INFORMATION AND INSIGHT FOR MEDIA FINANCE PROFESSIONALS
JANUARY/FEBRUARY 2022
People to Watch in 2022 THE FINANCIAL MANAGER
ALSO INSIDE
FUTURE OF BROADCAST STATIONS THOSE ‘FAKING IT’ FEELINGS BECOMING A TRUSTED ADVISOR
THE MEDIA
EQUALIZER
One-time comic Byron Allen is dead serious about diversity and changing the balance of power.
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INSIDE THIS ISSUE
The Financial Manager
FEATURES
The Official Publication of the Media Financial Management Association is published six times annually under the supervision of:
10 Upward Momentum
JANET STILSON, Editor TFMeditor@MediaFinance.org
Despite some speed bumps, radio and TV broadcast stations are expected to show increases in revenue moving ahead.
BILL KNIGHT, Art Director wknight5@nyc.rr.com
BY JUSTIN NIELSON
Limited commercial messages of interest to our membership and readers will be accepted. Rates and specifications on request to:
SPECIAL REPORT:
People to Watch
MEDIA FINANCIAL MANAGEMENT ASSOCIATION
in 2022
550 W. Frontage Road, Ste. 3600 Northfield, IL 60093 telephone (847) 716-7000 facsimile (847) 716-7004 and at www.mediafinance.org.
17 Realizing Dreams With Teams A look at five people shifting media companies into much higher levels of success today and tomorrow.
Subscription $69.00 per year. Copyright, 2022. All rights reserved.
BY JANET STILSON
Intro.................................................. 17 Heather Briggs...........................18 Veronica Landers......................19 Jason Kober............................... 20 Alex Mejia......................................21 Kimberly Mills............................22
What is MFM?
The Media Financial Management Association is a not-for-profit corporation organized in 1961. The MFM membership includes more than 1,200 of media’s top financial, IT and human resource personnel, station general managers and other media management personnel as well as associate members in the allied fields of auditing, tax, software, sales and the law. MFM sponsors webinars, seminars and conferences, publishes special studies and surveys, files position papers with federal agencies on behalf of its members and its industry, cooperates with other media industry groups and helps its members grow and learn both personally and professionally. MFM also is involved in media industry credit matters through its wholly-owned subsidiary, BCCA, which provides members with a Credit Inquiry Service, an annual Conference, directory of Credit Personnel, credit reports accessed via bccacredit.com online credit search, Commercial Credit Reports and a credit and collections handbook. The information and recommendations contained in this publication have been compiled from sources believed reliable. However, no warranty, guarantee or representation is made by the Association as to the absolute correctness or sufficiency of any representation contained in this publication, and statements contained in advertising and articles submitted to the Association are the responsibility of the authors, not the Association or its officers, directors, staff or members. Moreover, this publication is provided with the understanding that the Association is not engaged in rendering professional services through its distribution. The views and opinions expressed are those of the author, and not necessarily the Association.
24 Rebel With a Very Big Cause Byron Allen has ambitions the size of America. His acquisitions and lawsuits all add up to a burning desire for racial justice. And he’s not done yet. BY KRISTA VAN LEWEN & JANET STILSON
DEPARTMENTS 4 From the Chairman Rise and Shine 6 Dear Expert Trademark Pitfalls 7 Human Factor Imposter Syndrome
8 Credit Where Due
New ADA Puzzle 9 Board of Directors With Association News 30 Last Word What Bosses Want The Financial Manager • January/February 2022 3
FROM THE CHAIR
Rise and Shine
Despite our troubles over the last two years, perseverance and dynamic leadership provide reasons for optimism.
I
hear myself repeating this comment every time the calendar turns over: “How did last year pass so quickly?” We’re now looking back at nearly two years of unpredictability, brought on primarily by the pandemic and other factors as well. Yet the media industry continues to soldier on. And there is much to feel optimistic about, which we learn from experts who have shared their research, knowledge and advice on how to navigate the coming 12 months during industry events, and in this magazine. I’m thrilled TFM was granted an interview with Allen Media Group CEO Byron Allen, who at the time of this writing was awaiting a decision from the broadcast
audience growth in 2022. TV broadcasters will benefit from legalized sports betting ads and midterm political ad spending. While radio is expected to remain impacted by the decrease in drive-time audiences, it will see ad revenues increase enough to offset the steep ad decline of 2020, at least partially. While radio audience growth will slow, it will still be positive. In his “Credit Where Due” column, Robin Szabo dissects the new Current Expected Credit Loss model that should be adopted by those in credit and collections trying to determine the best way to calculate Allowance for Doubtful Accounts. In this continued climate of economic uncertainty, his advice is solid, as always.
The People to Watch in 2022 describe what it takes to excel at their jobs via leading, mentoring and building their teams. behemoth TEGNA on his company’s offer to purchase its assets for $10 billion. In this fascinating cover story, TFM editor Janet Stilson and contributor Krista Van Lewen asked Allen to address his transition from stand-up comedian to the owner of a growing collection of media properties. He shared his passion for ensuring Black America is represented both in front of the camera and through media ownership. Allen doesn’t shy from any question put to him, and you’ll get a clear sense of what drives him when you read this piece. I’m equally pleased to highlight our “People to Watch in 2022” special report. This series profiles a carefully selected group of media industry financial professionals who describe what it takes to excel at their jobs via leading, mentoring and building their teams – all while challenging themselves to reach higher levels of success. I’m struck by their determination and motivation – as well as the inspiration they find from activities outside of the office. In a separate feature story, analyst Justin Nielsen of Kagan provides extensive data that indicate both television and radio should feel confident about advertising and
Leadership consultant Sarah Levitt offers words of wisdom to newly promoted media executives in her “Human Factor” piece, “The Imposter Syndrome.” She lays out tactics on how to prevail when someone feels fearful that they aren’t fully qualified. Hank Price, a TV station general manager turned media consultant, provides particulars on ways financial managers can – and should – become trusted advisors to their department head or CEO in his “Last Word” column. And our “Dear Expert” column author, Ronnie Raju, warns of potential dangers when companies attempt to trademark generic terms and gain a leg up on competitors. She prescribes a very specific set of rules to follow. My hope for the new year is that media financial leaders throughout the industry will embrace ongoing challenges and will lean on each other – and on MFM – for advice and support.
4 The Financial Manager • January/February 2022
Dave Bochenek is Chair of MFM/BCCA’s Board of Directors; dbochenek@sbgtv.com.
EDITORIAL ADVISORY BOARD SALLY BUCKMAN Member Lerman Senter PLLC GREG LECHOWSKI Director of Finance Bonneville Media Phoenix NAT McCALL Senior Manager, U.S. Credit & Collections Discovery, Inc.
CAL MOSTELLA Vice President, Treasurer WarnerMedia CHRISTINE PECHER Director of Marketing Marketron GARY REX Director of Finance BYU Broadcasting
JOHN SANDERS Principal Bond & Pecaro MEREDITH SENTER Member Lerman Senter PLLC C. ROBIN SZABO President Szabo Associates JAMIE GRANDE MFM/BCCA Staff Liaison
CONTRIBUTORS DAVID BOCHENEK Sinclair Broadcast Group SARAH LEVITT JUSTIN NIELSON Kagan HANK PRICE RONNIE RAJU Wilkinson Barker Knauer LLP C. ROBIN SZABO Szabo Associates Inc. KRISTA VAN LEWEN MFM & BCCA Public Relations
CONGRATULATIONS TO HEATHER J. BRIGGS We knew from the start you’d be in the running! Kudos for being one of the TFM People to Watch.
DEAR EXPERT
Flawed or Fabulous?
One-upping rivals by trademarking words commonly used in media may seem brilliant. But legal eagle RONNIE RAJU explains the pitfalls.
