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RADIO NEWS®

Coen slashes radio forecast,raises TVWe said Bob Coen's forecast of 4% growth at both the nationaland local level for radio seemed pretty optimistic when he madehis 2006 forecast last December. Indeed, the market has beenmuch, much softer and the Universal McCann Sr. VP and Directorof Forecasting dramatically reduced the radio numbers in his sum-mer revision. He now expects national (network & spot) to grow1% and for local radio to show no growth at all.

But while Coen cut his numbers for radio, newspapers and cable,TV is having a better year than he expected. With political ad spend-ing already pushing up the rates that stations are able to command,Coen has boosted his 2006 growth forecast for both local and na-tional spot TV, while hanging firm on his network prediction.

While the picture is generally bright for broadcast TV, the shin-ing star in Coen's forecast is the Internet, where ad growth hasbeen even more robust than his original projection of 10% growth.He's now raised that to 25%.

Bob Coen's adertising forecast for 2006

Dec. '05 June '06 Ad spendMedia Forecast Revision (millions)Four TV networks 6.5% 6.5% $17,175National spot TV 8.5% 10.0% $11,045Cable TV 7.0% 4.5% $19,120Syndication TV 4.5% 5.5% $4,080National radio (net & spot) 4.0% 1.0% $4,325Magazines 5.5% 4.5% $13,425National newspaper 3.5% 0.0% $7,465Direct mail 7.5% 8.0% $59,635National yellow pages 3.0% 2.0% $2,205Internet 10.0% 25.0% $9,705Other national media 6.4% 6.3% $36,925TOTAL NATIONAL 6.8% 7.1% $185,105Local newspaper 3.0% 2.0% $40,665Local TV 4.5% 7.0% $15,400Local radio 4.0% 0.0% $15,355Local yellow pages 3.0% 1.0% $12,185Other local media 6.8% 5.8% $17,695TOTAL LOCAL 4.0% 3.1% $101,300GRAND TOTAL 5.8% 5.6% $286,405Source: Universal McCann

Boardroom dramain Univision saleThe auction of Univision didn't bring the $40 per shareprice tag that Jerry Prenechio had hoped for, but it didconclude with some excitement. After a $35.50 bid from aninvestment group that included "Mighty Morphin' PowerRangers" mogul Haim Saban was turned down, TelevisaCEO Emilio Azcarraga Jean thought his group, which in-cluded the personal investment fund of Bill Gates, had theinside track to negotiate from its bid of $35.75. So Azcarragagot a shock when directors of Univision were called tovote on acceptance of a new $36.25 bid from the Sabangroup. Directors representing Televisa and Venevision weresaid to have voted no, but the deal passed anyway.Azcarraga swears that he is not out of it yet, but his op-tions are limited. Unless he can find a lot more cash,Univision shareholders are likely to give the 60% approvalneeded and collect their $12.3 billion from Saban, whosegroup is also assuming $1.4 billion in debt.

RBR observation: Closing is still about nine months off, evenif everything stays on track, so there could yet be more drama.The most logical solution, for Televisa to become a partner toSaban, is the least likely to happen, given the egos involved.

Record company dragsUnivision into courtRegional Mexican recording specialist Disa Records sold halfof its company to Univision back in 2001, and says thatUnivision agreed at that time to buy the rest. The second halfof the deal has hit a snag, however, so the record company,owned by the Chavez family, who are Mexican citizens, istaking Univision to court to enforce the arrangement. Thevenue will be the US District Court, Central District of Califor-nia. In a court filing, Disa said, "Univision's inexplicable andirrational avoidance of its obligations to complete the sale ofDisa LLC has left Empresas Chavez II B.V. and the Chavezfamily members no choice but to file this action." Disa saysfor some reason, Univision wants to change a non -competeassociated with the transaction, making it subject to New Yorklaw and venue, rather than California.

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analysis and RBR observations give you theedge you need to stay competitive.

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RBR 8 TVBR August 2006 3

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Look at your dynamic audience. More dynamically.

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bewilders GMs, network and studio executives, news directors, promo managers, programming heads, researchers

and virtually everyone in broadcast. Nielsen Media Research now has an exciting new product concept that marries

minute -by -minute audience ratings and audience flow information with actual program content, taking the guesswork

out of viewing and programming!

Introducing grabix- a web -based, multi -faceted system that plays video content...captures it...stores it...archives

it...searches it...then plays it back with related ratings data...on your PC screen. And does this simultaneously for

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TELEVISION NEWS

CBS Evening News branches outWhen the CBS Evening News with Katie Couric debuts this month, viewers will get relatedprogramming on television, radio, Internet and wireless platforms. The offerings includeradio and cross -platform coverage. The first segment of the CBS Evening News will besimulcast by CBS Radio News and made available to its 500 affiliates. Already committed arebiggies like WCBS-AM New York, WTOP Washington, D.C. and WBZ Boston.

Additionally, "Katie Couric Reports," a one -minute look into a top story or issue by Couric,will be available via radio, Internet and wireless. The report will be available as an audiopodcast for their local websites. It also will be featured as an on -demand video clip onCBSNews.com and will be available on Verizon VCast phones and as a video podcast. Couricwill also anchor CBS Radio News' 5:00 PM newscast.

A daily, on -demand web -exclusive feature will also provide extended interviews with theday's newsmakers hosted by Couric and conducted by her or a CBS News correspondent.

The segment will be posted on CBSNews.com by mid -afternoon and will run three or four minutes. This report will available forvideo podcast and will be sent to all CBS Radio News affiliates around the country for broadcast and/or podcast.

In addition, early each weekday afternoon, Couric will offer a web -exclusive rundown on -camera from the newsroom -afirst look at the stories being considered for coverage on that night's news and some perspective on what is going on in theworld that day.

An interactive daily blog will explore the day's developments through links to exclusive, free video, as well as contributions fromCBS News correspondents around the world, and will be updated frequently throughout the day.

On the interactive and wireless side, all of this will be ad -supported. None will be subscription -based. Ad packages are currentlybeing put together.

Regarding her debut, Couric was quoted as saying "Obviously, we can't sugar-coat what's going on, but there are cases where wecan be more solution -oriented." Indeed, the CBS Evening News is looking to become a whole new kind of animal. A great idea as wellwould be to encourage viewers/listeners to email solution ideas to breaking news issues and have Couric read some of them them.Talk about interactivity!

The CW unwraps "Content Wraps"In an effort to keep viewers from skipping ads The CW network is introducing a new ad option called "Content Wraps." They'llreplace national advertising on an occasional basis on CW and will play at the beginning, middle and end of a program. At theSummer Television Critics Association tour, The CW Entertainment President Dawn Ostroff described the wraps as mini -shows witha beginning, middle and end that will run during breaks in series instead of commercials. She said an example would be a blind date:Part one, running at 8 p.m., could introduce a young lady and show her receiving a makeover. Part two, at 8:30 p.m., would introducea young man and show him being made over, as well. And at 9 p.m., part three would show the two of them enjoying their first date.

These stories will be told for one night, with sponsorship.The wraps also would have online and wireless tie-ins. The network has had a great response from advertisers, Ostroff said, with

several already signing up.Harry Keeshan, EVP/National Broadcast, PHD, tells TVBR he "absolutely" applauds them for looking for innovative ways to

retain viewers during commercial pods. "They're promoting their programs, as well as highlighting our clients' products. I'malways interested in something like this-something that's new and different. These guys went out of their way to try and lookfor something different."

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edge you need to stay competitive.SIGN UP TODAY!

RBR 8 TVBR August 2006 5

GM TALKBACK

Hispanic media managers:Tell us about your ratings andaudience trends.

Randy Nonberg, Una Vez Nas COO:Spanish -language summer ratingsare in flux due largely to Univision'scoverage of the World Cup Soccergames and, to a lesser extent, sum-mer reruns airing on all televisionnetworks. Typically HUT [House-holds Using television] levels dropand then will rebound after LaborDay in September. We are lookingforward to the fall. Our stations aregearing up for the November book

with heavy market promotions scheduled for our novellas,Mexican First Division soccer and La Academia, the numberone Spanish -language reality show. Our promotions will in-clude outdoor, radio and print.

Azteca America is still a relative newcomer to the U.S. As a net-work, we are adding markets and improving distribution every month.We see continued branding as one of the keys to our ratings growth.It's important to remember that the U.S. Spanish -language televisionmarket is no longer a monopoly and that we expect that both thesize of the pie and our share of it will grow markedly.

Luis Diaz-Albertini, Vice President/GM/DOS CBS Radio Tampa:WYUU 92.5 FM in Tampa switched format on August 7, 2005from Young Country to Spanish Hot AC. Ever since the change,the station has experienced dramatic growth in ratings as reportedby Arbitron and in advertising sales.

With only two Spanish AM stations in the market to serve thenearly 300,000 Bay Area Hispanics we saw a clear opportunityto launch Tampa's only Spanish FM station. Tampa is the 18thlargest Hispanic market in the country and WYUU super servesthe Puerto Rican, Cuban and Central and South American popu-lation with a musical format of Salsa, Merengue, Bachata andlimited Reggaeton. The station does play a mix of MexicanRegional music, but only in the Romantic genre and only byproven Mexican superstars.

