Stern on program repurposing

Aug 13, 2001  •  Post A Comment

Fox’s purchase of the Chris-Craft Industries station group one year ago may thus far be best known for the rumors it has generated.
Insiders and outsiders alike have examined the potential of the broadcast behemoth, filling the past 12 months with gossip ranging from mass layoffs throughout the country to either the takeover or shutdown of UPN to the closure of rising news broadcasts in New York and Los Angeles.
Meanwhile, the deal has syndicators and networks crying foul over potential unfair advantages gained from the new acquisition.
Two weeks ago, the Federal Communications Commission approved by a 3-2 vote the station group purchase, with the agency giving News Corp. extra time to comply with regulations that restrict the number of TV stations one company can own and the number of media outlets in individual markets. The deal has been valued at as much as $5.35 billion.
Since then, the Fox station group has moved swiftly, first with a deal to swap its San Antonio and Salt Lake City stations to Clear Channel Communications for Fox affiliate WFTC-TV in Minneapolis, where Fox has a pending seventh duopoly market. Last week, the company traded the former Chris-Craft UPN affiliate in San Francisco (KBHK-TV) for Viacom Television Stations’ Washington (WDCA-TV) and Houston (KTXH-TV) UPN affiliates to create duopolies in those markets as well.
Now Fox Television Stations Chairman and Chief Operating Officer Mitch Stern sits down with Electronic Media to discuss the validity and concerns of the rumors and the grand plan for the bigger and bolder Fox stations.
EM: You’ve been vocal from the get-go about sharing programming between two stations in the same market. Meanwhile, Chris-Craft has been all but silent the past six months on the program acquisition front, and it is left with a number of holes to fill a month before the new season starts. Will we start seeing shared broadcasts between duopolies by then?
Mr. Stern: Chris-Craft managed the company the way they wanted to. They bought a number of upcoming programs a while ago that we’ve inherited, and now we’re happy to have programs like `That ’70s Show’ coming down the road.
But as for this season, I have a feeling they were sort of just marking time because they knew they were going to be sold. The future was not as compelling, but I think they did a responsible job with the economics in the markets the way they are.
We are going to move forward with creative scheduling that you’ll see when the new season begins. A lot of syndicators are now working with us to develop different kinds of lineups on both stations instead of seeing the same show for the same demographic every day. Different audiences like different kinds of shows, and we’re going to move shows around and give people more choices throughout the day.
In a few more weeks, when we hit the fall, you’re going to see lineups that will be very interesting. You’ll see sitcoms, court shows and talk shows each moving back and forward from Chris-Craft to Fox and vice versa. Right now, of course, it wouldn’t be in that many markets, just New York, L.A. and Phoenix. But you’ll see a pattern starting to develop, and hopefully it will work.
EM: That obviously creates a lot of opportunities for Twentieth. Already, we’ve seen “Divorce Court” being upgraded to access in Orlando, Fla., on Chris-Craft station WRBW-TV, and “Texas Justice” has been cleared on your stations in Minneapolis, Portland and Baltimore. What other kinds of opportunities will we see for the syndicator?
Mr. Stern: Because we can provide instant launch for a new show, we now have all kinds of opportunities for incubating shows, trying shows at very low cost. So the form of distributing shows in-house is changing because we have so many opportunities and can develop shows for so many different dayparts.
Where Twentieth TV has had some success recently, I think we expect that to really double and triple under Bob Cook’s guidance. That really is one of the highlighted synergies of getting Chris-Craft, and now we have a lot of room to work with we never had before.
I know competitors have a sense that we’ll shut out other syndicated companies, but the fact is that the needs are that great to fill these holes, and I don’t think that will be an issue. Any program developer that wants to work with us, we’ll be happy to do it. But the idea, though, is that the more we can do in-house, the better.
Now that the deal is official, there are going to be shows that we’re going to try as well as shows being upgraded.
We’ve also been talking with Twentieth about producing shows for non-network evenings, since UPN is only on five times a week.
EM: How do you view UPN’s position entering the new season?
Mr. Stern: If you can have a few nights anchored by shows like `Buffy’ and `Star Trek,’ that really is a footprint of a network. And I think that’s great. The addition of `Buffy’ and `Roswell’ actually puts UPN in the best position they’ve ever been in. We’re just starting to meet with network representatives who are taking us through the promotions and the schedule and how they do things.
EM: Is there any interest in taking operational control of the network?
Mr. Stern: At this point we’re listeners, being a primary affiliate group, and hopefully we’ll be able to contribute quite a lot. But no, I think we’re happy with the direction they’re going, and we’re happy to make all the money from our UPN affiliates.
EM: It’s been a strenuous two weeks since the FCC approved the Chris-Craft acquisition, capped with the Viacom swap. Where exactly do you stand under the FCC ruling, and when might we see more swaps?
Mr. Stern: Generally speaking, we took over Chris-Craft and that gave us 33 stations covering 28 markets, and as everybody knows we have to do a number of divestitures to get down to the FCC-mandated 35 percent level. So the very first swap we announced, which was extremely important to us, was the swap of the Salt Lake City Chris-Craft station, which was ABC, and the NBC station in San Antonio for the Clear Channel Fox affiliate in Minneapolis, which gives us a duopoly there.
Then we announced the swap with Viacom, which was something that was in long discussion. But we finally got that one done, and that was the Chris-Craft station in San Francisco for two UPN stations in Washington and Houston. I think it’s a really good deal for both sides, and we didn’t have the option to lose the affiliation in San Fran. And in the next month or two we will probably announce at least one more set of swaps.
Now in terms of coverage numbers … with these two swaps we’re down to about 38.8 [percent], and fairly soon we’ll be down to about 35 percent.
So I think that’s the lay of the land today, and if there has to be a goal in any of this, our intention is to continue to swap for major-market duopolies. We’re now in Minneapolis with two stations, whereas a little while ago we were there with none. It’s a great sports market. It used to kill me when the Vikings used to win all these games and we weren’t even able to participate in it. Now they have a good baseball team as well. We have a sports net there, too, so that whole affair is very, very nice.
EM: What are some of the advantages these new stations will bring to the Fox group?
Mr. Stern: We always saw WDCA and KTXH as primary competitors in the D.C. and Houston markets, respectively, especially in terms of sitcoms.
In Washington we have the No. 1 station, and I think we did a good job beating the UPN station. But what I like about them as well as the rest of our UPN affiliates is that our company, Fox, is in a position to make UPN stronger, with our recent sale of `Buffy’ to them being a primary example.
Then as UPN gets stronger, and I think one of the ways we’re going to improve our Chris-Craft station UPN affiliates is that we’re really very, very good at promotion-especially in prime time-and as we improve those UPN stations and UPN improves, we’ll get all those profits right back. So I sort of like the idea of being a UPN affiliate at this time.

