Florida Trend

Florida Small Business



May 21, 2018

Media, Entertainment, Sports

David Poppe | 1/1/1996
Florida's broadcast media and advertising agencies enjoyed a robust 1995, and most industry leaders say they expect more of the same in 1996.

The newspaper industry, however, continues to suffer from rising newsprint costs. Florida's largest daily, the Miami Herald, says its newsprint expense rose by $20 million in 1995, a 40% increase, prompting the elimination of 200 employees. The Herald will cut $32 million from its 1996 expenses by reducing the number of sections it prints, trimming news space and not replacing workers who quit.

At the St. Petersburg Times, the state's second-largest daily, newsprint costs rose by $9 million in 1995 and the paper expects another $9 million increase this year. The Times will print some sections of the paper on lighter-weight paper this year, and will also use attrition to reduce its work force.

Former PaineWebber media analyst and current newspaper consultant J. Kendrick Noble says tough times will continue in 1996 for print media. Not only is newsprint getting more costly, but newspaper circulation is flat and papers' advertising revenue growth is sluggish. "Modest growth is the best one can see," says Noble.

For broadcasters, the news is cheerier. Peter C. Barr, Sr., president of the Orlando advertising agency Fry Hammond Barr Inc., notes that television advertising time in his city is nearly always sold out, thanks to ready-to-spend tourists. Broadcasters command major market ad rates.

Robert Leider, the general manager of WSVN-Channel 7 in Miami, the Fox affiliate, says the last two years have been "incredibly strong" for television nationwide. For network affiliates, national advertising makes up about half of revenues. The local ad market remains strong, Leider says.

Leider is optimistic about 1996. The Olympics will be a bonanza for NBC, but will also create a shortage of available advertising time. That, in turn, forces "spot" advertisers to buy elsewhere and at higher rates, he says. Plus, presidential elections stir a frenzy of TV advertising.

It's a similar story in radio. The Radio Advertising Bureau reports that radio ad revenues rose 10% through the first nine months of 1995.

As for 1996, Eric Rhoads, chairman and publisher of Radio Ink magazine in West Palm Beach, expects radio to benefit from a strong economy and from its status as a "stable, easy-to-understand, easy-to-buy medium." Radio should also benefit from the Olympics and the elections.

Advertising and Public Relations
The Florida print and TV advertising market continues to grow in size and stature, and most executives are optimistic about 1996. The American Association of Advertising Agencies estimates 1996 industry-wide revenue growth of 6% to 8%, up from about 4% growth in 1995.

"Everyone seems to be looking for a better year. Not that 1995 was bad. It was better than 1994. But everyone is looking for 1996 to be better than 1995," says Alan Campbell, executive vice president of Young & Rubicam in Miami.

Sandra Tinsley, chairman of Tinsley Advertising & Marketing Inc. in Miami, agrees. Her agency posted 1995 billings of $69 million, and she expects 10% to 12% growth in billings this year.

In particular, Tinsley says national TV and print advertisers are beginning to look to Miami agencies for their Spanish language campaigns.

It's not just South Florida agencies reporting good results. Michael Winner, partner in Tampa's Winner Koenig & Associates, which has 17 employees and $7.5 million in 1995 billings, says business has never been better. "My opinion is that with all the consolidations and mergers and cost cutting, people have cut costs as much as they can" and are now focusing on ways to fuel growth, such as advertising and marketing.

Even so, clients are watching their dollars closely. Orlando advertising executive Pete Barr says 1995 was a good year in Central Florida, but noted clients are getting very conservative. "Spending has become more cautious," he says.

Robert O. Faller, CEO of FKQ Advertising Inc. in Clearwater, agrees. "There are clients who are willing to explore and develop new markets, but there are also people who say we expect more for less and we want it faster," he says.

In public relations, several industry executives also say clients are becoming more conservative.

Bob Mervine, the president of the Central Florida chapter of the Public Relations Society of America (PRSA), says many clients have a "back to basics" philosophy. "They are looking for a simple, more basic PR product," Mervine says, and are shying away from "event marketing" or long-term projects where benefits may be hard to quantify.

Burson-Marstellar Senior Vice President Eileen Marcus says clients also are demanding more industry-specific expertise. In the Tampa Bay area, Tom Hall, chairman of the Tucker/Hall agency, describes the market as steady. "I think the market is growing, but it's probably not exploding," he says.

Marcus says Burson's South Florida operation had 1995 revenue of $2.6 million and expects $2.8 million this year. Rubin Barney & Birger of Miami grew 25% in 1995, to $2.5 million in revenue, says founder Bruce Rubin. Zynyx Marketing Communications, with offices in Miami and Washington, D.C., expects Florida revenues to grow from $2.6 million in 1995 to $2.9 million in 1996.

Employment also seems strong. PRSA's Miami chapter has a job bank with 30 available positions listed as of late October, a record high.

Film and Music
Florida growth as a center for TV and feature film production may be reaching a plateau.

John Reitzammer, executive director of the Florida Entertainment Commission, says there were 29 feature films made in the state in 1994 and 27 through mid-November of 1995, with several others ready to start production in December.

Reitzammer says Florida isn't likely to attract much more than 30 feature film productions per year.

There is more opportunity in television and commercial productions, and Spanish language projects. But the state lacks the sound stages, film laboratories and other technical capabilities needed to take full advantage.

Some companies are trying to fix that. Universal Studios built three new sound stages in Orlando in 1995, and a New York entertainment attorney, Thorpe Shuttleworth, has broken ground on his 41,000-square-foot Palm Beach Ocean Studios that should open in March.

"There have been so many prior announcements that someone is building a studio in Florida, people don't believe it's going to get built. There's a lot of skepticism," he says.

Universal opened two of its new sound stages during 1995 and is putting the finishing touches on a third which, when completed, will give it nine sound stages on 146,500 square feet of space.

Florida can't get enough of pro sports, and sports moguls seemingly can't get enough of Florida taxpayers' dough.

In November, Dade County christened its new $59 million, 60,000-seat taxpayer-financed Homestead Motorsports Complex with the sold out Jiffy Lube 300. Homestead officials hope the track will prove a shot in the arm for South Dade. But with just four big races per year scheduled, it's unclear whether the track will attract enough tourists to provide long-term benefits.

That's not stopping other areas from using -- or considering the use of -- tax dollars to finance sports venues. Tampa is building the Ice Palace, a $144 million arena for the Tampa Bay Lightning hockey team, and the Buccaneers say either they get a new stadium or they move. Jacksonville spent $138 million to refurbish the Gator Bowl.

Broward County wants to build a $165 million arena for the Florida Panthers hockey team and possibly the Miami Heat basketball team. But Panthers owner H. Wayne Huizenga says he can't wait three or four years until an arena is built and may move the team or sell it. Dade County is struggling to develop a plan to keep the Heat in Miami.

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