Releases : Business

DENTON (UNT), Texas -- The nation's largest radio station operator--San Antonio-based Clear Channel Communications-- is being acquired by a pair of private equity capital firms and the family that founded it for nearly $18.7 billion in cash and $8 billion in assumed debt. The chair of the department of radio, television and film at the University of North Texas says this is a surprising case of new money flocking to traditional media.

Dr. Alan Albarran points out the Clear Channel deal follows recent efforts by private equity firms to buy the Spanish language TV network Univision and bid for parts of the Tribune Corporation. He says, "Most media companies have squeezed out as much cost savings as they can, yet we are seeing these private equity firms offer to buy them. It's very surprising. Do they think they can operate the conglomerates more profitably?" He adds that Wall Street has shunned media companies for having " single-digit, slow growth" potential.

Clear Channel operates 1,150 radio stations nationwide, and Albarran says that has forced them to be both creative and aggressive. He says, "Clear Channel has been an innovator in the radio business, by clustering its stations in markets to reduce overhead and sharing talent through ‘voice tracking.' Following the 1996 Telecommunications Act, it substantially expanded its holdings."

Clear Channel is also planning to sell nearly 450 radio stations it owns outside the top 100 U.S. radio markets, as well as its television broadcasting unit. Albarran says this may be an opportunity for smaller broadcasters to expand their reach and scope. "Players in those smaller markets may be able to establish duopolies, where one owner owns and operates two stations," he says.

Albarran can be reached via his office, (940) 565-2537, or on his cell phone, (972) 989-7513.

Friday, Nov. 24, will be the start of an important 31 days for retailers -- the holiday shopping season for 2006. Spending on gifts in expected to increase 5 percent this year from 2005 -- a healthy upswing for retailers, according to Dr. Dee Knight, University of North Texas assistant professor of merchandising.

Knight says the Friday after Thanksgiving is known as "Black Friday" because it is the date "when retailers begin to operate from a profitable, or ‘in the black' position rather than an unprofitable, or ‘in the red' position."

"However, it is not the biggest sales day of the holiday season; that honor typically belongs to the Saturday before Christmas. This year Christmas is on Monday, so Saturday, Dec. 23, will probably be the biggest shopping day in terms of sales," she says.

Knight notes that many people do begin serious gift buying for the holiday the day after Thanksgiving, and they are usually rewarded with deep discounts by some major retailers. But she adds that with the bustle of the shops and, often, the entertaining of friends and family members who are visiting for Thanksgiving weekend with a trip to a mall, "it is easy to get caught up in the spirit of the holiday season and lose sight of your budget. "

Knight gives these tips for staying on a budget this year:

• Determine the total amount that you will spend on gifts for the season.
• Make a list of the people to whom you plan to give a gift and the amount you will spend on each person.
• If possible, have a general idea of a gift in mind for each person.
• Make a list of the stores you will visit.
• Ask a salesperson for assistance to save time.
• Check off each name on the list. "It brings a great deal of satisfaction!" Knight says.

Knight may be reached in her office at (940) 565-2433 or by cell phone at (940) 391-6408.

DENTON (UNT), Texas -- One of the biggest national issues as the November, 2006 election approaches is the talk of raising the minimum wage. Six states--Colorado, Missouri, Montana, Nevada and Ohio--have measures on the ballot to raise their state's minimum wage. But the director of the Center for Economic Development and Research at the University of North Texas says it won't help the average worker.

"My personal view is that it's a bad idea," says Dr. Bernard Weinstein. "It doesn't really help raise overall wages, and it prices people out of the market who have low levels of ability and educational attainment. The percentage of people who actually earn the minimum wage is very low, even in those places where the state or local minimum wage is higher that the federal one."

Twenty-two states, the District of Columbia, and several major cities already have state minimum wages higher than the federal level of $5.15 an hour, set in 1997. Texas' minimum wage law ties it to the federal minimum wage. The state of Washington has the highest minimum wage in the country, $7.63 an hour. Five states have no minimum wage law at all.

Weinstein points out in this election season with a number of tight races, talking about raising the minimum wage may be a strategy to engage parts of the electorate.

"Wages understandably vary from company to company, and from labor market to market. In states with low unemployment rates, you typically find higher minimum wages. Many states now have minimum wage laws higher than the federal minimum wage," Weinstein says.

Weinstein thinks the talk about raising the minimum wage is a "stalking horse" for an old idea, a guaranteed minimum income. He says, "It would guarantee that everybody who works would be assured a minimum income. The idea was last proposed in the 1970's, when Richard Nixon was president, but it hasn't been considered since."

Dr. Weinstein can be reached at his office, (940) 565-4049 or by cell phone, (214) 707-1834.

DENTON (UNT), Texas -- The chair of the department of radio, television, and film at the University of North Texas says NBC Universal's decision to save $750 million by cutting jobs and relying more on unscripted television shows for programming shows how tough it is to make a profit running a TV network.

