Weekly News Recap April 23-27, 2018

what we originally forecast, mostly Borrell Forecasts due to shyness about Facebook use following the Cambridge Analytica 21% More Political scandal.” Radio’s election bread has always Dollars For Radio been buttered at the local level, as campaigns leverage the medium’s local connection to listeners. So In 2018. newspapers and cable and less than it should come as no surprise As this year’s mid-term election it originally forecast for direct mail that ballot issues ($132.7 million), races heat up, there’s good news and digital media. The new numbers municipal government races for radio amidst all the political see radio grabbing a slightly larger ($125.1 million), special interests posturing and rhetoric. Radio is slice of the election ad pie than in ($122.4 million), and state senate in store for a much larger share the last mid-term elections. In 2014, contests ($120.8 million) will be of political dollars than originally radio received 7.5% of $8.3 billion radio’s biggest breadwinners in expected. Based on early activity in campaign spending, per Borrell. Campaign 2018. In fact, Borrell from what will be a turbulent, This year it will carve out a slightly estimates that 15% of all the money pivotal election cycle, Borrell larger slice of a bigger pie – 7.7% spent on municipal races will flow to Associates now says radio will of the $8.8 billion in Borrell’s freshly radio, nearly double the 7.7% the cordon off $683.4 million in election revised forecast. medium is expected to take from the advertising, a whopping 21.1% entire election pie. “Let’s not forget more than the $564.3 million first There isn’t one over-arching reason about all of those municipal races,” projected in the financial advisory why more political dollars will flow to Elliott tells Inside Radio. “There is firm’s original forecast. radio this year, according to Borrell always a lot of them – and they add VP of Research Corey Elliott. Rather up.” there are a few causal factors at play that compound each other. He also advises radio’s political “We see a decrease in originally sellers to keep an eye on some of forecast digital spending – things the “hot” House races this year. like Cambridge Analytica did not “Some of the most contested are help the matter,” occurring in shoulder and rural counties, where radio is by far one Elliott tells Inside Radio. “And we of the dominant media,” he says. are starting to see a lot more interest Radio’s biggest political booty will and competition heating up in state- come in the form of ballot issues but level contests in shoulder and rural broadcasters will need to be patient. areas – exactly where radio tends “Those won’t start popping up until to do well.” Elliott also notes that later in the year, but when they do, radio’s competitive pricing and there will be plenty of dollars spent promise of targeted reach are also ‘explaining’ different sides to an As campaigns shift money away working in its favor. issue,” Elliott says. from digital media and direct mail, radio will capture 7.7% of 2018 To no one’s surprise, broadcast TV But in other contests, the action is political dollars, more than one will again vacuum up the lion’s share ready to roll. “Starting this month, percentage point higher than the of election ad dollars, 38.8% to be a statewide political contest will 6.6% initially forecast. precise or $3.4 billion. “The media occur nearly every other week,” the beneficiaries in our new forecast are report notes. “There will be dozens In fact, across all ad channels newspapers (12% higher than our of primaries, runoffs, and special Borrell has plumped up its earlier previous estimates), cable (up 11%), elections, all leading up to the forecast by $321 million or 3.8 radio (up 21%), and out of home Big Event – the midterm General percentage points from its previous (up 26%),” Borrell says in “Political Election Nov. 6. Political advertising forecast. In addition to radio, Advertising Overload,” released will be unavoidable.” Borrell sees more money going to Tuesday. “Digital loses 5.6% from

