The widening gap will force some stations to go black or to merge with other local media under more liberal cross-ownership deregulation -- a life preserver that could be provided by a new FCC. Surviving broadcasters will have created and mined digital wireless connections between local consumers, marketers and content. Within five years, it is likely that the TV station business as we have known it will be radically changed.

It is not difficult to draw such assumptions from recently released statistics and revised forecasts.

BIA Advisory Services is the latest to downwardly revise its forecast: TV station revenues this year will decline 17.3% to $16.6 billion from 2008, returning to 1995 levels. Internet-related revenues will be $556 million in 2009 and not top $1 billion until 2013. While other estimates vary, the overriding picture remains the same. Broadcast TV stations' best days are behind them unless they can reinvent themselves.

TV stations' ability to excel in the nascent but promising world of hyperlocal information and services is hindered by a slew of uncontrollable forces. There is the collapse of core ad categories, such as automotives, which has contributed about one-fourth of all TV station revenues and will never fully recover. Internet-connected streaming video for PCs and mobile devices will continue to minimize and fragment television. Despite massive reductions in workforce and legacy operations, the pooling of local news-gathering and ad sales resources, and a growing Web presence, TV stations' economic quandary increasingly mirrors that of declining newspapers.

Despite the most optimistic forecasts -- more than 12 legacy broadcast companies generate between $10 million and $311 million in annual revenues from the sale of online advertising, per Borrell Associates -- there is no way to effectively offset lost ad dollars, some of which are not coming back.

Auto advertising on TV stations declined by more than $900 million in 2008, accounting for nearly 300% of the decline in total TV station revenues, according to Bernstein Research. It was the primary reason that local TV station revenues plummeted 29% in the first quarter, doubling year-earlier declines.

Even the major-market TV stations owned and operated by CBS, News Corp. and Walt Disney under-performed pure-play broadcasters by declining 25% to 35% from the prior year, according to Goldman Sachs. ABC TV station ad revenues will drop below $900 million, comprising 12% of Disney's total ad revenues. Fox TV station ad revenues will fall to $1.16 billion, or 10.7% of News Corp.'s overall ad revenues, and CBS' TV stations will generate $1.3 billion -- about 16% of the company's overall ad revenues, according to Barclays Capital.

Auto advertising on TV stations will decline by 43% in 2009, as more of the remaining auto ad dollars continue to shift to Internet display and broadcast networks, Bernstein estimates. With an overall -20% decline in TV stations' revenues expected in 2009 and an additional -7% decline in 2010, according to industry guru Jack Myers, TV stations' revenue growth will likely claw back to the low- to-mid-single digits by the 2012 presidential election. All told, the net loss of revenues requires major structural change, not just cost cuts.

TV station owners need a way out. Some, like Tribune Co. and Young Broadcasting, are seeking bankruptcy protection. In the first half of 2009, TV station transactions slowed to 45 collectively valued at $453 million, which is slightly ahead of the first six months of 2008, according to BIA and its Kelsey Group. Most are distressed sales of stations that are ranked fifth or sixth in a market and generally have negative cash flow.

Even the sale prices of more fiscally viable stations are not expected to eventually rise to more than six or seven-times cash flow. The lower valuations of broadcast stations are becoming more complicated, experts note -- pointing to the protracted demise of Clear Channel. With the rise of loan payments, program licensing fees and other commitments going unpaid by debt-burdened owners, the number of commercial stations in bankruptcy could double this year to about 10% of the industry. 

"With rare exceptions, we won't be going back to double-digit station multiples," said Mark Fratrik, vice president of the BIA Financial Network and a former executive of the National Association of Broadcasters. The reason reaches beyond the recession to systemic changes occurring in all of media and advertising. (I take a deeper look at the current phenomenon in the July issue of OMMA magazine .)

Advertising dollars are expected to be 10% to 12% lower than 2008, which was the second-largest-ever spending decline. Marketers are clearly paralyzed or bankrupt waiting out the recession, during which time digital technology is radically altering the media game board. When Madison Avenue revives in 2010, marketers will be spending less and seeking more of the target consumer connections and qualitative data they can only get on the Internet and connected devices.

  "Every local media company must broaden its thinking about what they are and how they go about their business," Fratrik says. That means partnering with Google and adopting its online ad auction model, partnering with local newspapers and other stations, aggressively getting into e-commerce and multicasting, and charging for their unique local content and services on mobile handheld devices, he said. NBC Universal, Hearst and Capital Broadcasting are among those aggressively repositioning their TV stations. The national print and online ad alliance announced July 1 by Tribune Co. and A.H. Belo is an example of the alliances that will help save the broadcast industry.

Only the fittest will survive. TV stations should be bracing for more permanent change. The yawning gap is no illusion.

This commentary is insightful. I recommend it to others.