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Gannett Getting More Local

Gannett reported a 20% revenue increase in its broadcasting division for second quarter 2010, with "very positive revenue trends" at its TV stations perking up the multifaceted media giant, according to Chairman/ CEO Craig Dubow. Gannett owns 23 stations, and recent deals with Yahoo on the ad side and DataSphere on the content side further expand its reach.

Gannett Broadcasting President Dave Lougee spoke with B&C Deputy Editor Michael Malone about what makes the Gannett stations, including KUSA Denver and KSDK St. Louis, among broadcasting's best.

What is a Gannett TV station? How do you define your local prototype?

The words that come to mind are a culture of quality, local innovation and local civic responsibility. The stations are populated by people who are smart and aggressive business people and who are passionately committed to their communities.

How do you make sure Gannett is a leader in terms of getting political money?

There’s no secret to that—it’s about having strong local brands. Political dollars go where the strong local news brands are. We are tremendously well-positioned: We’ve got Senate races in 15 of our markets and governor races in 18. The footprint looks very, very good.

How will the stations cover the elections?

Our stations are very aggressive, and you’ll see new things pop up on the Web as well as interactive ways to better educate consumers. But we’re also trying to get them to focus less on the horse races, [and more on] the issues in general.

Gannett and Yahoo announced an ad deal for Gannett’s newspaper and station sites. Why is Yahoo an important partner?

It’s part of our strategy to have robust customer solutions for our local advertisers. What adding Yahoo’s inventory and behavioral targeting capability does is allow us to add tools for our account consultants to bring solutions to large local marketers.

Tell me about the deal to launch community sites with DataSphere.

We’re very bullish on that. We’ll launch in Buffalo and D.C. initially, with the others right behind. Using the return path from users to help populate content on the sites is transformative inside our newsrooms.

Gannett’s got huge newspaper holdings. Does that slow growth on the broadcast side?

I don’t think we look at it that way. We’re a local media company with a national brand in USA Today, so we look at it from the standpoint of our overall level of engagement with our local markets—readers, viewers and advertisers, whether the core distribution path is a TV station or newspaper. We have a big opportunity as a company because we’re in more than 90 markets between the two divisions, in addition to having a nationally branded newspaper. So, we’re really focused on the opportunities that gives us to create local solutions in each of those communities, but also create national products that we can target and scale across the entire company.

You oversee a large number of NBC affiliates. Are you getting the sense that this may be the turnaround year for NBC's primetime problems?

This is an overused phrase, but I'm cautiously optimistic. I think that for the first time in many years, the programs we saw in development this spring indicate the levels of spending we think are probably appropriate for prime. Clearly the behind-the-scenes talent that they've gone out and gotten gives us a lot of optimism.

I'm about as good at picking winning shows as the next person, but I think in the aggregate we saw enough to say--and I know a lot of my peers felt this way as well--that there was a lot of [reason] for optimism.

If the Comcast merger is to go through, is that a good thing for NBC affiliates?

Yes. I've been part of that process with the affiliates board, working through those issues. Under certain conditions, we are essentially supportive of the merger. There's obviously a lot of pieces to that, but we're very impressed with Comcast as a company. I think their management is very smart and very strategic. Steve Burke is a very smart operator with broadcast genes. I believe that he very much wants to turn around the NBC network. I think NBC and General Electric had a great run, but it probably came to the end. We're optimistic about what Comcast will bring to both reinvigorating NBC under the current model, but also helping evolve the business model.

Are you concerned or relaxed about what you're hearing from the FCC regarding broadcaster spectrum?

Neither. I would say we are focused about being a constructive part of the conversation and making it clear it's not an either-or. It's becoming increasingly clear to people that when you talk about our mobile DTV efforts, there has to be an effective one-to-many solution in the use of spectrum in this country, because you can't find enough spectrum to have all of America watching HD programming on one-to-one networks. It's just a pure math standpoint; if everybody was watching tornado coverage at the same time in Omaha or a playoff game across the country, that would hog an enormous amount of bandwidth.

The other part of it is emergency services. At the end of the day, broadcasters not just culturally but technologically serve an enormously important role. Think of 9-11, when the Pentagon was hit in this town, or Hurricane Katrina. When those events happen, networks get clocked. It's absolutely critical that there's not just one-to-many pipes available, but that they're populated by responsible broadcast organizations who are committed to serving the community in a responsible way during those moments. I think that's probably a weakness of the broadband plan in its current form; that particular piece is not really discussed and contemplated. All of this is becoming increasingly clear to the people in the ecosystem.

When will Gannett see substantial revenue from mobile DTV?

We won't put a date to that, but we feel very good about the opportunity. The ability to maximize revenue is a function of doing good business planning on the front end. We've been an advocate from the beginning of it being a large-scale ecosystem play, as opposed to unilateral group efforts.

Is mobile a game changer? Will it shake up the broadcast world?

I think mobile is a game-changing opportunity. When the telephone came along, newspapers existed. And I don't know what opportunity telephones [represented] for the information business back at that time. A lot of what mobile is used for is separate from what we do, but it also can be used for what we do. I think most broadcasters would be honest in saying when desktop PCs and the web came along, we didn't necessarily maximize that opportunity. But we have a do-over with mobile, which is, frankly, going to be a much larger opportunity.

Do you see Gannett buying or selling stations this year or next?

We always take every conversation. Our stock answer is, if there's the right opportunity, especially in a market where we already exist, to pick up a second station. [But] it's pretty unlikely we would buy a standalone asset in another market. Given the uncertainty of the last couple years and the downturn in the economy, I think there's still a gap in valuations between buyers and sellers.

What are your must-see shows in a given week?

30 Rock is probably my favorite comedy, a little bit of inside baseball there. What's popular in my house is Dancing with the Stars--my spouse and son drive that. Being a former news director, I'm a big news viewer, so I'm a pretty regular viewer of 60 Minutes and the Today show.

Do you still feel like a news director?

I don't any more. I respect more than ever the work our news directors have to do, because their jobs are harder than mine was back then. I guess I'd say it gives me a great appreciation for maintaining values and principles while driving revolutionary change.

How do you feel about the long-term state of broadcasting?

I feel good about our division and the ability of local broadcasters to leverage their brands, if they transform a lot of their operations and do not think of themselves as just television stations. We have incredibly strong relationships locally. From a sales and marketing standpoint, we're probably underleveraged. This year you're seeing significant recovery in the broadcasting business, which really comes back to the fundamental level that television is as big as ever in consumers' lives and as big as ever in marketers' priorities.

So within the ecosystem of TV, local broadcasters will need to continue to innovate around how they produce product for their viewers, online users and mobile users, and as importantly or more importantly, how they market--how they create solutions for advertisers versus negotiating transaction money. So there's a lot that needs to continue to take place, or broadcasters will have challenges. But with the right transformation, local broadcasting has a tremendous future.

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