Television syndication executives say they’re expecting to trim fat from their businesses as they look toward a 2009 in which the economy struggles to find its footing.
At TelevisionWeek’s ninth annual Syndication Roundtable, panelists including CBS Television Distribution President John Nogawski said that as business conditions deteriorate, they’ll be looking to eliminate redundancies and find efficiencies.
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“Do I think that you can always find something, when you are our size, to eliminate?
Absolutely,” Mr. Nogawski told TVWeek editor Greg Baumann, who moderated the panel. Mr. Nogawski noted that as his company has grown through acquisitions over the years it has had to eliminate redundancies, so the operation doesn’t have a problem with bloat.
NBC Universal Television Distribution Senior VP of advertising and media sales Bo Argentino said it’s “very likely” her division will experience cost cutting in 2009.
“We’re constantly looking at cost savings, how to generate more revenue, how to bring more value to advertisers,” Ms. Argentino said.
Smaller, newer distributors haven’t built up excess staff and thus won’t be looking to cut as much, said Debmar-Mercury Co-President Mort Marcus.
“When you start from scratch, what happens is you literally have nobody. So, you only add people when you have a function to be done,” he said. “But, we’re trying to be more careful in marketing where we’ve been pretty aggressive.”
The television syndication industry, like the rest of the U.S. economy, is looking forward to a 2009 that will be marked by a recession that began 12 months ago. The resultant decline in advertising at TV stations is likely to reverberate through the syndication market in the form of narrower profit margins and less money to spend on production and marketing.
“In the case of launching new shows, is the marketplace going to be stepping up and paying for them?” asked Jim Paratore, executive producer of “TMZ” and “The Bonnie Hunt Show.”
Mitch Burg, president of the Syndicated Network Television Association, said that comparatively, the syndication industry may fare better than other parts of the TV business.
The panelists agreed that stations are feeling the biggest brunt of the economic downturn. Mr. Nogawski said the damage to the stations is affecting the syndicators as stations aren’t able to pay as much for licensing fees, which in turn affects production budgets.
“If they’ve taken the license fee and paid 25% of what they once paid, then we can’t afford to produce the show. They’re putting themselves into the position we can’t afford to be in business with.”
Mr. Marcus and Mr. Nogawski exchanged words during the session as Mr. Marcus said he feels the syndication business isn’t well served by the current business model, where stations pay for long-term deals on syndicated shows, locking up schedules and making it difficult for new shows to break in. That dynamic can prevent quality new shows from bubbling up, he said.
“In fall ’08, not counting court shows, four shows were launched … That’s not a marketplace. On the four networks, there were like 50 shows launched. If there were 20 shows launched, Hollywood would come racing to the table,” Mr. Marcus said of the syndication industry.
“You’re professing the exact problem the industry has: Dumping show. Put them on, dump them. Put them on, dump them,” Mr. Nogawski said. Mr. Nogawski’s CBS Television Distribution has many long-term deals, including “Oprah,” “Dr. Phil” and “Entertainment Tonight.”
“In order to find a hit, you need more at bats,” Mr. Marcus said. “If any studio only made four movies, they’d stop making them because they’re chances of success would be too low.”
Ms. Argentino said a flood of programming wouldn’t allow stations to exercise patience waiting for shows to succeed, increasing rollover in time periods.