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Vegas Numbers Racket

Station managers in Las Vegas would seem to have a good life. The city's population boom makes Las Vegas TV an an easy sell, as caravans of new residents look to acclimate themselves in a new city. And while millions of tourists spend most of their time losing billions of dollars, station executives know it's the syndicators who often hit the jackpot there.

That's because stations often pay premium rates for syndicated programming. “Las Vegas is a market that is way overpriced,” laments Paul Karpowicz, president of Meredith Broadcast Group, which owns Fox affiliate KVVU. “Some of the players there over the years have gotten a little too excited.”

They can afford to. Las Vegas is the country's 43rd largest designated market area but it is 22nd in terms of revenue, according to BIA Financial Network. The market pulls in nearly $240 million annually, which puts Vegas on par with bigger markets like Baltimore and St. Louis.

The reason for that is Vegas' fast growth, with an average of 6,000 people moving there each month, according to the University of Nevada at Las Vegas' Center for Business and Economic Research. Today, nearly 72% of Nevada's population lives in Clark County, where Las Vegas is located, up from 56% in 1970.

Playing for time

“If you look at this market, 47% of residents didn't live here nine years ago. The best way to reach them is through broadcast television,” says Emily Neilson, president and general manager of Landmark's KLAS-TV, a CBS affiliate.

“Newspapers have less than 40% penetration, but a broadcast station like ours is reaching 80% of the market in a single week and 90% in a single month. If you are an advertiser that has to reach a clientele that has no established brands, no established loyalties and doesn't know their neighborhoods, you have to go with broadcast television.”

Unfortunately for stations, syndicators take Vegas' high average revenues into consideration when they develop show pricing. “When they look at what the market cost-per-point is and they are looking at the average revenue, they relate a show's opening bid not to market size but to market revenue,” says Bill Carroll, VP, programming, Katz Television Group Programming.

That means syndicators end up being able to charge a 15%-20% premium for shows, according to one syndicator. And if bidding wars break out, stations tend to ante up even more.

Bidding wars do break out in Vegas. Besides Landmark's CBS affiliate, Sunbelt's NBC affiliate KVBC, Journal Broadcast Group's ABC affiliate KTNV and Meredith's KVVU, Sinclair owns a duopoly there: CW affiliate KVCW and My Network affiliate KVMY.

Las Vegas TV Partners, a joint venture between The Greenspun Corp. and Catalyst Investors of New York, also runs independent KTUD, a low-power Class A station. Syndicators say LVTP aggressively goes after programming it really wants, filling its schedule with shows such as CBS' The Oprah Winfrey Show (which it shares with Meredith's KLAS in a unique arrangement), Warner Bros.' Tyra Banks, Twentieth's Judge Alex, Acme's The Daily Buzz and plenty of off-net sitcoms, such as Twentieth's Family Guy, King of the Hill and The Simpsons.

“When there's an extra TV station in the market you have more people chasing around available programming,” says one station group executive. “At the same time, the market is mercifully generating more revenue than a market of its rank. So you can afford to a pay a little more.”

Contributing editor Paige Albiniak has been covering the business of television for nearly 25 years. She is a longtime contributor to Next TV, Broadcasting + Cable and Multichannel News. She concurrently serves as editorial director for entertainment marketing association Promax. She has written for such publications as TVNewsCheck, The New York Post, Variety, CBS Watch and more. Albiniak was B+C’s Los Angeles bureau chief from September 2002 to 2004, and an associate editor covering Congress and lobbying for the magazine in Washington, D.C., from January 1997-September 2002.