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Media Companies Are Ready to Sell. Does Anyone Want to Buy?

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Four months ago, part of this conversation was about why Netflix was pulling titles from its library.

Now, we have data:

Inside the Netflix Data Trove: ‘Wednesday,’ ‘Suits’ and 10,000 Titles (Almost) No One Watched​


 
All true. But the stations are declining assets and the networks have long been looking at a move to streaming and cutting the O&Os (and eventually the affiliates) loose.

That may be long term. But for now, they need major market clears to satisfy advertisers.
Seriously, if Paramount's market cap is $10B with CBS, CBS can't be more than a quarter of that with the station group. Spin those off and CBS might be lunch money.
At some point, you have to pay it back. That's the situation in radio right now.
 
I gave you the CW example.

Well, okay. Let's save people the scroll back:

CBS is no longer part owner of the CW, so they pulled their O&Os from the network. They said "we'd rather be indie than carry a network we don't own." That's what will happen to CBS if it sells its O&Os.

CBS is carried on 243 television stations in the U.S. Fifteen of them are O&Os. So there are 228 television stations owned by other companies that are CBS affiliates.

Eight of those affiliates owned by other companies are in the top 20 markets. That's 40 percent of CBS carriage in the top 20. Again, how common is pre-emption of network programming, and for what?

Any company that starts off with stations in Top 10 markets has the basis for starting its own network.

Sure, but the CW, MyNetwork, and really anything after FOX's launch 37 years ago has been more of a cautionary tale than an inspiration.

And if the owned stations group gets spun off to investment folks who are there to bleed what's left of the OTA broadcast model dry, starting a new broadcast network is probably not on their radar. Keep the affiliations, slash costs wherever possible and recycle as much local news produced by a progressively smaller newsroom into as many hours of the day as you can is much more likely to be their strategy.
 
Usually local or national breaking news or severe weather. That's assuming they're staffed at an hour when the breaking-whatever occurs.

And if it's national, they're rarely pre-empting the network, but rather going wall-to-wall with the network.

And O&Os do exactly the same thing. They're not staying with a rerun of NCIS if a plane crashes into City Hall.
 
I see major groups having to regionalize their local newscasts rather than individual stations having their separate news departments. It's getting to the point where local ads won't pay enough to justify the costs, and national ads in local newscasts are fading away.
 
I see major groups having to regionalize their local newscasts rather than individual stations having their separate news departments. It's getting to the point where local ads won't pay enough to justify the costs, and national ads in local newscasts are fading away.

Sure. They've hubbed everything else (graphics, master control). I was in a meeting in the past few years where the VP of News for corporate for a radio chain suggested one newsroom could cover all of California simply by only doing the stories that affect all Californians.

I disagree with the concept, but, given the mandate to manage the decline, I won't at all be surprised if a tv group tries it.
 
That's 40 percent of CBS carriage in the top 20. Again, how common is pre-emption of network programming, and for what?

You're talking about pre-emption. I'm talking about canceling the affiliation completely. That's what Audacy did with some CBS News affiliates once the contract ran out. There's a thread in the NY board about Scott Shannon's syndicated show being canceled because the Audacy stations dropped it. That can happen in TV too.

Keep the affiliations, slash costs wherever possible and recycle as much local news produced by a progressively smaller newsroom into as many hours of the day as you can is much more likely to be their strategy.

We'll see. Once CBS sells a station, and the contract runs out, that station is free to affiliate with anyone, or simply go indie. Just like in radio. If a former CBS station thinks it can make more money on it's own, then that's what it does.
 
Sure. They've hubbed everything else (graphics, master control). I was in a meeting in the past few years where the VP of News for corporate for a radio chain suggested one newsroom could cover all of California simply by only doing the stories that affect all Californians.

I disagree with the concept, but, given the mandate to manage the decline, I won't at all be surprised if a tv group tries it.
Yeah, I don't find the concept palatable either, but it may be all that groups would be able to afford without killing local news entirely. In theory it would help bolster the potential for national ad dollars because the demo/pop count reach would be multiplied by the number of markets. Essentially it would look similar to what you and BigA were discussing; a consolidated regional news network(s).
 
