EXECUTIVE SESSION WITH FRED RYAN

ALLBRITTON MAKES BIG PLAY ON THE WEB, NOT TV

The president/COO of the station group insists he still loves broadcasting, even though it is pouring time, energy and money--lots of money--into the launch of a Web/newspaper venture that aims to dominate political journalism. Politico.com debuted today.

As president and COO of Allbritton Communications, Fred Ryan runs a group of ABC affiliates topped by WJLA in Washington, D.C., the eight-largest TV market.

But it’s a safe bet that Ryan isn’t thinking much of the boosting spot sales or news ratings at the stations today.

Today, Ryan has something more pressing to do. He is overseeing the launch of one of the boldest, news-oriented Web ventures in a long while—politico.com.

The Web site, along with a companion thrice-weekly newspaper and a daily half-hour talk show on Newschannel 8, Allbritton’s Washington-area cable news channel, aims to be the go-to site for news about Congress, the now-incessant presidential campaigning and the vast enterprise of Washington lobbying.

Ryan is not saying how much Allbritton is pouring into the venture, but it is clearly plenty. The 48-person payroll alone, the product of raids on The Washington Post, Time and Washington political publications, must cost several million dollars per year. Printing and distributing a newspaper three times a week is millions more.

In this edited interview with TVNewsCheck Editor Harry A. Jessell, Ryan explains the Politico strategy and says Allbritton’s investment in the project should not be taken as a sign of waning interest in broadcasting. Ryan still likes the business so much so that he looks at every station that comes on the market and would go to the boss—owner Robert Allbritton—with a buy recommendation if the deal made sense.

BRAND CONNECTIONS

I imagine that Politico has stirred up Washington quite a bit. From what I’ve read, you’re stepping on a lot of toes by going after talent and advertisers. What’s the thinking behind it all?

We’re doing it for a couple of reasons. The newspaper itself is a niche publication focusing on members of Congress, decision makers and the people who are associated with the process, but the Web site is the thing that we are especially excited about because we think it’s very forward looking and it’s something that really hasn’t been done, at least not to the magnitude that we’re doing it.

The Web site makes a lot of sense because, as you know, the news cycle in politics has accelerated so much. It wasn’t long ago when it was a day-long cycle. Someone says something in the morning, his opponent rebuts in the afternoon and you read about it the next day in the newspaper. Now, sometimes the rebuttal comes out before the statement is even made.

People who follow politics closely, and that includes everybody up on Capitol Hill certainly, aren’t content to wait through the traditional cycle. They want the information to follow as fast as the events are occurring. The Web is a perfect platform for that.

So you would say this is a Web site with a complementary newspaper?

Exactly. Rather than a newspaper with a Web site, it is a Web site with a newspaper. You may have seen some of the other relationships that we have established with CBS News, CBS Radio and the No. 1 news-and-talk radio station in Washington, [Bonneville’s] WTOP.

How does that all work together?

We’ve established a relationship with CBS News where the Politico reporters will appear regularly on CBS news programming, including Face the Nation with Bob Schieffer. [Tonight], for the State of the Union, two reporters will be on with Katie Couric for analysis.

As the campaign season heats up, we will have our people out on all the campaign planes and on the road with the candidates and they’ll be providing content for CBS at the network level as well as our stations, the Web site and the newspaper. It will all be branded as Politico. When they appear on CBS, they will be appearing as Politico.

I think anyone would have to agree that you have assembled some great editorial talent.

That’s where we started. We had an idea of wanting to do something that was taking advantage of new media and the habits of people who felt that the current newspapers—the whole structure—was a bit antiquated.

These people who have joined us—John Harris, who was the political editor of the Washington Post, and Jim VandeHei, the top political reporter at the Post, and then Mike Allen, who was the top political correspondent for Time magazine—these guys all sensed the same thing: that the business of political journalism is changing. They felt that there was an opportunity for someone to emerge as a brand and a destination. That’s one of the things that drove them to make the decision to leave their very prominent jobs and become part of this start-up.

Washington is a company town and there is plenty of political news there—The Hill and Roll Call,  the Washington Post and the New York Times and their Web sites, the national news networks and their Web sites, radio stations and slews of trade magazines and blogs covering politics. There seems to be a glut of political reporting. How are you going to compete with all that and break through?

We looked very carefully and found that there are various kinds of places online where people were getting their political news. One would be blogs that don’t have the same journalistic standards as you see in the major media. Another are Web sites with bias, left or right, and then there are the content aggregators like Drudge.

Our view is, if we can have what’s regarded as high quality content, then we have a chance to break away from these other sites out there and these other publications. The model that we’re following is a bit different. Some of these other outlets have a model where you hire somebody who’s 24 or 25 years old, pay them $30,000 a year and they stay for a little while and then move on. You get the level of sources and insight and understanding of the process that you would expect for somebody who is early in his or her career. We have those people, too, and I’m not denying that, but we also have people who have won the awards and who know the process and know the players and have sources unlike anybody else in the business.

Why bother with the newspaper?

That’s a perfectly pretty good question. We saw this as the right combination for two reasons. One is that advertising has not by any means reached its peak yet on the Internet. We think it’s still in the early stages. To be able to support the level of reporters and staff we have, you need an accepted vehicle for advertisers that’s tried and true and tested. That’s part of the reason behind the print.

