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Studio Center
Wednesday, November 15, 2017 Volume 6   |   Issue 221
Tom Taylor Now
SBS faces the “going concern” question
Westwood One
Spanish Broadcasting SystemSpanish Broadcasting System broaches the possibility of a Chapter 11 filing.

Bankruptcy-court protection isn’t its first option, though management says that “may create an avenue to successfully execute on our strategy” by dealing with some of its debt. Like Cumulus, which included some “going concern” language in its latest 10-Q filing, SBS suffers from a debt problem. (As does iHeart – which has also used the “going concern” phrase.) SBS missed an April 17 principal payment on its 12.5% senior secured notes. It’s made interest payments, even after a “forbearance agreement” with the noteholders expired. But the company says if they can’t deal with the noteholders, “we may be required to seek protection under Chapter 11 of the U.S. Bankruptcy Code.” It knows that “such a filing may have several negative consequences to our business,” like how advertisers react. Also the “negative publicity that surrounds such a filing,” the potential sale of some assets, and “costs.” Along with “going concern,” another key financial phrase is “ordinary course operating activities.” SBS says it does anticipate “generating sufficient cash flows, together with cash on hand,” for ordinary course operation. But if something goes sour, like not dealing with litigation brought by holders of its Series B preferred stock – there could be “substantial doubt about our ability to continue as a going concern.” Read the SEC filing here.

Radio revenue down 9% for Spanish Broadcasting System in Q3.

In fact “decrease” is a common word in yesterday afternoon’s release. There were “decreases in local and national revenue…Our local sales decreased in our Los Angeles, Chicago, New York and San Francisco markets, while our national sales decreased” in L.A., New York, Miami, San Francisco and Puerto Rico. Special events revenue? It decreased. And for good measure, TV revenue also dropped slightly. But radio is the main show for Miami-based SBS, and radio revenues were off 9%, from $32 million to $29.3 million. That dragged consolidated revs for the entire company down 8%, to $32.8 million. There were some increases, such as in digital sales at the radio division. Chairman/CEO and founder Raul Alarcon says despite the drops, “Our footprint remains highly attractive, with leading stations positioned across key Latino markets nationwide, and we are taking steps to drive improved performance.” Getting a big payoff from the FCC’s TV spectrum auction would’ve helped SBS enormously – but that didn’t happen. It did realize enough to pay $4.4 million to noteholders. But it was forced to sell its L.A. property and more recently its historic mid-town Manhattan building.

Mike FrancesaNew York’s “Fan” WFAN-AM/FM may have its Mike Francesa replacement team.

“Sports Pope” Francesa is cleaning out his locker on December 15, after ruling afternoon drive in his format for over well two decades. There was a moment where it looked like he might extend for a year, after WFAN-AM/FM (660/101.9) morning co-host Craig Carton was arrested as part of an alleged Ponzi scheme. But that passed, and CBS Radio programmer Mark Chernoff knew he needed to have a replacement ready. And that is (according to multiple New York newspaper writers) – the newly-assembled team of Chris Carlin, Bart Scott and Maggie Gray. The Daily News ID’d current “SI Now” and CBS Sports Radio personality Maggie Gray as the third team member. Bob Raissman says she “should bring a much-needed female voice to the male-dominated Fan.” Chris Carlin’s practically a lifer around the Fan, having started as an intern in 1995 and eventually producing the “Mike & the Mad Dog” show featuring Francesa and ex-partner Chris Russo. Carlin later went on to the SNY cable channel. He’ll keep calling Rutgers football games, but gives up his PM drive co-hosting job at the Fan’s Philadelphia sister, WIP/94.1. (WIP adjusts by moving Jon Marks down from evenings to co-host with Ike Reese. Taking nights will be Joe Giglio.) Partnered with Chris Carlin and Maggie Gray will be former NY Jets and Baltimore Ravens player Bart Scott, who’s been with ESPN-managed/Emmis-owned sports WEPN-FM. Bob Raissman adds that Scott’s “been outspoken in defense of issues that impact black America, throwing his support behind Colin highlight police brutality to people of color.”