Dear Expert, The recent U.S. Supreme Court decision that changed trademark laws has me wondering if I can register a generic mark like FMradiostation.com. I thought marks that consist of a generic term plus a top-level domain, when used in connection with goods or services (such as mattress.com for stores that sell bedding) could not be protected and federally registered. Scheming in Schenectady, N.Y.
and the geographic scope of the survey. Conducting trademark surveys is an art in itself and requires expertise in formulating the appropriate questions and the process of targeting the right population of respondents. You can expect to pay upwards of $35,000 for an effective trademark survey. Booking.com was able to provide evidence that it started providing online Dear Schenectady, that a TLD such as .com, .biz, .org, etc., booking services to U.S. customers at least The short answer is that you have a chance could distinguish a source because the re- as early as 1996 and that it was ranked to obtain a federal registration for a generic sulting combination, generic + TLD, leads first in consumer satisfaction among interm plus a top-level domain (generic + TLD) consumers to a specific website, and URL dependent travel websites in a J.D. Power if you are using it as a trademark. However, addresses can be owned by only one entity survey. Perhaps the most powerful piece you will have to be able to provide plenty of at a time. of evidence was an extensive trademark evidence that consumers recognize survey in which 74.8% of relevant FMradiostation.com as a trademark. consumers considered booking.com Conducting trademark surveys is an In the case USPTO v. Booking.com, to be a service emanating from a sinart in itself and requires expertise in B.V., the Supreme Court upended gle company as opposed to a generic formulating the appropriate questions what was once a bright-line rule that service. a mark consisting of a combination If you want to be able to register and the process. of a generic term and a top-level doa generic term + TLD mark, make main like “.com” is automatically generic. The key is that a generic term + a TLD sure you are following the same rules that As background, you have to understand mark can be protected, but only if the owner you should apply to all of your trademarks: that generic terms cannot function as trade- can show that consumers associate the mark 1. Make sure the generic + TLD mark is marks and are not eligible for federal reg- with a particular source. In other words, the set off from the rest of the text by using a istration because granting a registration for owner has to show that the mark has ac- different font or unique stylization. a trademark means that competitors cannot quired distinctiveness. The type of evidence 2. Always use the generic + TLD as an use those terms. Terms that are necessary that may be submitted to support a claim of adjective, never as a noun or a verb. to accurately identify the type of goods or acquired distinctiveness includes consumer 3. Use a TM next to the generic + TLD services being provided cannot be registered, surveys, consumer declarations, advertising so consumers know you view it as a tradeas this would unfairly hamper competition. expenditures and evidence that shows the mark. For example, if a company was able to regis- duration, extent and nature of the appli- 4. Keep good records of advertising exter a generic mark such as “TV station” for cant’s use of the proposed mark, including penditures and estimates of how many consumers are exposed to the advertising broadcasting services, it could prevent oth- whether the use is exclusive. ers from using TV station when advertising Regarding consumer surveys in particular, and your social media campaigns. their own broadcasting services. the Supreme Court warned that they must 5. Consider having In the Booking.com case, the Supreme be properly designed and interpreted to en- a trademark survey Court ruled that booking.com is eligible sure that they are an accurate and reliable done to support any for trademark registration even though representation of consumer perception of application for trade“booking” is a generic term for online hotel a proposed mark. Therefore, an applicant mark registration of reservation services. The Court indicated submitting a survey must carefully frame the generic + TLD its questions and provide a report that docu- mark. Do you have a professional puzzle that ments how the survey was conducted. There MFM and BCCA experts might be able to should be information about how the survey answer? We’ll mine the contact base and find Ronnie Raju is a partner at Wilkinson Barker questions were developed; the number of con- Knauer, LLP. She can be reached at (202) 383-3370 the right person to answer your question. Just contact TFM editor Janet Stilson at or rraju@wbklaw.com. sumers contacted; the number of respondents TFMeditor@mediafinance.org.
6 The Financial Manager • January/February 2022
HUMAN FACTOR
The Imposter Syndrome
A very specific thought process can relieve the sensation that you’re faking it when stepping into a higher position. BY SARAH LEVITT
Y
ou might have a rather loud train running through your head that sounds like: “Do-I-have-what-ittakes-to-do-this? Did-they-makea-mistake-in-choosing-me? What-if-I’m-revealed-to-not-be-who-they-think-I-am?” Rest assured you are not alone. Very seasoned leaders tell me that they wrestle with self-confidence. They wonder if they’re up to the job; are afraid they’ll be revealed; are intimidated by the weight and responsibility of what’s on their shoulders; and are concerned that others see them as having all the answers. Being promoted into larger, more highly visible roles can set this train to high speed. A few ideas: First, remember that very bright and capable people put you where you are. You wouldn’t be there unless you were up to it. You might wonder if an error has been made to land you in your role, but there was deliberation that went into it. That in and of itself can provide some reassurance. Second, growth requires stretching. When we risk, we grow. It’s an equation. Despite the fear. This also means that we’re getting better along the way, even when our learning is the most difficult of all – what I’ve come to call our Stephen Colbert moments – where the only way to get better is by doing it and iterating, publicly. (I’ll never forget the time I was walking across a stage to deliver a keynote to many hundreds of people at a corporate event, and the heel of one of my Manolos went through the floor.) The only way we get better is to continually try things that we’re not sure we can accomplish. If we didn’t, we’d stagnate. So, keep in mind that as frightening as greater leadership responsibility is, it’s also an opportunity that you’ve been given. Third, know your values, what you stand for, what matters. Align with all that. Not only will it serve as a rudder through difficult waters, but you won’t feel as if you’re trying to be someone you’re not. Your role
may be different, but you are you. One of the most common misconceptions about leading in a bigger role is that you have to change who you are. Not at all. You don’t
One of the most common misconceptions about leading in a bigger role is that you have to change who you are. Not at all. have to imitate anyone; you simply have to be the best version of yourself. Fourth, find a trusted space where you can get input from others who have walked your path and continue to walk it. Part of what I consistently see with clients is that they think they are alone in feeling like an imposter. Hearing from colleagues and peers that they (no matter their position and experience), sometimes question whether they belong where they’ve landed can help to dispel the notion that you’re alone in feeling like you’re going to be found out. One of the great surprises for many leaders is
discovering that their colleagues grapple with the same concerns that they do. Fifth, get tactical and practical. Whether you’re preparing for a media interview, a board presentation or a high-stakes, allhands meeting, don’t wing it. Get coaching from someone who is experienced and knowledgeable about your goals and can craft specific, customized strategies tailored for you. For a presentation, that might mean slowing down your rate of speech (when we get nervous, we tend to talk faster); engaging the audience more often; grounding yourself with somatic exercises; or being aware of what to do during the first 10 minutes. For a new leadership role, it might involve evaluating everything from influence and key stakeholder buy-in, to setting strategic priorities and building a rock star senior leadership team. The goal should be to hit the ground running; lead your initiatives with confidence; and accelerate your learning in that first, crucial year to avoid common pitfalls and achieve your objectives with greater ease. I tell clients that the key objective, when they’re under the bright spotlight, is to be confident, comfortable, connected and capable. That combination is hard to beat. Lastly, leverage your fear into self-mastery. I haven’t met an exemplary leader yet who isn’t still learning, still stretching, still risking, still venturing into unchartered waters, still asking questions, still scared somet i me s, still unsure they can pull it off. That’s what ma kes them exemplary. Be that kind of leader, with pride and humility. And forget feeling like an imposter. Sarah Levitt works with CEOs and senior executives to elevate leadership performance and drive business outcomes. She is the author of Magnificent Leadership and is a keynote speaker. She can be reached at www.sarah-levitt.com
The Financial Manager • January/February 2022 7
CREDIT WHERE DUE
Solving the New ADA Puzzle
Calculating credit loss in a way that complies with recent regulations may seem daunting, unless you take a step-by-step approach. BY C. ROBIN SZABO
Y
