The Honolulu Advertiser from Honolulu, Hawaii • 2

A2 Wednesday, August 19, 2009 The Honolulu Advertiser 'Shocked' journalists worried about jobs Walter Cronkite of the Pacific. Its venerable headquarters in a cramped lot on Kapi'olani Boulevard is the former home of live audience broadcasts of the Checkers Pogo children's show, 50th State Wrestling and the "Island Music, Island Hearts" Hawaiian music series. KHNL is the upstart "fourth" news station which didn't even come into existence until 1995, promising a new approach to TV news delivery that featured snazzy graphics and herky-jerky camera movements. KHNL and K5 earlier this year moved from their original location at the corner of Sand Island Road and Nimitz Highway into a new, larger facility on Waiakamilo Road. Reach Gordon Y.K.

Pang at gpanghonoluluadver tiser.com or 525-8082. John Hart said he's not surprised by the merger. "Hawai'i, for its size, is an extremely saturated media market," Hart said. "There simply isn't enough money to go around. If you look at it that way, if surprising we've had so many independent media outlets for so long." University of Hawai'i media professor Tom Brislin said he has mixed feelings about the merger.

The merger allows all three stations to remain viable, allowing viewers a greater variety of choices. "But they're going to lose a news choice," said Brislin, a former Honolulu Advertiser city editor. The merger of KGMB, KHNL and K5 brings together a mixture of the old and the new. KGMB was the station of the late iconic news anchor Bob Sevey, often called the and in some cases themselves." Dicus, a former United Press International reporter who has seen his share of downsizing news staffs, said "some kind of consolidation was inevitable." Hawai'L he said, has the market size of Dayton, Ohio. "It's not big enough to support the number of TV stations it has, or for that matter, the number of radio stations and newspapers." Executives from the two stations said in a news release that they expected the joint operations will result in a larger news staff with greater resources to cover the news.

Several KHNL news employees contacted declined to comment, stating they don't want to hurt their chances of being retained. Hawai'i Pacific University communication professor Capital Corp. and KHNL and K5 owner Raycom Media, the merged staffs will operate out of the new Wai-akamilo Road headquarters of the NBC affiliate KHNL andK5. About 68 people may be cut, or more than a third of the combined staff. There are about 55 people in the KGMB newsroom and 45 KHNL and K5 news staff.

"The big concern right now is which people are going to lose their jobs, who's going to be retained, that's the huge question," Hunter said. "And we're not quite sure how those decisions are going to be made. Hopefully, they're going to keep the best people, but with the economy being the main reason this is happening in the first place, who knows?" A 27-year KGMB veteran, Hunter said he has been working four days a week recently and has been "thinking of cutting back" further. He turns 63 next month and doubts he'll be around to join colleagues in their move to KalihL Members of the KGMB staff were each issued 60-day "warning" letters informing them they would be terminated on Oct. 18.

Employees at both stations were told interviews will be conducted in the next few weeks to determine who will be kept KGMB staffers may have a slight advantage. Chris Archer, the station's general manager of about three years, will retain that title under the new jointly operated news staff. KGMB business reporter Howard Dicus said "it's a fair assumption that everybody will find somebody leaving that they're sorry to see go Staffs must reapply for positions under joint operations BY GORDON Y.K. PANG Advertiser Staff Writer The careers of reporters, videographers and producers at the KGMB9, KHNL and K5 television stations were cast into doubt when it was announced that the two newsrooms would merge in the coming months. "It's really sad, I mean people are just sort of in shock," said veteran KGMB reportervideographer Terry Hunter.

"It's hard to get your mind around the fact that so many people will be gone and that the ones that are left are going to be moving to a whole new different place." Under the agreement between KGMB owner MCG Merger A '1 it 4 f. 4 KEY FACTS KGMB9, KHNL and K5 will merge operations, but continue as separate channels. KGMB continues to broadcast CBS programs. KHNL continues to broadcast NBC programs. K5 continues to broadcast UH games.