T-minus 2 days to the likely closing of Entercom and CBS Radio.

• Yesterday’s developments included the final “set” of the “exchange ratio” of stocks on the CBS side. CBS has been issuing daily updates based on changing prices, and now the ratio is fixed – For each share of CBS Class B common stock that’s “validly tendered and accepted,” a CBS shareholder will get 5.6796 shares of the new (and short-lived) “CBS Radio” stock. Those CBS Radio shares will be “immediately converted into the right to receive an equal number of shares of Entercom Class A stock,” the existing “ETM” issue. Why so complicated? Entercom needed to create a rare “Reverse Morris Trust” so the deal is federal tax-free to CBS shareholders. The suspense is about how big the uptake will be – which is a kind of proxy for how CBS shareholders feel about the future of the radio business. If not enough shares are tendered, the CBS Radio shares that are left will be distributed on a pro-rata basis to CBS shareholders. So they’ll get some “Radio” stock, anyhow.


• Who is Scopia Capital Management, and why did it just take a 14.1% stake in Entercom stock? We don’t know the answer to the second question, but yesterday New York-based Scopia notified the SEC that it now owns 4,730,766 shares of Entercom, equal to 14.1% of Entercom’s Class A stock. Principals Matt Sirovch and Jeremy Mindich established Scopia in 2001 and say they have over $6 billion in assets under management. That doesn’t make Scopia a Wall Street titan, but based on a guesstimate of $10.50 a share, it paid about $50 million for its Entercom shares. You’re supposed to submit a 13-G filing when you accumulate more than a 5% stake in a public company, and that’s what Scopia filed yesterday. Entercom stock was all over the lot Tuesday, veering between $10.27 to $10.94. The $10.79 closing price represents a nearly 4% gain over Monday’s close. The day after Entercom and CBS announced their plans back in February, “ETM” was hit $15.85 a share. More about Scopia Capital here. See its SEC filing here.

Lisa Worden• Lisa Worden crosses the boulevard of dreams in L.A. from CBS Radio’s alternative KROQ/106.7 to iHeart – where she’s immediately gifted with two titles. (Of course the timing is just before Entercom takes over the CBS Radio cluster that includes KROQ.) Lisa’s spent most of the last two decades at KROQ, most recently as Assistant PD and music director, and now she’ll be a market-level VP of Programming at iHeart’s “Alt 98.7” KYSR. (Mike Kaplan continues as PD for “Alt,” which has outshone KROQ in the head-to-head ratings race.) At the national level, Lisa’s now “Alternative Rock Brand Manager for iHeart’s National Programming Group.” In that capacity, she has dual reporting status to Tom Poleman (Chief Programming Officer for iHeartMedia) and Brad Hardin (General Manager of National Programming Group). Poleman says Lisa’s industry “relationships are fantastic...she’ll play a key role in helping artists maximize iHeartMedia’s unmatched alternative footprint.” Rival Entercom, soon to inherit KROQ also fancies alternative rock (it’s reputed to be a favorite of CEO David Field) – so the format’s going to get plenty of attention nationally. Also probably gaining more attention from iHeart will be KYSR’s morning “Woody Show.” Expect to see more stress on syndicating it.

A decade later, Mancow Muller files a second suit against his GM.

