A bankruptcy filing--in Rhode Island it's called a receivership filing--by Global Broadcasting of Southern New England lends at least surface credence to broadcasters' claims that times are bad and cable retransmission fees are needed to save the business.
Global, the parent company of ABC-6 (WLNE-TV) in Providence, R.I., said the action followed a precipitous decline in advertising revenues. The station has already cut staff from about 100 people to 88 but it's not enough to offset the revenue losses, said Matthew McGowan, a Providence lawyer who's been named the station's receiver.
"With the past several years' downturn in the U.S. economy, as well as in the Rhode Island economy, Channel 6, like virtually all television and other media businesses, has experienced a decline in revenues (and this) business downturn has put unexpected severe pressure on its ability to serve its secured debt," said McGowan, in a prepared statement released by the station.
Cox Communications carries ABC-6 WLNE in Rhode Island. Time Warner (NYSE: TWC-WI) and ABC parent company Disney (NYSE: DIS) are in the midst of a nasty retransmission spat that's starting to look as bad, if not worse, than the one between Disney and Cablevision (NYSE: CVC) last spring. A station bankruptcy, therefore, can only throw gasoline on an already out-of-control fire.
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