Raycom will manage MCG Capital’s CBS affiliate KGMB along with its own KHNL and KFVE. The companies say the action was taken to “address the impact of the negative economy and to secure the future” of the three stations.
In Honolulu (DMA 72) Tuesday, Raycom Media — owner of KHNL (NBC) and KFVE (MNT) — and MCG Capital Corp., owner of KGMB (CBS), announced they have made a shared services agreement (SSA) under which, upon completion, the two companies would combine the three stations to, in their words, “creatively and successfully address the impact of the negative economy and to secure the future of all three television stations in Hawaii.”
“The purpose of a shared services agreement is to not only secure the future of KHNL, KFVE and KGMB, but to operate them more efficiently and effectively without diminishing the quality of news and other programming provided to our customers in Hawaii,” said Paul McTear, president-CEO of Raycom Media.
“We realize there may be other financial and business options available, and while we are certainly open to discussing these with any interested party, the economic reality is that this market cannot support five traditionally separated television stations, all with duplicated costs. Rather than experiencing the loss of one, or possibly two stations in Hawaii, we intend to preserve three stations that provide important and valuable local, national and international programming to viewers in Hawaii.”
Under the agreement, Raycom Media would provide certain services to all three stations. The agreement is an operational arrangement, not an ownership change agreement. Raycom Media retains ownership of KHNL-KFVE and MCG Capital Corp. retains ownership of KGMB.
The SSA creates what would be the largest local television news operation available to cover local, national and international news for Hawaii, according to the companies. The combined KGMB, KHNL, KFVE newsroom plans to produce more than 40 hours of local news each week. The stations will also continue to provide local Web sites featuring news, weather, sports, entertainment, business, advertising and other content of community interest.
Under the SSA, the three stations will share in the news services as well as other combined services. The companies said it’s anticipated that, once the two companies swap call letters, the national networks and other programming, along with the accompanying channel positions of each of the three stations, will remain the same.