TVN Executive Session | Gray: ‘It’s Going To Be A Tough Year’
Pat LaPlatney counts himself an optimist, but he knows there are shoals ahead.
The Co-CEO of Gray Television says the company is doing what it can to take care of its employees and advertisers as it pushes through an invariably tough second quarter and beyond this year.
In an interview with TVNewsCheck Editor Michael Depp, LaPlatney says that for now, Gray plans to hold to its pledge not to furlough or lay off any employees, though “in this environment, you can’t rule anything out.” He says the company is doing everything it can for particularly vulnerable account executives to “keep them at a level that allows them to take care of their families.” And he notes amid the unabating crisis, there are some promising signs for new advertisers and categories to come on board later this spring.
“The volume isn’t there,” he says, “but there is reason for hope.”
An edited transcript.
The industry has had to navigate an unprecedented transition since March. What have been the most challenging elements leading Gray through it?
Just the inability to be able to spend time with our people. We are social animals, and for me personally that has been very difficult. Our company has done a great job in two primary focal points: support of our people and communication. We put together a COVID committee made up of senior folks in the organization when this all started.
For the first couple of weeks, we talked every day, then we cut it back to five days a week and then to three days, which is the schedule we are on now. We have spent a lot of time thinking about how we can support our people, which is the most important thing we can do right now. While it is difficult not to go to TV stations or sit down with the folks from the corporate office, we have done a pretty good job of being supportive and communicating.
Advertising has taken a devastating hit in the first quarter and with things looking even darker for second quarter. Industry-wide and at Gray, what is your take on how bad all of it will be?
Second quarter is going to be a tough quarter, and it is going to be a tough year. There is no way around it. We are seeing the same evidence everybody else is seeing. I am much more an optimist than a pessimist, and we have seen some rays of light coming through here in May and more so in June.
Our new advertiser count in the month of April was not dissimilar from what we did in January or February. On the sales side and across every discipline in the business there has been tons of creativity, but it’s going to be a tough year.
What are those rays of light you are referring to in May and June?
New advertisers. We see some advertisers who might have gone dark coming back with a little bit of money. We see some new categories. The volume isn’t there, but there is reason for hope.
Account executives are some of the people feeling the pain most acutely right now. What can and will you do to help them along the long road until advertisers themselves can recover?
We are being as supportive as we can in terms of looking at what historical pay was and doing everything we can to keep them at a level that allows them to take care of their families and continue to do the great work they do for us. In March, we essentially kept everybody at a level where they would have been had the pandemic not shown itself. We haven’t made any real long-term decisions, but we are going to continue to support our folks.
When you look at something like what Nexstar has done with their AEs, does that look like a viable possibility?
I don’t think we would provide loans that would require repayment, to be candid. I can’t say for certain because we have not really talked about that. Our goal is just to be as supportive as we can based on historical pay levels.
For advertisers, Gray has created an online directory to promote essential local companies. What else are you doing to work with advertisers through this uncertain period?
Like every other group out there we are talking with our people every day. We have beefed up schedules that are on the air. We have done a lot of things just trying to help keep local economies moving in addition to the fundraising and charity work we have been doing. We have had multiple markets impacted with heavy weather, and so we are doing a lot of tornado relief and in addition to helping with food banks.
In a lot of ways there will be positives that will come out of this. It will take some time, but there is a level of creativity in every area of local television and in corporate offices that we haven’t seen before.
Gray has told its employees it doesn’t foresee any furloughs or cuts in jobs or benefits during the pandemic. How confident are you that the company can maintain that position as the crisis drags on?
In this environment you can’t rule anything out, and candidly I think our employees know that, but it isn’t necessary now. Our focus is on supporting our employees every way we can. We have a relief fund that we have had for years. It’s called Gray Cares and it has been available to employees in need for a long time.
The company made a cash and stock bid for Tegna in early March. What happened there? Was that a casualty of the pandemic?
I really can’t get into that.
You are the chairman of the NBC affiliates board, which had a dispute back in January with NBC over the Peacock streaming service. Peacock was going to be usurping the first-run rights for The Tonight Show and some of the then-scheduled Olympics programming. How did that get resolved?
