July 20, 2005

Unocal Picks Chevron, Rejects CNOOC (for now)

Filed under: Business Moves,Taxes & Government — Tom @ 6:40 pm

It’s never over ’til it’s over, as Yogi Berra used to say, but Unocal has for the moment cast its lot with Chevron (link requires registration).

Rival bidder, CNOOC, 70% owned by the Chinese government, has not thrown in the towel:

CNOOC said its $67 a share offer remains in effect and regretted that Unocal had not embraced its offer. It said it continued to monitor the situation actively.

Unocal shares closed down 3 cents, or 0.05 percent, to $64.96 a share — above Chevron’s offer price — suggesting the market thinks that a bidding war is on the cards.

A person familiar with the matter said CNOOC expected a higher Chevron bid and was reviewing options on how to react.

Among analysts, Chevron remains the favorite to win Unocal, whose board has favored its U.S. rival’s bid partly due to concern U.S. lawmakers might reject the CNOOC deal on national security grounds or the deal may be stuck in long review process. It recommended shareholders accept the sweetened offer at a shareholders’ meeting already scheduled for Aug. 10.

“We’re still making the bet that Chevron will prevail,” Fulcrum Global Partners analyst Duane Grubert said. “The politics against the Chinese bid are so severe.”

I’ll say. When a senior general with the principal owner of the rival bidder threatens to nuke your country’s cities, that can have an effect on things.

Flashback: BizzyBlog has opposed CNOOC’s takeover attempt from the start, and wonders why so-called market economists would be okay with a foreign government effectively nationalizing a domestic oil company when they’d go crazy if our government tried to do the same thing.

UPDATE: It also looks like a Chinese company won’t be buying Maytag (reading beyond first two paragraphs requires paid subscription).

JULY 21 UPDATE: The Chinese announced a very modest 2.1% currency revaluation. There are surely many factors that influenced this decision, but to me the timing, in the midst of CNOOC-Unocal, shows how government-controlled enterprises can leverage their governments to manipulate deal negotiations. So there’s one more reason why acquisitions by state-controlled enterprises, especially foreign ones, should not be allowed to happen. FURTHER UPDATE: Larry Kudlow is especially unhappy with the currency-manipulation abilities the Chinese have just given themselves.

Early Figures Indicate That Talk Radio Decline Is Real

Filed under: Business Moves,General,MSM Biz/Other Bias — Tom @ 3:35 am

BizzyBlog had a two-part excursion into talk-radio ratings analysis in late April (here and here) and opined that bloggers and blog readers might be eating into talk radio’s audience.

Well it’s still early, but the final second quarter figures are out for 5 of the top 20 markets (click on the “Rank” column to sort in descending order), including the top 3 of New York, LA, and Chicago (#17 San Diego and #18 Nassau-Suffolk round out the other available Top 20s). Together, these markets represent more than 15% of the national audience.

My take on the results, also having looked at a few of the smaller markets that have reported, is:

  • Talk radio’s audience continues to decline, and in general is down significantly, not only during the past two quarters, but also in comparison to the second quarter of last year.
  • It’s not just talk radio. All-news format stations are in general down similarly outside of Metro New York and Long Island.

So the question really is why a significant percentage of the news talk and all-news audience audience has decided to tune out (more on that later).

Here are the key items from the five ratings reports (click on the market to go to the full detail; the numbers presented are, in order, 2Q04, 4Q04, 2Q05):

New York
ABC (talk): 3.9, 4.5, 3.2
WINS (news): 3.7, 3.3, 3.7
WCBS (news): 2.4, 2.6, 3.0
WOR (talk): 2.4, 2.2, 2.3
Comment: Metro New Yorkers appear to be moving to all-news at the expense of talk. WOR’s relative stability could very well be due to Michael Savage’s popularity.

Los Angeles
KFI (talk): 4.5, 4.4, 3.9
KLSX (talk): 3.0, 3.0, 2.3
KABC (news): 2.9, 2.9, 2.1
Comment: Big declines across the board. Laid-back Angelenos are moving their ears elsewhere.

WGN (news/talk): 6.2, 5.9, 6.6
WBBM (news): 4.7, 4.3, 4.0
WLS (talk): 4.5, 4.4, 3.4
Comment: WGN is difficult to peg because of its emphasis on sports and local talk personalities. The extent of the drop at WLS is a shocker.

