NJBA Weekly Newsletter Friday, August 6, 2010

Leaky Boat Reveals Performance Tax Parties Negotiating a Secret “Deal”

Loose lips sink ships, and well, the cat is out of the bag on a deal being negotiated between the NAB and MusicFirst, and that is unfortunate for the prospects of settling the P-Tax controversy efficiently. Several media outlets like TRI and Inside Radio are reporting that “Broadcasters are descending on Washington today for high-level meetings at the National Association of Broadcasters over a potential breakthrough in the performance royalty battle. These outlets are only doing their jobs and are responsible to their readers. But there’s no solid deal on this complex and passionately argued matter and these premature leaks can only hurt all parties concerned.  Stepped up lobbying amongst advocates and opponents has also begun. But what can you expect when the powerful and mighty in Congress start to twist arms and threaten Armageddon for broadcasters and their audiences? TRI talks about the secret talks the NAB is having with its own members and also the not-so-secret ongoing talks with MusicFirst. But the deal is far from done! The three members of the NAB negotiating squad are experienced Washington hands who've all been Chairs of the NAB Radio Board. They feel the urgency of cutting a deal on the most favorable terms, before the industry gets whacked by a lame-duck Congress after the November elections. (Who isn’t?) Terms might include a royalty break on streaming fees for broadcasters (who already get better treatment than pure webcasters) and agreement that the record industry will support radio’s mission of getting FM chips into cell phones. 

The National Association of Broadcasters will host a meeting of its Radio Board in Washington, D.C., today to discuss the status of The Performance Rights Act currently in Congress. The NAB is steadfast in its opposition to a bill that emerged from Congress, but has been engaged in discussions with music industry representatives at the behest of key members of Congress. The Radio Board members were summoned to a four-hour face-to-face meeting today in D.C, and by now, everybody knows the agenda. (The board members weren’t originally told why they had to come to D.C. on such short notice.) Globally, what it’s about now is two-fold – #1, keeping up the negotiations with MusicFirst and maintaining as much leverage as possible for a good deal. #2 – even harder – persuading NAB members who’ve been trained for years to resist a performance royalty that for pragmatic reasons, they should do a 180 and “take the deal”, but broadcasters will first need to be convinced this is a good idea and will not harm their stations or the audiences they serve. The NAB insists there is no agreement, and EVP Dennis Wharton says they remain “unalterably opposed” to the bill that was passed by the House and Senate Judiciary Committees last year.  The NJBA and its members (as well as our loyal listeners) have been utterly opposed to the “P-Tax” from Day One and we’ll keep you posted as this drama unfolds on the Hill and at the NAB.

2010 Regulatory Fees due by August 31 and LUR Window Opens September 3rd

NJBA Chief Legal Counsel John Garziglia, Esq., of Womble Carlyle reminds NJBA broadcasters that the FCC has announced that regulatory fees for the 2010 Fiscal Year are due no later than August 31. All non-exempt broadcasters must begin the payment process through the Commission’s on-line Fee Filer system, which may be accessed at http://www.fcc.gov/fees/feefiler.html However, as of this writing, the 2010 Fee Filer module is not yet operative. Once a licensee has begun the Fee Filer process payment may be made on line with a credit card or by mail or wire transfer. The FCC is mailing notifications for each licensee, listing its stations, their fees and the basis for placing each facility within a payment category. The information may also be viewed on line at http://www.fccfees.com. Please note, though, that the FCC notifications and display do not include microwave auxiliaries, for each of which an additional $10 fee must be paid.

And be advised that the Lowest Unit Rate Window Opens on Sept. 3, which is the first day of the Lowest Unit Rate Period for the General Election to be held on Nov. 2, 2010.

Did NJ Gov Upstage Snookie and the Prez?

Gov. Christie continues to be in demand for network TV. Last week, he did the “Today” show on NBC and then “Morning Joe” on MSNBC. (He also told ABC that “Snookie” does not best represent the garden State. (There’s a surprise!) Our Governor is becoming a fixture around Rockefeller Plaza. Christie likes the give and take with other guests and they are blown away with a politician who is as blunt as he is. The cynical might think his heavy duty network appearance this day was about upstaging President Obama who was due in Edison later. Last time Obama visited was to campaign for Corzine. And everyone knows that New Jersey has the best beaches in the world. That’s why so many of our friends in NY and PA celebrate the summer here in the Garden State. But be nice: Snookie was arrested this weekend in Seaside Heights—for alleged conduct unbecoming…guess the Gov was right!  

