WPRI-12’s Parent Co. Closer to Mega-Media Takeover - Providence Implications Are Concerning
Thursday, September 08, 2016
GoLocalProv Business Team
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WPRI is about to have its third owner in less than 2 years
Late last week, the U.S. Department of Justice approved the $4.6 billion takeover by Nexstar Broadcasting of Media General. Media General is the owner of WPRI-12 and if the final FCC approval is granted, this will be WPRI’s third owner in less than two years.
For years, WPRI was the flagship station of LIN Media which was headquartered in Providence, but then two media mergers in a row have made WPRI-12 just another station among dozens of cities and media holdings.
The Providence-based owners were good to WPRI-12 and invested in the station and fueled their effort to compete with long-time rating champ WJAR-10.
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Nexstar Implications
The Nexstar takeover is creating uneasiness on Catamore Boulevard in East Providence for the staff at WPRI. The history of Nexstar has been to consolidate and to “add value” to investors — code words for reducing staff costs.
In fact, in a investor presentation published this month, Nexstar claims that when the merger with Media General is approved, there will be “$76 mm in readily achievable synergies in year one.”
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Nexstar's holdings after their acquisition of Media General
Moreover, Providence’s importance in the Nexstar universe is limited. Nexstar claims that after the merger they will hold 171 television stations in 100 markets "reaching 38.9% of all U.S. TV Households.”
As an example, in June of 2015 after Nexstar acquired a Las Vegas TV station, the Las Vegas Review-Journal reported, “Eighteen employees, including news director Ron Comings, were laid off from KLAS-TV, Channel 8, on Tuesday in the latest shake-up since Nexstar Broadcasting Group took control of the station in February.”
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Nexstar received DOJ approval last Friday
Articles from around the country outline the restructuring and cuts after Nexstar takes control. Nexstar has made more than a dozen acquisitions prior to the Media General deal and consumed 60 stations since 2011.
The deal was originally announced last January and the FCC approval is expected this fall, completing the mega merger before the end of the year and then triggering Nexstar’s “$76 million in synergies.”
Related Slideshow: Why the Last 60 Days May Have Been the Worst Ever for Newspapers
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Pew's Forecast is Dismal
"Though the industry has been struggling for some time, 2015 was perhaps the worst year for newspapers since the Great Recession and its immediate aftermath. Daily circulation fell by 7%, the most since 2010, while advertising revenue at publicly traded newspaper companies fell by 8%, the most since 2009. At the same time, newsroom staffing fell by 10% in 2014, the last year for which data were available. Coming amid a wave of consolidation, this accelerating decline suggests the industry may be past its point of no return," said Michael Barthel, research associate, Pew Research. June 16, 2016
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Collapse of Print
Mary Meeker's annual digital study finds that time with print has now declined to just 4 percent of consumer's time -- less than 10 percent of the time consumers spend with digital. Her report "2016 Internet Trend Report," was released June 1, 2016.
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Macy's Cuts
"In a large metro market, Macy’s ROP – or run of press, the ads running with the newspaper pages – would generate $1 million to $1.5 million in ad revenue a year. Now, with that number cut 40-60%, depending on the market, a publisher would see a drop of as much as $900,000. Figure that’s the equivalent of at least 10 newsroom jobs. In fact, at some companies, these cutbacks will mean a fairly commensurate cut in newsroom jobs, unless digital ad growth can offset the print losses," reports Ken Doctor in Politico on June 9, 2016.
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Newspaper Cuts
Employment Changes:
In The Newspaper Industry
1993 to 2007: -79,000
2007 to 2016: -168,200
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Other Print Cuts
68% of job loss occurred since 2007
In The Magazine Industry
1993 to 2007: -300
2007 to 2016: -48,400
99% of job loss occurred since 2007
In The Book Industry
1993 to 2007: 700
2007 to 2016: -20,700
100% of job loss occurred since 2007
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Loss of Readership
Newspaper readers are declining for all age groups -- especially the young. They aren't starting to read papers, accroding to the Center for Media Research, July 4, 2016.
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More Digital Staff Now
"Few industries have been affected by the digital or information age as much as newspapers and other traditional publishing industries (books, magazines, etc.). In June 1990, there were nearly 458,000 people employed in the newspaper publishing industry; by March 2016, that figure had fallen to about 183,000, a decline of almost 60 percent. Over the same period, employment in Internet publishing and broadcasting rose from about 30,000 to nearly 198,000." according to a U.S. Department of Labor report issued in June.
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Even Brexit Hits Hard
"Economic uncertainty arising from the June 23 referendum will impact advertising across all media sectors, including TV and the Internet, Enders Analysis, a leading London research firm, said in a report emailed to clients on Friday. But print is likely to be the worst hit, adding to the woes of a sector that is already facing serious financial challenges…Enders is projecting that print advertising income on Fleet Street will decline by between 20 and 25 percent in 2016 and 2017," writes Alex Spence from Politico.
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