ou may find yourself scratching factors and a reasonable forecast of future determine which ones have similar risk charyour head these days over how economic conditions. These components, acteristics. Pool similar customers together to calculate your company’s Al- when combined, will yield a more accurate and assign a loss percentage for each pool. lowance for Doubtful Accounts estimate of credit loss. It’s in use now by Se- This is where working closely with salespeo(ADA). It’s an estimate of the amount of curities and Exchange Commission (SEC) ple is vital as they pursue additional revenue accounts receivable that will not be paid by filers and will be for non-SEC filers by 2023. opportunities by either expanding existing customers and is used to improve the accuraWith the new CECL model, credit man- advertiser segments or exploring new ones. cy of accrual financial statements and aid in agers will need to create additional data Since you are modeling for the future, the forecasting of cash collections. Account- points and may need the help of other de- staying abreast of trends in your customer ing departments calculate the ADA, and the partments within their organization. Work- base and the industries they belong to is task is usually assigned to the credit extremely important. Keep an esmanager, since they are most fapecially close watch on those cusmiliar with the customers in their tomers that represent the biggest accounts receivable portfolio. dollars or are a high concentration When ADA is recorded at the risk. time of the credit sale, it’s listed If you have credit-scoring modin the current asset section of the els in place or subscribe to an orbalance sheet below cash and is ganization that provides one (like generally presented like this: “AcBCCA), this can be a big benefit. counts receivable, net of allowAs your customer base evolves, ance of $66,324, $5,197,456.” these tools supply quick decisionIn the past, many companies making information. relied solely on historical bad After completing your risk analThis new modeling is not an exact science; it will ysis, debt data using an incurred loss factor in current economic model to calculate their ADA. take time to implement and require tweaking conditions locally, nationally and This method, while widely used before a truly functional template is in place. globally. Take into consideration a for many years, had its shortcomgrowing economy versus a slowing ings. It did not allow for the probability of ing more closely with sales departments will economy; qualitative factors; severe weather; suspected future losses to be included in the be a must to track new types of customers. supply shortages; pandemics; reasonable allowance, since those losses had not yet If the data needed is not readily available, forecasts of future economic conditions; inbeen realized. managers may need to seek enhancements flation; interest rates; and employment. ComThis has resulted in issues for users of from IT. This new modeling is not an exact bining these new data points and applying the financial information who need deci- science; it will take time to implement and their influences to historical percentages sion-useful information about the credit require tweaking before a truly functional provides an adjusted overall percentage risk inherent with financial assets measured template is in place. So, begin now before that can be used to calculate the CECL alat amortized cost, which includes trade deadlines approach. lowance for trade accounts receivable. accounts receivable. The global financial Where to start? With a little of the old CECL implementacrisis magnified the shortcomings, result- and plenty of the new. First the old: credit tion may seem daunting in the Financial Accounting Standards managers historically have used previous loss ing, but by taking a Board (FASB) issuing new guidance in 2016 data from their aging buckets to calculate an step-by-step planned through ASC 326, “Measurement of Credit overall percentage for the incurred loss model approach, t his new Losses on Financial Instruments,” and the ADA. This historical information will be modeling will provide introduction of the Current Expected Credit part of the new model, but with adjustments. more accurate and deciLoss (CECL) model. Now the new: credit managers are re- sion-useful information. This model calculates the credit loss over quired to perform a risk analysis of their C. Robin Szabo is president of Szabo Associates the life of the receivable and has several accounts receivable portfolio. This involves Inc., media collection professionals, in weighted components: historical loss data, taking a deeper look at their current, past Atlanta, GA. He can be contacted at robin@szabo.com or (404) 266-2464. current economic conditions, qualitative and future portfolio of credit customers to
8 The Financial Manager • January/February 2022
ASSOCIATION NEWS UPCOMING EVENTS
MFM
BOARD OF DIRECTORS CHAIRMAN DAVID BOCHENEK Sinclair Broadcast Group VICE CHAIRMAN/
2022 CONFERENCE CHAIR DAVE BESTLER Hubbard Radio
SECRETARY/ CONFERENCE CO-CHAIR LORI LOCKE Discovery Inc. TREASURER MARIE TEDESCO Beasley Broadcast Group IMMEDIATE PAST CHAIRMAN MELISSA MITCHELL Bonneville International
MFM/BCCA DIRECTORS JENNA HARDY Gearbox Entertainment Software CAL MOSTELLA WarnerMedia CHRISTINE OLIVER Deloitte & Touche KIM PARKER Graham Media Group
JENNIFER HURLEY The Washington Post PAUL KELLY KTRK-TV/ABC/Disney DAN McGUIRE KPMG LORI BROCK Gray Media Group MATT DEPREY C-SPAN
PAUL RAHMLOW Midwest Communications
JOE HANRATTY WarnerMedia
DEE STEVENSON Gray Media Group
STANLEY HERRIOTT Hearst Television
ELIZABETH BRAMOWSKI Audacy
DOUG LYONS The E.W. Scripps Co.
CLIFFORD EJIKEME A+E Networks SEAN HETZLER TEGNA
KEVIN SCHMITZ Dotdash Meredith BCCA Board Member Rep ED IENNER Dotdash Meredith
CFO Summit
March 3-4 Pelican Grand Beach Resort Ft. Lauderdale, Fla.
Attendance is limited to CFOs and other highranking finance leaders.
The burning issues that CFOs and other toplevel financial executives face will be discussed during this annual signature event. The focus is on real solutions to real problems, including pre- and post-pandemic issues and rapid changes in the industry. Attendees can share thoughts and feelings openly and connect with like-minded people. The Summit’s co-chairs are Andre Alexander, CFO of GBH; Ginny Hernandez, CFO of Trilith Studios; and Glenn Krieg, CFO of Morgan Murphy Media.
Media Finance Focus 2022 May 23-25 JW Marriott on Water Street Tampa, Fla.
It’s never too early to mark your calendar for MFM and BCCA’s annual conference. Get ready for over 80 educational sessions; lots of networking opportunities; live entertainment; and CPE credits galore.
Visit www.mediafinance.org for details on both events.
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The Financial Manager • January/February 2022 9
REVENUE ROLLS AHEAD
A
DELUGE OF ADS FROM EXPAND-
ed legalized sports betting and the return of midterm political ad spending in 2022 are expected to aid U.S. TV broadcasters’ rebound from the pandemic. At the same time, radio broadcasters are likely to bounce back more slowly. They’re impacted by a reliance on ad categories that are still affected by the pandemic as well as declines in drive-time listening. At the same time, radio’s ever-deeper move into streaming is giving the media sector additional luster. Those are some topline findings from the firm I represent, S&P Global Market Intelligence’s Kagan research group. It bases its findings on data from a variety of sources, including proprietary surveys and analyst estimates, publicly listed company reports and third-party providers. For TV stations, spending in the 2022 midterm elections is expected to reach $3.25 billion, up 7% from the last midterm election in 2018. It’s likely to be spurred by the 50/50 split between Democrats and Republicans in
the U.S. Senate – along with the Republicans’ efforts to flip the House Democratic majority. Political advertising will be spent most heavily in swing-state markets – such as Arizona, Florida, Georgia, Nevada, North Carolina and Texas. And not so coincidentally, markets in three of those six – Arizona, Florida and North Carolina – are among the top five markets that are growing most quickly, when assessed according to ad revenue growth forecasts for the 2021-2026 period. The markets and their compound annual growth rate (CAGR) over that period are: ■ Orlando-Daytona Beach-Melbourne, Fla., 7.52%; ■ Tampa-St. Petersburg (Sarasota), Fla., 7.37%; ■ Miami-Ft. Lauderdale, Fla., 7.36%; ■ Charlotte, N.C., 7.34%; ■ Phoenix (Prescott), Ariz., 7.21%. Legalized sports betting has already been a booming new ad category for broadcasters. As a result, station groups are developing new programming that relates to betting lines and best picks. Nexstar Media Group
10 The Financial Manager • January/February 2022
recently announced the launch of the SportsGrid Network, a diginet for sports wagering and fantasy sports. And Sinclair Broadcast Group’s partnership with Bally’s has resulted in a sports betting app and an upcoming direct-to-consumer streaming service. This comes in addition to Sinclair’s decision to rebrand its regional sports networks with the Bally’s monicker. Other ad categories that are forecast to outperform for TV stations in 2022 include healthcare, professional services, telecom, banking and home improvement. On the flip side, the auto, retail and travel categories are still soft. Given all of this, the U.S. broadcast station industry ad revenue is expected to reach $40.05 billion in 2022, up 13.2% from $35.39 billion in 2021. If realized, that would surpass the $39.66 billion posted pre-pandemic in 2019. EXAMINING 2021 RESULTS Because core ad categories have mostly recovered from the COVID-19-induced
UPWARD MOMENTUM BY JUSTIN NIELSON
Despite some speed bumps, radio and TV broadcasters are both expected to show increases in revenue moving ahead. Each are impacted by very particular dynamics.
advertising pullback of 2020, TV broadcasters expressed optimism about the back half of 2021 in their earnings calls. The expanded schedule of National Football League games and new scripted content is adding to their positive outlook. Despite the sharp decline in broadcast TV network ratings, station audience levels were
boosted by local news viewership during the pandemic. Even though there was a slight dip in ratings during the first half of 2021, station executive remarks indicate they expect the ratings to be stable moving forward. As the effects of the pandemic ease, TV station groups have renewed focus on negotiations for increases in retransmission
consent fees, which added $13.5 billion to their coffers in 2021 overall, a 4% increase over 2020. They benefited from increases in per-subscriber fees in renewal negotiations that slightly outpaced traditional sub declines. However, the growth percentage is expected to drop further over the next few years. (See table, page 12.) That’s in sharp contrast
Ad Revenue Growth Projections TV STATION Total TV station ad revenue ($M) Total TV station ad revenue growth (%)
RADIO STATION Rated market total (local/ national spot & digital) ($M) Rated market total radio station ad revenue growth (%)
2019
2020
2021
2022
2023
2024
2025
2026
2021–2026 CAGR
$21,889.7
$21,044.8
$20,557.1
$24,300.0
$23,199.5
$26,942.8
$24,662.7
$27,618.5
6.08%
—
-3.9%
-2.3%
18.2%
-4.5%
16.1%
-8.5%
12.0%
2019
2020
2021
2022
2023
2024
2025
2026
2021–2026 CAGR
$10,375.9
$8,034.2
$8,794.9
$9,395.8
$9,866.4
$10,210.7
$10,451.3
$10,627.4
3.86%
—
-21.8%
8.4%
6.8%
5.0%
3.5%
2.4%
1.7%
NOTE ON TV STATION DATA: Based on Kagan estimates of Nielsen rated TV station market national, local, and digital advertising revenues (does not include retransmission consent fees). NOTE ON RADIO STATION DATA: Based on Kagan estimates of Nielsen Audio rated radio station market national, local, and digital advertising revenues (does not include network and off-air revenues).
