Hearst-Argyle's Barrett: ABC's 10 p.m. Needs Work

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ABC's rejuvenation is making its affiliates happy, but at least one large group holder wishes ABC Entertainment chief Steve McPherson could spread some magic to the 10 p.m. hour.

Appearing at the Credit Suisse media week conference in New York Tuesday, Hearst-Argyle President and CEO David Barrett said that the issue of ABC's comparatively weak shows leading into local stations' 11 p.m. newscasts "is a cause for concern." He noted, for example, that Hearst-Argyle's WCVB Boston was on top in the November sweeps for every one of its newscasts in the early morning and at dinnertime-but finished third at 11 p.m.

Hearst-Argyle owns 12 ABC affiliates, and manages another one for the separate Hearst Corp., making it ABC's largest affiliate group. Altogether its 26 stations (10 NBC affiliates, two CBS affiliates among them) cover just over 15% of the country, well below the 39% FCC limit. So Hearst-Argyle could be in a buying mood. Barrett was coy on the matter, though he said the corporation is watching the action.

"I think there's a lot of inventory that's available," he said. "I don't know what you'd say about the Tribune stations," he added, referring to Tribune Co.'s very public deliberations about restructuring the company, selling parts of it piecemeal, or all of its stations. But adding a super-big market, like Tribune's stations in New York, Los Angeles or Chicago, would catapult Hearst-Argyle into a new universe.

One victory Hearst-Argyle touted to analysts was its success in securing retransmission consents, though mainly from a deal with EchoStar. Barrett made it clear the company would keep pushing cable companies to pay up--it has now taken its HD channels off of Cox Cable systems in six markets as part of the back-and-forth dance over fees.

Barrett said Hearst-Argyle will grab $16 million-$18 million in retransmission fees this year, and just $8 million-$10 million in compensation from networks its stations are affiliated with. Those figures, more than anything, show how stations are trying to replace their shrinking network comp piece of the pie with retrans money. Hearst-Argyle doesn't renegotiate retransmission fees with cable's big boys--Comcast and Time Warner Cable--until a span of time between 2008 and 2010. "That's the next horizon," Barrett said.

In a quirky note, Barrett, noting how important political advertising was to stations, said that he took a financial snapshot of the 26 stations on just one random day during the 2006 campaign. On that day, Oct. 19, Hearst-Argyle stations ran 768 local ads for candidates or issues--an eye-popping 26.16% of all the stations' inventory. In an earlier conference call with investors, Barrett said political ads poured $23.4% million into Hearst-Argyle's pockets during the third quarter.

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