On Wednesday, the company said it will sell two of its owned-and-operated stations, reducing its exposure to any uncertain prime-time performance, as well as a business undergoing rapid change. In an internal memo, the NBCU executive who oversees the O&Os said the Miami and Hartford, Conn. outlets would be put on the block.
Assuming a sale takes place, NBCU will have unloaded six stations in the last two years. Its portfolio will still include O&Os in the country's six largest DMAs, as well as the ninth. And it plans to keep its O&O in San Diego--the 27th DMA--to maintain a strong position in California, with outlets also in Los Angeles and San Francisco.
Miami is the 16th-largest market, and Hartford is the 29th.
The local station business has seen growth slow recently--partly because top-grossing programming, the late local news, is losing relevancy. Many potential viewers are well-versed in the news, since they surf the Internet. National spot sales also appear to be slowing; plus, there is competition from so other media outlets, although competing local newspapers are struggling.
NBCU has tried to transform its station business into a local-media linchpin for advertisers, offering ad opportunities stretching from commuter trains to stadiums to health clubs. Unlike local broadcast, the out-of-home market is growing at a healthy clip.
In that vein, NBCU has created a local media group with John Wallace as president. "We're in the process of re-engineering the way we think, shifting our focus from a traditional stations' business to becoming full-service local media production centers," he said in the memo.
Wallace said new initiatives, such as moving into out-of-home and other digital arenas, "need to be self-funded," implying that the sales will give it flexibility there.
NBCU might have been able to command a higher premium for the stations had it sold them early last year, when flush private-equity firms were paying top dollar. It's unclear how the troubled credit markets will affect the sale price going forward.
NBCU owns 80% of the Dallas (fifth-largest DMA) and San Diego stations--with station group LIN TV controlling the remaining 20%.