Schurz COMMUNICATOR July/October 2015 SCI selling TV, radio properties ‑‑ Stories pages 2‑3 Advocate - Messenger 150 years old ‑‑ Stories pages 12‑13 Scott Schurz Jr. in named to SCI V-P post ‑‑ Story page 8 Tragedy hits Roanoke TV station Two WDBJ7 journalists are slain ‑‑ See pages 5‑7 SCI sells TV, radio properties to Gray By Kevin Allen from Gray to personally announce the news of the sale. South Bend Tribune “I right now am in Roanoke because the top two people from Gray Schurz Communications has agreed to sell its TV and radio sta‑ and I said, ‘Where do the staff and the station need to hear it from us tions to Gray Television, a move that acknowledges the realities of in person?’” he said. “It is emotional, but that is why we’re here in the broadcast industry. Roanoke.” Atlanta‑based Gray reached a deal to buy the Schurz properties — Schurz Communications’ expansion into TV over the years has two dozen TV and radio stations combined — for $442.5 million. included: Schurz will retain the South Bend Tribune and its other newspapers, --In the Wichita, Kansas, market (DMA 65), Schurz owns as well as the four cable companies it now owns. KWCH‑TV and three satellite stations that serve as the market’s The eventual landing spot for WSBT‑TV, in South Bend, however, CBS affiliate. KWCH‑TV is the top‑ranked and highest grossing sta‑ remains a question mark. Because Gray already owns WNDU in the tion in the market. Schurz also owns KSCW‑TV, the market’s CW South Bend market, and to speed up regulatory approval of the deal, affiliate, and it provides sales and other services to Entravision’s it plans to look for another company to acquire WSBT. KDCU‑TV, the market’s Univision affiliate. Gray already owns Gray will use the opposite strategy in Wichita, Kan. It already KAKE‑TV and two satellite stations, which serve as the Wichita operates the ABC affiliate, KAKE‑TV, but it will look to sell off that market’s ABC affiliates. To facilitate regulatory approval, and prior station and retain the Schurz‑owned and top‑ranked KWCH‑TV, the to the Gray/Schurz closing, Gray will sell KAKE‑TV and its assets CBS affiliate. to another broadcaster. After such sale, KAKE‑TV will be owned The move by family‑owned Schurz to sell its broadcast arm is one and operated completely independently from Gray. that could resonate for years, especially in Michiana, where the com‑ --In the Roanoke-Lynchburg, Virginia, market (DMA 69), pany has its headquarters. While the Schurz company began more Schurz owns WDBJ7, the market’s CBS affiliate, and the number‑ than 140 years ago with the South Bend Tribune, it launched a local one ranked and highest grossing station in the market. Through the radio station in 1922 and WSBT‑TV in 1951, cementing its standing acquisition of WDBJ7, the transaction will add a third Virginia as a media powerhouse in the area. market to Gray’s portfolio. In addition to WSBT, Schurz in the area currently operates WSBT --In the Springfield, Missouri, market (DMA 75), Schurz owns 960 AM/96.1 FM, Sunny 101.5, New Country 99.9, and Z94. KYTV (known locally as KY3), the market’s NBC affiliate, and “The television and radio industries have been experiencing rapid KCZ, the market’s CW affiliate. KY3 is the number one ranked and consolidation,” Todd Schurz, the company’s CEO and president, said highest grossing station in the market. Schurz provides sales and in an interview. “We have great stations, we are the market leaders in other services to Perkin Media’s KSPR‑TV, the market’s ABC affili‑ six of our seven TV markets and all our radio markets. But at the end ate. Springfield will be Gray’s first television market in Missouri. of the day, we reach two percent of the nation. With what’s going on --In the Augusta, Georgia, market (DMA 112), Schurz owns in the ecosystem right now, it becomes increasingly difficult to gain WAGT‑TV, the market’s NBC and CW affiliate. Gray owns WRDW‑ scale, to gain leverage.” TV, the market’s CBS affiliate. Over time, Gray expects to consoli‑ For Schurz Communications, he said, “It would be very expensive, date WAGT‑TV’s operations with Gray’s existing operations in this very risky and very difficult” to acquire stations to gain the needed market. Gray anticipates that the FCC license for WAGT‑TV will be scale. offered in the upcoming FCC spectrum auction, with the proceeds He also acknowledged the difficulty of the decision in South Bend. from such auction, if any, payable to Gray. “It is emotional because the ‘SBT’ in WSBT stands for South --In the Anchorage, Alaska, market (DMA 148), Schurz owns Bend