In this new 2017 suit, Marv Nyren’s barely gotten in the door as Cumulus Media’s manager for Chicago stations like classic rock “Loop” WLUP/97.9 and alternative WKQX/101.1. But Muller, who’ll be hosting mornings for Nyren at the Loop, says his hiring has triggered very bad memories of what happened over ten years ago, when Nyren fired Mancow from WKQX. In those days, Nyren was managing for Emmis. Mancow sued both Emmis and Nyren for allegedly making false and defamatory statements about him. They settled in 2011. Now Chicago media observer Robert Feder says Mancow’s latest suit claims he’s “suffered emotionally and physically, with the prospect that Nyren will continue his efforts to retaliate against him.” Some colorful stuff in this suit, like the claim that (as Feder says) “Nyren ordered a station employee to break into Muller’s home, and that he directed his sales staff to send raw meat – depicting Muller as ‘a dead cow’ – to major advertisers and media buyers.” The suit alleges that a decade ago, Nyren “went far beyond normal business decisions” and showed “an unusual obsession with punishing Erich Muller.” Nyren tells the Chicago Tribune that “I’m thrilled to be working with Cumulus and Mancow. He’s seeing some really great ratings, and I’m looking forward to working with him.” Muller’s attorney Michael Young says the suit’s about keeping “the pattern of retaliation…from continuing in the future.” Muller filed suit on Monday – Nyren’s first day on his new job.

Jerry LeeJerry Lee on “How to Grow Your Revenue More than 20% by 2020” – Chapter 5.

Remember Jerry’s mission in this weekly series – educating you about how to create “engaging commercials” that will generate superior results for advertisers, using research. Here’s Chapter 5 from Jerry Lee, Chairman of WBEB Philadelphia -

“Why the Combination of and Feedback from Sensory Logic Works.

“The Sensory Logic feedback system, together with its proprietary ‘Write To Engage Webinar,’ provides a proven, tactical and actionable approach to writing emotionally engaging radio spots - leading to consistent successful advertising.

◊ “A lot of creativity can be subjective: We often don't really know WHY we enjoyed a particular commercial, or why others are easy to ignore/forget. The 18 Principles of Emotional Engagement developed by Sensory Logic are data-backed, extensively-studied, and help illustrate the ‘why’ behind what makes consumers hooked by certain ads.” Quick review from last week, where Jerry singled out “The 3-second rule” (“pull them in quickly”), “Keep it close to home by playing off what is familiar,” “Mirror the values of the listener,” “Always sell hope,” “Branded solution as hero,” “Don’t (or never) lead with price,” and “Vary pace and intonation.”

◊ “For the Client/Brand: This process is proven to increase your spot’s ROI. Radio ads that are Engaging end up being 8 times more effective in terms of sales, according to a study done by the ad agency OMD.

◊ “For the Agency: The evaluation process gives you an objective, outside perspective to back up your creative direction. It also helps support your team when there are a few tweaks to the spot that could dramatically affect its success, or identify a red flag in the script (e.g. ‘leading with price’) that will hurt the emotional engagement score. This objective evaluation provides you with a concrete reason to defend your creative decision to your client.

◊ “For the Copywriter: This process will help make your work better, as you'll have a scientifically-tested framework with which to write your next spot (you'll add your own creative twist on it, of course). With the help of the 18 principles, you always have a measurement to compare against and improve your spot based on actual data - not just personal taste.

◊ “For the Industry: By ensuring that ads hook listeners emotionally, we'll raise the bar for overall creative work across the industry, and provide a more enjoyable experience for the listeners to Radio. Most importantly, the radio industry will dramatically grow its revenue.

◊ “Action Plan: #1, Start laying the groundwork for year-round advertising. #2, An Engaging Commercial heard on the Radio connects you to the Brand. When listeners later see the brand in digital media, it will pop off the page. #3, Convince the Agency/Client up-front on the importance of signing off on a campaign they can live with for years to come. #4, Start with price and always use two voices. And #5, If your group owns stations in other markets, make use of their voices to have a bigger talent pool to choose from. Follow the Plan and you will grow your revenue more than 20% by 2020. Learn how, right here. See you next week. Contact:”

◊ Chapters 1 through Chapter 4 of Jerry Lee’s “How to Grow Your Revenue by more than 20% by 2020” are now archived and available here.

