Management. Sales & Marketing By K8ty B8chm8n

Rat/lo 'lIfI"nUII tlbs.,ratlons f,om thlllnllust,y 'lIallll's1995 is another Iwt yearfor radio. Howlong will the winning streak last? Whatcan stations do to prolong the prosper­ity? RBR talked with key sales execu­tivesJor a read on where we're headed..

Lea Goldberg, President, The InterepRadio Store1995 is shaping up to be anothergreat year. Although June has soft­ened, we begin to pick-up again inJuly and August. By December, weare pacing double digits ahead of1994.At Interep, we're 13% ahead on oursame stations. When you factor instations we acquired in 1995, it ismuch better than that. Our transac­tional salespeople are selling radio athigher rates and focusing on qualita­tive sales points, which has a positiveeffect on pricing.

8

Ralph GulId, Chairman, The InterepRadio StorePending FCC and government deci­sions concerning station ownership.the radio industry is on the brink ofitsmost radical change since the adventof television. There will be continuedindustry consolidation. The largeststation groups will get larger. Andthere will be more dedicated rep com­paniesformed to handle national salesfor these groups. Independently­owned stations will be demandingmore individualized attention. While Ican't go into any details right now,Interep will be adding some new repfirms in the next few months.

Stu Olda, President, KatzRadio GroupThe industry is off to a tremendousstart. both locally and nationally.

something you don't usually see onboth sides. There's been a bit of aJune swoon. July is not as strong,but there evidence it will pick uplater in the month. Inventory re­mains at a premium; CPPs are goingup. With all the industry marketefforts by us, Interep, RIEP, andothers, radio continues to stand outvery tall in a 500 channel world. Idon't see any kind oflet-up through1996 unless there's a major calam­ity. With a strong 1V upfront, theOlympics and the election, we're ingreat shape.

The trend toward deregulation isextremely positive. It puts more sta­tions in the hands of better broad­casters, resulting in a better prod­uct. Broadcasters continue to real­ize their long term growth will come

RBR713/95

from market expansion and theywill continue to invest in the me­dium. We've entered a period of in­creased stability. We've already lived

- through the challenges of fragmen­tation. Advertisers have recognizedthis and are using radio more as aprimary medium.

RaIl D'Amico. VP/GM,CBS Radio RepresentativesThe year started off very well andpeople thought it would be like '94.My concern started in April and thenMay got bad. There was a lot ofdemand; stations locally were sell­ing out and prices got high. A lot ofbuyers decided they didn't want topay the rates, so agencies decidedthey would buy later, or not do thecampaign at all. June died and Julylooks soft. August is a question mark.But I'm optimistic that fourth quar­ter wil be strong, starting right afterLabor Day. September is back toschool. Just be a history student,you can chart the positive effect theOlympics and the election will have.TV upfront is another positive sign.<\gencies putting their moneyupfront, usually indicates there wilbe some money for us.

Judy Carlough. EVP Marketing.Radio Advertising BureauWhen a good year follows a good year,it's terrific. I think we will finish theyear up 10-11%.There's no reason tothink we can't continue in doubledigits. This is a dream come true-agood economy, plus the Olympics, theelection and a limited inventory.Theonly thing that can keep us fromdoing that is ifpeople underprice theirinventory. The Olympics and the elec­tion are good reasons to price aggres­sively. If you're 85% sold out and youdrop your rates like a stone in theocean, you won't be able to hype themaggressively. Stations will take a littleless business at first: there will besome that won't find rate hikes ac­ceptable. The busier and more de­mand you make it sound like you.ave, the more attractive you will ap­

pear. It tends to have a charismaticeffect on advertisers.

7/3/95 RBR 9

We Stecks RIdIIIIIIIgIIAfter SeIate Dereg VoteThe Senate's approval of legislation eliminating radio owner­

ship limits sent stocks soeringon the wings of investors' dreamsof mega-groups with mega-cuh flow.

.... K8pn~....' Radio Stock Index, which includes 15publicly traded radio groups and program suppliers. jumped 8.9%between June 14 (the day before the Senate vote) and June 19.

According to Kapn Senior Analyst BIIhop Cbeea, that growthwas powered by the huge pins enjoyed by leading groups such asIntIIIIty ............ which saw its stock price rise 5.8% in thedays following the Senate vote.

Cheen notes that the Senate vote added fuel to an upward trend inradio stock prices that is attributable to investor satisfaction with the

ITa1IIIe ..... 13

Continued from Page 1

resultsof the last round ofownershipdercguJal:ion- including duopolies,the expansion of large groups, andthe resulIing boom in cash flow thatoccurred in 1994. Indeed, Kagan'sradio index rose 19% from mid-Mayto mid-June.

Further relaxaaion 01' eliminationof the local and national ownershiplimits would create even more ofthose growth opportunities. panicu­lady in the largest markets.

I.asti. Elreet?Will radio stocks bold the added

value COIlfem=d by the Seoarc?That.said a.n. depends on the work ofthe coaferenc:e committee chlqedwith working out differences be­tweca the House and Senare teJec:om..municaIioos bills - not to mentionPresident c...·s thoughts OIl theIegisJltion.

"Everything [in the stock market)runs on emotion." Cheen explained."Ifword stilts to leak that the Houseand Senate leaden have work.ed thisout over diDner. [radio stocks) willtake off." Conversely. word of animminent veto could put the chill onthings.

But another looming legislativeinitialive. C1Icen noted, could providean even bigger boost to radio stocks.IfCongress cuts the capital gains taxrate. he said, it could prompt severaloperators to sell out, creating newgrowth opportunities for publiclytraded groups.

'The biggest trading quarter in ra­dio history was the fourth quarter of1986." says Cheen. "The capitalgains rate was about to go up, andpeople were trying to get out beforethat happened."

June 23. 1985 ..... 13

~--------""'~Fr[O~---------1IIIIII

With duopoly rules and strong advertising, station acquisitionin midsize and small markets has appeal to lenders

By Donna Petrozzello

Duopoly ownership rules, solidadvertising revenue and moreattention to radio from Wall

Street investors increasingly haslured large banks toward financingmidsize and some smaller-marketstation purchases.

"When the [radio] market was indifficulty, there was a stronger pref­erence to lend to large-market sta­tions, but now lenders are willing toreach into the smaller markets," saysTom Reifenheiser, managing directorof media and telecommunications atChase Manhattan Bank.

From station brokers to investmentbankers, many agree that lenders aredrawn to radio for its relative fiscalstability and for brisk station tradingin markets beyond the top 10 or top25 markets since duopoly rules wereadopted in 1992.

