Station Management and the non-promotion, promotion:
By the time Andrew Hebenstreit moved from News Director to Station manager and New Mexico Broadcasting company CEO. It seemed no amount of improvement in the news programs or an avalanche of promotion was going to change the public’s perception. In local television markets the news ratings are the measure of a stations success. Hebenstreit developed a different marketing and promotion approach. Called “The Sign of the Spirit”, the station began singing the praises of New Mexico and its people. Instead of running from and down playing the nepotism image, the station embraced the “family approach”. What could be more local? The station sought every opportunity to praise and promote the community and in the end the community praised KGGM.
One of those opportunities came in May of 1987 when the New Mexico Symphony Orchestra came to Hebenstreit asking for $10,000 to sponsor a program. Instead, he suggested taking the orchestra to the people. Most New Mexicans had never seen a symphony and no bond issue or mill levy for the orchestra had ever passed. People saw the Symphony as something for the “rich folk”.
It was no easy task to put together a live, outdoor performance by a symphony orchestra in 45 days. Then, the problem was getting the average citizen to come see the show. The answer: Synchronize the music to fireworks on the Fourth of July. Other events were thrown in and buttons were made to sell for a dollar each as admission.
The crowds came and kept coming:
Soon it became clear, the venue on Albuquerque’s west side was not going to accommodate the audience. With time growing short, Hebenstreit convinced the commander of Albuquerque’s Kirtland Air Force Base to make its giant tarmac available. Another problem remaining, figure out how to set up a giant sound system, a control booth and camera platforms for a remote broadcast to the rest of the state, get television sponsors for the program to help defray the costs, set up toilet facilities for the 80,000 people who had purchased admission buttons and get a lot of vendors to show up and sell food. There was one more thing, just talk the City of Albuquerque into closing down the airport for an hour during the fireworks show.
Finally, on the day of the concert there was another task that surfaced. Accommodate a crowd more than three times larger than expected. When the day came, the 80,000 people expected, showed up. Another 170,000 came too. Taking tickets became pointless and a huge crowd found its way to the show. The Station had inadvertently created a sort of “Woodstock for a Symphony Orchestra”.
Did the News suddenly get better?
More than a year before, the station had replaced Hebenstreit with Linda Thorne (Andrew’s sister) and hired a new anchorman who had recently been fired by both the ABC and NBC affiliates. The news ratings did not improve and remained the “perennial number three”. Ironically, as KGGM stopped marketing its improved news programs, the perception of them changed for the better. As the station promoted the community and substituted family for nepotism, the news ratings began to grow. After the Fourth of July celebration of the Symphony, Country and State there was a larger jump in the ratings. By November, KGGM did something it had not accomplished in more than 14 years. It knocked off KOB, the NBC affiliate, in audience share and made inroads into the number one, KOAT. The perception was the news had improved. In reality, attitudes toward the news improved. Anchor, Linda Thorne, was recognized for her abilities and Dick Knipfing, who had suffered an image set back a year before, was recognized as a top anchor. In Albuquerque Magazine’s, “Best Of Albuquerque” issue, it put together the “Television Dream Team”. Of the five personalities on the team, three were from KGGM. Even Andrew had found his niche as “Dream Team Commentator”.
The purchase of KBIM TV and the Competitive Edge:
Since the beginning of television broadcasting, the Albuquerque market, which covered all but the Southeastern part of the state, had grown to the 64th largest in the country. The top 50 was a magical number because national advertisers would sometimes only buy the top 50 markets to augment their network advertising. Television works on a classic supply and demand basis with the most perishable of products…. time. Once 30 seconds of the broadcast day came and went, it was as gone as the Roman Empire. If a station had to sell it cheap or for nothing at all, it was used for self promotion or public service. Cash money was preferable. If KGGM could take the whole market, including its competitors into the top 50, they all would have tighter inventory. KGGM would get something else as well. If those national buyers were using up more time, then all the stations could hold out for higher rates. Advertisers bought time based on a “cost per thousand”. That is a cost for every thousand viewers in a particular demographic. All stations could charge more per thousand if inventory was tighter. KGGM could also position itself to gain many thousands of those viewers.
The Southeastern part of New Mexico was problematic. KGGM’s competitors, KOB and KOAT, covered that part of the state with microwave and translators. Without getting technical, it meant they could get a signal to that part of the state and people could pick them up over the air. Their signals were not great but passable. The other Albuquerque stations were also on cable in the Southeast. KOB and KOAT covered all of New Mexico. KGGM did not have the ability to take advantage of either transmitters or cable. KBIM was the reason. In Roswell New Mexico, KBIM was the only local TV station and it was a CBS affiliate. It blocked any other CBS affiliate from the market. This was a big reason for that “perennial number three” thing with KGGM’s news.
