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Henry Luken, one of Chattanooga's biggest real estate owners, likens his broadcast properties to his office, golf course and other property holdings. Both become more valuable as demand grows.

Luken networks

Retro TV: Classic shows largely from the ’60s and ’70s

Heartland: Current and classic country music and lifestyles

The Family Channel: Family-friendly educational, faith and entertainment

PBJ: Classic children’s shows and cartoons

TUFF TV: Men’s programming, including hunting and fishing shows

Frost Great Outdoors: Home shopping, outdoor lifestyle programming

Jewelry Television: Home shopping programming

REV’N: Programming for motoring enthusiasts

There is an non-descript brick building on East Eighth Street where Jed Clampett, Little Joe Cartwright and Lassie live on.

And it's where Henry Luken, local telecom and real estate mogul, saw the future.

In 2005, Luken Communications — co-owned by Luken and Life Care Centers of America founder Forrest Preston — launched a low-power, digital broadcast network called Retro TV over the nation's free TV airwaves.

It was a simple idea: re-air the country's favorite old shows at no cost to viewers and eventually partner with small local stations across the country to grow Retro TV's footprint.

At the time, fewer than 10 percent of American households viewed the kind of broadcast programming that Retro TV was pushing out, Luken remembers. The low-power market represented only a tiny piece of the very large TV pie.

But in a manner of only 10 years, the format has made serious gains on cable and satellite.

In the first quarter of 2015, information watch group Nielsen reported that around 11 percent of America's 116 million TV households watched only broadcast television at home. While it is a mere fraction of the 75 percent of households that pay for cable and satellite service, it still means around 12 million people are watching broadcast TV.

And broadcast is still growing.

In the last year — specifically, from the first quarter of 2014 to the first quarter of 2015 — Nielsen found that broadcast TV gained almost 1 million new viewers.

Cable, meanwhile, lost 2.2 million subscribers, and satellite lost 300,000.

Some of those lost customers are switching to online-only TV such as Netflix, Hulu and Amazon Prime. But experts also predict that in the near future, broadcast TV is poised to make up 20 percent of the market.

And that it probably won't stop there.

"It's a growth business," said Dennis Wharton, spokesman for the National Association of Broadcasters. "It's an absolute, super growth business in the TV arena."

Broadcast TV manages to do something almost unheard of: it has heightened appeal to both young and old viewers.

Young, tech-savvy Americans have embraced online, on-demand television and streaming services and are happy to forgo paying for cable and satellite.

For the one-time cost of purchasing an antenna (new TVs are equipped with digital conversion technology), those young viewers can then supplement streaming services with broadcast TV, often catching at least the big three networks — NBC, ABC and CBS — through local affiliate stations.

"It's hip again to use an antenna," said Wharton. "These are not your father's or your grandfather's TV antennas."

Meanwhile, broadcast TV stations like Luken's Retro TV — which show old hits from the 1960s and 1970s — also appeal directly to TV's largest age demographic: the 50-plus crowd.

According to Nielsen, older adults, on average, watch TV six days a week. In those six days, they spend around 47 hours in front of a TV.

And TV viewers 65 and up watch even more, around 51 hours of TV every week.

"Think about it for a minute," Luken said. "It's free. In Chattanooga, there are 40 channels now that you can get digitally-modulated, free."

Free, compared to $30, $40 or even up to $100 and more for subscription TV.

Free to the young couple, watching every penny. And free to the retired person, living on a fixed income.

Not to mention, there was also a land-grabbing aspect to television when Luken did: the country's invisible airwave infrastructure — or wireless spectrum — is finite, and disappearing, eaten up in chunks by mobile phone, TV and radio signals.

"It makes all the bandwidth that exists for free television that much more valuable," said Luken. "It's real estate. When you start removing a certain amount of real estate out of the pool, everything that's left becomes more valuable."

Simple math, he said — coupled with an entrepreneur's intuition.

"It's not rocket science."

***

Of course, there have been hiccups along the way.

Right after acquiring Retro TV, Luken Communications was sued for $65 million by Retro TV's former owner, Little Rock, Ark.-based Equity Media Holdings Corp.

Luken Communications paid $18.5 million for Retro TV in 2008, and Equity Media Holdings Corp. went bankrupt soon after. The Arkansas company's bankruptcy trustee then sued Luken Communications on the grounds that Luken — a board member of Equity Media — paid "less than a reasonably equivalent value" for Retro TV.

Henry Luken said the allegations were hogwash. But the courts upheld the ruling. And Luken Communications, like Equity Media Holdings, soon declared bankruptcy.

But Luken didn't give up. For years, he battled the ruling and appealed to the courts, saying the judgment levied against Luken Communications was unfair. His efforts paid off last fall, when, in September, Luken Communications reached an agreement allowing it to pay out a much smaller $2 million settlement and exit Chapter 11 bankruptcy.

Luken Communications came out of bankruptcy in October.

But the fight had taken its toll. Luken Communications wasn't making money. And it had not grown as much as it could have through the lawsuit years.

It had held on, but Henry Luken's dream was never for the company to merely scrape by.

In the decade since Luken Communications launched Retro TV, the company's portfolio has expanded to include eight networks. And in the next six months, the goal is to reach 10.

After the company exited bankruptcy, Luken told David Leach, president and CEO, to go find the best guys in the business and bring them to Chattanooga.

Luken himself is an investor in the operation and sets down a general vision but largely places the responsibility of running the company in the hands of Leach.

And it was Leach who set out to find the best brains in the business and bring them to Chattanooga, to create a brain trust that could help Luken Communications take the next step.

And Leach thinks he's done it.

***

The way he tells it, Leach set out to get one home run hire for Luken's executive team, and he returned with three.

In June, Luken Communications announced its "new sales dream team," made up of Doug Evans, David Dornseif and Kevin Gaffney.

Evans is a longtime media man with years at The Enthusiast Network, a national leader in publications — print and multimedia — for hobbyists and industry leaders in a myriad of fields.

And this month, Evans also takes the reins as chairman of the Specialty Equipment Market Association, the national group devoted to gathering and connecting professionals in the aftermarket automotive world.

Evans is Luken Communication's new chief operating officer.

David Dornseif, a longtime advertising sales expert, comes to Luken after years with Chicago's WGN and Colorado-based Dish Network.

When Dornseif was hired as general manager of Dish's ad sales department in 2001, the company had basically no team in place, he remembers. He was tasked with creating it from the ground up.

Now Dornseif takes over as senior vice president of advertising sales at Luken.

Kevin Gaffney, meanwhile, comes to Luken after years in the TV industry. His career started at HBO, but he later took a job with Atlanta-based Turner Broadcasting Systems. Gaffney eventually became senior vice president of the company's eastern division.

Gaffney later went on to start The Gaffney Consulting Group, LLC, a media development and consulting firm.

He is now an affiliate sales consultant with Luken.

In other words, says Leach, these are men who made it to the top of their respective fields — and who gave up those spots to join Luken Communications.

Because, in their words, they believe in broadcast.

"This is the future," said Evans.

Contact staff writer Alex Green at agreen@timesfreepress.com or 423-757-6480.

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