.

And that may be a big dot -mistake.A new survey conducted by Arbitronand Edison Media Research showsthat Internet use in smaller marketsis a virtual mirror image of large mar-ket tendencies.

RBR unveils its newest internet initiativeCAUGUST 1, 2000, 1:00 EDT )

Join our live streaming news conference to hear about the latest online development at Radio Business Report. Just sign onto our Internet

radio station at http://www.rbr.com to hear the announcement. Email questions to participants during new conference to klee@rbr.com.

©2000 Radio Business Report. Inc. All content may not be reproduced, photocopied and/or transmitted without written prior consent. Subscription Cost $220.00

All material is protected by copyright law. Any violations with be dealt with legally. Publishers of Radio Business Report, Mid -Week News Brief, The Source Guide, Manager's Business Report, Radio

AdBiz and the Information Services Group database. Material may not be reproduced without permission. EDITORIAL/ADVERT1SING OFFICES: 6208-B Old Franconia Road. Alexandria, VA 22310 (or)

P.O. Box 782, Springfield. VA 22150 Main Phone: 703/719-9500 Editorial Fax: 703-719-7910 Subscription Phone: 703-719-7721 Subscription Fax: 703-719-7725 Sales Fax 703-719-9509

Email the Publisher: JCarnegiegrbr.com Email Editorial: RadioNewsgrbr.com Email Sales: KLeegrbr.com iNeff@rbr.com 5Pritchettgrbr.com

2 7/31/00 RBR

The study compared habits of indi-viduals 12+ in top -10 markets withthose in markets 76 and smaller. Inboth cases, half of all respondentshad Internet access, a third plannedto establish an Internet connectionwithin the year, over 20% madeInternet purchases last holiday sea-son and nearly half have clicked on awebsite ad.

Spending on Internet purchaseswas also virtually identical at $605 to$601. However, there were differencesin what was purchased. Small mar-ket persons were much more likely tobuy software, clothes, vitamins andmedicines than their urban counter-parts.

RBR observation: While the dot -din and dot -clamor clutter the air-waves in the top markets, some smartdot -operators are going to wise upand take control of America's hinter-lands. They will find congenial rates,less competition and a wealth of indi-viduals ready to click their way.-DS

Pound -333 can add tonnageto radio ads

"Picture this-a consumer is stuck inrush hour traffic and hears a radioadvertisement for the car they've beeneyeing. Instead of trying to remenbera difficult 10 -digit number, they canjust dial #333 on a wireless phoneand be instantly connected to that cardealership airtime -free and toll -free,"says Dean Becker, CEO and founderof ewireless, the provider of the #333service.

The system.is fairly simple. A radioad prompts the #333 number. Theconsumer dials it and declares whichcompany he is interested in contact-ing, and is then connected immedi-ately. The consumer can then getadditional info or make a purchase.

The service is currently availableonly in Chicago, with a aggressiveexpansion strategy in the works. Forfurther info, visit www.333.com.-DS

511 vs Metro Traffic/Shadow

The FCC's decision to implement anew 511 service to provide travel in-formation doesn't have Metro Trafficworried. "You're not getting down tothe localization that we provide andcertainly that the radio and TV sta-tions broadcast," EVP Shane Coppola

continued on page 4

Dot -corns take a big biteout of the Big Apple

Automotive and TV -Network advertisers are taking a back seat to the dot-coms when it comes to buying radio time in New York. NYMRAD (New YorkMarket Radio) has released its top 10 -advertiser list from January to May,and it shows dot -corns spending almost three and a half times the amountthey invested in radio airtime in 1999. The top ten categories are listedbelow-DS

Rank Category $Millions %Chng

1 Internet $47.0 347.5

2 Automotive $36.6 39.3

3 TV/networks $24.1 39.9

4 Communications $18.5 30.5

5 Financial svcs $16.1 3.9

6 Health care $15.0 37.2

7 Entertainment $14.5 47.8

8 Beverages $11.7 2.1

9 Professional svcs $11.6 42.3

10 Specialty retail $11.5 12.2

WAITT RADIO, INC.has entered into a

Local Marketing Agreementwith

MITCHELLBROADCASTING

Omaha, NebraskaThe undersigned acted as broker

in this transaction and assisted in the negotiations.

Miak

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

7/31/00 RBR 3

RBR News briefsImus suffers another setbackWestwood One (N:WON) morning driverDon Imus was rushed from New Mexicoto Lenox Hill Hospital in NYC (7/22) aftera collarbone broke through his skin. Imuswas just recovering after his fall from ahorse last month that broke the collar-bone, ribs and collapsed a lung. Imus stilldid his show via phone 7/24-25 beforereturning to the NYC studio 7/26, arm insling.-CM

*CD launches 30 -market trial*CD, a service that allows listeners to IDsongs, performers and titles of tunesplayed on the radio via telephones, cellphones and wireless devices and theninstantly purchase them, is taking its ser-vice nationwide. Announced this week,*CD is adding the following cities, amongothers, to its offering in Philadelphia andSan Francisco: NYC, Chicago, LA, Bos-ton, Washington, Atlanta, Seattle, San Di-ego and Dallas.-CM

RAB chooses GetMediafor website affiliatesThe RAB's eCom Solution for radio stationwebsites is now including GetMedia'sonline CD sales system. GetMedia's real-time display of album covers/artist infor-mation as songs are played on air allowslisteners to instantly "click to buy," provid-ing radio stations with a revenue share.GetMedia's "now playing" music store isstation -branded and includes a searchengine with a library of 2M titles.-CM

NBC sues FCCNBC has taken the FCC to court in aneffort to force the agency to raise the TVownership cap. NBC, a unit of GeneralElectric (N:GE), said its lawsuit "chal-lenges the FCC's antiquated yardstickthat prohibits over -the -air broadcastersfrom growing and realizing the efficien-cies and economies of scale associatedwith growth." Fox (N:FOX) has also said itwould challenge the 35% national audi-ence cap in court.-JM

Rosenfeld mournedInfinity Broadcasting (N:INF) colleagues andfriends are mourning the passing of DickieRosenfeld. A fixture in Houston radio since1950, Rosenfeld was GM of KILT -AM for 35years and, for the past five years, duopolypartner KIKK-AM as well. Just prior to hisdeath 7/19 of congestive heart failure,Rosenfeld's son, John, had been namedhis successor as GM of the two AMs.-JM

continued from page 3

tells RBR. The 511 service will bebased on the local level and it will beup to the local governments if andhow to implement it.

The Department of Transportationexplains the service as a number thatpeople can call before they leave theirhomes to find out what is the besttravel route to get where they want togo. By pushing certain buttons, thetraveler can find information abouttraffic speed and travel time betweentwo points. Coppola says "People aregoing to have to do an action to hearit. So you're going to have to stopdoing what your doing. There cer-tainly won't be any personality in-volved." For these reasons, he doesn'tfeel that 511 is a threat to MetroTraffic.

