Friday, September 14, 2007

Radio: Mel 1 Rehr 0

You are David Rehr and it appears that you’ve already lost the National Association of Broadcasters (NAB) its biggest battle.

You couldn’t block the XM-Sirius satellite radio merger.

Rehr’s day went to Hell on Wednesday when analyst group Cowen & Company bet on the XM-Sirius deal getting approved by the Department of Justice (DOJ).

The final decision is roughly eight weeks away but one C&C analyst predicted the DOJ could make this one a done deal in just four.

The FCC has to sign off on the merger, too, but it’s unlikely that their decision would differ from the DOJ’s.

The Motley Fool also predicted the merger’s a given and suggested that its followers should invest accordingly.

Even former FCC commissioner Mark Fowler is backing it.

What happened, David Rehr?

The NAB is supposed own the FCC – past, present, and future.

Rehr blew it badly. The merger plans, which would result in one company with a combined total of roughly 15 million subscribers, were laid out for the world to see back in February.

That gave him close to a half a year to rally Capitol Hill to his side.

There were no secrets. XM and Sirius claimed the merger would not be a monopoly since they compete with terrestrial radio, Internet radio, and MP3 players. That’s what they focused on and never deviated from that claim.

In response, the unfocused David Rehr who looks like David Johansen impersonated still another David – David Byrne and danced around the merger issues like Byrne did on the Talking Heads video, “Once in a Lifetime.”

It’s taken him just two years to go from the NAB’s hopeful hero to a hopeless zero.

Sometimes it is better to remain silent and be thought a fool than to open one’s mouth and remove all doubt.

Rehr had all the charisma of dead fish when he pitched Capitol Hill. And Mel Karmazin was Mel Karmazin. No contest.

The NAB argued that the satellite radio merger would create a "state-sanctioned" monopoly, which would be bad for consumers, and would harm local (and he emphasized local over and over and over again) radio stations nationwide. "Monopolists have the ability to raise prices and discriminate," he said. His argument was as believable as anything Gen. David Petraeus told Congress.

XM, Sirius and the NAB hired lobbyists to defend their positions. Sirius spent $650,000 between January and June and XM tossed in $580,000 and, combined, had total 13 different lobbying firms doing their influence peddling. The Palmetto Group got the bulk of XM’s cash - $70,000 – while Wiley Rein, the lead dog lobbyer for Sirius, received $420,000. Other lobbyists employed by XM and Sirius included Mehlman Capitol Strategies, run by former GOP National Committee Chairman Ken Mehlman and Quinn, Gillepsie & Associates, led by Jack Quinn, the former chief of staff to former Vice President Al Gore.

The NAB spent a staggering $4.3 million for lobbyists during the same period. It spread the business out to ten firms, with the lion’s share going to – and you’re not going to believe this – the Ashcroft Group, headed up by former Attorney General John Ashcroft.

Let’s back up for a moment.

John Ashcroft representing the National Association of Broadcasters? What was Rehr drinking?

The same NAB that’s backing CBS-TV’s argument over the $550,000 fine levied by the FCC for Janet Jackson’s nipple slip during the 2004 Super Bowl half-time show hired John Ashcroft?

This is the same John Ashcroft who spent $8,000 for drapes to cover the exposed right breast of the 75- year old Spirit of Justice statue in the Justice Department’s Great Hall. He dropped an additional $2,000 on consultants to assure that the statue’s nipple wouldn’t indent the drapes.

(A second statue, the male Majesty of Justice, with its sculptured strategically-draped cloth, was not considered offensive by Ashcroft.)

Ashcroft deflected all questions to a minion who issued a statement that said it was done for “aesthetic purposes.”

This is one sick puppy.

You have to question what kind of lifestyle a conservative Republican who plays the family values card really has.

John Ashcroft. Rhymes with Larry Craig? Or is it David Vitter? Maybe Mark Foley?

So Rehr who’s claiming he’s just alright with Janet Jackson’s right breast and ornamentally enhanced nipple teamed up with John Ashcroft whose Jesus is just alright – but the Majesty of Justice’s right breast and non-ornamentally enhanced nipple is not.

From Nipplegate to Nipplehate.

Rehr also called in a favor for a quote from outré-conservative Senator and Presidential candidate Sam Brownback (R-Kan). He claimed the deal would "not serve the public interest."

How does it feel to be David Rehr?

