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Dead stations walking (or dsws)
- Thread starter tall_guy1
- Start date
It varies, of course, but among the questions management has to ask itself:
1) Is there another hole in the market?
2) Why would we do better in that format than we have in this one?
3) What would it cost to switch and what would it cost to perform effectively in the new format?
Even if things look bad in the book, if the station is making a little money, often times (especially these days) that is more attractive to management than spending a chunk on something else with no guarantee of improved billing.
A story to prove that point. I knew a guy who owned a large market TV station—-a big 3 network affiliate. He came in fourth or fifth in a five-station market, but he made a nice profit.
Eventually he decided it would be nice to have ratings. Suddenly his $90,000 anchor talent is out the door, replaced by $300,000 anchors. His $100,000 yearly promotions budget is $1.25 million and he’s paying $90,000 a week for the rights to Oprah.
I don’t know if he had a better net profit before or after, to be honest. Eventually, even with great ratings, you bump up against what the market will bear and your competitors figure out how to undercut you and that starts the race to the bottom.
Sometimes, living with bad ratings is fine if the bottom line is in black ink instead of red.
Eventually he decided it would be nice to have ratings. Suddenly his $90,000 anchor talent is out the door, replaced by $300,000 anchors. His $100,000 yearly promotions budget is $1.25 million and he’s paying $90,000 a week for the rights to Oprah.
I don’t know if he had a better net profit before or after, to be honest. Eventually, even with great ratings, you bump up against what the market will bear and your competitors figure out how to undercut you and that starts the race to the bottom.
Sometimes, living with bad ratings is fine if the bottom line is in black ink instead of red.
Depends what you mean by struggling. The numbers that matter involve revenue and cash flow targets, not ratings. Low ratings are perfectly acceptable if advertisers/agencies are still signing contracts.
look at Boston, top 10 market... for years we have said WBOS needs to flip because the ratings are ehhhh
Rumor has it that they bill well, more than the ratings would have you believe.
That rumor has been around forever.
But even if they were to flip, what do they flip to that will not sabotage a sister station in the market, compete against a dominant established station in the market, compete against a less than dominant but established station that is already siphoning listeners away from the dominant station... Think WWBL picking the crumbs up from WKLB, ....and other possibilities... while weighing the risks and costs.... although David will point out some flips go to the top of the market and make money from almost day 1, IMHO it is more common for it to take a year or more to get established with listeners and advertisers...and then you are looking at a pile of money spent, blowing up a format, and what did you end up with on the bottom line for your effort.... enough to justify it or are you saying hey we had a good bottom line with a solid listener and advertising base and we blew it up for this?
Rumor has it that they bill well, more than the ratings would have you believe.
That rumor has been around forever.
But even if they were to flip, what do they flip to that will not sabotage a sister station in the market, compete against a dominant established station in the market, compete against a less than dominant but established station that is already siphoning listeners away from the dominant station... Think WWBL picking the crumbs up from WKLB, ....and other possibilities... while weighing the risks and costs.... although David will point out some flips go to the top of the market and make money from almost day 1, IMHO it is more common for it to take a year or more to get established with listeners and advertisers...and then you are looking at a pile of money spent, blowing up a format, and what did you end up with on the bottom line for your effort.... enough to justify it or are you saying hey we had a good bottom line with a solid listener and advertising base and we blew it up for this?
Here's the part of this that's often overlooked: Change costs money.
You have to fire the old staff, and that involves either paying out contracts or paying severance. You have to refund money to advertisers because they bought the old format. Then you have to operate commercial free because you don't have ratings that you can sell. Then you have to hire new staff, and promote the new format. Cost, cost, cost. So much easier and cheaper to continue cashing the checks for what you have. Maybe run some infomercials on the weekend to pick up the slack. The bird in the hand may be better than two in the bush.
You have to fire the old staff, and that involves either paying out contracts or paying severance. You have to refund money to advertisers because they bought the old format. Then you have to operate commercial free because you don't have ratings that you can sell. Then you have to hire new staff, and promote the new format. Cost, cost, cost. So much easier and cheaper to continue cashing the checks for what you have. Maybe run some infomercials on the weekend to pick up the slack. The bird in the hand may be better than two in the bush.
Nope. Theyn are around 16th in revenue, about tied with WPLM.
Usually there is a Zero in that column. Station bill after broadcast, not before. Only a few bad-pay accounts ever get put in the advance pay category.
