The TV station group Tegna has been the subject of acquisition rumors for nearly a year. Finally, bids started to surface earlier this month that pegged the company’s market value at about $8.5 billion.
But in the space of a week, the assets up for grabs at Tegna have taken on a very different kind of worth. The spread of the coronavirus pandemic has put a klieg light on the invaluable role that local TV stations play in disseminating news and information in times of crisis and emergency.
Even in a hyperconnected and overheated media environment in which news is available online in a nanosecond, survey after survey by Pew Research Center and others confirm that nearly half the country still gets most of its news, especially local news, from TV outlets.
Tegna is one of the last old-school TV station owners to go on the market. The company is home to 62 TV stations in 51 markets. Most of them are Big Four network affiliates, such as Denver’s KUSA (NBC), Washington, D.C.’s WUSA (CBS), Seattle’s KING (NBC), New Orleans’ WWL (CBS), Memphis’ WATN (Fox) and Des Moines’ WOI (ABC).
In the midsize and smaller markets they serve, these network affiliates are the oldest established TV brands, and more often than not they are pillars of the community. They’re the ones that host fundraisers and job fairs in their parking lots. They sponsor Little League teams and walkathons, and they send anchors to supermarket openings and parades. These broadcasters are laser-focused on their local markets because that’s how they maintain credibility in news programming, which drives so much of a network-affiliated station’s revenue.
The television business in the United States was built on the foundation of local affiliates serving a regional audience in partnership with national networks. And that compact hasn’t changed all that much over the years. KUSA delivers local news and entertainment to Denver viewers, while NBC provides KUSA with “The Tonight Show” and “This Is Us” and “Sunday Night Football” and other high-wattage programming. Tegna and other broadcast station owners now pay the networks for the privilege of the affiliation, whereas in the old days, networks used to pay their affiliates. But the basic construct of a local/national delivery system to get broadcast TV signals into every corner of the country is the same.
During a crisis, the mission to deliver what can be life-saving information to viewers allows the strongest local TV operators to shine. Before the coronavirus threat came into sharp relief in the U.S., it was easy to crunch the numbers on the ultimate price tag in a Tegna sale as being something in the neighborhood of eight to 10 times the company’s 2019 earnings of $708 million.
But at a moment like this, when news is moving at lightning speed and viewers are anxious, the role that a strong local TV station plays transcends profit margins and CPMs. It’s a beacon of credible information provided through a wide but regionally targeted reach that only a broadcast station can provide, no matter how much we are addicted to our smartphones.
Just ask Scott Livingston, senior VP of news for Sinclair Broadcast Group. He steers a team of some 4,000 journalists, photographers and camera operators who produce newscasts for Sinclair’s 170-plus local stations. He’s now got crews in some markets picking up equipment via drop box locations in order to minimize close contact with others, per coronavirus public health guidelines.
Sinclair has taken some deserved heat over the years for putting a political tilt with commentary segments on local newscasts at some stations. But the news pros at Sinclair’s KOMO-TV Seattle have been working around the clock to cover the impact of the outbreak in their backyard, at their own peril.
“We are on the front lines,” Livingston says. “This outbreak is impacting every aspect of our lives. And it’s another reminder that people turn to their most trusted source of local information in a time of crisis.”
Tegna’s suitors at present include private equity giant Apollo Global Management, Entertainment Studios chief Byron Allen and religious outfit Trinity Broadcasting. As the bidding process plays out, here’s hoping that the intangibles of news credibility and community goodwill aren’t sacrificed in the transaction.