“If there is a definition of ocean-front property, this is it,” said Viacom Television Stations President Fred Reynolds after his company agreed to pay $650 million in cash to cash-strapped Young Broadcasting for KCAL-TV, Los Angeles, the largest independent station in the country.
Last Thursday, Mr. Reynolds took a tour of the property-located adjacent to the Paramount Studios lot at the corner of Melrose Avenue and Gower Street in Hollywood-to which Viacom expects to have the key by mid-year.
He was already sounding like a man who believes the way to fix up so valuable a property is to remember it ain’t broke.
The station has built a cash flow estimated at $42 million with a lineup that includes more than six hours a day of news-“We think that’s important,” said Mr. Reynolds-a sports stable that includes the Lakers, Angels and Mighty Ducks-“and maybe there are some others we need”-and first-run syndicated programming.
Observers are unanimous that the clout of the combination of L.A.’s KCBS-TV and KCAL will make it possible for Viacom to get and hold onto better syndicated programming.
“I’m hopeful we can use our leverage,” said Mr. Reynolds, who added that in each of its duopoly markets Viacom is securing the rights to run acquired programming on either or both stations.
The man who oversees Viacom’s 34 owned-and-operated stations said it’s possible that some CBS News product could be packaged or repurposed for KCAL, whose news has a decidedly local orientation. CBS Television President Les Moonves already has asked CBS News to think about things it can do for UPN stations owned by Viacom.
As for the elimination of redundant operations when the two stations come under one corporate roof, Mr. Reynolds said he doesn’t have “a cookie-cutter model” to follow.
“What I don’t want to touch is anything to do with generating revenue,” said Mr. Reynolds, who believes in separate sales staffs and largely separate strategies-although he expects there are logical sales bundles to be made, including news inventory (Viacom owns two all-news radio stations in L.A., KFWB-AM and KNX-AM) and perhaps in the sports arena.
Viacom Chief Operating Officer Mel Karmazin said last week that the combo of KCBS and KCAL will give Viacom nearly a 19 percent share of Los Angeles’ $1.6 billion ad market.
Referring to the KCAL news department, Mr. Reynolds said, “On a per-hour-of-news basis, I’d have to say they’re pretty darned efficient.”
He described KCAL General Manager Don Corsini’s management team as “terrific,” but observers note that KCBS General Manager David Woodcock knows KCAL-and the L.A. market-intimately. He was general manager of the then-Disney-owned station from 1991 until 1996, the year Young bought it for $368 million. Mr. Woodcock took over KCBS last August after two years as chief of the market’s UPN affiliate, KCOP-TV.
Attention now turns to the San Francisco market, where NBC recently bought independent station KNTV-TV from Granite Broadcasting after being unable to get Young to come down from its $800 million asking price for KRON-TV, which lost its NBC affiliation on Jan. 1 and has since lost much of its audience share.
James Morgan, Young Broadcasting’s chief financial officer, said the KCAL deal says to owners of stations in San Francisco that “a very knowledgeable buyer” sees the value of a network affiliate-indie duopoly.