News programs may be simulcast. 68 staffers, or more than a third, may be cut. TV ad revenue in Hawai'i is down by about $20 million, or 30 percent, in last three years. Ownership doesn't change, but KHNL owner Raycom Media takes the leading role. KGMB9 President Rick Blangiardi will run KGMB9 and KHNL.

RICHARD AMBO The Honolulu Advertiser Raycom Media President Paul McTear, center, talks about the shared services agreement between the three stations. Looking on are KHNL and K5 General Manager John Fink, left, and KGMB General Manager Rick Blangiardi. -rr. ih-t-hiw ni -lUJIi'lf i i J- ll CONTINUED FROM A1 "This market cannot support five traditionally separated television stations, all with duplicated costs," said Paul McTear, president and CEO of Alabama-based Raycom Media, owner of KHNL andK5. Media watchdogs said the arrangement could mean the loss of separate voices in local news coverage.

"Democracy requires diversity of opinion and robust communication of information," said Chris Conybeare, president of the Honolulu Community Media Council. The merger "may help their bottom line, but will result in layoffs, diminish diversity, and rob Hawai'i's public of the best use of our airwaves." McTear said the merger, which is to be completed by November, will not require approval from the Federal Communications Commission because ownership of the stations and their FCC licenses won't change hands. FCC rules prohibit one company from owning more than one television station in a single market. The Media Council said the agreement is an attempt to skirt FCC rules. "I think this looks like a shell game," Conybeare said.

McTear said the merger is needed to prevent one or two of the stations from going under. He said annual television ad revenue is down by about $20 million, or about 30 percent, from three years ago. "Rather than experiencing the loss of one, or possibly two stations in Hawai'i, we intend to preserve three stations that provide important and valuable local, national and international programming to viewers in Hawai'i," McTear said. McTear's company, Raycom, has similar arrangements with TV stations in Wilmington, and Columbia, Ga. KGMB WILL MOVE McTear announced the merger at a news conference v.

it' -1 Tlrm -u, trik i.r'i uJz Any BRUCE ASATO Trie Honolulu Advertiser BRUCE ASATO The Honolulu Advertiser I I This building houses the new studios of KHNL and K5 on KHNL and K5 Technical Director Larry Gishitomi works in Waiakamilo Road in Kalihi. It soon will house KGMB9 also. the stations' broadcast operation center. agement interviews staffers for positions in the combined newsrooms, he said. Gerald Kato, journalism professor at the University of Hawai'i-Manoa, said the deal essentially creates a "tri-opoly" that gives the station owners a lot of leverage when it comes to setting advertising rates and controlling the scheduling of television prograinming.

Kato and the Media Council's Conybeare noted that KGMB and KHON then owned by Emmis Communications Corp. of Indianapolis operated under a duopoly arrangement for seven years with a waiver issued by the FCC. That deal allowed the stations to share production costs and save money but also resulted in staff reductions and diminished the diversity of voices in the local news market they said. "You might have more news," Kato said, "But it might be more of the same news." Reach Rick Daysog at 525-8064 or rdaysoghonolulu advertiser.com. the nation's largest broadcasters and owns and operates 46 television stations in 36 markets.

MCG Capital, a private equity fund, bought KGMB in 68 LAYOFFS LIKELY KGMB reported on its Web site yesterday morning that of the 198 employees now at all three stations, an estimated B0 would become part of the combined operations. McTear said the 68 layoffs is based on projections and is just one of several scenarios that are being examined under the new agreement The actual layoff count won't be determined until after man- in Honolulu yesterday. KGMB's owner, MCG Capital Corp. of Virginia, did not send a Mainland executive to the news conference but was represented by Rick Blangiardi, president and general manager of KGMB. In the deal, the intellectual properties held by KGMB, including its CBS network affiliation and revenues derived from the network affiliation, will go to Raycom.

