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Media and Marketing

Media exec hopes to cash in on TV consolidation

Mark Larson

Frank Washington, the CEO of System Integrators Inc. until the
Sacramento newspaper-software company was sold in
June 2000, heads a new company these days
called Moon Shot Communications. And his new goal is to make a lot of
money in the next several years by buying TV
stations across the country, waiting for their
value to increase, and then selling them to the highest bidders.

Washington believes the stations will command higher prices if the
Federal Communications Commission loosens rules
limiting the number of broadcast TV stations
a media company can own in the same market -- a change he expects to
happen over the next few years.

The change would uncork a consolidation-driven buying frenzy like the
one that began in radio 10 years ago. By buying
now and selling later, Moon Shot would try
to pocket some fat capital gains.

Washington and four partners are working with investors and the Carlyle
Group of Washington, D.C., a major
private-equity firm, to line up stations they might
buy. They figure they can assemble groups of TV stations for good deals
now, by purchasing TV stations owned
mostly by small companies outside large U.S.
markets. Washington counts on the sellers not seeing the same potential
in their properties that he does.

The potential buyers once the rule changes, he says, include radio,
cable, newspaper and other media companies.
Eventually, he predicts, a handful of companies
will probably own all the TV stations across the country.

Something similar happened in radio a decade ago. The FCC eased rules on
how many stations one owner could have
per city. Stations were sold and swapped as
radio chains with the deepest pockets locked up the richest markets.

When the smoke cleared, the industry had consolidated dramatically.
Sacramento used to have at least 20 independent
radio stations. Now three companies own most
of the market -- Clear Channel Communications, Entercom and CBS.

Washington, who worked at the FCC in the Carter administration, says the
TV broadcast rules are changing because
they're outdated. They were written when
broadcast TV stations had few competitors. Cable didn't amount to much
and satellite-based programming didn't exist.

Now, Washington figures, broadcast stations need to unite to compete
against cable and satellite fare. Consolidation lets
TV stations operate much more efficiently,
he says, by centralizing back-office and programming operations.

The value to local TV watchers is debatable. Efficient systems don't
necessarily produce good programs. Consolidating
commercial radio has gutted competition and
reduced diversity.

Mediocre content also pushes the public to consider any alternatives
that come along. Coincidentally, some alternatives
are just now surfacing in radio: satellite radio
companies XM Satellite Radio Inc. and Sirius Satellite Radio. Part of
their sales pitch is that the signals don't fade when
you drive out of town.

Both companies also believe plenty of people are willing to pay $10 a
month to receive 100 channels of ad-free music
and news not now available on most stations.
Reach reporter Mark Larson at mlarson at bizjournals.com.




