TVX Broadcast Group

American media company

TVX Broadcast Group was an American media company that owned a group of mostly UHF television stations during the 1980s and early 1990s. TVX was established by local investors as the Television Corporation of Virginia, which built WTVZ TV in Norfolk, Virginia, in 1979. The group soon became Television Corporation Stations—though abbreviated TVX—and adopted its final name in 1984. TVX built or acquired additional independent stations in mid sized markets, primarily in the southern United States, between 1980 and 1987; it became known for its cost conscious and cookie cutter philosophy toward station management, particularly its standard station employment plan with exactly 37 employees. While TVX always envisioned entering larger markets, the acquisition of five major market independent stations from Taft Broadcasting in 1986 proved to be its eventual downfall. TVX incurred substantial debt in the purchase just as the independent station market soured and investors shied away from its junk bonds. The firm struggled to recapitalize and soon was shedding most of the stations it had built in medium markets. Gulf and Western Industries, the corporate parent of Paramount Pictures, acquired 79 percent of the company from Salomon Brothers in 1989. TVX became wholly owned by Paramount in 1991 and became Paramount Stations Group.

The Television Corporation investors wasted little time branching out into new markets. In 1980, they purchased WGNN TV, a small Christian television station in Winston Salem, North Carolina, and rebuilt it as WJTM TV (representing John Trinder and Tim McDonald in its call letters). Television Corporation of Virginia then also purchased the construction permit for a new independent station in Richmond, Virginia, and put WRLH TV on the air in February 1982. A year after starting up, it already accounted for eight percent of the total TV audience in Richmond. TVX continued to add one new station a year, building WMKW TV in Memphis in 1983 and WCAY TV in Nashville in 1984. In expanding, TVX sought situations where novice broadcasters had gotten in over their heads and wanted to sell in Sun Belt cities predicted to have growing markets. Each new station put on the air was modeled after WTVZ, where bookshelves had been scrounged up at pawn shops and other furnishings were obtained in trade out deals for advertising. Each station had 37 employees—McDonald told Channels magazine in 1986 that "we've found over the years that that's how many we need"—and generally aired a similar mix of programming, with little local programming and more sports than the average independent. This strategy earned TVX derisive nicknames in a business known for a glamorous image: a 1986 feature article on the company was titled "McStations", and it was also dubbed the "Kmart of broadcasting". Despite this activity and a surge in revenues from $2 million in 1980 to $14 million in 1985, TVX remained an unprofitable company because of increasing programming costs and leveraged acquisitions. To clear the company's bank debt, TVX sold WRLH TV in 1985 to A. S. Abell Company, then publisher of the Baltimore Sun, then went public as an over the counter stock raising $19.8 million from the sale of two million shares. The cash was used on a buying spree of stations: two in operation (WNOL TV in New Orleans and WLFL in Raleigh, North Carolina) and two unbuilt stations in Pine Bluff/Little Rock, Arkansas (signed on in 1986 as KJTM TV), Buffalo, New York (the permit for WNYB TV), plus 49 percent of KRRT in the San Antonio market. (The Winston Salem station was sold in order to acquire the Raleigh station, as their signals overlapped.) The acquisition of WNOL typified TVX's cost cutting ways. WNOL TV had been put on the air in 1983 by a group that was losing money; TVX renegotiated programming contracts and cut such niceties as covered parking for station executives. The eight TVX stations owned at this time all became charter affiliates of the Fox network, which initially only provided late night and weekend prime time programming, in October 1986. Many of TVX's independents led their markets, though some faced much stiffer competition, most notably New Orleans and Nashville. Two additional attempts at expansion were unsuccessful. TVX filed for channel 42 in Austin, Texas, but wound up accepting a settlement with three other companies pursuing the channel in 1983; under the deal, the other three groups would combine to own the station, and TVX would serve as a consultant. The company also was the driving force behind a proposed distress purchase of WHCT in Hartford, Connecticut, in 1981; the troubled station was being sold by its licensee at a discount, and TVX joined forces with Herman Valentine, a Black employee of the company, and the Hispanic owned East Los Angeles Community Union in order to qualify as a minority licensee under FCC distress sale rules. TVX eventually backed out of the deal when the FCC began investigating the East Los Angeles Community Union for criminal misuse of funds; TVX investor Gene Loving told the Richmond Times Dispatch that "[w]e made the decision we couldn't be in business with them".

In November 1986, TVX agreed to pay $240 million to acquire five major market independent stations from Taft Broadcasting. The stations were all in markets larger than the existing TVX portfolio: WTAF TV in Philadelphia (renamed WTXF TV in 1988); KTXA in Fort Worth, Texas; KTXH in Houston; WDCA TV in Washington, D. C.; and WCIX in Miami. TVX officially closed on the deal on April 9, 1987. The larger market independents presented a puzzle for TVX's business model. Two of them—WTAF and WCIX—produced local 10 p. m. newscasts, something with which the company had no experience. Most of them, with the exception of WTAF, were doing rather poorly. The addition of five more stations to the portfolio also left TVX needing to divest itself of one station. It chose the still unbuilt WNYB TV in Buffalo, New York. After a deal to sell the station to Malcolm Glazer fell through, the company successfully approached the owners of the Buffalo Sabres hockey team, who were approved and put the station on the air in September 1987. TVX took on debt to make the purchase. TVX's bankers, Salomon Brothers, provided the financing for the acquisition and in return held more than 60 percent of the company. TVX then recapitalized over the course of 1988 and 1989 by selling stations in many of its medium and small markets. In 1988, TVX sold its stations in Pine Bluff/Little Rock and Nashville; 1989 saw the sale of the company's holdings in Memphis, New Orleans, and Norfolk. Additionally, McDonald left TVX in May 1988 after five years and was replaced by Trinder as president. TVX sold another station under very different circumstances. Miami's WCIX had become, from the moment Taft put it on the market in 1986, a major player in a brewing affiliation drama in the Miami area. CBS, which was seeking to buy stations, inquired as to purchasing the station and leaving longtime affiliate WTVJ; that caused a buyer for WTVJ, also on the market, to withdraw from the deal. CBS continued to negotiate with Taft, and the original purchase agreement between Taft and TVX allowed Taft to continue negotiating to sell the Miami station to CBS for 10 days after being announced. However, CBS ultimately walked away because it feared that the Miami station, whose signal had technical deficiencies in several populated areas of the market, would bring down network ratings. In January 1987, NBC instead acquired WTVJ. When the owner of the outgoing NBC affiliate in Miami, WSVN, reached an impasse in negotiations with CBS, CBS and Salomon Brothers began discussing a sale. CBS then purchased WCIX from TVX for $59 million; the station became the CBS affiliate in Miami on January 1, 1989, and CBS closed on the purchase two days later. Despite the successful recapitalization, Salomon Brothers reached an agreement in principle in January 1989 for Paramount Pictures to acquire options to purchase the investment firm's majority stake. This deal was replaced in September with an outright purchase of 79 percent of TVX for $110 million. Another four percent stake was acquired from Citicorp the next year. In 1991, Paramount acquired the remainder of TVX, forming the Paramount Stations Group. TVX and the Grant Broadcasting System were cited by Television Engineering editor Peter Caranicas and Variety writer John Lippman as among the highest profile economic failures in late 1980s independent television.