NBC Cuts Hit Telemundo

Early next year, the local news on an NBC-owned Telemundo station might
lead off with a story on a massive fire or brazen robbery in the market, then
cut to regional and national headlines. What the viewer might not realize is
that big chunks of those "local" news programs will come from a centralized
operation in Dallas, which NBC is opening to funnel content to many of its
Telemundo stations. As part of NBC's plan to cut 700 jobs and save $750
million, the corporation is overhauling local news at a half dozen of its
Telemundo stations.

NBC-owned outlets in San Jose, Calif., Houston, Dallas-Ft. Worth, San
Antonio, Phoenix, and Tucson, Ariz., will shutter local news operations and
take one of three regionalized feeds for early-evening and late news from the
new Telemundo Production Center. The stations will still be able to insert
stories from reporters in their markets.

"We will be live and focused on the stations in the regions," says Jay
Ireland, president of the NBC Universal Television Stations. "This is the way
we feel we can position these stations for growth."

NBC says the changes will improve efficiency and news quality. But
critics feel that centralized news operations run the risk of homogenizing the
product in an already underserved Hispanic market. Under the plan, newsrooms in
six markets will be downsized into bureaus. Remaining reporters and
photographers will contribute stories and cut-ins to the newscasts, and a
number of jobs will be eliminated. NBC, which owns 15 Telemundo stations, will
say only that the cuts represent 5% of the network's workforce, but they're
expected to include on-air talent, producers and technical operators.

Telemundo will maintain locally produced newscasts in its largest
Hispanic markets: New York, Los Angeles, Chicago and Miami. The New York
station, WNJU, is eliminating its local morning show.

Thanks to the new hub, some stations will air news for the first time.
Las Vegas will take the Mountain Time Zone feed (there will also be feeds for
Texas and the West Coast). Stations in Denver and Fresno, Calif., too have
expressed interest.

Since buying Telemundo four years ago, NBC is credited with upgrading
the stations' local news. Several, including Los Angeles and Miami, are
co-located with NBC O&Os and can share video, reporters and helicopters.
"NBC improved the product and sales opportunities," says Spanish-language media
buyer Adrienne Stephenson of Tapestry. "They have been able to offer
sponsorships and integrations similar to the general market that weren't
available before."

Despite investing tens of millions of dollars in local news, however,
most Telemundo O&Os still lag behind their Univision rivals. Amidst the
continued growth of the Hispanic market, Spanish-language stations have
struggled to grow advertising revenue. Even in top markets, fewer ad dollars
are spent on Spanish-language TV, and rates are generally lower than for
English-language news.

The disparity is a source of frustration for Spanish broadcasters. In
Miami, NBC-owned Telemundo outlet WSCV is top-rated in late news among all
stations. Univision's WLTV is third, and the two stations tied in May for No. 1
in prime. Yet both lagged behind English-language broadcasters in revenue in
the market and account for only a third of its gross revenue, according to BIA

The disparities are more pronounced in midsize Hispanic markets like Las
Vegas and San Antonio. In many cases, such conditions frustrate broadcasters'
plans to start up local news. In Atlanta, the Univision affiliate supplies
hourly news updates, rather than a half-hour newscast, despite a fast-growing
Hispanic population. Station owner Una Vez Mas, which runs Azteca America
affiliates, considered starting its own news operation but instead contracted a
third-party producer to supply newscasts for four of its stations.

"You need significant resources to support news," says Rosa Serrano, a
senior VP of multicultural for Initiative Media.

Given such realities, NBC's new centralcasting strategy for Telemundo
may work, says the network's former Executive VP of News Joe Peyronnin. "Rather
than having each station strain to do all the reporting necessary for a
newscast, you can focus your resources and have more quality."

But any effort to centralize local news rouses critics. Several years
ago, Sinclair Broadcast Group opened a much-publicized news center in Baltimore
to provide content, including controversial political commentary, to many of
its stations. Activists in many markets rallied against the NewsCentral model,
saying it stripped out localism. Sinclair scaled back the operation last fall
and now contracts other stations to produce its news.

Upon hearing NBC's plans, the National Association of Hispanic
Journalists (NAHJ) fired off a protest to the network's top executives. "This
shows a serious lack of commitment to serving the needs of the Spanish-speaking
Latino community," wrote NAHJ President Rafael Olmeda. "Regional news reports
should not be a substitute for local news."

But if NBC executes the model as planned, each newscast will retain
local components, including man-on-the-street reports and detailed weather.
That could translate into better newscasts, say media buyers. "This could be a
way to strengthen the product and boost ratings," says Initiative's Serrano.
"Advertisers are looking for a stronger product from Telemundo to compete with

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