The Financial Manager • January/February 2022 11
REVENUE ROLLS AHEAD
TV Station Retrans & Virtual Multichannel Projections: 2015–2026 (All Non-Percentage Figures in Millions)
Total TV Station Gross Retrans Fees Growth of Retrans Fees Virtual Multichannel Subs Subject to Station Carriage Fees Annual Virtual Multichannel Sub Station Carriage Fees (O&Os and Affiliates 100%) Total Multichannel Video and Virtual Subs % Change Total TV Station Gross Retrans and Virtual Multichannel Sub Carriage Fees % Change
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$6,514
$8,053
$9,360
$10,302
$11,011
32%
24%
16%
10%
7%
7%
2%
2%
1%
1%
1%
1%
0.1
0.4
1.5
0
5.2
6.9
8.8
10.2
11.1
11.8
12.2
12.6
$4
$27
$163
$760
$946
$1,245
$1,424
$1,607
$1,790
$1,982
$2,181
$2,211
100.1
99.0
97.4
96.2
91.9
87.2
82.1
$77.2
72.6
68.8
65.8
63.3
0%
-1%
-2%
-1%
-4%
-5%
-6%
-6%
-6%
-5%
-4%
-4%
$6,518
$8,080
$9,523
$11,062
32%
24%
18%
16%
$11,783 $12,077 $12,311 $12,477 $12,656 $12,817 $12,992
$11,956 $13,027 $13,502 $13,918 $14,267 $14,639 $14,997 $15,203 8%
9%
4%
3%
3%
3%
2%
2021–26 CAGR (%)
1.5%
-5.1%
2.4%
1%
As of June 2021. NOTE: Historical cable, DBS and telco video subscribers have been re-stated. This metric is higher than cable or DBS in later years because telco video providers are present in fewer but larger markets. Virtual Multichannel subscriptions could include live streaming broadcast TV stations such as DirecTV Now, Fubo TV, Hulu with Live TV, Sony Vue, Sling TV, and YouTube TV in certain markets. Revenue figures rounded up to the nearest million. SOURCES: Industry data; Kagan estimates
to the retrans revenue growth in years past. In 2015, it was 32%. The retrans revenue stream has been impacted by cord cutting. Many legacy multichannel subscribers have been lured by a growing number of options from virtual multichannel, subscription video-on-demand and over-the-top providers. However, churn of traditional multichannel
customers is not as pronounced as originally feared during the pandemic, and TV stations have benefited from virtual subscriber gains. Bottom line, when full results are reported, TV station revenues in 2021 are likely to be mostly flat year over year, at $34.06 billion. That is despite a 4% drop in total spot ad revenue, given that it was an election
off year. (TV stations garnered $3.58 billion in political ad revenue in 2020.) It also takes into account the 4% retrans growth as well as a 5% gain in digital/online revenue. 2022: THE POLITICAL WAVE This year, we expect a similar trend of rate hikes in retrans renewals that will slightly outpace
STREAMING, LIVE EVENTS BUOY RADIO RESULTS
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HILE THE RADIO STATION BUSINESS IS ALSO EXPECTED
to bounce back from the pandemic-induced recession, its growth will only constitute a partial recovery. Kagan projects U.S. radio ad revenue growth of 6.2% to $15.75 billion in 2022. That will partially offset the deep 23% decline in 2020, when revenues fell to $13.68 billion. Radio ads are predominantly local and focused on the auto, retail, travel and entertainment categories, which were heavily impacted by the advertising pullback. Off-air is forecast The media sector’s core local spot to rise by 5% in 2021 ad market is projected to grow by with the return of 10% to $8.41 billion in 2021. This year, live events. And it it’s likely to increase 7%, to $9 billion. Between 2023 and 2026, growth rates should remain a will gradually decline from 5% to 1.3%. solid segment for They’re expected to reach $10.08 the radio industry billion by 2026. long term. National radio ad revenues are forecast to rebound by 8% to $2.05 billion in 2021. In 2022, they’re likely to rise by 6%, to $2.17 billion. Between 2023 and 2026, national ad sales is forecast to drop from 4.5% to 1.3% annual growth. As radio stations continue to invest in streaming, podcast and digital marketing initiatives, the digital revenue stream is expected to
12 The Financial Manager • January/February 2022
rise to $1.52 billion by the end of 2026. Off-air is projected to rise by 5% in 2021 with the return of live events. And it should remain a solid segment for the radio industry long term, with a 2.5% CAGR taking the segment to $2.38 billion by the end of 2026. Total radio revenue, including national and local spot, digital, off-air and network revenue, should rise at a five-year CAGR of 3.39% — from an estimated $14.84 billion in 2021 to $17.53 billion by the end of 2026. Based on our radio market-level ad projections, the top five fastest-growing U.S. markets by 2021-2026 CAGR are: ■ Dallas-Fort Worth, Tex. at 4.27%; ■ Orlando, Fla., 4.25%; ■ Austin, Tex., 4.24%; ■ Phoenix, Ariz., 4.23%; ■ Seattle-Tacoma, Wash., 4.21%. Radio also must compete with multiple streaming and on-demand options for music and talk and is hindered by the new hybrid or permanent work-from-home economy, which has greatly reduced commuting hours during prime in-car radio time. Despite those headwinds, radio’s lower ad cost, local audience and relatively high return on investment compared to other media should help it maintain its share of the U.S. advertising market.
REVENUE ROLLS AHEAD
the cord-cutting trend, with gross retrans and virtual sub fee revenues up 3% to $13.92 billion. Virtual sub growth and the ability of TV stations to increase per-sub renewal rates are mitigating losses on the traditional sub side.
through 2026, the TV station industry is expected to become less reliant from the standpoint of traditional spot ad revenue. Retrans-fee revenue and more emphasis on digital revenue is likely to help smooth the ebbs
already broadcasting live over-the-air (OTA) NextGen TV streams. Another 25 are either preparing or intending to launch, according to information on ATSC.org as of Dec. 14. The upgraded OTA service should help boost
In 2022, TV station industry revenue, including gross advertising and retrans fees, is expected to climb to $38.22 billion, up from $34.06 billion estimated in 2021. Broadcasters are well prepared for the shift, hedging against a potential decline in retrans fees with their own streaming services in addition to virtual per-sub carriage fees. In 2022, TV station industry revenue, including gross advertising and retrans fees, is expected to climb to $38.22 billion, up from $34.06 billion estimated in 2021. Total spot ad revenues are expected to continue to rebound from the pandemic, improving 20% to $21.2 billion. That includes $3.25 billion in political ad spend. Digital is expected to come in at $3.1 billion, up 5% year over year. Over the projections period running
and flows in political ad spending. Retrans revenue, as a share of total station revenue, grew from 4% in 2009 to 38% in 2020 and is projected to reach 36% by 2026. Another factor at play is NextGen TV, also known as ATSC 3.0. It’s being deployed on local stations nationwide, with 41 markets
local ad revenue but might not be a solution to increase retrans revenue, a conundrum of sorts. Justin Nielson is a senior research analyst at Kagan, a unit of S&P Global Market Intelligence. He can be reached at (888) 275-2822 or Justin.Nielson@spglobal.com.
NOTE: These materials have been prepared solely for information purposes based upon information generally available to the public and from sources believed to be reliable. No content (including index data, ratings, credit-related analyses and data, research, model, software or other application or output therefrom) or any part thereof (content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of S&P Global Market Intelligence or its affiliates (collectively, S&P Global). The Content shall not be used for any unlawful or unauthorized purposes. S&P Global and any third-party providers, (collectively S&P Global Parties) do not guarantee the accuracy, completeness, timeliness or availability of the content. S&P Global Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the content.