National Association of Broadcasters
Doing Business

Another all-time low for Townsquare stock, and another 52-week low for Salem shares. For Townsquare Media, uncertainty about what happens with the NAME (North American Midway Entertainment) division may be weighing on investors’ minds. (While the local radio/digital results looked good on last week’s third-quarter call.) Last week the two new Co-CEOs said they’re “conducting an extensive review” of the Entertainment division that houses NAME. Previous CEO Steven Price, now Executive Chairman, led the $75.5 million purchase of NAME two years ago. Yesterday the “TSQ” stock dropped another 3.5%, down 27 cents to $7.28 a share. For Salem, the 4% fall to $4.75 a share (down 20 cents) returns the stock price to the levels of early 2016. One more suffering stock – Scripps. It bounced off the session-low of $13.91 by closing time. But $13.91 is the lowest price “SSP” has seen since October 2014. The final price was $14.21 a share, down 6 cents, or about a half-percent.

Entravision generates nearly 40% of its revenues from radio and digital, and that’s a positive for Moody’s Investors Service – given the competition for eyeballs in the Spanish TV space. Moody’s rates the company’s just-amended and extended term loan, and likes what the company’s doing with its debt. Namely, using part of its bounteous windfall from the FCC’s TV spectrum auction to pay down debt. Leverage is expected to decline from “the mid-4-times” cash flow range to about 3-times by year-end 2018. And Moody’s has a handle on what’s happening to traditional radio and TV – margins are being squeezed, while Entravision is investing in digital and OTT (over-the-top streaming) products. Entravision owns nearly 50 radio stations and owns and/or operates 54 TV stations. The note’s a reminder that ownership in publicly-traded Entravision is “concentrated with [CEO] Walter Ulloa and affiliated stockholders.” See the Moody’s review and improved PDR (probability of default rating) here.

Formats & Branding

WMUZ“The Salt” is Crawford’s contribution to the Christian radio scene in Detroit, a just-launched Christian teaching format on the former WCHB/1200. (In a nice pun, Crawford now has “Salt” and “Light,” its contemporary Christian “Bright Music/Bold Talk” WMUZ-FM/103.5.) Crawford paid Urban One $2 million for WCHB, which programmed a mixture of African American-directed talk along with Urban One/Reach Media’s Tom Joyner Morning Show. Urban One CEO Alfred Liggins publicly said on a call that WCHB was “billing $600,000 and making 80 grand” (February 7 NOW) – so there’s no mystery why he was inclined to take the $2 million from Crawford Broadcasting. New calls for WCHB are WMUZ. Broker on the sale of 1200 is Mike Bergner. Frank Franciosi is Crawford’s GM for Detroit.

Birmingham’s “Alt 94.9” becomes “Alt 99.1” with iHeart switching leased translators. Red Mountain Broadcasting is selling 94.9 (W235BS) to local attorney Courtney French (July 28 NOW). So iHeart’s moving the “Alt” brand to 99.1 (W256CD) – also owned by Red Mountain Ventures, and says Radio Insight, a better signal than 94.9. iHeart broadcasts the alternative format on two HD Radio signals – Birmingham’s WDXB HD2 and Trussville-licensed WQEN HD3. 94.9 will rebroadcast Courtney French’s R&B oldies WATV/900.

“Barstool Radio” earns its own 24/7 sports channel on SiriusXM – and yes, Barstool is the same outfit that ESPN decided it didn’t want to work with. Barstool may be a little too edgy for ESPN – but not SiriusXM. Common-man-oriented Barstool has had a two-hour chunk of SiriusXM’s Channel 93 since January. Now it’s taking over the entire channel, using its Barstool brand and spreading what SiriusXM calls the website’s “funny, irreverent and unfiltered approach to covering sports, men’s lifestyle, popular culture and more.” SiriusXM says its “uncensored national platform is the perfect way for Barstool’s voice to reach and interact live with fans across the country.”