Government Admits Performance Tax Would Cost Jobs

Recently, the Government Accountability Office (GAO) released its Interim Report on the performance tax issue. The Interim Report did not include new findings or conclusions, but was basically a restatement of each side’s arguments. Included in the report was a letter from the Federal Communications Commission to the GAO that noted the potential negative impact on the "public interest" should a performance tax be imposed on local radio broadcasters. This is a dangerous time for broadcasters and the final GAO Report is projected to be concluded in August. The NJBA and NAB continue to focus on must-pass bills and other large legislative vehicles to prevent any inclusion of the performance tax.

NJBA Pushes for FM Chip in All Cell Phones and iPads

In a letter to Homeland Security Secretary Janet Napolitano and FCC Chairman Genachowski, NJBA President Paul Rotella wrote to request that the Department of Homeland Security (DHS) and the Federal Communications Commission (FCC) examine the potential benefits for the American public of including FM radio tuners in mobile telephone handsets. Most iPhones and cell phones already have the technology embedded in the devices and their activation would be beneficial to our national security. The Warning Alert and Response Network (WARN) Act of 2006 authorized the creation of an emergency alerting system in cell phones. Radio’s emergency alert system (EAS) is the most excellent means by which to distribute emergency communications, and it is our understanding that incorporating FM radio tuners in mobile phones, when coupled by a properly funded and deployed EAS system, could help achieve the goals established in the WARN Act. The NJBA encourages both DHS and FCC to consider extending Americans’ access to radio EAS information via mobile phone handsets. Everyone involved, including the American public and public safety officials, as well as the mobile phone and broadcasting industries, stands to benefit.

NJN is Important to Garden State

The state should turn its budgetary crisis into a "moment of opportunity" for restructuring NJN and promoting the development of public radio and online public media in New Jersey, according to a new report, "A Future for Public Media in New Jersey: How to Create a New Basis for Public Radio, TV, and Online Media in One of American Journalism's Worst Covered States." Sad, but true, and this amplifies NJBA’s constant and urgent request of the FCC to fairly reallocate spectrum and frequencies to better serve the people of New Jersey. While "The hour is late to save NJN," writes Paul Starr, a Princeton professor. "New Jersey still has the opportunity to turn it from an outdated television network into a model for multiplatform public media that fits the conditions of the twenty-first century." The report - written by Professor Starr and two of his former students, Scott Weingart and Micah Joselow - argues that the key to assuring NJN's future without state subsidy lies in a transfer of broadcast licenses to the new temporary public corporation, which should begin selling off some of those licenses to facilitate the network's transformation. (See the Marcus Group’s Trenton Report below for the full report.)

The Trenton Report: From the Marcus Group

The state and future of public radio in New Jersey was the talk of Trenton this week. New Jersey Policy Perspective, a think tank based in the state capitol issued a report on this subject, which is particularly timely as policy makers grapple with the tough decisions on the future of NJN. Meanwhile the Senate President and Assembly Speaker have named all 10 legislative members of the task force created to study how to wean NJN off of the state budget. Here is a link to the NJPP report:  http://www.njpp.org/rpt_publicmedia.html

Witness the Best Air Show in the Country on August 25th!

Make sure to come out for the 8th Annual Atlantic City Air Show, which will be held on Atlantic City’s fabulous Boardwalk on Wednesday, August 25th! “Thunder Over The Boardwalk," is one of the most popular events in Atlantic City, and one of the very best air shows in the country, with its heart-stopping feats, aerobatics maneuvers, formation flying and solo routines by military and civilian pilots. See flybys and demonstrations that reach up to 15,000 feet and as low as 50 feet over the water in front of the Atlantic City skyline. Live broadcast coverage of this great Garden State tradition will begin at 10:30 by NJBA’s (and Atlantic Broadcasting’s) own Pinky Kravitz and can be heard on WOND 1400AM. See you at the Shore NJBA!

