Gray TV Sees Green in Station Launches

ATLANTA: In an era when television stations in some smaller markets, starved of national advertising, are pondering their future in the business, it might be surprising that a broadcast group would spend $2 million to launch three affiliates in relatively tiny markets. But Gray Television believes it’s on solid ground firing up CBS affiliates WECP in Panama City, Fla. (DMA 159); WSVF in Harrisonburg, Va., (DMA 178); and WIYE in Parkersburg, W. Va., (DMA 192).

“I thought it was the right time to do it,” said Gray president and chief operating officer, Bob Prather. “I think CBS is going to continue to be this strong for a good while in the programming area, and we wanted to take advantage of that.”

CBS and Gray Television are not strangers. Of 36 television stations Gray operates in 30 markets, 17 are CBS affiliates. Prather suggests there was interest from other groups in beating Gray to the affiliation in the three small markets.

Gray’s logos reflecting its presence in Parkersburg, W.Va. “We know that CBS has been trying to get markets covered where they didn’t have it previously,” he said, “and we wanted to make sure we got the beach-front real estate in those towns before anybody else did. So it was offensive and defensive.”

In the so-called short markets where a network affiliate is absent, broadcast groups are keen to bring the allure of Big Four network programming to the local community. As station groups hunt for duopolies, John Altenbern, president of market research firm Crawford Johnson & Northcott Inc., said other groups may join Gray in such launches.

“I think those are the things that have people’s attention these days,” he said. “When business is coming in over the transom, those things tend to be overlooked. In days when you can say ‘Hey, if I can get an extra one or two percent somewhere, it helps my business,’ I think you’ll see people looking for those opportunities that might have been overlooked in the past.”

Gray expects WECP in Panama City and WIYE in Parkersburg to be on the air by Sept.1; and WSVF in Harrisonburg to launch by Oct. 1. CBS Network president of affiliate relations, Diana Wilkin, said their debut helps the network as well.

“It makes sense that we have the local presence, and we continue to grow it, for the strength of Gray, and for the local viewers,” she said. “It enhances our news presence for the network when there’s breaking news there.”

Wilkin said that’s key in a market such as Panama City, which is prone to extreme weather around this time of year.

“There is a percentage of people in those markets who don’t have cable or satellite—over-the-air viewers who don’t get CBS,” she said. “So I would put that at equal importance to the news aspect—that we’re going to be able to reach everybody in the market.”

Gray already owns and operates robust stations in all three markets, which gives the company a couple of legs up. For example, its Parkersburg station, NBC affiliate WTAP, grabs 90 percent of the TV revenue in the market, according to BIA/Kelsey. “[We’re] fortunate that we’ve got very, very strong stations [in those markets] and have been the market leader for a long, long time,” Prather said. “We thought this was like the icing on the cake.”

For each of the three stations, Gray acquired a low-power license and transmission wherewithal. Prather said the cable operators are happy to carry CBS and its leading prime-time programming, such as “The Good Wife” and “Two and a Half Men.” Gray is in negotiations with the satellite systems for carriage.

Prather says the Ross Overdrive automation system is key to getting the stations off the ground. The group’s first Ross installation, at WOWT in Omaha, reduced its master control staff to less than a third of its previous level. “We don’t call it master control anymore,” he said. “We’re trying to eliminate the master control in all of our markets.”

There are major operational efficiencies to be had by adding new stations in markets a group already serves. In Parkersburg and Harrisonburg, the addition of the CBS affiliate will find Gray operating quadropolies, Prather said, along with a triopoly in Panama City. A few years down the road, Prather envisions adding news, and staff, to the stations.

“In the first 24 months, we want to be up and profitable, and establish ourselves before we try to do local news,” he said. “But at that point, we would probably add some reporters and anchors that would be assigned specifically to the CBS station.”

There could also be additional sales staff, though Prather said that CBS’s prime shows don’t need much selling.

“You’ve kind of got a different sell, because most of our markets are dominant in news right now, and it’s a little bit different sell when you’ve got CBS,” he said. “I think CBS prime will sell itself, and we’ve got some good syndicated programming to go with it.”

Industry watchers see the new Gray stations as a win for the local broadcaster and the network alike.

“Digital technology allows stations to multi-cast so much easier now, and also it’s an opportunity for Gray to make more money by selling locally another dominant network affiliate,” says Bill Hague, senior vice president at Frank N. Magid Associates. “It makes all the sense in the world for me, from the network side and the Gray TV side.”