TV-station groups are putting all their national-ad-sales business in one place. In fact, most of the top 20 groups are repped by one firm or by co-owned firms.
Case in point: Three weeks ago, Sinclair aligned its entire group with Millennium Sales & Marketing, a division of Katz Television Group. That's 62 stations and more than $300 million in annual national-spot advertising and the deal is believed to be the biggest single switch—in terms of number of stations—ever.
It's also believed to be the single biggest switch in terms of billings, excluding the network O&O groups. Last month, the Fox station group took its business from Petry Television—an estimated $800 million in annual billings—and brought it in house, as the other big networks have been doing.
Just last week, Emmis Broadcasting struck a deal with Cox Broadcasting to use its rep firms—Telerep, MMT and HRP—exclusively. Media General completed a similar deal earlier in the year. Sources estimate Emmis' annual national-spot billings at close to $100 million, Media General's at about $80 million.
Two years ago, Hearst-Argyle agreed to consolidate its business into a newly formed rep firm at Katz called Eagle Television Sales. "There are good reasons to do that," says Tony Vinciquerra, executive vice president, Hearst-Argyle Television. "You're able to have better input into how the reps hire and how they manage [your business]. You can also negotiate a better rate on the commission."
He notes another plus: "If a rep already has all of your business, he doesn't have to spend as much time positioning to get what he doesn't have or to protect his turf and can focus more on the ad sales effort."
At the Katz Television Group, Executive Vice President Michael Hugger says one of the big advantages of a one-shop-rep deal is "ease of execution. If you want to go to advertisers and offer them, in our case, the Sinclair footprint of 60-plus television stations, we can do that because we act as a single voice on the national side without having to go through other reps." And having to go through other reps is tricky because most, if not all station-rep contracts are exclusive arrangements.
A big part of the strategy for Sinclair, whose stations will form a separate division within Millennium, is to get advertisers to make deals covering the entire group. Sinclair Broadcast Group Chairman David Smith says he's betting that, by aligning with one firm, the group can boost its share of national-spot advertising.
In the current environment, every dollar counts. Local TV advertising (including both local and national spot) was down 15% in the first quarter, to $3.42 billion, according to Competitive Media Reporting, the New York ad tracker. And rep sources say the national-spot component is down closer to 20% so far this year.
Emmis Chairman Jeff Smulyan says the notion of aligning with one rep company has "pretty much been standard in the radio business. I think that's probably going to happen more in the TV business." He notes that advantages are numerous. "You develop relationships across the whole country so there's some consistency in dealings. There are group rates and more leverage. And it's just a simpler process across the board."
Tribune stations are aligned with the three reps owned by Cox Broadcasting. Says Tribune Television President Pat Mullen, "There's a certain continuity of leadership provided by Cox. It's an important relationship for them and for us."