"Because there are so few opportu­nities to invest in larger markets now,

the broadcast lenders and investorsare beginning to see the opportuni­ties in smaller and midsize markets,"says Rick Zitelman of the ZitelmanGroup of investment bankers.

"Three years ago, major banksweren't lending to broadcastinggroups, but they have now rediscov­ered that radio is a solid industry,"says Jeff Kilrea, vice president atFinova Capital Corp. of Chicago.

Most large banks known forinvesting in radio are still unlikely tolend money for deals in small mar­kets, those ranked over 100 by Arbi­tron, as opposed to midsize markets,generally ranked from II-50.

Brian Rich, managing director ofcommunications finance at TorontoDominion Bank, prefers to loan togroups whose stations generate atleast $10 million annually in broad­cast cash flow from stations in a vari­ety of markets.

Toronto Dominion recently loaned

to Radio Equity Partners, a groupwith stations in the top 50 markets.While the bank is pleased with itsinvestment, Rich said that "prior to1991, we would have been nervousabout it. If we get into small andmedium markets, we don't want anymore than 25% of the cash flow com­ing from any single market."

Since duopoly has narrowed thenumber of station owners in mediumand smaller markets, fewer ownersare competing for advertising revenuein those markets. This has made moremidsize radio stations successful,especially in markets heavy with FMsignals, and able to attract investors.

"Smaller-market stations had ahard time because there were toomany stations chasing too few dol­lars, but now it seems to be bal­anced," Reifenheiser says.

Several lenders agree that in 1995,banks have been more conservativewith radio investments than in tilelate 1980s.

Banks are back in, but they are inmore conservatively," says RossSecunda, president of Hanevan Finan­cial Services, which raises equity forradio and TV transactions. Secundasuggests that instead of lendinggroups the full acquisition price,banks are more apt to lend half thatsum, forcing owner equity or sellerfinancing to make up the difference. _

h j, .~ _, ' _' A ' N

radio markets, stations reported anaverage 9% growth in local ad rev­enue and an average 14% growthin national ad revenue for April1995.

Stations in the Midwest reportedthe strongest gains in local adver­tising, an average 11 % hike, andstations in the East reported thestrongest national ad gains, at anaverage 20% increase. Only sta­tions in the Southwest reported aslight dip of 2% in national ad rev­enue for the month.

Ad revenue up 10%Radio collected an average 10%more in combined local andnational advertising revenue inApril over the same period lastyear, the Radio AdvertisingBureau reports. In a survey of 100

.........stlng • Cable June 12 1995 3S

~ loss may be radio's gainSeminar concludes radio growth will come from its ability to lure advertisers from print

By Donne Petrozzello

Radio station group owners and.• industry analysts predict radio

will reap additional revenuethis year as advertisers are expectedto spend less money in newspapersand more money in broadcastmedia.

Participating in panel discussionsat a one-day seminar on radio'sfinancial future, hosted by PaulKagan & Associates, several groupowners said they expect advertisersto divert more of their spending fromnewspapers to radio.

"There is a direct correlationbetween retailers moving away fromnewspapers" and radio's projectedrate of revenue growth, said EmmisBroadcasting CEO Jeff Smulyan.

"Can we sustain 10% growth? Idon't know," Smulyan added. "Butlast year, radio revenue grew at a rate7.5% above the rate of inflation, andthat represents, more than anything

•

else, the fundamental shift of retail­ers from daily newspapers to radio."

"Radio's growth will come fromour efficiency and our ability to takerevenue from newspapers," saidEvergreen Media Corp. Chairmanand CEO Scott Ginsburg. "Newspa­pers are a declining business."

According to Veronis Suhler &Associates' 1994 CommunicationsIndustry Report, operating incomemargins at newspapers rose only one­tenth of 1% in 1993, and cash-flowmargins were only three-tenths of apercent higherthan 1992's.

Those results were significantlybelow newspapers' performance in1989, when income margins were 3.5points higher and cash-flow marginswere 2.2 points higher on average, thereport stated.

Meanwhile, a survey by the RadioAdvertising Bureau showed a 13%average increase in revenue totalsfrom local and national advertising

for first quarter 1995. For March1995, stations reported an average10% increase in combined local andnational advertising revenue com­pared with March 1994.

Although some analysts have pre­dicted that retail spending will slowin 1995, several broadcasters saidthat it should not affect radio toosharply.

"Slowing down of business willhave an adverse effect on radio, butthere are so many things inherentlyattractive about radio, revenue levelswill never go down to where theywere three years ago," said MichaelFerrel, president and chief operatingofficer of Multi-Market Radio. .

George Sosson, president andchief operating officer of RadioEquity Partners, however, warnedbroadcasters that a drop in retailsales and automotive advertising mayreduce radio revenue more thanexpected this year.

Other panelists predicted furtherconsolidation in the radio industry,despite limited ownership restric­tions in effect by the FCC.

Star Media Group station brokerWilliam Steding predicted that moregroup owners will expand into othermedia rather than buy radio stationsin a variety of markets: "In a fewyears, groups will concentrate powerin one market by expanding to owncommunity newspapers and othermedia."

Media Venture Partners stationbroker Elliot Evers said an increasingnumber of owners are entering jointsales agreements in their markets,allowing them to sell inventory onmore stations than the ones they ownand operate.

"We see the anticipation of triopolyin joint sales agreement arrange­ments," said Evers. "We are seeingsome people enter a joint sales agree­ment and control inventory on threestations on the same band in a mar­ket. It's clearly done in anticipation ofthe ownership rules changing." _

Traditionally slow quarter is anything but

Brisk pins in first quarterfar radio group ownersBy Donna Petrozzello

Although many companies.. regard the first fiscal quarter of

the year as their slowest, mostradio groups reported net revenuegains topping 10% for this year'sfirst quarter over last year's, whichwas also strong.

For the first time in the company'shistory, Infinity Broadcasting report­ed a positive net income for the firstquarter of a fiscal year. Multi-Marketreported a 55% increase in net rev­enue and also acquired SouthernStarr Broadcasting stations duringthe quarter. SFX Broadcastingreported a 39% increase in broadcastcash flow for the first quarter on apro forma basis.

Below is a summary of variousradio groups' first-quarter financialreports.

W....... Onelnc.Westwood One reported a 21 %increase in net revenue, to$31,421,000, and a 168% increase inoperating cash flow, to $3,197,000,for the first quarter over the same

•

period last year.Increases were attributed mainly

to the addition of the Unistar RadioNetworks, which Westwood Oneacquired in early February 1994.Higher advertising revenue also con­tributed to net revenue gains, West­wood One officials noted.

Net loss per share for the latestquarter was $2,492,000, or $.08 pershare. as compared with a net loss of$7,416,000. or $.29 per share, for thesame period last year.