Page 1 Weekly News Recap April 23-27, 2018

Scripps In Proxy Battle With Activist Shareholder. Among the broker chatter at the NAB Show this month was that E.W. Scripps has lined up at least one buyer for part of its radio division that’s been on the block since January. That decision is one of the few things that activist shareholder Mario Gabelli is happy with. But the list of what doesn’t sit well with Gabelli—whose GAMCO Investors holds about a 16.5% stake in Scripps—seems to be growing. “Help Us Help” is the headline in an advertisement in the Cincinnati Enquirer in which Gabelli urges fellow stock owners to select three board members that he’s backing, saying he’s trying to help Scripps management increase the company’s intrinsic value. Gabelli thinks adding broadcast veterans to the board could help Scripps grow its broadcast cash flow by 6% and put the company more on par with other broadcast Tax Law Changes Could Impact Radio’s Deal Market. groups. The company, meanwhile, has urged shareholders One of the ways the federal government’s tax reform law to vote for the candidates it’s nominated. In a letter to will trickle down to radio is through the deal market. The employee shareholders, CEO Adam Symson said the current sweeping tax law maintained the long-term capital gains tax management team is “delivering tangible results toward rates of 0%, 15%, and 20%—but it changed how those rates improving the company’s performance.” He also said that are applied. In effect it shifted the income thresholds lower the company’s new operating philosophies are focused on so that many entities would pay a lower rate. “That will bring growing its TV portfolio while investing in digital—while exiting a certain class of seller with that tax situation to market,” the radio business. “Scripps has a strong plan,” Symson told MVP Capital co-founder Elliot employees. FULL STORY Evers said. He thinks it could also convince some sellers who’ve Likely Ratings Participants All In On Smart Speakers. remained on the sidelines to jump Radio listeners that are likely to participate in Nielsen’s into the deal market, since they PPM panels are on board with smart speakers – in a big can now pay less in taxes. But way. According to radio research and marketing company Congress also made changes to NuVoodoo, nearly half (48%) of likely PPM respondents owned the part of the tax law that allows a smart speaker as of January 2018. What Nuvoodo calls for the use of like-kind exchanges “ratings liklies” – people prone to participate in ratings surveys as a mechanism for buyers and sellers to carry over their – are more apt to use their smart speakers to listen to AM/FM basis in certain types of assets in order to defer paying taxes radio streams than the general population. Among ratings on the sale of those assets. Under the new law, exchanges liklies who have smart speakers, over 35% are using their will only be allowed for real property. Broadcasters selling new devices to listen to streaming terrestrial radio content for personal property, such as transmitters and studio gear, or over two hours a week. But radio shares the “infinite dial” with intangibles—such as FCC licenses or network affiliation other streaming audio competitors on devices like Amazon’s agreements—can no longer “roll over” their basis in those Alexa and Google’s Google Home. The recent survey of 3,041 classes of assets. FULL STORY persons aged 14-54 in Nielsen’s PPM markets found just over 35% of PPM liklies who have voice-activated speakers say AC, Classic Hits Reach New Ratings Peaks. they use their devices to listen to Pandora content for more The usual first quarter ratings scenario sees AC fall back than two hours per week, 34.0% to listen to Spotify and 34.7% to earth after the Holiday book ends and the influx of new to listen to Amazon Music for the same amount of time. The listeners tails off. “This year has been different, however, with latter’s high showing isn’t surprising given that Amazon bakes AC surging to one of its best starts to the year (post-holiday) its music service into its own devices. FULL STORY that we have seen in PPM measurement, particularly with Millennial audiences,” Nielsen says in a new analysis. In the Radio Listeners Tune In For Personalities. PPM markets, AC posted its highest first quarter share of 18- On air personalities are one of the main tune-in factors for 34 year-olds in any year since Nielsen began tracking national radio listeners, with 68% of respondents in a Cumulus Media- format trends in 2011. The format is also in the midst of a four- commissioned study conducted by Vision Critical/MARU able to year upward trajectory in the 25-54 demo and nailed its best name a favorite DJ or personality. Over half of those surveyed 6+ share since 2011. Meanwhile classic hits, another big-tent say one of the main reasons they listen to a station is to hear mainstream format, notched its best ever performance since their favorite radio host. These listeners feel a connection to Nielsen began tracking formats across the 48 PPM markets. the personalities based on humor and trust, the study found – Among listeners 6+, classic hits pushed 5.1-5.5 year over 87% of respondents “strongly” or “somewhat agree” that their year for its best showing in the eight-year period tracked by favorite air talent makes them laugh, while 61% say the host Nielsen. The YOY gain in 18-34 is even more dramatic (3.5- makes them think. The connection is deep-seeded, with 51% 5.2), up a full share above the 3.2 registered in Q1 2011. considering their favorite personalities as friends or family. Likewise, classic hits advanced 4.6-5.1 in 25-54 for its highest FULL STORY Money Demo showing of the eight-year trend. FULL STORY

