McHale Videofilm
to close
Cuts in advertising by key
By Peter Wagner
clients and declining full-service
production are cited
Star-BulletinMcHale Videofilm, an affiliate of KHON Fox 2 that produces television advertisements, will close at the end of the year.
"The economy has really played havoc with the company," said Kent Baker, vice president and general manager at KHON, who met with employees on Monday.
McHale and KHON, formerly owned by SF Broadcasting Co., were acquired in July by Indiana-based Emmis Broadcasting Corp. The $307 million deal, which included the purchase of three mainland TV stations, was the fifth ownership change for KHON since 1995.
Baker cited major cuts in advertising by key clients -- banks, airline companies and department stores -- adjusting to Hawaii's weak economy. But Baker noted the general decline of full-service video production at television stations across the country.
"Television production has changed a great deal in the past 10 to 15 years," he said. "The large full-service production houses have found it hard to compete with some of the smaller operations that have grown up with computers over the years."
Meanwhile, big mainland retailers are arriving with advertising resources of their own, he said.
"More and more retail is being done by these 'big boxes' which are owned on the mainland and either produce their own or don't do any television advertising at all," Baker said.
McHale, which grossed "several million dollars" last year, has eight full-time and two part-time employees. Several might be picked up by KHON, which plans to take over production of McHale's smaller accounts, Baker said. A severance plan is being considered for others.
Baker said the decision to close McHale was nudged by KHON's planned move from its current location on Auahi Street to new quarters in the Hawaiki Tower on Piikoi Street next year.
"We had to make some decisions about McHale, whether we were going to expand it or downsize it," he said.
The $19 million move will double KHON's space.
