Independent Station Execs Have Advantages
Some private-station group execs are finding some things easier compared to their publicly traded counterparts
By Michael Malone -- Broadcasting & Cable, 3/23/2009 2:00:00 AM
While no one in the broadcasting business is turning cartwheels over the state of the industry, some private-station group execs are finding life just a little easier in some ways than it is for their publicly traded counterparts.
KPSP Palm Springs VP/General Manager Don Perry knows both worlds well, having run Clear Channel Television before taking over KPSP, part of a duopoly owned by tiny Desert Television, early in 2008. He says the combination of local ownership and not having to answer to shareholders has allowed KPSP to put resources into vital pet projects, such as making its formerly “watered down” weekly program Eye on the Desert a more lively daily show.
“Not having the 13-week cycles gives us a longer view,” Perry says. “And our owner has a little more emotional attachment to what we do than a distant one who's looking at a spreadsheet and his HR problems.”
Indeed, managers at several privately owned station groups, including Schurz Communications, Dispatch Broadcast Group and Drewry Broadcasting, say their unlisted status makes for a business strategy that's less reactive to the whims of the market. While smaller companies have their own challenges, being private may also mean better morale for staffers who aren't watching the company's stock price dwindle, while representing an attractive option for local advertisers who like the idea of keeping the money in the DMA—instead of at corporate headquarters in New York.
“The luxury of being a private company is we can make some decisions we think will help build for the long term,” says Schurz President/CEO Todd Schurz. “I think 'luxury' is really the right word for that.”
The best aspect of being private, say such broadcasters, is that their company is typically not saddled with a massive debt load. “These stations are generally less leveraged than the public ones,” says Frank N. Magid Senior VP Bill Hague. “If you're a homeowner with a smaller mortgage, you're doing a lot better than one with a big mortgage.”
As public companies like Tribune and Young stare down the barrel of stifling Chapter 11 obligations, smaller independent outfits can put resources back into growth instead of servicing creditors. “Having virtually no debt makes the way we operate a lot different than a lot of other folks,” says Drewry Senior VP Larry Patton, who oversees five stations in the Texas/Oklahoma area. Patton says the family-owned company will spend on new equipment—hopefully at a substantial discount, he says, because the public companies simply aren't buying much.
While the public media companies—many feeling the brunt of wheezing newspaper divisions—have gone through heavy layoffs, furloughs and suspension of 401(k) matching, the employee experience has been less onerous at several private outfits. While few broadcasting companies, public or private, have avoided downsizing, management at private groups say they've often been able to reduce expense through attrition more than layoffs. Some remain in hiring mode, finding it easier to lure strong prospects since public companies' stock options aren't the draw that they were until recently. “Suddenly it's a more level playing field,” Schurz says.
With stocks like Belo and Nexstar well below a dollar, the private broadcasters say it's easier for their employees to throw themselves into work projects when they're not worried about their dwindling nest egg, or simply keeping their job. “Our employees are not looking at their stock being down another five bucks,” says WSB Atlanta VP/General Manager Bill Hoffman, whose station is part of Cox Enterprises. “Instead, they can focus on other things.”
KPSP's Perry says strong owner support helped with a charity-oriented campaign he'd been noodling for some time. Each month, Coachella Valley Spotlight highlights one of Palm Springs' charitable organizations, such as the local YMCA, with a number of on-air segments and PSAs along with a $25,000 check from a local foundation. Perry says Spotlight would've been a tough sell at a public company: “I don't think that kind of project would work with a company that's solely focused on the bottom line.”
To be sure, the private broadcasters admit they're hardly immune from the pinch of the economic tsunami, and some regard the giant public groups' economies of scale with envy. Publicly owned companies still spend on station projects, and some believe the bloodletting on the public side is a necessary market correction that the private companies will eventually have to make.
But for many privately owned stations, the ability to plan a few years down the road—and have the resources to support enterprising ideas—is a strategic advantage. “Our decisions are our own,” says Dispatch Broadcast Vice Chairman/CEO Michael Fiorile. “Not the bankers'.”
E-mail comments to michael.malone@reedbusiness.com
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