Mel Karmazin, president/CEO ofWestwood One and president/CEOof Infinity Broadcasting. remarkedthat first-quarter net revenue andoperating cash flow were the "high­est reported results by the companyfor a first quarter since the companywent public in 1984."

1......, ............CGrp.

Infinity Broadcasting reported a 29%increase in net revenue, 'to$62,327.000, and a 21 % increase inoperating cash flow, on a pro formabasis, for the last quarter over 1994.

Net revenue figures included rev-

enue from stations new to its portfo­lio, WPGC-FM Washington andWXYT(AM) Detroit. acquired lastJune, Infinity officials said.

For the first time in the company'shistory, Infinity reported a positivenet income during a first quarter,said Karmazin. Net income for thequarter totaled $505.000, or $.01 pershare, as compared with a net loss of$3,864,000, or $.09 per share. forfirst quarter 1994.

SFX 8rNdcaltl1ll1nc.New York-based SFX Broadcastingreported an 18% increase in net rev­enue and a 39% increase in broadcastcash flow. each on a pro forma basis.for first quarter 1995 over the sameperiod last year.

The company's latest first-quarterreport placed net revenue at$14,288,000 in 1995. up from$12,151.000 in 1994. Also on a proforma basis, broadcast cash flow. forthe last quarter totaled $4,024,000over last year's $2,897.000 first­quarter figure.

In January of this year, SFX enteredinto an agreement to purchaseKTCK(AM) Dallas for $8 million in cashand $2 million in preferred stock. Thecompany also closed on a $50 million,five-year senior credit facility, whichwill be used primarily for acquisitions.

In April, SFX entered into anLMA arrangement and agreed topurchase WTDR(FM) Statesville, N.C..

and WEZC(FM) Hickory. N,C.. whicheach serve the Charlotte area.

Sep eon.unications Inc.On a pro forma basis. Saga reported a6% increase in net revenue. to$10.564.000. and a 13% increase inbroadcast cash flow. which comes to2.732.000 for first quarter 1995 overthe same period in 1994.

Saga attributed much of theincrease in net revenue for the quar­ter to revenue earned by WLZR-AM-FMMilwaukee and KOAM-TV Joplin. Mo..which were acquired in 1994. Like­wise. the bulk of the increase inbroadcast cash flow was attributed toproperties acquired in 1994. compa­ny officials stated.

According to the company's first­quarter statement. net loss per sharefor the period was $.07, which wasequal to the net loss reported last year.

In addition. after-tax cash flow pershare increased 41 %. to $.24 from$.l7 in the first quarter of last year.

........... Rldlo 11Ie.Multi-Market Radio reported a 55%gain in net revenue and a 92% gain inbroadcast cash flow for the latest fis­cal quarter. Net revenue for the quar­ter was $1,796.000. and broadcastcash flow was $542.000.

Increases included revenue ofWRXR-FM Aiken. S.C.. and WKBG(FM)Martinez. Ga.. which the companyacquired last year. along with revenuefrom Multi-Mackel's existing proper­ties. First-quarter results do notinclude results of seven stations Multi­Market acquired in March when itcompleted a $35 million merger withSouthern Starr Broadcasting.

Operating as a separate entity formost of the first quarter, Southern

Starr reported a 28% increase in netrevenue and a 63% increase in broad­cast cash flow in 1995 over the sameperiod last year.

Multi-Market also reported a $,20net loss per share in the first quartercompared with a net loss per share of$.12 during the first quarter of lastyear.

CIS .... NItworbWhile CBS Inc. reported net incomelosses reaching 68%, CBS RadioNetworks noted a "significantincrease" in radio revenue for the lat­est quarter.

CBS officials did not provide abreakdown in revenue and broadcastcash flow for the radio network. butattributed the bulk of the increase tostronger advertising and larger audi­ences for KCBS(FM) Los Angeles andKKRW(FM) Houston. _

RadIo ........ Up 13%In tint quarterFirst quarter 1995 totals for com­bined local and national radioadvertising revenue totals marked a13% increase over the same periodlast year. according to a survey bythe Radio Advertising Bureau.

Separately, local ad revenuetotals were an average 11 % greaterin the past quarter over first quar­ter 1994. with markets in theSouthwest showing the largestincreases of 14% on average.National ad revenue toralsincreased by about 23% overall.with markets in the Southwestreporting increases of 28% on aver­age. National advertising revenuerepresents a smaller percentage oftotal radio ad revenue than local.

Local and national ad revenuedata is based on a lOO-market sur­vey compiled by the RAB with fig­ures from the independent account­ing firms of Miller Kaplan Arase& Co. and Hungerford AldrinNichols & Carter.

... 11 ..... ac.llle May81995 17

6··SATELLITE WEEK APRIL 17,1995

Fries also said that radjo advertisjm~ is on strong upward trend, but stations should be aggressive in pursuinglarger share of advertising dollar. Fries said radio last year passed Yellow Pages in ad revenue, should post 8%-9%growth this year: "Will this prosperity last? Yes." Fries said radio listenership has held steady through introductionof cassette and CD players in cars, and he said RAB will release survey soon showing more up-to-date figures reach­ing same conclusion. In his speech, Fries also commended Fritts and NAB Exec. Vp James May for helping to per­suade Congress to pass legislation relieving radio stations of need for long disclaimers for rental cars. Task was hardbecause bill was in Banking Committee, which isn't usual field for NAB lobbyists, Fries said.

Exclusive: RBII/MIllIt, Kap/lnloeal revenue reportLocal revenue for February: +13.7%

Local advertising revenue was up 13.7% in February, according to the RBR/Miller, Kaplan revenue report. Overall, the six regionsposted an even-better 14.6% gain in total-cash sales for the year. National-spot was up 19.7%. The RBR/Miller, Kaplan revenuereport below shows the current standings ror radios two main revenue streams, local and national.

Figures show 1995 regional totalsfor major markets which report

revenues to Miller,Kaplan.All figures are $000

w..te....tLocalNatIOnalTotal cash

Rocky Mta.LocalNatIOnalTotal cash

4/10/95 RBR

1994$58,895

17,00976,956

19115 %$39,765 +127

8,808 +32.648,846 +158

19115 %$56,411 +13312,579 +7869,630 +121

$215,989 $245,60049,542 59,324

268,927 308,103

15

expected to favor rad:io in '95Medium called 'best positioned' for next five years

By Donna Petrozzello

Fritz s-n,.,., .."Ior VP, med,., OppenheltrHH & Co.; HowardfIB.., ..mar VPICOIfKJI'* director of spot broade..t, Foote,Cone & s.ldlng; and WlII"m Donald, med,. afllllyst, Standard &Poors, at NYMRAD's brellldtJst seminar March 14 In New York.