WYUU is a high energy, promotionally active, personality drivenradio station whose main focus is on the music and servicing thecommunity as the leading source for news and information. Thestation is already achieving Top 8 status in the two key sellingdemographics of Adults 25-54 and Adults 18-34. Ratings and rev-enues have grown every month since WYUU's inception and cur-rently realizes a Cume audience of some 90,000 listeners and amarket leading TSL of 14:30 hours. Revenue has also increasedalong with the ratings making this one of the best moves for theoverall health and future success of the station.6

By Carl Marcucci

Juan Gonzalez, VP of Programming& Promotions, Bustos Media, LLC:Our stations ratings in the last twobooks have been extremely good.Every single market we a have astation in, we have secured thenumber 1 spot in Spanish radio andin markets where we own multiplestations we have secured the num-ber 1 and 2 spots in Spanish radio.Some of the markets that we haveopened up to Spanish radio, almost

immediately showed a huge response from the listeners. OurMilwaukee station (WDDW-FM) is getting huge numbers andcompeting effectively with general market stations. Even ourmore established Hispanic markets like Sacramento andModesto have shown an increase in share. Our audience isvery loyal to their music, stations and personalities giving usa huge boost in TSL. Where in situations our CUME is not asstrong, the TSL gives us the boost we need.

Michael Hughes,Senior V:ce-PresidenVGeneral Manager,"El Zol" vaa-Fm Washington, D.C.:Since the debut of El Zol in Januaryof 2005, in the key target demo cellof A18-49, AQH rating is up 100% andAQH share is up 71%. We've in-creased our A18-34 share 88% andmaintained an average rank of 5thsince our second book on the air.

El Zol has been built on a founda-tion of three priorities: Music, Per-sonalities, Community. There is a tre-

mendous appetite for contemporary music presented by person-alities who know and love the music, but also who make anemotional connection with our audience by relating the issues,challenges, and celebrations of the day. Perhaps most importantly,is a staff wide connection to serving the community. Rarely a daygoes by where we are not engaged in some event, program orpresentation that addresses the many issues facing the Latino com-munity. Of late, the most significant, were the rallies in support ofImmigration reform. Three El Zol personalities were invited toaddress the crowd in excess of 500,000 people on the NationalMall and discussion dominated the airwaves for weeks regardingthe necessary reform. In a few weeks, the Latin American YouthCenter will be opening a third home for disadvantaged Latin youthso they can work, learn, and live with pride and hope. In recogni-tion of our service to the LAYC, it will be named "Casa Zol."

With focused tropical music, personalities that connect and relateto our audience, a commitment to serving the Latino community,and promotions that excite and engage, El Zol is building a growing,loyal audience and we work hard to earn their support every day.

RBR & TVBR August 2006

ARBITRON

PPM Is Rolling OutAcross America

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By 2010, PPM will be in the Top 50 markets...and measuring 65% of the country's population: A growing number of radio executives are anticipating the

benefits and opportunities that will be provided through PPM and Next Generation Electronic Ratings.

www.arbitron.com ® 2006 Arksitron Irk PPM.. and Next Generation Electronic Rattngs'' ore morks of Arboron Inc ' Population 12., Arbitron-rated radio markets 06 PPM 40,

HISPANIC MEDIABy Carl Marcucci

The explosion of Hispanic formats and networksSpanish -language radio in the US used to mean a full time AM thatwas akin to the old full service station with a little talk, news, music,sports and community service-or in many cases, a few brokered hoursa day or week. It has since evolved from that very thin basic radiomodel into a plethora of different formats that are hyper -targeted basedon age, ethnicity, political, informational, sports and current eventsinterests. The amount of new immigration continues to fuel the growthof Spanish language media in general. According to Arbitron's His-panic Radio Today 2006 study, there has been a 34%increase in Spanish -language radio stations in thepast seven years alone.

Spanish -language stations have not only migratedon AM but heavily on the FM side as well. The full -service Spanish-speaking stations are now called Span-ish Variety. In some markets AM still features music ofa variety of sorts-mainly oldies, such as La Preciosa,Recuerdos, Salsa Classica, Oldies Mariachi or traditionalRegional Mexican (still the most popular format). Likegeneral market, Spanish News/Talk now dominates theAM dial, especially in major markets. Spanish Religiousis quite popular on AM as well.

On the FM side, Spanish AC formats abound, withmonikers like Amor and Suave. Some include Rock enEspanol bands such as Shakira and Mana. Classic Hits isalso starting to see its place on the FM dial for Hispanicradio. Then you have the young stations with a musicmix of Reggaeton, Spanish Hip -Hop, Rap and R&B; some-times in English, sometimes in Spanish. Traditional His-panic formats like Salsa, Spanish Tropical and Bachataare still thriving, with much of the audience from Carib-bean/coastal Central America. SBS's Mega 97.9 (WSKQ-FM) NY is one very successful example. Tejano, whichhas kind of faded a little bit, is still of interest, especiallyin Texas and the middle southwest.

Programming to the assimilatedHispanic listeners in the U.S. are at different levelsof cultural assimilation, and those levels vary bymarket. In a market with higher levels of Spanish -dominant, with less -assimilated listeners, formats thatmirror the music tastes from their country of originare the logical choice. "This has forced broadcasters to fine-tune for-mats that will reach specific target audiences rather than trying to beformats for all ages and nationalities," observes Alfredo Alonso, formerCEO of Mega Communications and current resident Hispanic guru atClear Channel Radio. "Successful programmers know the compositionof their local communities and program accordingly."

Says Don Davis, Principal, Davis Research, which specializes inHispanic radio: "In markets with more English -dominant or U.S.-bornLatinos, formats that connect to their dual American -Latin heritage canbe very successful. If a broadcaster owns enough signals in a market,they may try several of these strategies in the same cluster, if availableaudience is present."8

David Haymore

Amador Bustos

"The proliferation of formats in Spanish language is due to the growthof that audience, but it is also an effort on the part of the broadcaster toreach the more assimilated Hispanic or those returning to their "roots" viaSpanish music," concluded Amador Bustos, a successful entrepreneurwho built Z -Spanish Radio Networks (sold to Entravision) and is nowcalling their latest flagship format "La GranD," which addresses first andsecond -generation individuals of Mexican origin with a blend of Rancheras,Nortefias, Banda, Grupos, plus a dash of Tejano and Cumbia.

One hot topic right now in Spanish -language ra-dio is whether broadcasters are instructing their airtalent to market in English or Spanglish or to be puristabout Spanish. Says a Univision Radio source: "An18-34 format in first generation could be all Spanish,regional Mexican or Spanish AC. It's second genera-tion where we've had this big burst of Reggaeton.That's a bi-lingual format, just as the listener speaksboth English and Spanish. Then we have stationslike The Beat in San Antonio that are Hip-Hop-allEnglish with maybe 10% Spanish thrown in."

However, the language issue can be a bit of a prob-lem on the agency side. Most of the Spanglish stationsare an 18-34 buy, Spanish, but it's bi-lingual. "So it's kindof hard to tell an advertiser who asks, 'Wait a minute-are you English or are you Spanish?'," recalled a UnivisionRadio PD. "That niche is very different because if yougo to a Spanish shop and they'll say, 'No it's too En-glish.' If you go to an English shop they'll say, 'No it'stoo Spanish.' So it's really hard to get people to under-stand what that audience is all about."

Keeping listeners listeningWhat are Spanish -language stations doing to keep lis-teners from migrating over to the pure Urban or PopRock stations where the young focus? Bustos claims theyoung Hispanic listeners are already listening in hugenumbers to those general market formats. 'What we tryto do is simply bring them back for a few quarter hours.Younger listeners have a greater tendency for 'hopping'from one station to another. Each format fills and satis-fies a portion of the young consumers' personality."

The goal for many is to take listeners away fromgeneral market stations. For example, Urban "The Box" in Houston prettymuch had every Urban CHR listener in the market-double-digit 18-34numbers. "Hispanics were listening to The Box because there really wasn'tanything else for them in the way of a rhythmic format," explained a UnivisionRadio source. "So we saw an opportunity and signed on The Party inHouston [Latin Urban]. We specifically targeted those Hispanics that werelistening to The Box and found out that there were truly different tastes thatthey had in the way of Urban music and CHR. We're hoping it keeps themaway from the Urban formats because they include the real heavy, syrupyR&B, which doesn't work for Hispanics."

As well, in the CHR world there has been a ton of Hispanic artistsbusting onto the scene-Baby Bash and Frankie J. "These artists that

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have broken out of Texas have broken at our stations," he said. "Thoseartists really don't do well on Urban stations. They are basically moreCHR mainstream and/or Hispanic -focused."

Says David Haymore, currently running Latino 96.3 (Reggaeton/Urban Latino) in LA for SBS: "In May of last year, we launched Latino96.3 as a station targeting the youth of LA with a bilingual format andpresentation. It rocketed to the number two most listened to radiostation after only three months on the air. Interestingly, the popularityof the station was a likely catalyst to another local station droppingtheir Hip -Hop format in favor of R&B."

