A FINAL LOOK AT 2006 IN 3,263 WORDS AND 57 LINKS

The year began with a bang at NATPE. It reminded one TV station rep of the 1991 convention in New Orleans, when normal business stopped with the flash that the U.S. had begun bombing Baghdad. “People rushed to their phones, and left meetings to see how it would affect them,” he said.

What disrupted NATPE 2006 was, of course, the merger of Time Warner and Tribune’s WB and CBS’s UPN. After a decade-long battle that produced little memorable programming and hundreds of millions of dollars in loses, Time Warner and CBS gave up their rivalry to create TV’s fifth network. Instead, they said they’d cobble together a new network—The CW—from the best programming of each. (Tribune simply decided it was time to get out of the costly network business.)

For TV broadcasting, the WB-UPN combination may have been the biggest news of the year. But there was plenty else to fill the center section of TVNewsCheck. This look back on 2006 is the 8,680th article posted on the site since its inception on Jan. 23.

THE TOP LINE
Any discussion of TV station revenue has to start with 2.1 billion. That’s the number of dollars stations reaped from political campaigns and ballot issues. The total blew away early projections and had broadcasters drooling in anticipation of 2008 when presidential candidates would add hundreds of millions more to the political total. “TV matters,” said Evan Tracey, who tracks political spending. “Winners outspent rivals in almost all cases.”

The problem with that $2.1 billion is that broadcasters will not be able to replace it in 2007. So, they will have to report declines in revenue quarter after quarter next year, while telling investors and debt holders to “wait till next year”—that is, 2008. Katz Television CEO Jim Beloyianis believes that without the political lucre,  national spot will be off as much as 10% next year.

Take away the political and spot sellers had little reason to cheer this year. The troubles of Ford and General Motors became their trouble as the auto makers cut their ad budgets in their struggles to get on sounder financial footing. The hope for 2007 is the return of at least some of the Motor City money.

Despite intense interest among advertisers in the Web and other new digital media and stagnant viewership, the broadcast networks managed to hold the line in the all-important upfront selling in the spring. Merrill Lynch’s Jessica Reif Cohen pegged the networks’ combined take at $8.4 billion, just a 1% decline from 2005.

THE NETWORKS
The news flash at NATPE on the WB-UPN merger turned into a year-long saga.

To fill the hours on its own stations and others made networkless by the merger, Fox came up with a novel—or novella—idea. It created My Network TV, a not-quite-a-network that would offer two hours of original programming every weeknight (plus two hours of recap on the weekends) in the form of English-language telenovelas. In adopting the popular Latin form of the soap opera, it hoped to keep expenses down and give viewers an alternative to regular network fare.

The two new networks devoted the rest of the winter, spring and summer to honing their schedules and signing affiliates. The first affiliation deals were announced in February and built up to MNT’s debut on Sept. 5 and CW’s on Sept. 18

Neither network excelled. Six weeks into the fall season, CW posted double-digit ratings decreases for most of the shows it brought over from the WB and UPN. Meanwhile, MNT’s ratings move steadily downward. In December, Fox let it be know that it was moving to Plan B—fewer hours devoted to the telenovelas and more to movies, reality and games.

For the spring upfront presentation to advertisers, the Big Four broadcast networks and the new CW unveiled 28 new primetime shows for the fall, including 14 dramas, 13 sitcoms and just a single unscripted show.

As of Dec. 20—as midseason replacements began to be plugged into schedules—ABC and CBS were tied for the primetime ratings lead with 3.9 ratings/11 shares in the 18-49 demo (CBS was down 5% from 2005, ABC down 3%). Next was Fox with a 3.0/8, down 6%; then NBC with a 3.7/10 (up 16%); and CW had a 1.4/4 (down 7% from last year’s UPN, even with WB).

Among the new shows that didn’t make it to the new year were CBS’s Smith (as well as its replacement 3 Lbs.), NBC’s Kidnapped, Fox’s Vanished, ABC’s Six Degrees, CW’s Runaway, and ABC’s The Nine.

