Just the beginning…

According to NewsBlues (subscription required), Granite Broadcasting closed the news department of WISE-TV (NBC) in Fort Wayne, Indiana Saturday. The FCC permitted Granite to sell the ABC affiliate in town, WPTA-TV, to a shell corporation it had created called Malara Broadcasting. A part of the deal was that both stations would operate under a “shared services” agreement. In a nutshell, Granite owns both stations in town but is able to operate them as one, albeit with different network and syndicated programming. Granite is also getting ready to do the same thing in Duluth.

This is nothing new for broadcasting, but it is new for television. Radio companies find profitability in owning multiple radio stations with different formats in the same community, and given the current state of television, it’s not surprising to see it happening here. The idea has its critics. It’s a shady method of getting around federal rules designed to keep it from happening, and it hardly serves the public interest.

But it is inevitable and, I think, just the beginning. There are now clearly two camps in the local station landscape, and the line between them will continue to crystallize in the years ahead. One group — generally the market leader(s) — maintains their position through solid ratings, aggressive sales, smart budgeting and staying ahead of the technology curve. These stations emphasize the revenue side of the ledger in their day-to-day operations. The second group is forced to focus on the bottom line and, because ratings dominance doesn’t permit revenue growth, the emphasis is on cutting costs. This is, unfortunately, the more common scenario these days.

I was news director of the Park Communications station in Chattanooga in 1988. The station was dead last, and at the time, Park was known as the “cheap” company, one that emphasized the bottom line. I remember a meeting with the company’s COO a few weeks after taking the job. At lunch, I asked, “How badly do you want to be number one in this market?” His response floored me, but he spoke the truth from that company’s perspective. “It’s been my experience that you can make a lot of money being number three.” In the business world, Park was known as one of the most profitable companies in broadcasting.

That another group of TV news people is on the street this week is sad, but it was and is predictable for a business being hammered by disruptive innovations and market fragmentation. We simply must reinvent ourselves — and this is true both personally and corporately — in order to lead happy and profitable lives in the years ahead.

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