Congratulations 2022 People to Watch Celebrating Your Leadership in Media and Entertainment Veronica Landers, Bonneville International Jason Kober, NBCUniversal Media Kim Mills, WarnerMedia Alex Mejia, Hearst Television Heather Briggs, Studio Distribution Services
(303) 694-0444 symphonymedia.com
14 The Financial Manager • January/February 2022
The Financial Manager • January/February 2022 15
SPECIAL REPORT:
PEOPLE To WATCH In 2022
REALIZING DREAMS WITH TEAMS
A look at five people shifting media companies into much higher levels of success today and tomorrow. By JANET STILSON
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ead through the following profile articles and you’re likely to see some common themes. The people we’re keeping an eye on in the coming year view the process of building, mentoring or motivating the individuals they work with to be absolutely crucial to their sense of accomplishment.
of them say that activities outside the office enhance their work performance or have deep personal meaning — whether it involves starting a scholarship fund, running marathons, teaching pilates or creating a nonprofit.
The People to Watch selections were made after much deliberation by TFM’s editorial advisory committee. We’ll They share lots of other insights about how to find the open the process again next summer for People to Watch stamina needed for some tough assignments – or to in 2023 and welcome all nominations from the media untangle certain brainteasers. And it’s striking how many financial community. Janet Stilson is editor of The Financial Manager. She can be reached at (212) 694-0126 or TFMeditor@mediafinance.org.
The Financial Manager • January/February 2022 17
HEATHER BRIGGS Running Hard at SDS
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HEN THE PANDEMIC HIT THE WORLD, HEATHER BRIGGS HIT THE
ground running, literally. “It’s been a huge stress reliever for me,” she says of her runs. A year ago, the longest distance she had run was three or four miles at a stretch. Then she trained for a half marathon, over 13 miles. She’s found the experience to have direct parallels with her work. A guided run coach said something that stuck with her: “It was something along the lines of: ‘We race to prove to ourselves that we can do hard things,’” she relates. There are certainly some hard things on her agenda. Briggs is CFO of Studio Distribution Services (SDS), a joint venture between NBCUniversal and WarnerMedia that launched last year and distributes DVDs with a more economical business model than the two companies were able to achieve by themselves. There are some sharp contrasts at SDS’s core. While the DVD business is mature, the company is a startup. It serves the sometimes-competing interests of not only two of the largest media companies in the world, but other studios whose videos are in its catalog. Also in the mix are retailer clients, filmmakers and people who are part of the company – all with different opinions about what the company should or should not do.
What she’s doing “is not easy for anyone, and certainly not easy for anyone new to the role of CFO,” says Kathleen Gallagher, executive vice president of global physical home entertainment at Universal Pictures. She explains that prior to her current role, Briggs was a controller for domestic home entertainment at NBCUniversal. She leaped up a couple of corporate levels when she became CFO. Eddie Cunningham, president of SDS, says that one of the things that impressed him the most about Briggs happened during the early months of the company’s development, before it launched. SDS’s leaders spent time envisioning what the business
What Heather Briggs is doing “is not easy for anyone, and certainly not easy for anyone new to the role of CFO.” — Kathleen Gallagher, Universal Pictures
would be like five or 10 years down the line, and how it would distinguish itself from competitors. “Heather was not only intimately involved with that, but she was a massive contributor to the process,” he says. There are plenty of challenges for Briggs moving forward, Gallagher says. “It’s a pretty complex financial business. You’re building inventory, and you have a new product launch essentially every week, and you’re also selling your catalog titles. All the metrics that go into forecasting and reporting on that business are complicated.” Despite all she’s accomplished over her career, and so far at SDS, Briggs says that what she’s most proud of relates to something outside of what she’s done on the job. She recently created a scholarship endowment in the business college at her alma mater, California State University at Northridge. “I’m passionate about creating equitable access to higher education for everyone,” she says. “As someone who came from very little – I was raised by a single mother who was a teacher – I never thought I’d be in a position where I could fund a scholarship endowment.” Briggs says she has several mentors both in the entertainment business and outside it. “The thing that I found with my mentors, Briggs and Staff: (from left) Rob Mancini, Andrew Synn, Amy Lagud, Birdie Guan, Sandy Weinstein, Monserrat Carrillo, Heather Briggs, Jonathan Rackham, Johnson Ho, Doris Wong, Daniel Uribe and Bryce Lewis. regardless of their background, is that they help me to focus on where my feet are – what’s “We run into situations where what might be best for a retailer may happening in this moment. What can I control, and what can I not control? not be best for one of the studios. And what may be best for the studio And in this control bucket, what’s the next thing that I need to do?” may not be best for our people. Trying to manage and juggle that is the The biggest lesson Briggs has learned relates to doing new things, never-ending puzzle that is the job of a leader,” Briggs says. Little wonder even when they’re scary. “That’s what courage is: pushing through all that says her unofficial title is “problem solver.” the self-doubt. And then being okay if it doesn’t go well,” she says. 18 The Financial Manager • January/February 2022
SPECIAL REPORT: PEOPLE to WATCH in 2022
VERONICA LANDERS Righting a Ship at Bonneville
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She’s taken the bull by the horns and transformed that department.” and collections, but it certainly has come in handy for VeronThat is a major reason why Landers is the first person that The Financial ica Landers and, by extension, the media companies where Manager has included in its People to Watch special reports two different she’s worked. years – the first in 2019 when she was with Meredith. Landers, who is director of credit collections at Bonneville International, Doug Lowe, a former executive vice president in Meredith’s broadcast explains what she learned during her six-and-a-half group, recalls her work well: “She likes to roll up her years in the U.S. Marine Corp this way: “It all boiled sleeves and get into the nitty gritty of things. Some down to synchronization, efficiency and discipline.” managers act like kings After joining corporate America, she realized “Our days sales – sit on their thrones that those lessons from the Marines needed to and bark orders. She’s outstanding be married with an understanding that there’s an the opposite. When her got to a point emotion-based way that people work in compadepartment is behind, where it was nies. And the key to success lies with the teams or lacking, she’ll get on below what I one builds. her computer and do the thought anyone same thing everybody Landers says she received some insight into that was capable of else is doing to make from a manager at Bonneville. “What she said was, doing.” ‘When you create a team, and that team will follow sure things stay on path.” you into the unknown, that will be your greatest — Doug Lowe, As a result, “our days Meredith Corp. accomplishment.” sales outstanding got That’s exactly what’s happened to Landers at to a point where it was Bonneville. She arrived at the company about a below what I thought anyone was capable of doing,” year ago after taking some time off to care for Lowe adds. Part of that probably has to do with the her parents, and before that she had a long stint at Meredith Corp. When relationships she built with clients, he theorizes. she arrived at Bonneville, the credit collections department was run by Landers says there’s plenty of work to get done at Bonneville, further people who had been there a long time but “didn’t really understand the automating the company’s systems. But her interests extend beyond credit process. They also had no accountability,” Landers says. working there. Along with a partner, she’s opened a nonprofit to help Bonneville’s leadership gave Landers the greenlight to move the credit at-risk youths in situations that appear insurmountable and show them department from Salt Lake City, where the company is headquartered, to Atlanta, where she lives. And in the process, she replaced the established staff with several people that had worked with her in the past and another person she had known for years. “This team is so well-oiled that I can give them a level of instruction and they just run with it,” Landers says. Selecting a crack team like that, and directing them, is nothing to sniff at. But “the accolades don’t belong to me,” Landers contends. “All I can do is write a good process, but it’s really all about the team.” When she started at Bonneville, the accounts receivable was $7 million over 90 days due. “When you have a 50% delinquency ratio, that tells me something’s broken,” Landers says. After working to automate some of the department’s systems and building her new team, Bonneville went from a 50% delinquency ratio to an aging that’s currently Building team spirit (clockwise, from back row, left): Adam Linton, LaTasha King, Justin Murray, Ronald around 4%. Williams, Veronica Landers. “She’s transforming the credit function into the 21st century,” says Leslee Beard, director of finance for Bonneville’s Sacra- ways they can get out of poverty-stricken environments. mento and San Francisco radio properties. “I had been kind of babysitting “It really is designed to take some of the principles that Bonneville the credit function in the interim between when the old director of credit operates under, with community involvement and helping those in need,” left and when we hired Veronica. And I knew what she was walking into. Landers explains. ILITARY TRAINING ISN’T A STANDARD PREREQUISITE FOR CREDIT
The Financial Manager • January/February 2022 19
JASON KOBER The NBCU Change Agent