Page 2 Townsquare ‘Open To Discussions’ To Selling NAME. Weekly News Recap As it shifts attention to strategically growing its radio portfolio, April 23-27, 2018 Townsquare Media is considering divesting North American Midway Entertainment (NAME). Co- To Close Tribune Buy, Sinclair Will Sell 23 TV Stations. CEO Bill Wilson says the company Aiming to appease regulators and accelerate the closing of is “open to discussions” about selling its $3.9 purchase of Tribune Media, Sinclair Broadcast Group the provider of rides, games and food says it will sell 23 TV stations in 18 markets to six different concessions, which it bought in 2015 buyers. The spinoffs add seven new markets to the original 11 for $75.5 million. The broadcaster’s the company had earmarked for sale back in February. The once-vaunted live events division buyers include Cunningham Broadcasting, Standard Media has put a drag on revenues – last Group, Howard Stirk Holdings, Meredith Corp, a company af- year billings from the division fell 8.6% to $158.8 million. That filiated with the CEO of Maryland-based Atlantic Automotive has Drew Prasad, who serves as co-CEO with Wilson, telling Corp. and Fox TV. The larger number of spinoffs comes amidst Westfair Business Publications that Townsquare will cut back renewed concerns about media consolidation prompted by the on the number of live events it stages from 500 to around mega-merger. FULL STORY 350. Selling NAME could free up more cash for Townquare to continue to bolster its radio portfolio. FULL STORY Nicholas Lehman Joins ASCAP In Strategy & Digital Role. As it looks to improve services for its members and music iHeart Partners With Amazon: Kid-Friendly Alexa Service. licensing partners, ASCAP has recruited a seasoned TV execu- With Amazon’s pint-sized Echo smart speakers claiming spots tive with a digital background to join its executive management on more kids’ nightstands, the company is launching offerings team. Nicholas Lehman, most recently chief strategy officer for with kid-friendly audio and parental controls, including a TV giant Tegna, has joined the performance rights organization subscription plan with expanded content. Amazon’s “FreeTime as executive VP and chief strategy & digital officer. Reporting to on Alexa” free plan features family-oriented programming, CEO Elizabeth Matthews, Lehman will oversee strategy, busi- conveniences like free calling and intercom messaging ness and product development and administration services. At between Alexa devices, and also allows parents to monitor and Tegna, Lehman was responsible for steering the company’s limit usage. The integration makes family-friendly iHeartRadio vision, cultivating partnerships, incubating new businesses live stations available across the FreeTime Unlimited on Alexa and driving innovation initiatives. Before that, Lehman was offering, including Nick Radio, Radio Disney, Disney Princess president of Digital for NBCUniversal where he oversaw the Playlist, Kids Club Radio, Sing-alongs Playlist, iHR Family Top company’s digital businesses. FULL STORY 40 Countdown and iHeartCountry Family. FULL STORY Advertisers Having ‘Light Bulb Moment’ With Radio. Beasley, DeBella Get More Time To Respond To Suit. Radio’s ability to reach more consumers on a weekly basis than Beasley and John DeBella have been given extra time to TV or smartphones has major brand marketers rediscovering respond to a sexual harassment lawsuit filed against them by its ability to connect with consumers. Advertisers are having a a former co-worker of the veteran Philadelphia morning man. “light bulb moment” with radio, says Nielsen Audio managing Judge Wendy Beetlestone granted an extension until June 21 director Brad Kelly in an interview with MediaVillage. “Now, the for the defendants to respond to Jennifer Neill’s claims that pendulum is swinging towards radio and audio as a whole,” DeBella repeatedly sexually harassed and groped her when Kelly tells journalist Alli Romano, who has covered digital me- the two worked together at classic rock WMGK Philadelphia. dia, radio and broadcast and cable TV for industry publications The defendants and the plaintiffs sought the extension because including Inside Radio, Broadcasting & Cable, TVNewscheck. attorneys for Neill amended their complaint on March 23, com and Multichannel News. “Billion-dollar advertisers are adding an additional party. In addition, iHeartMedia and Total re-discovering the power of radio and how it can augment, Traffic and Weather Network, for whom Neill apparently worked supplement and amplify their campaigns.” FULL STORY when she began contributing traffic reports to DeBella’s show, filed Chapter 11 on March 14. Extending the response deadline gives Beasley and DeBella sufficient time to respond to the new developments. FULL STORY

Google Looks To Double Podcast Listenership. Google is developing a new podcast product that integrates Google Search and Google Assistant, making it easier to search and listen to podcasts. By doing so, the company believes it could double podcast listenership worldwide. These new developments are separate from the podcast features available through Google Play Music. By clicking “more episodes” the user is offered a full episode list, subscribe options and the ability to add and manage multiple podcast subscriptions. An option to “add to home screen” creates a shortcut that Pacific Content says acts like an app. Even though Android devices outsell and are more widespread that the Apple iPhone worldwide, most podcast listening comes via Apple iOS devices. FULL STORY