Other network highlights:

• ABC’s Grey’s Anatomy operated its way to the top the Sunday schedule, pushing past Desperate Housewives to the No. 1 spot. Then it showed its staying power on Thursdays, opposite CBS’s CSI.
• Heroes proved to be a surprise hit for NBC.
• ABC’s Ugly Betty showed that English-language telenovelas could work on network TV.
• Fox’s American Idol had both the first and second highest rated regularly scheduled shows with average household ratings of 17.7 on Tuesdays and 17.2 on Wednesdays.
• The Super Bowl on ABC captured the best single broadcast ratings title with a 41.6, propelling the network to an 18-49 demo win in the February sweeps.

HUMAN RESOURCES
Among the most surprising—and oddly underreported—stories of the year is the apparently pending ouster of NBCU CEO Robert Wright, one of the most respected executives in television.

The New York Post first whispered on its gossip page in September that parent GE was pushing him toward the door. Even though every other news outlet ignored the report, the Post followed with increasingly insistent stories that Wright was a goner in the next two months. Finally, The New York Times weighed in with a story essentially confirming the Post stories (without credit, of course), quoting GE CEO Jeffery Immelt saying Wright was “close to retirement.” From there, others took up the story, speculating on when he would go and who his successor might be, with Wright lieutenant Jeff Zucker ending the year with the shortest odds.

GE’s unhappiness with NBCU’s performance was evident to all in October when, for the benefit of Wall Street, it announced that it was slashing 700 jobs as part of a plan to save three quarters of a billion dollars. Other signs that things may be unraveling at the company were the defections in November of two high-level execs—Randy Falco to AOL and David Zaslav to Discovery.

Wright should take some comfort that he doesn’t work for Sumner Redstone. The chairman of Viacom fired CEO Tom Freston in September, replacing him with Phillippe Dauman, a former Redstone lieutenant. Freston had had just eight months at the helm of the new Viacom. Redstone had split the old Viacom into two companies at the beginning of  the year. CBS, headed by Les Moonves, took the broadcasting assets, while the new Viacom, headed by Freston, hung on to most of the cable programming assets. Redstone is chairman of both companies.

Other changes in broadcasting executive suites were not quite so dramatic. Don Perry took over day-to-day operations at Clear Channel Television as CEO with Bill Moll stepping up to become chairman of the station group. Gary Chapman retired as CEO of LIN Television, clearing the way for CFO Vincent Sadusky to assume the top job at the publicly-traded company.

After months of rumors, Warner Bros. Domestic Television Distribution made it official in August: Dick Robertson would end his 17-tenure as president of the syndication company and turn over the reins to Ken Werner, a WB executive.

Dick Askin, the president and CEO of Tribune Entertainment, left his job in May as the company narrowed its ambitions.

In January, PBS dipped into the ranks of its member stations and selected Paula Kerger of WNET New York to succeed Pat Mitchell as president of the noncommercial “network.”

THE DIGITAL TRANSITION
The day when broadcasting would switch from an analog to digital medium became a reality in February when President Bush signed legislation mandating Feb. 17, 2009, as the day. At midnight local time, broadcasters must cease analog broadcasting and rely solely on their companion digital signals.

The legislation also makes available $1.5 billion to educate consumers about the transition and to help pay for converters that would allow consumers to receive the digital signals on their old analog TV sets.

Most affiliates have been using their digital channels to simulcast network programming in high-definition, spurring sales of HD sets throughout the year. In 2006, the number of stations also offering local news in HD began to grow. B&C counted 23 local HD producers in late November. Many more are expected in 2007.

WASHINGTON
After all the political advertising money (and, yes, votes) were counted, the Democrats had recaptured control of the House and the Senate. Representatives John Dingell and Ed Markey and Senator Daniel Inouye were back in control of broadcasting and cable policy. Somewhat surprisingly, given the country-club GOP leanings of the industry, some broadcasters were happy to see the return of Dingell and Markey, believing they would be more sympathetic to broadcasters than the outgoing Republican committee chairmen—at least in their battles with cable.

And broadcasters need help in Washington. They received a setback in June when the FCC failed to move ahead with a proceeding that would have given them multicast must carry rights—that is, rules requiring cable systems to carry all elements of stations’ digital signals. FCC Chairman Kevin Martin and Commissioner Deborah Tate were all for it, and they were counting their fellow Republican, newly sworn-in Robert McDowell, to supply the needed third vote. But at the 11^th hour, McDowell balked. He later said that he didn’t believe the FCC has legal authority to impose the expanded must carry rights.

