KUTV Channel 2 under new management
With the recession getting worse, the owner of KUTV-TV Channel 2 has turned to an outside company to manage the Salt Lake City station and six other television stations more effectively.
Four Points Media Group LLP has hired Nexstar Broadcasting Group to provide sales, programming and other management services to the stations in Utah, Texas, Rhode Island and Florida.
David Phillips, KUTV general manager, said viewers won't notice any changes.
"The changes that are affected by this are really at the corporate level. I think they are looking for advantages that come with combining with a larger broadcast entity. It brings to you some economies of scale," Phillips said.
Phillips said he now reports to Nexstar instead of Four Points. Members of the KUTV staff are still employees of Four Points, he said.
In 2007, Cerberus Capital Management bought CBS affiliate KUTV; KUSG in St. George; KEYE in Austin, Texas; WLWC, in Providence, R.I.; and WTVX in West Palm Beach, Fla., as well as two low-power stations in West Palm Beach, for $185 million.
The New York-based private-equity company then formed Salt Lake City-based Four Points, a holding company, to run the stations.
Nexstar will manage the stations for $2 million a year, plus a bonus if it increases their cash flow. The Irving, Texas-based company will receive a share of the profits, plus $10 million, if the stations are sold while the three-year contract is in effect.
The contract is an "endorsement of Nexstar's proven operating disciplines," CEO Perry Sook said in a statement. His company operates 50 stations in 29 small and midsized markets. About 15 stations are operated through local service agreements.
Television stations have been hit hard by a deep advertising downturn caused by the 15-month-old recession.
Last week, KUTV laid off seven people, including a news anchor and two reporters.
Nexstar claims that its stations are better managed than many of its competitors. It attracts general managers with experience in larger markets by providing them equity incentives.
Managers use "marketing and sales techniques that are not typically utilized in our size markets," according to Nexstar's Web site.
The deal allows Four Points and Nexstar "to take advantage of each other's strengths and run more efficiently in this down economy," Phillips said.