Bipartisan Bill Introduced to Protect TV Spectrum

Congressman Rick Boucher (VA-09), Chairman of the House Energy and Commerce Subcommittee on Communications, Technology and the Internet, and Ranking Member Cliff Stearns (FL-06) introduced the Voluntary Incentive Auctions Act of 2010. In response to the National Broadband Plan's inclusion of the reallocation of 120 MHz of television broadcast spectrum, the Boucher-Stearns legislation is designed to help ensure that any incentive auctions conducted by the Federal Communications Commission (FCC) are truly voluntary. With regard to spectrum fees, Boucher added that an effort by the FCC to impose a spectrum fee that would make some licensees financially unable to keep their spectrum would make the surrender constructively involuntary and would be impermissible under the legislation. As Boucher views the process going forward, he states that he will not support nor will the legislation support any FCC action requiring broadcast stations or others to relinquish spectrum in an involuntary manner. He added that any broadcaster who is required to relocate deserves fair compensation for relocation costs and should not lose over-the-air viewers as a result of repacking. The NJBA appreciates Chairman Boucher and Ranking Member Stearns for their vision on an issue of vital importance to tens of millions of Americans who rely on local TV stations for high-quality entertainment, niche programming and lifeline emergency news and information.

BFA Celebrity Golf Fundraiser

The Broadcasters Foundation of America will host their Annual Celebrity Golf Tournament on Monday, September 13, 2010 at the fabulous Siwanoy Country Club, Bronxville, NY. This fun filled event will feature many local and national celebrities as well as the biggest names in broadcasting. It’s the must attend golf event of the season. The mission of the Broadcasters Foundation of America is to improve the quality of life and maintain the personal dignity of men and women in the radio and television broadcast profession who find themselves in acute need. The foundation reaches out across the country to identify and provide an anonymous safety net in cases of critical illness, advanced age, death of a spouse, accident and other serious misfortune. For more information and to register your foursome, visit www.broadcastersfoundation.org.  BFA’s Chairman Phil Lombardo, and BFA Prez Jim Thompson promise a fun filled and successful event!

More BFA News

This week, the Broadcasters Foundation also named RAB’s Jeff Haley, Katz Radio’s Mark Gray and TVB’s Steve Lanzano as VPs. Tom Taylor reports that those industry leaders will keep the spotlight on the needs of broadcasters who’ve fallen on hard times, and their families. There was always a role for the Broadcasters Foundation of America, but now with the lingering effects of unprecedented layoffs, the need is even greater. The Vice President positions for Jeff Haley, Mark Gray and Television Bureau of Advertising Prez Steve Lanzano are new ones for the New York-based organization, which stages an array of fund-raising events to keep the treasury filled.  

Principle Radio Group Announces Changes

Michael Castello joins Bill Saurer-run Principle Broadcasting Network as the new VP/GM for its Long Island-based low-dial WLIE Islip, NY (540). Michael was previously the VP/Syndication Advertising Sales for American Latino Syndication-LATV Networks and has both general market (Daynet) and ethnic broadcasting experience. Principle Broadcasting focuses on brokered-ethnic in all its markets – Boston (WJDA/1300, WESC/1230), Dallas (KHSE/700, KFCD/990), the Bay Area (KLOK/1170, KCNL/104.9), as well as Long Island and New York, with WLIE. WLIE was historically licensed for 2,500 watts daytime and 220 watts at night, but it’s been able to boost daytime power to 10-kw. Bill Saurer, who is currently the Chairman of the NJBA Board of Directors, oversees Principle Broadcasting for Buffalo-based Mercury Capital Partners, run by Charlie Banta. (Hat Tip to NJBA pal Tom Taylor.)

Seton Hall Student Received Bayliss Scholarship

The board of directors for the Bayliss Foundation has awarded $25,000 in scholarships to 5 students at colleges and universities nationwide, including one student from New Jersey: Caitlin Duffy, who is currently attending Seton Hall University in South Orange, NJ. Ms. Duffy was one of this year's 5 recipients who are pursuing a wide spectrum of industry goals ranging from programming, new technology, sales and creative to announcing and station management. These ambitious young people were selected to receive the Bayliss Radio Scholarship because of their academic achievement and extracurricular radio activities, their passion for radio and their desire to contribute to the overall advancement of the radio industry. Good news our industry can celebrate!

