CBS’s McMahon: Local News Needs An Overhaul

“Winds of change” in audience behavior are buffeting the industry, says Wendy McMahon, president and co-head of CBS News and Stations. At her own company, they’re howling at gale force.

Since shifting over to CBS last April from her role leading ABC Television Stations, McMahon and her fellow co-head, Neeraj Khemlani, have dramatically overhauled the broadcaster, bringing national news and local stations into a single portfolio. They’ve put in place a highly centralized corporate structure, creating a slate of new executive positions staffed with fresh blood while simultaneously bloodletting a stream of former executives, GMs and news directors.

It’s all part of a new “holistic vision” for a synergized CBS News and Stations, McMahon says, one marked by a “tactile” level of executive leadership working more closely with station management on a cohesive “brand architecture,” marketing and content development strategy.

In an interview with TVNewsCheck Editor Michael Depp, McMahon explains the dynamics underpinning the restructuring, the plans for greater investment in local news, including CBS’s forthcoming Detroit operation, and the centrality of streaming to the group’s future.

An edited transcript.

When you came into the position as co-head with Neeraj Khemlani last April, that also saw a restructuring in the company with both CBS News and CBS Television Stations and their respective digital operations under your purview. What are the implications of having CBS News and the stations as one unit? How exactly does CBS News benefit and how do the local news operations benefit?

The unification of news and stations was really a vision of [CBS Entertainment Group President-CEO] George Cheeks in the belief that by bringing together journalists, our content from local to global could basically power the next generation of news products, programs, streams [and] channels. Neeraj and I were brought in to help realize that vision.

How it helps the network is when you think of the local connections, the grassroots journalism that happens city by city, community by community, no one is in a better position to ultimately deliver on that than local reporters. Bringing the groups together and having that immediately part of standard operating procedure eliminates a lot of the asks and the phone calls.

When those stories are put together for a local newscast, think about the stage and the platform exposing those in CBS Weekend News, CBS Mornings or CBS Evening News with Norah O’Donnell. That is an opportunity that local journalists want and now they have it as part of this unified pipeline. We talk a lot about this vision of content and journalists flowing like water across network news, across stations in the interest of our audiences.

You’ve brought in a whole new regime at the company with a restructuring inside the stations unit itself. Jennifer Mitchell, Tom Canedo and Adrienne Roarke are all now presidents of CBS Stations; Ross Dagan is the new EVP of news operations and transformation; Casey Kespohl is VP of brand strategy and development; and Chad Cross is VP of content development for your new Innovations Lab. That’s not to mention a number of new GMs and news directors across the group. This looks like a much more centralized operation than the one you were running at ABC. Is that the case?

At ABC, you had fewer stations. When we came in, it was so important to be sure that all of our leaders were aligned with our vision, our values and with how we were thinking about the business of tomorrow. So, in some respects what we have created is a highly tactile level of leadership. What that means is that each and every day our teams at our stations are leveraging research both from a qualitative perspective as well as quantitative one. They are leveraging their connections in the marketplace, connections with audiences and communities and then they have devised roadmaps for how they are going to deliver on this holistic vision for all of CBS News and Stations.

It is so incredibly helpful when you have support mechanisms, people like Adrienne [Roarke], who comes from a news background; Tom [Canedo], who comes from a sales and GM background; Jennifer Mitchell, who comes from a digital and streaming background. What a relief it is for a GM or news director to be able to have that collaboration and that innovation in real time. That is what we have basically created via that leadership piece.

Some of the other positions you mentioned — Casey Kespohl on the brand development side, Chad Cross on the content dev side — we can start thinking about this unification across all functions.

What does it mean that we are all one in terms of branding, our brand architecture and our marketing strategies from a content development perspective? How are we working with the network to really own special events, the midterms, to own big stories that come up? It works hand-in-hand with the day-to-day serving of the audiences that the stations do at their level.

That was very much the intent, and I can tell you it is working exceptionally well. The stations are showing real momentum in key dayparts on television and then in cross streaming. January was our highest month ever across streaming. We believe that that kind of focus is driving that performance.

Are you making a commensurate capital investment in the stations like new studios and sets, graphics, weather tech, news gathering vehicles and so on?

Yes. It’s a combination of being really thoughtful about investments in content and the news operation and then fully leveraging technology so that we can operate as efficiently, as effectively, as possible to continue to fund those content investments. The one thing that technology is never going to solve for is storytelling, journalism, that ability of a reporter to go out and really craft and attack a story.

On the whole, the CBS station group has underperformed in local news for many years. The moves that you have made suggests that ViacomCBS, now called Paramount, wants to turn things around. On the other hand, the omission of any talk about the stations in the company’s two-plus-hour earnings presentation [last week] sends a different message. Why fix things now after all these years?

If you don’t take an opportunity to evolve and modernize and continue to push your business forward, it will either remain stagnant or decline. All of us are in that position — CBS, ABC, NBC, Fox — we are all ultimately trying to figure out how do we maximize our traditional business while positioning ourselves for the business of tomorrow.