Serving Hispanic viewersOn the Television side, a proliferation of Hispanic tele-vision stations in the last 15 years have brought on newnetworks to provide content. Univision has launchedGalavision, Telefutura and TuTV; NBC Universal'sTelemundo has launched mun2, a cable network thatcelebrates the lifestyle of all U.S. Latino youth andTelemundo Puerto Rico. Si TV has also launched, tar-geting younger English-speaking Latino demos. AztecaAmerica and Hispanic Television Network have alllaunched, as have numerous Hispanic versions of popu-lar cable nets, i.e. "Discovery en Espanol."

Cable -only penetration is common for many Hispanicaudiences, as the over -the -air signals for many Spanish -language stations is on UHF, often with lower powersignals. Therefore, the must carry issue is important toSpanish -language broadcasters to reach their audiences.All of affiliate group Una Vez Mas' stations (the largestaffiliate group for Azteca America), for example, arelow power and therefore not subject to must carry sta-tus. Says Una Vez Mas CEO Robert Hyland: "We haveto buy our way on to the cable systems even thoughwe are over the air stations licensed to that particularmarket-same as the full power station receiving 'mustcarry.' Because we have to pay for cable carriage itslows us down in being able to target our audiencewith local programming such as news. We will belaunching local news in January, but we could havestarted earlier if we had must carry rights."

Robert Rose

Julio Rumbaut

Language and targeting younger generationsUntil recently, the only game in town was Univision and Telemundo,but now with multicast digital platforms many non -Spanish languagebroadcasters are also looking to place Hispanic programming in place.Most of the content comes from Latin and South America, from pro-viders like Televise and Venevision. Telemundo's bid to win marketshare away from Univision (and they're having some measure of suc-cess) is to create original US -generated Spanish language program-ming content specifically for US Spanish-speaking viewership. SaysMike Castello, VP of television syndicator AIM Tell -A -Vision Group(AIM TV): "And it is written to be relevant to their lives to includethings that the challenges, circumstances, backdrops, etc. that are rec-ognizable for them and that they can relate to."

"Hispanics' experiences change dramatically once they migrate tothis country. The best way to serve this growing audience is by offer-ing programming that is relevant to their lives while it entertains andgives them an inspirational outlook for the future," said RamonEscobar, Senior EVP/Network Entertainment, Telemundo.

Some of Telemundo's most successful programs include programsand novelas like "El Cuerpo del Deseo," "Tierra de Pasiones," and theo

weekday series "Decisiones."With added bandwidth provided by digital cable and satellite, net-

works are now programming the full spectrum, from pure Spanish topure English. All Azteca America programming, for example, is pureSpanish -language with no mix of bilingual programming and 100%Mexican produced in Mexico City.

On the other side of the spectrum, cable net SiTV CEO MichaelSchwimmer explains his network targets young Latinos in Englishwith all production done in the US. The younger they are the morelikely they are to be speaking English because they're often secondand third generation Hispanics. "Some are what are called 'one and a

half,' meaning Latinos that arrived but arrived hereyoung," he explains. "They're bi-lingual of coursebut that doesn't mean they want to watch theirmoms' Novellas. If you look at the Hispanic audi-ence, 50% are bilingual and another 25% are En-glish -dominant. Young Latinos are watching Ameri-can Idol, MTV and the baseball game but no one isprogramming to them. There was no place theycould go where they can see themselves playingstrong roles as opposed to being the dishwasher,the gardener or speaking Spanish in a Novella."

And the dollars are rolling in for English-speakingHispanic programming. Julio Rumbaut, President,Rumbaut & Co., a Hispanic media advisory firm, sayswhile the vast bulk of the dollars are being spentagainst Spanish in television, "because of the percep-tion there is an untapped target against young Englishdominants or bilinguals, there appears to be a will-ingness on the part of advertisers to pay fairly decentrates for the new entities that are trying to serve thisaudience, even in the absence of ratings data."

AIM TV is one of the top programming produc-ers in the US for Hispanic audiences. Ironically, muchof their programming ends up on the major generalmarket networks. Like SiTV (which runs some ofAIM's programming), the content is also in English.AIM TV CEO and Executive Producer Robert Rosesays the two weekly shows-American Latino TVand Latination-has grown from clearing 27 marketsfive years ago to over 100 markets today. "We actu-ally have more full power, over the air broadcast

clearances than Univision, Telemundo and all the Spanish languagenetworks. We're on ABC, NBC and CBS affiliates because we target US -born Hispanics-really the majority of Latinos in the US."

La Familia Cosmovision, from The Inspiration Networks, is fillingthe void for "family friendly" television by providing programs thatspeak to the Latin way of life. The array of programming-a blend ofSpanish and English -language content-is now available in 8 of thetop 10 Hispanic markets and is carried by 11 MSOs in 24 states.

Says Tom Hohman, SVP/Affiliate Relations, The Inspiration Net-works: "Second generation Latinos favor bilingual programs. In re-sponse to this shift, LFC has adjusted the percentage of its pure Span-ish -language programming from 85% to 70% to accommodate secondand third generation Latinos."

Bottom line-on both the television and radio side of the coin, tar-geting US -born Latinos seems to be the ticket right now. Says Rose:"Very few US -born Latinos watch any Spanish -language TV, but they'revery Latino, they're very into their culture. So what we try to do is fillthat void between this lily-white network programming and thishardcore, Spanish language TV stuff that came from Mexico. There's awhole big audience in the middle."

RBR 8 TVBR August 2006

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ADBIZ®By Carl Marcucci

Rashid Tobaccowala, chief innovation officer of PublicisGroupe Media (PGM) and Denuo CEO.Publicis Groupe's Denuo unit is a new strategic initiative designed toanticipate and exploit the rapidly changing digital, interactive and mo-bile communication environment. Denuo is a standalone business butnot based on any pre-existing industry model. Denuo functions as astrategic consultant, an inventor of solutions and as an investor inpartnerships. The company is also venturing with a variety of startupsincluding Brightcove, an open Internet TV service, and Shadow TV, astreaming video service that provides access to live and archived tele-vision content via the web. Denuom meaning "afresh," "anew" in Latin,is led by Rishad and has offices in Chicago and NYC.

How is Denuo unique?It's basically a unit of the Publicis Groupe which isdedicated to helping its clients get to the futurefirst by making tomorrow tangible today. We doso by combining skills of strategy with skills ofidentifying and honing new opportunities and part-ners, with creating great products and ideas thatcan be taken to market.

The way we brought our company together is webrought in skill sets that I had incubated previously.We had a gaming unit called Play and a word-of-mouthunit which used to be called Reverb. We're workingwith lots of different companies that span from theworld of traditional companies like the Kellogg's andthe GM's of the world, to new start up companies likeBrightcove. We're talking to about two -dozen compa-nies right now to help them identify and hone theirproducts, and at the same time finding how they cansolve some of the needs that our clients have.

What future do you see for ROI measurement?The science will be increasingly return on objective because that's whatwe say-R00 rather than ROI. What's your return of objective? Returnon investment basically makes it sound like a cost-cutting exercise. Re-turn on objective is what are you trying to achieve? I think the bigchallenge is how do we measure outcomes vs. inputs? How do wemeasure holistically and integrate across different contact points?

In 2009, analog TV spectrum will be surrendered.How might this change things?

Increasingly what we're finding is that in the past, distribution used to bea choke hold. If you thought about it companies basically got bornbecause of location or distribution advantages. What has begun to hap-pen, because of a combination of broadband and wireless and the Internet,the advantages of distribution have basically fallen a lot. You neededdistribution to get audiences. Now you can get audiences without distri-bution. So you would have space and space there would be local therewould be national, even space all the way to the 30 -second ad and theprint ad. Now what is increasingly happening in the new world, space12

and time is not following the rules of space and time. Where all of asudden time is being shifted and space is being shifted. What's happen-ing is either you can shift not only your programming from one time ofday to another, but you can basically shift them from device to devicewith things like Sling Box and Akimbo and Orb Networks. You can alsoshift them from country to country. So the whole idea of the boundariesof geography, the boundaries of distribution, the boundaries of time arecollapsing so 2009 is just another indicator of what probably began 10-12years ago and which has now reached sort of a rather large emphasis.

In our March interview with JackKlues, he mentioned a project ofyours that was like MRI reverse

engineering. Tell us more.If you think about MRI they basically say the peoplewho use your product what media do they use? Soyou use product behavior as an important way ofdoing things. The insight we basically had wasthat somebody either in an on demand world (be-cause of the way you utilize media when every-thing becomes itemized-you can pick programs,websites, streaming channels). Then in effect if Icould know your media behavior down to the pro-gram level, it tells me more about your interestsand passions then even your product behavior. Soin effect what basically happens is the best way totarget media will be through media behavior.

What areas are you concentrating the most effortright now for your clients?

