Starkman: TV Merger Likely Means Another Blow to RI Newsgathering
Monday, April 21, 2014
Channel 10’s parent just bought Channel 12’s parent. Does it matter? You bet it does.
Driving the deal is a frenzied bull market national for local TV stations that, paradoxically, is boosting values while placing increasing productivity pressures on local TV news operations and diluting the quality of local news.
Last week, as we’ve all heard, local TV giant Media General Inc., based in Richmond, Virginia and the owner of WJAR Channel 10, unveiled a $1.6 billion deal to buy LIN Media LLC, a smaller Providence-based rival that includes WPRI Channel 12 in its portfolio. The deal creates the nation’s second-largest broadcast TV owner in the United States, with 74 stations as of now, reaching nearly a quarter of the country’s TV watching audience.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTFor the moment, the deal would leave Providence with two of its main local TV news providers owned by a single company. And while that is not strictly forbidden under the famously lax regulatory culture fostered by the Federal Communications Commission, even the two participants in the deal recognize that media consolidation in recent years has gotten so far out of hand that the newly combined company will be obliged to shuffle its portfolio to shed one of its Providence stations, as well as those in four other markets where the new company owns more than one station.
“The day we announced our merger with LIN Media, … we knew we would have to swap or sell certain stations,” Lou Anne Nabhan, a Media General spokeswoman, says in an email. A LIN representative didn’t reply to a request for comment.
Huge money
But even so, such is the money flowing into local TV that the deal figures to be immensely profitable for the stations’ owners, whichever Providence station is eventually discarded. As a measure of the market’s enthusiasm for the deal, the share prices of both media companies jumped on news the merger. Normally, shares of the buyer fall or hold steady on merger deals as investors try to figure out whether the deal will be profitable and assess how long the buyer will need to recoup its investment. In this case, Media General shares jumped 12 percent, even thought it was paying a premium -- 23 percent -- for LIN.
The profits here are built in.
The Media General/LIN deal is part of a huge consolidation wave among local TV stations. Last year, 290 stations changed hands at a total cost of $8 billion; that’s compared to 95 stations and a $1.9 billion from the previous year, which was considered busy at the time, according to the Pew Research Center.
Driving the market is a spiral of consolidation among big cable operators, who buy the content that local TV stations produce and are their biggest customers. Earlier this month, Comcast, the cable behemoth based in Philadelphia, announced a merger with New York’s Time Warner valued at $45 billion, a huge deal that will leave the company in control of nearly a third of the nation’s cable customers. The sheer size of these companies give them big leverage in negotiations with TV stations over so-called “retransmission fees,” paid to use the TV station’s content, including its news programs.
Consolidation spiral
Companies like Media General and LIN argue that they need size to push back against cable companies to fund local news. Cable companies argue they need size to compete with new entrants like Netflix and Amazon, which are offering content through streaming and downloads.
Left out in the cold, as usual, is the public, which relies on robust local operations reporting the news. Despite protestations by station owners that combining stations into larger companies will create efficiencies that will allow them to beef up local newsrooms, the opposite has been the result. While the total number of people working in local TV news is high historically, the same is true for the amount of news on the air, which has grown faster than employment.
The amount of news on TV is 46 percent higher than in 2003, according to Pew, as newscasts fill more hours on weekends, earlier times slots in the evening and morning, and further stretch available news resources. The number of stations airing news at 4:30 a.m., for instance, rose 159 percent in 2013, from the year earlier, to 634 stations, from 245.
What’s more, the number of local news stations that actually originate news has been decreasing, down 8 percent since 2005, Pew says. Now a fully quarter of US TV stations do not produce programs themselves, instead relying on an array of shortcuts to get around the expense of newsgathering. In some markets, ostensibly competing stations share reporters, content, equipment, even anchors. In Hawaii, for instance, two stations’ entire broadcast is identical, with the only difference being the call letters appearing in the corner of the screen.
“One-man bands”
Another consequence is fewer hands involved in reporting the news. The number of so-called “one-man bands” –reporters carrying backpacks who shoot their own stories -- has been rising for years, according to the Radio Television Digital News Association.
Now, a majority of stations in markets around Providence’s size (the city is the nation’s 53st largest market, according to Nielsen, use one-man bands at least some of the time:
What will happen now in Providence is anybody’s guess. But the point is that consolidation nationally has led to a dilution of new gathering strength locally, even as values of the stations soar.
And don’t let anyone tell you differently.
The Wrap blog asks -- “Will Media General-LIN Merger Lead to More Local TV Job Losses?” -- but the question is pretty much rhetorical.
This matters because, even today, more Americans get their news from local TV than any other source. In a Pew survey, 72 percent said they watch local TV news sometimes or often, while only 11 percent said they never watched it.
Filling a void
And it’s a particular problem in Rhode Island, where, unlike other markets, local TV news has been an increasingly important part of the news environment -- most especially the two stations involved. WJAR, a Rhode Island institution dating to the postwar era, has long cast itself as a serious reporting shop – to the point that it famously dismissed one of its night-side reporters, Julie Tremmel, after she authored a couple of reporting stunts deemed by some to be overly flamboyant. But this winter, its long-time investigative chief, Jim Taricani, retired, dealing the station more than a symbolic blow. Its future direction is far from clear.
Meanwhile, WPRI has come on with aggressive coverage of politics and media in a bid to challenge WJAR’s primacy. What will become of that effort under the new regime – whether with Media General or somewhere else -- is also unknown.
Both stations have sought, with some success, to fill the reporting void left by the decline of the Projo, where, as reported, revenues have plummeted by half over the last decade and a much faster rate than the national average and the reporting staff, once a small army, is now a platoon. The paper has been on the block since December – a sale its owner hoped to have completed by the end of the month. The clock is ticking, and the slowness of the process indicates that buyer interest is less than robust – another not-particularly good sign.
It is ironic – one is tempted to say, perverse -- that a weak market for newspapers has meant a thinning out of the local reporting corps while a robust market for TV news also augurs the exact same thing on the TV side.
Do not adjust your screen. Your TV is okay. But there is indeed something wrong with this picture.
Related Slideshow: Rhode Island’s Changing Media Landscape
Radio, print, television and digital - the faces in Rhode Islands's media has changed drastically over the past months... Let's take a look at some of the biggest moves:
Bob Kerr
Howard Sutton
Andrew Gobiel
Rick Daniels
Fred Campagna
Karen Meyers
Felice Freyer
Flo Jonic
Phil Marcelo
Julie Tremmel
Jim Taricani
John DePetro
Helen Glover
Mike Stanton
Dean Starkman
Karen Bordeleau
Bob Whitcomb
Tom Heslin
Tara Granahan
Connie Grosch
Gene Valicenti
Jennifer Jordan
Ron St. Pierre
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