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Best Part of 2013:A Step Closer to Election '14 - Broadcasting & Cable

Best Part of 2013:A Step Closer to Election '14

Auto hopes, consolidation and new-media concerns will keep everybody busy this year
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Absent the nearly $3 billion in political spending in 2012 and a booming Olympics performance on television, what exactly do TV stations have to look forward to in 2013? The Super PAC largesse covered up fundamental ills in the business; chiefly, a grave concern over the economy persists, and prolonged dickering in D.C. over the fiscal cliff only served to crush consumer confidence.

It is a cloud looming over broadcast groups that rely on viewers spending their cash— and marketers spending their cash—to mitigate the absence of political spending. Dunia Shive, Belo Corp. president and CEO, spoke for many broadcasters when she recently told investors: “We do expect spot to grow, but how much it grows is largely dependent on economic conditions.”

Political Spot-ty

Everyone knows the political cycle by heart—frenzied TV spending during even years, a paucity in the odd ones. Steve Lanzano, TVB president and CEO, suggested measuring revenue in two-year blocks to eliminate the unfair year-to-year comparisons, and focusing on core revenue. That, he added, should be up 2% to 4% in 2013.

BIA/Kelsey forecast $19.1 billion in local TV revenue for this year—down from 2012’s $19.7 billion, but well up from 2011’s $17.9 billion.

Political spending might not be quite as dead as many figure. The implementation of the Affordable Care Act, for one, may spark spending from interest groups in key markets. “It’s a fairly new category that brings new money into the marketplace,” Lanzano says.

Others are less sanguine. “We are absolutely not building any political or issues money into the budget in ’13,” says Paul Karpowicz, president of Meredith Local Media. “If it happens, we’ll be delighted. But we’re not building it into the budget.”

Auto Driving Revenue

Automotive advertising keeps stations humming, of course, and those watching the sector see positive things in 2013, like a slight bump in unit sales (around 15 million-plus vehicles, up from 2012’s 14.5 million). That means more ads. “It’s growing, which is the main thing,” Lanzano says.

Consolidation Nation

Several station groups look different heading into the new year. Marshall Morton, president and CEO of Media General, has retired, and George Mahoney moves into the corner office. He takes over a group that sold its newspapers in 2012—and is poised to fully invest in broadcast and digital.

Tribune is eager to put bankruptcy in the rear view. Growing Sinclair now owns or provides services to 84 television stations in 46 markets, and may continue to expand.

The likes of Newport Television, New Vision Television and Freedom Broadcasting are gone following their acquisitions. Landmark may deal KLAS Las Vegas. Cox, Barrington and Nexstar may shake free some properties as well. “I think there will be some [activity],” Karpowicz says. “There are probably some groups [that] had a spectacular 2012 and think, it won’t get any better, let’s cash out now.”

Mega Platforms

Station chiefs are charged with the daily task of navigating the new media labyrinth; one top 20-market GM likened it to coming in each day with a limited batch of casino chips and having to put them on the right platform—social media, mobile, multicasting or perhaps plain old TV. “We know digital is going to be big-big-big, but we don’t know when it will be big enough [to invest heavily in],” he says. “Every day, we make choices about where to put resources and have to be able to turn on a dime.”

Every station is challenged to make its content stand out to viewers and users faced with an array of digital distractions that grows more entrancing every day. Local TV will continue to thrive only if stations can make an effective value proposition to a generation of digital natives who probably don’t give a whit about the late news.

“My largest competition at 10 p.m. is the DVR,” says a general manager at one CBS affiliate powerhouse. “What does that mean for us going forward—how do we get our arms around that?”

Amid the increased fight for limited revenue and the ongoing station consolidation, expect some local news also-rans to exit the news business altogether.

But look on the bright side: Every passing day means 2014, and its free-spending midterm elections, are a day closer.

E-mail comments to mmalone@nbmedia.com and follow him on Twitter: @BCMikeMalone

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