I think there are three areas. The first is providing products and servicesand ideas so that people can say we make tangible solutions that can go tomarket. Word of mouth, gaming are a couple of areas. The other is we arespending a lot of our time identifying new opportunities and new compa-nies and new types of technologies, which allow our clients to begin toengage in this new world of what we call people rather than consumers.Then the third area is we're trying to simplify the world because what wefound is that clients are being often left with huge books and decks andplots and plans but no one says, "Okay here's the two or three things youshould focus on and here's what needs to get done let's go do it."

The overall theme it's about people not consumers. When youthink about consumers you think about two problems. One is youthink about it from a brand perspective. A person is much broaderthan a consumer of a brand. The other is by consumer you're think-ing of people in the old way that we would just consume content orconsume media. Today many of us consume as well as we retransmit.We say people are gods or people are goddesses because it's aboutpeople, which is broader in all the power that you and I have with allthe new technologies. We almost have goddess or god -like power.

RBR & TVBR August 2006

THE ALL. NEW

'FORN1ATS

Coming August 1, 2006

By Carl Marcucci

Beth Comstock, President, Digital Mediaand Market Development, NBC UniversalBeth was named president of Digital Media and Market Development in December 2005. She'saccountable for driving NBC Universal's digital strategy and leading the company's content anddistribution efforts to capitalize on new and emerging digital platforms. Her responsibilities alsoinclude strategic marketing, research, communications, and advertising and promotion. Shereports directly to Bob Wright, vice chairman of GE and chairman and CEO of NBC Universal.

Comstock had served since 2003 as corporate VP and chief marketing officer of GeneralElectric. Comstock has been a GE company officer since 1998, at which time she was namedGE's VP/Corporate Communications. Previously, Comstock served as senior vice president ofCommunications at NBC (1996-98), and as VP/NBC News Communications (1993-96).

Before that, she held a succession of communications and publicity positions at NBC,Turner Broadcasting and CBS Entertainment, beginning in 1986. She started her career for atelevision news service and in local cable programming in Virginia.

Tell us about your role at NBC Uni.My role is to help the company define the future, to get our digitalbusinesses up and running to go from the experimental to the moneymaking. Part of what the digital media groups' responsibility is to helpfind new opportunities that digital brings in, to incubate businesses andto grow them. A good example of that is iVillage. We were attracted toiVillage for many reasons. Obviously it is an Internet survivor, but wealso liked their profitability and really liked the strong base of commu-nity that they have built up over a decade. We see a multitude of oppor-tunities with to connect our TV and film content with their users. Espe-cially on the TV side, we want to create that connection point wheremaybe TV gets the conversation started and iVillage keeps the conver-sation going within its community. We also see the thriving iVillagecommunities as a launching pad for other new digital consumer offer-ings that we hope to introduce within the next year or so.

How will you integrate iVillage with your digital strategy?We talk about our strategy revolving around three key things - con-tent, context and community. Clearly we have great content, but weare also focused on context, and by that I mean understanding howyou take that great content and put it in a form and in a method thatconsumers want to use it. So that gets into a lot of distribution plat-forms. So you may say "I'm not going to watch a two-inch TV screen,"but you're commuting home on your train at night and all of a suddenyou love having that two-inch TV screen. The third leg the stool iscommunity. iVillage, specifically, helps us get our skills in and get thecapabilities around community. Today, it's not yet where it needs tobe and that's where we plan to invest time, energy and technologyinto upgrading the tools that can make that community more robust.

You were the keynoter at the last TVB. Tell us about your speechand what you just touched on-The Three C's.The fact is you have to have those Three C's, the content, the contextand the community. It's not just taking television programming andrepurposing it for the web or for wireless. It's a real pull from theconsumer. It's understanding that sometimes it means creating newcontent exclusively for that platform or that application. For example,14

we have NBC Universal Digital Studios, which produces programmingexclusively for wireless, exclusively for broadband applications. Insome cases the programming has to be shorter. You have to under-stand how to match the content with the experience.

Another important tenet to this is building a strong sense of community.It's not like, "Hey let's just form a community just because we said so andjust because we're NBC, we're going to have a natural community." That'snot it. It's understanding how you engage people. How do you createmore interactivity? How do you allow people to use your content and toolsto create something different? That's what we mean by community.

When you do those things, when you engage your users and youfind new ways to bring/deliver your content to users, you'll be able todrive commerce. Increasingly, advertisers are looking for new waysto engage consumers around their brand. The other thing I talkedabout was the fact that, especially from a local station perspective, thearrival of digital technology should be great news to local TV stationsbecause local is all about community. Community is local, it's whatlocal television stands for and so that ability to deploy technology tomake those local communities come alive is very exciting.

What about the content arrangement with Telemundo and Yahoo?Yahoo is looking for quality content to make its destination richer. We'relooking for more eyeballs and it was a perfect marriage from that perspective.We're combining together to create Yahoo Telemundo and taking some ofthe best content from Telemundo with the applications and the tools thatYahoo has to offer and combining them to come up with new content andnew ways for a community to be rallied around what they can find there.

Who are your other partners in the digital space?Well probably one of the more visible we've had has been Apple withiTunes, which has been a very good partnership. It's really helped usunderstand the whole consumer experience around downloading tele-vision programs. On the film side we work with Toshiba in HD/DVD,so understanding that technology has been critical. I would say in thewireless space we work with a host of partners-Verizon, Cingular,Sprint, T -Mobile, Amp'd, there is a whole host of them. Our partnershipwith Verizon is very strong. We're learning a lot from each other.

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DIGITAL MEDIADo you agree that the networks should acquire as much digital media infrastructureas possible to keep future ad dollars in-house?I think for us the game isn't just making acquisitions for the sake of acquisitions. You haveto ask: what's your strategy? How does it make sense? iVillage for us was really a great wayto extend our core-it's women focused, which is a big section of the viewing audience, anda space we know well. It's one that made great sense for us. I don't think you'll see usacquire pieces just to have digital assets unless they are part of our strategy or unless theycan extend who we are. One of the things you're always confronted with in this space is yougo through the make vs. buy analysis. Acquisitions give you scale quickly. With iVillage wewere able to very quickly get a user base of 16 million users. Which would have taken us alot longer to grow on our own and to get that capability and ability to monetize it. Theconnection that iVillage has with their advertisers is incredible. It would have taken usmuch, much longer and frankly we might not have had all those skills. The acquisition gotus scale, it got us impact very quickly and it made sense in that respect.

What predictions do you have about traditional media and new media?I think you're going to have a hard time telling them apart. Traditional and new media are headingto the same place if this industry is going to stay successful. There will be more choices. It will bea much more holistic experience. We're already seeing that. One of the things we're very proud ofis an initiative we launched this year around Content 360, which is to take our programming andfrom the beginning figure out how we create a holistic experience for the consumer and for theadvertiser? We literally wrapped the content around the brand and the consumer so they can havetotally different storylines online. They can also have a very different game experience, let's say inthe office on their mobile phone. That is happening now and I think you're going to see muchmore of that. A very interactive, immersive experience around content-that's the future.

How is digital marketing different than traditional television?Television has incredible power. There is nothing like television to drive awareness, to launch

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product, to build emotion about your brand. Tele-vision does that like no other medium. From adigital perspective, you can engage consumers withyour brand in a different way. As a marketer, I'ma firm believer that you need TV as a starting pointand you need the digital touch points in order tomake that brand interact with your consumers.

How are you integrating with Keith Turnerand Randy Falco on marketing digital me-dia in the television upfront?We were all part of a process with the TV 360 offer-ings that we teed up at our upfront. It was a greatcollaboration between the sales, marketing and digi-tal media teams. We were able to get together, wehad fun which was great, but it was a really excel-lent process to bring these groups together, rallyaround the market need, the advertiser and theconsumer need. We came up with 100 ideas thatwe took to the marketplace...and I can tell youthat that pipeline is filled with many more.

What can traditional media do more withcontent to capitalize on digital?I think digital can't be an afterthought so I thinkfrom a traditional point of view you start rightfrom the beginning saying "how rich can we makethis?" This has got to be such an exciting time tobe a creative person in this industry because youcan come up with an idea, and think about thedifferent avenues you have to bring this to life.What digital really does, I believe passionately, isunleash creativity. It gives us more outlets to workwith. I think that's what traditional media cando-really unleash itself. Think about how digi-tal can extend the life, the viability of the creativeidea and can take you places that you neverthought possible. Again, a great proof point isthe way "Lost" from ABC has been able to liveand thrive and exist long beyond the televisionshow. For us it's been things like "The Office."It's been programs like "Deal or No Deal," wherewe're able to create different kinds of experiences.It's very exciting from a creative perspective.

How do you work with NBC affiliates to notcannibalize their traditional viewership?I think we work together on that. One of the bestproof points is what's happened with our affiliatefutures committee, which is a sub -group of theaffiliate body. We've come together and launcheda couple of great collaborative efforts in the space,for example, "Weather Plus," which is a digitalweather offering. The one we're very excited aboutcame out of the affiliate meeting back in April orMay. For now, we're calling it by its working title"The National Broadband Company," and it is ba-sically an affiliate video syndication service wherewe will be able to offer affiliate videos to differentwebsites across the Internet. That's a very excitingendeavor for us.

