New York's ex-rival stations merge under single licensee
Originally published in Current, Aug. 6, 2001
By Dan Odenwald
What began with talk of a joint master control three years ago ended up last week in the merger of New York's two largest public TV stations. Trustees of the Long Island-based WLIW voted July 31 to join forces with WNET, based in Manhattan.
In addition to sharing digital facilities, equipment and programming resources, WNET has promised to commit substantial funding for WLIW's local programming and promotion--more than WLIW can afford on its own.
"We wanted to create a strong, viable resource for public TV viewers," said Terrel Cass, WLIW president. "Under this deal, everyone benefits."
According to the agreement, each station will "retain their distinct public identities" but will be controlled by WNET's parent company, Educational Broadcasting Corp. (EBC), which will hold both licenses. While WNET approved the merger in May, the deal must still win regulatory approval from the state attorney general and the FCC, which station officials believe will come readily. The merger should be final in six to 12 months.
While WNET has always harbored hopes to acquire its Long Island competitor, the crippling price tag of digital conversion hurried WLIW to agree, said Steven Rattner, chairman of WNET's board. Because WLIW faced DTV transition costs that nearly equaled its annual budget, it made sense, he said, for the station to look for opportunities to save money.
The merger will shave $4 million from WLIW's total DTV bill of $10 million, Cass said. By sharing facilities and equipment, the Long Island station will avoid buying the same DTV hardware that the larger station already has. WNET raised and spent $30 million to prepare for launch of its digital signal in mid-July. Neither station plans a "mass lay-off," Cass said. Savings will come primarily from shared hardware.
In addition to immediate savings, WLIW and WNET stand to gain much more through increased efficiencies, said Dale Emerson, a Tampa-based consultant, who worked with the stations on their master control study. Over the course of 10 years, a shared master control among WNET, WLIW, and WNYE, the Brooklyn-based station licensed to the city's school board, would yield $16.8 million in savings. Although WNYE is not part of the merger, WNET is in negotiations with the school board to take over its master control operations as well.
Despite the long-standing rivalry between the stations, Emerson said, the financial opportunities of collaboration became evident to the stations and overrode any lingering bitterness. He saw a "lessening of the competitive spirit" as station leaders came to see the advantages of working together.
There was a recognition that "we needed to get over our past problems," Cass said. "The world is changing dramatically, and public TV had better change if it's going to be a strong resource."
There were no dissenting votes on WLIW's board, but not everyone backed the merger. Five days earlier, WLIW trustee Anne Ellis resigned in objection to the merger, claiming that the marriage was bad for Long Island. A critic of the deal from the very beginning, Ellis said the identity of Channel 21 would be lost if absorbed by the giant WNET, according to Newsday.
Both WLIW and WNET reject Ellis's conclusion, noting that the agreement boosts local primetime programming on the Long Island station and strives to maintain independent services to reach the widest possible audience. Rattner argued that it would run "contrary to the purpose of the merger to turn WLIW into another WNET." Cass said the chief priority for his negotiating team was to preserve WLIW's local identity.
Explicit in the contract are safeguards to prevent the losses that Ellis fears. Programming decisions, for example, will be made by a joint committee with three members from each station. In the event of deadlock, WNET will make the final call.
Channel 13 will also help WLIW pay for three new local shows during primetime, increasing the number of Long Island-based productions from two to five. The stations will also work together to present at least four town hall meetings on Long Island every year.
In addition, eight members of the 26-member WLIW board will join the 55-member EBC board. One will be selected to serve as vice chairman of the licensee. Cass will report to WNET President Bill Baker.
An added boon for viewers will be the coordination of fundraising efforts. The merger was designed to dramatically reduce pledge drives on WLIW and to avoid the awkward evenings when both stations run the same pledge specials.
The contract sets these safeguards in place for five years, after which the stations will redesign the arrangement based on past practices. "This didn't happen overnight," said WLIW Chairman Barry R. Shapiro. "If we didn't get the safeguards we were looking for, we wouldn't have done this deal." Ultimately, Rattner said, the goal was to strengthen each of their services to help public TV fend off its cable competitors.
Talks of merging the two stations are at least a decade old, but the union gained momentum with the CPB-funded study of a joint master control. A grant from the Overlap Market Program three years ago created the opportunity for dialogue between the stations, said David Clark, who oversaw the overlap projects for CPB.
Reps from WNET, WLIW and WNYE shared a $2 million pool of money to seek ways to maximize efficiencies and reduce duplication. Those conversations grew beyond their original scope--putting the joint master control project on hold--to produce the merger.
The overlap fund was created in response to public TV's congressional critics, who said the system was overbuilt and wasteful and that large markets didn't need two, three, even four public TV stations. In response, CPB reduced the grants to overlap stations (roughly 44) and redistributed this money through the overlap fund to encourage cost-saving consolidation.
In a very real sense, said APTS President John Lawson, the merger sends a clear message to Capitol Hill that public TV is seeking creative ways to enter the digital universe. "We're not simply going to digitize our analog infrastructure," he said. "Our goal is to maximize our resources to create local programming and services."
Although criticism about overlap on the Hill waxes and wanes, Lawson said, stations who look for ways to reengineer their operations help public TV makes its case that it can invest digital funds wisely.
Baker believes the merger can serve as a model for other overlap stations. The CPB grant was critical, he said, in opening the path to communication. Strong leadership on the board and healthy participation of station management were the keys to the merger's success.
"Their work typifies public broadcasting really working," Baker said. "The boards spent months of their volunteer time doing the right thing for public TV. This is proof that the system still works."
Merger talks followed an agreement to share WNET's new multistream digital master control. Above: Eulugio Ortiz at the switches. (Photo: Joseph Sinnott, WNET.)
. To Current's home page . Earlier news: Talks included not only WNET and WLIW but also the school board's WNYE.
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