How Bad Will It Get in Local Markets?
TV
Stations Weigh Risk to Economy
While
the federal government on Friday passed a financial rescue package,
the television station business is warily watching the economic storm
clouds.
TelevisionWeek
National Editor Michele Greppi talked to leaders in local TV to gauge
their mood and assess their tactical plan. What she found was guarded
optimism, tempered by concerns about specific parts of their operations.
An
edited transcript of her conversations with Post-Newsweek Stations
boss Alan Frank, Gray Television leader Bob Prather, WMDT-TV owner
Berl Brechner and NBC Local Media chief John Wallace follows.
Alan
Frank President and CEO, Post-Newsweek Stations (6 stations)
"All business is tough today. I don't know anybody else who
is having a good quarter, a good year.
We're
all in the same boat. I think there's a delay on when it's hitting
certain markets, but it's like a wave coming in to shore. The only
question is how far up and how far in it goes. "We are all in short-term
pain. This is just more short-term pain, I'm hoping. If it's not more
short-term pain, it's catastrophic. That's a different question.
"I
think stations will cut back on everything they can cut back on.
We're not going to cut back on how we cover news. We're not going
to cut back on how we cover politics. Will we cut back on discretionary
contributions to charities? Sure. Will we cut back on expense accounts?
Sure. Will we cut back on, you know, tickets to ball games? Sure.
"People
will cut back on [memberships in] organizations. Which ones they choose
to stay in and which ones they don't choose to stay in will be interesting.
"Will
anchors be worth what they were worth? No. Will people start poaching
other anchors? Probably not. You cut back on salaries. The people
who had the ability to get higher pay won't have it. It doesn't mean
they won't be valuable. It doesn't mean they'll lose their jobs. They
might, but what it probably means is they probably won't make as much
money."
Bob
Prather President and chief operating officer, Gray Television (36
stations)
"The car dealers out there were really, really nervous about credit
lines and buying inventory. So from the standpoint that our industry
traditionally has been around 25% auto advertising, this [bailout]
is a big plus. I'm not a big believer in government getting involved
too much, but by the same token, we have an unprecedented situation
that requires something the government could do at this point: Give
financial institutions a little confidence to start loaning to each
other again and to other people.
"We
are taking a very close look at all our budgets. We're looking to
cut expenses going into the next year for two reasons. One, we don't
see the economy turning around right away. And No. 2, I think it's
just prudent. No political next year, no Olympics. All those things
send a signal to me that 2009 could be tough, and the digital transition
I think could have a little bit of a temporary blip a week or two
before and after the transition.
"There
are no sacred cows other than our news product. And even there, I
think there's some things we can do smarter and more efficiently.
We're looking at doing more automation in those areas.
"One
of the areas toughest to cut is syndicated programming because it's
usually several-years-long contracts, although our syndicated programming
is pretty well the lowest cost in the industry because we've got so
many No. 1 stations.
"I'm
cautious in the short term and very optimistic in the long term."
Berl
Brechner Owner of WMDT-TV, ABC affiliate and CW 100-plus digital affiliate,
in Salisbury, Md.
"We're in the final stages of digital changeover right now, we're
about half way on this final round of spending, with another several
hundred thousand [dollars] to go. The revenues are not paying for
that right now. The revenues are barely paying normal operating expenses,
so we're dipping into our reserves to pay for this stuff. But hopefully
we'll be able to pay it out of cash on hand, because you just can't
get financing for businesses that aren't performing as they have in
the past.
"Our
local [advertising] is up compared to last year. Our national is down,
but our business overall is up a little bit. I haven't calculated
how long we can continue at this level of spending. Whether more dramatic
actions would be needed ... it's just not my way of thinking.
"I'm,
to coin a phrase, cautiously optimistic. I think there is still business
to be had. Our local is growing. We know we have to grow, because
national spot is not going to ever come back. We are able to find
new niches, new categories of advertising."
John
Wallace President, NBC Local Media (10 stations)
"I would say that for us, from a business perspective, especially
in a down cycle like this, it's challenging us to reassess our business,
our structure. But are we applying the appropriate resources to
[Web, mobile and out-of-home] platforms to be successful or are we
still very much managing toward a traditional model that's clearly
under pressure right now?
"In
the local markets where we're playing, we are [under pressure]. The
local economies are all feeling equivalent pressure. But my point
is more about that reassessment of your structure to insure that you're
putting value on these [new-media] platforms, so that when there is
the recovery you're well-positioned for growth. But certainly, right
now, we are feeling in the local markets pressure on all these platforms.
"Right
now we're in our budget season and there are really two things that
we're looking at. If you are looking at our multiplatform business,
are we applying the appropriate value to each of the platforms? It
forces us to take a hard look at that. Secondarily, you have to look
at your costs. You have to look at where those costs are and are those
costs aligned to those things that can grow.
"I'm
optimistic about localism and all the things that these multiplatforms
can deliver, including broadcasting, but cautious about the economy,
certainly."
By
Michele Greppi@tvweek.com
HOME
Headlines
How
Bad Will It Get in Local Markets?
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Thai
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L.A.
mayor's girlfriend demoted by TV station
FCC
urges fine for Comcast
BBC
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NFL's
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Another
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Ex-forecaster
insists she's not guilty of shoplifting
'Early
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Pit
bulls attack TV, radio station workers
Police
review actions of TV crew at office protest
Voice-over
actor tapped as traffic reporter
Family
files civil suit against anchor
Eyewitness
News back on after fire
Broken
Pipe Cripples TV News
Philly
shooter slugged
Photog
arrested
Camerawoman
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Global
TV cameraman saves toddler
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Hopefuls
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anchor jailed, charged with felony
Man
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Another
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Station Fires Worker Over Porn Prank
TV
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TV
Helicopter Pilot Saves Stranded Deer
*Watch
video
Pols
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Former
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Ex-news
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Former
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Sentence
in crash that kills photog
Cameraman
tossed from tour
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Chopper
4 crashes during search
Once again a near death incident. Glad everyone's safe...but
here's another reason why I've given up helicopters for good.
Cameraman
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Now that's what I'm talkin' about. You go get 'em
cameraman!
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PGA
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Former
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Anchorwoman
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Cameraman shot dead in Baghdad
Shootout
video cameraman drops out of sight
Spitting
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TV Reporter Cited For Trespassing
TV photogs attacked outside court
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Viacom lays off 11 at KOVR, KMAX
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station suspends local news
NFL
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Cameras
Captured a Disaster but Now Focus on Suffering
Cameraman Assaulted
