TV Broadcasters Take Daytime Talk Shows Into Their Own Hands

Monday, Jan 25, 2016

Television-station owners have lost big bets in recent years on daytime talk shows hosted by familiar names including Anderson Cooper, Katie Couric, Queen Latifah,  Meredith Vieira and Jane Pauley. Those shows were canceled after failing to deliver strong enough ratings to justify the high cost of making and airing them.

Now, some big broadcasters, including Tegna Inc., Tribune Media Co. and E.W. Scripps Co., are betting they can do better themselves, producing their own shows for less money and distributing them nationally. While they have yet to find the next “Dr. Phil” or “Ellen,” they say that kind of star power isn’t necessary to make a show a financial winner.

Not only has the fragmentation of the TV audience lowered the bar for success, but owning their own programs increases the potential payoff for broadcasters. That is partly because producing in-house is cheaper than paying what can be tens of thousands of dollars a week in licensing fees for shows from Hollywood studios like Time Warner Inc.’s Warner Bros., CBS Corp. or Comcast Corp.’s NBCUniversal.

What is more, if a station owns its shows, it doesn’t have to worry about being outbid by a rival when the show’s contract expires, or paying more to keep a successful program on its schedule. It also keeps all the commercial time.

“It’s not that the stations want to go Hollywood. They want more control over distribution and protection for themselves,” said Sean Compton, Tribune’s president of strategic programming and acquisitions.

A few years ago, Mr. Compton launched “The Bill Cunningham Show,” because he felt too dependent on NBCUniversal, whose talk shows featuring Jerry Springer, Maury Povich and Steve Wilkos are mainstays of Tribune stations. “We wanted a little diversity, and not be tied to our distributors,” he said.

“Bill Cunningham,” which stars a conservative radio host, is averaging about 864,000 viewers this season on Tribune and other stations around the country, according to Nielsen. That’s less than half what Messrs. Povich, Springer and Wilkos average. But Mr. Cunningham’s show, which some industry insiders describe as a knockoff of Mr. Povich’s tabloid talk show, can get by with lower ratings because Tribune doesn’t have the overhead costs associated with big studio shows.

“I can’t spend $30 million producing ‘Maury.’ I spend half that or less, and the results are a very profitable show for our company,” said Mr. Compton.

Tegna, which owns 46 television stations, is following Tribune’s lead. The company plans to launch a show in the fall featuring T.D. Jakes, pastor of a Dallas megachurch. Tegna broadcast a test run of the show on its own stations, and the ratings were big enough to merit taking a shot. Besides its own channels, Tegna is selling the program to other outlets around the country.

The company was tired of seeing “big names that cost a lot of money that may not be best suited to do daytime talk,” said Bob Sullivan, senior vice president of programming. What’s more, studios and production companies often restrict the time slots in which their talk shows can air or require a broadcaster to do a set amount of promotion.

“Destiny and control,” Mr. Sullivan said, were priorities for Tegna.

The budget for a typical daytime show from Hollywood is more than $20 million a year, and sometimes closer to $40 million, depending on the star’s popularity. When a show is a hit, like Warner Bros.’ “Ellen” or CBS’s “Judge Judy,” its annual profit can hit $50 million, say people familiar with the matter.

Hollywood’s misses, however, far outnumber its hits, and it continues to put its faith in costly talent, such as Ms. Couric and Ms. Vieira. Both Ms. Couric and Ms. Vieira had their shows canceled after two seasons, as stations wanted out and the studios behind the shows cut their losses.

While Ms. Couric’s show averaged a respectable 2.2 million viewers, that wasn’t enough to justify its budget, say people familiar with the matter. Ms. Vieira’s audience in her show’s final season is only about 1.1 million.

Representatives of Ms. Couric and Ms. Vieira declined to comment.

The most recent daytime talk successes are NBCUniversal’s “The Steve Harvey Show” and “Wendy Williams” from Lions Gate Entertainment Corp.’s Debmar-Mercury. Both shows are several years old. The only new daytime show from a Hollywood studio planned for this fall is a variety show from NBCUniversal starring Harry Connick Jr.

“They’ve been making Mercedes-Benz-priced programming for a while and it’s tough for them to figure out how to make a Prius,” said Scott Carlin, a former syndication executive at Warner Bros. who is now consulting with Tegna on distribution of the T.D. Jakes show.

Traditionally, a local TV station pays a weekly license fee for a show and gives up a percentage of advertising time during broadcast to the distributor, in what’s known as a cash-plus-barter deal. The weekly fees vary depending on the size of the market. A TV station in New York or Los Angeles can pay as much as $100,000 a week for a successful show, while one in a midsize market might pay half that, syndication executives say.

Not all broadcasters think making their own daytime shows is a recipe for success. “I feel that’s like a catcher playing shortstop,” said Perry Sook, Nexstar Broadcasting Group Inc.’s chairman and chief executive, at a National Association of Television Program Executives conference last week.

Studio executives say they understand broadcasters’ frustrations, but would rather that stations leave the business of producing TV shows to Hollywood. “These strategies seem to me to be a distraction of capital resources and a station’s focus,” said one senior studio executive.

Broadcasters, already faced with increasing costs to remain affiliated with a big network, view their program-making as a necessity. “You better figure out some ways to become more self-sufficient,” said Mr. Carlin.



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