TVN Executive Session | Fox’s Jack Abernethy: TV Leadership Has ‘Never Been Tested’ Like Now
Fresh off quarterly earnings in which Fox Corp. Executive Chairman-CEO Lachlan Murdoch pointed to the company’s owned stations as a bright spot, Jack Abernethy says political advertising may yet “stiffen up” an ad market battered by COVID-19.
The CEO of Fox Television Stations says states like Texas turning into a potential battleground in the presidential election make for record-breaking possibilities.
It’s something to hold on to in a climate where automotive remains challenged and the forthcoming NFL season, “lifeblood” for the group, faces its own uncertainty as the pandemic rages on.
In an interview with TVNewsCheck Editor Michael Depp, Abernethy speaks to the prospect of a canceled football season, the human problem of keeping most workflows virtualized after the crisis abates and the unprecedented challenge of managing through a climate of ongoing fear. “Fear is not a helpful element in decision making,” he says.
An edited transcript.
As quarterly earnings wrap up, it seems broadcasters walked away less scathed than they might have been. Does that track with your thinking?
Absolutely. At the beginning, we were expecting a much greater drop in sales given how much we are linked to retail. We were pleasantly surprised that it improved more quickly than we had thought. We hope that the political demands will stiffen up the market, certainly in places where you have contested races.
In last week’s earnings call, CEO Lachlan Murdoch said that in Q3 (which is your fiscal Q1), your stations in the top seven markets are pacing down 29% and in the other 11 markets are pacing down 4%. Are those percentages inclusive of political?
Murdoch said political is pacing 50% ahead of 2016. What are you doing to make sure you can accommodate as much of that as possible? How much are you expanding your news inventory?
We have expanded news across the board in order to take advantage of this. A lot of this was done because of the newsgathering demands of the coronavirus and the Black Lives Matter stories. In L.A., for example, we are doing news at 7 p.m. We have a full news block for three hours, whereas before we used to have sitcoms.
And those battleground races seem to be proliferating.
The state of Texas is becoming contested, which is great for us — we have three television stations there. Historically, there is not a lot of money out of Texas for the presidential race, but if you recall two years ago when [Rep.] Beto O’Rourke challenged [Sen. Ted] Cruz, there was more money than you would ever expect. It is going to be very interesting. Everyone tells you it is going to be record [breaking]. Every indication is that is the case.
How is automotive doing?
Automotive is challenged. It is down substantially, but it is coming back and we are seeing some health in the industry in general. That bodes well for the future.
Given that there is no end in sight to the pandemic and rolling lockdowns are likely to persist across the country, what does that mean for the prospect of future layoffs, furloughs or salary reductions at the Fox stations? There were reports last month that stations in Atlanta, San Francisco, D.C. and Dallas have cut staff and some staffers are being asked to take pay cuts.
As things improve we will be able to put that behind us. We had to make some changes as a result of the economics of COVID, but we are in pretty good shape now as sales seem to come back. Clearly as a Fox entity, we are excited about sports coming back. That will be a tremendous opportunity for us in the fall.
Sports have returned, but it has already been volatile with COVID-19 cases canceling MLB games and the NFL canceling its preseason. In a worst-case scenario, what is going to happen to the station group if the NFL’s regular season were to be canceled?
We will figure it out. It is not ideal, it is our lifeblood, but we do a lot of news and we have an adept and agile team.
Richard Friedel, your EVP of engineering operations and technology, has said he sees many elements of your current remote production and workflows as becoming more permanent after the pandemic. What do you see as potentially the most permanently virtualizable components of the business?
I would probably say none. On the one hand, we are very effective in this current state and have been stable since mid-April, when we got out of the office and came up with a formula for who would [remain] and made sure that people outside the office had the tools in order to perform. We want to keep that as it is until this starts to settle down. It makes it very hard to make changes.
Long term, you really need that one-on-one interaction for many jobs. Most people perform well when they have a close relationship with their supervisor and can get feedback. The creative process suffers when you don’t have that intimacy of being able to read body language and brainstorm in large groups.
Are you still roughly about 85% remote right now?
No, it is a little over 65%.
So you have been able to slowly bring people back in.