Silly Season’s Upon Us

It’s that time of year again and elections are right around the corner. Political ad buying should be at an all time high this fall, and stations trying to locate the "political form" stations fill out and place in their public inspection files following a political ad buy (which reports the information required by the FCC), can go to the NAB website for NAB forms. This is because the FCC has never issued its own form for this purpose (it just specifies the information that must be placed in the public file), but stations are free to use any format they like as long as it contains all of the required information regarding the political ad buy. In the absence of a federal form, the NAB's "PB-16 Candidate" and "PB-16 Issues" forms have become the industry standard with which advertisers and agencies are familiar, and which the great majority of stations use.  However, be careful if you are asked for copies of the PB-16 by another station.  The PB-16 is copyrighted by NAB and is available for purchase at http://www.nabstore.com/pobrfopbfo.html (the NAB Website) for $30 for non-members.  As indicated on that webpage, NAB is providing the form free of charge to member stations that contact the NAB at 202-429-5400 or by email at: membership@nab.org By referring to the NAB link, stations can quickly get the latest version of the form at no cost, if they are an NAB member, of course.

Lowest Unit Rate Charge

Campaign finance reform bills otherwise known as the DISCLOSE Act have been making their way through Congress recently.  The bills, introduced by Sen. Charles Schumer (NY) and Rep. Chris Van Hollen (MD), are a response to the Supreme Court decision in the Citizens United case which deals with contribution limits and disclosure of third-party advertising. The broadcast industry has been closely following these bills with concern over inclusion of language that would expand or change lowest unit charge (LUC) political advertising rates.  As originally introduced, the House version of the bill did not contain any LUC language or changes.  The Senate bill, however, did include a section on television media rates and which would drastically alter the current LUC law.  On June 24, the full House of Representatives approved their bill, H.R. 5175, and consistent with the original version, it does not contain any LUC language.  Meanwhile, on July 22, the Senate sponsor introduced modified legislation in an attempt to more closely align it with the House version and to bring it before the full Senate for consideration.  In response to industry advocacy, the new bill, S.3628, no longer includes LUC changes. As the Senate prepares for possible debate and consideration of S.3628, we will continue to monitor any developments. (Hat tip to NAB’s Mike Hershey for this contribution.)

Rush Beats Howard

Rush Limbaugh tops Howard Stern in Talkers’ all-time “Heaviest Hundred.” Publisher Michael Harrison tells Radio-Info’s news page why it worked out that way – "Rush is a part of a movement that he has influenced, and he defines as a whole an historic genre of radio.” He says “Stern might have been #1 for the greatest shock-jocks, or DJ's, or greatest entertainers." Nice to see some of talk radio’s earlier figures remembered, much the way you’d want an all-time NBA list to recall Bill Russell or Oscar Robertson. Here’s the rest of Talkers’ top ten - Larry King. Sean Hannity. Don Imus. Arthur Godfrey (the "pioneer of unscripted talk radio"). Dr. Laura Schlessinger. Sally Jessy Raphael (she put her trademark red glasses in front of a radio mic before she did the daytime TV show). Barry Gray (the "father of the call-in show"), and Bruce Williams.

PPM Shows All-Day Strength of Radio

While morning and afternoon drive remain radio’s most in-demand departs, some agencies are encouraging advertisers to allocate more dollars to midday’s. Middays are showing higher listening levels under electronic measurement than in the diary.  About 60% of national rep business has historically been placed in a.m. and p.m. drive, with about 15% in the middle of the day, according to Katz Media Group.  But some advertisers are responding positively to agency suggestions to adjust day part weights based on PPM data that demonstrates radio’s strength beyond drive times.  “PPM is showing that radio is an all-day medium,” McGuire says.  “Agencies like the fact that they’re better able to negotiate good rates in these day parts.  They see non-drive day parts as a way to counter balance higher cost-per-points in morning and afternoon drive.” Greater Media’s Paul Blake says, “There is absolutely much more acceptance of radio and online working together today than there was a few years ago.  With consumers being hit with so many more messages than they have in the past, utilizing a couple of different tools and touch points with the consumer is an effective way to get results for advertisers.”

Radio Show Registration Now Open

The 2010 Radio Show, produced by the Radio Advertising Bureau (RAB) and the National Association of Broadcasters (NAB), will be held September 29-October 1 in Washington, DC. This year's show brings radio broadcasters and industry colleagues together to share knowledge, discover the latest innovations, network with industry leaders and explore creative business strategies to help radio flourish in the digital age. To learn more about the 2010 Radio Show, visit www.radioshowweb.com. Don’t miss this opportunity to join other leaders in the radio industry for this exclusive event.

QuickNews will be on the road next week but will return on Friday, August 20th.

QuickNews is provided for general information purposes only and should not be relied upon as legal or tax advice pertaining to any specific factual situation. Legal and tax related decisions should be made only after proper consultation with a legal professional of your choosing.

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