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During his years growing up on Long Island, Kober developed a passion having enough of him to go around,” says Antonella Ricciardi, for finance from his dad – along with a love for the Yankees and a certain senior vice president, group controller of corporate finance at way of approaching the tasks he’s been given. the company. “He’s always had a really strong work ethic,” Kober says of his father. The work Kober’s doing is a little under the radar “What he instilled in me is [the understanding] that – not something readily noticeable to people outside hard work pays off.” of the finance realm. But among those who know The biggest lesson that Kober’s learned profeshim, Kober has gained a reputation for moving some sionally involves how to juggle multiple priorities. proverbial mountains in his role as senior director “Work on what matters,” he advises others. “You of programming accounting within the TV and have to align yourself to strategic areas of the streaming group. business. I’m often asked to manage multiple “We’ve centralized the accounting for programresponsibilities, and it’s up to me to assess which ming under Jason. And in doing so, we are recogones are going to make the biggest impact on the nizing a tremendous amount of efficiencies in our business, both in the short term and longer term. workflow as well as our work product,” Ricciardi Then make sure your team is aligned to that as well.” explains. He has special advice for up-and-comers in the Kober’s importance within NBCU also relates business. “It’s important that you surround yourself to the rise of streaming platforms across the TV with the right individuals – particularly people with landscape as a whole, and more specifically the key professional connections who will not just mendevelopment of the company’s Peacock service. tor and coach you but provide you with exposure His team has built out Peacock’s accounting systo business leaders.” tem and processes, with a particular focus on the He adds, “Having a person like that will also “For a team that isn’t used content side of the business. “Right now, they spend challenge you and therefore accelerate your proto working with accounting north of $1 billion a year, so my team and I make fessional development.” or doesn’t understand sure we have all the accounting in place for that,” Given his drive and strategic thinking, it’s not accounting concepts, he’s so Kober explains. surprising that Kober was chosen to champion easy to talk to.” For Riccardi, it’s not just what Kober has accomNBCU’s Controllership Culture Committee, which plished, but the ways he’s done it since joining the is tasked with creating greater communication — Akash Patel, AMC Networks company in late 2019. “Ever since he’s gotten here, with controllers across the organization. And he there’s been a constant state of change,” Ricciardi says. When considering has joined Ricciardi in monthly meetings with peers in similar roles at issues that need to be tackled, “his first response is not, ‘Well, that will The Walt Disney Co. to leverage and exchange experiences. be challenging; or we can’t do that because of this; or I don’t know how Ricciardi sees a big challenge for Kober moving forward: “maintaining this group will respond to that.’ He’s extremely resilient. He’s adaptable. pace with change, and continuously meeting the high bar that we’ve set Those attributes have influenced his success.” ourselves,” she says. Not only is he flexible, but he’s easy to partner with, says Akash Patel, who’s senior vice president of programming and finance at AMC Networks. Patel worked with Kober first at EY and then NBCU. “For a team that isn’t used to working with accounting or doesn’t understand accounting concepts, he’s so easy to talk to,” Patel says. Kober views his current role as the most important to date. His career has included a stint at EY as a manager, at CBS as a director, and then both a director and corporate controller position at SBE Group, a lifestyle and hospitality company. Along his career path, Kober has followed in the footsteps of a mentor: his father, who was a certified public accountant before retiring recently. HERE’S A PROBLEM WITH JASON KOBER AT NBCUNIVERSAL – “JUST
The Peacock streaming service, which is a focus of Jason Kober’s work, was highlighted outside NBCUniversal’s New York headquarters by this topiary.
20 The Financial Manager • January/February 2022
SPECIAL REPORT: PEOPLE to WATCH in 2022
ALEX MEJIA Building Bridges at Hearst TV
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LEX MEJIA LEARNED A LESSON EARLY IN LIFE, AS PART OF A LARGE,
close-knit family in the Bronx: “You’ve got to be good at what you do and step up. Otherwise, you’ll be overshadowed by someone else in your family,” he says. That way of looking at things has very much worked to the advantage of Hearst Television where Mejia is senior director of financial planning and analysis. “We have 10 key leadership values at Hearst Television that we encourage people to strive for. Alex exemplifies those values – and particularly the value of helping others,” says John Drain, Hearst TV’s CFO, who lauds Mejia’s work mentoring other people. “He’s always put others first before himself. He’s very passionate about building bridges across departments and disciplines.” That skill involves reading people exceptionally well, notes Ana Occhiuzzi, controller of Hearst TV. “We’re in a lot of meetings together. If we’re discussing a certain project or a problem, he has a unique ability to listen and understand everyone’s thoughts and concerns. And then he gets us to a place of resolution.” One of Mejia’s biggest accomplishments to date has involved modernizing the way that Hearst TV disseminates financial information to its leaders. “We were doing a lot of that by paper without a lot of drill-down capabilities, particularly for general managers and sales leadership,” Drain explains. “Alex was key to our project to build dashboards.” The process involved partnering with the advertising operations team, along with corporate and regional financial units. The fruits of Mejia’s labor — a dashboard system — is quite sophisticated, according to Hearst’s consultants, Drain says. Mejia is someone to watch moving forward, Drain says, because “as the financial operations transition to more machine learning and artificial intelligence, I see Alex continuing to grow and be a leader.” “We’re just scratching the surface with the technology that we have,” Mejia adds. “There are a lot of things we can embrace, like AI and predictive analytics.”
Hearst Corp.’s headquarters in New York, where Alex Mejia works.
Mejia has a real “can-do attitude,” says Tracy Clark, a Hearst TV vice president. “He’s asked to provide different schedules, details, financial analysis. And he never says, ‘No.’” But there’s a potential downside to that. Clark says that one of his challenges, moving forward, is to continue in his growth mode, but at the same time keep from stretching himself too thin. “He gets requests from so many individuals.”
“As the financial operations transitions to more machine learning and artificial intelligence, I see Alex continuing to grow and be a leader.” — John Drain, Hearst TV Despite the no-nonsense nature of his work, Mejia has a sense of humor that isn’t typical of financial planning and analysis people, comments Occhiuzzi. Case in point: when asked about his favorite extracurricular activities, Mejia responds, “I’m an avid bruncher.” “He’s way more fun than a lot of the finance people I’ve worked with. He has a serious job, but he doesn’t take himself too seriously,” Occhiuzzi says. Mejia, who still lives in the Bronx, has worked at Hearst for the majority of his career. He joined in 2009 as a senior financial analyst, then left in 2011 to join Ralph Lauren as a senior finance manager. He came back in 2015. While at Hearst Mejia found two important mentors. One is Jeana Stanley, who was Hearst Corp.’s vice president of finance and a member of the MFM Board executive committee at the time of her passing. “She taught me that building relationships and partnerships are key to improving your own work, and gathering insights to deliver best results,” he says. Another mentor is Drain. “He challenges me to go the extra mile. Because he’s so good, I have to be good,” Mejia explains. One of the biggest lessons Mejia has learned is to embrace technology and not be afraid of trying something new. He advises younger team players to build bonds with colleagues. “You tend to work with people who are experts in their field. People love it when other people say, ‘I know you’re great at this; can you help me with something?’ And they collaborate with you. The people I work with love to mentor and teach.” The Financial Manager • January/February 2022 21
SPECIAL REPORT: PEOPLE to WATCH in 2022
KIMBERLY MILLS HBO’s Transformation Maestro
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EVER LET IT BE SAID THAT KIMBERLY MILLS IS ONLY DEVOTED TO
finance. For many years prior to joining the business workforce, she was a trained dancer and now teaches pilates in her home studio. That has served as a calming counterbalance to her extremely intense work as senior vice president of corporate finance for HBO and HBO Max programming. “It keeps my body and my mind sane,” Mills says with a laugh. Why would she need to do that? “This past year, I would say, has been the most challenging of my career,” Mills explains. “There was almost a perfect storm of things, on top of the pandemic. In November [2020], my role in some ways tripled. There was a massive reorganization of my group. I think I oversaw 14 people, and now I oversee 30. I took on a number of different departments and actually created one as well to meet the demands of the workload,” Mills says. That marked the second reorg at HBO in a year. Mills and other finance staff members had lost a lot of coworkers during the first restructuring, which was caused by the merger of Time Warner with AT&T. In the latest round of changes, Mills moved from HBO finance lead to HBO and HBO Max finance lead. In addition to blending those responsi-
seem fair, at the beginning.” Flash forward a year, and Mills feels much differently. “We’ve done such a good job, and the team is so incredibly efficient. We’re operating at such a high level.” It’s a very good bet that Mills and team will face more tough challenges ahead, as Discovery and AT&T’s WarnerMedia content unit complete their merger. The transaction is expected to close later this year. Glenn Whitehead, president of business affairs and production at HBO and HBO Max, explains what Mills and crew were up against in the last reorg.