RBR observation: We have onlyone comment: Please spare us fromthose who would dial up this servicefrom their earphones while trying todrive!-ED

S.Florida pirates get shut down

The FCC has shut down anotherwave of pirate operators in SouthFlorida, adding to the list of 100 shutdown in the past two years. In thepast few weeks, one Miami, two Ft.Lauderdale and one West Palm Beachpirate station were shut down. TheBroward County Sheriffs office saidin a recent Miami Herald story thatit's getting harder to bust them. "We'dsee them," a Broward Lieutenant said,"we would try to set up so we couldmove in and they'd disappear."

A new pirate trend was workingwell for a while with a Reggae -Rapstation on 90.9 FM in Ft. Lauder-dale. It would broadcast where aparty was going to occur-in a park-ing lot or such. 600 people wouldshow up partying in public spotsaround town. The police would showup and bust some. Later more wouldshow up at another spot. The policeeventually caught the pirates andconfiscated the equipment, but onlyafter many tries-the pirates couldget the transmitting equipment in avan and be gone in five minutes. "Wemay have put them down tempo-rarily, but we anticipate them get-ting back into service," the Lieuten-ant said.-CM

Tween a Rock and a CHR place?Arbitron measures kids

Top 40 -CI is the dominant formatchoice of kids (defined as six to eightyear olds) and tweens (nine to eleven),according to Arbitron's initial surveyof this previously unmeasured demo-graphic. While that is not surprising,the extent of listening and the stationloyalty of the group is of interest.

Kids-tweens average eight to ninehours of weekly listening, clusteredaround school hours, in early eve-nings and during weekends. Althoughtotal listening is less than any otherdemo, almost all of it is divvied upbetween no more than two stations(the rest of us spread our listeningaround to a much greater degree).

A targeted ad flight can be particu-larly effective with this age group.Girls tend to gravitate toward the Popside of CHR-one such station claimed67% of them, while boys prefer theRhythmic approach -71% tuned tothe same station.

Following up, Arbitron is going indepth to determine at what age chil-dren begin picking their own sta-tions, and when they begin to beinfluenced by what they hear on theradio.-DS

KFBI escapes FCC fine

Stranger things have happened, butfor Americom's KFBI-FM Las Vegas,this one saved them an FCC fine. In1992 and 1993, complaints were filedfor indecent material broadcast onthe "Howard Stern Show." A Notice ofApparent Liability was filed by theFCC with responses filed by KFBI in1993 and 1994. Since that time, KFBIhas gotten no response from the FCC,positive or negative. In a freak deci-sion, the FCC has decided to drop theforfeiture order because in the mean-time, KFBI has changed licensees andtoo much time has passed. The FCChas noted that the decision to dropthe forfeiture order does not condonethe material within the questionablebroadcast.

Much has changed at the stationsince then-about the only remain-ing link is Howard himself, who stillfills the AM drive slot. Ownership haspassed from Americom to Crescent toARS to Infinity. The format has gonefrom Classic to Modern Rock. Thecalls are now KXTE.-ED

4 7/31/00 RBR

Congratulations Rush,

as you begin your 13th year of

Excellence in Broadcasting

.1*

and...

THERUS

on your Nomination

for the 2000

Marconi Award

Network/Syndicated

Personality of the Year.

/MARCONI

--NAM= MIME

RBR News briefs

Citadel partners with CoollinkCitadel Broadcasting Company (O:CITC)has signed an agreement with CoollinkBroadcast Network, which makes Coollinkthe exclusive streaming provider for 110Citadel stations. Coollink will also be incharge of all pending acquisitions as theyare added. Citadel chose Coollink be-cause of their ad insertion product, whichallows listeners to immediately interactwith advertisers.-ED

Radio Unica hopes Yolkswagenwill drive profits to egg clientOperating on the philosophy that in orderto make a Spanish omelet, one must breaksome eggs (eggs-istentialism?), RadioUnica (O:UNCA) has teamed with theCalifornia Egg Commission on a four -mar-ket, 20 -week promotion in California. A"drivable egg"-a 2000 VolkswagenBeetle with an eggshell exterior and egg -yolk yellow interior-will spend five weekseach at various sites in Los Angeles, SanFrancisco, San Diego and Fresno beforebeing awarded to a lucky winner later thisFall.-DS

Katz Interactive Marketingsigns NetRadio.comKatz Interactive Marketing announced ithas signed with NetRadio.com (O:NETR),which webcasts 100+ formats on the net.Katz Streaming Media Sales is addingNetRadio to its Network of national adver-tisers. Streaming audio ads will be tar-geted by format, rather than individualprofiles, as has been the recent hype withstreaming aggregators such as Hiwire.More than 2.5M unique visitors visitNetRadio several times per month.-CM

Westwood acquires "BeatleBrunch," launches MartinoJoe Johnson, host of "The BeatleBrunch" for eight years and running, hassigned with Westwood One (N:WON) forsales and syndication beginning the week-end of 8/5-8/6. The Beatle Brunch, a one -hour feature of music and interviews withthe Fab Four, is currently cleared on 40Oldies affiliates across the country.

Meanwhile, KHOW-AM Denver con-sumer advocate Tom Martino is goingnational. His 10 -year -old show,featuring"Toms Help Center" will air Monday -Fri-day 2-5p ET-CM

FTM board goes for expansion

Feed The Monster (FTM) Media's(0:F I'MM) board has approved plansfor re -vamping its technologry offeringto radio station website clients. Staffwill also be added to implement thechange. Adding to FTM's famed ani-mation streaming and other bells andwhistles, the new technology may in-clude targeted audio ad insertion.FTM's clients include KROQ-FM LA,KITS -FM San Francisco and WBCN-FM Boston. FTM merged this yearwith Interactive Radio Group (IRG):Infinity (N:INF) is a major share-holder.-CM

Broadcast Programming debutscomplimentary formats

Dubbed as complimentary to its 40on -air formats, Broadcast Program-ming is developing 40 formats forradio station websites. Seven werelaunched (7/24). The formats, offeredon a cash or barter basis would flankthe on -air format, i.e. a Country sta-tion would offer "Legends of Country"or "New Traditionalists," as well as theon -air stream. The formats will also bean avenue for NTR. "Absolutely-itwill be a little further down the line.Initially, it's really to protect the radiostation against all of the Internet mu-sic programmers," says BP SVP JimLaMarca. "But there will be commer-cials in the stream and we'll eventuallyget to the point where it will be tied intoall the web sales stations will have.They will have banner ads, audio adsand promotions."-CM

WOR Radio Networks' newlaunches

WOR Radio Networks is readying forsome new launches. While the sta-tion site, WOR710.com, has beenaround for almost two years, gettingover 2M hits a month, the net is alsolaunching two more sites:WORTalk.com will launch withRealAudio Q4; WOR Music.com willfirst feature "The Best of Everything,"set to start streaming early August.The new format (WOR's first foray inmusic formats) is programmed by GMWOR-AM Bob Bruno, whose back-ground is in music programming(WNEW-FM, WOR-AM). The format islaunching for on -air syndication Q4 -early 2001. "It is a variety -based for-

mat li- Adults 45-64. We are firstusing the NM) as a method for pro-grammers and stations to sample theprogram in long form," notes WORRadio Networks President KirkStirland.