Advertisers are expected to. remain bullish on radio, and

larger radio groups shoulddevelop under relaxed ownershiplaws, media analysts at leadingadvertising and financial firms say.

"The radio industry is probably inthe best position it's been in fordecades and will be the best-posi­tioned medium for at least the nextfive years," says Fritz Beesemyer,senior vice president, media, Oppen­heimer & Co.

Beesemyer was joined last Tues­day by William Donald, media ana­lyst, Standard & Poors, and HowardNass, senior VP/corporate director,spot broadcasting, Foote, Cone &Belding advertising, at a breakfastseminar organized by the New YorkMarket Radio Broadcasters Associa­tion. WLTW(FM) and WNEW(FM), bothNew York, hosted the seminar.

Beesemyer noted that 7% of alladvertising dollars are spent on radiospots, and radio's share appears to begrowing. Combined advertising rev­enue devoted to local, national and

............ & CIIbIe Mar 20 1995

network radioexceeded $10 bil­lion in 1994,11.3% more thanin 1993, accord­ing to a marketsurvey compiledby the RadioAdvertisingBureau.

Donald thisyear expects a7.5% gain intotal advertisingdollars spent inthe U.S. Whilethe "domesticeconomy mayslow down, the upward momentum inadvertising should continue for1995," he said.

Given network television's prob­lems with "channel surfing," newnetworks, declining viewership andexpanded satellite channels, radiomeasures up favorably, Nass said.

The speakers also pointed outradio's selling points to advertisers,including its portability and its abili-

ty to deliver a targeted audience andreach consumers close to the point ofpurchase.

However, Nass said, local cableoperators could give radio some com­petition because they can offer adver­tising spots on television more inex­pensively than can national cableoperators and may attract advertisingdollars that might have been spent inradio. _

45

..---------------RADIO-------------__~........ spot revenue up 38%By Donna Petrozzello

N.ational radio ad revenue in Jan­uary increased an average of38% over January 1994 rev­

enue, the Radio Advertising Bureaureported last week.

The largest increases in nationalrevenue were reported by stations inSouthwest markets, which tallied anaverage 49% increase over January1994. Markets in the East and Westreported an average 40% revenueincrease, while Midwest marketswere up 39% and Southeast marketsrose 30%.

RAB President Gary Fries saysthat "the 38% growth in national spotrevenue is just that-pure incremen­tal growth for an industry that contin­ues to attract new advertisers andlarger budgets."

Meanwhile, local ad revenueincreased an average of 11 % nation­wide, and combined local and nation­al radio ad revenue totals were anaverage 15% higher than in January1994, the RAB reported.

Fries adds that "January's 15%jump is all the more significant whenyou consider that we're using as the

basis for comparison January 1994. amonth when radio revenue grew 12CJc."

Markets showing the most growthin local ad revenue were those in theEast and West, which both reportedaverage 12% growth in January 1995over January 1994. Southwest mar­kets were up, on average. 10%. whileSouthest and Midwest markets rose anaverage of 9% and 8%. respectively.

The RAB calculations were basedon a survey of 100 markets by theaccounting firms of Miller KaplanArase & Co. and Hungerford AldrinNichols & Carter. _

Mar 13 1995 8roIKIcaIsting. ClIbie

---------------------- -

On the heels ofa prosperous 1993, radio and TV salescontinue their banner pace, doing $5 billion in business

In late 1992, the FCC loosened itsownership restrictions, allowinggroups to own up to two AMs and twoFMs in markets with at least 15 sta­tions. The impact on the sluggish radioindustry was unprecedented. By theend of 1993, the dollar volume of FM­only transactions almost tripled, to$743.5 million, while group sales grew44%.

American Radio System's co-COODavid Perelman points to Buffalo,N.Y., as a model of duopoly's explo­sion. Fifteen months ago, Buffalo hadseveral independently owned radio sta­tions. Today, he says, four companiesown 79% of the listening audience and95% of the revenue. Only one stationremains independently owned.

"Deals are being driven strategicallyrather than by multiples," Stevenssays. Liberty Broadcasting, for exam­ple, follows a regional strategy of buy­ing only stations on the East Coast.

"We've turned down opportunitiesout West because we don't want to befragmented," Liberty President/CEOJim Thompson explains. They wereone of the year's most active groups,putting 19 transactions through theFCC. "We want to have some market­ing influence in regions."

While the duopoly trend continuedinto 1994, other factors spurred tradingactivity. The economic recovery couldbe felt on all fronts of the radio indus­try. There was an availability of equityplayers. Banks began lending again,but unlike the freewheeling late 1980s,caution reigned. Lending multipleswere capped at five or six times cashflow, Stevens says, versus the seven oreight times that was standard beforethe recession.

As a result, the structure of dealshas taken on a new look. At theheight of the recession, according tobroker Bill Steding of Star MediaGroup, the average deal was 60%

By Julie A. Zier

RADIO

When the early 1990s are revisitedand we look at radio, this will be

viewed as a period of enormous struc­tural change. You're not going to seetrading like this five years from now.This trading is genetic engineering,"says radio broker Gary Stevens.

Brokers and group owners agree that1994, like 1993, was a year of phe­nomenal growth for the broadcastingindustry and that the undisputed forcebehind the activity was duopoly.

"Duopoly has increased the value ofstations," JacOT President/co-COORandy Michaels says. "There is powerin having a multibrand strategy in asingle radio market,"

The growth curve of the broadcast­ing business continued to soarupward in 1994, marking the sec­

ond year of booming station tradingfollowing the recession.

Although trading slowed mid-year,1994 saw a dollar volume that exceed­ed 1993 's by almost $2 billion. Duop­oly, the resurgence of equity and debt,and the economic recovery wereamong the facors contributing to the$5 billion year.

Combination deals exploded, morethan doubling total dollars from $756million in 1993 to $1.8 billion. Televi­sion had another banner year of $2.2billion in deals, although several con­toversial deals have yet to be approvedat the FCC.

Sale prices of standalone FMs rose12.7%, from 1993's $743.5 million to$838 million, while the number ofdeals dropped 23%. Standalone AMsfelt a similar decline in the number ofdeals, from 231 to 169 in 1994. But thetotal dollar value of AM sales shot up84%, totaling $132.3 million in 1994over 1993's $71 million.

~STATION TRADING IN 1994 I

Station sales encore in '94

32 Feb 27 1995 BroINIc8atlng & cable

equity and 40% senior debt. In1994, senior subordinated debt wasadded to the mix, providing a lessexpensive capital structure.

"You don't have the leverage youhad in the '80s," OmniAmericaChairman/CEO Carl Hirsch says."It's harder to enter the game now."

