Who Will Protect The Protectors?

Flooding and tornados across the Southeast … wildfires burning in Alberta … earthquake warnings for the southern portion of the San Andreas fault — there are emergency or potential emergency situations all around us. Global climate changes are only making them worse.

TV stations are a crucial component in our nation’s Emergency Alert System. But, to appropriate the words of the Roman poet Juvenal, “Who will protect the protectors?”

That or more exactly, “My station’s news department reports on disasters. We don’t want to be a casualty of one,” was the comment made by an MFM member. We posed his question, “How can I minimize or avoid interruptions to our business if catastrophe strikes?” to Timothy Ehrhart, a Chubb vice president who manages its commercial entertainment and broadcasting segment. In addition to ranking as one of the world’s largest commercial insurance companies, Chubb provides liability and casualty coverage for many of the country’s TV stations.

Ehrhart leveraged that experience to provide the following tips, which are invaluable if you want to remain on the air when your viewers need you the most.

Preserve Your Physical Assets

Start by imagining what can go wrong. Ehrhart explains, “The most effective disaster preparedness and recovery plans start with scenario planning that helps identify and prioritize your organization’s vulnerabilities.” Basics for operating a station during and after a disaster include backup power for studios, newsrooms, transmitters and other broadcasting equipment. In addition there should be backup for signal feeds and, in some circumstances, remote facilities and equipment available and ready for use.

These elements are just a few examples of what should be covered in a plan. If you don’t already have a rigorous plan in place, consult with the experts to get started. They include risk management professionals, agents from your casualty insurance carrier and disaster experts from FEMA and other organizations that can help to identify the types of disasters most likely to impact your community.

Ehrhart also stresses the importance of regularly conducting emergency tests. This will help your organization learn whether key steps will work as envisioned as well as uncover “other small details that could result in big interruptions.”

It’s important to update disaster and business continuity plans regularly. Breaks in the chain of communication or execution of certain responsibilities can arise when the people who were assigned to handle these tasks have left your organization. Plans that haven’t been updated may also fail to address how a station should integrate social platforms like Facebook, Twitter and Instagram into your disaster response. According to Ehrhart, “Details such as consistent Twitter hashtags can strengthen your station’s social media presence and could be your primary line of communication.”

Protect Your People

Anticipating staff needs is equally important. After a disaster, workers’ homes, cars or the roads they use may be damaged, making getting to work more difficult or impossible. Ensuring you have the people you need to keep the station on the air and reporting on the latest developments may require measures such as securing transportation, providing on-site daycare and offering lodging accommodations.

Providing time off and offering employee assistance services that can help staff deal with stress are other examples of the extra benefits that a station should be ready to provide.

The plan must also address how to keep people safe onsite. Accomplishing this requires having the answers to such questions as “Who determines when an evacuation is necessary?” “What criteria do they use?” and “Where do employees go?”

Ehrhart says the on-air evacuation of WTVA Tupelo, Miss., dramatically illustrates the difference a plan can make. While reporting on an approaching tornado, the station’s chief meteorologist Matt Laubhan realized that his newsroom could be in the twister’s path. Fortunately, the station had recently practiced tornado safety, including designating Laubhan to lead an evacuation and he knew what he needed to do.

“This is a tornado emergency for Lee County … this could be deadly,” Laubhan told viewers as the screen flashed tornado safety instructions. Seconds later, Laubhan commanded employees, “Basement! Now!” WTVA’s planning enabled it to remain on air long enough to warn viewers but still keep employees safe.

Be Ready For The Monetary Losses

As Ehrhart reminded MFM members, “Last year 10 natural disasters produced losses of more than $1 billion each in the United States, according to the National Oceanic and Atmospheric Administration.” These losses included not only the extra costs associated with recovering from a disaster but also losses that occurred from business interruptions, such as lost advertising revenue.

Because disasters can have a significant effect on both of the columns in a station’s P&L (profit and loss statement), most media business carry “business interruption” or “business income” insurance. This component of your insurance coverage is designed to protect against revenues that are lost when your station isn’t fully operational. Also consider including an “extra expense” component to address the costs of getting back into business quickly.

“Here again, details matter,” Ehrhart says. “When considering your coverage options, determine how much revenue may be at risk. Organizations that rely too heavily on historical data may underestimate that number.”

In drilling into those forward-looking details, it will be important to mine the data that can address variances occurring as a result of the seasonality of the ad sales business. Examples include spikes in ad revenue that occur in the fourth quarter as a result of Black Friday and holiday advertising, as well as increases during an election year like this one. Likewise, increased revenue that will result from a pending merger or acquisition will affect the amount of at-risk business.

Similarly, stations need to have a good handle on the additional expenses that may be required to maintain or resume operations. These costs can include the need to rent additional equipment, operate from another location, and the expenses required for restoring operating facilities, which can run higher following a widespread disaster.

Stay Ahead Of The Learning Curve

These tips from Tim Ehrhart can be found in the “Ask the Expert” column appearing in the May-June issue of MFM’s The Financial Manager magazine, which will be available digitally via the MFM website in the coming weeks. Ehrhart will also introduce a keynote addressing another type of liability faced by TV stations — cyber attacks — at our upcoming Media Finance Focus 2016 conference in Denver May 23-25.

The keynote by cyber-security expert Jim Prendergast will occur on Tuesday morning during a breakfast sponsored by Chubb, the only business casualty company endorsed by our association. The 56^th annual conference for MFM and its BCCA subsidiary, the media industry’s credit association, will also feature presentations from more than 150 experts on the dollars-and-cents topics of importance to broadcasters and other media organizations.

More information about Media Finance Focus 2016 may be found on our conference website. We hope that if you happen to be in the area you will join us, if even for a day. As these tips from Tim Ehrhart demonstrate, ensuring a profitable future requires having the knowledge that can prepare your station for the risks and opportunities that lie ahead, which include knowing how to remain on the air when your viewers need you the most.

Who will protect the protectors? The answer must be, “the protectors themselves.”

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary. She can be reached at [email protected]. Her column appears in TVNewsCheck every other week. You can read her earlier columns here.