WOR2, WOR Radio Networks' sec-ond satellite channel has been up andrunning for two months. "It's predomi-nantly re -fed programming that wealready produce. It's an opportunity tomultiplex some of our evening showsat times that are more appropriate forthe national marketplace," saysStirland. "It will eventually have twonew unique shows on it that we will beannouncing soon."-CM

"Biography For Radio" to debut

Already airing in Canada since 4/3,"Biography For Radio" launched onmore than 45 US affiliates 7/24. The90 -second daily vignette features hostJack Perkins from A&E Networks'award -winning "Biography," alongwith the same background music.However, the show is produced spe-cifically for radio. "The thinking here isyou can't do a whole life in 90 seconds,but you can tell one great, compellingstory about an individual from thatperson's life." Co -Executive ProducerElliott Forrest tells RBR.

Like the TV show, biography fea-tures famed individuals such as OprahWinfrey, Albert Einstein. JimiHendrix. Napoleon, Judy Garland.Louis Armstrong and Carl Sagan. 90programs have been produced so far.The show is produced, cleared andsold by Forrest Productions and TotalMedia Communications (RobertKipperman. Frank Murphy from CBSNetwork Radio).-CM

RCS unveils two new adinsertion products

RCS has announced two new ad in-sertion software products, enablingbroadcasters to insert separate adson Internet audio streams. "InSert"and "SplitStream" both allow on -airspots to be replaced with a differentad or a different feed in general. How-ever, SplitStream can deliver differ-ent ads at once, each targeted toindividuals' demographic profile. Thetwo products are an upgrade fromRCS's "MC Net," which is also capableof separate ad insertion, but not morethan one at at time.-CM

6 7/31/00 RBR

COMPETING MEDIA

Sinclair gives compelling DTV demoin front of CongressThe House Subcommittee on Telecommu-nications got a compelling DTV demo 7/25at an oversight hearing that included SinclairBroadcast Group (0:SBGI) engineers show-ing the viability of the DVB-T DTV standardand Nxtwave, Zenith and CEMA attempt-ing to do the same with their favored ATSCstandard. Sinclair engineers hooked up asimple bow -tie UHF antenna and set it onthe witness table. The reception of WRC-DTV channel 48 was fine. Two ATSC demoswere performed, but used larger, direc-tional antennas that were taped onto theroom's windowsill. Responding to Chair-man Billy Tauzin's (R -LA) repeated ques-tions of why the antenna needed to beplaced at the window, Nxtwave CEO MattMiller admitted that if not, the "ATSC re-ception 'potentially' might fail."

RBR observation: No country hasadopted the ATSC standard since 1998; onlythree countries use it as the standard today.Most are going with DVB-T because it worksbetter and is more robust. The US market hasyet to embrace DTV-it will be much harderwith poor indoor reception.-CM

Newspaper companies -

buy Web competitorYou didn't really think that newspaperswere going to roll over and play dead if theInternet started to siphon away some oftheir classified ad revenues, did you? Tri-bune Co. (N:TRB) and Knight Ridder (N:KRI)are teaming up in a new venture to buy andcombine two successful Internet job -hunt-ing and employee recruitment sites. They'llpay $8 per share (about $190M) forCareerBuilder Inc. (O:CBDR) and also buyout other shareholders of CareerPath.comfor an undisclosed price. Those other share-holders are the New York Times Co. (N:NYT),the Washington Post Co. (N:WPO), Gannett(N:GCI), Cox Interactive Media and TheHearst Corp. CareerBuilder's stock hadbeen as high as $16.25 in the past year butclosed 7/14, before the buyout was an-nounced, at $4.125.-JM

DARS agreementmade between US and MexicoAn agreement concerning Satellite DigitalAudio Service (DARS), Terrestrial ServiceF,and Wireless Communications Services(WCS), has been made between the USand Mexico, mirroring a similar agreementwith Canada. Of concern was use of theband 2310-2360 mHz (S -band) in bothcountries along the border. Segments of

the band were designated for US use andothers for Mexico.

Besides satellite usage, the agreementalso set aside bands for terrestrial use anddeveloped other parameters for coexist-ence across the border.

Sirius Satellite Radio (O:SIRI) and XMSatellite Radio (O:XMSR) are both licensedas satellite DARS providers in the US andcan now avoid possible interference whenput into use next year. This agreementeliminates many barriers that were in theway of advancement and efficiency forsatellite DARS and WCS.-ED

Global Media buying Magnitude?Magnitude Network is reportedly up forsale by 88% principal owner CMGI(O:CMGI) and will cease operations underthe Magnitude name later this month. Thelikely buyer of existing contracts, accord-ing to RBR sources, is Global Media(O:GLMC). Global recently bought all ofOnRadio's radio website client accounts. Itwas also reported Magnitude was boughtfor $23M and sold for $5M.

We got neither confirmations, nor deni-als from both sides: Said Global Media

President Jeff Mandelbaum in a pre-pared statement: "From time to time, GlobalMedia has sought out acquisition opportuni-ties for strategic growth. Presently, we arelooking at a number of opportunities. Wecontinually follow the requirements of theSEC and will follow the requirements of theSEC and will continue to announce anymaterial events as they occur. At this time,we are not announcing any material events."

"We're talking to some folks that have aninterest in our business, that's what I cansay. The most important thing is our busi-ness is going to continue to function oneway or another," adds Magnitude NetworksPresident Todd Schmidt.-CM

Arbitron strikes alliance with LariatsoftwareArbitron New Media is licensing Lariat'sMediaReports software for streaming me-dia server data collection for its InfoStreamratings system. The goal is to provide themost objective and comprehensivewebcasting listenership information to ad-vertisers and agencies, which will lead tohigher adoption and more buys. InfoStreamdebuted 10/99 as the world's first webcastratings service.-CM

RADIO VENTURE PARTNERS, INC.HAVE AGREED TO TRANSFER THE ASSETS OF

KXEG-AMPHOENIX (TOLLESON) Az.TO

JAMES CRYSTAL RADIO, INC.