After launching the new KGGM with a different approach, attitude and community outreach, the station had grown organically and become more competitive. There was, however, nothing KGGM could do about the hundreds of thousands of viewers its competitors could reach which it could not.
KBIM was a successful and prosperous business for the Rieshman family in Roswell. As the only TV station in the area and with the tallest free standing tower in the world, KBIM dominated that part of the state. With the huge tower, the station reached all the communities in Southeast New Mexico and a bit of West Texas as well. The only answer was to approach patriarch, Gene Reishman, and get him to sell the station to KGGM and the Hebenstreit family. Andrew’s father, Bruce, had tried this for decades without success. Though the Reishmans were originally in the baking business and still owned bakeries throughout the region, the TV station was a prize possession. Andrew saw that acquiring KBIM was critical and there were a couple of ways to go about it. One, he was willing to pay a premium, up to 10 times the station's cash flow. Secondly, Andrew understood the family connection. Gene Reishman's son in law was managing the station. Since, as a subsidiary of Andrew's New Mexico Broadcasting Company, the management of KBIM would be under Andrew’s control, he could afford to keep Reishman’s son in law in a management position in Roswell.
In the end, Andrew Hebenstreit was successful where previous attempts to acquire KBIM had failed. At 5 million dollars KBIM was acquired at eight times cash flow and Mark Reishman was retained with a three year contract as manager. Andrew honored that obligation after the contract had run its course. In the long run that position would not matter because of other plans.
A Bear in Bull’s clothing:
Most people had two concepts about the KBIM deal. The first was, $5 million was too much to pay. When the price got out, Andrew was criticized in the press and harangued by minor stockholders. The second impression, Hebenstreit was very positive about the future of local television. In fact, both those widely held beliefs were wrong.
The purchase did, in fact, bring the market into the top 50, barely. In the next Nielson rating period Albuquerque was ranked 49th. Suddenly, the NBC and ABC affiliates saw an advantage turn into a big weakness. The combination of KGGM and KBIM was greater than the sum of the whole. KBIM continued to sell local ads in the Southeast and dominate the market. National ads could now be run through both stations. KOAT and KOB, with relatively small transmitters on various channels throughout the Southeast, were easily dominated. KBIM’s image and acceptance as “the local station” was not diminished. The fact the station was now owned by another New Mexico family, not a large corporation, enhanced the transition.
The ABC affiliate, KOAT, was and still is owned by media giant Pulitzer Corporation. It took a few months, but Pulitzer came to realize it was now at a disadvantage that could only get worse as KGGM and KBIM continued to develop synergisms. Six months after the purchase of KBIM, Pulitzer was calling to arrange a visit from one of Andrew’s old friends. Mary Lyn Roper was a former KOAT anchor woman who was now at Pulitzer’s corporate headquarters in Saint Louis. Mary Lyn flew to New Mexico in a Pulitzer corporate jet. Mary Lyn took Andrew for a ride down to Roswell in the corporate jet and he gave Mary Lyn a tour of the facilities, including the world’s largest television tower.
It stood (and still stands) 1,837 ft tall, more than a 180 story building. The cables that held it in place were six inches in diameter and the tower was large enough to have a small elevator that ran up its middle. Small means three people could stand in it if they were thin, were very close friends and willing to take a very intimate ride pressed tightly together. The tower had fallen down twice before, but engineers were now sure it would stay there. The tower was designed to be flexible. At the top it would sway in the wind, up to 25 feet. Riding the elevator up a rider began to feel the tower sway after the first 100 feet (ten stories). As the ground drew further away and the little chain holding the passengers in seemed to be more and more stressed the ride got very scary. “How many times has this thing fallen down?” “Twice, bad weather both times.” Andrew chickened out before Mary Lyn did. About a quarter of the way up he suggested they go back down. Mary Lyn was known to have nerves of steel. If there had been more room in the elevator she probably would have been doing her nails. Today, Mary Lyn runs KOAT with an iron fist and beautiful nails.
Back on the plane, Mary Lyn got to the point. In return for selling it KBIM, Pulitzer was prepared to give KGGM its entire microwave and transmitter system down to and covering Southeastern New Mexico. In addition Pulitzer would throw in Seven Million dollars. Not bad, from no coverage at all in that part of the state, KGGM would get a whole system to do it, plus two million dollars more than Andrew had paid for KBIM six months earlier. Those who had said Hebenstreit paid too much for KBIM would be a bit surprised. The minor shareholders would need to rethink their positions as well. Despite a 2 million dollar profit in six months and as beautiful a spokesperson as Mary Lynn was, it was not to be, for a number of reasons. The first being, it was not part of the plan.
The KGGM shareholders who had opposed the purchase of KBIM were now begging Hebenstreit not to sell it. Now that the market was larger and the station finally had a fighting chance and because profits were up, even after debt service, selling the Southeastern powerhouse was crazy.