Stalled Fox 11 news projects will now happen, but done by KOLD - Inside Tucson Business: Media Watch

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MEDIA Stalled Fox 11 news projects will now happen, but done by KOLD

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Posted: Friday, November 18, 2011 7:00 am

A year and a half ago, KMSB 11 was making ambitious plans to hire a dozen news staffers to launch a new morning news and information show. Station owner Belo Corp. never green-lighted the project citing budget concerns. Now the show is going to happen, but with KOLD News 13 doing the work.

In fact, KOLD is taking over the operations of both KMSB 11 and KTTU 18, along with their digital side channels, This TV classic movies and Spanish Estrella TV.

The sputtering no-go for KMSB's morning show may best explain why Dallas-based Belo announced this week it is turning over operations of its two Tucson stations to KOLD, owned by Raycom Media, headquartered in Montgomery, Ala.

By Feb. 1, KOLD is planning to produce a local two-hour morning show on KMSB from 7 to 9 a.m. weekdays as well as taking over production of the nightly 9 p.m. "Fox 11 News." That means KOLD will produce 7½ hours of news each weekday between the two stations.

KOLD also will take over the master control switching functions for both KMSB and KTTU, which currently are being handled by Belo in Phoenix.

The arrangement is called a shared services agreement, where basically Belo pays KOLD to operate KMSB and KTTU but to meet federal business antitrust rules, the business functions will be kept separate. That means Belo will keep its own advertising sales staff and do all of its own scheduling of commercials even though those employees will be housed at KOLD's studios.

The two sales departments will not be allowed to interact on business matters, such as pricing. Preliminarily, in fact, remodeling plans are to put Belo's employees on the opposite side of the building from KOLD's own sales staff.

KMSB and KTTU accounting functions will be handled by Belo headquarters in Dallas while other programming and business decisions will fall under Nick Nicholson, president and CEO of Belo's stations in Phoenix. (Nicholson's career included running KMSB and KTTU from November 2004 to March 2006.)

Belo's Tucson staffers were caught by surprise when they were given the news at a 10 a.m. Tuesday meeting. One person said they were still working on budgets for next year and had been given no indication Belo was planning such a drastic change. An attempt to reach Bob Simone, Belo's Tucson general manager, was unsuccessful.

About 20 Tucson Belo employees will be out of jobs but at least some could wind up being hired by KOLD.

Paul McTear, president and CEO of Raycom Media, said KOLD will hire additional people for the new newscasts, adding there could be shifting and hiring of news anchors. Current KMSB/KTTU employees will be given opportunities to interview at KOLD.

One staffer at KOLD said they were told for instance, the new 7-to-9 a.m. show on KMSB would most likely not be a continuation of KOLD's 4:30-to-7 a.m. show and even used the word "Foxify" to describe an effort to make the show look more compatible with the Fox-affiliated stations.

Indeed that was an issue for Belo. Out of the 20 stations it owns, KMSB was its only Fox affiliate. In all but one of its other markets it operates either an ABC, CBS or NBC affiliate with traditionally produced newscasts. The one exception is Phoenix where its KTVK is a successful independent station largely built around news.

For its part, Raycom Media has experience in a shared services agreement but from the opposite perspective. Since the beginning of this year, operations for its Fox affiliate in West Palm Beach, Fla., have been run by that market's NBC affiliate.

McTear said advertising revenues in the Tucson TV market have fallen by $25 million since 2007, requiring stations here to move away from their old business models to find a different way to be sustainable.

"If we don't find different ways to run our business, we will have to shrink our operations and that means a dimunition of service to our viewers," McTear said. "This puts us in a place where KOLD will be hiring more people and expanding with extra news. It's better and more."

Another benefit for KMSB and KTTU viewers and advertisers will be full upgrades to high definition. Currently, neither station is capable of airing high-definition local programming or commercials.

Star parent struggles

Executives at Lee Enterprises, the parent of the Arizona Daily Star, are still trying to deal with debt payments coming due in April and say they're still reserving the possibility of a prepackaged Chapter 11 bankruptcy filing if it can't get 95 percent of its lenders to agree to a refinancing.

So far the company has worked out arrangements, including delayed payments, on $864 million and needs to work out deals on another $175 million.

Lee, based in Davenport, Iowa and owner of 48 publications, reported a net loss of $8.8 million in its fiscal fourth quarter, which ended Sept. 25. Included in that was an additional write-down of the value of assets by another $13.9 million because a $162 million third quarter adjustment wasn't enough.

Company-wide, Lee Enterprises said its revenues were down 3 percent to $182.4 million with combined print and digital advertising revenue down 4.7 percent to $128 million. Despite that, digital advertising revenue grew to 12 percent of total revenue. Circulation revenue was up 2.7 percent.

Hear those sleighbells

By this time next week - the day after Thanksgiving - as traditions go, Journal Broadcast Group's Mix-FM KMXZ 94.9-FM should be playing all Christmas music. They don't announce it in advance but the station has done it for the last 18 years and it's popular, according to Arbitron ratings.

The question is whether Mix-FM will have any competition this year. According to trade publications, many Clear Channel stations also are switching to Christmas music formats this year, including situations where stations are vamping while prepping format adjustments. That's the case with KWMT 92.9-FM, which has been making plans to rebrand itself as My929Tucson.

Clear Channel made a half-hearted attempt to get in the Christmas spirit last year when it flipped its Mia KTZR 97.1-FM to Spanish holiday music but that turned out to be a ratings dud.

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237. Inside Tucson Media appears weekly.

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