FOR 4.5 MILLION DOLLARSWE WERE PLEASED TO HAVE SERVED ASEXCLUSIVE BROKER IN THIS TRANSACTION.

8 5 9 6 4 7 - 0 1 0 1

FAX 8 5 9 6 4 7 - 2 6 1 6

JOHNPIERCECO@AOL.COM

JOHN(!)111

rn,_MPANY

7/31/00 RBR 7

aI FT Itir:MIN mITTIM1 17777"1--.4171 1 1111 .111°M111 -.41:1111

"11.1111111111111!.. IIIIL°11 1 l'by Carl Marcucci

Turning streaming into a revenue streamStreaming your station's audio is nice,but trading the service for on -air in-ventory doesn't seem to be bringingin the dollars. Furthermore, the adsyour local listeners are hearing arewasted on out -of -market listeners.The latest drive is to replace on -airinventory with streaming audio ads.Why not generate some NTR by sell-ing net -only ads on stopsets? Or bet-ter yet, let someone sell them for youas part of a network and benefit fromrevenue sharing.

While ad insertion, or ad -strippingtechnology is just starting to reachradio station web sites, two varietieshave already emerged: those that re-place an on -air ad with one that reachesall surfers at once (server -side or server -driven) and the latest, just surfacingtechnology (client -side or client -driven)that serves separate audio ads on anindividual basis, based on Internetprofiles including age, location, sex,interests and more. While the hype forindividual targeting is big, the technol-ogy and acceptance are still in theirinfancy. "It's still a brand new world forstreaming media. This is the secondwave of the Internet. The first wave ofthe Internet was the print world, thesecond wave is the broadcast world,and that is going to prove its chal-lenges," says Tom Des Jardins, CEO/CTO of Lightningcast.com.

Where it's at:a work in progressLightningcast, along with Hiwire,WebPresence and MusicBooth'sAdAcoustics Network, all claim thefunctionality to target individual us-ers, based on technology similar toDoubleClick's banner ad system. TheLightningcast model serves as a back-bone to content providers likeDiscJockey.com, MFNRocks andCyberradio2000. While the demandmay not be at the table just yet, thecapability is impressive. "We can de -

8

liver a unique audio spot to everysingle individual listening to the streamsimultaneously," says Jardins, who islooking to point his offering at radio:"We're out talking to big radio sta-tions. The groups want a really robustsolution, and what we're saying iswe're building the infrastructure forthe entire group, not just one station."

Robert Wolfe, MusicBooth CEO,agrees audio ads are the next wave: "Nolonger is it a question of 'Can I get aflashing banner in front of a person'seye?' We provide multiple ads and tar-get them to the individual most likely tobe interested. We're taking it prettyclose to the precision that the advertis-ers have been dreaming of."

Two traditional streaming compa-nies looking to provide ad strippingfunctionality to their offering includeBroadcastAmerica.com andWarpRadio.com. "In the next fewweeks,we are going to have a little more of anidea on how we can facilitate it for theradio stations. The technology reallyhasn't been that clear yet on making itwork," says Denise Sutton, WarpRadioCEO, who is looking at it very cau-tiously for her network of 300+ sta-tions. "I have a feeling it is just a value-added for the stations and for us to givethem value, we need to make sure thatit's 100% and can be done in a cost-effective manner. Because obviously, ifwe're going to revenue share with thestations, they are going to be disap-pointed if they don't get a check."

"To be honest with you, it's still toopremature to come up with a firmstrategy and revenue model. The firststep is making sure the technologyitself is sound and works. I think it'sgoing to be a while until that is areality. We're actively testing the tech-nology, working with a couple of com-panies [including Hiwire-see below)and developing our own in-house,"says BroadcastAmerica PresidentJohn Brier, who is beta testing withaffiliates.

With 600 stations under exclusivecontract, Brier plans on developinghis own in-house networks: "We'renot going to go out and try and sell itto radio stations-we would use itwithin our own network. In all of ourcontracts in the last six months, thestations agree to allow us to use thead stripping technology on theirstopsets, and in exchange, they get arevenue share. When we have 600+stations and the average station inthe US plays 12 commercials an hour,you can see we have potentially 7,200commercials an hour that could bereplaced. That's when you can go to aFord Motor Company or Coca Cola orAmerican Airlines."

StreamAudio.com VP Sales TomO'Connor tells RBR 25 affiliates areusing his ad insertion now and he'sadding about 10 a week. Leveraging400 streaming clients that includeEntercom's 96 stations, the currentmodel leverages video ads. "We do a15-30 second multimedia gateway adthat's effectively a TV commercialwhile the station is buffering in thebackground."

BRS Media's .AM and .FM has morethan 5,000 clients worldwide. Whilethe majority of clients aren't stream-ing with BRS, the company is betatesting ad insertion. Says BRS Presi-dent George Bundy: "I think the op-portunity is now at the point wherethe stations say that there's an abilityhere with ad insertion that they'renow able to generate revenue to offsetthe cost. We've contacted a few ofthem to try and get a few on betatest-there's a few kinks that we haveto work out. We will put this out in asmall scale and see how it worksbefore we roll it out."

RealNetworks' audio ad insertioncapability is limited to one ad at atime. It is not attempting to networkits streaming stations-the plan is toenable groups and individual sta-tions to sell their own streaming in -

7/31/00 RBR

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ventory. "We have the ability to targetadvertising using our 'advertising ex-tension' to the Real Server, which es-sentially ports into leading ad serverengines like DoubleClick and Engage,"says Gregg Makuch. RealNetworksMarketing Manager. "The way that'sexecuted is it exists before and aroundthe live radio programming. You clickon a live link on a web page and you getan ad delivered to you before-thatcan be an audio, video or an animatedad. Then the live broadcast begins andbanner ads are flipped within the RealPlayer. Within the audio, the terres-trial broadcast spot can be replacedwith an Internet -only spot."

However, even with the size andscope of RealNetworks, the ad re-placement concept is still young withthe company's clients: "We've deployeda couple in our demonstration for-mat, our live ad replacement ser-vice-WKHX in Atlanta and KAAK inGreat Falls, MT, as well as program-ming from ABC Radio Networks. We'recontinuing to present this to majorbroadcasters," he adds.

Motorola -owned RadioWave's "I -spot" also replaces one ad at a time.Clients include Susquehanna, withKSAN-FM San Francisco and KKMR-FM Dallas (Merge933.com-RBR 1/31, p.8). RadioWave offers the addedbonus of coordinated visuals with theI -spot providing couponing and e -commerce functionality.

Server -side vs. client -sideinsertionWhile most streaming aggregators aredeveloping or testing Internet ad in-sertion capabilities. a line is beingdrawn between those that offer server -side vs. client -side targeting. The firstcompany to announce targeted ad in-sertion for radio was Hiwire. Its firstlive ad was sent 7/12 on Salem's"Christian Pirate Radio." To achieveclient -side functionality. the systemrequires a small software download,the "Hiwire Ad Manager." The softwareis needed to "pull" the correct ad fromthe stream.