We are still in discussions with the network and we have some different views on what they are doing. We absolutely understand their need to move toward a D-to-C-type product. There has been a lot of dialogue and some positive movement since our initial discussion in the middle of January. We are still talking and looking forward to the day when we can sit down across a table again and move it forward at a little brisker pace.
Meanwhile, no shows are currently in production. What are the networks telling you about what this fall is going to look like programming-wise?
There hasn’t been a ton of discussion around that yet. I would think that we will start hearing from them pretty soon on that. I am sure that they, just like the local stations, are looking for new ways to do business and creative ways to get new programming produced.
An upshot of what has happened has been a bump in local news viewership and attracting younger viewers into the fold, many of them for the first time. Given that, what strategies are you putting in place to try and hang onto that audience for the long term?
I don’t think we are going to shift the way we produce our local newscast in any real significant way that someone might consider as a way to reach millennials, Gen Xers or Ys. It has been great that they have been exposed to the quality of product that is out there. There is a reason why local television is the most trusted source of news and information.
You’ve done a national newscast with Lee Zurik and Greta Van Susteren. Do you see that opening the door to any other variations of national programming down the road?
I am not sure, but I see more local news in our future. We have had a number of markets actually add news, and the plan is not just to do that during the current [crisis]. We are going to do that long term. As a group we are focused more on our own product going forward. Every time we put a newscast up, we do a better audience than what we had in there. It is an efficient way to produce programming, it’s good for our communities and it is good for our business.
Gray stopped using a rep firm and started relying on itself to represent its stations to national advertisers. What has that meant for the company in terms of national spot TV growth, and does that growth outperform in the industry at large?
If you go back and look at ’19, we are very happy with our performance on the national side. We think that we are well positioned as a company to maximize our share of national spot. I have great respect for the folks at Cox who serviced us for a long time, but we are very happy with where we are.
How, if at all, has your OTT strategy pivoted around the pandemic? Are you making programming changes or expanding your content there?
Not a ton. We have the vast majority of our stations taking their linear newscasts and making them available on OTT platforms. We also experiment with any kind of local programming we might do. OTT viewership is rising, and if you put something out on one of these platforms generally it will find some eyeballs. We are working with one of our partners to actually expand that effort. Ultimately, our job is to aggregate as much audience as we can and then layer a little data on it and sell it.
Is this going to be a year where OTT needs to be more of a focal point for broadcasters in order to shore up that audience that is cutting the cord and leaving what would be in the retransmission fold?
A focus on OTT is a healthy thing for any broadcast group right now. It is a challenging environment with the MVPDs. It is a good time to be focused on generating as much audience as you can regardless of platform. If you are a company that has not spent a lot of time focusing on OTT, now is a good time to start. My guess is there are not that many out there who fall into that category.
It’s early days as to imagining how this event will have a longer transformative effect, but what is your view in terms of what has a higher propensity to stick around in the longer term?
I am really proud of our technology group and our news people, who found creative ways to meet every challenge. We’ve made investments in tech in a lot of areas that made it easier for us to manage through this. Does that mean going forward we will be producing newscasts remotely in every market? I don’t think that is necessarily true. Getting people back together will be a good thing when it is safe. There is something to be said for people looking each other in the eye and making decisions based on interpersonal communication.
Last week, I spoke with Richard Friedel, EVP of engineering, operations and technology at Fox Television Stations. He foresaw that some departments may potentially never need to come back to the office. Does that come into play in your thinking that there could be cost saving measures there?
I am not sure there is significant cost savings there. We would look at it through the lens of how we run the most effective organization. Efficiency is part of that, but effectiveness is critical. You might be able to save a little money doing something, but is that ultimately going to cost you? It is going to take some time to do some analysis. Since we are in the middle of it, now is probably not the time to be making judgments.
To read more TVNewsCheck coverage of how TV stations, station groups, news organizations and individuals are pivoting to work amid the coronavirus pandemic, click here.