Small-market broadcasters also want the FCC to relax is broadcast ownership rules so that they may own two stations in a market and enjoy the economies that flow from such duopolies. The FCC initiated a proceeding to that end, but there is mounting grassroots opposition to any further consolidation of media and it has close ties to the newly empowered Democrats. Broadcasters may get their relief, but not quickly or without some quid pro quo.

Janet Jackson’s “wardrobe malfunction” at the Super Bowl in 2004 continued to plague broadcasters. In March, the FCC issued another round of indecency fines topped by $3.6 million against CBS affiliates for airing an episode of Without a Trace. A few months later, Congress increased 10-fold the base indecency fine to $325,000 per incident and President Bush made it law in June.

Believing the FCC overreached in its March decision, the broadcast networks have mounted a major challenge of the FCC actions in federal courts in New York and Philadelphia. Rulings are expected next year.

THE REAL WORLD
Those objecting to Big Media consolidation in comments to the FCC and in the first two in a series of FCC public hearings on ownership seemed not to be paying too much attention to what was actually happening in the marketplace. There, the news was that consolidation was not all it was cracked up to be and that the station business was under some financial stress. Some of the biggest broadcast companies got smaller, not bigger.

Unable to stave off pressure from unhappy shareholders, the Tribune Co. began looking at strategic alternatives that could lead to a complete breakup of the broadcasting and newspaper publisher. For whatever reasons, the synergies and economies that were to flow from Tribune’s ownership of big-market broadcast-newspaper combos never materialized. In 2006, the beleaguered company sold TV stations in Albany, N.Y.; Atlanta; and Boston.

Clear Channel Communications, the nation’s biggest radio owner and a lightening rod for anti-Big Media sentiment, agreed in November to a takeover by private equity firms and said it would spin off its small-market radio stations and its TV station division. The expectation is that the stations will be soaked up by a number of buyers.

NBC decided it could do without four stations in mid-sized markets—Raleigh, N.C.; Columbus, Ohio; Birmingham, Ala.; and Providence, R.I.—and found a willing buyer in Media General, which agreed to pay $600 million.

The New York Times Co. decided to get out of the TV station business, putting its station group on the block. An announcement of the buyer is expected early in the new year.

None would be surprised if the buyer of the New York Times stations is a private equity firm, which have been attracted to the TV station business by its high cash-flow margins that allow them to borrow most of the purchase price. In addition to Clear Channel, private equity firms stepped up to buy broadcasters large (Univision) and small (Bluestone Television).

Providing fair warning to equity firms taking on heavy debt to buy broadcast groups were the Chapter 11 bankruptcies of Granite Broadcasting and the White Knight/CCA.

THE BRAVE NEW WORLD
The Big Four networks rushed into new media just as quickly as they could—sometimes bringing along their affiliates, sometimes not. They offered primetime programming and original content over the Web as ad-supported streams and pay-as-you-go downloads. Viewers who missed ABC’s Desperate Housewives or NBC’s The Office no longer had to wait for the reruns on their local affiliates.

In partnership with its affiliates, NBC launched the National Broadband Co., a.k.a., nbbc.com, a video syndication service that aggregates video clips from among NBCU broadcast and cable networks, NBC affiliates and other content producers and makes them available to Web sites on an ad-supported basis.

It was a powerful sign of the times that none of the six major TV companies—Disney, CBS, NBCU, News Corp., Viacom and Time Warner—landed the red-hot video Web site YouTube.com when it became available. Google stepped in and snagged it for $1.65 billion. At year’s end, there was talk that some of the old-line companies might create a YouTube rival.

SYNDICATION
This past year was a pretty lackluster one for the new first-run syndicated shows. Among the rookies were King World’s Rachael Ray, Sony’s Greg Behrendt, Warner Bros.’ Keith Ablow, NBCU’s Megan Mullally and Twentieth Television’s Geraldo at Large.

The only unqualified success was Rachael Ray. The show finished its debut week on Sept. 24 with a winning 2.3 household rating and has been a standout ever since. For the most recent ratings week, it recorded a 2.1, still champion by a mile, and scored its highest ratings in 10 weeks in the top market—New York—hitting a 3.7/15 and winning its timeslot by a more than a 2-1 margin. Most of the other newcomers are not expected back for a second year.