Many stations that change format know the bottom feeders in the market, and often launch with lots of two-for-one or "pioneer package" accounts. Less revenue, sure. But not necessarily none.
Today, it can all be voice tracked. Nearly nobody does advertising now anyway.
Agreed, a format change reduces or nulls revenue and makes management's job harder. Local GMs, who earn much of their salary on cash flow don't like format shifts due to losses in their own income.
So they continue to play their brand of classic rock because there's no format hole in the market that will help Beasley bill significantly better? Or there is a format, but it's not one that Beasley has any expertise in programming?
Or, during a pandemic, they don't think the ad market will accept a new format launch.
They also get a major market clear for their Detroit morning show. That can help at contract time with a popular morning show that is getting offers in other markets. You can give them something that makes the additional money you pay more worth it. In the meantime, the company is making up for lost revenues at WBOS with what they make at The Sports Hub.
First off, you have to look at the market and whether it is a corporate station. Years ago, formats changed often and that was when many stations were individually owned vs today. Everyone was racing to “the top.” Now you have many stations with formats that were original when purchased and changes are few. For example, we have had few format changes in Nashville in a decade (92.1-107.9). I think there is a complacent attitude that has permeated the big companies and I can appreciate and understand it. Yet, I have a hard time seeing and knowing you always attempt to up you game to up your sales and ratings and yet you literally keep things the same to “save expenses” by bringing in less than a more viable could create. Yes. It might be a risk. But, sometimes accepting things for they way they are is more “expensive.” Now, it seems many groups just put it on autopilot and let it ebb
and flow. Smaller stations can actually do well by just being the local guys who care and are part of the community. Its often interesting to see and hear the big companies comments on their mediocre attempts at local sales. I venture to say its easier now to bring in revenue than the 80’s and 90’s when local stations were beating down the doors of local business. No it’s like a lake in the Sahara. Alotta money sitting on the table these daze. Some of the big battles for revenue are from very small markets where there are just too many signals.
and flow. Smaller stations can actually do well by just being the local guys who care and are part of the community. Its often interesting to see and hear the big companies comments on their mediocre attempts at local sales. I venture to say its easier now to bring in revenue than the 80’s and 90’s when local stations were beating down the doors of local business. No it’s like a lake in the Sahara. Alotta money sitting on the table these daze. Some of the big battles for revenue are from very small markets where there are just too many signals.
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Hey Tibbs! You bring up great points. It gets back to the difference between running an individual station and running a cluster. Not every station in the cluster can be #1 in sales or ratings. There is only one #1. On top of that, the 1996 ownership rules put a limit to the percentage of revenue a cluster can make in a market before it can be considered a monopoly. So the law actually requires you to have a dog or two in the batch. The question becomes how can you use that dog in a strategic way, rather than strictly as a source for revenue.
Which, my friend, should be the station dogs that are having fun. You bring up a great point (you know where I stand/sit/“lie” in the scheme of all this) —— how many clusters have gone over the $ threshold and had to dial it back? Anyone sanctioned for it? Talk about a badge of honor. Somehow I totally forgot about this rule. Man, am I that dang forgetful? Don’t answer that. Obviously. Or I missed that rule all
together.
together.
That's an excellent question. The one that immediately comes to mind is the Boston cluster of then-Entercom, that had to spin off stations when it merged with CBS not only because they exceeded station limits, but also revenue limits. The choices they made for which stations to spin off were based on revenue. Now Audacy is stuck with the dog WEEI instead of the market leader Sports Hub. Woof!
They turn to sports betting. WWKB 1520 Buffalo 50,000 wasted watts.
Look at the Townsquare cluster in Trenton. It has over 90% of the market revenue. It owns three of 12 stations in the metro.
I believe the criteria on revenue applies upon purchase, but does not prevent future revenue growth. But... I have never had to look at that so there may be other factors.
On close to the world's worst frequency... 1600 (excluding the useless Expanded Band).
Maybe but in the case of WWKB if you look at Radio-Locator the station covers the market and a little more. I remember it as a dominant signal. Granted WGR at 550 has a great daytime signal but it's non directional. WGR's directional night time signal isn't so great I realize it's 5KW vs 50KW but there are other factors besides dial position.
Yes that's the case. Nobody is going to practically punish a group owner for owning too much revenue within a single market, until they want to do a station trade or M&A deal with another group or owner. It's at that point the potential Godzilla cluster might be required to realign, depending on the proposed transaction.
That said; since 2008, there hasn't been many huge waves of transaction requests like we saw in the 90's and early 2000's.
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