Breaking the ranks of TV tradition with new strategies for coping with cable and dwindling advertising


December 23, 1991|By Ellen James Martin

One of the first things Marcellus Alexander did when he arrived at WJZ-TV Channel 13 was to order the printing of a half-dozen oversized gold posters emblazoned in black lettering with his business philosophy: "The time you're most vulnerable is when you're ahead. Never let up."

The ABC affiliate may have led in overall ratings for 15 years, but Mr. Alexander, WJZ's vice president and general manager, is acutely aware of the fragility of ratings.

In the Brave New World of television fragmentation, the other two Baltimore-based major network affiliates have gained in the ratings race. He also has to worry about the growth of cable, the rise of the area's two independent stations, and the steady increase in home video viewing. And recently, he has confronted a decrease in revenue from advertising, as well as a weakening of network financial support.

"There's the old cliche that 'If it ain't broke, don't fix it.' Nothing could be further from the truth at our station. In our business, when you stop having new ideas in the pipeline and executing them, that's when you're in trouble," says the 40-year-old Mr. Alexander.

To cope in the new era, Mr. Alexander has laid off employees, executed a broad cost-cutting and restructuring program and zTC canceled expensive local productions -- including the nightly "Evening Magazine" that went off the air last December. He is also breaking television tradition by forging some unusual ties with rivals -- ties that generate revenue but carry substantial risk.

One of the first ventures will involve "cable alliances."

Starting in February, WJZ will provide five-minute news breaks at least eight times a day to United Artists Cable in Baltimore and Comcast Cable in Baltimore County. News breaks will be produced with WJZ anchors and video at the station's studios on Television Hill and transmitted by microwave to the cable companies.

"In essence, such alliances give us two shots at an audience instead of one," Mr. Alexander says. "We provide the product and will share the revenue with the cable systems from the ad sales. What we also get is exposure for our anchor talent on another credible news source."

But to other TV executives who've lived for years with intense competition, the notion of providing support to a rival channel is threatening. "Isn't that like eating your young?" asks Tom Griesdorn, general manager at WXYZ-TV in Detroit.

The biggest danger with alliances: Viewers who tune into your news programs on cable will become more frequent cable viewers. And that could affect ratings.

But Mr. Alexander, something of an iconoclast in the television industry, says it's better to align with cable than to battle it independently.

"It's a calculated risk. People are watching cable in increasing numbers anyway. And the additional exposure of our talent, along with the upside revenue potential, makes this alliance worth it," Mr. Alexander says.

Still, he stresses that WJZ's emphasis will remain on newscasts and programming that airs on Channel 13.

Mr. Alexander also plans to bring the station into the era of "cross-promotion" with cable. This could involve extended coverage of major news events, such as a City Hall debate, by the WJZ news organization. Such coverage could be aired on local cable channels, rather than WJZ, but would be promoted by WJZ. Details of such an arrangement have not been worked out.

The cross-pollination going on between WJZ and its competitors is still in its earliest phase, says Mr. Alexander -- hinting that tighter relationships could follow.

WJZ, like other network affiliates, is searching for ways to replace lost "network compensation." In the face of severe financial problems at the network level, such funding -- which pays affiliates for carrying network shows -- is falling. For ABC stations, it slid about 5 percent in the last two years, and industry analysts predict that it could completely evaporate in three more years.

Advertising revenue is falling, too. Network affiliates throughout the United States have suffered an average of 8 percent decline in ad revenue in 1991, says Chuck Sherman, of the National Association of Broadcasters in Washington.

"What distinguishes the great manager from the good manager is that he can find revenues in these lean times," says Gary Stokes, executive producer of "Eyewitness News," WJZ's evening news broadcasts, featuring Al Sanders and Denise Koch as anchors.

To be sure, WJZ, like most other network affiliates, remains profitable.

Advertising revenues have eroded but, due to cost-cutting efforts, WJZ is still yielding the healthy 25 to 35 percent net profit margin it did through much of the 1980s, Mr. Alexander says. He declines to provide further details, though he notes that total Baltimore-area television revenues declined 10 percent to $150 million from 1990 to 1991.

Generating revenue is a far more difficult chore than it once was, Mr. Alexander says.

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