http://www.tvnewsday.com/articles/2009/ ... .3/?page=2
By Kim McAvoy
TVNEWSDAY, Apr 15 2009, 7:06 AM ET
So when are TV stations going to dig their way out of this mess and show a little growth?
The fourth quarter of this year, according to a TVNewsday survey of a dozen general managers of network-affiliated TV stations representing a cross-section of the country and markets.
All but two of the surveyed broadcasters said they expected some kind of year-over-year rebound in core advertising revenue (excluding political spending) in October, November or December.
It's "a fairly good possibility," says Paul Sands, president and general manager of NBC affiliate WPTZ Plattsburgh, N.Y. (DMA 93), a Hearst-Argyle station.
"I am hearing from some local advertisers that they might be able to do more in October or November. That gives me some cautious optimism."
Even with such optimism, the consensus of the broadcasters was that ad revenue for the year would be down between 15 and 20 percent from last year with a few thinking the shortfall could exceed 20 percent. (One exception said revenue at his station would fall just 7 percent this year.)
In any case, the other good news is that operating budgets are not falling as fast as the revenue. The broadcasters were unanimous in saying the budgets would be down just 8-10 percent this year compared to last.
The surveyed broadcasters were promised anonymity on their revenue forecasts and operating budgets for the year, but they were willing to speak on the record about the economic health of their markets, strategies for coping with the recession and, in some cases, about when they expected the rebound.
Spencer Koch, who runs Fox affiliate KTVI St. Louis (DMA 21) for Local TV, was the most optimistic on the rebound, saying he wouldn't be surprised to see an uptick in core ad revenue as early as August.
"We're seeing things starting to come back quicker than we anticipated," he says.
"Local automotive [advertising] is starting to come back. Telecommunications is coming back a little more. It's encouraging," he says.
But such optimism was the exception, not the rule.
The recession has created tough times for an island economy extremely dependent on tourism, says Rick Blangiardi, senior vice president and general manager of KGMB Honolulu (DMA 72).
"The ad dollars just contracted at an amazing velocity," he says.
As a result, the CBS affiliate has had to lay off 23 of its 115 employees. "Most of us are working more than one job these days but were happy to have a job," he says.
"I'd like to say maybe we are going to see a little uptick in the fourth quarter because last year's fourth quarter was so awful. I want to be optimistic," he says.
Like Hawaii, Michigan has been hit hard.
"Detroit certainly has its challenges," says Bob Sliva, vice president and general manager of Scripps' WXYZ Detroit (DMA 11).
Still, the ABC affiliate hasn't given up. "In March, we had our best new-business month in the history of our television station," says Sliva. "You're seeing a lot of individual automobile dealers spending money to survive. They've got to compete." Hospitals have also brought new business to the station, Sliva adds.
All the GMs complained about the loss of auto spending.
"We have been hard hit by the auto industry, obviously not quite as bad as Michigan," says David L. Zamichow, president and general manager of the ABC-owned WTVG Toledo, Ohio (DMA 73).
"National business is way, way, down over last year. Our local business has held up reasonably well," says Zamichow.
With the supply of inventory high, advertisers are demanding more, Zamichow says.
"It could mean a cheaper rate, extra spots or sponsorship of the weather or sports," he says. On the other hand, we have to think about what's in it for us."
Belo's WFAA Dallas (DMA 5) thought it was riding out the recession better than most broadcasters. Now the station is "getting hit hard and late," says Mike Devlin, president and general manager of the ABC affiliate.
"We thought we had some protection here with strong employment and housing that never went into the bubble," he says.
It wasn't until August 2008 that WFAA experienced its first wave of advertising cancellations, reports the Belo executive.
Like the others, he attributes the station's economic woes to the decline in automobile advertising. "We were disproportionately hit compared to a much smaller market that may not have as much auto money."
Newport Television's KGPE Fresno, Calif. (DMA 55) has been looking for revenue from non-traditional sources.
"If you're going to have a good year this year that's what you have to do," says Linda Danna, vice president and general manager of the CBS affiliate.
"If you're relying on the same top 20 that you had the year before that's probably not a good strategy for success," she says.
vice president and general manager of WBTV Charlotte, N.C., (DMA 24), says the CBS affiliate is "coping fairly well."
"The big difference that I am seeing this year than in past years is that we have clients that normally do an annual deal with us that are doing month to month," he says. "These are clients that historically are doing annuals that are holding off right now."
However, Simonette sees some light of late.
"Our national business is starting to get some traction and becoming robust," he says. "That really is a good sign for us."
WSB Atlanta (DMAis also seeing some positive signs and some opportunities.
"There's been an uptick in legal and, across the board in a lot of markets, there's been an uptick in medical and health care," says Bill Hoffman, vice president and general manager of the ABC affiliate.
When the economy starts to improve, the Cox station expects to see some quick gains.
"Atlanta's ability to rebound will be better than other places in the country," he says. "We've got a special infrastructure here with Emory Hospital and other hospitals and the Centers for Disease Control. We're a wonderful educational market with Georgia Tech, Georgia State, University of Georgia, Emory, Morehouse. We've got the No. 1 airport in the world. We have some distinct advantages."
The recession has changed the way advertisers and their clients do business at stations.
"It's almost like out of control is the norm. When the business does come in, it is almost always last minute," says Jerry Watson, vice president and general manager of Quincy's KTIV Sioux City, Iowa (DMA 149).
"You don't see anybody buying stuff out there a quarter in advance or even a month in advance," he says.
Watson also believes that even though advertisers are spending less, they are getting results.
For example, KTTC Rochester, Minn., also owned by Quincy, ran ads for a local furniture store, Mackies, that had not advertised in four years, Watson says. "They had the biggest sale they've had in their history."
"It's back to the basics," he says. "Hopefully, the good that comes out of this is that we start focusing on products being sold rather than efficiency of a cost per point."
National advertising is way off at KBAO Great Falls, Mont. (DMA 191). "But locally we've been able to keep it steady," says Kathy Ernst general manager of the Sunbelt Communications station.
Still, the NBC affiliate has suffered some casualties, mostly in the news department. The station canceled its weekend news shows, which ran Saturday and Sunday at 5:30 and 10 p.m.
"It was a very difficult decision to make. But we need to survive," says Ernst. "It's the bottom line."
At least one station in the survey is expecting a huge increase in local advertising revenue this year, although it will not be enough to offset losses in national.
"Our local will be up about 30 percent," says Glenn Rausch, station manager at Northwest Broadcasting's KFFX Yakima-Pasco-Richland-Kennewick, Wash. (DMA 126).
The nuclear power industry and a thriving construction business is keeping the tri-cities' economy strong, he says. "We're projecting a good year."