Jim Pavilack. Hiwire's President/Founder, says server -side insertioncan't compare. "In terms of revenue,it's night and day-you can charge amuch higher premium for that adspot if you know you can target it to aperson. And you can sell more ads-

five, six, 10 over the same spot," hesays. "Some companies are only of-fering server -side insertions for au-dio. They sort of slap in a big genericInternet ad, which doubles your in-ventory, but it doesn't target anybodyin particular."

O'Connor is quick to defend server -side insertion: "We haven't gone thatfinal route," he says, "and we don'twant to. It requires a piece of softwareto sit on their computer to ID them.Even though it's information that'snot personal, we think its a privacyissue and Congress may do some-thing about it. We think that beingable to target an ad to the format iswhat people understand. Remember,it isn't whether its an 18- or 35 -yearold. If somebody likes that music.they're interested in the lifestyle thatparticular station is offering."

"All we ask for is your birthday. zipcode and location. That's a big differ-ence from asking somebody your nameand email address. which is very per-sonal." says Pavilack. "We have a server -driven solution also, but we don't pushit because we are able to get muchhigher rates when we can offer anadvertiser 1,000 women in Los Ange-les, rather than 1.000 people whereveron earth they happen to be listening."

WebPresence President DavidOwen. who is in a "quiet period" andcan't say a lot about his plans, doesoffer a glimpse of what the companymay be looking to offer: "The winningsolution of the future would be onethat has the characteristics of whatbanner ads have now, which is theytarget very narrowly. The winning so-lution with targeted audio advertis-ing is one that allows individual tar-geting, doesn't require any interven-tion by the listener, which means noneed to download anything."

The closer an ad is targeted to theparticular listener, the higher the re-sponse rates. While still immature,the technology does provide targetingability that traditional airwaves justcan't match. "Why would the Internettake a step backwards? How is it youare distinguishing yourself. if you haveserver -driven functionality, frombroadcast?." asks Des Jardins. "TheInternet is about one to one market-ing. This is the conversation betweenthe advertiser and the listener. Whywould you want to have conversationswith people that aren't there for you?"

Acceptance by agenciesWhile the technology is just out forclient -side insertion, the real chal-lenge is convincing the agencies andadvertisers of its value. MediaAmerica,Winstar Global Media and KatzStreaming Media Sales are all reppingInternet audio ads. "Agencies are nowlooking for how to get traction with thetechnology. We've hired MediaAmericaas our rep firm, so they are selling ourad insertion option," says O'Connor. "It's an education process-you've gotto show them that it's out there. I thinkthe heavy lifting is going to be done atthe media buyers' desk, convincingthem to create a budget for Internet -only radio. It's a CPM model, not a costper point (CPP) model. And thatchanges the dynamics of it."

"The biggest barrier between theHiwires and those companies thatare in the business of buying na-tional radio media is the InternetCPM vs. the network radio CPM.Network radio is among the cheap-est CPMs there is. If I can buy agiven demo for S5-$10 on a CPMbasis, why would I spend $45 or$55. which is not an uncommonInternet CPM?," observes MatthewWarnecke. Group Director,MediaCom. "This is not going to comefrom the same revenue stream, sountil we figure out how to valueInternet -provided streaming into thethe price, it's not going to be efficientform a network radio standpoint. Cer-tainly. just demography delivery isn'tenough, because it's not efficient, vs.the radio model."

For those who offer revenue shar-ing in exchange for giving up stream-ing inventory to a network, the inven-tory "clock" has similarities to anynetwork offering. "Typically, the localsales force will sell any local ads.Hiwire has the sales force in place willsell all the rest of the inventory na-tionwide. What your local sales forcedoesn't want to sell, we take a per-centage," says Pavilack.

RBR observation: Ad insertionutilizes credible, near census -qualitydata that can be reported back over-night. In the next few months, most ofthe providers will have their ad -insertion technologies implementedand hopefully get the critical massneeded to provide revenue sharing.We look forward to seeing the num-bers as they come in.

10 7/31/00 RBR

The business of formats: News-Talkers on topBased on its dominance of large markets in general and the AM dial in particular, stations programming

some form of News, Talk and/or Sports claim the most listeners in Arbitron-rated markets. It is also the

most commonly -programmed format group, with 1,001 adherents.

Adult Contemporary and its three closely -related flavors (Hot, Soft and Modern) is the most -listened -

to music format, and takes up the most room on the FM band with 18.2% of all FM listeners. However,

like the News -Talk group, it experienced slight slippage in total listenership. Country is still king inmarkets 51 on down, but it was also on a downtrend -its 0.7% loss was the largest of any format group.

Filling the vacuum left by the aforementioned formats was CHR, which picked up enough steam to

supplant Country as the third -ranked format overall. The Ethnic categories also picked up listeners,with Urban and Hispanic groups picking up 0.6% ands 0.7% respectively.

The AM dial is the primary host of niche formats. After the News -Talkers, the most commonly heardformats are Standards. Spanish and Religion. Rarely heard are the Rock -based formats-CHR, Rock,Alternative and Classic Rock have almost no presence whatsoever on the senior band.

These statistics are based RBR analysis of Arbitron population and ratings data from its Fall 1999survey and information from the RBR Source Guide database. All percentages refer to total listenersper category. Stations in Puerto Rico were excluded from this study. -DS

Format performance, persons 12+

Rank FormatRated Unrat

Stns StnsTotalStns

%AMDial

%FMDial

%AllRadio Chng

1 News -Talk 699 302 1001 66.3 1.6 15.1 -0.32 AC 609 98 707 0.6 18.2 14.5 -0.33 CHR 329 15 344 0.0 14.8 11.7 +1.1

4 Country 617 178 795 2.1 13.2 10.9 -0.75 Urban 307 31 338 2.3 12.4 10.3 +0.66 Spanish 275 177 452 8.1 6.5 6.8 +0.77 Classic Rock 308 25 333 0.0 7.2 5.7 -8 Rock 234 9 243 0.0 6.9 5.4 +0.39 Oldies 296 74 370 0.9 6.6 5.4 -0.6

10 Alternative 153 24 177 0.0 5.5 4.4 -0.311 Standards 254 95 349 11.9 0.9 3.2 -0.312 Religion 345 472 817 7.0 1.3 2.5 +0.113 Jazz 66 6 72 0.4 3.0 2.5 -0.214 Classical 32 7 39 0.2 1.9 1.5 +0.115 Children -Other 15 78 93 0.3 0.0 0.1 -0.2