“She never lets her ego or sense of self interfere with the primary goals and issues that she happens to be pursuing at any time.” — Glenn Whitehead, HBO and HBO Max
While Time Warner was very profit-and-loss focused, AT&T has a much stronger cash orientation, and Mills had to redirect her team accordingly. “That is a particularly difficult transition to manage in the context of a content creation business,” Whitehead said. “As we’re managing a multi-billion portfolio, you can imagine the number of factors that go into the cost side of the cash equation. They’re incredibly dynamic. At any given point in time, we have 160 and 190 shows in various stages of production. Those individual shows are subject to a broad range of volatile factors.” Whitehead says that one of the keys to Mills’ success, in managing through change, has to do with her character traits. “It’s very hard for people not to be affected by the ego-driven nature of this business. Kim is exceptional. While she is spirited and has personality and perspective, she never lets her ego or sense of self interfere with the primary goals and issues that she happens to be pursuing at any time. I can’t overstate what a delight that is.” “She’s so real. And she keeps it real all the time,” adds Sue Parrino, a longtime colleague of Mills who is an associate, production finance, within Netflix’s original series unit. “Her team at HBO has been with her for so long – for decades. They choose to stay with her. I think that’s a pure indication of her as a leader.” Mills says she believes that one of the keys to her Kimberly Mills expresses great pride in her team, which has gone through two reorgs in recent years. continued success is flexibility. “Going into another “We’re operating at such a high level,” she says. merger, with Discovery, I want to make sure that I’m bilities, she had to manage the morale of staff members in the midst of not stagnant in my approach to leadership – always being open to new disruption and massive change. ways of doing things, or new processes,” she says. “There were times when I thought, ‘I don’t know if I can do this,’” Mills She advises people lower on the corporate totem pole to stay curious says. “There were expectations for accuracy and deliverables that didn’t and ask questions. “Be okay challenging things,” she says. 22 The Financial Manager • January/February 2022
BYRON ALLEN has ambitions the size of America. His acquisitions and lawsuits all add up to a burning desire for racial justice. And he’s not done yet. He started out as a teenage standup comedian and joke writer for sitcom star Jimmie Walker, part of a writing team that also included then-unknown Jay Leno and David Letterman. But today Byron Allen is well known for his aggressive tactics to expand his portfolio of video properties and obtain what he considers to be a fair share of advertising revenue. Allen is founder, chairman and CEO of Allen Media Group. In the following interview he unabashedly states that he’s creating the world’s biggest media company “to help effectuate change for the greater good of America.” As part of his mandate, Allen Media reportedly raised $10 billion in a bid to purchase the large group of TV stations owned by TEGNA. Whether or not Allen and TEGNA would strike a deal was unknown as this article went to press. Among Allen Media’s holdings is The Weather Channel and related properties like the streaming platform Local Now. Allen Media is currently home to 33 TV stations with Big 4 affiliations. And it is also partnered with Sinclair Broadcasting Group in 21 regional sports networks. In this exclusive conversation with contributor Krista Van Lewen and TFM editor Janet Stilson, Allen riffs on topics ranging from his early days in show business to his lawsuits and acquisition goals. An edited transcript follows.
24 The Financial Manager • January/February 2022
FOCUS ON LEADERSHIP
REBEL WITH A VERY BIG CAUSE TFM: What’s the long-range vision for Allen Media? What do you expect it will look like five or 10 years down the road? ALLEN: Almost 20 years ago, everybody was dotcom, dotcom, dotcom. Dotcom was more or less [about] reading. I said, “The human animal watches more than it reads, so I don’t believe the internet’s going to be used so much for reading, but it’s going to be used quite a bit for watching.” So, 15 to 20 years ago, I started buying all the premium dot TVs – the beachfront digital real estate. That’s why I own Cars.tv, Sports.tv, Comedy.tv, Pets. tv, Recipe.tv, News.tv, Kids.tv and MyDestination.tv. We’re better positioned to go direct to 4 billion
connected devices worldwide than anyone because we own all of these premium dot TVs. And over the years, we have produced enormous amounts of content in HD, most of it without a host. Why? So you could swap out the American English voiceover and use artificial intelligence and swap in voiceovers with over 200 different languages and go direct to 4 billion connected devices worldwide. I believe we will be the world’s biggest media company because nobody is better positioned for direct-to-the-consumer verticals. People are passionate about cars and pets and food and travel and comedy and weather. In five years, I think The Financial Manager • January/February 2022 25
FOCUS ON LEADERSHIP
people will see [Allen Media] as one of the largest portfolios of streaming assets. We have some very
If you don’t foster diversity and ownership, then all the media is given to you through the filter of the white male.
strong platforms [such as] Local Now. When I bought The Weather Channel in 2018, they said, “You own something that’s the equivalent of a fully distributed broadcast network and uses artificial intelligence and proprietary software to curate, aggregate and stream local news, weather, sports and traffic, and geofence to the users’ ZIP code.” But then they said, “You’re probably going to want to shut it down because it loses over $25 million a year.” And I said, “I’m disappointed I wasn’t clever enough to come up with the idea, but I’m certainly not dumb enough to shut it down.” So, I invested over $100 million of my capital over the last three-and-a-half years to reposition the asset.
TFM: Was there an event in your life that made you realize you could be more effective as a media owner than as an entertainer? ALLEN: I was born in Detroit in 1961, and Motown
was such a great source of pride to me – the greatest record company ever. Berry Gordy is one of my heroes. And when he sold Motown, I cried. Because what little we [African Americans] owned, was sold. When they murdered Martin Luther King, I was seven years old. My mother got pregnant with me when she was 16. [We moved to L.A.] and she was able to get into UCLA and get her master’s degree in cinema TV production. That education and that opportunity allowed her to get a job working for free at NBC in the publicity and marketing department. She couldn’t afford childcare, so that allowed me to be with her there and get exposure to the [entertainment] industry. My mother and father got a divorce when I was seven years old. I used to watch my mother cry herself to sleep over bills and money and food. I wired myself to go make money, and to do it legally, so I wouldn’t get in trouble and be a burden to my mother. I decided that I was going to own something that was quite significant, that would be the world’s biggest media company, because that’s never been achieved in America, and certainly not in Black America. [My goal] is to be bigger than The Walt Disney Co., to be bigger than Comcast-Universal. There’s no reason not to be. I’m creating the world’s biggest media company to help effectuate change for the greater good of America, which is to help achieve the one America that Martin Luther King taught us.
TFM: Do you think you have enough financial support to go up against Apollo Global Management and anyone else who may be interested in bidding on the TV stations owned by TEGNA? ALLEN: Money is not an issue. There’s plenty of money
out there. There’s over $20 trillion in the system – a lot of money out there from baby boomers who had
26 The Financial Manager • January/February 2022
worked, and trillions of dollars looking for a safe place to go. Our deal is a very safe place. Money’s not an issue. It’s all about other things that have nothing to do with money. Money is the easy part. Raising $11 billion, not hard at all. There’s plenty of capital out there looking for good deals. TFM: Let’s discuss your interest in changing the Federal Communication Commission’s (FCC’s) ownership rules. You are among those who would like an incentive for companies to sell to minority-owned companies. Given the current FCC makeup, do you see it moving anytime soon? ALLEN: I’m highly confident the FCC is in support of
diversity and ownership. I’m the only African American that owns a Big Four network affiliate, and I don’t think that’s a great statement for America. I happen to be the largest owner of Big Four network affiliates, Black or white, that’s not publicly traded or a multi-generational family. I currently own a little less than 5% of the country in terms of the footprint. I don’t think you have a real democracy when women don’t really own their networks, when Black people don’t own networks. And you have a bunch of white guys that own Spanish-language networks, and they can’t even speak Spanish. Asian people are pretty much invisible in this country. Until we all have a seat at the table, and we all control how we’re produced and how we’re depicted, and all of our voices are widely heard and distributed, it’s a fake democracy. I think media ownership plays a key role in that. The FCC can’t do it alone. You’re going to need legislation, because a tax incentive goes beyond the FCC. The House and the Senate have to get involved in that. If you don’t foster diversity and ownership, then all the media is given to you through the filter of the white male, and no one else matters; no one else exists. It will take time, but it can’t take much longer because time is a weapon against real progress. TFM: Are there more lawsuits down the road? Have you done everything you want to do on that front? ALLEN: Absolutely, there will be a lot more suits. Those
lawsuits need to occur so we can flush the bad characters out of the system. The greatest trade deficit in America is the trade deficit between white corporate America and Black America. That trade deficit is the economic genocide against Black America. Black Americans make up 14% of the population, but over 40% of the incarceration in prisons. That’s a direct correlation with the lack of access to a proper education and economic inclusion. America kills Black America in the schoolroom by making sure we don’t have a proper education. America kills Black America in the Continued on page 28
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The Financial Manager • January/February 2022 27
FOCUS ON LEADERSHIP
ALLEN — Continued from page 26
I used to watch my mother cry herself to sleep over bills and money and food. I wired myself to go make money, and to do it legally.
