Market Eye: Invest Northwest

Spokane stations fund local fare

Spokane has been hit hard by the recession, with the major advertising categories down at least 20% this year. But some in the No. 75 DMA say it's a bad time for stations to slash costs.

KAYU sent a reporter to cover the American Idol finale in May—a substantial expense, but one that General Manager Jon Rand says scores major points with viewers and pays off in the ratings. KHQ, meanwhile, is betting big on a new sports and weather channel with an ESPN Zone-style studio in a resort sports bar (see Station to Station, p. 17).

“I like to say, 'Go big or go home,'” says KHQ President/General Manager Patricia McRae. “In the long run, we'll be much further ahead by building when everyone else is cutting back.”

NBC affiliate KHQ has benefited from privately held local ownership in Cowles Co. KHQ and Belo's CBS outlet KREM tied for the total day household ratings win in May, and were virtually knotted in late news, too (KHQ had a 4.0 rating/24 share, KREM a 4.0/22). KHQ won mornings, while KREM took evening news. KREM grabbed the 2008 revenue race, according to BIA Financial, its $15.6 million haul just ahead of KHQ's $15.2 million.

Brian Brady's Northwest Broadcasting owns KAYU (Rand is the Northwest COO), Morgan Murphy owns ABC affiliate KXLY, and Belo has a duopoly with CW outlet KSKN.

General managers say the economy has typically been steady, thanks to major employers such as Fairchild Air Force Base, the health-care industry and Spokane's public school system.

Automotive advertising is “ugly,” in the words of one general manager, but the market has never been too reliant on it. As the DMA is so spread out, broadcast can be a tough sell to car dealers. “Some towns might be 100 miles apart,” Rand says. “If it were a more concentrated market, I think we'd be impacted differently.”

KAYU was involved in a landmark showdown over retransmission consent fees; it went dark for Time Warner Cable subscribers from December 2006 to February 2008. Rand says the stalemate helped in negotiations with other cable carriers. “It makes a statement when you show you have the guts to make a stand against a company like Time Warner Cable,” he says.

Just as KAYU is investing in its 10 p.m. news, which is produced by KHQ.  KHQ has put resources into new programming such as live high school sports on its SWX subchannel and the local business program Invest Northwest on Sunday mornings. With stations slashing weekend morning news, McRae believes it's a good time to grab market share. “You can't let the economy dictate your business,” she says. “Now is the wrong time to cut.”

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