On The Block

WJKEAlbany’s hot AC “The Jockey” WJKE/101.3 is the latest score for K-Love parent EMF. Educational Media Foundation’s paying $550,000 for the north-of-the-market Class A licensed to Stillwater, NY. The Jockey name is a reference to the Summertime activities around Saratoga Race Course and the local horse industry, but soon the equine stuff will be gone, presumably replaced by Educational Media Foundation’s not-for-profit contemporary Christian “K-Love” feed. Seller is Empire Broadcasting, established after Joe Reilly stepped down from running the New York State Broadcasters Association. He’d owned stations before he took the NYSBA job in 1979, and he returned to ownership in 2012 with partners like Neerav Patel and Joe Tardi. WJKE was known as AC WQAR before Empire restored the previous “Jockey” handle and up-shifted to hot AC. Empire Broadcasting retains the other stations it bought from New York City TV newsman Ernie Anastos – adult standards WABY Watervliet/900, and what’s now the “Empire News Network” biz-talk simulcast of WAIX Mechanicville/1160 and WPTR Schenectady/1240, supplemented by an Albany translator at 106.1. Broker on the sale of WJKE – Michael Bergner.

Mount Vernon, Illinois was the seat of power of station owner and NAB Radio Board Chair Russ Withers, and it’s where his daughter Dana buys her 31st station – classic rocker WDML/106.9, billed as “Adult Rock & Roll.” It’s a class A licensed to Woodlawn. Russ passed on in early 2014, by which time Dana had already established her own group. She’s also based in Mount Vernon, and her Withers Broadcasting stations there are AC “V104.7” WNSV Nashville, Illinois, Centralia-licensed hot AC “X95” WRXX and “Oldies 1210” WILY, and Mount Vernon-licensed country WMIX-FM/94.1 and “News Talk 940” WMIX. WDML becomes station #6 in that cluster, and the purchase agreement specifies that Dana retains the agreement with Two Petaz Inc. to do a minor-modification upgrade from 3,000 watts to 6,000 watts. Seller is David Lister’s Volunteer Broadcasting of Illinois and the price is $50,000 cash.

Talk Shows
Worth Reading

Edison Research and the Knight Foundation studied “super listeners” of podcasts, and finds they’re consuming “about ten hours of the audio content per week, compared with about five hours seen in Edison’s [previous] Infinite Dial,” says the RAIN Newsletter. “Super listeners” are going through about 13 different shows per week. The nearly 29,000-person sample was of those age 18+ who listen at least one podcast from NPR, WNYC, WBUR, American Public Media, PRX or Gimlet Media. More about the study from RAIN here.

You Can't Make This Up

Vintage WPGCThere used to be a radio station there – and “decrepit digs” they were at the old WPGC in the DC market, says Bill Prettyman. He says “When ‘WPGC’ stood for ‘Where People Get Cash’ and it played top 40, the studios and offices were located in Bladensburg, Maryland in the Parkway Building. The place was clean and new, and manager Bob Howard had a no-coffee mandate, lest it be spilled onto the new carpet. Sadly, the landlord neglected the place completely. We all had elevator entrapment stories, and the air conditioning ceased to cool, to the point where we installed our own AC system for the studios. Bathrooms were down the hall. One night when he was on air and alone in the station, Bob Raleigh (Bill Miller) made a bathroom run, but found he had locked himself out. Terrified the record would run out, Bob somehow pushed himself up through the hall’s suspended-tile ceiling and over the top of the doorframe. He came crashing through the ceiling on the station side, hitting the floor hands-first. Poor guy broke both thumbs. But – no dead air.” Prettyman says “WPGC later moved to Capitol Office Park, leaving behind decrepit digs with lots of memories. Dan Mason, Scott Shannon, Big Ron O’Brien, to name a few, passed through there. Someone finally tore down the Parkway Building – it was past time.” Share your own favorite true radio story with the industry. Email “You Can’t Make This Up” –


Want to reach the readers of this NOW Newsletter, with your company’s marketing message? Or need to spread the net to fill a vacancy, with a Classified ad? Talk to our Kristy Scott. Reach her at or phone 818-591-6815. See you back first thing tomorrow morning - Tom

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