How’s the new year shaping up?

It looks like 2012 will be a very healthy year with NBC affiliates having both the Super Bowl and the Olympics. We continue to see automotive coming back. Really, 2011 was the story of two halves. The last half of 2011 was far more robust, particularly for automotive, than it was in the first half of the year and we think, with the Toyota/Honda recovery, that will most likely continue into 2012.

How are you positioned for political?

We don’t expect to hit the records that we saw in’08 and ’10, but it looks like it’s going to be a good year.  We have one of the super states in Virginia and we’re seeing political spending starting early there. Missouri, which is no longer a presidential super state, nonetheless, has a big Senate race. [Sen.] Claire McCaskill [D] is up for reelection as is the governor [Jay Nixon (D)]. So that looks like it will be big. Those are probably our two biggest. [Sen.] Dick Lugar [R] has a challenge so Indiana will be healthier than it normally is.

You  have launched weather multicasting channels in most of your markets. How are they doing?

They do pretty well. They certainly have a good margin on them, and we have tried to use them innovatively. For example, in Wichita, Tornado Alley, the team there has done some really interesting things with a couple of small built-in cameras. When severe weather is approaching, but long before you would ever break in for coverage, they basically just go live with their weather guys who kind of do play-by-play on their forecasting. They just talk to the audience in a very informal way and tell them what’s going on up until those storms move in and we go wall-to-wall on all platforms.

What about some of new multicasting networks? Have to picked up any of them?

We haven’t done any of those yet.

Are you looking at them?

We’re always looking. I can’t say we have really had any active interest in any of them to date, but that’s not to say we won’t.

What about the online?

We are extremely pleased with our online businesses. In many of our markets, we’re often the No. 1 local news site or we’re very, very close. In Wichita, four years ago now, they launched a site they call CatchItKansas, which is solely and exclusively high school sports. It is probably the deepest, richest local sports site out there. It just continues to set page view records.

I just got a press release this week saying that you have renewed your contract with Rentrak for use its set-top audience measurement service in Wichita and added Roanoke and Springfield. How are you using the data?

Wichita was the first television station client of Rentrak. We started out with the intention of renewing Nielsen, but we could not come to an economic agreement that made sense for us. While we don’t reveal economic data, it’s fair to say that at that point Wichita’s Nielsen cost was higher than all of our other stations combined. We felt that was unreasonable and untenable. We did a lot of research on what else was out there and made the very tough and scary decision to go with Rentrak. You know what? We’re not afraid anymore.

So you’re using Rentrak to the exclusion of Nielsen there.

It’s certainly harder for that sales team, especially when they were really the first to roll out the new product. But we found very good advertiser acceptance. We have lost zero money. In fact, I would say we gained some. We have not dropped Nielsen in the other two markets [Roanoke and Springfield] and our goal is to be able to look at both of the products, side by side.

So you may have a little leverage the next time you talk to Nielsen.

Well, we want to be smart; we want to be educated. Each system has its pluses and it’s minuses. Neither is perfect.

In the past, you have been active on the NBC affiliate board. What do you think of NBC’s proxy retrans plan? Does it work for you?

I am not privy to any first-hand information on it. I know they have worked very, very hard on both sides for nine months now. There are certainly things that are appealing about the idea to us, but, like a lot of things, the devil is in the details.

You got into the duopoly game I guess back in 2006 when you bought the CBS and CW affiliates in Wichita in separate deals. Now you are involved in duopolies in Springfield and Augusta. I guess they make a lot of sense financially.

I am obviously biased, but I think anybody could look out at the results of what we have done and would be hard pressed to argue that they aren’t good things. In Springfield, I used to joke about that station because I was a news director there and worked there for a dozen years. I used to say that station got sold more than I change sheets. It happened so many times. You could see it spiral down and down.

When we bought it, its building was in horrific shape. Its equipment was  held together with bailing wire and twine. They did no community service. They had not built out anything for HD and had no plans to do it. Now that station has expanded its news coverage, has a full community service staff and is doing great things in the community. Its ratings are up across the board and it’s doing news in HD.

