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Loss of CBS affiliation slices $110M from Indy station's value

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How much value did the CBS network affiliation bring to WISH-TV Channel 8? About $110 million, if you believe the parent company’s calculation.

Austin, Texas-based LIN Media agreed to shave that amount off its sale price to Richmond, Virginia-based Media General in an acknowledgement of just how deeply the loss of CBS hits the Indianapolis TV station. The move affects the stock portion of the $1.6 billion merger deal.

Tribune Media, which owns FOX affiliate WXIN-TV Channel 59, wrested away the CBS affiliation for its WTTV-TV Channel 4 station. Analysts say the move is both a big victory for Tribune and a cautionary tale for other local stations as networks push for a larger share of revenue from pay TV operators.

LIN Media CEO Vince Sadusky told Wall Street analysts on an Aug. 20 conference call that WISH-TV will draw a much smaller audience without CBS and face a more than 50-percent drop in retransmission fees from cable companies, but that the parent company remains “committed to localism.”

“We look at WISH as an opportunity to work a different model,” Sadusky told analysts. “We have assembled a strategic team that has experience in running unaffiliated television stations, and we are putting our heads together and working on what that new model will be for WISH-TV.”

On the call, Sadusky described the change to the merger agreement as "a technical recalibration in light of the change in affiliation status of WISH TV." Later in the call, Media General CEO George Mahoney said "the term changes are principally a reflection of the changes in Indianapolis."

On the flip side, the deal catapults WTTV’s value higher overnight, said Tom Cochrun, a former WTHR anchor and WISH news director.

“They have to go out and make that happen, but on paper and in theory certainly the stations value is greater,” he said.

Meantime, Cochrun sees an opportunity for WISH to double-down on local programming—extending news coverage, adding high school sports, broadcasting community and cultural events, and developing talk shows hosted by community personalities.

“In all actuality, it probably costs less to put studio lights on and keep talent working than it does to go out and buy syndicated programming or old movie packages,” Cochrun said. “They could become a truly local station. There is a way forward if LIN wants to make a commitment.”

Another option—one that’s less attractive to news consumers and WISH employees—would be to automate the station with syndicated content.

WISH-TV could become an all-news channel, but that won’t necessarily limit “collateral damage” from such a dramatic change, said Tobe Berkovitz, an associate professor of communication at Boston University. WISH-TV will be losing a strong primetime lineup, NFL package and the just-added Thursday Night Football.

Revenue will fall without such strong lead-in content.

“The question is whether there’s a model to find,” he said. “I wouldn’t want to be a stockholder in a broadcaster without any affiliation.”

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  • Local Programming will be Key
    Local programming will be key for WISH TV as a former staff member of former low power WAV TV 53 a Hoosier Radio and TV (Bill Shirk) station back in the 90's. We were successful with local programs, sports, Shopping shows, movies and national programs that were available WISH will truly have to partner with the community and be a community station to be successful.

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

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