Taking Care of Broadcasting's OwnBroadcasters Foundation work another example of Hearst TV chief Barrett’s commitment to service 2/25/2013 12:01:00 AM Eastern
David Barrett has achieved just about everything in the
broadcast business: running radio and television stations, serving as CEO of a
major group, being inducted into the B&C Hall of Fame. Barrett,
chairman and CEO of the Hearst Television group, adds another prestigious prize
to his trove when he receives the Golden Mike award from the Broadcasters Foundation
of America on Feb. 25.
Barrett spoke with Michael Malone, B&C deputy
editor, about the state of the local broadcast business and why the
Broadcasters Foundation, a charity that provides financial assistance to radio
and television broadcasters who are in dire need, is well worth his time and
energy. An edited transcript appears below.
You are involved with all sorts of industry
associations and boards. Why the Broadcasters Foundation?
I admire their mission. There are plenty of people in this industry we
hear about who have been very successful, who enjoy great careers. But there
are also lots of other folks you don't hear much about whose lives have taken
different turns, who have had catastrophic events. This is an organization that
"takes care of their own," like the Springsteen song. I greatly admire the
leadership chairman Phil Lombardo, and before him, Ed McLaughlin, have put in
place to have the industry help those people who've worked in the industry
who've fallen on hard times. As a company we've been very supportive;
personally I've tried to be very supportive of the organization because its
mission is wonderful. The more we get the word out that our mission is of
importance and value, then we're able to raise money. That money helps people
in desperate need. Good for all of us for helping people in need.
So you're a Springsteen fan?
I used to run rock radio stations! We were playing [Bruce] Springsteen in the
beginning in some places, before people knew who he was. We were playing
Springsteen on a rock station in Montreal that I ran in the '70s.
What do you make of the consolidation going on in the
local broadcast industry? Is it a good thing?
I think it's the normal course of business. I've always talked about a
Darwinian outcome; in most circumstances in local markets and overall, the
strongest people are in a position to invest more in the business and provide
the right kind of service. Scale is important in every industry; people that
are consolidators are creating scale that makes for better business
circumstances. We hear about US Airways and American Airlines talking about
combining to form the largest airline in world. There will be people who
observe that there may be adverse price implications for consumers in that
environment. There are pros and cons with these kinds of consolidation plays,
but it's the normal course of business.
There may be a lack of leadership for industry
organizations when you have fewer station groups and fewer executives. Is there
concern that, amid consolidation, one byproduct might be a lack of top-level
people to do the hard work to make the industry work?
Over time, everybody has been concerned about who the next generation
of executives are. Alan Frank has been succeeded [atop Post-Newsweek] by Emily
Barr, who's an outstanding executive. Jordan [Wertlieb] was named president of
Hearst Television. He's an outstanding next-generation executive. If companies
are to be successful, they are going to have to develop next-generation
management talent. The leading companies will be bringing those people to the
industry table to provide leadership to the NAB, TVB and the like. While that
is always a concern, I think it works itself out-people do emerge. I think
there's some outstanding young talent in the industry.
You do think about, if there are fewer companies, sometimes
it's harder for the Broadcasters Foundation to raise money because there are
fewer people to tap. But that doesn't mean one should cut back on important
initiatives to develop young people and spark interest in our industry and
mentor them. The Emma Bowen Foundation is another organization that is a spectacular
mentoring program. There are fewer companies, particularly on the radio side,
that participate. But the companies that are committed long-term for our
industry are stepping up. We certainly see that with the Broadcasters
Foundation. It's a function of the kind of leadership Phil Lombardo and
[president] Jim Thompson are providing.
All TV stations are trying to be 24/7 media outlets
instead of just stations. What is the Hearst TV group doing to accomplish that?
We are focused on our digital platforms. Last year we did more than 4 billion
page views, and 38% of those were on mobile platforms. The growth in our mobile
activity and traffic is remarkable. We will hopefully generate in the 5 billion
range of page views [in 2013], and I think mobile will be 50% of those page
views. We are monetizing that. It is a challenge, but we are generating revenue
and profitability on our digital platforms.