The other reason is that it’s a niche market. Although the circulation of major papers across the country is dropping dramatically, niche publications, like the ones that you mentioned, are doing fine because our sell to an advertiser is not that we have circulation of X thousands, it’s that we are reaching the key decision makers, the members of Congress, their staff, the people in the administration, the people who are involved in lobbying.

If you look at the advertisers in the niche publications, they’re people who need to reach those key decision makers. They might be people with organizations or companies with issues pending before Congress or companies that are big customers of the federal government. It’s not your the classic television advertisers—automobile dealers, furniture retailers.

You have this wonderful multiplatform play—Web site, newspaper, cable news channel, national news, but not broadcasting. What’s up with that?

No. We will use Politico stories on WJLA and our other stations when they are relative to those markets. Politico reporters are providing the stations with pre-State of the Union help and then with reaction to the speech. It’s a great example of synergy with the broadcast stations. Our first lessons on synergistic opportunities came when we launched Newschannel 8 in Washington in 1991. Between Newchannel 8 and WJLA, we now produce 18 hours of live news every day here in Congress’s backyard. It’s worked very, very well for us.

So, if a story breaks in Washington and it affects Birmingham, Ala., Politico might put together a story for your station in Birmingham.

Exactly. If one of the senators from Alabama is in a contest to be chairman of the Intelligence Committee or something, we would have the resources of Politico to report live or in-depth or whatever from Washington under the Politico brand. We are working very hard to establish Politico as a brand.

How long did it take for Newschannel 8 to break even?

It took about five years for it to turn a corner and to catch on and to be able to be self sustaining. Now it’s great. It’s the most successful local news channel in the country.

And you will be making that same kind of commitment to Politico?

Oh, absolutely. We think that the Internet is here to stay and that we can establish a position on the Internet for politics and build a brand with Politico. There are great opportunities here so we are definitely looking at the long term.

How much are you investing in Politico? Give me a number.

I’m not going to do that because I’m not going to release what we’re spending, but I will tell you this is not something where a bunch of guys are working out of a garage and we’ve maxed our credit cards out to the limit. We’re purchasing the equipment to do it right—the resources, the travel commitments, the salary figures.

I don’t know if you’ve been to our facility in Washington, but it’s the largest local television facility in the country because obviously we have two stations [WJLA and Newschannel 8] producing 18 hours of news a day out of it.

We’ve been able to establish the Politico newsroom as a continuation of the ABC 7/Newshannel 8 newsroom. Our graphics department, our business office, HR, the back office—they have been able to provide resources to this venture, which has been helpful. It’s not a major investment for us.

Why did you do the deal with CBS News rather than ABC, with whom you have had a long relationship?

We have a wonderful relationship with ABC. All our stations are ABC affiliates and we do a lot of things with them. But Politico is something that is independent of WJLA. There’s nothing that will lead to having ABC News content appearing on CBS.

I understand that, but you’ve had this relationship with ABC and you’re airing ABC News every day. It just seems to make sense to keep it all in the ABC family.

It’s been a chance for us to reach out and form another partnership. As I said earlier, I think establishing partnerships with other media organizations is very important and we think in the future it’s critical. The thing with CBS is going to work out well. At the same time, we are going to preserve our wonderful relationship with ABC.

Given all this attention to the Web, are you still excited about the broadcasting business?

We think it’s still a wonderful business. As fast as the Internet has grown, broadcasting is still, by far, the dominant medium. We’ve tried taking an innovative approach to every aspect of the station business, from programming to sales. We had a great year this year, a fantastic year, and we think the future looks bright.

One of the keys that distinguishes broadcasting from cable and Internet and everything else is the whole local aspect, localism. We can have a lot of different looks and feels to our stations. Our goal for our general managers is to have their stations reflect their community. Actually, our ultimate goal is to have the general manager so involved in the community that the people think he owns the station.

The national buy is what it is and people in New York and Chicago are buying eyeballs across the country, but locally that’s where the relationships make a difference. That’s where there’s a chance to partner up with local organizations. We have been putting a major emphasis on new business development at the local level and we’ve been seeing great results.

You have an odd station group. You have one top-10 station and then you have a bunch of stations in small and medium markets. Have you ever given any thought to selling the smaller stations and putting all your eggs into Washington, your big franchise?

The other stations all do very well. They’re great local brands. They’re performing well in terms of ratings and financially so we like the combination. Having the big market has been very helpful in things like programming buys. Shows cannot get cleared unless they get a clearance in Washington. It’s helped us with our negotiations in the other markets.

Would you buy more stations in these small and medium markets?

We’re a disciplined buyer, but we have looked at literally every television station that’s come on the market in probably a decade. We’ve looked very closely and we have a team here that does that.

We constantly look at the opportunities, and not just stations that are listed or have retained an investment banker. We also look to see if there’s a station someplace that might fit into things. But, as I say, we’ve been disciplined about it and we’ll continue to look at new stations that come up.

So I should not be surprised to see you pop up as a buyer, even though you haven’t purchased anything in long time.

No, you shouldn’t because we’re looking at stations all the time to see if they makes sense for us.


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