If you look in Wichita where we bought the CW with a failing station waiver, it was a similar situation. It only had a very small sales staff. And as a single owner, it had no capital to invest. Now, it has become the first CW in the station to have an HD newscast on it. It is arguably one of the most successful CW stations in the country.  It’s got a terrific community image. It’s just hard to argue that anyone could have come in as an independent owner and done a better job than what’s been able to happen under a duopoly situation.

Now in Augusta, we have done exactly the opposite. We were the last owner into that market. We bought a station out of bankruptcy in 1980. It didn’t start doing local news until 1997 and from the day it did news it was unprofitable. It was in the red and we stuck with it until 2009. Well, now we are being managed by Media General. We have a SSA and a JSA and the two of us have just moved into a state-of-the-art HD facility. Ribbon cutting will be later this month.

It sounds like you sort of threw up your hands in Augusta and turned your station over to somebody else and the station lost a voice.

Oh, no, I wouldn’t say that at all. We have a very robust partnership where we have been able to take advantage of being housed together. We’re still handling the programming decisions. They’re managing the news and the product is much better for both. You can get the back-end efficiencies, but you still have to have robust competitive products for it to grow long-term. So we have separate news folks, separate weather, separate sales.

But there can only be one broadcaster in charge. In Springfield, it’s you; in Augusta, it’s Media General.

In Springfield, you can walk into that building and find two separate newsrooms. They compete against each other. They try and hide their exclusives. I mean you have a whole different set of management issues that you have to deal with because it’s kind of like, you know, which kid does Mom or Dad love better.

It’s encouraging healthy and robust competition in your own building. Now are there places to share, sure. In a server, you have got a shared area where you say here is the kind of the daybook news that we can send one person out to cover [for both stations], but what we try to do is make sure that the enterprise and the investigative is what we focus on and align the individual staffs to do.

So you’re telling me that in both in Springfield and Augusta you have two distinct editorial voices.

Yes, that is what I am saying.

Alright. I am going to go there and see for myself.

I would invite you to do that. You should go to Springfield, you should go to the Chamber of Commerce, you should go to Salvation Army, you should go to the food bank and you should ask which stations they rely on when they need to get information out to the public either through local news in an emergency or in a community service project. If they don’t answer, one of our two stations, I would be floored. I would bet every dollar I have that those would be the answers you would get.

I know Schurz has been active in the past in trying to relax the local ownership rules. I guess there is little change for that these days.

Well, it just boggles my mind that anyone is still hanging on to [newspaper-broadcast] cross-ownership rules. I mean every court that has looked at it has questioned how anyone can hang on to the vestiges of that. As newspapers are dying all around us, you would think that the government would want to give some kind of relief. That’s astounding to me.

Do you fear that the FCC may go the other way and try to tighten up on these shared services agreements and joint sales agreements.

Some of the language in the FCC’s Hawaii decision gives us reason to be concerned. I hope the commission would give some clarity as they continue to approve such [arrangements].

When I interviewed [Schurz COO] Todd Schurz in 2007, the company was buying stations, but you have sort of let some pretty big properties sail by recently — Four Points, McGraw-Hill, Freedom. You’re not in the buy mode these days?

We’re in the buy mode, but I think if you look at our history, we have a self-imposed debt limit and that certainly proved to be a pretty wise strategy when 2009 came around. So it prevents us from some of the bigger deals that are out there. We also really don’t have an appetite to be in the top 20 markets. We tend to like being a bigger fish in a smaller pond. And we don’t think we’re particularly good fixer-uppers.

Todd also told me that he paid 14 times cash flow for KWCH back then. In retrospect, was that a good deal?

We have been very pleased with that deal and the way that that business has grown. As he said, we can take a longer term view than most companies can.

Would it make any sense for TV stations to buy co-located newspapers. Is there any synergy going on in South Bend that demonstrates to you that newspaper-TV crossownerships would actually work in smaller markets?

There is a lot of synergy that’s going on in our markets. The problem is the revenue collapse is happening so fast on the print side. There are places where, if that rule were relaxed, we would probably take a look at the opportunities of acquiring a newspaper where we have got a station or vice versa, but there’s going to be that classic gap between the buyer’s and seller’s expectations. There’s part of me that worries that that horse is out of the barn. This should have been allowed five years ago.