WTHR general manager departure a stunner

Neither side is talking, but one thing is certain: The removal of the 13-year WTHR veteran known for a sometimes-testy temperament
comes at a crucial time for the local television station.

WTHR's prime rival, WISH-TV Channel 8, is surging in the ratings and WRTV-TV Channel 6 recently hired two new evening
news anchors and embarked on its biggest marketing campaign in several years. And Pegram left just as the November ratings
"sweeps" began.

"The November ratings book is the one that sets the tone for the first part of the next year," said Bill Perkins,
longtime media buyer and president of locally based Perkins Nichols Media. "Of the three sweeps periods, this is arguably
the most important."

Local stations often air special news features and other programming to boost ratings during November sweeps.

"No question, November is the No. 1 book you want to have success in," said WISH General Manager Jeff White.

Station officials said Pegram's Nov. 1 departure won't change their plans for this month or beyond.

Rod Porter, who formerly served as WTHR's program director, is now interim general manager. "Rich was a great leader,
but this station is the sum of its parts. We have strong department heads who have put together strong staffs," Porter
said.

TV advertisers and media buyers won't simply take his word for it. They will be watching to see if Pegram's departure
affects the station's strategy and programming.

"Rich, by elevating ratings, did make that station more valuable for advertisers," Perkins said. "Our business
revolves entirely around a station's audience size. If Rich's departure affects WTHR's audience, that will affect
our ad buying." For now, WTHR retains its grip as the local TV news leader, as the recent election-night ratings demonstrate.
WTHR newscasts on Nov. 6 often attracted more audience than WISH and WRTV combined.

In some cases, WTHR still is able to get nearly twice the rate that WISH or WRTV get for a 30- or 60-second advertisement
during local news, Perkins said.

When Pegram joined WTHR in 1994, the station was a long way from the leading local station.

"When Rich arrived, the station's news was No. 4 behind 'Punky Brewster,'" said Jacques Natz, who served
as WTHR's news director for 10 years before departing to take a job with New York-based Hearst-Argyle Television in October
2006.

Now, WTHR's competitors detect blood in the water.

"Anytime you have a shake-up in leadership, it provides an opportunity," said WISH's White. "We have a
lot of momentum right now, and this gives us an opportunity to continue that momentum."

The reason for the WTHR shakeup is unclear–at least to outsiders.

Some blame a leadership change at WTHR's parent company, Columbus, Ohio-based Dispatch Broadcasting Group. Poe Timmons
was hired in late January as the company's new chief financial officer. Although she doesn't have media experience–Timmons
previously worked for a major accounting firm, Ohio-based girls clothing outlet chain Tween Brands Inc. and Columbus-based
auto glass replacement firm Safelite Group Inc.–industry sources said she was brought in to tighten budgets at Dispatch's
TV stations in Columbus and Indianapolis and at the Columbus Dispatch newspaper.

Pegram had a series of meetings with Dispatch management–including Timmons and CEO Michael Fiorile–in late October and
early November, sources close to the station said, and at one point became so upset that he walked out on Timmons.

The disagreements came to a head during a Nov. 1 meeting between Pegram and his Dispatch superiors, who at the end of the
day dismissed him and had him escorted from the building.

"I don't know anyone who didn't hold him in the highest regard," Perkins said of Pegram. "Everything
I have heard said this had more to do with budgetary cuts."

Though Pegram declined to discuss why he left, his parting statement was cordial.

"It's been an honor and thrill to work with such talented staff at WTHR, our advertising partners and community
leaders in Indianapolis, and I wish them all continued success," he told IBJ.

During his tenure, Pegram was known as a general manager who could attract top talent, even luring it away from larger markets.

"The general manager sets the tone for the entire station, and that is key to attracting good on-air talent," said
talent agent Rick Gevers, whose locally based Rick Gevers & Associates represents on-air TV news personalities nationwide.
"WTHR has had a commitment to journalism that few stations can match. It will be interesting to see where they go from
here."

The early returns of the November sweeps show that WISH and WRTV newscasts are gaining audience faster than WTHR.

"Rich is a very competitive guy, and I'm sure part of his argument is now is not the time to be making cuts,"
said Paul Montgomery, WRTV director of programming and promotion.

The privately held Dispatch company gained a reputation in this market for outspending its TV competitors: WISH, which is
owned by Rhode Island-based Lin TV Corp. and WRTV, owned by New York-based McGraw-Hill Cos. Lin and McGraw-Hill are both publicly
traded companies known for keeping a close eye on expenses.

"Everybody is stunned by this because of the success they had," Montgomery said. "The reality is, they can't
afford to run the station the way they did before."

The station's employee pension plan was frozen earlier this year, sources said, and other cuts are on the horizon. But
WTHR officials are promising to continue their commitment to local news and programming.

"There's no orders to slash and burn the budget," said Porter, who expects a permanent replacement to be named
by January. He declined to say if he was pursuing the job.