Another difference from the frenzyof the late '80s is in the nature of thebeast, Liberty's CEO Jim Thompsonsays. "There were a lot of businesspeople who didn't know radio, and alot of radio people who didn't knowbusiness." In today's radio market­place, he says, the two converge.

Advertising revenue set newrecords in 1994. Total radio ad rev­enue grew 11.3% last year, its highestincrease since 1985, according to theRadio Advertising Bureau.

"The surge in radio revenues creat­ed a more robust operating income,which ultimately raised the pricesand value of stations," broker DickForeman explains. "They've helpedcreate more interest in the radio sec­tor, and more people want to invest."

In mid- to late-1994, trading activ­ity slowed. Part of the blame restedon multiples, which hovered at 10-11times cash flow in major markets, 9­lOin medium markets and 7-9 insmaller markets. But most notably,interest rates rose five times last year.

"We can't be as aggressive onprices and what we might pay for astation in a rising-interest environ­ment," EZ Communications Presi­dent Alan Box says. "They're notstopping the good deals, they're justmaking everyone look a little closerbefore they sign on the dotted line."

"There is an eagerness to acquirestations now before interest rates gohigher," broker Jim Blackburn says."But that desire is not being satisfiedbecause of a lack of supply."

The next flurry of activity will fol­low the widely expected changes inownership rules, traders agree. TheFCC has proposed raising or elimi­nating the radio ownership cap of 20AMs and 20 FMs. Every broadcasterand broker interviewed for this arti­cle favors such a change.

"If we are going to be able to com­pete with cable companies and tele­phone companies and satellite tech­nology and digital broadcasting, the

IIroIIdc8st1ng & Cable Feb 27 1995

STATION TRADING

idea that we should be limited to anumber of radio stations seems to beinappropriate," Infinity President/CEO Mel Karrnazin says.

"Let the free market decide," saysSteding, who also is in favor of elim­inating restictions on foreign owner­ship, another proposal on the table atthe FCC. "The demons the Democ­rats expect to come forward will not."

But the FCC seems to have itsbureaucratic hands full processingroutine paperwork. Radio broadcast­ers are complaining the FCC is back­logged, delaying action on the mostbasic deals.

"Anything slightly controversialhas stopped in the commission,"Michaels says. "Almost every groupbroadcaster is frustrated about thefact that one or more applications aretied up because the commission has itsitting on someone's desk anddoesn't really know what to do."

Radio broadcasters are predictinganother active year in 1995, but notup to the 1993-94 levels.

"The easy, logical deals got donein 1994," Box says. "The more cre­ative, or stretch, deals will be done in1995 as people look around and try tomake the best of what's available."

Box says the trend for this year willbe group owners trying to establishduopolies in markets in which they donot now operate. "The dynamics arecompletely different," he says.

Certain unresolved factors thatshould be decided this year will havean effect on trading volume. "Theindustry is set for a nice tradingpickup if capital gains are cut andownership limits are lifted," saysbroker Tom Gammon of Americom."Small markets could come moreinto play."

Some larger players that haveachieved critical mass-looselydefined as enough stations and cashflow to entice investors-will begin toget impatient, Bergner says. The ini­tial public offering market cooled offin mid-year, preventing some compa­nies from tapping into public money.

"There will be more mergers andbuyouts because companies are real­izing they can get a lot more for theirstations on the private market thanthe public market," Bergner predicts.

Overall, the mood of the industry

is one of optimism and excitement.Carl Hirsch, like others, is "bullish"on radio, and he hinted that televisionis also opportunity-rich. "I see thenext three to five years as a wonder­ful window of opportunity," Hirschsays. Why? "Broadcasters are likecrabs in a bucket; none of us can getout of the bucket, and none of us canget out of each other's way."

33

1M meetinI marks syearWith 11% increase in radio ad revenuefor 1994, association's annual conference is upbeatBy Donna Petrozzello

Radio Advertising Bureau Presi­dent Gary Fries at the RAB'sannual marketing leadership

conference in Dallas congratulatedradio station sales teams for billingmore than $10 billion in advertisingrevenue in 1994. More than 2,000 sta­tion general managers and sales man­agers were on hand, double the num­ber in attendance just four years ago.

The conference marked a particu­larly prosperous year in radio sales.Combined 1994 revenue for radiofrom local, national and spot adver­tising garnered $10.65 billion, an11.3% overall increase over 1993levels. In addition, stations nation­wide billed a combined $1 billionduring May 1994 alone.

[n his opening remarks, Friessaid that radio's strong perfor­mance last year made it the fourth­largest advertising medium for theyear, surpassing the amount billedby other national advertising medi­ums, including telephone book yel­low pages.

"We've created an environment

8rcNIcIcaatIng & CIIbIe Feb 27 1995

enue growth in markets nationwidefor 1995: "I don't think anybodycan stop this industry. I think we'llkeep going forward at a pace thatthose of us who have been aroundfor a while have never seen before."

"I don't think anybodycan stop this industry."

RAB President Gary Fries

of deep respect for us, the people inthe radio industry, as it [radio] is apart of the media scheme" pur­chased by advertisers, Fries said."The landscape has changed. Ithink this is our moment and ouropportunity."

Fries also predicted more rev- •

IIICIIo IIWPS IRish '94 with solid pinsMany public companies turned in double-digit revenue, cash-flow performancesBy Donna Petrozzello

..

Fourth-quarter and year-end fi­nancial reports from several pub­licly traded radio group owners

understated the strong fiscal gains inadvertising revenue that radio stationsin nearly all markets saw in 1994.Most companies reported double-digitgrowth in net broadcasting revenueand broadcast cash flow for both thelast quarter of 1994 and the year intotal. Following is a summary of fiscalreports from several public companies(figures are on a pro forma basis).

_ EZ Communications reported a10% increase in net broadcasting rev­enue and a 17% increase in broadcastcash flow during fourth quarter 1994(ended Dec. 31). The company'syear-end results also show a double­digit increase in broadcast cash flowand improved net revenue over 1993.

Ron Peele, EZ's chief financialofficer, says the company's gross rev­enue of $22.36 million in the fourthquarter compared with $20.4 millionfor the same quarter in 1993. Broad­cast cash flow totaled $7.2 million infourth quarter 1994, compared with$6.2 million in 1993.

As for 1994 as a whole, EZ reportsnet broadcasting revenue of $72.5million, up 5.4% from 1993's $68.5million. The company reportedbroadcast cash flow for 1994 of near­ly $26 million, 15% higher than the$22 million in 1993.

