The owner of Sunbeam Television says his purchase of Tribune’s WLVI Boston was driven by the opportunity to operate a duopoly in the seventh largest TV market, not by fear of NBC.
Ed Ansin’s Sunbeam Television is broadcasting’s smallest big TV group—or biggest small TV group. Although it has just two stations, they are network affililates in top 20 markets—WSVN, the Fox affliate in Miami, and WHDH, the NBC affliate in Boston. That gives Sunbeam coverage of 3.5% of all TV homes and, according to BIA Financial Network’s revenue ranking, makes it a Top 25 station group with estimated 2005 revenue of $218 million.
Now, the group is set to get a bit bigger. When word went out earlier this year that Tribune was willing to sell its CW affiliate in Boston, WLVI, Ansin couldn’t resist. Here was his chance to enjoy the economies of operating two major-market stations from one facility. The price: $113.7 million.
In 1989, NBC suddenly yanked its affliation from Ansin’s WSVN after the network had purchased a station in the market. Ansin was stunned. But fortunately for him, the Fox network was just then emerging as a legitimate fourth network. With Fox and a greatly expanded news operation, Ansin and WSVN were soon back on their feet. They have thrived ever since.
In this interview with TVNewsCheck, Ansin says the WLVI deal was all about duopoly and not, as some have suggested, about any concern that NBC would grab the station before Sunbeam did and repeat 1989. Boston is one of only two top 10 markets were NBC doesn’t operate its own station.
The following is an edited transcript:
So, why did you buy WLVI? You seemed to be happy with your Boston and Miami affiliates and the Boston economy is rather weak right now.
This came along and it was just a great opportunity for us. We get to do a duopoly, which is a good thing because we can take a lot of costs out of the station. And the station is a good fit. Because it’s a CW affiliate, we can do a 10 o’clock news. CW is new and fresh and it looks promising. So, we are very optimistic.
So, the idea is to produce the 10 o’clock news from the WHDH newsroom with the WHDH staff.
Oh, yeah, definitely.
The word is that you are laying off everyone at WLVI.
We are not assuming them at all. We are only buying the assets from Tribune. The employees remain with them. Whether they are going to transfer some, or pay them off is up to them. We will be hiring some.
Was your deal in Boston a defensive move? There was some speculation that you bought it because you feared that NBC might buy it, yank your affiliation and create another O&O for itself. As you well know, they’ve done it before.
Oh, no. That was entirely a myth. We have a 10-year contract with NBC that goes to 2017.
Did you do the affiliation agreement before the Tribune deal?
Yeah, yeah. The NBC affiliation had nothing to do with the Tribune deal.
What is the plan for the WLVI newscast?
We are going to do a very contemporary newscast similar to what we do in Miami.
In other words, you are going to be chasing a younger audience?
Definitely. We have a CW station so it has to skew younger.
What do you think of CW?
It’s after a target audience. It’s not shows that you and I watch. I am not being facetious. That’s not programming I can relate to. I can’t look at those shows and tell you whether this one is going to be good or not. But they are doing well so far.
Do you see any of the new businesses—the Web, mobile phones, multicasting—as compelling, as the answer to the shrinking national spot dollar?
We are all trying to develop new sources of revenue, and so far I don’t think anybody is having any great success with [the new media] yet. There is going to be some revenue from the Web. I’m not sure how significant it’s going to be, but I don’t think it’s going to be huge.
What we are having success with is opening new accounts locally—in the market. We have to develop local spot.
All the networks are experimenting with downloading or streaming their primetime shows over the Internet. Do you feel threatened by that?
I don’t think that’s going to make a big difference. Anybody who wants to can TiVo those shows and watch them on their TV set. They don’t have to watch it on a computer screen.
So what’s driving the networks?
They seem to think they catch certain viewers that they might not otherwise. Maybe they do. I don’t know. But I don’t consider it a threat. Maybe they get some promotional benefit.
Are you getting any network comp in your new NBC affiliation deal?
They are not paying compensation fundamentally, but we have a deal that really extends back to when we first became an affiliate of theirs at the beginning of 1995. At that time, they were paying substantial compensation. And that 1995 deal has been recast. We are not getting any new compensation, but we are basically still receiving some money because we recast the old deal.
Some people think they can replace lost network compensation with retransmission consent fees from cable. Do you?
I think it is on the horizon. I don’t know if it will replace compensation, but I think that is significant money. It will happen when the phone companies become a factor.
I assume you are pretty much ready for digital broadcasting and the February 2009 transition.
Do you have any plans to use the multicasting capability of digital? Are you planning secondary digital channels?
Well, we are using one of the channels in Boston for NBC Weather Plus, which we are selling and receiving some revenue from. WLVI has a music video service called The Tube on the digital channel. We are not doing anything in Miami right now.
Will you be going to HD news at these stations?
That’s on the horizon. I don’t know when. It’s very expensive now. Over time, the cost should come down.
Is there anything you would like the FCC or Congress to do or not to do to make your business easier?
It’s more of an annoyance than anything, but at the top of my wish list is indecency. It’s the sort of issue that can pop up at any time. Something inadvertent happens and suddenly you have an indecency issue. The other thing that is happening is that they are holding up license renewals because of what was on one network program.
A lot of people were surprised that you bought another station after being inactive in the station marketplace for so long. Would you buy another?
We might consider it if we had the right opportunity.