Media Monopoly
GOODNIGHT, NIGHTLY

BY JEFF GRALNICK

Buried in the noisy debate about media consolidation — and the easing (and perhaps eventual disappearance) of rules governing who-can-own-how-much — is an intriguing question: What’s the effect of this controversial deregulatory trend on the fate of the three national evening newscasts, the flagship programs of the Big Three network news divisions for five decades?

We’re talking, of course, about the CBS Evening News with Dan Rather, NBC Nightly News with Tom Brokaw, and ABC’s World News Tonight with Peter Jennings. Add deregulation of media to the seismic changes that already have afflicted the landscape in which network news operates, and there is more than enough reason now to believe that bad things are very likely to happen to good news broadcasts.

Look at the past if you want to see the future:

• Steady and scary erosion of evening news audience figures across the last twenty-two years.

• The growing capability of local station newscasts during that same period, as the networks were forced to compete with each other by feeding national and international news to those stations.

• A succession of givebacks that network-owned stations and affiliates have exacted from their parent networks during the annual push and pull over scheduling and so-called “compensation” — the money stations get paid for carrying network programs.

The potential dollar value to local stations, especially the network-owned stations, would be significant if the half-hour were theirs for local news. So would the resulting (potentially huge) revenue that would flow back to the networks from a larger string of owned stations, thanks to the lifting of ownership caps.

In these hyper-competitive times when the networks are struggling to hold on to their audiences while still making a profit, several factors paint an ominous picture for network news in general and the evening news programs specifically.
To begin at the beginning: the universal need for the evening news broadcasts was widely acknowledged in the once-upon-a-time before cable news. In 1977, when I produced ABC’s nascent World News Tonight, the program was a bad third in the ratings: 19 percent of the available audience on an average evening. Walter Cronkite and the CBS juggernaut sat first with about 30 percent. The three newscasts together were watched in more than 70 percent of American households. Today, the producers of a first-place broadcast would think the gates of heaven had opened if they could grab a 20-share with regularity.

Leap ahead to 1993 and it becomes painfully clearer. Then, it was NBC Nightly News with Tom Brokaw that occupied third place in the ratings. By 1997, the program was in first place. But the size of its audience had changed little from what it had been when the broadcast was in third earlier. It had merely managed to hold steady while ABC and CBS had shed audience. Cable news and other cable choices had taken a toll, as had the extended disruption in normal viewing patterns caused by the O.J. Simpson trial and other such spectacles. The evening news broadcasts in their aggregate were then (and are now) being seen in less than 45 percent of American households each night. In the summer months that number is even lower.

Many viewers discovered they could get the news they needed, when they wanted it, from the growing number of cable networks and the Internet. The argument that networks’ vaunted newsgathering capacity made their evening news broadcasts mandatory no longer held water.

Neither did a parallel argument — that “only the networks have the ability to do it right.” Stations had access to more and more national and international news from a number of sources — including special, closed-circuit, backchannel “feeds” from the networks themselves.

Before cable, each of the network news divisions operated news-video support systems for their owned stations and affiliates, providing them with news footage on a daily basis. It was not much of a priority and not much of a service until CNN changed the competitive landscape.

At that point, affiliates, station groups, and network-owned stations began putting pressure on networks to give them what they needed to compete against both CNN and the local stations that subscribed to CNN’s video services.
Across the years since the birth of CNN, these network services to stations have caused self-inflicted wounds, because now any station in the country can receive a daily menu of breaking news video, feature stories, and packaged live and taped reports, as well as coverage from the scenes of every major news story. Tune in to your local station’s early evening news, especially if it is a network-owned station, and you will get network-quality news and analysis and reporting from anywhere in the world.

And what does that mean? Quite simply that any local station in the country now can look and sound as sharp and informative as the network news programs that follow. On many nights, that can make the network evening news program redundant.

Network news divisions will continue to exist to provide content for early morning shows and prime-time TV newsmagazines, and to handle special events like national elections. But nightly news programs no longer have the ubiquity, importance, and uniqueness to justify their continuance.

What about their power to produce profits for their news divisions and parent networks? Will that be enough to keep them around?

It is here that deregulation and the relaxing of ownership limits come back into play and become of potentially crucial importance. An evening news broadcast when properly managed is a cash cow for its news division. Thirteen or more thirty-second commercials every night bringing in more than $40,000 each, over fifty-two weeks, adds up to a lot of dollars. That revenue not only provides profit for the news divisions but also helps finance the totality of each division’s news coverage.

But a station that a network owns is also a cash cow, and a network’s owned-stations division is a whole herd of cash cows. Deregulate ownership, allowing a network to triple or quadruple the number of stations it owns, and the bottom-line impact becomes immense. And if each of those owned stations were able to increase its revenue by recapturing that half-hour in which the evening news broadcasts now reside, the added profit potential would be breathtaking.

How breathtaking? Here is a tidbit from the memory bank. In 1994, in an attempt to prevent ratings damage to NBC Nightly News by live coverage of the NBA playoffs, NBC asked its west coast stations if the newscast could be repositioned in their schedules, even as early as 3:30 or 4 p.m. All stations agreed except one, which pointed out that giving up a half-hour of its own afternoon schedule would cost it in excess of $1,500 a night in lost profit. Annualize that $1,500 for this one station, which was then not even in the top ten, and you find that, if it could recapture the evening news half-hour, it could add over $2 million to its bottom line.

Now, take a network that owns not ten or fifteen stations but thirty or more — most likely including stations in all of the top ten markets — and the positive impact on a network’s bottom line of handing that half-hour over to the stations is stunning. It can easily approach $100 million in added black ink, to say nothing of the savings realized by not producing the evening newscast.

Remember, too, that dealings between networks, their owned stations, and owned station groups (and their other affiliates) have always turned on a series of Faustian bargains the networks made with their stations as they phased out what had been the normal practice of paying stations to carry network programming. As they took those compensation dollars away, they had to find other ways of allowing the stations to maintain their bottom lines, which meant providing them with added periods of salable air time.

For example: the time made available for local news on the early morning shows such as Today and Good Morning America has doubled. Also: hard-news network programs once occupied the half-hour immediately preceding those morning programs. Such newscasts are now relegated, in most cases, to 4:30 or 5 a.m. because local stations insisted on having that immensely profitable half-hour adjacent to the morning programs.

This diminution of network news time was just part of that series of trade-offs, as the networks tried to end a hemorrhage of cash payments to their stations while maintaining a semblance of peace in the family.

In the current environment where profitability is paramount, the question of survival for the evening news half- hour represents just one more thing the networks can bargain away as they seek to retain their affiliates and forge new and financially beneficial relationships.

No longer can it be successfully argued that America will be less well-informed if the nightly network newscasts disappear due to the proliferation of other news sources — or due, ironically, to the continuing maturation of local news broadcasts, aided greatly by content provided by the networks.

If these linch-pin arguments are no longer valid, then bottom-line pressures will loom larger, with the financial stakes made even greater by deregulation. So the belief that network news at the dinner hour on the over-the-air networks can never and will never disappear is shaky at best because, as young broadcast writers are taught, “never” as a predictive in news copy is a very dangerous word.

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Jeff Gralnick spent forty-three years in broadcast news, including stints as executive producer of ABC’s World News Tonight, NBC Nightly News with Tom Brokaw, and a long period as vice president and executive producer of special-events coverage at ABC News. He now consults on broadcast and Internet projects.