Consolidate to survive
In the Chico-Redding, Calif., market, three men run seven TV stations in two cities 70 miles apart. Bob Wise runs ABC affiliate KRCR-TV and cable-only WB station KIWB(TV). John Stall runs Fox affiliate KCVU(TV) and low-powers KRVU-LP and KZVU-LP. Tony Kiernan runs NBC affiliate KNVN(TV) and, in accordance with joint services and joint sales agreements, everything but programming at CBS affiliate KHSL-TV.
The last arrangement is clearly the most unusual, but Kiernan expects to see more in many markets. Among its features are simulcasts of some newscasts. The combining of the news departments last summer led to layoffs and some less than favorable local press, although Kiernan notes that most newspapers exist as monopolies.
The agreements and resulting efficiencies, he says, "were necessary to continue the news and its strong local connection and to maintain network affiliations" as network comp disappears in smaller markets. Efficiencies enable both stations to hire a higher level of talent, purchase better equipment and produce a stronger news product. For smaller and larger markets, Kiernan says, consolidation may be the only way to survive.
Chico-Redding ranks 133 in population, 142 in revenue and well below both numbers in ad rates, say TV execs. With several stations signing on relatively recently, the market became flooded with inventory, and rates have not caught up. But they see an upswing ahead: New employers are moving in; homes are snapped up in 48 hours over the asking price—without advertising, they lament. Building abounds in the shadow of Mount Shasta, in college-town Chico and more residential Redding. Truck-rental company U-Haul, notes Stall, recently ranked Chico the No. 12 growth city in the nation.
Locals execs hope to educate national advertisers to the value of their market. "The economy is very vibrant right now," says Wise. "We need to do a better job of going out there and selling the market as a whole."