LIN’s Local Programming Grows Ratings, Rev

Amid the mass of data LIN Media presented during this morning’s earnings conference call, one nugget stands out: After launching its 11^th local lifestyles show last year — Wingin’ It on WNLO, its CW affiliate in Buffalo, NY.. (DMA 51) — LIN totaled nearly 32,000 hours of local programming.

Those hours will increase this year: LIN in January launched its 12^th local lifestyles show, Living Dayton, at its Dayton, Ohio (DMA 63), NBC affiliate WDTN.

Even factoring out local news — say an average of roughly 1,000 hours a year — that’s more than 30,000 hours of local programming.

“Strong local programming is one of most important elements in building loyalty with viewers,” Vincent Sadusky, LIN president-CEO, said during the call.

It doesn’t hurt ratings, either. According to Nielsen measurements in the November 2011 ratings period, Studio 10 on LIN’s Mobile, Ala. (DMA 60) Fox affiliate WALA outperformed Good Morning America, the Early Show and the Today Show in the 8 to 9 a.m. time period with women 18-49.

Better ratings mean more ad revenues but there’s another side to the local equation — savings. Network and syndicated programming aren’t cheap and getting less so as networks, in particular, want to cut a bigger piece of affiliates’ revenue pie through network fees, programming costs, reverse compensation, call it what you will.

LIN’s entry into local lifestyle programming in 2008 was timely. It launched Maranda Where You Live on WOTV, its ABC affiliate in Grand Rapids, Mich., (DMA 42) and Living with Amy on WLUK, its Fox affiliate in Green Bay (DMA 69).

The launches came just as the recession was taking hold. The shows performed well enough that LIN decided to copy the concept at other stations.

“It’s always been the challenge of local television to produce something important and differentiated in the local market versus amortization and exploit that over multiple markets,” Scott Blumenthal, LIN’s EVP/television, said during the call. “The opportunity for us is creating local programming that is cost efficient.… The secret sauce is in the localism of these programs.”

In other comments during the call, LIN executives, like many industry peers, projected that M&A activity looks likely to ramp up this year as the economy and credit markets improve and some station owners look to cash out amid improving multiples.

“We really believe 2012 will be a year of significant M&A in the industry,” Sadusky said. “Several entities have gone through reorganization, others have restructured their debt. When I look at the landscape of the ownership structure of many groups, there’s a desire and plan to exit at some point.”

After selling two stations that didn’t fit its portfolio — WWHO, the CW affiliate in Columbus, Ohio (DMA 32) and WUPW, the Fox affiliate in Toledo, Ohio (DMA 74) — LIN is happy with its station lineup. However, executives didn’t reject the idea of potential acquisitions, whether stations or digital businesses.

In response to a question from Wells Fargo’s Bishop Cheen about the degree of difficulty in finding the right deal, Sadusky acknowledged that’s the key challenge.

“I would put degree of difficulty at super high,” Sadusky said. “I can’t tell you how many things we’ve looked at on the interactive side that just don’t fit the bill. We’re not going to stop looking. It’s incredibly hard … but we’re very disciplined. The acquisitions we have done have worked out very well.”