The more markets we can do this in, the better. Of course, having duopolies in major markets gives you all kinds of efficiencies as well. Both of those stations sit nicely in that they don’t air any news, so they are easy to consolidate.
EM: What are your plans for news divisions at those stations?
Mr. Stern: My goal is to increase news in general on all stations, whether it’s on Fox or UPN or whatever. Right now I think as a group we produce more news on a weekday than anyone else. We do over 120 hours of news a day across a very large group, and this just gives us a larger platform to do just that.
EM: The Chris-Craft stations in New York and Los Angeles do, however, air news that competes directly with Fox’s own news broadcasts. Will you shut down the L.A. and New York newscasts?
Mr. Stern: Right now, things will stay as is. When we’re ready to go, there will be more news on these stations than ever before. Exactly what hours they are going to air in and how this is going to work and the timing of it, you’re going to have to wait and see.
But right now, I can say that we won’t be repeating a newscast from one station only to air it on the other station at a different time. I’m not saying that would never happen, but that would be such a minor part of the whole plan. We’re planning on original programming on both stations where we have duopolies, hopefully separate and distinct from each other.
EM: Already we’ve seen the Fox general managers in Phoenix, L.A. and New York add the Chris-Craft station under their duties. Can we expect similar movement in Minneapolis, Washington and Houston? What other divisions in stations are prone to be streamlined?
Mr. Stern: We’re still waiting on FCC approval on those swaps, but I think you can see a certain pattern on what we’ve done so far with the general managers.
As for streamlining, first of all, all the sales units will be combined. Not only will there be some cost savings, but we’ll be able to create a new kind of sales effort where you’re selling more than just a station. For example, in Los Angeles, the sales team will have KTTV, KCOP as well as Fox Sports West 1 and 2. They’ll have an exciting menu of alternatives to offer buyers, and hopefully advertisers will see it as an efficient way of buying, and we’ll all sit down and do business. I think in the end we’ll end up increasing our market share for both stations.
Engineering functions to some degree will also be shared. In some cases we have a very large facility, and if we could move a lot of these functions into one facility, that would be grand. Newscasts would be difficult, but certainly if you could bring all the accounting people together, what a wonderful world that would be.
Again, a lot of the UPN stations do not do news, and when they do not do news it’s much easier physically to combine the two entities. The main goal will be to combine the entities for cost efficiencies yet maintain different identities to the audience.
EM: What are your plans for the WWOR Secaucus production center?
Mr. Stern: That’s really a very good facility. We’re going to keep it going because there are so many alternative uses for it. First of all, we’re going to continue to do the WWOR news out of there. They also run
the Baltimore Chris-Craft station [WUTB] out of there, and that will continue as well. But for us, it gives us the chance to produce shows out of there, and part of the entire plan is to use all the shelf space given to us by having all these duopolies and going heavy into first-run development at Twentieth Television.
EM: Five years ago, Fox really became a station player with the acquisition of New World. How does the business and Fox’s position in it now compare to your position then?
Mr. Stern: New World was trying to figure out how to get from very old and almost unwatched to young. So we decided to experiment with certain things and found out, yes, you can do 4 o’clock, 5 o’clock and 6 o’clock programming that is nonkids. You can plug sitcoms after news in access and make it very successful. And today the strongest stations from sunup to sundown are the old New World stations. That is much more the model for a Fox station today than the old one.
Now we have to go from making a successful station in a city to making a media center that in some cases is not just two stations but involves a sports channel as well. You’re creating something that’s different; it’s not just saving money or having leverage. It’s all about how with one general manager in charge to broadcast two distinct personalities. It’s like going from two dimensions to three dimensions. It’s the kind of thing that allows us to redefine what we do locally and then bring all these synergies from what we do at Fox.