Format performance, various demos

Persons Mkts 51- 101- 151- 201 -Rank Format 18-34 25-54 35-64 1-50 100 150 200 250

1 News -Talk 6.4 12.4 16.7 16.9 11.1 11.3 10.6 10.02 AC 15.5 17.1 16.5 13.9 15.9 15.9 15.5 16.33 CHR 17.7 9.2 6.0 11.4 12.7 11.7 15.2 10.14 Country 9.4 10.4 12.3 7.5 16.2 17.8 20.4 26.55 Urban 13.0 11.0 9.5 11.5 8.3 8.9 5.1 5.86 Spanish 8.5 7.5 6.5 8.4 4.4 1.9 2.4 1.47 Classic Rock 6.7 8.0 6.9 5.3 6.4 6.4 6.2 9.28 Rock 9.6 6.4 4.0 4.7 6.6 8.0 8.3 6.69 Oldies 1.9 6.3 8.7 5.1 5.8 6.7 6.3 6.3

10 Alternative 7.9 4.7 2.7 5.1 3.6 2.7 2.2 1.411 Standards 0.0 0.7 2.0 2.8 4.2 3.9 3.8 3.512 Religion 1.5 2.3 2.9 2.1 3.4 4.1 2.6 2.713 Jazz 1.2 2.9 3.6 3.2 0.8 0.7 0.7 0.214 Classical 0.0 1.0 1.6 2.0 0.5 0.0 0.7 0.015 Children -Other 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.0

Source: Arbitron, RBR Source Guide database

7/31/00 RBR 11

V V V

I I I I 1 I 1111.111_L_r_mr.IN I ! I T.-111_1 II I 1:011111 I 1 1111:117 IL:Nor. en a I Illi'IMI I I I 1111111-11L--_,. I I -

Clear Channel bites off more of Cumulus

Cumulus Media (O:CMLS) expects tohave $91M in its coffers this weekafter reworking its cash/swap dealwith Clear Channel (N:CCU) for a sec-ond time. Cumulus is now gettingonly seven stations-in Cedar Rapids,IA, Shreveport, LA and Melbourne,FL-from Clear Channel, dropping fourHarrisburg, PA stations from the origi-nal deal (RBR 3/13, p. 6-7). Thatboosted the cash payment from ClearChannel for 25 Cumulus stations by$54.4M to $91M, with the total valuestill $209M on each side.

In a new transaction, Cumuluswill also sell 30 additional stations infive markets to Clear Channel for$75M cash. Four of those stations, asuperduopoly in Evansville, IN, arecoming to Cumulus as part of itspending $242M buy of Connoisseur

Communications.Combined, the two deals have Cu-

mulus selling $284M worth of sta-tions to Clear Channel, in return forstations valued at $118M plus $166Min cash. In the end, Cumulus says itwill wind up with 250 stations in 50markets.

Although Clear Channel's settle-ment with DOJ (RBR 7/24, p. 4) re-duced the number of stations thathave to be spun -off from 110 to only99, it still has to find buyers for sixstations. Four are the Harrisburg, PAstations dropped from the Cumulusswap: WTCY-AM, WNCE-FM, WNNK-FM & WTPA-FM. The other two are inPensacola, FL: WMEZ-FM & WXBM-FM. Clear Channel had announcedthat they were being sold to URBanRadio (RBR 3/ 13, p. 7), a previously

Chaparral Broadcasting, Inc.has agreed to purchase the assets of radio station

KZJH-FMJackson, Wyoming

from

Alpine Broadcasting, Ltd.for

$1.1 Million*R. Thomas McKinley and G. Gregory Merrill of

Media Services Group, Inc.represented the parties in this transaction.

Tom McKinleyTel: (415) 924-2515 Fax: (415) 924-2649 e-mail: TomMcKinley@compuserve.corn

Greg MerrillTel: (435) 753-8090 Fax: (435) 753-2980 e-mail: 72203.2456@compuserve.com

www.mediaservicesgroup.corn

MEDIA SERVICES GROUP, INC.ACQUISITIONS VALUATIONS FINANCING CONSULTATION

San Francisco Philadelphia Dallas Washington Kansas City Providence Salt Lake City Jacksonville Richmond

*Pending FCC Approval

by Jack Messmer

unheard-of company headed by KevinWagner. That application has beendismissed and the DOJ announce-ment lists the buyer as "to be deter-mined." The fate of those six stationswon't hold up closing of the AMFMmerger, since they can be put intotrusteeship pending their sale.

RBR observation: Just about theonly question remaining regardingthe biggest merger in the history ofradio isn't about radio at all-it's whatwill happen to AMFM's stake in LamarAdvertising (O:LAMR), which com-petes in several markets with ClearChannel's Eller billboard operation.Clear Channel isn't saying yet whatit's agreed to in the antitrust settle-ment with DOJ, but a 7/21 SEC filingreveals that Clear Channel expects tohave to divest the Lamar holding.

Five new Clear Channel markets

Here are the new stations Clear Chan-nel is buying from Cumulus:

Evansville, IN (#152): WGBF-AM &FM, WTRI-FM & WYNG-FM Columbus, GA (#169): WDAK-AM,WMLF-AM, WPNX-AM, WVRK-FM,WGSY-FM, WBFA-FM, WSTH-FM &WAGH-FM

Rochester, MN (#229): KNFX-AM,KMFX-AM & FM, KRCH-FM & KWEB-FM Mankato -New Ulm -St. Peter, MN( #255) : KNUJ -AM , KYS M -AM & FM,KXLP-FM , KNSG-FM & KNUF-FM Mason City, IA (#269): KGLO-AM,KCHA-AM & FM, KCZE-FM,KLKK-FM & KWMM-FM

Cumulus buys Fayetteville fill-in

Although Cumulus Media has beensidelined from making any big -dealswhile its management works to clearup problems and get back in WallStreet's good graces, Lew Dickey isstill shopping for fill-in properties inexisting markets. Thus, Cumulus ispaying $6.15M to add WKBQ-FM toits Fayetteville, NC cluster. The selleris Walker Morris' Muirfield Broad-casting Inc. Broker: Mitt Younts,Media Services Group

12 7/31/00 RBR

Dex heads north to Montana

Dex Allen's Commonwealth Com-munications LLC is heading northfrom its current holdings in CA, AZand CO to buy nine stations fromJack Whitley's STARadio for $7.5M.The buy includes three stations inArbitron market #273. Great Falls,MT, plus two unrated markets-three stations in Helena, MT andthree in Williston, ND -Sidney, MT.Broker: Charles Giddens & ElliotEvers, Media Venture Partners

