Greenfield: Get in the Pool, ABC

Says O&Os' cost structure is out of whack without content shares

By Michael Malone -- Broadcasting & Cable, 7/9/2009 3:55:08 PM EDT

Pali Research analyst Richard Greenfield blasts ABC in a report for not partaking in cost-cutting content pools in markets where it owns a station. "Why Do ABC's Stations Want to Have the Highest Cost Structure in Local News?" is the title of Greenfield's report, issued this morning.

With local news viewing and revenue in decline and the sector seeing increased competition from the likes of new local sites from ESPN and Huffington Post, Greenfield says partnerships such as the Local News Service (LNS) between Fox and NBC and, in some markets, others, makes abundant sense.
Greenfield wonders why ABC doesn't take part.
"While ABC is the market leader in a good portion of its TV station O&O markets, we simply cannot understand why they do not want to participate in LNS, even as ABC affiliates such as Scripps are participating," he writes. "It would appear that ABC does not want to impact the quality of its local news gathering, however, LNS is invisible to viewers and is a way to reduce costs in a declining business. ABC's O&O's will now end up with the highest cost structure in the local TV markets it operates in and may not even have the opportunity to participate in LNS (ie. in NYC, the benefit of a fifth partner is rather marginal for the existing players, who also may not want to help the ratings leader).
ABC did not have comment on Greenfield's report at presstime.

Last month, WLS Chicago President/General Manager Emily Barr told B&C that she understood why Fox, NBC, CBS and Tribune would share content in the #3 DMA, but said it was essential for WLS to retain an independent voice. "We remain convinced the way to stand out is to provide coverage in our own unique way," she said. "I understand and respect the others' position, but we feel this is what we need to do to remain strong."