Fates and Fortunes

Hiring TV's Next-Gen Leaders

9/18/2009 04:54:07 PM

Two big leadership gaps in television were filled today when NAB named former U.S. Senator Gordon Smith (R-Ore.) to be its president and TVB named MPG COO Steve Lanzano to its top spot. Both men have some work to do.

Back when TV stations were the voice of the local market and the local news could make or break a politician, the NAB was one of the most powerful lobbies in Washington. While still important, TV stations are no longer politicians’ central means of communicating with their constituents. That change has deeply eroded NAB’s power in Washington.

NAB’s problems are TV stations’ problems: both are living in an era that has passed them by. Once upon a time, politicians lived in fear of their local TV station: it had the power to make or break them with a single newscast. That’s no longer the case.

Almost since I began covering this industry in 1997, I have felt that the majority of TV station owners have spent their time trying to hold on to what they had – huge profit margins, local dominance – instead of trying anticipate the digital world that was clearly coming and adjusting to that. TV stations’ failure to do that rolled over them like a tsunami this year.

Instead of coming up with new, viable business models for the digital world, many TV stations sold to owners who overleveraged the stations, leaving them incredibly vulnerable in last year’s credit and market crash. Much like homeowners who suddenly found themselves with a third mortgage (that had financed their Lexus and last year’s Caribbean vacation) and no job, TV station owners suddenly found themselves owning devalued, highly leveraged assets with no cash flow. As a result, many formerly strong broadcasters — Tribune, Young, Pappas — had to declare Chapter 11 this year and last.

Today, TV stations are looking toward monetizing their Web sites and to mobile broadcasting to usher them into the digital world. Their local equation remains valuable, if a bit less so: only TV stations can offer advertisers one-stop shopping when they want to cover the entire local market. Still, TV stations have taken too long to figure out that they need to be aggressively carving out a local online advertising niche for themselves – as a result, Internet upstarts like craigslist are eating their lunches, much like newspapers, and it may be too late for stations to put that genie back in the bottle.

SmithNAB’s pick of Gordon Smith makes me think that the association’s board is still wistfully living in the past. Smith is a Republican who left the Senate last November, when he lost his election to Democrat Jeff Merkley. At the moment, Washington is the most big-D Democratic it has been since President Bill Clinton and the Democrats held both houses in 1992. If ever you were going to hire a Democrat to lead your organization, now’s the time.

I know that most broadcasters are steadfastly Republican, and that Republican approaches to legislation more closely align to broadcasters’ own pro-free-market views, but hiring a Republican to lead your organization puts you on the wrong side of an incredibly polarized environment. It means that Smith’s best relationships are with Republicans, and those aren’t the guys in charge right now. It’s also unlikely that Smith has any relationships within the Obama White House.

NAB is convinced that Smith is their guy and that he can build the relationships in Washington that former NAB President, David Rehr, could not. I’m willing to give them the benefit of the doubt for now.

“We conducted an exhaustive search to identify the very best individual to lead a great trade association,” said NAB Joint Board Chairman Steve Newberry in a statement. “We’re convinced we have found that person in Gordon Smith. His background as a lawyer, a statesman, and as an entrepreneur — coupled with his extensive knowledge of broadcast issues from having served many years on the Commerce Committee — make Gordon eminently qualified to represent the interests of free and local broadcasters in Washington.”

According to B&C’s John Eggerton, Smith’s priorities will be strengthening broadcasters’ case that they continue to need free access to their huge chunk of prime spectrum even as wireless technologies encroach. A better digital business model would lend strength to that argument. Smith should spend breakfasts, lunches, dinners, and weekends building his relationships with today’s Washington establishment, and rebranding himself as television’s Washington leader. He’ll have to be conversant and convincing on such issues as retransmission consent fees and transmission of local broadcast signals via satellite. And he’ll need to build the case that broadcasters remain an incredibly important constituency who are worth listening to.

LanzanoMeanwhile, Steve Lanzano has been named president of the Television Bureau of Advertising, replacing Christopher Rohrs and starting in January 2010.

According to B&C’s Claire Atkinson: “Heading TVB will be no easy task. TNS Media Intelligence reported half-year ad spend numbers which showed ad spending in spot TV dropped 27% through June. Lanzano’s job will be to advocate for bigger spending at the local level.”

If Lanzano is looking for any guidance, let me recommend SNTA’s Mitch Burg. Burg has done quite a bit to advance syndicators’ cause with national advertisers, and those efforts have been realized in real dollars. Burg and his team are intense researchers. They have made a strong case that syndication is a value proposition; that advertisers should want to be placed closed to syndication’s popular and day-in-day-out personalities such as Ellen Degeneres, Regis Philbin, Kelly Ripa and Rachael Ray; and that viewers watch syndicated programs live and thus do not skip the commercials.

Burg also frequently points out that syndication’s national advertisements come at the beginning of the program, giving them the highest opportunity to be viewed. Finally, Burg has great contacts in the industry and he’s constantly working those contacts and thinking of ways that syndicators can innovate their advertising propositions through brand integrations and other efforts.

Actually, that’s good advice for both men: Constantly work your contacts. Constantly think of ways the television business can innovate. And be the strong advocates that this industry needs.

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