Gannett Co. Inc.'s planned $717 million acquisition of the Detroit-based Evening News Association would give the Rosslyn-based communications company control of the profitable Washington television station, WDVM-TV (Channel 9).
WDVM, a CBS affiliate, had revenue of about $40 million and cash flow of about $16 million in 1984, sources said yesterday. The station, which captures the highest share of the area's viewing audience in several important time slots, could have cash flow exceeding $18 million this year, sources said. ENA does not make financial information about WDVM publicly available.
While much of the attention in the fight for control of ENA during the last month has been focused on the company's flagship newspaper, The Detroit News, WDVM is believed to be the company's single most valuable operating property. While The Detroit News has been losing money in recent years as it cut advertising and circulation rates and increased news expenditures to try to prevail in its battle with Knight-Ridder's Detroit Free Press, WDVM has been a source of steady income.
If Gannett receives ENA stockholder and Federal Communications Commission approval to acquire WDVM, the station would return to the control of a local corporation. The Washington Post Co. owned WDVM until 1978, when it swapped the station and about $2 million in cash for ENA's Detroit television station.
"We have been waiting to see what would happen over the last month," WDVM station manager Ron Townsend said yesterday, "and we're delighted to see that it is a company like Gannett. They are a large broadcast and media company and that is important. ENA is a good company and one of the things we really enjoyed was autonomy. Edwin W. Pfeiffer, who is vice president and general manager of the station, talked to Al Neuharth Gannett Chairman and he affirmed that it autonomy would continue."
Sources in the broadcasting industry said yesterday they believe Gannett would make WDVM even more profitable by cutting certain expenses.
"I think Gannett will change the lifestyle of the station very quickly," one broadcasting industry source said. "In some areas the station is a relatively high-cost operation, and Gannett is a company that knows how to get to the bottom line."
Townsend said WDVM is the leading station in Washington based on the May Nielsen ratings, which he said are critical financially since the May numbers are a key factor used to set advertising rates for the second half of the year. Townsend said WDVM had 23 percent of the viewing audience from sign-on to sign-off, while WJLA (Channel 7) had 19 percent, WRC (Channel 4) had 18 percent, and WTTG (Channel 5) had 17 percent.
"In May 1983 we lost our lead to Channel 4, but by the next May we had regained it," WDVM's Townsend said. "We probably had gotten a little complacent and we did a few things, changed some personnel and have had strong numbers since."
Townsend said the station's contract to broadcast Washington Redskins football games is important in its financial success. He said WDVM has won more Peabody Awards for outstanding local news and public affairs programming than the other stations that serve the 1.5 million households in the area.
While the network affiliates here are in a close race for audience share for the 11 p.m. news broadcast, Townsend said WDVM clearly has the lead during the important 6 p.m. to 7 p.m. news hour.
"We feel they WDVM have been good competitors," said Tom Cookerly, WJLA (Channel 7) president and general manager, who also is president of the broadcast divison of Allbritton Communications. "Obviously, Gannett brings tremendous resources to the table and they are known as good operators. I am happy the station was sold to a professional broadcasting organization. This is a very competitive market, one of the most competitive in the country. I think Gannett coming in will increase that level of competitiveness."
"I hope the transition is easy and works out well for them" said Fred DeMarco, vice president and general manager of WRC (Channel 4), adding that his latest numbers show WRC moving ahead of WDVM during the 11 p.m. news slot. "This is a healthy news market, an information-oriented market, and all three stations do a damn good job of presenting the news. They (WDVM) are an aggressive news operation and will continue to be."
Gannett, which has 86 daily newspapers and six other TV stations, also would acquire television stations in Mobile, Ala., Tucson, Oklahoma City and Austin, Tex. if its ENA bid succeeds.