Multicasting has become a very significant business for us;
it's now, in aggregate, the size of a small-to-middle-market television
station. If you talk about value creation, we've been able to do that by having
virtually all our stations involved in multicast programming. We are selling
advertising and getting some ratings-we've created value in that space.
That is part of the growth strategy going forward. We can
look at investment in additional TV stations, but also look at lower-level
investment in multicast and digital, which is responsive to how people are
It's earnings season. Do you miss doing quarterly
earnings calls since Hearst TV went private?
Part of me does. It had been an opportunity for us to articulate our view about
the industry and use the pulpit, if you will, to advance some things our
company felt were important. As I see people do earnings and talk business
[now], part of me misses the opportunity to articulate where the business is
going and assert the leadership of our company in a more public way. I don't
miss the accountability that a lot of analysts expect. I kind of grimace when I
see someone missed analysts' estimates by $7 million, less than 1%. I don't
miss some of the short-term thinking that drives some of the analysts'
Hearst is the diametric opposite of that. We have assets
we've owned for 50-100-125 years; if anyone takes the long view, it is us. We
are as successful as a 125-year-old company as many of these new upstarts are.
I would say the quality of earnings at Hearst Television and Hearst Corp. are
higher than that of a lot of other [companies] in the industry. The depth of
relationships we have with viewers, readers, advertisers and partners has
remarkably strong and deep roots, and that makes for quality earnings.
How come we haven't heard Hearst TV's name in the M&A news?
We've got significant scale now at 18% of U.S. households. We've got a nice
balance between NBC stations and ABC stations. Now that we are privately held again
by Hearst Corporation, we're not in the public markets. The allocation of
capital in Hearst Corporation is considered across a lot of different areas. The
great success of Hearst has been driven by a diversified strategy: We are strong
in magazines, strong in cable entertainment, strong in broadcasting and business
media has been an area where we've invested. Hearst's board of directors and
corporate management assess where the best opportunity for a return is as it
allocates capital to different businesses. We want to keep a very balanced
portfolio to the extent we can.
We are heavily invested in the TV business. We've spent as
much money on the TV business as we have spent-I'm speaking for the corporation-in
other areas. There is a balance in our portfolio that makes sense. Television
is something Hearst is comfortable with and proud of; we've come off a very
strong year in 2012 and we can be very measured as to what opportunities we
look at, how strategic we are and what sort of return potential they have.
Might we see an acquisition this year?
I wouldn't signal one this year. But I would say we are certainly in
the deal flow. We know everything that is out there. People would like us to be
in the process, if only because we are a well-heeled company that people like
to have at auctions. I'd say there's nothing imminent, but we've got our eye on
the operating ball and our eye on strategically where the company needs to grow
over the next 5-10 years and how we accomplish that. That's what we're focused
What did you see in Jordan Wertlieb that made you think he projected to
a corporate role at Hearst?
He's smart, he has good judgment, good experience. He's been with us for
20 years so we've seen him in a variety of situations. We've challenged him as an
executive in Boston and Baltimore in a number of different roles and he's got
the right stuff. He's got the whole package-management skills, energy. He's a force
of nature in terms of how he addresses the industry. Jordan loves television, he
helps people be better at what they do. For me that's a key management attribute-help
other people succeed. People like working with Jordan and he makes people better.
That makes him an executive who's a great fit at Hearst.
With Jordan taking on the group presidency, are you transitioning toward
This is about preparing next-generation talent. This is a company that
is ever mindful of that. [Former Hearst-Argyle President/CEO] John Conomikes
brought me in as his right-hand guy and I understudied to him for a number of
years; ultimately, he retired and I took over, and ultimately I will retire and
Jordan will take over fully. We put a lot on his plate this year. It's the way Hearst
approaches management transitions. I am not making any announcement as to specific
plans about what I will do. I am a director and trustee of Hearst Corp. and a
trusteeship appointment is for life. So I'll be coming in and out of this
building for years to come if I stay healthy. I'll have involvement in the company
for years to come, but I don't intend to be working as hard in the years to
come as I've worked the past 30-40 years.
You're spending less time on airplanes these days?
[Laughs] A little bit, yeah. Jordan and [senior VP] Frank Biancuzzo and
others are out there.
How does that feel?
