The Boston Globe from Boston, Massachusetts • 340

NH 16 THE BOSTON SUNDAY GLOBE APRIL 16, 1989 IF 11 I'm DEAD AIR 1985 Farm Bill forces dairymen out of business Demise of Ch. 21 traced to series of mistakes Shutdown could block second affiliate for state in the future 1i- ing darts at a dart board with a blindfold on." Flatley eventually hired 22 full- time news people and began air-ing four newscasts a day last spring. He also spent $300,000 a year on popular and costly syndi- cated shows such as "Oprah," "Wheel of Fortune" and "Jeopar- ''r dy," which were aired around the 6 p.m. newscast. Ad revenues at Channel 21 did Increase, by 48 percent last year perhaps based on the station's op-' timistic audience projections.

But by the end of last year, many ad- vertisers in the state were cutting their ad budgets as the economy softened. Ratings declined Channel 21's ratings never im-, proved, Flatley said, and ad rev- enue growth dipped into the single, digits this year. Arbitron ratings showed the total number of that tuned into Channel 21 fell' from 202,000 a week in 1988 to 172,000 a week this Feb- ruary. Viewers of the 6 p.m. time slot fell from 20,000 households in, February 1988, when the station still ran "Star Trek," to 2,000 households this February, despite the local news.

After the important February; Arbitron ratings came in, Flatley decided to cut the rioon news and lay off 15 people. But he said he. soon realized the station would i. continue losing money at last i year's rate. The same day that Flatley told Channel 21's staff the would close, he signed a merger 9 agreement with Channel 50.

Based in Derry, WNDS-TV was tip I for auction but could find no buy- ers, beset by the same economic woes as Channel 21. Gerald a Channel 50 co-owner, suggested a merger of the two stations. The only way i IHl fThen Robert Mitchell of Piermont and Roger I Wlbur of Surry announced that they were closing down their dairy farms, it gave fur- tner evidence of the demise of our New I I Hampshire dairy industry. ImI Steve Taylor, state agriculture commissioner, cited some disturbing statistics in addressing the difficulties that are forcing dairy farmers to close up shop. In 1988, there were 3,000 dairy farms that went out of business in the United States, and 2,000 of them were in the eastern region of the country.

According to Taylor, there are now approximately 300 dairy farms in operation in the state and that number will continue to decrease each year for the near future. The major culprit continues to be the 1985 Farm Bill. This bill guarantees dairy farmers a perpetual outlet for their milk at a fixed price. Taylor points out that this policy favors states such as California and Texas that are increasing the size of their dairy operations in order to meet the milk demands of states such as New Hampshire. The demand for milk in New Hampshire far exceeds the supply available from its dairy farmers.

ROBERT K. DOK13ROWSKI CUSiISS California and Texas are thriving on the 1985 Farm Bill since their feed and labor costs are far less than those of New Hampshire. Furthermore, the economies of scale are playing a major role in their continued profitable operations. The average dairy farm in Texas and California ranges from 1,500 head of cattle to 2,500 head, while New Hampshire dairy farmers average 300 head of cattle on their farms. The states of Oregon and Washington are also expanding their dairy operations on a large scale to benefit from the Farm Bill of 1985.

Taylor points out the tremendous advantages that dairy farmers are deriving from the application of computers to their operations. Selection of the least costly grain feed programs, application of the most nutritious feed programs and genetic resource selection for breeding are but a few examples. This computerization has increased the annual milk production per cow to 20,000 pounds of milk per year. Unfortunately, these advantages, although applicable to our New Hampshire dairy farmers, are further competitive advantages for California and Texas in the US marketplace. Since the federal government administers the 1985 Farm Bill on an overall national basis, the average performance favors the results and size operations of the larger states, masking the difficulties encountered by New Hampshire.

