Big Issues Energize Small-Market Owners

Over the past seven or eight years, more than a dozen small broadcasting companies with stations in small markets have coalesced into the Independent Television Group. Most are family-owned and longtime newspaper publishers.

They meet twice a year — once in conjunction with the NAB Small-Market Television Exchange and once in the early spring — to compare notes, hear from industry experts and figure out how to prosper as small broadcasters and newspaper publishers in a digital world that has not been kind to legacy media of any size.

The current ITG roster includes Cowles California Media, Holston Valley (WKPT Tri-Cities, Tenn.-Va.), Duhamel Broadcasting, Forum Communications, News-Press & Gazette, Northwest Broadcasting, WMDT Salisbury, Md.; Lilly Broadcasting, Morris Multimedia, Calkins Media, Sarkes Tarzian, Schurz Communications and California-Oregon Broadcasting.

The leader of the group is David Bradley, chairman and CEO of News-Press & Gazette of St. Joseph, Mo., one of those family-owned newspaper groups that has accumulated radio and TV stations over the years.

In this interview with TVNewsCheck Editor Harry A. Jessell, Bradley talks about the ITG’s mission and its ambitions.

An edited transcript:

When you get together, what’s top of mind? What are you talking about? What are you trying to do?

I would say top of mind now is we want to have a good network-affiliate relationship and what to do in the future to keep that and not lose it. We want to have a level playing field with our network partners. Also important to us is what’s going to happen with spectrum in the future as this repacking goes on. Where does that leave us as far as being able to serve our entire audience as we have in the past? We also talk about how business is, how are you selling your stations, how are we selling our new platforms. Those are some of the main things.

I take it the networks are squeezing you on reverse comp just like they are everybody else.

Yep. We have got the same issue with the networks. I think that they’ve squeezed us, but they there’s a lot of value in what we do with them and so I think they want to maintain that relationship. So I think there’s a good prognosis for our future and keeping that relationship going. I particularly like the fact that they have made long-term deals with some of these sporting events. That should help solidify the relationship.

What are some of the other topics at your meetings?

We get people to come in to talk about what’s going on. We just had [station broker] Larry Patrick in to talk about what’s going on with the evaluation of companies. We also talk about syndication. You know, there’s a lot of discussion right now about the ATSC standard and whether or not we should look at a new standard called OFDM.

We also had people talk to us about new kinds of things that could be done digitally as far as our Web presence and our mobile presence. We have had people talk to us about news consulting — what people are looking for in news today, what kind of new things we should be doing to stay relevant. It’s a changing world out there. People want more in- depth reporting and less looking at the latest holdup at the mini-mart down the street.

How do your companies and your interests differ from those of larger broadcast groups like Hearst and Sinclair?

I would say one difference is our companies are mostly private, mostly family owned. We are more concerned about our long-term financial success and our communities’ success than some of these other companies, especially companies that are funded by private equity groups that are going to be selling out in a few years to get a big terminal value. We’re looking at a long-term situation where we can have a successful company that we can pass along to the next generation.

Another difference is the amount of resources we have. They have the same transmitter that we have. They have got the same news set we have, more or less. They have the same size buildings as we have, maybe a little bit larger. But there’s just a whole dimensional difference in the amount of revenue coming into a top-50 market than there is in a market that’s between 100 and 150.

I take it your margins are a lot tighter than the big boys?

Yes. Our margins are not the margins they have in these larger markets. I would say we’re a lot more dependent on local revenue than larger stations, which have a larger percentage of their money coming from national revenue.

What’s the business outlook for stations of your kind?

In our size markets? I think we have got a very viable future for the broadcasting industry. We have to make good use of all the spectrum we have. We now have the ability to put on more than one station a lot of times.  For instance, we are making good use of the multicast signal for CW and Telemundo.

I see that you personally must have faith in the business since News-Press & Gazette just bought stations in Columbia [Mo.] and Santa Barbara [Calif.]

