Gray TV president says Leno show is failure

Gray Television President Bob Prather is not happy with the ratings performance of “The Jay Leno Show” on his company’s 10 NBC stations. But he also says certain unnamed executives at NBC may not abandon the “Leno experiment” because of their egos.

Business is looking up for Gray Television. It’s projecting that, excluding political (which is a lot to exclude from 2008), Q4 local revenues will be up about 1% and national will be down about 9%. That will be a decent improvement over Q3, which saw net revenues decline 20%.

“All of our GMs feel like business is getting better in their markets,” Prather told analysts and investors in his quarterly conference call Monday. While not yet giving guidance on the year to come, he said “2010 could be a very good year,” with company officials noting that Gray is in states which have an extraordinary number of contested gubernatorial and senate races next year. The company is hoping to book more than $50 million in political advertising in 2010. Some recent analysis by Wells Fargo Securities analyst Marci Ryvicker found that Gray has 37% of its consolidated revenues in states and congressional districts with “hot” races next year.

But Prather is not happy with having Leno as lead-in to local news on his NBC stations, which account for 10 of the 36 stations in the Gray portfolio. He said the five nights per week airing of the talk show, which he referred to as “the Leno experiment,” is not working. “It’s definitely hurting as a lead-in” to late local news on Gray’s NBC stations, he said. Prather intends to make his displeasure known to network executives, but he said he doesn’t think the experiment will be ended soon because of the egos of the NBC executives – whom he didn’t single out by name – who made the decision to air Leno for an hour in primetime every weekday.

Prather was so negative on Leno that Gray CEO Hilton Howell Jr. stepped in at one point to offer some defense for NBC. Howell said the strategy was intended to run over the course of the year, so it will be interesting to see how Leno does in the ratings when he is airing fresh shows against reruns of scripted shows on other networks. 

As you would expect, analysts asked Prather about efforts by the networks to grab a share of retransmission consent fees as affiliation contracts come up for renewal. Those are all in the 2012-15 timeframe for Gray, so “fortunately, we’ll have several years to see how this shakes out,” Prather noted. But he made it clear that he doesn’t want to share any of that new revenue. Praising Sinclair and Nexstar for leading the TV industry into successfully demanding retrans payments from cable MSOs, Prather declared that, “It’s based on our work and nobody else’s work” – so the affiliates ought to keep 100%. In his view, the NAB and the affiliate councils for each network should be working to create a united front and insist that the networks keep their hands off of the retrans cash.

That’s obviously not what the networks have in mind, with CBS Corporation CEO Les Moonves insisting just last week that the nets are entitled to a share and will get it. Gray, by the way, has 17 CBS stations – its largest affiliate group.

RBR-TVBR observation: Bob Prather isn’t afraid to speak his mind. Gray’s stations may not be in the largest markets, but it sure has a lot of them. All things considered, we’re glad we’re not the ones on the other side of the negotiating table from him.