Hang around any television station these days and sniff out the attitude. It's far from positive. Nearly every projection for advertising revenue is headed the wrong way. Auto dealerships, long a crucial part of every station' advertiser portfolio, are cutting back, if they're not outright locking the doors. America's most prominent broadcast companies are issuing round after round of dismal reports. Belo's President and CEO, Dunia Shive, recently penned a grim letter to shareholders, noting that the company's stock value is down over 75 percent since the first of the year.
Shive went on to explain: "Since we cannot predict the duration of the downturn, we're responding with an intense focus on cost reductions while ensuring the journalistic standards and competitive positions of our operating companies remain intact. Recent actions include the freezing of open positions Company-wide, staff reductions in certain markets, and other cost-saving measures." And, she promises, there's more of the same on the way, since "the next 12 to 18 months will be challenging for all business, including Belo."
Other examples? Sure. Why not. More stock price trends:
One year ago -- $11.57
Today -- $2.50
One year ago -- $13.71
Today -- $1.73
One year ago -- $8.50
Today -- 87 cents
No rose-colored glasses there. A big chunk of America may be feeling that Barack Obama can turn things around, but the reality is that it's not going to happen anytime soon. I fear that, by the time something can be done, the face of modern broadcasting may be scarred forever, if it's even recognizable. There are many, many broadcast operations who don't have the resources to sustain operations when advertising revenues fail. And, given the current economic crisis, some of them can't even turn to banks for cash. Here's a quick exercise that any of you can do to prove me right or wrong. Just check the websites of your local TV stations; look for the "jobs" or "careers" link. I'd be very surprised if you find much there. I was in broadcasting for 30 years and stations are almost always in the market for sales people. Not now.
Just like you and me. Times are tough. This economic downturn is real. Look at the parking lots at your area malls. Not as full as a year ago, are they? I'm not counting cars, just eyeballing the crowd. There's an obvious difference. Will customer traffic increase as we move into the holiday season? I'm not betting any real money that it will. And that's depressing on so many levels. This is all one big circle and it only works when that circle is unbroken -- advertisers buy spots on TV, spots drive customers to the store, customers spend money, advertisers buy more spots, etc. Right now, customers aren't spending. Advertisers aren't buying. Broadcasting, as it exists now, is in trouble. TVB, the non-profit Television Bureau of Advertisers (the trade association of local broadcasters) has just revised it's advertising forecast. Two months ago, TVB predicted local spot sales would see an increase of 2 percent to a loss of one percent. Now they say there will be no gain, only losses; 4 to eight percent. National spot sales, for the networks, will drop as much as 15 percent.
I mentioned the Sinclair stock price decline above. But. Wait. There's more. Sinclair just notified staffers that it's closing its Washington News Bureau and killing the entire corporate news division (its centralized newscast production operation). Total personnel savings: about 20 people.
Hit the comments. Convince me things aren't that grim. I'd really like a bit of optimism right about now.