Citadel’s Ambitious Game Plan For WLNE

When Citadel Communications takes over WLNE in Providence, R.I., on May 1, it will have its hands full. Philip Lombardo, CEO of Bronxville, N.Y.-based Citadel, said there’s much to be done at the station, a laggard in the ratings in Providence.

“Basically, we’re taking over a station in exceptionally poor shape,” Lomardo said yesterday. “All the equipment needs to be replaced. There is barter programming on the air – not very good programming – because the company stopped paying bills. What you’re left with is a station that is incredibly weak, needs to be completely rebuilt, from the programming, morale and equipment points of view.”

A key early step will be upgrading the station to high definition, said Ray Cole, president/COO of Citadel.

“We have upgraded the other television stations we operate to HD,” Cole said. “This would be the largest market in which we would operate. During our first trip to Providence, I was surprised to see that none of the stations there had made the move to HD. Those are the kind of investments we will look to make to help better position WLNE in the market.”

Citadel owns four other stations, including three ABC affiliates and one CBS affiliate. Excluding Providence, the company’s largest market is Des Moines-Ames, Iowa (DMA 73), where it owns ABC affiliate WOI. Its smallest market is Sioux City, Iowa (DMA 149), where it owns KCAU, also an ABC affiliate.

Lombardo, Cole and other members of the Citadel team will meet with WLNE staff next week. “I told the staff, we’re going to interview you and you’re going to interview us,” Lombardo said. “You’ll find out how we operate and we’ll find out how you operate.”

The mood at the station following the change in ownership? “Not bad,” one staffer said. “I think people are sort of relieved.”

One immediate and visible change: No more Genie Bra infomercials in the 7 p.m. news slot. Although Lombardo and Cole chuckled about the station’s decision to run the bra infomercial in the news slot earlier this month, they stressed it won’t happen again.

“We had a staff meeting (Tuesday) at the station and I said let’s recognize why we’re running 7 p.m. news,” Lombardo related. “It’s no secret that when the station lost all of its syndicated programming, there was a scramble to find new programming.

“One of the things the station decided to do was create the 7 p.m. news. As the station looked for revenue opportunities, apparently there were numerous times that programming was preempted for infomercials. When that happened a week or so ago, it created a joke. I said to the staff, we don’t preempt news for infomercials,” Lombardo added.

That should come as no surprise to anyone, Cole said. “I think anyone familiar with the operations of our other stations, and who know Phil and Ray well, know that won’t happen on our stations,” he said.

Although Citadel’s $4 million stalking-horse bid was not the highest, it still won the auction. Liberty Ventures bid $4.3 million and Brine Communications bid $4.2 million. A third bidder, former Providence Mayor Joseph Paolino Jr., bid $2.2 million.

Citadel won because it met the most important of three key criteria, Lombardo said. “First and most important, the bidder or bidders had to have an agreement with ABC to continue its affiliation with WLNE,” he said.

The other two criteria – negotiating a rental agreement with the landlord where the studios are located and a lease with tower owner Media General – are being addressed, Lombardo said.

“We’re still in dialog with them,” Lombardo said. “We knew that within a week or two, we would be able to satisfy those criteria.”

Former owner Kevin O’Brien, head of Global Broadcasting of Southern New England, said Tuesday after the auction that he’d been told ABC had stopped talking to other bidders and was working solely with Citadel.

Lombardo rejected that claim. “I know for a fact that not only the other three bidders in the process but also others were all in dialog with ABC,” Lombardo said.

“It was very clear to me that while we were talking with ABC, ABC was talking to the other bidders,” Lombardo added. “They were being very fair, very methodical and with lot of legal guidance that process be done properly.”

O’Brien bought WLNE from Freedom Broadcasting in 2007 for $14 million. Global was forced into receivership, a form of bankruptcy, in mid-2010.

O’Brien, who called the auction price “the biggest rip-off since the Dutch bought Manhattan from the Indians,” said Tuesday he was consulting with his attorney about possible legal action.

“It was the most outrageous, flawed asset auction in the history of television,” he said. As of late Wednesday, he said he had not decided whether to pursue legal remedies.