Local TV and 2010

So what can the average broadcast professional expect from local broadcast television in 2010? If I knew, I'd be rich. I can only offer an opinion based on what I do know and what I believe to be likely.

In 2009 automotive advertising plummeted, consumer goods advertising retracted and the overall spending on television advertising fell some 25 to 30%. Media companies have slashed costs (read jobs) and others have filed for bankruptcy protection. While I never say it cannot get any worse, I believe we seen bottom.

Beginning in the 1990s and continuing through 2007, the high profit margins of local television made it an attractive investment for the financial types whose business plan was to cut costs, push revenue, grow the profit higher and then flip the station. The Great Recession changed all of that.

Profit margins for market leading stations are still strong. However station sales are non-existent and multiples are low. Many station groups got into trouble because they could not service the high debt load with falling revenue. Now many are either bankrupt or stuck.

Patience is the key to 2010. Broadcast professionals need to focus on controlling what they can control -- their job responsibilities. The economy is showing signs of bouncing back. Political should be very active in many markets. Stations will make more money. Now, however, is not the time to go in and demand a raise.

Let the process play-out. Stations will be slow to add back positions, restore pay levels and benefits. The cost savings obtained over the past 18 months will be expected to be maintained. Cost constraint, not cost cutting will be the mantra.

As things improve, some of the troubled groups will find the environment favorable to selling stations. They will be sold, not to investment groups but back to broadcasters. I believe over the next few years local broadcast will be reborn. Bankers don't want to own or run stations. They'll cut their losses and leave.

It will take time but for any person, any station that has survived the past year, the future is bright. I am very bullish on local broadcast television.