White elephant

"We Never Earned Greenbacks" - WNEG

The shiny new television station installed this year at the University of Georgia has been a spectacular commercial failure.  The Red and Black reports that WNEG, which moved its operations from Toccoa to a new studio at the Grady College of Journalism, may have to pull the plug on all its operations by September.

From the Red and Black:

Following months of declining revenue and a growing deficit, the station faces the real possibility of being taken off the air mere months after it started programming from the Grady College of Journalism and Mass Communication. WNEG has already burned through most of a five-year, $5 million grant and could “hit the brick wall” by September if woeful economic trends continue.

“It all depends on what happens in between now and then,” said Michael Castengera, manager of the station now housed on the bottom floor of Grady College. “Then we’ll have to decide the next steps.”

“We’ve been in Athens effectively since January 1, and it takes time to reorient,” said Culpepper “Cully” Clark, dean of Grady College. “With all the factors, the cash has burned much quicker than we thought.”

With a fiscal year 2010 operating expense of $1.8 million and a projected annual revenue of $800,000 — which merely covers the $786,000 in staffing salaries — the station will incur a deficit of $1 million. The deficit will be drawn from what’s left of the grant.

The Red and Black reports that WNEG’s financial woes are rooted in poor advertising sales.  The TV station is based in a tiny market in Northeast Georgia, whose major cities are Athens, Gainesville and Toccoa.  WNEG also lacks affiliation with any major TV network.

WNEG has a small full-time staff to produce UGA-based newscasts.  Grady students also produced content for the newscasts, making UGA one of three universities in America with a commercial TV station at its disposal for journalism students.  For students seeking careers in TV news, work at a “real” TV station is a big plus on the resume.

The Red and Black reports that WNEG had hoped to land programming contracts with the UGA athletic department to broadcast sports like gymnastics.  But in 2009, the Athletic department signed a big contract with another provider.

In the same issue, the Red and Black’s editorial board calls for the University to shut down WNEG.  Which would be a damned shame.

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Doug Richards is a reporter at WXIA-TV. This is his personal blog. WXIA-TV has nothing whatsoever to do with this blog, under any circumstances, in any form. For anything written herein, Doug accepts sole credit and full blame. Follow him on Twitter: @richardsdoug. All rights reserved. Thanks for visiting.

17 thoughts on “White elephant

  1. Missourigrad

    As a Missouri grad, I can applaud Grady for the lofty goal of creating a self-sufficient TV operation. KOMU-TV is really the model for how to do it correctly (the station gets NO university funding to operate) and it has a full-time sales staff, paid anchors and management.

    It’s too bad there aren’t enough ad dollars to go around to help keep WNEG alive. I wonder if Grady ever consulted with Mizzou about its model?

    As for the professor’s comments about “busloads of people” coming to see how it’s done. Sorry, Charlie, they’ve been doing it at KOMU for decades. You’re not reinventing the wheel here.

    Reply
    1. live apt fire Post author

      The biggest difference between WNEG and KOMU is the fact that KOMU is an NBC affiliate. It’s 120 miles away from the STL and KC markets. WNEG has zero chance of becoming affiliated with one of the big four TV networks because, although it’s a separate market, it’s too close for comfort to Atlanta.

      Reply
  2. Steve Schumacher

    I think this is a great idea to teach the students what real TV is all about. It’ll teach students how messed up the business is and they’ll switch careers much faster and not wait 20+ years to burn out! 😉

    Reply
  3. Dr. No

    It would seem the University jumped into this without a business model or without the counsel of commercial broadcasters. WNEG needed to be more than a playground. There really wasn’t a plan for programming. It’s gone.

    Reply
  4. Missourigrad

    Good point, LAF. I imagine the NBC affiliation helps KOMU immensely. Hard to sell ads if there ain’t much for viewers to watch other than college broadcasters honing their craft.

    Grady should have stuck with the cable access route.

    Reply
  5. Mr. Bear

    Of course, there’s also the oddity that the north Georgia market has two Public Broadcasting System outlets, WGTV (Channel 8) and WPBA (Channel 30).

    Reply
  6. Jimmy

    They used to be a CBS affiliate. I wonder why they gave it up. The CBS Atlanta station sure as hell doesn’t cover that area (the Big 5, yall!).

    Reply
  7. Mr. Bear

    The David Hazinski video is telling, because he keeps repeating “in a perfect world”, which is what they appear to be attempting. There was a lot of money spent on infrastructure before the first broadcast. You have to wonder if things might have been better done in an old warehouse with chroma key filling in for material costs.