San Diego
KOGO (news/talk): 4.7, 5.2, 4.3
KFMB (news/talk): 4.0, 4.8, 3.2
KFI: (talk) 2.0, 2.0, 2.4
Comment: Interesting substitution of LA talk for San Diego talk.

WABC: 4.4, 5.1, 4.1
WCBS: 3.7, 3.6, 3.8
WINS: 2.9, 3.2, 3.2
WOR: 2.7, 2.8, 3.0
Comment: Like New York, there appears to be a move to all-news at the expense of talk. Again, WOR’s climb is noteworthy, and may be because of Savage.

Three possible explanations for the declines, especially from a year ago (to eliminate the impact of the presidential election) are:
– People who want to stay informed are doing so in other ways: blogs, forums, Internet news, etc.
– Many people, even news junkies, are worn out from following the news after the intensity of the past election cycle, the Iraq War, and other events. They are also tired of the same short list of topics that are getting beaten to death in hard news and in talk, and are either seeking refuge in music formats or simply keeping the radio off.
– Talk-radio and all-news programming itself is getting stale.

Despite my theory back in April, I don’t think the first reason is a major factor, YET (but I believe it continues to build in the background). I believe the second and third factors are the primary influences that are acting in combination to drive talk numbers down.

The list of items usually discussed on talk radio is very short, and at least to me is getting very, very tiresome. Speaking only for myself while believing that I am not alone, I can tell you that the radio almost inevitably gets turned off when I start hearing anything about the following (and keep in mind that I am a news junkie, and I believe that everything listed has relevance):

  • Nadagate.
  • Federal and Supreme Court judges.
  • The word “filibuster.”
  • People who are complaining about the progress, or lack of it, in Iraq.
  • Outrageous things some Democrat said today, yesterday, or in the past week.
  • Stupid things some Republican said today, yesterday, or in the past week.
  • Stupid or outrageous things some celebrity said today, yesterday, or in the past week.
  • Bill Clinton or Hillary Clinton.

If you conclude that I turn the radio off quite often, you are correct.

Now as to why I believe that the format is getting stale:

I believe that talkers are letting the Mainstream Media set their agenda. This is a big mistake. I’m certainly not proposing that the day’s news and how well or poorly it has been covered should be ignored, but must we take up most of entire programs over Nadagate just because the MSM can’t think about anything else? (That’s it! Nadagate is a leftist plot to turn conservatives away from talk radio!–Ed.; /sarcasm) For all the complaining about the MSM-driven drumbeat of bad news from Iraq without perspective, where is the consistent effort by the talkers to tell the good news of economic and societal rebuilding, or to relay the incidents of military heroism (how about this one while I’m at it)? And think about this: Savage is the only big player in talk who will go off on weird tangents that sometimes make you wonder if he’s simply lost it–but he’s the one whose ratings are either holding their own or are growing.

Second, talkers are spending way too much time criticizing the loopy comments of politicians and celebrities. Again, I’m not proposing that they be ignored, but the daily laundry list of outrageous comments that ends up gobbling up whole hours of time has got to go. (Aha! Maybe THAT’S the leftist plot: Have their leaders say so many outrageous and stupid things that talkers can cover nothing else, causing listeners tune out for the sake of their sanity–Ed.)

Third, I believe the format has lost a lot of the sense of humor it had in the mid- and late-1990s. Yes, we live in more serious times, but you can only keep the adrenaline and edgy anger going for so long before it just wears the listener out and he/she doesn’t want to hear it any more. Lighten up, people, and don’t hesitate to poke fun at conservatives (besides McCain) who lose their way from time to time and deserve the needle.

Most of the rest of the major radio markets will be reporting in the next week or so. I expect that this will be all I have to say about talk radio this quarter, because as soon as Brian at Radio Equalizer weighs in, I’ll be officially out of my league.

UPDATE: Brian has done his first weigh-in, with more to come. 9:30 PM July 20 He’s added Philly and Detroit. Brian’s bottom line on the business: “The emerging Spring 2005 figures paint an especially bleak picture that must serve as an urgent industry wake-up call.”

UPDATE 2: This post is an Outside The Beltway Traffic Jammer.

UPDATE 3: The radio business is apparently looking to more high-tech methods for measuring listenership.

UPDATE 4: This post is a Wizbang Carnival Trackbacker.