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David KennedyWhen it comes to radio, David Kennedy has pretty much doneit all, from DJ to CEO. But his most recent task was the mostunusual-selling off the company he headed and helped to build,Susquehanna Media, after the founding family decided it wantedto cash out. So now after 35 years in the business, Kennedy ispursuing a new path in his life, following the sale of SusquehannaRadio to Cumulus Media Partners and Susquehanna Communi-cations, the cable TV systems business, to Comcast.

Having joined Susquehanna Radio in 1973 at WLQR-FM Toledo,Kennedy moved up the ladder from DJ to PD to Operations Man-ager, then became corporate Director of Research, added VP stripesand moved to company headquarters in York, PA. As Sr. VP hewas put in charge of Susquehanna's stations in Indianapolis andCincinnati and in 1995 became President and COO of the entireradio group. He moved up a final notch in 2004 to become Presi-dent and CEO of the parent company, Susquehanna Media, over-seeing both the radio and cable TV operations, not to mentiondealing with Wall Street bondholders-for while Susquehanna wasprivately owned, it had public bonds.

Along the way Kennedy was active in just about every broad-casting organization you can name and headed some of them.He has served as NAB Radio Board and Joint Board Chairmanand still serves on the NAB Education Foundation Board. He isthe immediate past Chairman of the RAB and, as such, currentlyserves on its Executive Committee. So, even without a job, he isstill keeping busy.

What attracted you to radio?I guess you could say my interest in radio cameabout the old fashioned way. I discovered it as akid. I wasn't born into a radio or a media fam-ily-in fact, nobody in my family ever had any-thing to do with the business. For my eighth birth-day, an uncle gave me a miniature transistor ra-dio. I was hooked. I could listen to all kinds ofprograms, all kinds of music from all over thecountry. I grew up in Toledo and I could listen atnight to Chicago and Boston and New York andSt. Louis and there was many a night when I wouldfall asleep listening to a baseball game or a toptO show from far away. But I really didn't stopthere. I took that radio apart and I tried to learnhow it worked, and that got me interested in elec-tronics. I got my General Class Amateur RadioLicense, which I still have today. I also built andoperated from my basement a small AM station,which I would sign on the air after school andsign off at dinnertime. Like others in this busi-ness, I began to hang around radio stations andattend station remotes and appearances. I wasone of those pests who eventually got to helpout, for no pay of course, but I didn't care. ThenI went on to get a couple of degrees in communi-cations in college while also working full time inthe business, and that exposed me to new anddifferent facets of radio that I found very interest-ing. I've really been very fortunate to make a ca-reer out of it all.

You've spent almost all of your careerat Susquehanna, but you didn't actually

start there.That's right. My first radio job was as a part timeannouncer in Toledo at a station named after theowner, WMHE, which stood for William HillebrandElectronics. I had that job for a couple of years andthen also picked up another job at the same time onanother station in town, WLQR, and that happenedto be the Susquehanna station.

How did you get from spinningrecords in Toledo to running

the entire company?I joined Susquehanna's WLQR as a part time week-end overnight announcer. I had developed a goodworking relationship with the program directorthere, Rick McDonald, who, incidentally, stayedwith the company until last year, when he retired.A few years after I was hired, I was doing a Sun-day night shift and Rick was due in to do theMonday morning show-and he never showed up!I had to do the show myself and about halfwaythrough the show the studio phone rang and it

RBR 8 TVBR August 2006

NAB National RadioAward Recipient

David KennedyFormer CECSusquehanna Mecl,a

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ONE ON ONEwas his wife. She told me that Rick had been in an accident on his way to workand was in the hospital. He was fine, but he wouldn't be able to come in for atleast a week, if not longer. He had asked me if I would work with the otherannouncers to try and reschedule people to do different shows. As it turned out,no one could do the morning show. I could, I was in college at the time anddidn't have any early morning classes, so I ended up doing the show. When hereturned to work, Rick met with me and told me that he listened while he was inthe hospital and he liked what he had heard, and asked me if I'd be willing to dothe morning show from that time on. Thus, I ended up in morning drive workingwith him for a while and then with other people. That's how I ended up goingfrom all nights into mornings. It was because the PD was in an accident with amilk truck!

So do you have a DJ name that we're all going to laugh at now?Not at all, I never did. It was always Dave Kennedy. I suppose I should havechanged that, but I never did. After a while I started to do other things at thestation, eventually becoming Assistant PD and then PD and then OperationsManager. At about that time, I had finished my undergraduate degree at theUniversity of Toledo and had begun work on a master's at Bowling Green. Formy thesis, I conducted a research project on a couple of the Susquehannastations and sent that report to Art Carbon, who was President of the companyat the time and, like Rick, became one of my mentors. Art read it, came toToledo several months later, and asked if I could do similar work for otherstations in the company. Shortly thereafter, I pulled myself away from my sta-tion responsibilities and set up a separate office in Toledo and became Directorof Research for Susquehanna. I stayed at Bowling Green to complete a doctor-ate, and within two years, Art asked me to move to company headquarters in

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20

York, PA. At the time I moved, I was VicePresident of Planning & Research, over-seeing all research and strategic planningthroughout the company. After a fewyears, I was given responsibility for ourCincinnati and Indianapolis radio stations,and then in 1994, Art made the decisionto retire. I was then appointed by LouisAppell to become President of the company.

How much did the company growover those years?

It seems to me we had 14 stations at thetime that I joined the company, andwhen we just sold it, we had 33.

So looking at the entire radio indus-try, what strikes you as how it's

changed over those years? What'sgood about the changes and what do

you miss about the old days?First of all, there's no doubt that it haschanged. As for whether it's changed for thebetter or for the worse, I can remember whenI was young in this business reading inter-views with people who talked about howmuch things had changed. Some of themwould complain that the business wasn't whatit was when they first entered it and that thechanges were bad. I took issue with thatbecause I was excited about where I was andwhat I was doing and I saw opportunity, eventhough I understood what those people weresaying. So I try to remember those feelingswhen people ask me about the changes inthe business now. I do think the industry isgoing through a rough spot right now. It'sone that we can't necessarily blame all onoutside forces. I think we've brought on someof our current pain ourselves. Still, I haveunquestioned belief in the fundamentals ofthe business and in our collective ability toovercome these obstacles that we're facingand demonstrate our strengths, once again,to both our listeners and our advertisers. Aslong as we continue to attract bright mindswith energetic attitudes we will have accessto the ideas-and I believe radio is first andforemost a business of ideas-that will pro-pel us to further growth.5

Where do you see it going now?Is there still a lot of opportunity

in this business?I believe that we have an undeniable lead overany and all other forms of audio entertain-

RBR 8 TVBR August 2006

ment in terms of time spent listening. I be-lieve we have increasingly rich and varied con-tent that is improving each day. I believe wehave technology and an overall delivery plat-form that is evolving to digital state of the artand remains remarkable for its reliability, itsubiquity and its quality. And I believe we havethe intelligence within our industry leaders torecognize these strengths, to work togetherand to harness them for the good of the busi-ness. So I continue to remain excited andvery optimistic about radio.

Now you've just gone through a veryunusual period where you had to

sell the company that you'd workedfor for so long. \Vas that kind of a

shock when the owners came in andtold you. Dave we want you to sell

the company?Considering that while I was helping to sell it, Iwas also trying to run it and buy it, yes. For me,perhaps the toughest part was the sense I had ofletting down so many people who were so sup-portive of our effort to purchase the company. Iknow today that they don't feel let down, butafter 33 years of growth and success, it was diffi-cult to fail, nonetheless.

Okay, so what is nextfor Dave Kennedy?

You may have seen the line that Dan Ratherused when he announced his departure fromCBS-he said something like, "It just isn't inme to sit around doing nothing." I identifywith that. I've been blessed to have had apretty good run so far and I really don't see itcoming to an end. I continue to have a greatdeal of interest in our business and I see manyopportunities in a number of areas. To thatend, I intend to explore those that look inter-esting and try to further develop ideas thatexcite me. That may be a long-winded wayof saying I don't know yet, but I hope it'salso a way of saying that I really have no de-sire to retire. I love a challenge and I knowthat I can always count on this business toprovide one for me.

What are you most proud ofabout the time that you had

at Susquehanna?When I think back on my career, the first high-light for me was getting my first job, that weekendair shift. I couldn't believe I was getting paid fordoing something that I liked so much. I think itwas all of $1.85 an hour at that time, but to meRBR & TVBR August 2006

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Congratulations to:

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Radio Award WinnerOn behalf of the entireGreater Media family.

4ir

David Kennedy

imotGreater svi-4.dia, IncCelebrating 50 Years

in Broadcastinga family -owned company

that was a big highlight I'll never forget. Get-ting hired by Rick McDonald at WLQR in To-ledo was a highlight and, as you know, I endedup staying with Susquehanna for 33 years. Be-ing permitted to contribute to the growth ofthe company in increasingly responsible posi-tions over the years, from the station level tothe corporate level. Each of those promotionswas a highlight. But it really wasn't just thepromotion, it was realizing that the people thatyou worked with were actually supportive ofyou at all levels of the company and happy tocontinue to be a part of what you were doing.For me, that was the real highlight of thosepromotions. Others, as I think back, have in-cluded seeing various stations that I've beeninvolved with go on to win ratings battles andbecome successes in their markets; also, someacquisitions and sign-ons that were successful.In addition, I've really been very privileged toserve the industry at various positions in boththe NAB and the RAB. But most of all, I thinkit's been the pleasure and the honor of work-ing with so many exceptional people over theyears. When I think back on the past, I thinkmore about the people than the events or theaccomplishments themselves. It's the peoplewho've really made the difference.

