JESSELL AT LARGE

Jessell | Broadcasters Back To Work: Questions Abound

Labor Day is receding in the rear view mirror and now it's time to buckle down. In the weeks and months ahead broadcasters will be looking for answers on what the FCC will do about the ownership cap; who will be the big buyers and sellers in the station M&A market; how will the ratings for NFL games fare; and which new fall broadcast network shows will hit or miss. Advertising is always top of mind and there are several upcoming events that will discuss just that.  

It pains me to say this, but summer is over.

Starting today, all the gears that drive the broadcasting business slam into high and they will remain there until Wed., Nov. 21, when we’ll all slip out early for a long Thanksgiving weekend.

By that time, many of you may find you have new bosses.

The M&A market is hot. Cox and Cordillera are sellers and Tribune, I presume, is back out there looking for a buyer or buyers after the spectacular collapse of its merger with Sinclair.

Fox still wants Tribune’s largest-market Fox affiliates. Deprived of the stations he was to get from the Sinclair-Tribune divestitures, Soo Kim, who rolled up Young and Lin into Media General, is still game to buy.

Tegna and Scripps signaled that they are in the hunt by picking up half the stations being spun off from the pending Gray-Raycom merger.

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Meredith’s name keeps coming up as a buyer and seller.

Nexstar is a puzzle. There has been much speculation that it will step in for Sinclair and absorb as much of Tribune as the FCC allows. At the same time, there have been reports that it is talking to private equity groups about selling.

Ironically, two of broadcasting’s most acquisitive groups are on the sideline — Sinclair because it got into deep trouble with the FCC for fibbing in its effort to win approval of its Tribune takeover and Gray because it wants to focus on paying down the debt that it will heap on itself when it closes on its merger.

Much of the M&A will depend on what the FCC does.

There is a possibility that it may take up the question of a new national ownership cap this month. Its next open meeting is set for Sept. 26, which means we should know this week what’s on the agenda and what Chairman Ajit Pai’s intentions are. It’s his practice to release a draft of orders to be voted three weeks prior to the meeting.

A lot of Washington watcher think he is going to adopt a 50% cap as was proposed by a group of leading station groups. But he could lock it in at 78% (the upper limit under the current flex cap) or eliminate it altogether.

Of course, he could do nothing. If he balks, it probably means he’s having trouble bringing along the two other Republicans he needs for a majority. Commissioner Michael O’Rielly has suggested that the FCC doesn’t have the authority to fiddle with the cap, which was originally imposed by Congress.

Meanwhile, the FCC is weighing how far it wants to go in allowing common ownership of two Big Four affiliates in the same market. The test case — the one that will set a precedent for deals to come — involves Gray’s bid to buy NBC affiliate KDLT Sioux Fall, S.D., for $32 million and operate it alongside its ABC affiliate KSFY.

If the FCC OKs that deal, it will be signaling to other broadcasters that similar combos between No. 2 and No. 3 stations in a market dominated by a strong No. 1 are now acceptable.

College football started over the past week, but it’s the pro game that matters most in broadcasting and that kicks off on Thursday night (Sept. 6) on NBC (Atlanta Falcons at Super Bowl champs Philadelphia Eagles).

NBC, CBS and Fox will be watching the ratings closely in the opening weeks to see if viewership continues to slip.

Of the three, Fox has the most at stake this season.

Last January, it bet nearly $3 billion on the rights to an 11-game Thursday night package over the next five seasons to complement its regular Sunday lineups. Fox Thursday broadcasts begin on Sept. 27 (Minnesota Vikings vs. Los Angeles Rams) and will run until the middle of December.

The addition of the Thursday night games is part of Fox’s sports-heavy strategy that is supposed to carry the network and its O&Os forward after most of its other major assets are spun off to Disney in a $71 billion deal.

If nothing else, having the games relieves Fox of having to program Thursday for the better part of four months, which it has been struggling to do.

Speaking of primetime, the broadcast networks’ new seasons get underway the week of Sept. 23 with a wide array of new and returning shows — sitcoms, dramas, reality. It’s impressive. I will be rejoining some of my favorites like Young Sheldon and This is Us and sampling some of the newcomers.

But the FALL SEASON no longer grabs the attention of America as it used to. What did grab my attention this week was a story in BGR that Netflix is debuting 52 original series, movies and specials in September. And, of course, Amazon, Hulu and cable are also challenging the broadcasters with a host of new offerings, too.

I suppose it is a blessing that Netflix and Amazon do not compete for advertising. But plenty of other media do and it’s a constant battle to maintain share against them.

So, it’s a good thing that the broadcasters have a couple of places they can go this month to talk over the advertising and how to get more of it.

The first comes next week (Sept. 13-15 when the NAB’s Small Market Exchange rolls into Nashville’s Omni. It always gets high marks from small-market broadcasters looking for practical advice on how to weather odd-numbered years and new ideas for coaxing ad dollars out of the local auto dealers, PI attorneys and furniture stores.

Two week later, on Sept. 27, TVB will presents its annual one-day Forward Conference at New York’s Chelsea Piers, hoping that rain or high winds do not spoil lunch and cocktails on the veranda alongside the Hudson as they did the last two years.

The agenda looks good. S&P Global’s Robin Flynn will moderate a panel of CFOs and industry analysts who will discuss the outlook for the business and perhaps the meaning of all the M&A churn.

The conference will also tackle audience measurement, automated sales and, most important, weigh prospects for broadcasting’s two most important ad categories: automotive and political.

Broadcasters are expecting heavy political spending ahead of the midterm elections on Nov. 6, but they are just not sure where the money will be spent. The panel will provide some direction.

Can there be anything worse than being left out of a $3 billion buy?

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or here. You can read earlier columns here.


Comments (1)

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HopeUMakeit says:

September 4, 2018 at 11:53 am

its not about station employees having a new boss, its really about when station employees are going to get laid off. I have been through a this and it has yet to be good for the station being acquired.


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