• by Wayne Friedman , December 2, 2008

The crumbling advertising market for TV stations advertising has resulted in one area of big business growth: TV station collection agencies.

Szabo Associates, the longtime Atlanta-based media collection agency that represents some 900 TV stations and thousands of radio stations, has been seeing strong business over the last several months.

"My volume is up significantly," says Robin Szabo, president of Szabo Associates. "This economy is unlike any other."

Szabo notes that TV stations are feeling the brunt of some recent wide-ranging bankruptcies of local TV advertisers in categories such as home building and building products, consumer products, music and entertainment, and financial institutions.

Few big national brand advertisers are having problems paying TV stations. But some medium-sized and regional TV advertisers have placed themselves under bankruptcy protection, where the station and their representatives are then left to fight for any unpaid TV media.

Recent names include electronics retailer Circuit City, casino operator Tropicana Entertainment, catalog and specialty retailer Sharper Image, household retailer Linens & Things, discount chain Goody's Family Clothing and Metromedia Restaurant Group's Bennigan's and Steak & Ale.

While Circuit City was a recent entry--filing for bankruptcy on November 10--Szabo notes that up to that time, stations were paid regularly from the company for its advertising, typically on a net 30-day-term basis.

Szabo's recommendations for stations are not to change any terms of their deals with advertisers. "Stick to sound fundamentals," he says. He notes that as a result of some TV marketers' problems, "there is a tendency to loosen credit. If they do that, I urge them to strengthen their internal collection activity. Like a barn door, you don't want to keep the doors open at both ends."

He believes that local TV advertiser problems will only grow, noting that business bankruptcies are estimated to grow to 60,000 or 70,000 for 2008--up from 40,000 a year ago.