Seven people are out of work at the Newsplex television stations, according to the stations’ General Manager Jay Barton, who said the reduction in staff was prompted by an “exponential” increase in the affiliation agreements with the networks that provide the programming, and was achieved through layoffs and attrition.
“The bottom line is the bottom line,” said Barton, who said the 10-year-old network affiliate owned by Atlanta-based Gray Television has been profitable for the past four years, but that the sudden change in those fees forced a tough decision to reduce the stations’ staff from 58 to 51. “The physical reality is that when almost all of your profit disappears overnight, you have to make some adjustments to accommodate,” he said.
Newsplex, a multi-station affiliate that airs three stations from its headquarters at the Ix property downtown—ABC16, CBS19, and FOX27—went live on August 14, 2004, bringing an end to NBC29’s three-decade monopoly of local television airwaves. While Newsplex began as and remains the underdog in the area television news market, it has always placed a strong focus on news, airing multiple morning, noon, and evening broadcasts on CBS19, which creates the newscasts, and simulcasting some of that programming on ABC16. Other than the axing of an underperforming 7pm broadcast, Barton said viewers won’t notice any changes in the news coverage, and he stressed that while the recent cuts will ultimately reduce the 28-person newsroom staff by three, none of those who lost their jobs—two anchors, the news director, and the assistant news director—created content. Barton, who is temporarily overseeing news production, said the station is hiring to fill a newly defined news director position, and he offered praise for the work done by the “hard-working” former employees.
The increase in fees that networks charge affiliates is hitting stations across the country, according to Barton, who declined to offer specifics on Newsplex’s network contracts, citing a confidentiality clause, but explained that affiliates like Newsplex and NBC29 pay the national networks a licensing fee for the right to air content. In turn, the affiliates charge cable and satellite providers a fee to carry the programming. In Charlottesville, those providers are Comcast, Dish, and DirecTV, the latter of which just began carrying local stations on September 17. Barton said in the past, the networks Newsplex contracts with charged a percentage of the fees the affiliates collected from the providers, an arrangement that allowed the affiliates to make a profit. A sudden change in the way some networks calculate their fees—from a percentage to a flat fee—proved a staggering financial blow.
NBC29 General Manager Harold Wright declined to offer details on his station’s affiliate agreement with NBC but described such fees as “substantial.” NBC29 has no plans to cut any of its 91 staff members, 41 of whom work in the news department, Wright said, adding that he sees the competition provided by Newsplex as positive.
“There’s no doubt NBC29 is a better station now than it was 10 years ago,” he said.
Barton said he and the remaining Newsplex staff remain focused on local news and described the staff reduction as a proactive approach to keeping a healthy bottom line.
“There’s a term for businesses that spend more than they make,” he said. “It’s ‘bankrupt.’ We’re not that, and we’ll never be that.”