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Ownership Change Decimating a Local Newsroom

JD Lasica’s New Media Musings put me onto a story about FOX affiliate KHON in Honolulu, where the station’s news anchor went on a bit of a tirade on air about the massive layoffs the station’s new owner is implementing.

In particular, he revealed the new owner to be nothing more than the equivalent of a TV station day-trader, telling viewers:

The new owners have changed the name of their company from SJL to Montecito. It is a virtual company, with no office building, that specializes in buying and selling TV stations. Their business plan for KHON2 calls for an immediate, drastic, across the board reduction of personnel in order to slash the payroll.

At the same time, the plan calls for a huge increase in advertising revenue to be generated by a sales department that is already far exceeding industry standards. In short, it is not a plan used by a quality broadcast company to foster a long-term commitment to its employees, or to the viewers it is charged with serving.

The new owner apparently didn’t take kindly to be called a “virtual company,” according to the the local paper:

“What was said last night was not the truth,” said Sandy Benton, chief operating officer for Montecito Broadcast Group LLC, which has changed its name from SJL Acquisition LLC. …

Benton said there is a home office. “Of course there is. It’s in Montecito (Calif.),” she said. …

Benton countered, “We have every intention of serving the community to the same degree it has been served in the past. If somebody had asked, we would have told them that. In fact, we did tell them that.”

This is an extreme version of what companies like Nexstar and Sinclair are up to — buying up stations and draining their revenues to fund additional station purchases and fatten executive wallets. I’d include shareholders as fattening recipients, but these companies aren’t generally doing so well on the stock market.

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7 responses to “Ownership Change Decimating a Local Newsroom”

  1. George Avatar
    George

    I’m not sure your generalization applies in all cases. In the case of Sinclair, I know from watching their stations in two markets that they have a huge commitment to local news and public affairs. The Sinclair station where I live does two hours of prime time news every night, most of it local, and some of it from the national Sinclair service. It’s not just 24-hour off-network syndication, which is what most indie TV stations did in the 70s & 80s.

    I think there’s a natural assumption that cutting staff means cutting public service. It depends on what the fired staff did. I worked in a newsroom where we had an employee whose job it was to deal with the teletype machine. He’d make sure it always had paper, a ribbon, and the alerts were given to the newsman on duty. When we switched to an electronic newsroom, his job was no longer necessary, but he was kept on for a few years. When his job was finally eliminated, the news was still being done. So did that damage the public interest in any way?

    The Congress decided back in 1928 that American broadcasting would be run by profit-making companies rather than the government. Since then, the Congress has also created non-commercial, public broadcasting, supported by taxpayers, to compete with these companies. In addition, they’ve required cable companies to provide several channels for local access. There are many duplicating ways for local communities to use the media for public service.

    If companies are breaking the law, they should be prosecuted. But that doesn’t appear to be the case here. We’ll see how dedicated this TV anchor man is to serving the public. If the people object to what’s going on, this station will lose viewers and money. If it’s not as big a problem as they say, they won’t. Leave it up to the people to decide. But don’t make assumptions about what the people want, because you may be disappointed. Last time I checked, more people watch American Idol than the evening news.

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  2. Paul Avatar
    Paul

    Congress may have decided to have a commercial system in 1928, but that doesn’t make it the right decision, nor is it right that the public service requirements of stations have been steadily eroded down to almost nothing since that time.

    And public broadcasting was not created to compete with commercial broadcasting. The big three networks were all in favor of public TV when it was created in the 1960s because they knew it would help relieve them of the obligation of doing public service broadcasting. Public broadcasting was created to fill the gaping public service void left by commercial broadcasting.

    If companies are breaking the law, sure, they should be prosecuted. But there’s a long distance between the law and what is best for the public interest. One of my chief complaints is that the law and regulations have been so watered down with regards to broadcast that they’re nearly useless.

    You clearly have much more faith in the current commercial broadcasting system and the wisdom of the market. Saying “more people watch American Idol than the evening news,” doesn’t prove anything. I don’t watch much local news myself because it’s poorly done and does an inadequate job.

    But what if news were done well and were promoted, would that still be the case?

    And, so what if American Idol leads? I’m not against entertainment, even if I don’t like the program. But yet when you want more information about what’s going on in the world, or, more importantly, your own town or state, you should have quality news to turn to. And, increasingly it’s the case that the news is gone.

    So your Sinclair station, in your estimation, may do a fine job, and you should count yourself lucky. I might argue that it’s the exception that proves the rule. Back in Aug. Sinclair cut back local news to just a half hour total on its stations in Raleigh, Las Vegas, Milwaukee, Cincinnati, Buffalo, Birmingham and Tampa.

    And when Sinclair has another bad quarter, then other cities will see the same thing.

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  3. George Avatar
    George

    I come to this from a career that has included small community radio, and large commercial radio, so I know a bit about this.

    How much local news is done by public broadcasting? When I was at NPR, I found out that most of our stations did no local news except rip & read cut-ins in ATC amd ME. Otherwise, it’s all network all the time. How good is that? I have yet to find a public TV station that has a large commitment to coverage of local news. I don’t consider Washington Week in Review a local news show. Jim Lehrer does a fine job, but he doesn’t tell me what’s happening at home. I think before we rant about how bad commercial TV is, we should look at how our public stations are covering the news.

    For a commercial TV station, your main product is your local news. You own 100% of it, and don’t have to share revenues with the network. It’s your identity. Whether it’s good or not is a matter of opinion.

    I just got my gas bill, and it’s twice what I paid last year. My gas company is a profit-making company. So is the electric and water company. They all are getting raises and filling their coffers with my money. So can I go to someone else for my gas or electric? No. Broadcasters aren’t the only ones getting rich off the public. But at least if I don’t like what’s on one channel, I can switch to something else. I can’t with the gas company.

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  4. George Avatar
    George

    By the way, I just did some more research on this Hawaii station. The station was originally part of a duopoly owned by Emmis. They sold one of the stations to SJL. Once free of the duopoly, the station had excess staff. This is a station that had over 100 employees, pretty big for a market the size of Honolulu. None of the people let go were news staffers, but rather engineers. The GM, who resigned from KHOM, went to the former duopoly partner, which is still owned by Emmis. I don’t think this situation is comparable to Nexstar and Sinclair, both of which clearly are broadcasting companies and not “holding companies.”

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  5. Paul Avatar
    Paul

    George, why are you so interested in defending Nexstar, Sinclair and the new owner of KHOM?

    Reply
  6. George Avatar
    George

    I don’t think I’m “defending” anyone. I’m correcting mistakes that are being made in the reporting of this story. I’m a journalist, and I believe in facts, not hyperbole. One thing I’ll give you credit for is you printed the response from the new owners. No other media watchdog site has done that. There are always at least two sides to every issue.

    Reply
  7. Paul Avatar
    Paul

    Fair enough.

    I don’t consider myself a journalist, I don’t advertise myself as one, and never have. I am a blogger and radio show host. I am anti-corporate, I do not hide that fact, and I do not lie about it. That is my angle and that is my bias.

    I am quite happy to post opposing viewpoints or the responses from corporate entities, since I think more information is always better than less information. I’m glad to have people comment critically and engage in a spirited back and forth.

    So, thanks for commenting here and giving me some challenge in my day.

    Reply

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