MCG will get revenues from K5, including revenues from broadcasting UH athletic events. MCG's revenue stream will likely be reduced under the arrangement, but its costs also will go dowa KGMB will move from its Kapi'olani Boulevard offices to KHNL's facilities in KalihL MCG sold the Kapi'olani property last year to a local investment group for $12.4 million and had occupied the building under a lease-back arrangement In addition to the merged news operations, the companies will share the costs for KHNL's facilities in Kalihi, as well as engineering, production and marketing costs. The stations will have separate sales teams. Blangiardi will head KHNL and KGMB. John Fink, president and general manager of KHNL and K5, will head K5.

CBS programs such as "60 Minutes," "CSI" and "Late Night with David Let- terman" will remain on KGMB while NBC shows including "The Late Show" and "Saturday Night Live" will remain on KHNL Yesterday's announcement wasn't a surprise to workers at the stations, who have heard rumors about it for several months. But several expressed worries about their job security at time when the local economy has lost more than 30,000 jobs and the statewide unemployment rate has soared to 7.4 percent. KGMB's employees will be terminated and they will have to reapply for positions at the combined operations. Raycom Media is one of Changes CONTINUED FROM A1 Kl Vs corporate parent, Hearst Television Inc, has resisted the idea of video-sharing agreements in Honolulu or in any of its other markets, Rosenberg said, and has no plans to merge broadcasts with KHON. "Despite the call to share videos and all of these other things, we have decided we want to remain an independent voice," Rosenberg said.

But, in perhaps a sign of the economic times for television news, Rosenberg took an unusually aggressive tone toward his competitors at KGMB, KHNL and K5: "We want to dominate news and information in Hawai'L" Rosenberg said, "and if this gives us an opportunity, you can be sure we'll be mobile, agile and hostile." Every local news show has loyal viewers who will be dislocated." Yesterday's announcement represents the flip side of the heady days of 1995, when star anchors and reporters found themselves in bidding wars between Honolulu's four television news stations. With the merger announced yesterday, laid-off workers now will be trying to find jobs amid a dwindling number of TV newsrooms. "Now it's the evil twin," said Mike Rosenberg, KTrVs president and general manager. KHON might hire a few of the 68 laid-off news employees from KGMB and KHNL or at least those "with a different skill set," said KHON president Joe McNa-mara. "There will be more talent for people to access, no doubt about it" The changes at KGMB and KHNL could also end up backfiring and costing them viewers, McNa-mara said.

No change for K5 broadcast of games Programming of University of Hawai'i athletics on K5 is not expected to be affected by the merger, at least for the upcoming season. "We do not anticipate any changes in the near term, for at least the upcoming year, from how things have been done in the past with K5 and UH athletics," UH athletic director Jim Donovan said. K5 televises more than 100 UH athletic events each season, including football, men's and women's volleyball, men's and women's basketball, baseball and soft-ball Stanley Lee The crews at competitors KITV and KHON will have particular interest in how the combined KGMBKHNLK5 news show looks, and they won't be surprised to see technical glitches and other early mistakes. "We'll be sitting back, watching the fireworks," McNamara said. "It should be very interesting." The changes at KGMB and KHNL also could lead to more cost-cutting or "efficiencies" at KHON, McNamara'said.

"Where they can send one crew for three stations, it may become too competitive and might force us to do other things," he said. "I'd be blind if I didn't think they would get an advantage we might not have when it comes to operational costs." McNamara said he has no plans for layoffs and is looking to hire someone for the station's Web site. "But we'll be looking to see if there are any other efficiencies," he said. gle, joint news department, with some of the news programming simulcast on KHNL and KGMB. It will be the biggest shake-up in Island broadcast news since 1995, when dominant KHON lost its NBC affiliation to KHNL, and KHON became a Fox statioa KHNL, which had been the Fox affiliate at the time, then jumped in with its own news show giving Island audiences four distinct news stations in addition to two daily newspapers.

"Hawai'i's been fortunate to have a market that competitive," said Bob Calo, co-director of the television program at the University of California-Berkeley's Graduate School of Journalism. "But this is a sea change. Reach Dan Nakaso at dnakasohonoluluadvertiser or 525-8085..