Fast facts about David Kennedy

We all should really call him Dr. Kennedy. Some-how while working in radio in Toledo, Ohio, hishome town, David completed a BS at the Uni-versity of Toledo, a Master's at Bowling GreenState University and a Ph.D., also from BGSU.

The National Radio Award he's receiving nextmonth from the NAB won't be his first honor.His trophy case already contains the following:2000 Radio Broadcaster of the Year, Pennsylva-nia Association of Broadcasters2000 Leadership York, Distinguished AlumnusAward2004 NAB/Broadcast Education association, H.M.Beville Award2005 Avatar Award, Broadcast Cable FinancialManagement Association

In addition to chairing both the NAB and RAB atvarious times, he also found time to serve as lo-cal chairman of the York County CommunityFoundation, American Red Cross York CountyChapter and the United Way of York County.

His wife is Beverly and their children are Rebecca,Nathan and Neil.

If you forgot to send him a birthday card lastmonth, mark July 8, 2007 on your calendar towish David a happy 55,11

22 RBR & TVBR August 2006

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TELEVISION SALESBy Carl Marcucci

Here's a unique perspective-Magna Global Chairman and CEO Bill Cellaagreed to share some of his experiences from his early days at the other sideof the desk-WXYZ-TV Detroit (ABC) and The ABC Television Network.

Tell us about your local sales days at WXYZ.I was hired to work at WXYZ when I was working for a small rep firm.I met with Lee Gannon. who was the General Sales Manager at thetime. Phil Sweenie was National Sales Manager and I reported toKeith McClellan, the Local Sales Manager. The General Manager wasJim Osborne. Lee Gannon went to school with one of my uncles.My future wife and I drove out to Detroit in her Datsun 240Z. My wifehad landed a job at WB Doner. We got there in February of '79.

People can get very New York -centric. We leftNew York never having lived anywhere else. Wewent to Detroit and spent two years in this wonder-ful environment at WXYZ. Bill Bonds was the latenews anchor and "Kelly and Company" was the morn-ing show. The late news was a real powerhouse iithe market and was delivering about a 27/28 share.

At that time ABC spot expected its managers to gothrough "The System." You would work in a localstation first to get to know that market and learn howa station works. You then moved to different marketsaround the country, building relationships whichwould eventually help solve problems when youbecame a manager in their various markets. I sawhow Chicago spot and New York spot worked, andthen became eligible for management.

WXYZ was a great local television experience.The station was on 80 acres and on Friday after-noons we'd have croquet matches with our clients.It was a family -oriented environment. We still have many friends inDetroit to this day. WXYZ was also an ABC Owned and Operatedstation, so the morning show, Kelly and Company, had a lot of talentstop by. You'd see Hollywood celebrities in the station all the time,which was fun. The market was not robust-in '79 the automotiveindustry got hit a little bit, but WXYZ was still a juggernaut. I think itwas one of the highest rated stations that ABC owned.

I'll never forget this as long as I live-I was on the job a short timeand was in my sales cubicle when I heard this pounding in the hall-way. It sounded kind of distant and then all of a sudden it got closerand closer, and it was booming. I look up and see from my littlecubicle the Michigan State Marching Band coming down the hallwayto wish Jim Osborne Happy Birthday. He was a Michigan State gradu-ate. His office rug was bright green. The horn on his car played theMichigan State Fight Song. It was amazing. The experience of AnnArbor and Michigan and East Lansing and Michigan State was incred-ible. I'm actually still a college football fan.

What's different about local and nationaltelevision sales today?

Today there's so much pressure on local and national sales people todeliver the numbers. It removes part of the personal touch of what24

sales is all about-engaging with buyers and clients. Spending timeentertaining, getting them to feel comfortable with you and develop-ing credibility. That still happens but there's not as much quality timespent with clients. Today, the reality is that sales departments have todeliver on a lot of different platforms. There are smaller staffs, whichmeans more work and less time to get out and get under a client's skinand learn what their company is all about.

How about your move to ABCnetwork sales?

It took me three months to get the job at ABCSports Network from ABC Spot Sales. There hasalways been a cultural difference between Spotand Network sales personalities. There were somesenior managers at the network who had been inspot. They knew my work ethic and supportedme, and of course helped me in my career.

What made you leave the sales sideat ABC for the other side of the desk?I went from 19 years on the sales side (15 at ABC)to a buying position at Universal McCann becauseI was looking for a change. In late 1993/early 1994,when I headed up ABC Sports Sales, we had puttogether Rights fee Pro -Forma's for all the majorsports leagues that were up for renewal. Every-

thing was locked and loaded for between four and seven years, so thequestion I asked myself was, "what's next?"

So along comes John Dooner, who was president of McCannWorldgroup at the time and a life long friend. He says "How aboutcoming onto the agency side?" Four months after we started talking, Iwas running the Coca-Cola account and learning fast how the agencyside worked. Needless to say, my world exploded and I was able torepresent the number one Brand in the world, whose marketing machinewas a graduate degree in itself. I've been fortunate in having worked fora lot of good people wherever I've been, but the experiences at WXYZ-TV provided me with a strong foundation upon which to build my career.

What advice can you give sales folks today, beingnow on both sides of the desk?

They should study and fully understand clients' businesses. Be awareof the competitive nature of their business and know what their com-petitors are offering. Then put together a presentation that addressestheir expertise with their product. Sit down in front of the client andthe agency and say, 'We've looked at your businesses we think we cantake it to the next level. Here's how we can grow your brand." Thatis what clients want to hear - new ideas and how they can connectdifferent media points with their various campaigns.

RBR 8 TVBR August 2008

I:I FOR PROFIT

Maximizing HD Radio Signals:Antenna Optionsby Henry Downs, Technical Director of RF Components and Subsystems Development for Dielectric Communications

As HD Radio is becoming a reality for a growing number of radio sta-tions nationwide, so also are the logistical challenges of integrating digi-tal transmissions into an existing infrastructure. As with analog, the goalof any station is to ensure that the maximum amount of power pro-duced by the digital transmitter is radiated from a suitable antenna intofree space, where it can be picked up by the listening audience. Thereare two components involved in the maximization process, namely in-sertion loss and digital to analog isolation.

The insertion loss of any system is well understood and there aremany proven techniques to minimize it, leaving broadcasters with themain challenge of isolating the analog and digital signals.

This challenge is compounded by the fact that the analog radiatedpower level is 100 times greater than that for the digital. In the case ofinsufficient isolation, not only is the digital power loss greatly increased,but the analog power which feeds back towards the digital transmitterwill inevitably be sufficient to cause the digital transmitter to fold back.

The search for the most efficient antenna for simulcasting analogand HD radio has spanned the last decade and produced a number ofoptions for broadcasters to pursue.

IBOC Combining MethodsThe original proof of concept for IBOC radio utilized a 10 -dB combiner

on the ground that caused over 10% of the analog signal power and90% of the digital to be dumped into a load. Conceptually a success, thismethod was extremely inefficient and not feasible as a long-term solu-tion for most stations. Since that time, a number of manufacturers haveinvested resources in developing different combining methods and, todate, the most efficient method found is to combine the signals in freespace by way of the antenna. The critical parameter for the antenna is toprovide sufficient isolation to ensure a strong digital signal.

Separate Antenna SystemsMany stations have looked to work around the issue of poor isolationby utilizing separate antennas (or even separate towers) for their analogand digital broadcasts. By optimizing an antenna specifically to the low -power requirements of digital, the station minimizes the potential im-pact of an analog antenna's power loss from poor isolation.

Of course, this approach does have some drawbacks. In addition tothe added equipment, this method also requires additional apertureon the tower. Since most stations do not own their own towers, thisquickly translates into higher operating costs. Additionally, becausethe digital and analog antennas will be mounted to the tower at slightlydifferent elevations, a station's coverage for its analog and digital trans-missions will likely vary. Nexth Month Part II.

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RBR 8 TVBR August 2006 25

I

II MARKO'S 8, MONEYit.Yager is out to do all agamAfter so many decades in the television business, no one would have thought it strangeif after handling the transition from selling the Benedek Broadcasting group to GrayCommunications (now Gray Television). Jim Yager had decided to devote his time tothe golf course. But that idea didn't appeal to him, so he jumped right back in to starta new TV group. Thus was born Barrington Broadcasting.