Dr. Alan Albarran says the growing fragmentation of audiences, and the changing economics of network television, are forcing the networks to look closely at ways they can trim expenses and become more efficient.

"In the case of NBC Universal; there are considerable savings the company can make in the area of news, as it has maintained separate news bureaus for NBC Nightly News, MSNBC, CNBC, and Telemundo," Albarran says. "The company will move to ‘hub' these news operations, and while it will mean a loss of some employees, in reality it probably won't impact what viewers see."

NBC Universal is planning to cut 750 jobs throughout the company as part of the broader effort to save $750 million by the end of 2008. The company's operating profit has dropped 10 percent in each of the past three quarters. NBC's fall from first to fourth place in prime-time TV has in part driven the slump.

But Albarran says NBC's decision on prime-time programming--to rely more on game shows, news magazines and unscripted "reality" programming during the first hour of "prime time" evening viewing--is much more revealing. "Traditionally, the first hour of prime-time has been critical to network strategy. By eliminating high-cost programs in this first hour, such as dramas or situation comedies, the network will have to focus on game shows like "Deal or no Deal," reality programs (which NBC has a mediocre record of achievement) and possibly news magazines," he says.

Albarran does not think, however, that this will ultimately impact television producers as they "pitch" their shows to NBC. "Obviously it cuts out seven hours of programming a week, so that can be interpreted as less inventory being available for shows," he says. "But, in reality, they are not doing things that are that much different from the other networks." Albarran points out that NBC's broadcast competitors have scored sizable audience hits with reality shows like "Survivor" on CBS, "Dancing with the Stars" on ABC, and "American Idol" on Fox.

Albarran can be reached via his office, (940) 565-2537, or on his cell phone, (972) 989-7513.

DENTON (UNT), Texas -- A professor of applied gerontology at the University of North Texas says Wal-Mart's plan to sell nearly 300 generic drugs at $4 per prescription in the Tampa, Florida area may be good news for senior citizens struggling to pay for medicines.

Dr. Stanley Ingman says, "It sounds like a contribution to the complex problem of drug reform plans. Anything to help will be a welcome addition."

Wal-Mart--the largest retailer in the United States--plans to introduce the $4 generic drugs first in Tampa, Florida, and then expand the program statewide during January, 2007. A national expansion would then follow. Ingman says the program would be most helpful to senior citizens who are enrolled in Medicare part D prescription drug plans. Those plans have a "donut hole" in the coverage, forcing senior citizens to pay for all of their prescription costs once their out-of-pocket costs reach $2,500.

"Drugs versus food is a common scenario with many senior citizens; they are forced to pick between the two," Ingman says. "With the "donut hole" problem of Medicare part D, we are seeing that problem more and more. Plus, since different policies only cover specific medicines, when a doctor changes a patient's prescription drugs and the new drugs aren't covered you see additional problems."

Target, the nation's second largest discount store, has announced that it will match Wal-Mart's generic drug prices. Ingman predicts that other retailers may also be forced to adopt the pricing strategy so as not to lose customers.

"They will have to do something to respond to the challenge. Major national pharmacies like CVS and Walgreens can't afford to not have all those seniors in their drugstores, filling their prescriptions," Ingman says.

Ingman can be reached through his office, (940) 565-2298, or on his cell phone, (940) 206-7473.

DENTON (UNT), Texas -- When the CBS television reality show "Survivor" premieres Sept. 14 (Thursday), several of its longtime advertisers won't be sponsoring the show--and some media watchers speculate the decision of show producers to split up competitors into teams by race may have played a factor. But an associate professor of journalism at the University of North Texas says the decision may have really come down to costs and declining ratings.

Dr. Jim Albright says, "I don't believe the (breakdown of the teams on the show by race) had much to do with the companies' decision to pull advertising. I think the competition of the media market, and where companies ultimately decided to spend their money, are a bigger factor."

The sponsor withdrawals total more than $26 million in ad sales. But Albright points out major corporations who had pulled ads from "Survivor" including General Motors, Proctor and Gamble, Coca-Cola and Home Depot also advertise during televised sporting events, and the costs to do that are rising.

"Advertisers want to go after a young audience, and live programming including sports are among the best ways to do this, " Albright says. "But it's extremely expensive. It's a case of simple economics--spend more money where the viewers are, and less where they aren't."

Even though "Survivor" is expected to perform strong in the ratings, it has seen a decline in viewership since its first two seasons in 2000 and 2001. Albright adds, however, content is a key factor for companies when they buy ads.

"In all forms of advertising, people who choose where to place their ads do so based on editorial content. For example, you probably wouldn't see the same company advertise in both the Wall Street Journal and Playboy magazine."

Albright has been a copywriter, broadcast producer and/or creative chief/group head for several ad agencies in the Dallas area. He can be reached at (940) 565-4916.