The CBS stations, because of having fewer hours of news than our competitors and then the lack of investment in the past, the lack of focus on audiences and community service, that will negatively affect your product. Understanding the opportunity there, which I do, and George does, and the company does, is the why of the investment.

When you talk about the earnings call, stations are such a different business. The purpose of [the presentation was] very much about how we are thinking about planning for Pluto and Paramount+ and shifting our company to be a streaming-first organization. Bob [Bakish, Paramount president and CEO] was very much on the record saying that the linear platforms are a key driver, a key enabler of that.

That is the business that the TV stations are in. The consumption that local is driving on Pluto, on Paramount+, that is significant. Let’s not forget that the NFL on Paramount+ is watched on local channels. It was wrapped up into the presentation, the broadcast impact on streaming, even if it wasn’t specifically called out from a station perspective.

You have complained that Nielsen is undercounting local audiences because its methodology is flawed, and it introduced BBO homes before that methodology was ready. Is Nielsen making an effort to improve this methodology? Have they communicated a timeline to you?

I have not received anything from Nielsen in terms of evolving the sample, improving the underlying sample, correcting how they are thinking about the universe when it comes to BBO. I haven’t heard anything.

The new Local News Innovations Lab will be based in Dallas at KTVT and KTXA. Why Dallas? Where will we be seeing output from the lab, and what are your production expectations?  

Part of our belief is that so many times innovation is built at the center of an organization and then spread out. It never works quite as well as when you recognize that each and every one of these stations are labs in their own right. Everyone across our group is empowered to experiment and learn in real-time in the belief that if we ultimately discover something in Boston or Miami, that is something that we can scale and share across the entire organization.

The reason why in Dallas for this initial base is because of two things. The primary [reason] is because right now there are very few local news hours on those television stations. That basically prohibits us from taking part in the local news marketplace from a revenue perspective. We also didn’t want to tackle that in a traditional way from a production model perspective and an overall format packaging perspective. We are thinking about how we leverage the power of each of our stations to build an original program that is basically pushing a bit on how we have done local news, both internally and externally.

Does local news need an overhaul in its format to find new generations of viewers?

Yes. That is an industry issue in many respects. I don’t think there’s any group that is not dealing with the winds of change happening with audiences in addition to the behavioral shifts from a streaming perspective. The fact of the matter is that local TV news is the most-watched source of news, the most trusted source of news.

But in that very same breath, audiences will tell you they are largely unsatisfied with the product. It doesn’t reflect or represent their lives accurately. When you have that kind of gap in audience expectation, a gap that has only accelerated over the past two years, then you immediately start tackling how can we be more relevant to audiences.

How can we accurately reflect and represent the communities that they live in? The traditional approach, the hamster wheel, is a tough one to break. It is a tough workflow to rethink. But it is also in complete alignment with what we are hearing from audiences in terms of what needs to be done.

You are bringing local news back to Detroit. Can you say in percentage terms how this will increase the station’s revenue given that Michigan is a political swing state and one that now also permits online gambling?

In any good business analysis, you are going to look at the P&Ls associated. Detroit is first and foremost an investment specifically in the early years, meaning there is not a strong revenue source there. We are literally building it from scratch. This demonstrates the company’s commitment to optimizing and supporting these broadcast platforms.

Are you going to be working with freelance reporters there?

Every newsroom is made up of some freelancers, but that is not going to be the lion’s share of the workforce.

We recently saw rebranding and expansion of streaming for CBS News and Stations. There are a number of new, streaming-only programs that have been created nationally, and you are adding 15,000 more hours of live local news to streaming this year. What does this signify in terms of what streaming means to the longevity of both network and local news and how high are the stakes for news’s success on streaming?

For me, the very promise of our brand is the promise of that public service mission. We will meet audiences where they are. When consumers moved to mobile, our newsrooms ultimately moved how we create content to ensure we were meeting and exceeding that touch point of the audience journey with our brands.

Now we understand the shift and the evolution to streaming, and it is imperative that we meet audiences where they are. It is simply part of the culture of these newsrooms and the public service nature of what we do that helps drive quite a bit of that.

What it says about our business and in terms of the stakes being high, I feel like we are better positioned as video creators, as storytellers, to step into this space. It is an incredibly freeing and creative time that we have to continue to reimagine these brands for new opportunities.

I have never felt like it is an either/or proposition. Audiences and viewers move between any number of platforms, devices, experiences. They watch NFL on a Sunday on CBS, they will then move to an SVOD experience on another channel and then they will move on another platform to an AVOD experience. The audience is much savvier and much more sophisticated than we ultimately give them credit for.

Looking at all the separate issues that we have discussed ­— bringing these assets together, reshuffling the staff, layering in streaming — what is your overall vision?

What we are trying to do is grow the business by growing the overall engagement with our products, programs, channels. From a strictly business perspective, there is significant data to support our optimism and our belief in the business. From a vision [standpoint], this notion, again, of bringing together local to global teams to ultimately create products to evolve these programs [inside] our sandbox. That is the vision for our teams.