He outspent XM-Sirius’ lobby expenses by over $2.7 million – and lost? Who’s Rehr’s accountant? Tom Noe?

Rehr can’t read the room. He turned over the NAB’s entire lobbying budget to the conservative wing of the GOP when polls show their integrity locked in the sub-basement.

He has tire tracks up and down his back from all the times Mel’s crew has thrown him under the bus the past seven months.

While Rehr tanked whatever influence the NAB had on Capitol Hill, XM shares rose 70 cents to $14.32, and Sirius was up 16 cents, or 4.8 percent, to $3.47.

When the going gets tough – Rehr fetches David Wharton, his executive VP of media relations to cover his ass. “In Mel Karmazin's world, elevator music is competition to satellite radio," he said. "Get real. It doesn't pass the laugh test.”

Silence.

All Whatron confirmed was that he wouldn’t even be considered for an audition to NBC’s Last Comic Standing.

$4.3 million. Money for nothing. Mark Knopfler should rewrite the lyrics just for you, Mr. Rehr.

30 comments:

Anonymous said...

Dave Rehr's appointment to the NAB had to be approved by its committee that is made up of "broadcast leaders". It shows why leadership is in short supply in the broadcast industry. Any broadcst company wanting to protect their integrity should resign from this organization and let those who nominated him die with him.

Anonymous said...

Satellite radio is planned obsolessence. When wireless is available for mobile use no one will need satellite radio. There has to be a scam connected to the XM-Sirius merger.

Anonymous said...

If you enjoy radio, not just listening to music, satellite radio is a revelation. A variety of talk shows, comedy, and sports PLUS a true variety of music may be found on satellite, not terrestial, radio. The lack of censorship and the paucity of commercials is unmatched. If the merger is approved, the combined content of Sirius and XM will attract a wide audience.

Satellite radio lover said...

If the merger goes through here are my suggestions: Use XM's rock stations. They are far better than the Sirius variety. Have some oldies stations that sound like oldies stations with jingles & music from the 50S 60S and early 70S the way it used to be on terrestrial radio. Neither Sirius or XM do their oldies formats well. Offer the option of purchasing individual stations and group packages for sports and news.
XM has better music programming than Sirius and I hope the merged company agrees. I like my satellite radio. I have both XM and Sirius. One came with my car (XM) and I also added a Sirius unit that I purchased from the Honda dealer. I rarely listen to terrestrial radio. I used to listen for traffic reports but they are now rarely accurate.

Anonymous said...

I have heard David Rehr speak. He should be nominated for membership in the Liar's Club. He made claims about terrestrial radio which were totally false. He praised terrestrial radio and over-the-air televsion for being local.
Local? Maybe their prerecorded traffic and weather reports are (and wrong most of the time) but that is it. Rehr did more for the merger than the other side.

Anonymous said...

That visual of Rehr as David Byrne - unbelievable. I have seen Rehr speak. He speaks well and says nothing. Maybe he is a good representative of the broadcasting industry considering that.

m said...

Yeah, "local radio" is no more than a conglomerate of Clear Channel stations that plays only to the lowest common denominator. With the exception of NPR and sometimes Air America, the medium of radio is spiraling into mediocrity.

John said...

I do worry that Mel's influence will homogenize sat radio. As one poster has commented, XM has better music programming.
Although, I don't care too much. Internet streams beat either XM or Sirius.

Anonymous said...

I have to agree with the Mel Karmazin comment. He had his pet stations (WXRK, WBCN, KROQ) but most of them were your typical garbage. Even WBCN and WXRK became also rans. I don't believe he cares about the music or any programming. He is completely sales driven and that isn't bad as long as he hires the right programming people and I agree that both Sirius and XM's music stations need change.

the ghost of scott muni said...

karmizan is a snake. how about his lifetime contract for scott muni at wnew-fm? he made that public and went back on his word. the only true loyalty he has is to howard stern and only because he owns a piece of him.

Satellite of Love said...

Things are different. Only some SIrius and XM channels have commercials. He has to concentrate on subscribers and churn and that means the product becomes vital. Mel doesn't know rock from classical so I would not expect him to pick up on how bad some of his music stations sound. Maybe he will bring in some fresh programmers to clean it up.

Joseph Aubele said...