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<P> this is the info i talked about today, 
<P>Dorothy mame in the iMC and discussed the fact that the Carlyle group has been buying Media Companies.
<P>&nbsp; <B><I>Dorothy Martirano &lt;esofea at ix.netcom.com&gt;</I></B> wrote: 
<BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid">Date: Sun, 24 Feb 2002 10:11:41 +0000<BR>From: Dorothy Martirano <ESOFEA at IX.NETCOM.COM><BR>Reply-to: esofea at ix.netcom.com<BR>Organization: SalMar Foundation<BR>To: solaraycer at yahoo.com<BR>Subject: carlyle<BR><BR><BR>Here's the info I have on Carlyle. I know there's more, but it's a good<BR>start.<BR>The website is Carlyles own posting. This is very long, but also very<BR>illuminating. During 2001, many new<BR>directors have joined the board, and many of them are former heads of<BR>government offices. They're buying real estate, communications<BR>companies, and media all over the world.<BR><BR>I've also included 2 articles:<BR><BR>1) Guardian Article from Oct. '01<BR>2) Luckily, I had saved the one from the Sacramento Business<BR>Journal...it was print edition only, which explains why I couldn't<BR>find it on the net.<BR><BR>I wish someone would connect all the dots and publish an article. If<BR>these bastards are able to do what I think they're trying to do,<BR>we won't have a prayer of getting any meaningful news from anywhere.<BR>Dorothy<BR>p.s. enjoyed the discussion yesterday<BR>I bet Molly Ivins has written about these thieves too...maybe in one of<BR>her books<BR>************************************<BR><BR>http://www.thecarlylegroup.com/news.htm#07<BR><BR><BR>Featured Article<BR>The ex-presidents' club<BR>Oliver Burkeman and Julian Borger<BR>Wednesday October 31, 2001<BR>The Guardian Discuss this article by clicking here<BR><BR>It is hard to imagine an address closer to the heart of American power.<BR>The offices of the Carlyle Group<BR>are on Pennsylvania Avenue in Washington DC, midway between the White<BR>House and the Capitol<BR>building, and within a stone's throw of the headquarters of the FBI and<BR>numerous government<BR>departments. The address reflects Carlyle's position at the very center<BR>of the Washington establishment,<BR>but amid the frenetic politicking that has occupied the higher reaches<BR>of that world in recent weeks, few<BR>have paid it much attention. Elsewhere, few have even heard of it.<BR><BR>This is exactly the way Carlyle likes it. For 14 years now, with almost<BR>no publicity, the company has<BR>been signing up an impressive list of former politicians - including the<BR>first President Bush and his<BR>secretary of state, James Baker; John Major; one-time World Bank<BR>treasurer Afsaneh Masheyekhi and<BR>several south-east Asian powerbrokers - and using their contacts and<BR>influence to promote the group.<BR>Among the companies Carlyle owns are those which make equipment,<BR>vehicles and munitions for the US<BR>military, and its celebrity employees have long served an ingenious dual<BR>purpose, helping encourage<BR>investments from the very wealthy while also smoothing the path for<BR>Carlyle's defense firms.<BR><BR>But since the start of the "war on terrorism", the firm - unofficially<BR>valued at $13.5bn - has taken on<BR>an added significance. Carlyle has become the thread which indirectly<BR>links American military policy in<BR>Afghanistan to the personal financial fortunes of its celebrity<BR>employees, not least the current<BR>president's father. And, until earlier this month, Carlyle provided<BR>another curious link to the Afghan<BR>crisis: among the firm's multi-million-dollar investors were members of<BR>the family of Osama bin<BR>Laden.<BR><BR>The closest the Carlyle Group has previously come to public attention<BR>was last May, when a Seoul-based<BR>employee called Peter Chung was forced to resign from his<BR>£100,000-a-year job after sending an email to<BR>friends - subsequently forwarded to thousands of others - boasting of<BR>his plans to "fuck every hot chick in<BR>Korea over the next two years". The more business-oriented activities of<BR>Carlyle's staff have been conducted<BR>much more quietly: since it was founded in 1987 by David Rubenstein, a<BR>policy assistant in Jimmy Carter's<BR>administration, and two lawyer friends, the firm has been dispatching an<BR>array of former world leaders on a<BR>series of strategic networking trips.<BR><BR>Last year, George Bush Sr and John Major traveled to Riyadh to talk with<BR>senior Saudi businessmen. In<BR>September 2000, Carlyle hired speakers including Colin Powell and AOL<BR>Time Warner chair Steve Case to<BR>address an extravagant party at Washington's Monarch Hotel. Months<BR>later, Major joined James Baker for a<BR>function at the Lanesborough Hotel in London, to explain the Florida<BR>election controversy to the wealthy<BR>attendees.