QUESTIONS ABOUND AS PETRY'S PROBLEMS PERSIST

Blair and Petry are two of the oldest and most distinguished brands in television. Petry Media Co.’s two rep firms trace their roots to the days when AM radio was considered new media.

But I’m beginning to think the name plates may soon go the way of Studebaker and Packard. I know a lot of broadcasters are, too.

The reps have lost a ton of business since the beginning of the year to rivals Katz Television (Continental, Millennium and Eagle) and Cox (TeleRep, MMT and HRP).

Just last Friday, I learned that five more stations are defecting.

The three stations that Raycom just bought from Lincoln Financial—WWBT Richmond, Va.; WSCS Charleston, S.C., and WBTV Charlotte, N.C.—are being moved to Cox.

And News-Press & Gazette Broadcasting is shifting KRDO Colorado Springs-Pueblo, Colo., and KJCT Grand Junction-Montrose, Colo., to Katz, effective today.

By themselves, the five stations are not a big deal. But they are the latest in a series of substantial client losses for Petry over the last several months. Taken together, they have cut deeply into Petry’s billings and revenue and cast doubt on its future.

The big blow came in late April when Gannett decided it was moving its business to Cox’s TeleRep. That shift was effective May 12.

According to various sources, Gannett accounts for about $400 million a year in billings. If you figure a 6 percent rep commission, the Gannett business meant about $24 million in annual revenue to Petry.

TeleRep probably paid Petry millions to buy out the remainder of its contract with Gannett. But that payment will do little to replace the deep year-after-year revenue stream that Gannett represented.

Gannett came on the heels of smaller, but significant losses to Katz: Nexstar in March and Dispatch and Fisher in April.

All told, some believe that Petry may have lost more than half its billings and revenue this spring.

It’s hard to know exactly what’s causing the defections, although you get the sense that broadcasters started losing faith in Petry’s staying power last year and that began building its own negative momentum.

The first sign that something was amiss came last summer when Petry lost two of its highest ranking executives, Tim McAuliff and Leo MacCourtney. To make matter worse, MacCourtney landed at Katz Television.

Petry certainly didn’t help itself when it laid off a few dozen people in February without properly reassuring its clients and at least trying to put a positive PR spin on it. Some clients learned of the layoffs from the grapevine or from the press. Not good.

The layoffs strongly suggested that Petry was having financial trouble. They came at a time when most were still nothing but bullish about 2008.

No doubt, Petry’s rivals have contributed to its woes. Cox and Katz are apparently doing all they can to pry away business, although no one is saying (or admitting) that they were slicing their commissions to do it.

This isn’t just about dollars, of course. Every time one of these accounts shifts, managers and account executives lose their jobs.

The loss of Gannett alone affected as many as 40-50 people, I’m told. TeleRep may pick up a couple of dozen, but the rest will be cast off. This is not the best time to be looking for a job.

There is a lot of what’s-next-for-Petry talk floating around.

Petry's best hope appears to be Tribune, now under new ownership and management. Sources say that Petry is working hard to steal the Tribune business from TeleRep. It’s about the only way Petry can replace the Gannett business and get back in the game.

But rep followers I spoke to consider Tribune a long shot. They have formulated other theories about Petry’s fate, none good.

One theory says that Petry will downsize, perhaps collapsing Blair Television into Petry Television, and try to carry on. It still has some substantial clients, notably LIN, Hubbard and Journal. They don’t seem to be going anywhere.

Another says that Petry will merge into either Katz or TeleRep. That may make sense for Petry, but not necessarily for Katz and Cox. If they wait, they may be able to gradually pick off Petry’s remaining clients without giving up anything.

And then there is the doomsday scenario: Petry simply folds, walking away from its leaseholds and other obligations around the country and leaving its remaining clients to find new homes with Cox or Katz.

What actually happens, of course, will depend on Petry CEO Earl Jones and the nebulous New York-based investment firm that owns the company, Patriarch Partners.

And they aren’t talking. In fact, Petry hasn’t had much to say since the February layoffs. After losing Gannett, it issued a limp statement saying it is “confident in the future of the company amid a rapidly changing media environment.”

Right now, that confidence isn’t shared by many.