In Desperate Times …
It is never a good thing when the general manager calls a station-wide meeting in the middle of TV sweeps, especially these days. Belo Corporation-owned KVUE TV had such a meeting Tuesday (March 10th) morning. KVUE staffers were apprehensive, and the news from corporate headquarters in Dallas was not good:
“DALLAS - Belo Corp. (NYSE: BLC), one of the nation's largest pure-play, publicly-traded television companies, announced today several cost-saving measures that will help reduce the Company's expense base amid the current economic slowdown.
“The cost-saving measures include the suspension of Belo Corp.'s 401(k) matching contribution for all employees, a 5 percent salary reduction for employees who are part of the Company's management compensation programs, and a Company-wide staff reduction of approximately 150 positions. These additional cost-saving measures will become effective mid-April.”
It is not unusual that employers do not match contributions to 401(k) plans. It is, however, an appreciated benefit and incentive, one that employees come to expect over time. Belo is saying that this benefit is being “suspended” not ended. That is good. It is unusual that managers are now facing a 5-percent pay cut. Also, there have already been some layoffs at KVUE. It is not known whether the further reduction of 150 positions will be here in Austin. Viewers would not have noticed the layoffs to this point as they were people behind the scenes, off-the-air.
These cost-cutting measures come on the heels of another Belo corporate announcement a week ago. In the same breath that Belo declared a second quarter dividend to its stock holders, it announced it is suspending future dividends indefinitely. “In light of current economic conditions, suspending the dividend will allow Belo's management team to continue to focus on paying down debt and preserving cash while enhancing the Company's financial flexibility," said Dunia A. Shive, Belo's president and Chief Executive Officer.
Belo owns and operates 20 television stations (nine in the top 25 markets) and their associated Web sites. KVUE TV (ABC) continues to be Austin’s #1 TV station. Its flagship station is WFAA TV in downtown Dallas next to the Dallas Morning News.
Meanwhile there is related turmoil among north Texas media. “Time” magazine is naming the Fort Worth Star-Telegram one of the “The Most Endangered Newspapers in America”:
“The Fort Worth Star-Telegram is another big daily that competes with a larger paper in a neighboring market — in this case, Dallas. The parent of the Dallas Morning News, Belo, is probably a stronger company than the Star-Telegram's parent, McClatchy. The Morning News has a circulation of about 350,000, while the Star-Telegram has just over 200,000. The Star-Telegram will have to shut down or become an edition of its rival. Putting them together would save tens of millions of dollars a year.”
Back here in Austin, representatives of local TV newsrooms were to meet again today (March 11th) concerning a plan to pool video of what would be considered “routine” news conferences and events.
Desperate times call for desperate measures. You may take some comfort in the fact that the roots of that sentence may date back to the early 17th century.
© Jim McNabb, 2009