<BR><BR>We can assume that Carlyle pays well. Neither Major's office nor Carlyle<BR>will confirm the details of his salary<BR>as European chairman - an appointment announced shortly before he left<BR>the House of Commons after the<BR>election - but we know, for the purposes of comparison, that he is paid<BR>£105,000 for 28 days' work a year for<BR>an unrelated non-executive directorship. Bush gives speeches for the<BR>company and is paid with stakes in<BR>the firm's investments, believed to be worth at least $80,000 per<BR>appearance. The benefits have attracted<BR>political stars from around the world: former Philippines president<BR>Fidel Ramos is an adviser, as is former<BR>Thai premier Anand Panyarachun - as well as former Bundesbank president<BR>Karl Otto Pohl, and Arthur<BR>Levitt, former chairman of the SEC, the US stock market regulator.<BR><BR><BR><BR><BR>Industry Wrapups<BR><BR>From the November 23, 2001 print edition<BR><BR>*******************************************************************<BR><BR>Media and Marketing<BR><BR>Media exec hopes to cash in on TV consolidation<BR><BR>Mark Larson<BR><BR>Frank Washington, the CEO of System Integrators Inc. until the<BR>Sacramento newspaper-software company was sold in<BR>June 2000, heads a new company these days<BR>called Moon Shot Communications. And his new goal is to make a lot of<BR>money in the next several years by buying TV<BR>stations across the country, waiting for their<BR>value to increase, and then selling them to the highest bidders.<BR><BR>Washington believes the stations will command higher prices if the<BR>Federal Communications Commission loosens rules<BR>limiting the number of broadcast TV stations<BR>a media company can own in the same market -- a change he expects to<BR>happen over the next few years.<BR><BR>The change would uncork a consolidation-driven buying frenzy like the<BR>one that began in radio 10 years ago. By buying<BR>now and selling later, Moon Shot would try<BR>to pocket some fat capital gains.<BR><BR>Washington and four partners are working with investors and the Carlyle<BR>Group of Washington, D.C., a major<BR>private-equity firm, to line up stations they might<BR>buy. They figure they can assemble groups of TV stations for good deals<BR>now, by purchasing TV stations owned<BR>mostly by small companies outside large U.S.<BR>markets. Washington counts on the sellers not seeing the same potential<BR>in their properties that he does.<BR><BR>The potential buyers once the rule changes, he says, include radio,<BR>cable, newspaper and other media companies.<BR>Eventually, he predicts, a handful of companies<BR>will probably own all the TV stations across the country.<BR><BR>Something similar happened in radio a decade ago. The FCC eased rules on<BR>how many stations one owner could have<BR>per city. Stations were sold and swapped as<BR>radio chains with the deepest pockets locked up the richest markets.<BR><BR>When the smoke cleared, the industry had consolidated dramatically.<BR>Sacramento used to have at least 20 independent<BR>radio stations. Now three companies own most<BR>of the market -- Clear Channel Communications, Entercom and CBS.<BR><BR>Washington, who worked at the FCC in the Carter administration, says the<BR>TV broadcast rules are changing because<BR>they're outdated. They were written when<BR>broadcast TV stations had few competitors. Cable didn't amount to much<BR>and satellite-based programming didn't exist.<BR><BR>Now, Washington figures, broadcast stations need to unite to compete<BR>against cable and satellite fare. Consolidation lets<BR>TV stations operate much more efficiently,<BR>he says, by centralizing back-office and programming operations.<BR><BR>The value to local TV watchers is debatable. Efficient systems don't<BR>necessarily produce good programs. Consolidating<BR>commercial radio has gutted competition and<BR>reduced diversity.<BR><BR>Mediocre content also pushes the public to consider any alternatives<BR>that come along. Coincidentally, some alternatives<BR>are just now surfacing in radio: satellite radio<BR>companies XM Satellite Radio Inc. and Sirius Satellite Radio. Part of<BR>their sales pitch is that the signals don't fade when<BR>you drive out of town.<BR><BR>Both companies also believe plenty of people are willing to pay $10 a<BR>month to receive 100 channels of ad-free music<BR>and news not now available on most stations.<BR>Reach reporter Mark Larson at mlarson at bizjournals.com.<BR><BR></BLOCKQUOTE><p><br><hr size=1><b>Do You Yahoo!?</b><br>
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