Meredith's O'Brien chides broadcasters for cable failures

Local TV broadcasters must stop rolling over for cable operators, Nielsen and the networks, Meredith Broadcasting Group President Kevin O'Brien, told a gathering of his peers and media analysts in Washington last week.

"We are the biggest wimps," he said at the Bear Stearns Television Industry Summit. "We've got to get tough and stop worrying about what people think of us.

"We have allowed syndicators and networks to add inventory" to programs aired on stations and are allowing networks to stop compensating stations for airing their programming, even though the quality of the affiliates has "a hell of a lot to do with how a network does."

O'Brien turned some on his ire on the sources of broadcasters' problems, charging that cable operators act "as a cartel" when negotiating with broadcasters for retransmission consent and called for competition in local audience measurement.

"I don't like what's going on in Boston," he said, referring to Nielsen's use of local people meters in that market, a practice so far rejected by the major broadcasters there.

O'Brien noted that he himself had been under fire recently on accusations that he added commercial spots in prime time programming in Nashville and at other affiliates, but he did not address the charges.

He exempted from his "wimp" characterization a few broadcasters, notably Alan Frank, whose Post-Newsweek station WJXT-TV Jacksonville, Fla., gave up its CBS affiliation in July when CBS yanked his compensation; and Emmis Communications Chairman Jeff Smulyan, who has been a leader in trying to turn cable retransmission consent into an additional revenue stream that could mean billions for local broadcasters.

"Alan Frank made a tough business decision when he felt he didn't get the proper attention, respect and compensation," O'Brien said.

"Cable's been getting [local TV stations] without paying for it," he continued. "How the hell did that happen?"

He noted that, like Viacom's Mel Karmazin, Smulyan came to television from radio, "a medium that's much tougher."

The desire for a second revenue stream was a recurring theme at the daylong conference. Several broadcasters noted that TV stations draw much higher ratings than even the highest-rated cable networks, yet the TV stations get no fees from the operators while cable networks do.

"That's the worst mistake this industry ever made," Smulyan told the gathering. "We have the leverage, but we don't know how to use it." Emmis has taken a hard line in its own negotiations with satellite-TV operators in Portland, Ore.; Orlando, Fla.; and New Orleans, and plans to continue that tactic.

Smulyan said after the summit that he recognizes that some of the most powerful groups in local television also own cable networks and may have different interests, including using retransmission consent for cable carriage. But "even companies that have income from cable channels have seen their interest in over-the-air television derogated by retransmission agreements as they exist."

Smulyan and Fox's Peter Chernin have led a group of major TV-station players, including ABC, CBS, NBC, Post-Newsweek Stations, Cox Broadcasting, Tribune Broadcasting and Hearst-Argyle Television Inc. to study the problem. Smulyan said there will be a report soon.

O'Brien, who spent years running Cox Television's KTVU(TV) Oakland, Calif., before taking over the Meredith group, tweaked Cox Executive Vice President Bruce Baker during their panel. Baker leaned in to his microphone and joked that "that's Kevin O'Brien calling cable a cartel."

"Bruce," O'Brien responded, "you've always been a wimp." There's "a basic problem with this industry when a fellow broadcaster" feels the need to isolate a cable critic, he said.

"You're not a wimp," media attorney Wade Hargrove told Baker following the panel.

"Well," Baker said graciously of his former colleague, "that's Kevin."