Among off-net offerings, Warner Bros.’ Two and a Half Men and Twentieth’s Family Guy were offered for 2008 runs.

While syndication is all about daytime, the offerings from the major syndicators are few for NATPE 2007 in January. Only Sony’s Judge David Young looks like a go for fall of 2007. All else is wishes and promises

NETWORK NEWS
In January, ABC News’s Bob Woodruff was severely injured by a bomb blast while reporting in Iraq, just a short while after he and Elizabeth Vargas had taken over ABC’s evening World News following the death of Peter Jennings in 2005. Vargas anchored the broadcast solo, but then informed the network that she was pregnant. ABC then turned to Good Morning America co-host Charles Gibson to take over the solo anchor duties in May.

But the biggest news in news was the move of Katie Couric from NBC’s Today to the anchor chair at CBS News. It was announced in April and then analyzed and scrutinized by about everyone until her first day at the CBS Evening News in September.

The switch to Couric pumped up the Evening News ratings—for a short period. After enjoying first-place numbers for a few weeks, viewers began to shift and by the end of the November sweeps, the CBS newscast was back in third place while NBC Nightly News with Brian Williams was No. 1 and World News was second.

Couric’s move set off a chain reaction of job changes. Shortly after Couric officially announced, NBC hired Meredith Vieira from ABC’s The View to fill Couric’s spot on Today. The next domino to fall was Vieira’s replacement on The View. That turned out to be Rosie O’Donnell and after her debut in September, the show’s ratings got a boost.

On the morning news front, Today didn’t miss a beat, ratings-wise, following the Vieira-for-Couric move. In fact, by November, the show had gained viewers from the year before. And as the year came to a close, NBC acknowledged that it was seriously considering adding a fourth hour to the venerable franchise.

THE PASSINGS OF 2006
Television lost one of its true giants on Christmas Eve. Frank Stanton was president of CBS for nearly 30 years, throughout its best and most influential years. As the day-to-day captain under founder William S. Paley, Stanton guided the radio company into the television era and set CBS News on its path to greatness. He made huge contributions before ascending to that post with his development of ratings methodology and technology.

Ed Bradley, the veteran CBS newsman and 60 Minutes correspondent, died of leukemia on Nov. 9. With his signature earring, Bradley was ”considered intelligent, smooth, cool, a great reporter, beloved and respected by all his colleagues here at CBS News,” Katie Couric said in a special report.

Another CBS veteran was Tony Malara. The gregarious broadcaster worked in the station ranks as general manager of WWNY Watertown, N.Y., for over 20 years before being recruited by the network. At CBS he started out as vice president of station services and moved up the ladder until in 1992 he was named president of the network.

In November, Lawrence Taishoff, for many years the president and publisher of Broadcasting magazine (now Broadcasting & Cable) died at the age of 73. Taishoff’s onetime rival, another influential trade publisher, Al Warren, of TV Digest and Communications Daily, died just weeks later at 86.

A true network news pioneer, Reuven Frank, died in February at 85. His career at NBC ran from Huntley and Brinkley in 1950s to Tom Brokaw in the 1980s and included two stints as NBC News president.

A TV production empire unto himself, Aaron Spelling died in June at 83. His “mind candy” included such hits as Charlie’s Angels, The Mod Squad, Love Boat, Beverly Hills 90210, Dynasty, Charmed  and 7^th Heaven. He was honored with a special tribute at the 58^th Annual Primetime Emmy Awards.

Mike Douglas was one of the last of an almost extinct breed of broadcaster. He drew on his affable personality and singing talent during 21 years as host of a syndicated talk show. He died in August on his 81st birthday.

Joe Barbera, who along with his partner Bill Hanna, created some of TV’s most memorable animated characters and shows, died Dec. 18 at 95. Yabba Dabba Boo Hoo.

The great Don Knotts won five consecutive Emmys for his portrayal of Deputy Barney Fife on The Andy Griffith Show. He died in February at 81.

John Higgins, business editor of Broadcasting & Cable, died in November suddenly of a heart attack. As a reporter, he was renowned in the media industry he covered for his knowledge of the business and for his tenacity.

Well-known TV news talent scout and newsletter publisher Don Fitzpatrick died in April. Fitzpatrick was the founder of ShopTalk and a companion Web site, TVSpy.com.