KXAN Owner Steps Up
When LIN TV (TVL), owners or operators of KXAN TV (NBC), KNVA (CW), and KBVO, claims to be a forward-thinking, multi-platform business, they mean it. Today (October, 6, 2009), LIN announced acquisition of Red McCombs Media based here in Austin. The LIN corporate offices are in Providence, Rhode Island. Red McCombs Media is an online advertising and media services company.
Yeah, you’ve heard of Red McCombs. Red McCombs media is a brain child of THAT Red McCombs—The one with the automobile dealerships, the one how was a cofounder of the radio, TV, and billboard giant Clear Channel Communications, the one with his name etched on the school of business at The University of Texas at Austin. That’s just some of what’s he’s done with his good and great fortune. Did you ever wonder what McCombs real name is? Billy Joe “Red” McCombs. Anyway, check out the Red McCombs Media web site www.redmccombsmedia.com for much more information.
According to the LIN TV release, “the acquisition significantly expands LIN TV’s local multi-platform offerings by providing national advertising and enhanced services, including targeted display, rich media, video advertising, custom-built vertical channels, search engine marketing, search engine optimization, and mobile marketing.”
Al this means that LIN just got a lot bigger. “RM [Red McCombs] Media advances LIN’s transformation from a local broadcaster to a digital media company with a national footprint,” said Vincent Sandusky, LIN TV president and chief executive officer.
Austinite and Internet entrepreneur John Flatt founded RM Media in 2004 with Red McCombs in 2005. RM Media connects targeted audiences with advertisers and publishers based on demographic, psychographic, and consumer behaviors. “As part of LIN TV’s digital media strategy, we will be able to benefit from important synergies and have greater resources for growth, enhanced service, and innovation,” Flatt said. According to Forbes Magazine (August 12, 2009), RM Media is one of the nation’s fasting growing companies in the nation with a growth rate over the past three years of 230.6%.
The last paragraph of the LIN TV release posted on the LIN website is perhaps the most important and telling. “LIN TV’s acquisition of RM Media will further diversify and augment the Company’s digital marketing and sales business, as well as providing new opportunities for growth. [Here it is:] By integrating RM Media’s in-depth online media properties with sophisticated technology, LIN TV will be well positioned to deliver and monetize [my emphasis] a vast array of multimedia product offerings.
I keep writing about how local TV stations all of the way up to the networks are searching for new streams of revenue. The LIN TV acquisition of Red McCombs Media has the potential of doing just that only LIN is taking serious leaps on to multi-platforms instead of constantly catering to the insatiable appetite of the television beast. There may come a time when LIN TV will become LIN tv or just LIN.
LIN TV should benefit in another way from its acquisition of Red McCombs Media. RM Media has a really cool web site. LIN should use talented folks at RM Media to fix the LIN TV site, www.lintv.com. It’s pretty, er, lame in comparison.
© Jim McNabb, 2009
[My thanks to “Anonymous” whose comment to www.newsmcnabb.blogspot.com turned me on the news release on the LIN TV web site.]
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8 comments:
Jim,
You're welcome. The news release did not mention the cost of the purchase.
The acquisition cost LIN $7.9 million, paid with $1.2 million in cash, $2.2 million in an unsecured note and the rest in Class A common stock.
While LIN is taking a forward-looking approach, another broadcast company is at the financial edge.
Emmis Communications, owner of six Austin radio stations, including KLBJ AM & FM, and Texas Monthly, has received a notice from NASDAQ that the company is subject to delisting if the company's common stock price doesn't rise about the minimum bid price of $1 per share by March 15 of next year.
The company is looking at various options if its common stock doesn't trade at a level that is likely to regain compliance. A reverse stock split is one option for raising the stock price.
In the last fiscal year, Emmis lost $284 million.
Wasn't someone on here posting not that long ago that LIN was having money woes?
They still are.
Jim,
How about writing an item about when KXAN-TV will begin operating a subchannel?
KEYE has one in operation and KVUE does, too. So what's the deal with KXAN?
Enlighten us!
Editor's Note: KXAN TV management has not responded to any of my questions for the purposes of this medium in months.
I've asked about the digital subchannels, but received no response.
I've been patient. I still have many friends at KXAN. It may be time to contact the corporate office.
That's all of the enlightenment I have, dang it.
Regarding the financials of the deal to buy RM Media, what "Anonymous" #1 said is apparently fact. The numbers were repeated in the Austin American-Statesman this morning. In the limited time I had to work on the story yesterday, I could not independently verify them.
Yes, LIN has crushing debt. Their August financial report is posted on their web site. I glanced at it yesterday.
While they continue losing money, the upside is that LIN's digital dollars are growing, leading to the purchase of RM Media.
For RM Media, however, it doesn't look like a very good deal to me: $1.2-million in cash, $2.2-million in an UNSECURED loan and the rest in stock, stock which is worth about 20% of its original price when offered and now varies wildly in value. Interesting.
Jim
Jim,
"Crushing debt" is absolutely the way to describe the company's debt obligations.
As I've mentioned before, LIN TV and all other broadcast companies will have to come up with new ways to make money. But the first obvious place to tap to increase revenues -- get KXAN's two subchannels up and running with programming and commercials.
Why hasn't that happened?
LIN TV doesn't have the ready cash to make it happen. Additional cuts in staffing would not free up the money needed to operate subchannels.
On another point, LIN TV needs to cook up new multi-platform approaches for expanding revenues. The company is working on that right now.
Jim,
Changing subjects again.
You recently stated your believe that television stations should have put reporters on health care reform. I bring that up because I want to give you a glimpse at behind the scenes developments that have occurred on that issue at the major TV networks. These developments have not been reported in the media. I'll add a note to your blog about that subject in the coming days.
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