Robert Mitchell auctioned 124 head of dairy cattle on April 7 and feels sad in leaving the dairy business on his 250 acres in Piermont. Thirty-seven years of dairy farming represent the major portion of his 57 years. It's been a 365-day job for him each year in the dairy business. According to Mitchell, his labor and grain costs have been far greater than those of farmers in California. Texas, Oregon and Washington.

Year-round grazjng and growing seasons, no freight cpst for grain and the economies of scale are advantages that he cannot compete against. Although milk revenues were $180,000 for 1988, Mitchell was able to take out a mere $4,500 after meeting all applicable expenses. Now Mitchell plans to farm about 50 acres of corn and 100 acres of hay for a few years while exploring the benefits of selling off some of his property as choice residential swites. He still laments the fact that a $15 per hundred weight price might have kept him in the dairy business as opposed to the current $13.68 per hundred weight fixed Globe staff photoBill Ryerson, An idle vehicle sits in Channel 21's parking lot in Concord. and with their character, and it looked like they had a strong commitment and the economic wherewithal to make It go." Flatley and CBS knew the station would lose money for up to four years, but Flatley had hoped the revamped Channel 21 would attract viewers much faster than ago, his consultants affirmed his plans to make Channel 21 a network affiliate, recommending that Flatley go all out to establish a news team to compete with Channel 9.

The consultants, he said, assured him that once Channel 21 was an affiliate, it could not lose. CBS' own research showed an By John Stevens SPECIAL TO THE GLOBE CONCORD On Oct. 19, 1987, the stock market crashed the same day the owner of WNHT-TV (Ch. 21) in Concord first met with CBS officials in New York to discuss an affiliation. Little did they know then the TV station itself would crash months later.

"It came as a big surprise, and embarrassment, when they went off the air," said Scott Michels, CBS' vice president for affiliate relations in a recent interview. "We knew it was going to be tough sledding, but they seemed to have all the right ingredients to make it go." Despite the best market projections money can buy, Channel 21 lost $3 million last year and was going to lose another $3 million this year when owner Thomas Flatley of Milton, pulled the plug two weeks ago. It was only the second time in 10 years that a CBS affiliate in the nation has gone off the air, Michels said. When the station's signal evaporated, so did any hope that New Hampshire could support another network affiliate in the near future, or a news team to compete with WMUR-TV (Ch. 9), an ABC outlet, In Manchester, said Flatley and other media experts.

As Flatley swept up the mess last week, helping 55 people find Jobs, merging operations with WNDS-TV (Ch. 50) in Derry. and pondering Channel 21 's future, he was asked how a man so successful in real estate could fail so miserably at such a high-profile venture. "I've made very few mistakes in my life, but this was a beaut," he said. "I thought I was smart; I thought I could do everything." Flatley agreed with some of the hindsight assessments made by other TV and advertising executives in New Hampshire last week: Channel 21's management was too ambitious and made a series of mistakes that doomed the affiliation and news effort from the start.

"He approached broadcasting as if he was putting up a new hotel; you want it to be glamorous and big, expecting consumers will come to it," said David Zamichow, general manager of Channel 9. "But when viewers didn't check into the hotel, they closed the doors." Early outlook was rosy Flatley, 56, is not used to making such miscalculations. He started his real estate business in 1959, building apartments and branching into bigger development projects along the way. Now the Flatley Co. of Braintree, employs 6,000 people and owns hotels, apartments, shopping centers and health care facilities in New England, New Jersey and Florida.

The company grosses about $400 million a year. Admittedly bored with real estate, Flatley bought Channel 21 for $5 million in 1984. Two years Others will be feeling the pinch Flatley decided it was the only way to salvage some of his losses, rj. What Channel 50 got was Chan- nel 21's residual bash flow, some' sales staff and other and some of Its ad accounts. What Flatley got was a passive Invest-, ment, which may yield him $2 million eventually.

nw Channel 50 will continue operations In its current form and has year's political ads, WMUR's revenues will be up slightly by the end of the fiscal year in June, Zamichow said. If more auto dealerships stop advertising, however, things could get worse, he said. "We're not anywhere near the increases we had for the past five or six years," Zamichow said. WMUR in effect cut its ad rates last fall by not raising them as audience share increased. Some jobs were eliminated through attrition, and the station has also cut back on consultants and has avoided sending its news teams on expensive trips such as last summer's political convention coverage.