As a subscriber to both XM and Sirius I'm looking forward to the merger; but I much prefer the Sirius music lineup (ok, channel 21 -- Alt Nation -- specifically) XM's.

Billy said...

This guy is a complete joke. His 2 main arguments - the monopoly thing and the local thing - look ridiculous when the NAB has been describing satellite radio as the "competition" forever, and when "local" barely exists anymore. Whatever Clear Channel doesn't own just copies Clear Channel. He seriously is the definition of buffoon.

Anonymous said...

I would rather have one excellent satellite service than two mediocre ones which is what we have right now. I agree with the posts on the music channels. I think both Sirius and XM fall short but Sirius is the absolute WORST when it comes to rock. I like Little Steven's show on terrestrial but his full time format channel sucks. I hope he gives it up and they put a better selection on that channel when he goes on tour with Bruce.

Anonymous said...

John I thought you made that stuff up about Ashcroft. Pretty funny. I told someone about it and confirmed it really happened. I went on line and sure enough. Rehr (or Rehr-end)'s choice of Ashcroft as a lobbyist for the NAB was just plain dumb. No wonder why radio is so bad. You have idiots like him running the business. Thank you for a great story.

The Swami said...

Mark my words.

Five years from now.

Terrestrial radio - dead.

Satellite radio - dead.

Internet radio - the only place to go.

Take heed in the swami.

Anonymous said...

I predict Mel will get what he wants and gets to be the only game in town and then adds spots to all the channels. Maybe six minutes an hour. I do not believe he will improve the product. We will still be stuck with the same sh!#y rock formats. Most of the XM channels except the sports will go too. Look at the end result of what Mel did to CBS/Infinity. History repeats itself.

Not Mel's fan club said...

Rehr played into Karmazin's hands.

He lack the savvy to fight with the big guys and his politics did him in.

That was a funny story about Ashcroft. I was not aware of his dislike of the female breast.

I worked for Infinity before and during CBS. The person that wrote about Mel's favorite stations and people is absolutely correct.

The station I worked for was not one of his pets nor was my PD. He signed off on everything. I swear even pen and pencil sets. It was not well run.

Scott Muni was his friend until he didn't need him anymore.

He ruined Roscoe's life.

He called programming arts and crafts and all his attention was on sales.

It takes a good product to generate good sales and that fact fell on deaf ears.

The merger means little to me other than I would have preferred to see the XM management and programming not Sirius's survive it.

Anonymous said...

Just discovered your site. I appreciate that someone like you who knows radio also knows what its listeners want. This is a very informative story. This and others I have read about the radio and music industry convince me that those who are running those businesses have no idea what they are doing.

David Kominski said...

Did anyone see the interview with XM's Gene Parsons and Nate Davis in the New York Times on Saturday

If not, here is the URL:
http://www.nytimes.com/2007/09/15/business/15interview.html?_r=1&oref=slogin

I was impressed with these gentlemen compared to Mel Karmazin's gruff run you over style.

Former TV AE said...

You spend too much time on satellite radio and terrestrial radio. Neither one will serve the purpose they barely serve now within the next ten years.

You're a smart guy, John. You know that.

Internet radio/TV is a future and control of your own media enviornment is another.

Terrestrial and satellite radio/TV proponents are stripping whatever they can from these industries while they can.

Everyone from the Mays family to Mel Karmizin will be living large safely out of the U.S. with their wealth tucked away in the Caymans and Sweden.

Anonymous said...

"with their wealth tucked away in the Caymans and Sweden."

The Caymans, yes.

Sweden, no. A 90% tax rate will do that.

Anonymous said...

Anything new on the Clear Channel and American Securities Capital Partners deal / lawsuit?

Anonymous said...

Those at the top of the food chain will walk away with a fortune while everyone else will get nothing. America home of the haves and the have nots and those that have didn't do anything to deserve it.

Anonymous said...

John...Two things were in Inside Radio this morning (9/18) that may be of interest to you. Mel Karmazin is renegotiating with the RIAA/CRB and wants a reduction in royalties & they want it upped by 7-8%. Karmazin is saying why should he pay royalties if terrestrial radio isn't since he is competing with them.....

....and XM and Sirius hired an independent third party to review contracts and expenses to determine the true value of the synergies. Opie & Anthony think they will be gone and I agree with most of the people on your comments page. GET RID OF SIRIUS'S ROCK FORMATS. XM'S ARE BETTER.

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