Vox swaps with Magnum

Bruce Danziger's and JeffShapiro's Vox Radio Group is build-ing in its New York State strongholdby swapping out of Valdosta, GA.One Vox -related company is swap-ping WIMV-FM Madison, FL -Valdosta, GA for Magnum's WRLP-FM Russell, PA -Jamestown, NY.Another Vox company is then buy-ing Magnum's WM N S -AM & WMXO -FM Olean, NY for $790K. Broker:Dick Foreman, Richard A. FormanAssociates

Four fly to Eagle

Regional powerhouse Eagle RadioInc. is adding four more stations inKansas. Eagle, headed by GaryShorman, is paying $2.5M for KJLS-FM Hays, KKQY-FM Hill City, KFIX-FM Plainville and KBGL-FM CPLamed. The seller is Rick Kuehl'sRadio Inc. Broker: Terry Green-wood, Patrick Communications

Clear Channel beats The Street

It's become so common that it wouldalmost be newsworthy if Clear Chan-nel (N:CCU) had a quarter where itdid no better than equal analysts'expectations. Lowry Mays & com-pany put Q2 into the history bookswith a 53% rise in after-tax cashflow to $271.8M. On a per-sharebasis, that was a 33% gain. Netrevenues increased 56% to $965.9M,just missing the $1B mark. Cashflow (operating income before de-preciation and amortization) rose54% to $403.1 M.

RBR observation: Even ClearChannel (N:CCU) has thrown in thetowel on trying to count exactly how

many stations it owns or is buying onany given day. The company's Q2 pressrelease says it has "over 900" US radiostations, equity interests in "over 240"foreign radio stations, exactly 19 TVstations and "more than 700,000 out-door advertising displays, includingbillboards, street furniture and transitpanels across the world."

Citadel BCF marginbreaks 40% mark

Also reporting stellar Q2 results wasCitadel Communications (O:CITC). Themiddle -market radio specialist said net

revenues gained 65.1% to $68.2M.Broadcast cash flow increased 85.7%to $28.6M. After-tax cash flow rose248.3% to $15.6M (41 cents per share,up from 16 cents). On a same -stationbasis, revenues gained 14.9% andcash flow 20.6%. Any way you mea-sure it (historical, same station or proforma), Citadel's cash flow marginwas above 40% for the quarter, upfrom the mid -30s range a year ago.The actual (or historical) margin forQ2 was 41.9%, up from 37.2% a yearago.

more 3M page 15

The RadioIndexTM

Bargain basementstocks got a littlecheaper last week.The Radio IndexTMslipped 0.42 to close7/26 at 170.92.

!II111 !OM !INEEMI=

VII, .1 1.1 10141"11141R A II I 0 N E T W O R K

THE WALL STREET JOURNAL

185

175

1657/5/00 7/12/00 7/19/00 7/26/00

Entercom Communications Corporationhas agreed to transfer the assets of

KCMG-AM/FM & KCFX-FMKansas City, MO

for

$113,000,000to

Susquehanna Radio Corp.StarMediaGroup, Inc.

"Radio's Full ServiceFinancial Specialists"

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

7/31/00 RBR 13

McCoy Broadcast Brokerage, Inc.

REAL RESULTS.

JOSEPH BENNETT MCCOY, IIICOLORADO SPRINGS, COLORADO

719-630-3111 PHONE719-630-1871 FAX

HAMMETT & EDISON, INC.CONSULTING ENGINEERSRADIO AND TELEVISION

Serving the broadcast industry since /952...

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IT'S A HIT

CHECK ITOUT TODAY

The deals listed below were takenfrom recent FCC filings. RBR's Trans-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.

$242,000,000 37 stations in 10 mar-kets from Connoisseur CommunicationsPartners LP (Jeff Warshaw et al) to CumulusMedia Inc. (O:CMLS) (Richard Weening,Lew Dickey Jr.). $11.35M escrow, balancein cash at closing subject to various adjust-ments. Additional $10M to be put by buyerinto post -closing escrow account. Also in-cludes two LMA'd stations. Severalduopolies, superduopolies. LMA since12/1/99. Broker: Lehman Brothers (seller)

$56,200,000 WJOL-AM, WLLI-FM &WJTW-FM/WZSRFM/WAIT-AM/WBVS-FM/WLIP-AM & WIIL-FM Chi-cago (Joliet IL/Woodstock IL/Coal City IL/Kenosha WI) and WEXT-FM Milwaukee(Sturtevant Radio LicenseInc. (James H. Hooker) to NextMedia Op-erations Inc., a subsidiary of NextMediaGroup Inc. (Carl Hirsch, Steve Dinetz, SkipWeller, Thomas Weisel Capital Partners,Weston Presidio Capital). Cash. Daisy chainoverlaps in the Chicago area. Broker: Me-dia Venture Partners Inc. (seller)

$46,300,000 KVOX-AM, KFGO-AM& FM, KULW-FM, KRVI-FM & WDAY-FM Fargo ND (Fargo -Kindred ND -DetroitLakes MN) from various entities owned byTom &Jim lngstad to Clear Channel Broad-casting Licenses Inc. (Lowry Mays), a sub-sidiary of Clear Channel Communications

THE EXLINE COMPANYMEDIA BROKERS CONSULTANTS

SOLDKNRY-AM/KIEZ-AM

Monterey/Carmel Valley, CaliforniaANDY McCLURE DEAN LeGRAS

4340 Redwood Highway Suite F-230 San Rafael, CA 94903Telephone 415-479-3484 Fax 415-479-1574

by Jack Messmer & Dave Seyler

(N:CCU). $3M escrow, balance in cash atclosing. Existing superduopoly. LMAanticipated upon Hart-Scott-Rodino Anti-trust clearance.

$43,500,000 WHBC-AM & FM CantonOH from Beaverkettle Company (Tom Boyd,Raymond Hexamer et al) to NextMediaLicensing Inc., a subsidiary of NextMediaGroup Inc. (Carl Hirsch, Steve Dinetz, SkipWeller, Thomas Weisel Capital Partners,Weston Presidio Capital). $2.2M letter ofcredit as escrow, $43.5M in cash at clos-ing. Broker: The Ted Hepburn Co.

$19,800,000 WMKI-AM Boston,WDZK-AM Hartford (Bloomfield CT),WHRC-AM Providence (West Warwick RI),WGFY-AM Charlotte NC, WMNE-AMWest Palm Beach (Riviera Beach FL) andWDZY-AM Richmond (Colonial HeightsVA) from various subsidiaries of HiberniaCommunications LLC (Jim Thompson, MikeCraven, Palladium Equity Partners) to ABCInc. (John Hare, Pres./Radio), a subsidiaryof The Walt Disney Co. (N:DIS). $19.8Mcash. Note: All stations are full-time affili-ates of Radio Disney.