    Reply
  8. daryll

    KUDO’s Mr. Bear. They should have spoken with broadcasters in the real world about start-up costs. Heck, the suits at the Terry College of Business should have written their business plan. Most of the stations these kids will go to have equipment held together with bubblegum, bailing wire and a prayer.
    The perfect world exists only in the movies.

    Reply
    1. Mr. Bear

      There’s a phrase in the construction trades that may apply here. “Spiking the job” happens when a contractor wins the bid on a job after making a low estimate of costs. Once the job is underway, enough work is done so that the client can see progress, then things slow down considerably as the contractor takes on additional jobs to pay his bills.

      At that point, the client becomes dissatisfied with the progress which was once being made, but is locked into the contractor because too much has already been done. This sets the stage for the phrase “Well, it’s going to cost more than we had expected…..”

      Can’t say that this necessarily happened with WNEG, but it does make you wonder out here in the real world.

      Reply
  9. Jimmy

    I wonder why they didn’t just use the set and studio they already had for their college cable station. They were doing (and I guess they still are doing) newscasts for the UGA cable channel long before WNEG came along.

    Also, if I were them, I would move heaven and earth to make sure they were on satellite and cable. One of my relatives lives in Athens and has DirecTV, but WNEG is not on the satellite.
    I don’t know if they’re on Dish Network.

    You’ve got to be available before you can be watched.

    Reply
  10. Mr. Bear

    Some specifics of the sale:

    UGA bought the station on June 25, 2008 for $1.4 Million. The funding was from a grant by the University of Georgia Research Foundation. It was anticipated that “The new WNEG will provide students and faculty with new ways to experience and use media,” Likewise, it was anticipated that the ad revenue stream would continue, with what ever losses occurred as a result of the move would be offset by revenues from sports broadcasts of UGA events. This may not happen because of existing agreements with other carriers.

    In addition, Online Athens states: “Dish TV and DIRECTV have rebuffed UGA requests to carry the station’s broadcasts into the Atlanta market.” Likewise, when the station moved, it lost is CBS affiliation, which led to a loss of ad revenue. The station apparently now broadcasts content from the America One network, along with infomercials and some religious content.

    At the time, Michael Adams, President of UGA, stated: “This provides a winning combination of strengthening local markets by emphasizing local interests, while offering a real-world opportunity for faculty and students to work in research, development and teaching in media,” Adams said. “The revenue produced by this commercial venture will strengthen the operation of the television station while enhancing the research and outreach mission of the university.”

    From the Gainesville Times site: “WNEG went on the air in 1984 as an independent station owned by veteran Toccoa broadcaster Roy Gaines. It was affiliated with WNEG-AM 630, which is now under separate ownership.”

    “In 1991, the TV station was acquired by Spartan Radiocasting Co., owner of CBS affiliate WSPA-TV in Spartanburg, S.C. When WAGA-TV in Atlanta became a Fox affiliate in 1994, it opened the door for WNEG to become a CBS affiliate for Northeast Georgia in 1995.”

    “Spartan was acquired by Media General, a communications company based in Virginia. A year ago, Media General announced it was exploring the sale of WNEG and other stations.”

    WNEG apparently employs 29 people, many carryovers from the Toccoa operation. In January 2009, they posted ads for a production technician.

    Reply
  11. arky

    Wow… this is just the perfect example of a group of people being handed a bucket of money and having no idea what to do with it. I’m amazed they would rest the entire economic future of such a big project on the notion, “Surely we can get the rights to some sports.” Anyone who has ever actually worked with an athletics department for broadcast rights knows it’s all about two things: money and prestige. WNEG has neither.

    Apparently the poor decisionmaking continues. I looked over the documents the Red and Black posted that provided the basis for this story. From what I can tell, it consisted almost entirely of attorney work product and contract details. In other words, things that are exempt from open records requests and should never have been released to the newspaper in the first place.

    Reply
    1. Mr. Bear

      I just took a look at the supporting emails for the Red & Black article. Wow. Talk about one-stop shopping. It’s pretty much all there. Another site pointed out a potential problem for WNEG because of ownership. What happens if the station does a negative report on a UGA administrator?

      Reply
  12. Pingback: WNEG TV – Ground Zero in the White Elephant Poop « The Brookhaven Bear Report

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