New York-based McGraw-Hill Cos. said Tuesday it plans to sell its nine television stations, including WRTV-TV Channel 6 in Indianapolis.
The company owns four ABC affiliates, located in Indianapolis, Denver, San Diego and Bakersfield, Calif., and five smaller and less-valuable Azteca America-affiliated stations in San Diego, Bakersfield, Denver and Fort Collins and Colorado Springs, Colo. It isn’t clear whether McGraw-Hill intends to sell the stations as a package or piecemeal. It hired Morgan Stanley & Co. to pursue the divestiture of its broadcasting group.
WRTV employees were informed of the planned sale Tuesday morning. WRTV General Manager Larry Blackerby, who took over for the retiring Don Lundy in January, referred questions to McGraw-Hill’s New York office.
“The planned divestiture is part of a continuing portfolio review that McGraw-Hill is undertaking across the enterprise to re-evaluate its strategic core and ensure it is appropriately allocating capital to generate shareholder value,” the company said in a news release.
Even though the value of network affiliates has dropped in recent years and WRTV has lagged its major competitors in local TV news ratings—a major revenue generator for stations—industry sources don’t think McGraw-Hill will have any difficulty selling the local ABC station.
“Indianapolis [has been] a Top 25 market,” said Bruce Bryant, president of Indianapolis-based Promotus Advertising. “There’s still tremendous value in the station.”
Bryant said the sale will have little impact on ad agencies, media buyers and other marketers that may look to Channel 6 for ad placement.
“McGraw-Hill has historically been very conservative with its TV stations,” Bryant said. “They haven’t always invested in their TV product the way other [TV] companies have. If anything, this change could be a blessing for WRTV. It could free up WRTV to be more aggressive in programming, marketing and community outreach. I know the management there wants to do that, but I think McGraw-Hill has held them back.”
Founded in 1888, McGraw-Hill is far better known—and makes far more money—as a book publisher than a TV station operator. With leading brands including Standard & Poor’s, McGraw-Hill Education, Platts energy information services and J.D. Power and Associates, McGraw-Hill has about 21,000 employees in more than 280 offices in 40 countries.
Sales in 2010 were $6.2 billion. The company said broadcasting-division revenue amounted to $100 million, less than 2 percent of the total.
“Part of the problem is McGraw-Hill just doesn’t have the focus on TV that it needs to at this time to make it work,” Bryant said. “It’s the same problem Emmis had. TV is a business that you have to be all in or not at all. Frankly, I’m surprised McGraw-Hill stayed in television as long as they did.”
Indianapolis-based Emmis Communications Corp. in 2005 started selling off its TV stations to concentrate on its core business, radio. Its 16 stations sold for $40 million to $217.5 million each. The least expensive station was located in Hawaii; the most expensive was in Orlando, the nation's 20th-largest television market. Indianapolis ranks 27th.
The impact the sale will have on WRTV's operations isn’t clear, said Bill Cahoe, director of Ball State University Teleplex, which operates public station WIPB-TV Channel 49 in Muncie.
“It’s really impossible to say what will happen locally until we know who the buyer is,” Cahoe said. “I’m sure it’s a bit unsettling to the employees there.
"Some jobs could be lost if a conglomerate buys the station and centralizes certain operations. And there’s always the possibility that a new owner will want its own management. You’d think reporters, engineers and many of those in sales would be safe.”
So far this year, WRTV has hired a new general manager, news director and sales manager.