Yeah. Columbia-Jefferson City should be closing in November and so should a station we’re buying in Santa Barbara. So we’re very happy with the business. We are not going any further until we make sure we digest them and have very successful operations.

Now some of the bigger groups have been able to do pretty well in getting fees from retransmission consent. As small operators, are you able to do that, too?

That’s kind of the $64,000 question. Nobody discusses exactly what their retransmission is and that’s not a subject in our discussions, but I think in smaller markets it’s probably a more difficult negotiation than in larger markets. But I still think we’re important to the cable systems in our markets and I know we’re important to the satellite people in our markets so we have got a pretty good shot at getting fair value for our signals. So, we’re doing as good as can be expected, but I don’t think we’re quite up to where the large markets are.

Does your group get into centralcasting and other things to coax greater efficiencies out of your operations?

We are talking about centralcasting. We have project right now with our stations and I know some other groups have done that. I think Cowles stations have done that out of Spokane. There are different ways of doing it and we have a lot of interesting discussions comparing and contrasting which way is the  best way to go — whether you move the video signal or just move directions to trigger the signals.

Traffic can also be combined among on your stations. Could any other operations be combined? Content management service providers? We definitely often compare notes of that.

What about cooperating with another broadcasters? A lot of broadcasters have common towers. What about common master control among competing stations?

It’s a very good possibility, but first we have got to get our own master control working right. We want to make sure it works well for us first, but, yes, in the future that could definitely be a place to save money behind the scenes so you can put more money into your news and sales and things to help the community.

Have you ever been involved in any Washington issues as a group?

No. We have not, but it doesn’t mean there couldn’t be something in the future where we have a common interest to go talk to our representatives.

Or hire an attorney to represent you on some issue?

Or hire an attorney to represent us, that’s right. But as far as the Congress, I think they would rather hear from us individually rather than hear from our attorneys or representatives. So it’s up to us to get out there once in a while and let them know we’re still struggling to survive in the future in this digital world.

How is the newspaper business going?

Actually, the newspaper business this year is doing a lot better. We’re having a good year. As a matter a fact, our top-line revenue is in a positive direction. We have had to watch our costs very closely so our bottom line has gone up. We have had to restructure our businesses.

A lot of people don’t have their own printing plants anymore. They print at other places, which has helped them contain their costs. We have had to do things like deliver not only our paper, but other papers as well. For instance, in St. Joseph [Mo.], we deliver the Kansas City Star along with our News-Press. That’s the kind of thing we do to make us more successful.

We’re looking at new ways of doing the business and our digital business for the newspaper industry is strong. I think Gannett has said their digital side is 20% of its business now. It’s not that high for us, but it’s a growing factor in our business. So anyway, I still think there’s a good long-term future for selling newspapers as part of a multiplatform information package. I guess I am old school, but I have a positive outlook on what’s going on with newspapers, particularly in smaller communities.

Do you have any markets where you have both TV and newspapers?

No, we don’t have any crossownership going on. All that’s against the rules. But we did start a low-power station here in St. Joseph, a Fox affiliate we call KNPN. There’s no crossownership ban on that. We have a converged newsroom. We have about a 45-person newsroom for the newspaper and there’s probably eight or 10 people over on the TV side. They exchange information and they both contribute to a common website and we have had the TV people write stories for the newspaper and the people on the paper side do stories and take video for the television station.

You sell them together, I take it.

No. We sell them separately. They have separate sales staffs, but actually we’re just getting started. We just started this in June.

It sounds like your group might want to work to get rid of that crossownership ban?

To get rid of the crossownership ban, that would be fine with me. It’s an antiquated rule. If we got rid of crossownership ban, we could combine resources and provide better overall in-depth coverage of what’s going on in the community. It’s better to have one strong operation versus two operations that have limited resources.

If they got rid of that rule, do you think there would be a lot of selling and swapping of stations and newspapers so groups could have combined operations in markets.

I think there would be an open season for that. It would be a way for a lot of these smaller markets to be successful in the future.