Page 3 Nielsen’s Q1 Revenues Up 5.5%. WeeklyWeekly News News Recap Recap Driven by strong growth in its Watch division, Nielsen’s April 23-27,March 2018 12-16, 2018 revenues reached $1.61 billion in first quarter 2018, an increase of 5.5% compared to the same period one Palm Springs, CA – Educational Media Foundation files a year earlier (2.4% on a constant currency basis). Watch $450,000 deal to buy contemporary Christian “Joy 92” KHCS billings, which include the company’s TV, radio and digital (91.7) from the Prairie Avenue Gospel Center. EMF already measurement products, jumped to $834 million, up 8.5% owns the contemporary Christian “K-Love” affiliate KLXB (7.1% on a constant currency basis). Within the Watch (105.1) in Palm Springs and it plans segment, audio billings were up 0.8% to $121 million on a to program its Christian CHR “Air1” reported and constant currency basis. network on KHCS. Watch is the largest revenue engine at the measurement giant, producing more than half of its billings. In first quarter, Missouri – Lake Area Educational audience measurement of video and text were Watch’s Broadcasting Foundation files an biggest growth drivers, posting a 12.5% increase to $599 $80,000 deal to buy KTRI-FM, million (10.5% on a constant currency basis), as more TV Mansfield, MO (95.9) from Thirteen Forty Productions. KTRI- FM has been off the air since last August when it told the FCC networks sign up for Nielsen’s Total Audience Measurement that its property had been foreclosed on and operating funds system which tracks viewing across multiple platforms. had been “exhausted.” Marketing Effectiveness research continued to be one the fastest growing areas of Nielsen’s business, with revenues SALES – TRANSLATORS up 24.6% to $81 million in the first quarter, or 22.7% on a constant currency basis. A small portion of those dollars Nebraska – Craig Larson’s Nebraska Rural Radio Association comes from radio broadcasters contracting with Nielsen for files a $40,000 deal to buy the Scottsbluff, NE-licensed ROI studies and attribution analytics. Other Watch revenue translator K269DO at 101.7 FM from Chris Bernier’s Armada decreased by $16 million – or 32.7% on a reported basis and Media. The filing says the translator will simulcast country 35.3% on a constant currency basis – as Nielsen continues to “94.1 The Brand” KNEB-FM, Scottsbluff but since that Class prune money-losing products from the division. C1 covers the region it may instead have other plans such as Cola Nielsen’s Wars Buy Hit division,Full Force which With measures consumer product simulcasting its CHR “The Beet” online-only channel. Pepsi,purchases, Coke is facing Vying what On CEO Radio. Mitch Barns calls “challenged” market conditions in the U.S. with revenue of $776 million, Nebraska – Craig Larson’s Nebraska Rural Radio Association up 2.5% compared to the first quarter, but down 2.1% on files a $38,000 deal to buy the Schuyler, NE-licensed translator K276FB at 103.1 from Mike Flood. Nebraska Rural Radio a constant currency basis. Buy billings were up 10.1% in Association will use the signal to simulcast classic hits “Kool emerging markets but fell 5.2% in developed markets, due Radio” KAWL, York, NE (1370). to what the company calls “continued softness” in the U.S. market. Nielsen’s first quarter net income for the quarter CLOSINGS increased 1.4% to $72 million but was flat on a constant currency basis. FULL STORY Charlotte – Martin Hurney’s 2G Media closes a $900,000 deal to buy sports “ESPN Radio 730” WZGV from HRN SALES – STATIONS Broadcasting. The deal includes the Higgston, GA-licensed translator W283AR at 104.5 FM. 2G Media had been Sioux Falls, SD – Real Presence Radio files a $945,000 deal operating WZGV under a time brokerage agreement since to buy KBAD-FM (94.5) from Badlands Airtime. KBAD-FM is Jan. 2015. HRN Broadcasting stills own “CBS Sports Radio a Class C3 FM that’s been off the air since last September. 1350” WZGM in the Asheville, NC Market. Real Presence Radio will put its religious format on the signal. It already has ten other full-power stations in the Pueblo, CO – Mike Hernandez’s Western Radio closes Upper Midwest including KJRC (89.9) in the Rapid City, SD an $80,000 deal to buy classic hip-hop “The Buzz” KWRP (690) from Todd Robinson’s United States CP. The deal also market but this will be its first in Sioux Falls. includes two FM translators: the Boone, CO-licensed K262BB at 100.3 FM and the Fowler, CO-licensed K230BZ at 93.9 Olean, NY – Rick Freeman’s On Air files a $615,000 deal FM. United States CP still owns regional Mexican “Tigre FM to buy “103.9 The Eagle” WAGL, classic country “Eagle 104.9” KRYE (104.9) in the Pueblo market which it leases to Country Throwbacks 96.7” WVTT, and adult hits “106.3 The Greeley Broadcasting. Mountain” WXMT from Jeff Andrulonis’ Colonial Radio Group. The deal also includes two FM translators: the Olean, NY- licensed W256BS at 99.1 FM and the Olean, NY-licensed W254BQ at 98.7 FM. In what is a first for radio the filing shows the deal will be paid with virtual currency—not cash or other traditional lending mechanisms. The contract stipulates Freeman will transfer at least 3,770,667 tokens representing units of crypto currency with Ideum, which Freeman says are worth a minimum of 15-cents per token. After closing Andrulonis would then have the right to sell the tokens on the open market and if their value yields less than the purchase price Freeman will pay the difference in cash. Scranton- based Freeman doesn’t own any other radio stations but he’s the owner of the boutique media planning and buying firm FC Corp Media. He’ll operate the stations under a time broker agreement until closing.

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