EZ Communications President/CEO Alan Box attributed the rises to"increased advertising revenue" andthe performance of EZ's WUSL(FM)Philadelphia and KZOK(AM) Seattle,acquired in midyear. EZ also forgeddeals last December (now awaitingFCC approval) to purchase WBYU(AM)­WRNo(FM) New Orleans and KBEQ-AM­FM Kansas City, Mo., and entered aone-year purchase option for KFKF-FMKansas City, Kan. The pending deals,expected to close early this year, willgive EZ duopolies in eight markets.

_ Jacor Communications report­ed an 11 % increase in net broadcast-

....do........ CIlIIIe Feb 20 1995

ing revenue and a 24% rise in broad­cast cash flow in the fourth quarter.Jacor's year-end '94 results showedan 11 % increase in net revenue and a29% increase in broadcast cash flow.

The company's net broadcastingrevenue totaled $98.4 million in 1994and $25.9 million in the fourth quar­ter. By comparison, in 1993 Jacorreported net broadcasting revenue of$88.3 million for the year and $23.3million for the fourth quarter.

Jacor President/COO RandyMichaels attributes the increases tostrong performance by its Denverduopoly of KAZY(FM)/KRFX(FM).

Jacor reported net income of $7.9million, or 37 cents per share in1994, a 250% increase over 1993's$1.4 million (10 cents per share). Netincome for fourth quarter '94 was$3.1 million (14 cents per share),compared with fourth quarter '93totals of $900,000 (5 cents per share).

_ Evergreen Media Corp. report­ed net revenue II % greater in fourthquarter 1994 compared with the sameperiod in '93, while broadcast cashflow was up nearly 15% over 1993during the same period.

Net revenue in the fourth quarter

totaled $29.7 million, up from $25.8million in 1993. Broadcast cash flowtotaled $10.7 million, compared with$8.7 million the year before.

Evergreen Chairman/CEO ScottGinsburg says, "The fourth quarterresults demonstrate that our funda­mental corporate strategy of growingEvergreen's presence in the nation'smajor radio markets is paying off."

Evergreen reports consolidated netrevenue in 1994 ofS110.4 million, up3.1 % from 1993. Broadcast cash flowtotaled $41.1 million, up 9.3%.

Ginsburg also says that the compa­ny expects revenue and cash-flowgrowth to continue this year, helpedin part by the company's recentacquisition of Broadcasting PartnersInc.'s 11 stations. The acquisitionboosts Evergreen's station total to 22and gives it its first station in NewYork.

_ SFX Broadcasting Inc. 's latestfinancial report shows a 13%increase in net broadcasting revenueand a 22% gain in broadcast cashflow for fourth quarter 1994. SFXposted a 17% increase in net revenueand a 41 % increase in broadcast cashflow for 1994.

SFX had net revenue of $15 mil­lion in fourth quarter 1994, up from$13.3 million for the same period in1993. Broadcast cash flow totaled$6.1 million for fourth quarter 1994,compared with $5 million in the sameperiod in 1993.

The company also reported netincome for fourth quarter 1994 at$305,000 (4 cents per share) as com­pared with a loss of $14.9 million($2.62 per share) in fourth quarter1993. Net income for 1994 was $1.8million (26 cents per share), com­pared with a loss of $17.7 million($7.08 per share) in 1993.

Commenting on the company's1994 performance, SFX Chairman!CEO Robert F.X. Sillerman an­nounced that SFX received a commit­ment from the Bank of New York for a$50 million secured credit facility. _

BILLBOARD FEBRUARY 18,1995

1114 RadIo IIevenues Break$10 iii CelIHng, Brewing 11.30A. From '93FINAL RADIO ADVERTISINGrevenue figures for 1994 are in, andthe news is very good. Thanks to a11.3% growth rate over 1993, radioadvertising revenues hit $10.7 billionlast year. up from $9.57 billion in1993. according to the Radio Adver­tising Bureau. This represents theindustry's fastest ad revenue growthrate since 1985.

Not only was 1994 the first yearever to break the $10 billion barrierfor total radio advertising, it also wasthe first year that radio ad revenuetotaled more than $1 million in a sin­gle month (May).

National spot revenue grew 14.8%last year, the biggest increase in thatcategory in more than 50 years, ac­cording to the RAB. Local advertis­ing was up 11.2% in 1994, comparedto the previous year.

Less sensational were radio net­work revenue figures. which endedthe year just 1% ahead of 1993's to­tal.

,...--------.~Ft!o~--------~

...-llil revenue pins in 1994Ad revenue increase-11.3%-biggest since'85 .. year-end totals break $10 billion

By Donna Petrozzello

Early ,."". look...for 4fII ".,..,Solid fourth-quarter fiscal reports from meny rado groups ended a yearthat industry executives c:onsidIrId perhIpe racIo's best since the down­turn in business in 1989. Below..MI1y reeulta from two groups.

Infinity reported a 35% incr... In net revenue and a 17% Increase inoperating cash flow (on a pro forma basis) for fourth quarter 1994 over thesame period in 1993. Net revenue tor the quarter ended Dec. 31, 1994,was $82.6 million, compared with $61.1 miIMon for 1993. Operating cashflow for fourth quarter 1994 was $38.8 mHlon, compared with $27.8 milltonin 1993. Infinity's net income for fourth quarter 1994 was $14.1 million,compared with its net income of $9 million for the same period in 1993.Earnings per share for fourth quarter 1994 were 32 cents per share, com­pared with 20 cents per share for fourth-quarter 1993.

Tribune's radio division had net revenue that rose 7.3% in December1994; a 9.7% increase for fourth quarter 1994, and a 1.1% increase for1994 over the same periods in 1993. Tribune says last summer's MajorLeague Baseball strike caused the company's broadcasting and enter­tainment properties to lose an estimated $30 millton in advertising rev­enue for the year. --

Radio station revenue from local.national and network advertisingpeaked at $10.65 billion in 1994.

an 11.3% increase over the $9.56 bil­lion year-end total for 1993. accordingto market surveys compiled by theRadio Advertising Bureau. Last yearalso was the first year in which radioadvertising revenue exceeded $10 bil­lion. according to the RAB.

The double-digit increase repre­sents the steepest growth in revenuetotals since 1985. when advertisersspent an additional 11.5% in radioover 1984 levels. the RAB says.adding that in May 1994 revenuetotaled more than $1 billion. thehighest recorded in a single month.

RAB President Gary Fries saysthat the selling points of radio as anadvertising medium account for itssuccess last year.

"Key to radio's growth both thispast year and in the future are itssteadily increasing audience in theface of a proliferation of new mediaoptions. its status as the only elec­tronic medium to travel easily withconsumers outside the home, and

40

[its] targeted advertising environ­ment." Fries says.