[Laughs] I don't miss taking my belt off.
The Hearst TV stations have a strong reputation in terms of journalism and
community service. How do you build that?
It's a cultural thing. We continue to focus on what our priorities are.
The most important thing we do is local news and local engagement and serving these
local communities. It's a conversation that is ongoing. We also take the approach
of the old saw that if something is worth doing it's worth doing well. We're
very competitive-there's a competitive culture here of high performance. We
want to win in our markets. Winning means strong local ratings, strong local
sales and high profitably, and that allows us to attract and retain talented people.
There's a whole cultural commitment to excellence that runs through the parent company
and certainly runs through the television company. The stations are successful because
of really talented people at every level of the station. It isn't about the
people in New York on the 39th floor of the Hearst Tower making all the
decisions, being the puppet master. We've got a great station in Boston that's led
by Bill Fine. We've got a great station in Orlando, led by Jim Carter, in Pittsburgh,
led by Mike Hayes-
Now you have to name everybody.
[Laughs] Caroline Taplett in West Palm Beach is terrific, Sarah Smith
in Kansas City... You've got to have the best general managers, sales managers,
news directors, people in engineering, marketing-the best people at each
television station for them to be successful. It's been a challenge but we've been
good at attracting and retaining talented people because they like the culture
of the company, they respect the company and we empower them to do their thing.
Is there a corporate leadership training program where you identify a
future leader and put them into the program?
I'm very focused, as is Jordan, on who the shining stars are out there.
We have employee recognition programs in sales and marketing and we talk about who
are next-generation people in every area of the company. Hearst has an
executive development program called Hearst Management Institute, which we've
done for a decade, probably longer. It's in association with Northwestern
University. We've run a lot of our talented TV people through that program, as
have the magazines and newspapers and business media. It's one opportunity for
us to help develop next-generation people and we're very focused on that. Many
of our best performers have been participants in that. They learn a lot; they learn
things outside their wheelhouse of expertise-non-financial executives get good
financial executive and marketing training, and leadership training is probably
one of the most important things we cover.
What did you think of the Super Bowl?
We like the fact that Baltimore won. WBAL Radio is the rights holder
for the Ravens.
You've got some roots in Baltimore.
I got there 60 days after the Colts left in Mayflower moving vans in the
spring of 1985. The Ravens hadn't come to Baltimore and established that franchise
when I left. Our TV and radio stations there have a great relationship with the
team. We carry the preseason games on TV and fancy ourselves as the Ravens station.
WBAL and 98Rock carry the games. [WBAL sports director] Gerry Sandusky is the
play-by-play guy and Stan White, an All Pro player who played with the Colts,
is our color guy. We're proud of our association there and it was fun to follow
them all the way to the Super Bowl. They lost four of their last five regular season
games, so I didn't have any expectations that they'd go deep, and there they
What did you make of the broadcast?
I thought it was OK. I thought they were ill prepared for the power
outage. I was surprised there wasn't a plan-a disaster plan, if you will-for
coverage. I viewed that as a news-like event in the game and they were ill prepared
to cover it. They were scrambling. It's a broadcaster's nightmare when the power
goes out, but you need to have redundancy plans in place and there wasn't
enough redundancy in place to keep them going. It's one thing for the lights to
go out in the stadium but to lose the booth-it's surprising that occurred. The guys
were scrambling. I guess that was never done better than Jim McKay in Munich-how
he shifted from sports guy to news guy to talk about the horrible circumstances
that occurred [11 members of the Israeli Olympics team were killed in the '72
Games]. I don't compare them in any way, other than it was a shift to a
different story. They had to scramble to get into a different storytelling mode,
and there wasn't lot of information to come out.
There are so many options for your multicast channels. What works? Local?
It's a combination of both and it's very market sensitive-some formats
work in some markets but don't work in other markets. Some classic TV things-Me-TV
is an interesting product that resonates. In Monterey we've got the ABC
affiliate as a multicast product that generates ratings. In Fort Smith [Ark.],
we've got The CW, and we were recognized as the best CW Plus station in the
country. That has become a profitable enterprise. It's taking some content and
leveraging the audience and the relationships we have with advertisers in the
local marketplace and launching new products. Every company is interested in
innovation initiatives and launching new products, and we're certainly doing
that with what we put on websites, mobile devices, multicast platforms. We are
very much involved in new product development and innovation activities.
