As 2013 draws to a close, syndicators, which serve as programming partners to TV stations, have seen a seismic shift in the industry with station groups consolidating at a furious pace. All of a sudden, groups that own stations in the country’s largest markets—particularly New York, Los Angeles and Chicago—don’t necessarily have the final say in whether a new show is a no or a go.
“It used to be that if you got New York, Los Angeles or Chicago, you were in great shape,” says Joe Di Salvo, CBS Television Distribution president of sales. “Now, because there’s so much consolidation, those new big groups are so much more important to any venture.”
What that will likely mean is that syndicators and station groups will work more closely together to create programming. That’s already happening, with groups such as Tribune partnering with CBS Television Distribution on The Arsenio Hall Show and The Test and with Debmar-Mercury on next year’s Celebrity Name Game, and Scripps partnering with Telepictures on Let’s Ask America. Station groups also are creating original programming, such as Raycom’s America Now (produced by ITV Studios America) and Meredith’s The Better Show.
“Everyone is trying to figure out how to become partners with syndicators,” says one syndication executive.
Consolidation Pluses, Minuses
Syndicators say there are pros and cons to station consolidation. On the pro side, consolidation—coupled with retransmission consent deals that have reaped millions for stations in the past year—should mean healthier buyers.
“Consolidation provides a stronger base,” says a syndication executive. “Television stations have not been viewed in a favorable light in quite a while. Stronger television stations with bigger resources are more competitive and should be able to throw off higher ratings.”
On the con side, the existence of huge station groups means that buyers will buy shows in group-wide deals. Syndicated shows reap more revenue when sellers can go market by market, creating individual auctions that drive up a show’s price. When groups buy shows in megadeals, it means less work for sellers but lower prices for buyers.
“It becomes harder to get the proper lineups for your shows,” says Mort Marcus, copresident of Debmar-Mercury. “You might be forced to do a deal with a group and do 15-20 markets. When you are trying to get the best deal in each market, it’s best if you can go market to market, station to station. I’m a big believer that really strong competition bodes better for everyone.”
Is Patience a Virtue?
Another trend that seemed to take hold in 2013 was stations and syndicators both being willing to hold on to shows that showed promise, even if their early ratings performances were weak.
While there’s some grumbling in the market about keeping shows on the air that aren’t turning in especially strong ratings—such as this year’s crop of Arsenio, Bethenny and QueenLatifah—just as many people make the argument that it’s better for everyone to show patience in this fragmented environment.
“It’s much worse to be canceling [shows] every single year and replacing them with ideas that failed 15 years ago,” says one TV station executive.
While station and syndication executives applaud patience, many also warn that patience comes at a price.
“Mediocrity is not so much a trend, but a trap,” says Chuck Larsen, president of consultancy October Moon Television. “To feel safe, we in the TV business tend to copy things that have worked before. Generally, copies don’t work as well as the original.”