Yes, but it’s not like that has been an objective. The most important thing is people are safe, and then how are we performing.
The move to remote production has been hastening broadcasters’ shift to IP and the cloud. Do you see Fox investing more in software-based infrastructure and possibly reducing the physical size of some of your stations as more departments can work remotely?
Yes. Again, it is all about effectiveness and capability. People need human contact. It makes them more effective. But there is no question that this has pushed the use of AWS and other software products. We are surprised at how effective [they are].
You have been communicating regularly with GMs across the group since the onset of COVID-19, helping them get what they need to keep them operating and safe. At this point, what are their biggest worries and their most acute needs at the station level?
There is general worry. Corporate leadership has never been tested like it is now. Television stations have a leg up in many ways because we are used to stopping what we are doing and covering disasters like a flood or an earthquake. Those disasters affect you, but usually they are gone in days. Here you have something that affects everyone at work, at home and in every station and it’s not lasting days. People have all sorts of fears that you have to manage. But unless a lion is attacking you, fear is not a helpful element in decision making. So we try to minimize their worries and focus on what we can do and how we make people safe.
What about your salespeople? Is there any way that you can allay their anxieties?
Any salesperson wants something good to sell. They are competitive. If we do our job and provide them with good ratings, that is going to be helpful. It is up to sales leadership to maintain close relationships with people because the best salespeople are extroverts and now they are not allowed to do what they do best.
Fox stations have always been a major player in developing shows with syndicators. How has that been affected by the pandemic?
We are still developing new syndicated shows. We started production of Divorce Court in Atlanta. That is up and running, but it has been a little challenging. We are doing 25 Words or Less with Meredith Vieira virtually. I was very proud of our partners. Warner Bros., in particular, was able to turn on a dime with Extra and didn’t miss a beat, as has TMZ.
Has the pandemic given syndicated shows a boost?
I think it has. There has been a lot more sampling.
What about the fall season? Fox said in its earnings call that there are two new shows ready to go. The Masked Singer may have a new season and animated series have been relatively unaffected. Are we going to see something close to normalcy this fall?
I don’t think close to normalcy. There are too many issues and delays with a lot of the productions, so they just won’t have as much original content as you normally do. But people are trying very hard, and you can ramp up very quickly as incidents level off and cities become relatively safer.
NextGen TV has continued to roll out this year despite the pandemic making that process much harder. What’s your take on its progress?
It is coming along. We may have five or six markets up by the end of the year. I have always felt it is a huge opportunity that most likely is going to have nothing to do with over-the-air television. It is going to be optimized somewhere, but not by us in an over-the-air environment.
The Black Lives Matter movement and protests have prompted many news organizations to assess their own problems and failures toward diversity and inclusion in their ranks. How has this movement impacted you and perhaps your own reassessment at Fox?
It is a reassessment. We are asking ourselves: Can we do better? We have a great relationship with the Emma Bowen Foundation, which provides internships and then placement to great African-American [candidates] and other minorities. We have had a relationship with them for years and we are looking at expanding that. We have had a number of internal discussions that generally are best done at the station level. This is a process. Given the fact that we are trusted by our audience, we have a particular obligation to make sure that if we are serving a diverse audience that we have a diverse group of managers making decisions about what people are going to see on our channels.
Looking out on the other side of the pandemic, what are some of the long-term changes that you see happening to the industry as a result of all this?
Clearly, this has forced people into doing things digitally. That will be helpful to us because we have a lot of products that people can take advantage of. One good thing has been appreciation for the value of local news. What is transitory and what is permanent is something every leader is going to have to keep an eye on because it is going to impact where you put your resources.
What have been the hardest elements for you in managing through this crisis?
The hardest part is managing in an environment of fear — my own fear, my family’s fear, fear in the organization. Some people get frozen and you have to listen to them and figure out what is going on. Other people engage in magical thinking and they create risks for your organization.
As a leader, my job is to come up with a game plan. We are going to march this way, take these precautions. Keeping people safe is my No. 1 priority. That’s the most important thing for me and any other leader that didn’t have the luxury of shutting down and had to go right back out and cover this story in the midst of all the uncertainty and risk.
For more from Jack Abernethy on his station group’s streaming news strategy, click here.