KHON to slash work force
The new owners of the top-rated TV station will automate as many as 35 production jobs
THE NEW owners of KHON will lay off as many as 35 of the station's 110 employees, or 32 percent of its staff, and automate newscasts -- and they will have to hire a new general manager.
There could be as many as 50 job cuts, KHON's top-rated, outspoken anchor Joe Moore said during yesterday's 6 p.m. newscast. He cited information from mainland television executives familiar with the new owners' operations.
Affiliates of SJL Broadcast Group, based in California, and the Blackstone group, a private investment firm, announced the purchase of four stations, including KHON, from Emmis Communications Corp. in September. The new owners won Federal Communications Commission approval for transfer of the broadcast licenses in December.
The tumult at Hawaii's No. 1 rated television station began yesterday with a letter of resignation from Senior Vice President and General Manager Rick Blangiardi, which was distributed to the staff at 9 a.m.
"I never intended to leave you," Blangiardi wrote in the letter. "But, regrettably, I do not share the same vision and approach to the television business as SJL. These differences make it impossible for me to serve you and SJL effectively."
Blangiardi, who returned to Hawaii to run KHON and KGMB for Emmis in July 2002, will resume serving as general manager at KGMB and steward the station through its pending sale.
The new owners' intention to cut employees was announced by SJL Broadcast Group Comptroller Wade O'Hagan at a 2 p.m. meeting.
One wave of terminations is to be completed at the end of this month, and the next wave by the end of next month, a Nielsen rating period. O'Hagan did not return calls yesterday.
Sandy Benton, chief operating officer of SJL Broadcast, said the company tells employees about coming layoffs as soon as it can because the workers have seen what SJL has done when it has entered other markets.
"You owe them as much honesty as you can give them ... so they can make life plans," Benton said. She was reached in Portland, Ore., where she ran a meeting at KOIN on Wednesday similar to yesterday's at KHON.
Some people have thanked her "for being so honest," she said, but that is not the majority reaction. "We're a much smaller company than Emmis; it's difficult for us."
Emmis has assembled a severance package to which SJL is contributing. Severance will be paid on top of the success bonuses of three months' pay that Emmis has announced for all of the stations that it is selling.
"Hopefully, we'll be great people to work for, for those who remain," Benton said.
Most of the cuts will come in KHON's production department, according to J.R. Rothschild, assistant business manager of the International Brotherhood of Electrical Workers Union Local 1260, which represents technical employees at the station.
The department handles large productions, such as live broadcasts from Easter Seals' annual "Taste of Honolulu" event, but it primarily focuses on daily news, Rothschild said. It also produces commercials for advertisers and promotional announcements for the station.
The union's collective bargaining agreement with the station includes bumping rights, meaning part-timers will have to be let go before any full-time employees are affected.
"There is a successor and assignee clause, but (SJL) has not notified the union that they are the new owners and plan to recognize the union," Rothschild said.
SJL has already purchased an Ignite system to automate newscasts, cutting the number of people involved in getting a news show on the air.
Blangiardi said KHON just wrapped up its best year of business performance ever.
KHON and KGMB are top-rated and are top billers in the market, according to a Broadcasting & Cable magazine story in October. KHON earned $19.5 million in gross revenue in 2004, while KGMB took in $13.5 million, the magazine reported. Blangiardi did not divulge 2005 figures.
Yesterday's events set off a disturbance in the force within the local media industry and among media watchdogs, who are closely monitoring developments.
Consolidation of ownership in the radio industry saw news departments eliminated, and technology allowed companies to cut on-air staff. Those who remain on the air are often required to prerecord shows under different names for use on multiple stations.
The newspaper industry nationwide has cut jobs as circulation has declined. The wave has now hit local television for the first time since the decimation of highly paid, veteran broadcast journalists at KGMB in the 1980s, following an ownership change.
"Hawaii's media consumers are very concerned about the commercial profiteering and concentration of media ownership," said Sean McLaughlin, founder of Hawaii Consumers LLC, a consumer advocacy group.
McLaughlin's group and others plan to review local stations' public files and participate in the FCC license renewal process later this year, and he encourages the public to get involved.
"People have to pay attention. Local people are losing their jobs. Those are local jobs, part of our local economy, part of our local marketplace of ideas -- voices that are being silenced in our community," he said.
Offshore ownership degrades the quality of local media and reduces the public benefits they provide, he said. "Stations are licensed to use public airwaves. It's a public resource. Commercial (success) must be secondary to their obligation to serve the public."
SJL has a history of running duopolies, in which two stations in the same market have a common owner, according to research Rothschild reviewed.
At one point George Lilly, SJL's president, bought a station in a market, and his nephew, with other investors, bought another station in the same market. The second station was eventually sold, Rothschild said.