Honolulu Star-Bulletin from Honolulu, Hawaii • 17

TV stations' pact draws fire tri I 1 i. a. I i A I W.J II If i I ur ON if Oi PHOTOS BY DENNIS ODA DODASTARBULLETIN.COM KHNL and KFVE General Manager John Fink, left, listened yesterday as Paul McTear explained the merger of the TV stations. KGMB General Manager Rick Blangiardi, far right, also was in attendance during the announcement an urn Officials say dwindling revenue prompted a sharing agreement BYERIKAENGLE erikastarbulletin.com The shared-services agreement between KGMB-TV and KHNIVKFVE-TV to keep all three stations operating in the throes of the revenue-crippling recession was met with fear and loathing yesterday. Advertising revenue for Honolulu's five major TV stations, which is projected to plummet to $48 million this year from $68 million in 2006, prompted the stations to find a creative solution to keep operating, officials said at a news conference.

KGMB is owned by Virginia-based MCG Capital Corp. and is its only TV station, while KHNIVKFVE is owned by Alabama-based Raycom Media which owns or operates stations in 36 markets in 18 states. KGMB is a CBS affiliate, while KHNL is an NBC affiliate and KFVE is an independent station that airs University of Hawaii sports. The programming arrangements will remain in place, though the KGMB and KFVE call letters will be swapped by MCG and Raycom in a pending filing with the Federal Communications Commission. KGMB and KHNL will be led by Rick Blangiardi, and John Fink will head KFVE, each as vice president and general manager.

When KGMB, which sold its property at 1534 Kapiolani Blvd. in January 2008, moves in to KHNLKFVE's facility at 420 Waiakamilo Road in two months, the stations' news, marketing, engineering and possibly other departments will be consolidated, leading to layoffs of 68 people, up to 34 percent of the stations' combined work force of 198 full-time employees. Paul McTear, Raycom president and chief executive officer, would not discuss layoff numbers at the news conference and later disputed the figure that was reported by KGMB and other news outlets, saying there was no official layoff tally. KGMB employees received 60-day termination notices yesterday, and those who remain will become Raycom employees. All employees will be interviewed to determine both the faces that viewers will see delivering the news and the employees who will keep their t- -off-camera jobs.

are- KHNL-TV 1962: Signed on as KTRG-TV, licensed to Watumull Broadcasting Co. 1966: Purchased by Ohio-based Friendly Broadcasting Co. and United Broadcasting Co. of Maryland. 1967: Call letters changed to KIKU; Japanese programming increased.

1979: Purchased by Mid-Pacific Television Associates. 1984: Call letters changed to KHNL under new General Manager Rick Blangiardi, former sales manager of KGMB. 1986: Purchased by King Broadcasting Co. of Seattle. 1992: King Broadcasting purchased by Providence Journal Broadcasting Corp.

and Kelso Co. 1993: KHNL began operating KFVE-TV through one of the first local marketing agreements in the U.S. (KFVE first signed on in 1988 under a partnership between Southern Cross and Lee Holmes.) 1997: Texas-based A. H. Belo Corp.

completed the acquisition of Providence Journal Co. 1999: Alabama-based Raycom Media Inc. purchased KHNL and the local marketing agreement with KFVE, of which it completed an acquisition the same year. KGMB will lose 68 positions in the merger. Here, Technical Director Larry Gishitoml sits at the switcher control that controls the playlist on TV.

KGMB-TV 1952: Signed on by the Hawaii Broadcasting System 1960: Purchased by the Honolulu Star-Bulletin 1965: Purchased by local broadcaster Cec Heftel 1977: Purchased by Iowa-based Lee Enterprises Inc. 2000: Purchased by Indiana-based Emmis Communications Corp. 2007: Purchased by Virginia-based MCG Capital Corp. subsidiary HITV Operating Co. Inc.

2009: Entered into a shared-services agreement with KHNLKFVE-TV owner Raycom National based in Alabama. DECREASE IN AIR TRAVEL EASES NEW YORK The International Air Transport Association said worldwide passenger traffic may have stabilized in June, in part because lower fares got more people on planes. Airlines cut fares on many routes to fill planes as fewer people flew because of the weak global economy. Total traffic fell 7.1 percent from a year ago, following a 9.2 percent decline in May. IATA said the decline moderated in both premium and economy travel.

But the front of the plane (first and business class) is still hurting much more than coach. Premium traffic fell 21.3 percent in June from 23.6 percent In May, while economy traffic slipped 5.5 percent after a 7.6 decline in May. some to be simulcast across multiple stations, is troublesome to Media Council Hawaii, formerly the Honolulu Community-Media Council. "It just seems intentionally to avoid the FCC ownership rules, and the consequences are already becoming clear," said President Chris Conybeare. "There are layoffs and less people covering the news, so diversity of opinion is lost." He added, "I think the holders of (broadcast licenses) are supposed to serve the local market and not offshore corporate interests.

There might very well be antitrust implications." Source: KHNL.com stand to gain from this." KHON parent NV Broadcasting LLC, based in Atlanta, is in the process of a Chapter 1 1 bankruptcy proceeding. It is too early to tell how the arrangement will affect the competitive environment, said Mike Rosenberg, president and general manager of KTTV, an ABC affiliate. Its owner, Hearst has declined to enter news-sharing agreements in several mainland markets, because "we want to be an independent voice in our community, and we're strong enough that we don't have to do that." "When the economy rebounds, we'll be in a better position," Rosenberg said. The agreement and the melding of two newsrooms mtooiMllbMMlHHMrfcfc, Source: Honolulu Star-Bulletin possible at all three stations," said McTear, adding that Raycom will honor all contracts. A KHNL reporter, who asked not to be Identified, said a staff meeting confirmed rumors that had been swirling for months.

"For me personally, I'm single," the reporter said. "I can go back home, live with my parents. I'm really worried for people who have made their lives here." The KHNL reporter said fellow employees are worried that KGMB management is calling the shots. going to be one team, but it's going to be a divided team," the reporter said. McTear said in a meeting with the Star-Bulletin that the stations had "done some research." "We're going to base a lot of our (employee retention) decisions based on what people want," McTear said.

The consolidation is "a sign of the times," said Joe McNamara, president and general manager of KHON-TV, Honolulu's Fox affiliate. "It gives us more of an opportunity, with one less voice in the I'm sure we I Star-Bulletin reporter Leila Fujimori contributed to this Associated Press.