Market to market, on average,national ad revenue increased 14.8%,to an estimated $1.86 billion in 1994over 1993 levels. Revenue from localadvertising sales-which constituteabout 75% of all radio revenue­increased by 11.2%, to $8.37 billionin 1994 over 1993. the RAB reports.

Combined in a weighted average.national and local ad revenueincreased by an average 12%. theRAB says. A survey of local andnational ad revenue at radio stationsin 100 markets was conducted by theaccounting finns of Miller KaplanArase & Co. and Hungerford AldrinNichols & Carter for the RAB.

Advertising revenue from networkad sales. which constitute only about4% of radio advertising revenue,totaled an estimated $411 million for1994. a 1% increase over 1993 levels,the RAB reports. A survey of net­work ad revenue was compiled by theRadio Network Association withMiller Kaplan Arase & Co.

Radio stations in the southeasternU.S. report the largest gains in

national ad revenue, an average 17%increase for 1994 over 1993 levels.National revenue increases averaged15% for stations in the eastern andwestern U.S. Increases in local adrevenue were fairly consistentthroughout U.S. regions. with anoverall average of 11.2% for the year.

In a 1994 year-end survey of radiorevenue and retail sales figures in radiomarkets nationwide. BIA Publicationsfound stations in Southwestern mar­kets generally showed the highestincreases in revenue over 1993 levels.

Stations in Albuquerque showedrevenue increases of 23% in 1994over 1993. BIA reports. with estimat­ed revenue at $24.8 million for 1994compared with $20.1 million in1993. And stations in Boston.Atlanta, Phoenix and Las Vegas alsoreport 20% average increases.

The RAB also reported revenuetotals for December 1994. Local adrevenue showed an average 10%increase across all markets andnational revenue increased an aver­age 19% for the month.

Stations in the eastern. midwesternand western U.S. each reportednational revenue totals for the monthmore than 20% greater than totals inDecember 1993. the RAB states. Net­work ad revenue, on average. edgedup nearly 2% last year over 1993.

In a survey of 65 Los Angeles-areastations, the Southern CaliforniaBroadcasters Association reportedestimated radio revenue at $503 mil­lion from local and national advertis­ing. says Gordon Mason of theSCBA. Thirty-four of those stations.which were also surveyed by MillerKaplan Arase & Co., report revenueof $457 million.

Mason says that the automotiveindustry continued in the second halfof 1994 to be the largest radio adver­tiser in the Los Angeles area. Retaildepartment stores and telephonecompanies also advertised heavily onradio in the same period, he said. -

Feb 13 1995 .....e....... 1& callie

Cable

Newspapersrelevision

Radio

5-re.rre,enue 'fInds($ Billions)

tising Bureau's radio revenue index ofmore than 100 markets. Networkrevenue is compiled by the Radio Net­works Association as reported to Miller,Kaplan. Arase & Co.

RSR observation: Perhaps themost incredible thing about 1994 wasthat the big increases carne on top ofbig jumps in 1993. The industry is20% ahead of where it was in 1992.Not bad.

Truth be known, the real 1994num­ber is more like 12%, because syndi­cation dollars are "real" radio dollars,and the syndicators do not reporttheir revenues to a major accountingfirm, as do local stations, reps and

a national spot jump well into doubledigits.

Local and national spot revenuefigures are based on the Radio Adver-

1990 1991 1992 1993 1994Soures: News Assoc. of America, Veronis, Suhler,TVB, McGann·Erickson, RAB,Paul Kagan

~ .-i!t"'"~-J7

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25

15

35

10

20

30

1116141210

Banner year: Radio breaks $10 Million in revenue,11.3% jump biggest since '85

1913-1994 R",nue growth %

Fries. "The bottom line is we increasedrevenues by over a billion dollars,which is no small accom­plishment. The industryshould be proud of itself."Fries added, ~Look1ng atfirst quarter, all indicationsare that it will continue."

National spot was1994's stellar per­former. It registeredan unprecedented14.8% increase for theyear. It's nationalspot's biggest increasein more than 50 years.

Local advertising,which accounts formore than 75% ofradio's revenues, wasup 11.2% in 1994. Lo­cal and national combined wereup 12%.

Network radio, which rose onlySoures News Assoc. of America, Veronis, Suhler, 1%, was the only category whichTVB McCann-Enckson. RAB,Paul Kagan

did not register vigorous growthin 1994. Industry observers note

that much of the advertising activitywhich traditionally would have beenreported in the network column ischanneling through various syndica­tors.

Every region of the country sawdouble-digit local revenue growth in1994. The Southwest's 13%jump ledthe pack.

At the same time, the Southwestwas the only region which did not see

For the first time ever, radio's rev­enues increased by more than a bil­lion dollars in a single year. It's radio'sbiggest percentage jump since 1985,when revenues grew by 11.5%. May,1994 also marked the first time thatthe industry registered a billion dol­lars in revenue in a single month.

"It's the biggest dollar volume in­crease we've ever seen in the radioindustry." said RAE President Gary

RAB's year-end figures show radioadvertising revenue grew at a rate of11.3% in 1994, compared to 1993figures. RAE estimates the industry'srevenues reached $10.652 Billion.That's up from an already-healthy$9.568 Billion in 1993, which repre­sented a 9.3% increase over 1992.

2 RBR 2/13/95

networks. The syndication marketrepresents at least another $100 Mil­lion in ad dollars, and is growing at arate close to 20%. We estimate thatthe RAE would have reported some­thing in the 11.9% to 12% range hadsyndication been included as networkrevenue,

We also note that revenue directlyto stations '-local and spot - was upa full 12% for the year.

4 Radio News RBR 2/13/95

US Raelio Revenue IndexDecemberr994 vs. December' 993

andYear end '994 Revenue. vs. '993 Revenues

E,tl••ted 1994R.1I111 Re"enue(In ",'lIllIns)

Local Revenue -Decemb!r 1994:All Markets 10%

~~ ~

S East 8%Midwest 10%SWest 12%West 11%

National Revenue - December 1994:

Local Revenue - Year End 1994:All Markets 11.2%

East 12%S East 12%Midwest 10%SWest 13%West 11%

National Revenue - Year End 1994:

Local $8,374 (+ 11 2%1

National Spot $1,867 (+ 148%)

Network $411 (+ 1 %1

Total: $10,652 l+ 11.3%)

All Markets 19% All Markets 14.8%

East 22% East 15%S East 11% S East 17% R.dlll lIetwlltk RevenueMidwest 22% Midwest 13%S West 8% S West 9% 4th Quarter + 1.9 %West 21% West 15%

Local It Nat'l Revenue Local. Nat'l Revenue Full year '94 +1 %December1994: Year End 1994:

All Markets 12% All Markets 12% Network revenues are compiled by theRadio Network Association a reported

Source: RAB calculations derived from figures supplied by Miller, Kaplan, Arase & Co to them by the accounting firm of Miller,and Hungerford Aldrin Nichols & Carter Kaplan, Arase & Co.

