Tribune Sale Stymies Syndicators

Mar 5, 2007  •  Post A Comment

The potential sale of the Tribune Co.’s television stations is sending ripples through the syndication industry, threatening to crimp revenue for some distributors not only for the fall season, but in 2008 and 2009.

With the Tribune Co. board of directors mulling whether to take the station group private or sell the company’s 23 stations outright, programming decisions have been put on hold. This has left syndicators in limbo, facing three unpalatable choices:

  • They can wait out the Tribune sale, risking a summer of stagnant sales.
  • They can rush into the arms of Fox stations, which would have bargaining leverage in price negotiations because of a lack of competition for shows from Tribune buyers.
  • They can make deals with independent stations, whose lower ratings and lower advertising prices would pare down the value of deals based on bartered ad time.

The Tribune uncertainty probably won’t have a major impact on the bigger syndicators launching shows for this year, but smaller players may experience fallout. A number of first-run Monday-Friday shows from independents still are looking for homes in at least one of the country’s top markets where Tribune operates stations.

“Laugh Off” from October Moon and “Baywatch” from Litton Entertainment are among series seeking distribution.

An executive at one of the indie distributors said the company is talking with independent stations because it couldn’t afford to wait any longer and needed the top markets done in order to secure deals in other cities.

October Moon and Litton didn’t immediately return calls seeking comment.

HBO executives who asked not to be named acknowledge the Tribune situation has affected their plans to sell “Curb Your Enthusiasm” for 2008. The sales team at Warner Bros. Domestic Television Distribution, which will handle sales for the series, has decided to hold back until summer, hoping Tribune stations then will enter the bidding and rev up more competition.

A Warner Bros. representative declined to comment on potential sales of “Curb Your Enthusiasm.”

“It would be suicide for us to go out there and try to make a deal right now,” said one syndication executive who asked not to be named. “We would basically be forced to take whatever Fox is offering to get it on their duopolies because no one else other than Tribune is buying off-net in the major markets. We’d probably end up paying them.”

The delay also is vexing off-net shows such as NBC Universal’s “The Office,” Twentieth Television’s “My Name Is Earl” and CBS Television Distribution’s “Everybody Hates Chris,” a Tribune executive said. Those shows appear slated to enter syndication in the fall of 2009.

Studio sales teams normally would already be taking meetings with buyers around the country for an off-net product set to be released on that timeline. Due to the Tribune uncertainty, all three companies are holding back the series to see if Tribune outlets will enter the bidding, according to executives who asked not to be named.

NBC Universal, Twentieth Television and CBS Television Distribution declined to comment on those shows.

Analysts agree that syndicators would be better off with more than one major station group in the bidding.

“It would make sense for syndicators to wait until the ownership questions about Tribune are settled,” said Garnett Losak, VP and director of programming for Petry TV.

The sales process also has Tribune station executives in a twilight zone for 2008 and 2009, as they need off-net shows to buoy ratings and advertising revenue in afternoon and early-evening time slots, where those programs typically air. Those early and late fringe hours typically generate about 40 percent of station ad revenue, a Tribune executive said.

A Tribune representative declined to comment for this story.

Happily for Tribune station executives, the group has few programming holes to fill. For this fall, the company has double runs of “Family Guy” from News Corp.’s Twentieth Television and “Two and a Half Men” from CBS. In addition, Tribune has renewed runs of “Jerry Springer” and “Maury” from NBC Universal and added rookie hour “The Steve Wilkos Show” to its lineup. The company has runs of “DeGrassi: The Next Generation” set as well.

Some syndication executives say business is proceeding as usual for their companies.

“We have a wonderful relationship with Tribune,” said Sean O’Boyle, senior VP and general sales manager at NBC Universal Domestic Television Distribution. “We are thrilled to be partners with them on series such as `Jerry Springer,’ `Maury’ and now `Steve Wilkos’ and we look forward to working with them again in the future.”

As Tribune’s board of directors mulls the variety of options for the sale, operating profit for the television ventures at the company in the fourth quarter of 2006 rose 12.6 percent to $107.4 million compared with a year earlier.

Tribune Owned-and-Operated Stations

Stations // Market // Percentage of U.S. Audience Reached

WPIX New York 6.693

KTLA Los Angeles 5.024

WGN Chicago 3.113

WPHL Philadelphia 2.655

KDAF Dallas 2.120

WDCW Washington 2.044

KHCW Houston 1.760

KCPQ/KMYQ Seattle 1.544

WSFL Miami 1.382

KWGN Denver 1.284

KXTL Sacramento, Calif. 1.221

KPLR St. Louis 1.109

KWBP Portland, Ore. 0.998

WXIN/WTTV Indianapolis 0.956

KSWB San Diego 0.931

WTIC/WTXX Hartford, Conn. 0.919

WXMI Grand Rapids, Mich. 0.664

WPMT Harrisburg, Pa. 0.642

WGNO/WNOL New Orleans 0.610

Total Stations: 23 Total Markets: 19 Total U.S.: 35.669

Source: Nielsen Media Research