When dealerships close their doors, far more is at stake than the 100 or so people who have had their livelihood taken from them. Set aside, for a moment, the assets that used to have value for the families who have held them for decades and for generations. Forget the public companies who are watching the asset value of their companies drop almost overnight.
Local media will suffer another blow in the string of events that has been like Chinese water torture under Niagara Falls. The lifeblood of both newspapers and broadcast stations has been the automotive industry. Don't forget local cable advertising too. One just has to wonder how much more the local media outlets can take.
The newspapers can at least control the flow of the advertising by cutting back on pages and delivery, although I'm sure that's little solace to the print media who are watching 25% of the base of advertisers dry up. Broadcasters are in a different position. They are selling a commodity. In a linear world, once an avail goes, it's got to be sold at some price. There is limited shelf life. Without the demand that comes from the automotive dealers to support the advertising floor, I'm afraid media costs on a per spot basis will start dropping precipitously. I know for a fact that automotive advertising in most markets has historically represented a disproportionate share of all local broadcast advertising. The net effect will be that the cost per spot has nowhere to go but down.
Be expecting more cutbacks at broadcast stations as the revenue continues to drop--not just because there won't be as much automotive advertising, but also because of the compounding effect of the drop in demand for their commodity--fewer buyers at the auction. At this rate, pretty soon, interns will be reading from the prompter.
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