We'll see. Once CBS sells a station, and the contract runs out, that station is free to affiliate with anyone, or simply go indie. Just like in radio. If a former CBS station thinks it can make more money on its own, then that's what it does.
However, if the sale contract specifies continued affiliation, then that is actually a possibility.
 
You're talking about pre-emption. I'm talking about canceling the affiliation completely. That's what Audacy did with some CBS News affiliates once the contract ran out.

Sorry. This confused me:

IMG_8696.jpg

We'll see. Once CBS sells a station, that station is free to affiliate with anyone, or simply go indie. Just like in radio. If a former CBS station thinks it can make more money on it's own, then that's what it does.

Yeah. That CAN happen. It's vanishingly rare among major (ABC, CBS, NBC) network affiliates. In fact I'm straining to think of a single example that wasn't actually triggered by something else.

KTVK in Phoenix went indie from ABC after it lost the game of musical chairs when Fox bought New World. KRON in San Francisco lost NBC when it priced itself out of a deal that would have made it an O&O. That was miscalculation, not strategy, and they paid dearly for it. WHDH in Boston did the same with NBC and sued unsuccessfully to try to keep its affiliation after NBC bought a weaker signal and made it an O&O.
 
However, if the sale contract specifies continued affiliation, then that is actually a possibility.
Sure. And that depends on how a spinoff were to go.

Let's say Paramount has a buyer for the network and other buyers for the O&Os. It protects the value of the network to the new buyer, and thus the sale price, by specifying continued affiliation and selling the O&Os first.

Likewise, if CBS, including stations, goes to a buyer who then takes it upon themself to do the spinoff, that could also be a condition of the sale.
 
Yeah, I don't find the concept palatable either, but it may be all that groups would be able to afford without killing local news entirely. In theory it would help bolster the potential for national ad dollars because the demo/pop count reach would be multiplied by the number of markets. Essentially it would look similar to what you and BigA were discussing; a consolidated regional news network(s).

And in full disclosure, the NPR station I work for right now runs a regional network---CPRN, Capital Public Radio Network. There are no live newscasts, but we provide stories of statewide interest for network member stations all over California.

The difference is that most of those stations have their own newsrooms, and they and we cover stories that are of interest to our local audiences as well as stories that have statewide interest.
 
However, if the sale contract specifies continued affiliation, then that is actually a possibility.
Let's say Paramount has a buyer for the network and other buyers for the O&Os. It protects the value of the network to the new buyer, and thus the sale price, by specifying continued affiliation and selling the O&Os first.

It can but there's always a term to it. I'm not aware that any company forced an affiliation in perpetuity.

The concept of a "network" has really changed since the internet is the ultimate network that anyone can access.
 
It can but there's always a term to it. I'm not aware that any company forced an affiliation in perpetuity.

Right. Network affiliation deals are typically three years or five. There are exceptions, with some as short as a single year (usually if the relationship is going to hell) and some as long as ten.

By the time a deal for the CBS O&Os went through and the new guys have the keys, it's probably 2025. A five-year deal gets you to 2030 and I'm thinking it's going to be very much a streaming world at that point.
 
And in full disclosure, the NPR station I work for right now runs a regional network---CPRN, Capital Public Radio Network. There are no live newscasts, but we provide stories of statewide interest for network member stations all over California.

The difference is that most of those stations have their own newsrooms, and they and we cover stories that are of interest to our local audiences as well as stories that have statewide interest.
Sure, they do that here for Maryland and Virginia NPR affiliates. VPM (Virginia Public Media) out of Richmond used to have a pretty large newsroom which over the past year shrank about 60%, yet still contributes stories to WAMU in DC while doing 'local-ish' newscasts for Roanoke, VA Beach, and other smaller public stations. I believe MPT used to have a much larger news footprint than it does now.
 
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