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From AJR,   June/July 2008

Star-Crossed Newsrooms   

A flurry of big-name layoffs marks the reinvention of the local TV news business.

By Deborah Potter
Deborah Potter (potter@newslab.org) is executive director of NewsLab, a broadcast training and research center, and a former network correspondent.     

Anyone who's been in the television news business for a decade or more has seen it before. A tough economy always means cutbacks, so it wasn't a surprise when the ax fell at stations across the country this spring. But the buyouts and layoffs this time around signal something more than a predictable reaction to a looming recession.

Prominence and longevity and the high salaries they tend to guarantee used to make some TV newspeople seem invulnerable. Not anymore. Some of the nation's best-known local news anchors and reporters were let go in a brutal week of layoffs at CBS-owned stations from Sacramento to New York.

WBZ in Boston dumped legendary sports anchor Bob Lobel, who had worked there since 1979. KPIX in San Francisco dismissed four reporters who had a combined 61 years of service at the station. WCCO in Minneapolis cut a 22-year veteran meteorologist and a weekend anchor. In Los Angeles, longtime KCBS coanchors Harold Greene and Ann Martin were told their contracts would not be renewed. At WBBM in Chicago, anchor Diann Burns was terminated six months before her seven-figure contract was to expire.

There were cuts behind the scenes, too. At the CBS station in Denver, video editor Shawn Montano was let go after winning his second editor of the year award from the National Press Photographers Association. A week before he was laid off, he says, the KCNC newsroom had a party to celebrate his achievement. Other stations also are cutting back, just not as publicly. NBC affiliate WSAZ in Huntington, West Virginia, owned by Gray Television, let eight production people go in March. The Fox station in Philadelphia laid off four news writers.

The layoff decisions weren't based solely on salaries, of course, but money was the driving force. Burns, for example, had been lured away from the market-leading ABC station in Chicago five years ago in an effort to pull WBBM's ratings out of the cellar. Higher ratings would have meant more advertising revenue. But the strategy didn't work, and she became expendable. "There's this perception that [television news anchors] are all Teflon superhuman celebrities," longtime WCCO anchor Don Shelby told MinnPost.com. "We're not." So maybe it doesn't matter as much who makes the widgets if it doesn't make a difference to the customers. And that means the local TV news formula of using star anchors to attract viewers may be headed for the ash heap. It's expensive and apparently not that efficient if you consider the recent downturn in both audience and advertising.

In 2007, for the second year in a row, ratings fell for local evening and late night newscasts, according to the annual survey by the Project for Excellence in Journalism; morning news numbers barely held steady. Advertising that has moved online is not coming back to broadcast news, and most local online ad spending is on Internet "pure plays," not TV or radio Web sites, according to the research and consulting firm Borrell Associates. That suggests the local station shakeout is far from over.

"I would presume that everything has to be considered as the business moves forward, as television redefines itself and as the market redefines itself," said Shelby, a star anchor himself whose contract is up in 2010, to MinnPost.com.

He's exactly right, because the budget crunch hitting stations today is entirely different from past setbacks that could be weathered by temporary cost-cutting. "You're talking about a financial struggle that is not cyclical," says Jerry Gumbert, president and CEO of the broadcast consulting firm AR&D. "It's not going to turn around soon, and probably not at all."

Cost reduction can help stations keep going in the short term, but Gumbert says it's not a viable long-term strategy. So what is? "We tell them to re-engineer the newsroom to operate in a world with new revenue realities."

That means emphasizing nontraditional ways of delivering the news rather than relying on highly paid stars. The recent cutbacks suggest that stations are beginning to get the point.

Innovation can kill a business that refuses to adapt and change. Just ask Polaroid. The company that made its name and fortune on instant photography finally threw in the towel in February and announced it will stop making film it had already stopped making instant cameras and will focus instead on flat-screen TVs and digital cameras.

Local TV news could become another Polaroid, left in the dust by technology while continuing to produce a product fewer and fewer consumers want or need. Or it could take a page from a different camera company's playbook and turn itself around.

Remember how bleak things looked for Kodak five years ago? The company bet on disposable film cameras just as digital was taking off. In 2003, its stock price hit a 20-year low. Since then, Kodak has cut almost half its workforce and become a leading digital brand, not just by changing its products but by reinventing itself as a service company.

The lesson for TV news seems obvious. Cutting jobs won't solve the problem. It's reinvention time. Anyone listening?