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Ion Eyes Growth After Restructuring

With 59 stations covering 64% of the U.S., Ion Television has the largest station-group footprint in America. Yet, it's something of a sleeping giant, with lots of off-network product and no local programming. Ion emerged from bankruptcy in late 2009 and is now privately owned; President/CEO Brandon Burgess says the company is poised to grow. Burgess speaks with B&C's Michael Malone about his growth roadmap.

With such a giant footprint, will Ion get into local programming or local news?

The answer to the first question is, I hope so. The answer to the second is, I don't know. The question is, is the best use of our airtime doing another repurposed local news, or doing something different? I don't know that yet. We're just 180 days into our next phase, and that's something we need to think through. I certainly hope that we're going to do more locally over the next couple of years. Whether it's news or not, we have to figure that out.

Who's your typical viewer?

Our typical viewer is adults 25-54, 55% women, 45% men. Middle-of-the-road demographic, mainstream America-type viewer. It's quite an improvement over where we were as little as three years ago, when our average age was north of 60.

When you see TV Land with Hot in Cleveland and AMC with Mad Men, is there a model there where you say, boy, we'd like to brand Ion with a signature show?

The PR value and consumer awareness value of successes like that is inescapable. But you have to be really careful that it computes when all is said and done. These projects are very, very expensive and for every one that succeeds, there's probably five, six, seven others that haven't that you still have to fund. So, when you look at original production, you really have to look at signing up for a slate, not signing up for an individual show. There are hits and misses out there. Certainly, the ones you mention are best in class when it comes to breakout successes. Would I like us to have one or two of those to look back on three or four years from now? Yes, absolutely. I hope we can find our version of getting into that thought process.

How is your day-to-day different now that Ion is out of bankruptcy? What does it mean for the company?

It's been liberating. It's been, quite frankly, really enjoyable to finally be able to focus on the business, and not deal with balance sheet-related questions that have really little to do with the business and have everything to do with the past. Our new ownership structure is terrific. It's hugely beneficial that we're privately held now so we don't have to go through quarterly short-term thought processes and can really be strategic about what we want to do. The ownership group [Black Diamond, Avenue Capital, Trilogy Capital] has been extremely supportive. I come to work every day with a whole new bounce-I'm really enjoying it.

How's business?

Business is good, business is better. For us, business being better is a function of two things. We had to get our house in order the last couple of years related to our legacy balance sheet. That's all behind us now and we're 180 days into our new life, so to speak. In [that time], revenue has turned up noticeably. Both national and local spots and direct response are pretty healthy at this point.

Will Ion's local outlets have more of a local feel anytime soon?

There's no question that one of the best opportunities for us is localism. At the same time, the local marketplace is a tough one to break into. We would have to compete with very, very well-established and competent news organizations. Whether that is our best contribution, I don't know, but maybe there is a different form of news that could evolve in the digital age. I've always been a big fan, at least intuitively, in citizen journalism; whether that is something that allows us to do some version of News 2.0, I'm certainly supportive of exploring that.

There's record political spending around the corner. Is that something that Ion gets a taste of?

Not historically, but I hope it will going forward. We've been discussing trying to get ourselves a little more on the radar screen as an outlet for that. We are actually a relatively attractive reach vehicle to over-the-air homes, which as we know influence votes. So, we'd like to position ourselves a little more along those lines.

How do you do that?

We've toyed with the idea of providing an overview of our company and network to key constituents in political races, maybe even host them on a local basis to introduce themselves using our air in some way, shape or form and hopefully get on the radar screen. Maybe over time we are able to monetize some of that. It might not lead to monetary results day one, but over time, as political becomes more competitive, over-the-air hopefully will be attractive to that constituent.

Ion introduced some original movies in 2008. What are you doing now in terms of original programming?

We have had a lot of success laying in foundation which, largely speaking, has been an off-network syndicated model. [But] I do hope and think we have to revive our original aspirations. And we need to figure out whether movies or reality or series are the right way to go. At the time, movies were the thought because they were a relatively bite-sized way, particularly when you're resource-constrained, to put some accents on top of an off-network, syndicated foundation. I think we'll continue to do some of that.

The next frontier for us has to be examining whether reality or a miniseries or scripted [series] makes sense for us in terms of the 2.0 version of what we're doing.

Ion has added more high-profile off-network shows, such as Ghost Whisperer and Criminal Minds, in the last few years. Have you gotten a commensurate boost in viewership from those shows?

We think so. Not to overstate things, but we know we have a long way to go. But at this point, if you look at our trajectory, I think we're on our way to meeting our goals and establishing ourselves as one of the nation's top 15 television brands that people turn to as part of their general entertainment roster. We've only been at this for really two seasons in earnest because it took us a couple of years to deal with restructuring and assembling content. Today, we're ranging in the top 20 among all cable-equivalent networks. We measure ourselves more against the cable universe than we do against [broadcast]; we don't really compete at that level.

The average viewer watches 10 to 15 networks, so if you can establish yourself in the top 15, you're definitely going to be relevant. Year-to-date, we're around No. 20 of all networks, if you strip out special-interest ones. That's a good first milestone. Now the question is, how to you build from there and sustain the progress?

You're a leader in terms of mobile DTV. Since Ion doesn't have local news content, why is mobile so important to the company?

We would be a carrier. When we started this journey, which was a time long before I could see the end of the light at the tunnel, we were spectrum-rich and content-poor, and we're trying to reverse that.

Only time will tell whether the ecosystem will come together in a way where we can plug into it and support the effort. But our philosophy was, in order to make the ecosystem possible, we need to step up and be a leader and demonstrate technical capability and bring the industry together on consensus. Hopefully, we've made a small contribution to doing that, and now it's over to some of the content-rich companies to determine whether it makes business sense to go to the next level.

Are you concerned about what you're hearing from the FCC about spectrum, or are you hearing the right things?

I'm hearing the right things. As Spider-Man would say, with great spectrum comes great responsibility. I don't inherently disagree with what the FCC is trying to accomplish. What they're really saying is, let's all make sure we're bringing this to the highest and best use. It may be a little nerve-wracking when you're not prepared for that question, but it's not an inappropriate question. I think broadcasters have to be realistic about that.

I think we always have to be alert that we have a responsibility to think through the use cases. We have hopefully been a role model [in terms of] thinking more about use scenarios than any other company in the space. I welcome the discussion with the FCC. Ultimately, we have to be good custodians for both the public airwaves and our investors, and I have every intention of participating in that fully and rationally.

In terms of TV watching, what are your can't-miss shows?

CBS is best in class in my book in terms of scripted development: Criminal Minds, NCIS. Glee is my wife's favorite. I think it's a great show, so my hat is off to Fox. USA Network is a leader in scripted with BurnNotice and Royal Pains. I think there's a lot of good television being produced equally on broadcast and cable.

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Michael Malone, senior content producer at B+C/Multichannel News, covers network programming, including entertainment, news and sports on broadcast, cable and streaming; and local broadcast television. He hosts the podcasts Busted Pilot, about what’s new in television, and Series Business, a chat with the creator of a new program, and writes the column “The Watchman.” He joined B+C in 2005. His journalism has also appeared in The New York Times, The Philadelphia Inquirer, Playboy and New York magazine.