courtroom by making sure we don’t have equal justice. And America kills Black America in the boardroom by making sure we don’t have economic inclusion. [And it began] long before you showed the world with your knee on our neck. I didn’t sue McDonald’s for $10 billion because they weren’t doing business with Black folks. I sued them because they weren’t doing enough with us in the way of advertising. Chris Kempczinski’s [CEO of McDonald’s] personal compensation is approximately $11 million. That’s more than [McDonald’s] spends on all of Black-owned media combined. That is unacceptable. You take in $100 billion in revenue, a lot of it from Black people. You have a huge ad budget and very little goes to Blackowned media. [McDonald’s] hired a brilliant lawyer, who happens to be Black and the former Attorney General of the United States, Loretta Lynch. I said to her, “You’re on the wrong side of history. You’re going to lose this. Because Coretta Scott King told me our greatest weapon is the truth. I’m undefeated because I bring the truth.” And guess what? The judge said, “This $10 billion lawsuit will not be dismissed,” and gave us a court date. That’s history. [After this interview took place, a U.S. District Court judge dismissed the McDonald’s case. Skip Miller, Partner at Miller Barondess, LLP, attorneys for plaintiffs, responded: “At the invitation of Judge Olguin, we will amend the complaint to add greater detail. And when we do so, we firmly believe that the case will go forward.”] I want to clear something up. People think I lost in the Supreme Court; I did not. When I sued the cable industry, we went downtown [the U.S. District Court for the Central District of California] and downtown said, “This case is solid. It’s going forward.” [My opponents] were upset. They said, “Let’s go to the Ninth Circuit.” The Ninth Circuit said, “This case is solid. It’s going forward.” [My opponents] were upset that downtown and the Ninth Circuit agreed with me, so they said, “Well, we’re going to take it to the Supreme Court.” The Supreme Court didn’t rule on my case. They ruled on the scrutiny, and they went with the highest level versus the motivating factor. It had to be 100% that you were discriminated against because you’re Black. After they ruled that was the level of scrutiny, they sent it back to downtown, and the judge said, “Byron Allen achieved that level of scrutiny, and this $10 billion lawsuit is going forward.” And that’s when all of the industry settled with me. The entire industry settled with my $40 billion in lawsuits. TFM: How does your acquisition of The Weather Channel
28 The Financial Manager • January/February 2022
affect those who you believe are disproportionately affected by climate change? ALLEN: Climate change and global warming are the
greatest threat to human beings on planet Earth, period. People are starting to connect the dots as they’re watching their cars float down the middle of Manhattan. We’re breaking records every single week. We’re seeing extreme weather events that are really catastrophic. There are over 200 million viruses out there that don’t even have a name, a much higher mortality rate than 2%, like COVID-19. And as we melt the ice [caps], there are viruses that we’ve never shared the planet with and don’t even know if we can. It’s going to create all kinds of economic problems. You’re going to see a lot of food shortages, water shortages, goods and services [shortages]. There are countries that know there aren’t enough resources to support a global population approaching 10 billion people. And as we hit that number, the top 3 to 4 billion will be okay. But that bottom 5, 6, 7 billion will get wiped out.
TFM: Who were your heroes when you first started in comedy, and what did they teach you? ALLEN: There were so, so many brilliant minds. I love
Redd Foxx, Johnny Carson, Flip Wilson, George Burns, Richard Pryor, George Carlin, David Brenner and Joan Rivers. They were just great American gifts. I wanted to be a comedian at age 14 and started writing. I was on Jimmie Walker’s staff with David Letterman and Jay Leno, who were unknowns. They were getting 200 bucks a week, and I was getting 25 bucks a joke. I was the youngest comedian to do The Tonight Show With Johnny Carson, so it was such an honor when they gave me a star on the Hollywood Walk of Fame. They put me right next to Johnny. If you really think about comedians, they’re media owners. They own their voice; they own their IP; they own their image. They create it; they produce it; they manage it. They are industries unto themselves. They have a great relationship with the customer – the consumer. They may not be considered great businesspeople in the technical sense, but they are great business brands and managers. That’s how they become successful comedians. They work hard, and they’re creative. It takes a lot of creativity to start a business and to grow a business because every day you’re going to have many, many obstacles, and you have to come up with creative solutions to overcome those obstacles. That’s how I’ve been able to use creativity in building my business.
Krista Van Lewen is a contributor to this magazine and provides public relations services to MFM and BCCA. She can be contacted at kvanlewen@gmail.com or (415) 608-0263. Janet Stilson is editor of TFM. She can be reached at TFMEditor@mediafinance.org or (212) 694-0126.
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LAST WORD
What Bosses Really Want
Becoming a trusted advisor to your unit head can be critical to the business’s success, as well as your own. BY HANK PRICE
T
hirty years ago, when I first became must also be thought of in terms of severI was deadly serious about that speech a television station general manag- ance, potential legal exposure, recruitment and followed it up with as much one-on-one er, I was steeped in the idea that of a new employee and training. time as the financial person needed. Because only two things really mattered in I could go on, but by now I’m sure you I expected so much, I tried to give much, business: product and sales. Everything else have observed the common financial theme supporting her or him in achieving their was a support system. It didn’t take long to in each of these examples. A wise old general career goals. realize just how wrong I was. manager once told me “You can always fix If you are a controller, business manager Media companies, like most or other financial manager and other businesses, are complex don’t have this kind of relationoperations with competing inship with your unit head, there ternal goals. I believe a general are some ways to build it. manager’s primary responsiFirst, always tell it straight. bility is to align all employees, Don’t sugarcoat bad news or starting with department heads, over-celebrate good. You need to toward achievement of a few be the steady hand who is frank, common objectives. This can composed and willing to tell the be incredibly difficult because truth when others don’t. departments also compete for Second, when bringing up scarce resources. problems, always lay out options For instance, during political to move forward. Options are season, the sales department not necessarily solutions. They wants to temporarily increase are the best possible courses inventory to take advantage of A wise old general manager once told me, “You given the present circumstances. newfound candidate and issue can always fix news or sales, but if you get the Third, learn to listen to emmoney. This can be at odds ployees and other department with the key news department wrong financial person, you can be ruined.” heads. You have access to the goal of generating an audience staff in ways your boss does large enough to make inventory valuable. news or sales, but if you get the wrong finan- not. You need to be able to help your boss Extended breaks reduce audience retention. cial person, you can be ruined.” He was right. understand internal issues. As you gain a The same is true for digital platforms. Over As I gained experience, and managed ever reputation as a listener who does not tattle commercialization hurts the user experi- larger stations, I came to see the financial on individuals, more and more people who ence, resulting in fewer engagements, yet manager as my trusted confidant, advisor might not want to talk to their department too little commercialization means revenue and right arm. The financial manager was head will come to you. goals will not be met. the only other person in the station who Doing these three things – telling it straight, A severe weather event might cause tech- knew the full inside workings – from sal- offering options and keeping your finger on nical and news overtime to soar to the point aries to vender contracts to the cost of elec- the organization’s pulse – will be invaluable where profit is affected. This means the tricity. The best financial managers were to your boss. Over technical department must find ways to part of every major decision I made, acting time they will cause reduce expenses in following months while as in independent voice, sometimes with you to become a truststill serving the news department’s needs. contrarian ideas. ed advisor to your genThis same competition for resources Over time, I developed a little speech that eral manager or CEO. shows up throughout an organization, often I gave to each new financial manager: “Your They will also lead to in unexpected ways. The cost of a new syn- job is to keep me out of jail. That means achievement of your dicated program must be balanced by other no one breaks the rules or plays with the personal career goals. factors, including existing contracts, the numbers, including me. Your second job is Hank Price is a media consultant and lead-in value of the new program and lost to work with me to solve problems, so you leadership coach. He is the author of the revenue from the program being preempted. need to understand how the various departguidebook Leading Local Television. He can be reached at hank@hankprice.com. The termination of an employee for cause ments work as well as I do.”
30 The Financial Manager • January/February 2021
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Cheers to a half century of collecting MORE media client debts MORE often!
1971–2021
In 1971, Pete Szabo recognized an opportunity to fill a gaping hole in the media finance business. The industry needed expertise in collecting media and entertainment accounts receivable. Szabo Associates met that need and founded the media collection industry. Today, 50 years later, we’re still exceeding our clients’ expectations by delivering MORE. Through the decades, the Szabo brothers guided the company through thoughtful growth, collected MORE debt than all other competitors combined, and committed to earning long-
term relationships. All along, we realized that the key ingredient to Szabo’s success was you, our amazing clients. We are grateful. No other media collection company has MORE experience or deeper understanding of the intricacies of collecting media and entertainment debt. No other media collection company delivers MORE service from long-tenured employees—it’s our promise and our passion. We work on contingency collecting media and entertainment debts
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