$13,360,000 WYXL-FM, WQNY-FM,WHCU-AM & WTKO-AM Ithaca NY fromEagle II Broadcasting Corp. (KennethCowan) to Saga Communications of NewYork LLC, a subsidiary of Saga Communi-cations Inc. (A:SGA) (Edward K. Christianet al). $640K escrow, balance in cash atclosing. Existing duopoly. Broker:Blackburn & Co. (seller)

$6,000,000 WCEN-AM & FM SaginawMI (Mt. Pleasant MI) from Somerville Asso-ciates LLC (Richard & Letty Sommerville)to Wilks Broadcasting LLC (Jeff Wilks, WicksCapital Management LP). $250K letter ofcredit as escrow, $6M in cash at closing.Superduopoly with WSGW-AM, WGER-FM & WTSF-FM.

$4,000,000 WOSN-FM Ft. Pierce -Stuart -Vero Beach (Indian River Shores FL) fromCentennial Broadcasting License tLC, asubsidiary of Centennial Broadcasting LLC(Allen Shaw, Gordon Gray), to Vero BeachBroadcasters LLC (Mitchell Rubenstein,Laurie Silvers, Robert McAllen).Superduoopoly with WTTB-AM, WGYL-FM & WPAW-FM. Broker: Blackburn & Co.

more transactions @ rbr.com

14 7/31/00 RBR

continued from page 13

Saga's net income up double digits

Yes, we said net income. Saga Com-munications (A:SGA) is one of therare public radio companies whichactually has a positive number on thebottom line, in part because Ed Chris-tian hasn't been willing to chase ac-quisitions quite as aggressively assome of his fellow CEOs. Christianalso showed that he knows when toget out of a bad acquisition, taking a$1.3M charge in Q2 for selling Saga'sstake in six FMs in Iceland. Withoutthat charge, Saga's Q2 net incomerose 32.7% to $3.4M. Of course, withthe foreign write-off included, net in-come fell 17.5% to $2.1M. More im-portantly, as far as most investors areconcerned, after-tax cash flow rose28.4% to $6.1M. Broadcast cash flowgained 18.3% to $10.7M as net rev-enues rose 11.6% to $26.2M. On asame -station basis, cash flow was up15.1% and revenues 6.9%.

In a teleconference with analysts,Christian cautioned that he's observedsome softening in national spot sales forJuly, although he's not yet sure howsignificant that might be. CFO SamBush noted that the same, thing hap-pened in two months of 1999, which wasa strong growth year for the other 10.

Cox 02 up double digits

By any measure, Q2 was up doubledigits for Cox Radio (N:CXR). Broad-cast cash flow gained 23.5% to $37.9Mas net revenues gained 21.7% to$95.7M. On a same -station basis,cash flow gained 28% and revenues17.5%. Cox noted strong revenuegains, based on ratings gains, for itsstations in Atlanta, Birmingham, SanAntonio and the Long Island market.

USA Radio now public

USA Radio Networks has completedits merger with a public shell com-pany and is now eligible for publictrading under its new name,USARadio.com. Don't go calling yourbroker just yet, though. CFO TimMaddox says the company is going to"seek some private investment, someventure capital, and try to go straightto the Nasdaq," rather than begintrading on the over-the-counter bul-letin board. If things go as planned,

the company will raise $10M in newcapital by year's end. It's also lookingto buy a radio station or two.

The Dallas -based network special-izes in news, conservative commen-tary and religious programming. Itreported revenues of$3.692M for 1999,little changed from $3.715M in 1998.

WTNC movesfrom Bishop to Buck

Bishop L.E. Willis is completing hisexit from the Greensboro/Winston-Salem, NC market. Willis Broadcast-ing is selling WTNC-AM Thomasville,NC to George Buck Jr.'s GHB Broad-casting for $350K. GHB already ownsWIST-FM, which is also licensed toThomasville.

Karmazin expands in Wisconsin

While his dad continues to build aworldwide empire, Craig Karmazinis building his own radio empire insouth-central Wisconsin. His GoodKarma group is buying WKPO-FMEvansville -Janesville, WI for $2.825M

from TBK Communications. The ac-quisition is south of Karmazin's Madi-son area cluster and creates a comboof sorts with WTJK-AM South Beloit,IL, which Good Karma has LMA'dwith an option to buy. In all, CraigKarmazin will own six stations in oradjacent to the Dairy State.

Alliance takes out Lighthouse

Penny -stock player Alliance Broad-casting (O:RADO) has reinstated adeal from last year (RBR 8/30/99, p.18) to buy WCTG-AM Columbia, SCfor $802K. The purchase from Light-house Productions was approved bythe FCC last November, but with-drawn in March. Now Joe Newman'sAlliance has placed $250K in escrowand a new LMA began 7/1. Most ofthe purchase price due Lighthouseowner Udel Richardson Sr. is in afive-year note for $550K. Alliance'sexisting three stations are all inFlorida. The tiny company's stock,which began the year at 25 cents pershare, has recently been tradingaround two cents.

Breaking off is hard to doYou're a public company and you decide that Wall Street is undervaluing part of yourcompany. So you decide to create a tracking stock to enhance the value of that unit.Sound like a simple solution? Think again. RBR got a briefing last week on just how manyissues Emmis Communications (O:EMMS) has to deal with to create the dual stocksolution that CEO Jeff Smulyan has been talking about for months.

Emmis had three potential roads to follow in creating a pure -play radio company that, intheory, investors would value higher than those radio assets have been valued in leaguewith Emmis' growing TV group. It could either 1) create a tracking stock based on theperformance of the radio division, 2) spin off radio or TV into a separate public company,or 3) take the TV unit private. According to VP/Associate General Counsel Scott Enright,Emmis' Board of Directors is leaning heavily to the tracking stock course.

Even with that all but decided, there are still issues to be resolved. Will Emmis sellshares of the radio tracking stock in an IPO? Will shares in the tracking stock be handedout to current Emmis shareholders as a dividend? Will the company make an exchangeoffer, allowing shareholders to decide whether they want to keep their Emmis shares orswap them for shares of the tracking stock? To date, there's been no decision and all ofthose options are still under consideration.

Even then, there will be other issues to deal with. For example, all Emmis employeesare also shareholders. Every employee has at least one share of Emmis stock which theyreceived from the company. Many participate in the employee stock purchase plan.Employees also receive shares through the company's profit-sharing program. Thoseprofit-sharing shares are held in a trust, so if shareholders get to choose from two or moreoptions regarding the tracking stock, will the same options be offered for shares held bythe trust?

Of course, some employees have Emmis stock options as well as stock. How willoptions be treated?

Emmis postponed its annual shareholders meeting so that the tracking stock proposalcan be put before shareholders for a vote. The tracking stock structure will also have toget approval from the SEC and pass -muster with the IRS for tax-free treatment.

All of that takes time, but Enright says the whole process is still on track to be finishedin the latter part of this year.

7/31/00 RBR 15

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