About 15 years in the past, Ion Media chairman-CEO Brandon Burgess got down to play “Moneyball” with a bunch of TV stations that had been on the verge of chapter.
He scored in the long term by following his personal type of algorithm, with a method that was counter to the enterprise developments which are remodeling the pay-TV market. After inheriting an organization saddled with practically $three billion in debt, Burgess this month accomplished the sale of Ion to E.W. Scripps Co. and Berkshire Hathaway for $2.7 billion.
“We were never the cool, sexy network, but we gave our investors a return of 28X on their capital,” says Burgess, who spent eight years as a high dealmaker at NBC earlier than transferring to Ion in late 2005.
In Burgess’ view, the largest consider Ion Media’s turnaround was the self-discipline to withstand the siren track of authentic content material. Whereas dozens of area of interest retailers started to put money into new scripted and unscripted manufacturing, Burgess studied the panorama and realized that Ion’s assortment of 70-plus stations couldn’t compete with out an enormous bankroll, which it undoubtedly didn’t have. It was overspending on content material that led the earlier regime on the firm, then known as Paxson Communications, to turn into hobbled by debt.
When Burgess took over Paxson, the corporate was so cash-strapped that its stations served up solely infomercials for about half the day.
Burgess was an enormous fan of “Moneyball,” the 2003 nonfiction e book by Michael Lewis that chronicled how Oakland A’s supervisor Billy Beane used his evaluation of participant stats and math to construct a powerhouse squad with out paying sky-high star salaries. Burgess made his administration staff learn the e book.
The TV spin on “Moneyball” was to check rankings. It’s no secret that essentially the most plentiful viewers in TV is older adults, notably ladies. What do older ladies watch? Procedural crime dramas and film thrillers constantly rank excessive on the listing. Burgess centered on buying syndicated reruns that may match the invoice: “Criminal Minds,” “Law & Order: SVU,” “NCIS: Los Angeles,” “Blue Bloods” and “Hawaii 5-0.” As an alternative of chasing elusive youthful viewers, Ion could be pleased with drawing a crowd within the 25-54 age vary and past.
Focusing on older viewers with reruns to drive a enterprise model solely depending on promoting is just about the other of the imaginative and prescient for many different sizable tv gamers. That’s why it labored.
“As no one else was systematically focused on this strategy, Ion was able to run the table and corner the market for top-quality syndicated crime dramas,” Burgess says. “And studios were thrilled to license those to us because Ion paid good cold cash for the shows.”
When Burgess first took over Paxson in late 2005, he tried to influence Warner Bros. to merge with the station group to supply a spine for its WB Community. However he didn’t know then that WB Community and UPN had been already down the highway on their very own merger, which begat The CW. That drove Burgess to double down on his focus to maintain overhead extraordinarily low. Ion stations are programmed 24/7 by reruns and operated from a central hub in West Palm Seaside, Fla.
Extra just lately, when Ion started pursuing a sale once more, the slimmed-down Fox Corp. was seen as a logical contender as a result of it could have given it leverage with most of the community’s affiliate station house owners. However amid the upheaval of the pandemic, essentially the most aggressive suitor turned out to be Scripps, with an help from one of many world’s most famed traders, Berkshire Hathaway’s Warren Buffett.
Ion stations had been early into the sphere of multicasting as a result of it owned so many stations and since Burgess was intent on experimenting after the nation’s digital transition took impact in mid-2009. The infrastructure that Ion constructed out in its Florida amenities was an enormous draw for Scripps, which has invested in multicast area of interest nets together with Bounce, Grit, Laff and Court docket TV Thriller.
Ion prospered by respecting its pure limits. Burgess thinks the corporate was helped by being headquartered far exterior New York or Los Angeles.
“It never would have worked if my owners had been Hollywood experts,” Burgess says. “We did the opposite of what everyone told us to do.”
(Pictured high: “Law & Order: SVU”)