OPEN MIKE BY JIM DOYLE

TV Groups Guilty Of Collusion? Bullshit

News of a class action lawsuit against six of the largest TV groups for advertising price fixing is "crap," says sales consultant Jim Doyle. "I know the group heads and many of the station sales leaders at all of these companies. I’ve been part of the TV business for more than 40 years and I am positive that it is absolutely not the case. Not a single one of those people is stupid enough to engage in any conversation that could be construed as collusive."

This week’s news about a class action lawsuit against six of the largest TV groups for price fixing on advertising prices is just about the biggest piece of crap I have ever read.

I know the group heads and many of the station sales leaders at all of these companies. I’ve been part of the TV business for more than 40 years. And I am positive that it is absolutely not the case.

Not a single one of those people is stupid enough to engage in any conversation that could be construed as collusive. These are smart leaders and they would never do that. That these six companies would agree on anything is laughable.

Even when they do meet together at NAB meetings, there’s always a lawyer in the room to guarantee that nothing gets done that is anticompetitive.

So, this will get a lot of publicity, probably increase the Maalox usage of several group heads, enrich the lawyers, but in the end be determined to be total absolute garbage

Can you tell I am offended?

BRAND CONNECTIONS

And by the way, if the industry was engaging in collusion, you have to say they have done a really horrible job since our business continues to decline. In fact, the news article about the class action suit by the law firm in Alabama suggests local TV revenue is going to be up this year. If that’s the case, it’s because of political spending and no other reason since most of the stations I know are having real challenges in core.

There are two separate issues. The first is the Alabama suit.

Totally bogus.

The second is the Department of Justice inquiry based on their examination of the Sinclair-Tribune merger. From reading the news articles, it appears they are concerned about our industry practice of sharing quarterly revenue reports with Hungerford and Miller Kaplan.

This information is assembled after a quarter ends so it can’t be collusive. It only shows how the market did retrospectively. It’s history — much like the retail market share trends that food producers get from Nielsen scanners in the grocery stores or the monthly sales of SUVs that auto manufacturers get.

And I believe the quarterly share reports actually do more to reduce ad prices than to raise them.

Here’s what I mean. As a TV sales manager I live in fear of the day the share reports come in. My corporate bosses are getting them at the same time and their opinion of me will be somewhat determined by how well I did last quarter.

If I have a bad quarter, if I lost share of the market’s revenue, I’ll be on the hot seat. I can guarantee you that I will do anything I can to make sure that doesn’t happen again. And how do I do that?  An easy way is to lower the rates. That allows me to increase my share to get back in the good graces of my corporate bosses.

A personal example: Just a few years ago I was a partner in a station that was kicking butt. During that time, we actually stopped reporting our numbers. We did not want our competitors to know how well we were doing because if they knew their likely response would be to cut their rates. We believed that not sharing information would keep our prices higher. That’s the total opposite of collusion.

It’s even worse than you think. Some companies place too much emphasis on share growth as a determinant of management effectiveness. So, I’ve seen literally dozens of situations where sales managers of dominant stations are reducing rates to increase share and actually damaging the market.

Ask any TV sales manager if they have ever been frustrated by the pricing weakness of a market leader. I can reel off 20 markets off the top of my head where the market leader doesn’t price like the market leader and damages the revenue potential of the entire market.

I am convinced that the DOJ inquiry will go nowhere because there’s nowhere to go. But in the meantime, we’ll waste a whole lot of energy, money and time on an absolutely bogus claim.

When I speak to GM and sales management groups there’s a line I sometime use that always gets a laugh. I’ll say, “The TV industry is the only business that can take a 5% reduction in demand and successfully negotiate into a 10% reduction in our business.”

It gets a huge laugh because all the sales managers know it’s true. The price dive for share is one of the biggest challenges facing our business.  That sure as hell doesn’t sound like collusion to me.

Jim Doyle is the founder of Jim Doyle & Associates, a national sales training and marketing consulting firm that partners with broadcast and cable television companies.


Comments (13)

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Larry says:

August 3, 2018 at 10:36 am

DOJ could save a lot of time by just interviewing several leaders in the field of Broadcasting, but the real reason for the suit is to enrichen the coffers of the Law firms, The business community needs to file a lawsuit against the legal system in the United States. At one time there were more attorneys in the Washington, D.C. area than the entire country of Japan?

Mario500 says:

August 3, 2018 at 2:28 pm

I was surprised to see profanity in the name of an article for this site (I would had not given it a name involving profanity if I were its creator or editor).

Johnathan Williams says:

August 3, 2018 at 3:04 pm

Have known him for years and thought he might be more prudent than to comment before we know all the facts……Jim, facts and emotions are two totally different paths, my friend…

Johnathan Williams says:

August 3, 2018 at 3:09 pm

…but he is correct ..Market leaders do underprice their inventory more than you would think…and he represents a few groups that have these stations…..

hopeyoumakeit says:

August 3, 2018 at 4:16 pm

The only reason broadcast is in decline is because wall street owns the stations. wall street cannot rationalize managers chasing a vision. Few people remember that CNN originated in a TV station in Atlanta. That was a vision not a management tactic. Wall street wants to sell off all the broadcast spectrum to the cell companies. Wall street likes subscriber based media because ratings don’t matter, subscriber counts do. They are also easier to count.
The only reason TV stations talk about new business all the time is because there is not rate competition on 100 share business. Collusion is a joke.

Brooks Hogg says:

August 3, 2018 at 4:20 pm

Right on, Jim! I’ve been out of the business for 10 years, but some things never change. Stations still dive for share, and ambulance chasers still bottom-feed.

Robert Rose says:

August 3, 2018 at 4:25 pm

Good thing this article’s headline isn’t overseen by FCC. Why the profanity? seems there’s enough crudeness w/o seeing it in the trades as well. What’s next, an F-bomb headline? Takes away from an otherwise well-written article.

    Ed Woloszyn says:

    August 3, 2018 at 4:52 pm

    Horse poop, fish hooks and geewillikers.
    – Ned Flanders

    Broadcast Lady says:

    August 3, 2018 at 5:36 pm

    In my opinion, Jim called it what it is… sometimes a strategically used “profanity” is perfect punctuation…

    Megatron81 says:

    August 3, 2018 at 11:26 pm

    I don’t care that there was profanity when it’s right on the money and BS to me isn’t a swear word and I’d be fine hearing it on primetime broadcast TV.

Young Timer says:

August 3, 2018 at 7:17 pm

This article is very factual. In fact, it is correct in every aspect of Massey and Associates’ complaint. Their lawsuit is a laffer and a complete waste of printer ink.

A station or a group cannot hide rate price-fixing. I’ve only seen it a handful of times in my 50-year career in television and the final results were devastating. Jim is right.

He’s also right about Sinclair-Tribune… Trump’s in that corner, so quit dragging it out and let’s get on with it.

His headline…… is also factually correct. Get over it.

‘Nuff said.

DIS says:

August 4, 2018 at 8:43 am

look at Jim Doyle’s website where “UPGRADE Selling” is prominently featured. Upselling is not cutting rates. How pompous to say the DOJ doesn’t know what it’s doing – Jim Doyleand may have just added his name to the list in the investigation – and his clients…. there is collusion in every industry in America it just has to be discovered

Larry Nuss says:

August 6, 2018 at 4:31 pm

BRAVO JIM!!!!
BRAVO!!!!!!!


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