A Return To the Golden Age of Television…I Don’t Think So.

Wow, Nothing worse than getting your blog knocked off for a couple of days and then some big news erupts in the broadcasting business.
First things first, the news from Clear Channel. CC announced plans to sell 448 radio stations (those outside the top 100 markets: it has 1150 radio stations) and all 42 of its TV stations located in what it calls 24 small and mid-sized markets. To give you an idea of how big this company is, the corporate mouthpiece says these properties contributed less than 10-percent of the company’s revenues last year.
Anyway you cut it, that’s a whole lot of broadcasting property going on the market. I would think it’s become something of a buyer’s market with a glut of stations hitting the block. And while I admit I don’t know the subtleties of buying a station, I would imagine that having a lot of stations to choose from might help drive down the premium prices that some are asking for in other broadcast groups. Mr. GM, perhaps you could weigh in on that for me.
The news from CC had some posters on a TV chat site talking about how the day of the bean counters is over and that we’re about to enter a new Golden age of television. I hate to be the bearer of bad news because I don’t think that will happen. First, defining the so-called Golden Age of TV really depends on who you ask. Some will say it was in the 50’s and 60’s while others will say it was 70’s and 80’s. Ask a dozen people and you’ll get a dozen answers. The point is, at one time a TV station and even radio stations were considered a license to print money. That’s why corporations began buying them up in the first place. Then, in the early 80s, cable and satellite started scratching for a foothold and creating competition along the way. We went from three channels to a whole bunch over the next 26 years and stations that once had their pick of advertisers now are willing to do whatever they need to do so a client gets “added value” for their media buy. That’s one of the reasons TV stations are forming alliances with newspapers these days. They’re doing anything to get an edge on the competition.
Some say they can’t wait to have local ownership again. I say “Be careful what you ask for”. I think there will be some stations snapped up by local groups and then you will really see the budget axe fall on some of the big dollar folks in the newsroom and management. I think it will become a bloodletting of biblical proportions if and when a coporate group without deep pockets buys a few stations. Maybe I’m wrong. Maybe there will be a handful of stations out there bought by some kindly person who likes to throw out the money. It can be done if you’ve got a good manager who keeps spending in check. But then, isn’t that what the beancounters have been doing all along?
And now to the potential buyers of the Station DOTR and its sister stations.
According to Jamey Tucker, who always has a great source of information, three groups are apparently showing interest in the NYTimes broadcast group. Gray Television, LIN TV Corp. and Gannett. I know several folks had kept their fingers crossed that Hearst-Argyle would show an interest. To my knowledge, they haven’t. If I were still DOTR, Gannett would be the one I would root for. LIN and Gray would follow in that order. Regardless of which one it is, one of the toughest parts is just waiting. Most of the worker bees know they don’t have the option of a golden parachute like a few of the manager types within the broadcast group.
Christmas might be a bit on the lean side this year as some worry if they’ll have a job after the first of the year.

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6 Comments on “A Return To the Golden Age of Television…I Don’t Think So.”

  1. Doug Johnson Says:

    Local ownership. Yikes. Last time I was at a station like that I spent half the week covering Rotary, Chamber of Commerce & the Propeller Club (it was in Savannah, GA).

    Even the good locally-owned places (like WBNS in Ohio) have to be extra-extra careful to keep the owners and their friends happy.

    There was an incident at that Ohio station a few years back where they got a big story wrong that reflected poorly on Ohio State — GM, ND & asst. ND were all gone within months.

    So yeah, be careful what you wish for.

  2. Anonymous Says:

    Rumors have Fox 13 for sale. NYT’s 3 is for sale, and now ABC-24 CW-30, FOX 16 in the memphis area are up for sale.

    The CC sale seems to be a dale to digest the “going private” plan and to focus on the top 100 radio markets.

    It looks like WMC may be the only stable operation. That might actually help their bottom line.

    Do you see another owner of local media or even local investors buying a station or two out of the 5 in the area? Would TV-5 owners gamble on another property in the Memphis-Jackson area? Will George Flynn expand his local media to include the PAX station and two others?

    Tribune Media larege market stations may draw all the cash. NYT and CC are middle markets for sale.

  3. Anonymous Says:

    if they run their tv stations anything like they run their newspapers, you don’t want gannett, either.

  4. Average Guy Says:

    The golden age of television is in the past but television remains a remarkably good business. The average television station opertates on a profit margin of 30 to 50%. The oil companies that everyone bemoans for making too much money, operate on a profit margin of about 10%. Tell me this isn’t a good buisness.

    Regardless of whom buys these stations, unless they are self financed with very deep pockets, they will have a high debt service to pay. That means the station has to operate more efficiently than before the sale because the first one to be paid is the lender. How does one operate efficiently? Get salaries and benefits under control and take advantage of technology to do more with fewer people.

    With all these stations for sale, one can assume it is a buyer’s market. To a degree it is but the stations are bought and sold on a multiple of cash flow (profit). On the low end its 10 to 12 times, on the high end 16 to 18 times cash flow. A station like the one DOTR should garner the high end. The Clear Channel stations in Memphis will go for about 15 times cash flow since they are operate two stations for the cost of operating one an a half stations.

    There will be more local ownership but it won’t matter if the local owner has to leverage his soul to buy the station. Only the very wealthy can buy a station and be satisfied with a less than industry standard profit margin.

    Times are a changing but they’ll never be the golden age because we will never have markets with 3 TV stations and limited competition.

    The GM

  5. Anonymous Says:

    From Tennessee Independent Media Center, November 16, 2006
    By Anna Thompson

    The Federal Communications Commission today announced that the second public hearing on media ownership issues will be held in Nashville, Tennessee on Monday, December 11, 2006.

    At the Commission’s first public hearing in Los Angeles, the FCC heard from a large number of citizens about the current state of the media and specific issues facing that local market. Similarly, this second hearing will provide an opportunity for those in the Nashville area to broadly discuss media ownership issues as well as those of concern to their community.

    In response to the announcement regarding the upcoming FCC hearings, Radio Free Nashville and the Prometheus Project will be hosting a public workshop to prepare for the FCC hearing on Saturday, November 18th at 3pm at the Nashville Peace and Justice Center at 1016 18th Avenue South in Nashville.

    The Federal Communications Commission is considering new mediaownership rules that may increase the number of newspapers, radio stations and TV stations that one company is allowed to own. On December 11th, the full FCC will be holding a public hearing on media ownership issues in Nashville.

    In a release sent out by Radio Free Nashville earlier this week an appeal was made to the general public to attend the workshop, “Do you want the media to do a better job of covering the issues you care about? Do you want more quality journalism? Are you wondering whether a few giant media conglomerates will provide the diverse and independent viewpoints you need? The FCC has not set the time or place for the event, but Radio getting ready to make our voices heard. This is your chance to tell the FCC to protect community voices on the people’s airwaves in Nashville, and hold the media accountable for the service it provides to the city.”

    This article is from Tennessee Independent Media Center. If you found it informative and valuable, we strongly encourage you to visit their website and register an account to view all their articles on the web. Support quality journalism.

  6. AMNewsboy Says:

    I call no way on Gray buying the NYT group… I really don’t think they’re ready to expand beyond market 50+. KAKE in Wichita is either their biggest (or second biggest) station, and it’s in the 60s. Buying NYT may be out of their reach — but, then again, I’m just a lowly newsroom peon. 😉

    Having said that… Gray isn’t a horrible group to work for. I found them to be pretty decent when I was working for them. I don’t think it’d be bad if NYT was bought by them, but I don’t think it’s practical.

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