Coming off a lucrative presidential election, it should be the best of times for media companies. Instead, nearly everyone — especially those dependent on advertising sales — is preparing for an economic hurricane in the year ahead.
CBS, even with its primetime successes, posted a loss of $12.6 billion for the third quarter after taking a one-time charge of $14.12 billion to write down the value of its TV and radio stations. The company said it would slash capital spending and has cut hundreds of jobs during the quarter.
More than 70 percent of CBS’ revenue depends on advertising from TV and radio stations and outdoor signs. The company’s 29 television and 140 radio stations has seen local ad spending plunge precipitously in the past few months as big-ticket spenders such as auto dealers and banks bear the brunt of the economic turmoil.
At ABC, David Westin, president of the news division, sent out an e-mail to staffers warning that ABC News is not “immune from the downturn,” and that the division (along with the rest of Disney’s Media Networks Group) will be implementing new “guidelines” to “reduce administrative costs.”
As part of the cost-cutting measures, all ABC executives are being asked to fly one grade below their entitlement and to stay in “B” level hotels. Starting immediately, the only business meals for which ABC employees will be reimbursed are those with third parties. Any meals (or drinks) with ABC or Disney employees will not be reimbursed, Westin said.
As of Dec. 1, ABC will cancel all subscriptions (newspaper and magazine) for executives and production employees and move them to online. And convention or conference attendance will be kept to an absolute minimum. “Anyone who attends things like NAB or RTNDA, we need to have a conversation,” Weston said. “If someone needs to attend, it will be a skeleton crew.”
In addition, ABC will forego all holiday parties this year. This means that the company parties in Los Angeles, New York and Washington, D.C., are cancelled.