Zamichow said he has no plans to cut news staff or close the station's bureaus in Portsmouth and Nashua. -JOHN STEVENS MANCHESTER The loss of WNHT-TV (Ch. 21) in Concord could lead to a net loss of advertising dollars for other television stations In the state, said David Zamichow, general manager of WMUR-TV (Ch. 9). "They had sales people uncovering accounts that would be good for us, too," Zamichow said.

"It's like having two gas stations on the corner; you get more business with both. Now some customers might say there aren't enough TV stations to warrant TV advertising." The Manchester station now has the only nightly local TV news broadcast in the state. Though its ratings have continued to improve, Zamichow said the station has had to impose budget cuts to ride out the current downswing in ad revenues. Excluding money from last price. Roger and Nancy Wilbur of Surry have also decided to call "it quits.

After 22 years of raising dairy cattle, they feel that enough is enough Their two boys, 17 and 20 years of I i age, have been a big help, but everyone feels that it is time to pursue other Interests real estate, travel and other business interests will get the family's full-time attention. They auctioned off their cattle on April 5 and intend to keep the farm while raising hay on a good part of their 300 acres. The 300-head dairy farms are disappearing in New Hampshire thanks to the Farm Act of 1985. At the same time, the and dairy farms in California, Texas, Washington and Oregon are increasing in size as they pick up the slack and ship their excess milk to us. Robert K.

Dombrowski is a retired corporate executive and associate professor, executive In residence, at Keene State College. no pians iu revive us own news staff. And what will happen to Channel 21? Flatley said he plans to sell much of the broadcasting equip--, ment but has not yet decided what' to do with the station. He can renew the Federal Communications Commission license every six; months as long as he proves to the agency he has plans for the sta-, tion. i CBS' Michels said another af-; filiate could open in the state "fairly the prospect': seems unlikely.

Channel 21's viewers are now lost to other sta-tions, Michels said. Mann said that the station's credibility is shot and that the advertising com' munity will not be there with open arms if broadcasting returns, But the real loss, as Zamichow put it, was in human terms. The experienced news people, most brought in from other parts of the, -country and assured last year of Flatlev's loner-term pnmmltmmr'1 it did. Flatley was also buoyed by the limited success of his other station. Fox affiliate WSYT in Syracuse, N.Y.

That station lost money in Its first two years but will break even this year, Flatley said. Projections doubted Some advertising executives, such as Warren Mann, president of Mann Advertising Inc. in Manchester, were leery of Channel 21's projections from the start, though. Mann rarely bought ad affiliate in New Hampshire was viable. Although the state is well-covered by CBS stations in Boston and Portland, Maine, New Hampshire still seemed like a good opportunity given the state's overall population and economic growth in the last decade, Michels said.

"They made an effective presentation," said Michels of the Black Monday meeting with Flat-ley, station manager Ron Pulera and Larry Salters. Flatley's executive vice president. "We were impressed with their corporation were out last week looking for new jobs. News director Matt James, who came from a Nevada station, was pnnosopnicai about Channel time on the station because projections never matched real numbers. "They came to me with an audience projection comparing the CBS audience in Boston with ABC's Boston affiliate audience, making an analogy between what Channel 9 was doing and what they would do," Mann said.

"That kind of prqlection was like throw JUOT3UG zis closing. "I don't want to sound syrupy) pie here," James said. "Maybe Mr. Flnrlpv was nhrar! nf hie tim 000-2011 AND CAREER CHANGING PROFESSIONALS. EXECUTIVES.

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