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Life Goes On at KRON - Broadcasting & Cable

Life Goes On at KRON

Broadcaster adopts do-it-yourself attitude
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Amidst a full-court press to sell the station, a much leaner and presumably meaner KRON San Francisco launched an hour-long 8 p.m. news Sept. 2.

KRON moved Dr. Phil from 8 p.m. to 5 p.m., and now has San Francisco's only newscast in that slot. The so-called “Bay Area's News Station” has also extended its 4 p.m. news to an hour—bringing KRON's daily news haul to 9½ hours, which it claims to be tops in the market.

On the trading block since January, KRON has seen its head count and costs cut dramatically. But instead of idly waiting for marching orders from a new owner, President/General Manager Mark Antonitis has overhauled the KRON game plan, including an infusion of local programming that's produced in unique ways. Antonitis says the station has spent the last few years fighting through the slump that the rest of the broadcasting universe has faced more recently—and believes he sees a little light poking through the tunnel.

“If you want to be successful, you can't just deliver someone else's product,” he says. “You have to make your own.”

Whether one favors the cliché about desperate times and measures or the other one about necessity begetting invention, the heavy cuts seem to have sparked an entrepreneurial spirit at KRON. A small army of video journalists (VJs) hits the streets each day to ferret out, report on and edit news segments. Antonitis likens the new way to 32 people producing 32 stories, instead of 32 people doing a half-dozen reports.

The station has also been aggressive in terms of branded integration, with shows such as the shopping-themed Bay Area Bargains and the real estate-focused Bay Area Living produced in conjunction with local advertisers. Viewers like the programs because special deals are offered within the show. Management likes them because production costs are shared and KRON also sells commercial time in the programs. Other local shows deal with health and gardening.

KRON's news tweaks—it also scrapped its 9 p.m. news in favor of the 8, and runs MyNetworkTV prime from 9 to 11—come at an interesting juncture. Its stock hovering around $.07 at presstime, Young Broadcasting has been motivated to sell KRON ever since tapping Moelis & Co. to find a buyer in January. “Our decision to sell is based on the high level of interest in the property we have received,” Young chairman Vincent Young said at the time. Young, which would not comment for this feature, said it was hoping to reach a sale agreement by the end of the first quarter; several months later, the buyer remains elusive.

Young's KRON travails have been painstakingly documented. Young shocked the broadcasting business when it paid $823 million for what was then an NBC affiliate in 2000. After a battle with NBC (which lost to Young in its efforts to buy KRON), the network yanked its affiliation and the station became an independent in 2002. It became a MyNetwork affiliate when the network launched in 2006.

On a conference call last month, Young announced a $139 million write-down on KRON, lowering the station's value from $366 million to $227 million, and company brass deflected numerous investor inquiries about the sale's progress. Broadcasting veterans value the station at around $125-$150 million; interested parties are said to include a group fronted by San Francisco broadcasting veteran Kevin O'Brien, as well as Fox and Hearst-Argyle.

To be sure, KRON is hardly out of the woods. Young reported KRON's net revenue to be $10.5 million in the second quarter, down from $12.3 million in the same quarter a year ago. The station brought in $46.7 million last year, according to BIA Financial, but has seen its share in the No. 6 DMA drop a percentage point in 2006, and almost another point in 2007.

Furthermore, industry watchers remain skeptical about the VJ concept. “In theory, it's terrific—more people on the street, more coverage,” says one consultant who asked not to be named. “But is it another way to say we're making cuts?”

Through it all, Antonitis says the survivors at KRON remain optimistic. He says the 8 p.m. newscast posted a .7 in the demo—certainly not a smash, but not terrible for San Francisco, where households-using-television (HUT) numbers are usually low. And the newscast is an improvement over Dr. Phil in that slot. Says Antonitis: “We're lean, we're local and we're creative.”

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