Tribune. We have long and close ties to that station and those KTUU‑TV, the market’s NBC affiliate. KTUU‑TV is the number‑ employees,” Schurz said. “So if I said to you it wasn’t emotional, one ranked and highest grossing station in the market – as well as the that wouldn’t be telling the truth. But as we looked at the future, we most‑watched and highest grossing station in the state of Alaska. It believed that others would be better stewards of the stations, and will become Gray’s first television station in Alaska. employees would have better opportunities as well.” --In the Rapid City, South Dakota, market (171), Schurz owns The deal is subject to review by the Federal Communications KOTA‑TV and three satellite stations, which serve as the market’s Commission, a process that is expected to take at least a few months. ABC affiliate. KOTA‑TV is the number one ranked and highest The sale, if approved, would expand Gray’s reach to 49 TV mar‑ grossing station in the market. Gray anticipates combining KOTA‑ kets in 28 states. The company has been trying to grow aggressively TV’s operations with those of Gray’s KEVN‑TV, the market’s FOX in recent years and recently purchased KCRG, the ABC affiliate in affiliate. Cedar Rapids, Iowa. The company reported revenues of about $500 --Radio Stations: Schurz owns the top‑ranked group of radio sta‑ million in 2014. tions in South Bend, Indiana; Lafayette, Indiana; and Rapid City, Hilton H. Howell Jr., the company’s president and CEO, said in a South Dakota. Like Schurz, Gray owns television stations in two of statement that the Schurz announcement is “a momentous day in these three markets. In addition to the South Bend radio stations, Gray’s 118‑year history.” Schurz currently runs KFXS, KRCS, KOUT and KKMK in Rapid “We welcome more dedicated reporters, account executives, and City, S.D; and WKHY 93.6 KHY, WKOA K105, WASK 98.7, technologists to our growing family,” he said. “Gray’s existing sta‑ WXXB B102.0 and WASK ESPN 1450 AM in Lafayette, Ind. tions will make the Schurz stations stronger, while the Schurz sta‑ In 2008, Schurz built an 83,000‑square‑foot facility on East tions will make our existing stations better.” Douglas Road in Mishawaka for WSBT and Schurz corporate head‑ Schurz Communications moved into broadcasting in 1922 with the quarters. The building cost more than $25 million, and another $10 launch of WGAZ radio (now WSBT) in South Bend. million to equip. In 1969, it purchased WDBJ‑TV in Roanoke, Va. WDBJ7 is the Schurz will not sell the building as part of the deal and plans to station where two employees were shot and killed last month by a keep its corporate headquarters there, even while the stations contin‑ former co‑worker while they were on location. ue to operate from the facility. Todd Schurz traveled to Roanoke on Sept. 15 with top officials 2 Fall 2015 Schurz Communicator Schurz Communicator Fall 2015 3 Glimpse at the future for Schurz Communication By TODD F. SCHURZ every organization, similar to living crea‑ President/CEO tures, is either growing or shrinking. There Schurz Communications Inc. is no such thing as “staying the same” over This issue of the Communicator may have time. Given the pace of disruption and TODD F. changes in consumer behavior today, we more important stories in one issue than any SCHURZ other in its short history. Since there are have to innovate, experiment and grow just President/CEO to keep pace. Second, the stewardship value articles about the tragic events in Roanoke Schurz and the proposed sale of the radio and tele‑ runs very deep in our culture. We receive Communications, with gratitude what others have done before vision stations, I would like to use this col‑ Inc. umn to talk about the future of the company. us, and then do all we can to pass along The extended Schurz family gets together something better and stronger than what we every year, and three generations meet to have received. I would argue that this is tied discuss our goals for the family and for the very closely to the American Dream and business. In the past few years, we have what we wish to leave our children. Third, reached a few conclusions: mate community connections, proprietary family businesses need to grow because Our industries have changed and are data, and billing relationships. We can pro‑ families grow over time. In our case, we had changing dramatically; so must we. As vide the key insights when you need to know four members of the fourth generation of the owners of a family business, we treasure our more than what an algorithm can provide.