Why does he keep working instead of taking it easy?"You know, before my wife passed away she kept asking me the same question,

'Why don't you just stay home,' and today I am delighted I did not do that. She washealthy as could be on the Friday before Labor Day in 2003; had a little pain in her side,we took her to the doctor the next week and she was diagnosed with pancreatic cancerand passed away in 13 weeks," Yager said. Even before that emotional upheaval, Yagerhad been talking with some of his key Benedek associates about starting a new com-pany. After losing his wife, he went full -bore on the project. "I've got great kids, butthey're all grown and live in different parts of the world, so I was really saying, boy Ithink it's time I really get engaged and build a company with a strong foundation, sothat's what I did," he explained.

And, yes, he does have a golf course condo in Arizona-not that he's been thereeven a single day this year. Yager has been too busy with the biggest deal yet to growhis new company, the $262 million acquisition of 12 stations in nine markets fromRaycom, tripling the size of the Barrington group.

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By Jack Messmer

That big acquisition came after Yager hadbeen building Barrington slowly, in partbecause there was so little inventory avail-able. The company acquired two formerBenedek stations from Chelsey Broadcast-ing in early 2004, along with one from LIN,and added one from Mel Wheeler Inc. laterin the year. 2005 brought two more acquisi-tions from New Vision Group and Diversi-fied Communications. So the portfolio stoodat six stations when the Raycom spin-offsbecame available. Once the Raycom dealcloses, Barrington will have 18 stations in13 markets ranging in size from #65 to #199.We asked Yager how big do you want toget and what size of markets are you inter-ested in being in?

"Number one, I love the size marketswe're in. Television is still the most effec-tive way to advertise in a market 60 -plus.We're not selling the commodity in thesemarkets. We are actually working with ad-vertisers on how to move their products ortheir service to clients. It's not an 18 to 49,it's not 25 to 54, which is what you get whenyou get into the larger or more major mar-kets. It is really, does television work? Canwe make it work for an advertiser? For 45years now I've been making it work foradvertisers and it's still the most effectiveway for somebody with a service or a prod-uct that they want to sell to the consumerto reach the consumer. I love the business.I love that aspect of the business," Yager

RBR & TVBR August 2006

replied. "As to how big we want to get-that's a hard question to answer today be-cause we just acquired nine stations and afterspending a weekend of worrying about TaxID numbers and a bunch of other thingsthat have to be done, we want to take this alittle more gradually. We certainly reachedcritical mass with the Raycom acquisitionand we certainly have got our work cut outfor us with the Raycom stations," he said.

Even so, Yager is still ready if another de-sirable acquisition becomes available. "I'malways looking. You never stop looking be-cause you don't know where the next op-portunity might be," he said.

That is the voice of experience, since JimYager broke into the TV business four anda half decades ago, first helping to build upthe cable assets of The Broadcasting Com-pany of The South, which soon changed itsname to Cosmos Broadcasting. He becameGM of WIS-TV Columbia, SC, and Cosmostransferred him to New Orleans when itbought WDSU-TV. "Then there was a changein upper management at Cosmos and Ithought the direction of the company wasnot the same direction that I wanted to goin, so I joined what was then called SpartanRadiocasting Company," Yager recalled. Itbecame Spartan Communications and herose to COO.

"I guess I was there about six years and Iwas approached by a fellow by the nameof Richard Benedek who said, look I'mbuilding a group of mid -size and smallermarket television stations across the coun-try, I'm pretty well financed. Spartan at thatpoint was not in acquisition mode becauseMr. Brown, who was the owner, was veryafraid of debt. Now I went from the fryingpan into the fire, I went from somebodywho was leery of borrowing money to some-body who could borrow any dime that heever saw, that was Richard Benedek. It waskind of a real wakeup call to realize howsomebody could use debt working with Ri-chard. So I spent 16 years working with Ri-chard," Yager said.

That extreme leverage caught up withBenedek, but even as the company was be-ing sold to Gray, Yager was assembling anew company. Three top managers fromBenedek joined him in creating Barrington:Chris Cornelius, COO, Mary Flodin, Sr.VP of Finance & Administration, and KeithBland, Sr. VP of Acquisitions & Development.

Of course, someone had to supply themoney and that turned out to be PilotGroup. "Oh yeah, we talked to a number ofventure capital firms. Pilot seemed to havea better understanding-because of theirvast experience in media-about what we

Barrington Broadcasting Company Stations

CALLS Ch. Affil. Market Name Market Rank

WBSF 46 WB Flint -Saginaw -Bay City, MI 65

WEYI-TV 25 NBC Flint -Saginaw -Bay City, MI 65

WNWO-TV 24 NBC Toledo, OH 70

WSTQ-LP 14 UPN Syracuse, NY 76

WSTM-TV 3 NBC Syracuse, NY 76

WACH 57 FOX Columbia, SC 83

KGBT-TV 4 CBS Harlingen -McAllen -Brownsville, TX 92

KXRM-TV 21 FOX Colorado Springs -Pueblo, CO 93

K28GE 28 Colorado Springs -Pueblo, CO 93

KXTU-LP 57 UPN Colorado Springs -Pueblo, CO 93

WPDE-TV 15 ABC Myrtle Beach -Florence, SC 107

WPBN-TV 7 NBC Traverse City -Cadillac, MI 113

WTOM-TV 4 NBC Traverse City -Cadillac, MI 113

WHOI 19 ABC Peoria -Bloomington, IL 117

KVII-TV 7 ABC Amarillo, TX 131

WFXL 31 FOX Albany, GA 147

WLUC-TV 6 NBC Marquette, MI 180

KTVO 3 ABC Ottumwa, IA -Kirksville, MO 199

Source: BIAfn MediaAccess Pro

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RBR 8 TVBR August 2006 2 7

2006 SALES IL CLOSINGS

Main"

WIX0-111, INVEL-FM, WPIA-FM Peoria, IL - $2.8 M

WIKL-FM Greencastle, IN - S2 M

WCVG-AM Cincinnati, ON - S1.9 M

WBTK-AM Richmond, VA - S1.5 M

WHAPAM Hopewell, VA - S200K

KXEG-1114 a KXXT-AM Phoenix. AZ - $10 III

Traded WBOB-AM a WTS1-AM Cincinnati. WIfor Detroit, MI + $6.7 M

Traded KNIT -AM Dallas, TXfor WORL-AM Orlando, FL +$6

WOCN-AM Miami, FL - S6 M

WINIM4M, WCGW-AM, WWFT-AMLexintsn, KY - S4.5 M

KOKF-F11 Oklahoma City. OK - S4 M

KYLA-FM Shreveport, LA - S2.85 M

WSRC-1lM Durham, NC - S1.2 M

KTFX-AM Tulsa, OK - S1.025 M

KBID-AEI Bakersfield, CA - $925 K

KITA-AM Little Rock, AR - $600 K

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were trying to do in our smaller market stationsthan anybody else we talked to. They, I think,also realized there are very few opportunitiesavailable at under 10 times cash flow even in thesmallest of markets, but that if you have the rightoperators you could take a station that you mighthave to pay 11, 11 1/2 to 12, not over 12 prob-ably, but in that range, and within a year to 18months bring it in at an under 10 multiple and asyou develop the news and you develop the pro-gramming side of the station, as well as the salesside of the station, you can have a very fine grow-ing investment. Pilot subscribes to that theoryand we've had a very, very good relationship,"Yager said of his backers. Among the Pilot Groupmembers are Robert W. Pittman, HowardLipson, Mayo Stuntz, and Robert B. Sherman.

So, while Barrington is in medium and smallermarkets, it has jumped on the digital bandwagonjust like its peers in bigger markets.

"We are starting, we are multicasting, we havebeen multicasting the WB in Flint -Saginaw. Wewere able to pick up the Pistons and the RedWings games there. We've been multicasting them,but we're actually putting a station on the airthere so we will stop the multicasting and wewill be CW there after September We like whatNBC is doing with the weather. We think thereare an awful lot of opportunities for us to reposi-tion our own newscast in our markets. We, Idon't believe that Moses brought down early newsbeing at 6 o'clock at night. I think we've got toplay with different times for our newscasts. Inthe Eastern Time zone I wonder about 7 o'clockand experiment with different times and do dif-ferent things. We can do that with the digitalmulticast. We can re -purpose some of our stuffto see how it works. I'm pretty excited about theopportunities that will be available to us just toexpand the content or the uses of the content wecurrently have," Yager explained.

With that enthusiasm for a changing industrywith new challenges, Yager talks like someonewho just got into the TV businesses and is look-ing decades ahead. So, we had to ask, will JimYager ever retire?

"I don't know. I have told all the youngpeople that work for me-I'm so far older, mucholder-I said, look, when you see me missinga step or loosing a beat, come tell me becausethis is a business where you've got to be youngat heart anyway. Maybe not young in chrono-logical years, but you've got to be young atheart and we have pretty frank discussions withthe young people that work with me and theyare not the least bit intimidated by me, so if Iget to that point the answer is I would be happyto step aside and hope there would be somekind of senior role they would allow me tooccupy," Yager said.

Don't look for that to happen anytime soon.RBR & TVBR August 2006

New owners takingthe broadcastingplungeby Dave Seyler

The Federal Communications Commission is get-ting ready to take up the issue of local and na-tional broadcast ownership caps, as well as theissue of broadcast and newspaper cross -owner-ship. New rules which we passed on partisanlines at the Commission 6/2/03 were not struckdown by the Third Circuit Court of Appeals, asyou read various places from time to time. Theywere not even labeled as being bad rules. Theywere instead said to be poorly justified. Theywere sent back to the Commission to either berewritten or better explained.