What's on your DVR?
Scandal. Person of Interest on CBS. I still like scripted television better
than reality shows. I'm looking forward to Red
Widow on ABC. The Voice is a very
appealing show. Hearst has a joint venture with Mark Burnett's company so we
are an owner of The Voice and a lot
of projects Mark Burnett has in place. So this building is rooting for the success
of The Voice, and given that we've
got 10 NBC stations, it's a double good feeling when we watch The Voice's ratings perform as they did.
What was key to NBC's rebound in prime?
Having hit shows. The Voice is
a hit show, Sunday Night Football
performed well. They're challenged in the first quarter without football or The Voice but The Voice is back on later in the spring. They're making good
decisions about show concepts, they're producing and marketing and scheduling them
well. Interestingly, they hired Jeff Bader [NBC president, program planning,
strategy and research] away from ABC. He's a name you don't hear a lot about
but he's a very smart guy who's got a talent for scheduling. He's kind of an
unsung hero. He's made some good decisions about how to schedule things. [NBCUniversal
CEO] Steve Burke has hired talented people and he's getting a benefit from them.
NBC's news leadership is, at the moment, in flux. Is that a concern for
We certainly watch that with interest. They've had a great run for many
years, but nothing lasts forever. They determined, [former NBC News president] Steve
Capus determined it was time for a change. We are keenly interested in who
succeeds Steve, what the vision is and how capable he or she is as an executive
in running a very important division. The legacy of success at NBC News is long
running and our 10 NBC stations are very focused on what happens next in terms
of executive leadership. I'm a big fan of Pat Fili [-Krushel, chairman of NBCU
News Group]. I'm confident she'll make a good call with Steve Burke about who takes
that over. Those are important jobs in the industry and important jobs for the
country. We need smart people on top of our network news organizations-that's
good for our society.
Network affiliation agreements were very divisive in the recent past,
but that seems to be quiet of late. Do you feel like stations have determined
that paying the networks is just part of life now?
We're coming to commercial agreements that ultimately people accept on
the network side and on the station side. The old expression I use goes back 15
years: We're in a deadly embrace of sorts with the networks. They need us in a big
way and we need them in a big way. When that exists and that is acknowledged, you
come to a business conclusion. The old saw that neither side is happy with the deal
suggests that a reasonable deal may be the outcome. There is a new paradigm-we're
providing money, paying fees, if you will, to the network for programming. It's
a function of the high cost of programming and the fractionalization of audiences,
but we need good programming; that one has to pay more to get it is a reality
of the business. Not everyone has reached final affiliation agreements, but
they're works in progress and they work themselves out as commercial agreements
How's your anxiety level regarding Washington and broadcast spectrum?
My anxiety level is moderating right now because of my confidence, and
the industry's confidence, in [NAB president and CEO] Gordon Smith and how the
NAB represents us in Washington, on the Hill and at the FCC. We have a leader in
Gordon who is respected and well regarded and trusted-I think the Congress
trusts him, I think the FCC has come to trust him. And our organization, I believe,
is in a better place than it's been in a number of years in that regard. He is
advancing solutions-oriented arguments as opposed to being an organization that
says, no, we can't do that. He proactively tries to find solutions and compromises
and addresses the concerns the government has.
That said, we've got to see how the auction rules play out. The
Longley-Rice data models were released by the FCC [Feb. 5] with an invitation,
I'm told, to look at it and tell us what we're uncomfortable with. That's the
right kind of step. The engineering community in our industry will assess those
models and hopefully be able to tweak them where necessary. You've got to really
look at the rules of the auction in fine detail and look at the timing. It's Gordon
Smith's and [NAB executive VP of strategic planning] Rick Kaplan's notion that this
is so important that we shouldn't rush into it-in my words, not take a Ready,
Fire, Aim approach, as opposed to a Ready, Aim, Fire one-is the right way to go.
Gordon is doing a remarkably good job for our industry. The
NAB TV board is loaded with talented people who get the issues, are engaged in
the issues and work hard.