12 RBR 2/13/95

4 Radio News

1994 spot up 150/0 In top 100 marketsJust-released data from Competitive Media Reporting show national spotradio gained 14.9% from 1993 to 1994. The top 5 markets (by '94 revenuerank) accounted for nearly 30% (29.8%) of the top 100 total. See Monday'sRBR for a list of the top 25.

Rev Mkt '93 '94 %Rnk Rnk Market Rev (000) Rev (000) Incr

1 2 Los Angeles $100,237 $111,043 10.82 3 Chicago 62.084 67.995 9.53 1 New York 52.587 58.040 10.44 4 San Francisco 47.977 54.488 13.65 5 Philadelphia 43.231 51.270 18.66 8 Washington. DC 41.807 50.266 20.27 9 Boston 37,782 43.133 14.28 10 Houston 30.458 37.287 22.49 7 Dallas 34.883 35,488 1.7

10 12 N.lanta 23.074 30.203 30.911 6 Detroit 27.387 30.006 9.612 11 Miami 24.601 28.563 16.113 13 Seattle 18.428 24.028 30.414 15 San Diego 20.409 22.623 10.915 23 Denver 18.075 21.483 18.916 16 Minneapolis 18,592 21.191 14.017 20 Phoenix 15.305 20.054 31.018 28 Sacramento 15.593 17.947 15.119 21 Tampa 15,471 17.205 11.220 18 Baltimore 13.930 16.584 19.121 17 St. Louis 14.272 16.241 13.822 19 Pittsburgh 14.361 15.350 6.923 40 Orlando 13.848 15.111 9.124 22 Cleveland 12,438 15.042 20.925 25 Portland. OR 10.518 14.309 36.0

Top 25 Total 727,348 834.950 14.8

Top 100 Total $1,001,435 $1,150.949 14.9

Source: CMR, but obtained through other sources

RBR1/30/95

NEW YORK,\[(),\JDAY, JANUARY 2,1995

Ads on Radio PostedStrong Gai~s in 1994

By JOSHUA MILLS

For the oldest broadcasting medi­um, 1994 was a very good year.

Advertisil1l revived with a venge­ance, postil1l double-digit increasesin 7 of the first 10 months of the yearand ending the first 10 months up 12percent over all. In the face of thisgrowing demand, the industry wasable to raise its rates after severalyears of marking them down to pinbusiness. Radio executives are opti­mistic that stl'Oft8 increases will beposted in 1915 as well.

As industry ownership continuedto consolidate, the biuest lOt bil­ger, taking actvantap of rules revi­sions adopted by the Federal Com.munications Commission in 19t2.One owner may now operate 20 AMand 20 FM stations, ud even thouIhtwice as many stations are oa the airas a decade 810. the number of 0wn­ers remains the same. More dealsare now in the worb, so the conlOli­dation wUl IUrely continue In 1915.

The InfbHty Broedcastina Corpi)­ration of New York, for example.added .. staoons in 1994, livinl it 16FM and 10 AM stations, and alsogained control of the large WestwoodOne radio network. CBS; Westing­houle Broadcasting, the subsidiaryof Westinlhouse Electric that is alsoknown as Group Wand CapitalCitieslABC either added stations,swapped smaller ones for largerones, sharply increased revenue orall three.

The other growth spurt came intalk radio, which soared in numbersand in influence - a trend that wasmade clear by the candidates trip­ping over each other as they tried toget on the air before Election Day.Radio stations carrying nothing butnews, talk, business coverage orsports - in other words, no music ­grew to 1,028 in 1994 from 841 in 1993(and from 308 in 1989). And the BigThree of talk radio - Howard Stem,Don Imus and Rush Limbaugh ­continued to increase the number ofstations carrying their syndicatedprograms.

The radio industry scored anothervictory in 1994 when the F.C.C.looked Mr. Stern in the eye. recoiledin disgust at what it called his inde­cent programming, but then slunkaway, concluding that it lacked the

power to penalize Infinity, Mr,Stern's employer, in any meaningtu~

way. The commission had discussedblocking Infinity's plan to pay $17qmillion to acquire three stations, OFeven rescinding some Infinity Ii.censes, but it decided in Februarythat a Federal appeals court deci­sion had eroded its power to do so(More than $1 million in flnea thatthe commission has levied apJnstInfinity for Mr. Stem's on-air reo·marks continue to be appeaJed lR thecourts.)

Infinity'S chairman, Mel Karma­zin, continued to consolidate his poat­Uon as radio's moat inOuential exec­utive. one Karmazin strateIY thathas cauatlt the eye of Induatry~Uves is his attempt to establisb Flttradio, traditionally the bastion 01.music, as a home for sportS b~casting. Infinity carries Dallal eo.boys games oa KVIL·FM. Dallal'the Eaales on WYSP-FM, Philadelrpilla, and the Ta~ Ba.y Bucca.­neers 00 WQYK-FM. Tampa. NeR.season, Its WBCN-FM. Boston. wilJcarry the New EnaJand Patriotagames. It those bets payoff, imila!­tors will surely follow.

20'_----...--......:.

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1lIe New York Tim..

On a roll lite never before,RAB looks to maintain radio's growth momentum

RAB's Board of Directors met in San Di­ego last week. Members were clearlypleased with the role radio's sales andmarketing organization has played in theindustry's unprecedentedgrowth over thepast couple ofyears. RBR VPIEditor J. T.Anderton was there, and filed this report.

"U', • ".", 'I." ,ood tim. tor u,"RAB President Gary Fri••' opening re­marks to his board of directors in SanDiego last week summed up the gen­eral atmosphere at the meeting. Withthe industry riding a growth wave ­some 25 straight months of revenueincreases - there was ample reason tosmile.

Citing numerous newspaper articlesand several national TV reports on theeffectiveness of radio advertising, Friesstated that "Radio is becoming the dar­ling of the advertising community." andis now"welcomed everywhere as a majorplayer."

The words came as welcome newsto industry veterans on the board, manyof whom have labored for years to gainwidespread advertiser acceptance forthe aural medium.

Even with a bright revenue forecastfor 1995and beyond, RAB execs warnedagainstcomplacence. While noting thatrevenues are up 12%forthe year, Exec.VP/National Marketing Judy Carloughcautioned, "Now, we have to fight thenatural human tendency to forget stormyseas." Said Fries, "The challenge nowis to maximize the potential."

4 RBR 11/21/94