It is well known thatKevin Martin is particu-larly in favor of easing re-strictions on newspaper/broadcast combinations.As we've noted manytimes, that concept wasalmost endorsed by theThird Circuit, which

noted that in many markets where such combi-nations exist, they are demonstrably the finestnews operation in town. Still, the Court had aproblem with how the Commission arrived atthe local media counts that would be permittedfor markets of varying sizes.

In addition to cross -ownership, the 6/2/03rulemaking focused on television issues, pro-posing to raise the national audience potentialcap from 35% to 45% (it's now 39% followingsome back -room legislative maneuvering onCapitol Hill), easing the rules to allow far morelocal TV duopolies and making possibletriopolies in the largest markets. Broadcasterswere disappointed that the rules did little to helpoperators in the smallest market where the fi-nancial need for increased efficiency of opera-tion were the most acute.

All of this was at-tacked with great feroc-ity, sparked in part byDemocratic Commis-sioner Michael Copps,who managed to get thepublic involved in mat-ters usually reserved forinside -the -Beltwaypolicy wonks.

Back in February, coming as somewhat of asurprise out of the clear blue sky, key Housemember Fred Upton (R -MI), Chairman of thepertinent House Subcommittee on Telecommu-nications and the Internet, came out with a pro-RBR & TVBR August 2006

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Radio a TelevisionBusiness Report

August. 2006

Volume 23, Issue 8

Publisher & Editor Jim Carnegie

Managing Director

RBRITVBR StaffExecutive Editor Jack Messmer

Managing Editor Dave Seyler

Senior Editor Cad Marcucci

Production Manager Michael Whalen

VP Administration Cathy Carnegie

Administrative Assistant April McLynn

Marketing/Sates Director June Barnes

Corporate Office

Radio & Television Business Report2050 Old Bridge Rd Suite B-01

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Main Phone: 703/492-8191Editorial Fax 703/997-8601Subscription Phone: 703/492-8191Subscription Fax 703/997-2677

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Phone: 941/792.1631Fax 253/541-0070Email: JMessmer@rbr.com

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Phone: 803/731-5951Fax 803/731-5982Email: JBarnes@rbr.com

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MEDIA MARKETS & MONEYposal to up the local radio cap from eight to10 stations, and up to 12 stations in the larg-est market, a request rarely voiced by anyradio companies we know of other than oc-casional remarks to that effect from ClearChannel and from CBS/Infinity back whenMel Karmazin was there.

Despite the possibility that another attemptat deregulation may be in the offing, someobservers have noted that there has notseemed to be much clamor for dereg anymore. Perhaps TV/newspaper combos pro-duce great news. Multimedia companies seemto have had difficulty figuring out how tomake them pay off on the balance sheet.Broadcast earnings have been sluggish in gen-eral, and in a reversal from the norm,the greatest punishmenthas been inflicted onoperators in the larg-est markets.

We're seeing largecompanies actuallydivest stations, ratherthan invest in newadditions to theirportfolios. ABCpacked up its radiogroup and sent it toCitadel; CBS Radio islooking to follow suit inmany of its current markets. Raycommade a major investment in television sta-tions acquired from Liberty, but took the op-portunity to execute a number of spin-offs,including many stations which it had prior tothe Liberty deal. Many established groups arenot putting anything on the block, but nei-ther are they making much effort to add totheir portfolios.

Despite all this, new companies are gettinginto the business.

Perhaps the greatest leap of faith is comingfrom an outfit called MM Broadcasting LLC,headed by Edward Mule and RobertO'Shea. It is picking up seven full -poweredtelevision stations and several more lowpower sticks from troubled Pegasus SatelliteCommunications. It'll get two stations in thefar-flung Wilkes Bane -Scranton PA DMA, twomore in far-flung Portland ME DMA, and oneeach in Tallahassee FL -Thomasville GA,Gainesville -Ocala FL and Chattanooga TN.There's a Fox affiliate in Wilkes Barre, andmost of the others will cast their lot with ei-ther CW or My Network TV. All this for lessthat $42.5M.

One more TV owner is actually achieving

herrree

z

grouphood, also thanks to Pegasus (partly).Stephen C. Brissette's Bluenose Televisionis getting digital -only WTLH-DT Tallahasseeand WSWB-TV Scranton PA from DanielDuman 's Mystic Television for just over$3M. Duman himself just agreed to pick upthe Tallahassee station from Pegasus.Brissette is already operating in SavannahGA with WIGS -TV.

There's been even more activity on the ra-dio side. One of the biggest buyersin recent times has been Peter Davidson,who, if our internal search engine did not failus, filed his first contract with the FCC 1/8/04and has been accumulating frequent buyermiles ever since. Davidson Media Group has

been content to buy mostly onthe AM side, and although it hasyet to make a move further westthan Iowa and Oklahoma, it'sotherwise geographically di-verse. A big part of thekDavidson m.o. is to get intothe Hispanic radio business inmarkets that have not yet hit

the radar screen at the biggerHispanic broadcast compa-

nies. They're doing thatthroughout the Carolinas,

in Virginia's two biggestmarkets, in Indianapolis,

Des Moines, Louisville, Kan-sas City, Providence and Springfield MA,among other places. And its using various Re-ligious formats in places like Detroit, Raleigh,Nashville, Louisville, Richmond, Greenville SCand the NC -SC shore.

However, the biggest recent buy from anewer radio group came from Joe Schwartzand his Cherry Creek Radio. It recently paid$33.4M to take the small -market radio stationsoff the hands of Fisher Broadcasting, addingmostly Montana and Washington stations to agroup scattered throughout the small -marketwest (not to mention an outpost just about asfar east as one can get, on Long Island NY).

One of the more intriguing new groups onthe scene is Armada Media Corp. How manynew entrants into the broadcasting businesscan boast the former governor of Wisconsinas their nominal head? Tommy Thompson isthe ex-gov in the lineup, along with JimCoursolle, Chris Bernier, John R. Larson,John Lynch and Terry Shockley, has an-nounced a $9.25M acquisition of a six -stationcluster in Aberdeen SD and an $8.5M deal toget seven more stations in two markets alongthe Wisconsin -Upper Peninsula Michigan bor-

RBR & TVBR August 2006

MEDIA MARKETS & MONEY

1

der. It has also had some unusual press, for a new small -marketgroup. We can't remember the last time a broadcaster was get-ting ink for staying out of a race for the US Senate, but that'sexactly what happened with Thompson. He decided not to head-line the Republican electoral ticket as the candidate to take onHerb Kohl (D -W1). The group has also gotten some bad inkbecause of one final name on the owner-ship roster. Nicholas Hurtgen is underindictment in an influence -peddlingscheme involving the construction of anIllinois hospital. Before the group can getaround to closing its pending acquisitions,it'll have to get around from watchdoggroups which are trying to block the deals.

Another group has just made a movewhich will take it into a fourth market,and when you take as a given that is basedin the eastern half of the country, it's quitegeographically diverse. The company isArchway Broadcasting Group, headed byGordon Herzog and Kathy Stinehour.It just announced an $8.15M deal to ac-quire an intact five station superduopoly (three AMs, two FMs)in the Decatur IL Arbitron market. The seller is NextMedia, whichhas been trimming its portfolio of late. That will fit in alongsideits three FMs in the Little Rock area, a five -FM cluster in thesprawling Greenville -New Bern -Jacksonville NC market, and aone -AM, three -FM cluster in the Columbus GA area.

Todd P. Robinson has been on the move as well, building avery interesting collection of stations. He has KZID-FM Orofino

ID, in unrated territory east of Lewiston and Clarkston WA. Thereare a pair of California FMs: KTKE-FM Truckee, just north ofLake Tahoe and west of Reno NV, and KHRN-FM Huron, west ofthe Visalia -Tulare Arbitron market. He has a 50% stake in thelatter. In the midwest, he has WUSP-FM Nekoosa WI, just southof Stevens Point, which is the southern extremity of the Wausau -

Stevens Point market.Add to that KZLZ-FM, coming in a

$4.75M deal with Hispanic specialistEntravision Communications. Thiswill mark Robinson's largest market. Thestation is licensed to Kearny AZ andserves Tucson.

Robinson has also been very active in themountainous area just off the eastern sea-board. Last year, he spent 1.3M to get anAM -FM combo in Covington VA and anotherjust to the west in White Sulphur Springs/Lewisburg WV. Now, for another 400K, he'smaking Covington the centerpiece of a triplecombo daisy chain, betting another AM -FMcombo in Clifton Forge VA.

RBR/TVBR observation: What's interesting about the fourradio groups we've looked at is any one of them is capable ofstriking anywhere. But it is not surprising that they are findingopportunity in smaller rather than large markets. After Telecom1996 passed, the buying and selling spree that followed beganat the top and worked its way down. In the large markets, theinventory of stations is pretty much picked through. Expandingradio groups are succeeding by thinking small.

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