Posted by chicagomedia.org on June 16, 2008 at 13:54:34:
Tribune Plans Safety Net for Stations
Company Bidding on Shows to Form New Network or Ignite WGN America
The Tribune Co., which owns 23 television stations, is beefing up its library of programming, providing the company flexibility either to launch a new national broadcast network or invigorate the slate of its rebranded WGN America channel.
The contingency plans are being spurred in part by concern about the future of the company's 15 CW affiliates, multiple people at Tribune said. The CW, which went live in 2006, has stumbled in the ratings. Should it not be able to return to the air for the 2009-2010 season, Tribune doesn't want its CW outlets to have to scramble for programming.
Tribune executives said they hope The CW will return for another season and they are optimistic about the network's upcoming schedule. Still, one executive said, they don't "want to be caught with their pants down," recalling the difficulty Fox initially had pulling together viable programming for MyNetworkTV after its stations lost their UPN programming.
The plans for a new network are being developed to prepare for a "worst-case scenario," said a Tribune executive who asked not to be named.
The CW, formed from the combination of Warner Bros.' The WB and CBS' UPN networks, voiced confidence about its future.
"We have a long-term strategy to build The CW with quality programming, strong stations and great advertisers," The CW said in a statement. "The CW will be in business well beyond 2009."
Tribune Broadcasting President Ed Wilson declined to comment on his company's plans.
Tribune in recent months has been bidding for off-network, off-cable and first-run shows that could fill any gap, create a new network or reinvigorate WGN America, company sources said. WGN America currently broadcasts over satellite services.
CW affiliates have a clause in their contracts with the network that requires the affils to provide nine months' notice should they opt out. January 2009 is the likely horizon for a final decision by Tribune stations as to whether they want to continue as CW affiliates, as cutting ties then would still provide content for the stations through September.
"I think Tribune is smart about looking at this and saying what do we do if [The CW] goes out of business," said Garth Ancier, who was president of entertainment when The WB was launched and was serving as network chairman when it was shut down.
The key for Tribune is to retain the value of its CW stations by providing original programming that creates a marketplace identity, said Mr. Ancier, now president of BBC America. It's going to be particularly important to differentiate station brands next year, when analog channels will lose their channel positions, he said.
Tribune Broadcasting has undergone an executive makeover this year in the wake of Sam Zell taking control of the company. Mr. Wilson in February was put in charge of the stations, WGN America, Tribune Entertainment and WGN Radio. Tribune has TV stations in the country's top five markets and a presence in 16 of the top 30 markets.
One of the challenges of contemplating the launch of a new TV network is the massive cost it would entail, at a time Tribune is slashing spending to help service the debt taken on in the Zell purchase.
Another big challenge is coming up with cost-effective programming people want to watch.
"That's easy to say and hard to do, as you can see from MyNetworkTV," Mr. Ancier said. "To the degree you are making original scripted programming or original reality programming that really moves the dial and is attractive to advertisers, that is a difficult and expensive process."
But it could be a smart investment, he added.
"If you own TV stations of the importance and value of what Tribune has, I think that's worth contributing $50 million in losses to maintain the value of the TV stations," he said. "Virtually every network in the U.S. on the broadcast side operates at a pretty substantial deficit, but they do it to support their owned-and-operated stations."
Adam Ware, who was chief operating officer of UPN before CBS took charge of it and now is president of IA Media, said he thinks Tribune can succeed where The CW has not if it maintains an independent local station mindset and keeps costs under control.
"You have to operate this thing differently," he said. A network can succeed if it concentrates its programming and promotion on a single night of premium programming while running lower-cost programming, movies and off-net shows the rest of the week, Mr. Ware said.
He added that Greg Meidel, the former syndication executive who now runs MyNetworkTV, gets it, and Mr. Wilson gets it, too.
Having very strong stations in New York, Chicago and Los Angeles is a good start for Tribune, Mr. Ware said.
"The biggest issue is that they aren't perceived as syndication by the advertisers," because broadcast networks get much higher advertising rates, Mr. Ware said. While startup networks have mostly failed in the past, "Viewers and advertisers will rally around a hit show that is an alternative to what they can currently buy."
Developing and airing premier programs every night of the week is where new networks "start burning a tremendous amount of cash."
Staffing can be kept to a minimum, Mr. Ware said. MyNetwork TV has about 10 to 15 dedicated staffers, with support coming from other divisions of News Corp.
"That's the model, so that even if you fail the first time out you haven't burnt through so much cash and you don't have so much overhead that you can't afford a second or third or even fourth try," Mr. Ware said.
Ad buyers said the market may support new entrants.
Opportunity Is There
"There is definitely an opportunity for a fifth broadcast network," said John Swift, managing director at media buyer PHD. "Just look at this upfront. People want to spend money nationally. People like networks."
But the devil is in the details.
"I'd make sure I had a real brand and a real branding strategy for what I was trying to create," Mr. Swift said. "Who's going to program it? What is going to be the strategy? What's going to be the vision? Who's going to be the target audience? Are they going to go niche? Are they going to go young? Are they going to try to go broad like everybody? That's what you're going to have to know."
Others remained skeptical of the model.
"Buying programming obviously makes sense. Developing it would be more of a concern for us," said Mike Simonton, senior director at Fitch Ratings, which rates Tribune's debt. "If CBS and Time Warner can't develop and sell product for a fifth network profitably, there's no reason to believe that Tribune can do it."
Tribune is furthering its transition by completely remaking Superstation WGN into WGN America, with an eye toward becoming a broader entertainment cable channel. The first major shift on the channel debuted June 8, when WGN America introduced "Out of Sight Retro Night," a weekly night of television classics such as "Newhart" and "The Honeymooners" hosted by Casey Kasem.
The channel also is expanding its roster of first-run development with an eye toward launching new series this fall. However, those programs also are being considered for the new net.
One of those names could already be on the air. Tribune has expressed interest in top-rated late-night comedian Jay Leno, who's a free agent in 2009 after NBC replaces him next year as host of "The Tonight Show."
Tribune, which owns the largest stations affiliated with The CW, including WPIX in New York and KTLA in Los Angeles, has a close, complicated relationship with the network. People familiar with the matter said Tribune was instrumental in the network's deal for a new, outsourced Sunday lineup to be programmed and financed by Media Rights Capital.
Tribune's ties to The CW got even deeper last month when the company inked a deal with Warner Bros. Domestic Television Distribution to create a daily two-hour afternoon programming block this fall in tandem with The CW.
The block will create an outlet for upcoming court show "Judge Jeanine Pirro" as well as two off-net comedies on CW affiliates from 3-5 p.m. each weekday. Joining "Pirro" will be "The Wayans Bros." at 4 p.m. and "The Jamie Foxx Show" at 4:30 p.m. both of which return to the syndicated marketplace with the move. The new programming schedule will debut Sept. 22.
(TV Week)