Big Media's Cross to Bear

Newspapers and local TV stations aren't necessarily a match made in heaven, big media companies are learning.

A number of big newspaper outfits bought into the TV business in a bid to reap supposed advertising synergies. But while some operators have succeeded -- E.W. Scripps(SSP) and Belo(BLC) come to mind -- such cases are proving to be the exception, not the rule.

Hard-won experience shows both the paper and the TV station must be market leaders for the owner to enjoy the benefits of cross-ownership. And of course, both properties must be in the same market.

The turmoil at Tribune(TRB) is a case in point. The Chandler family, a 12% shareholder, has demanded a breakup at the Chicago-based company, arguing that the cross-media strategy behind 2000's Tribune/Times Mirror merger has failed.

One industry veteran says the Chandlers are asking the right questions.

"We've always tried to have the No. 1 or No. 2 station in each of our market," says one media company manager at a rival company. "If you have the fifth TV station and a newspaper, the synergies just aren't there." This source says the Chandlers question whether management's plan to sell some assets goes far enough.

Tribune's properties in New York City serve as case in point. The company may have hot properties in L.A. and Chicago, but coupling the fifth or sixth most popular TV station in New York City with a print property like Long Island's Newsday just isn't likely to yield many advertising or cost-saving benefits.

To be fair, Tribune has sold two local TV stations in the last two weeks. One of which, a station in Atlanta, will give Gannett (GCI) its third duopoly TV market. Duopolies are widely acknowledged in the broadcasting industry as being economically advantageous.