“K-Love” to West Palm Beach? - from http://tomtaylornow.com/

[AMRocks]

Tom Taylor reports:

The Palm Beach Post picks up on today’s scheduled vote by the board of Classical South Florida, where they it could choose to sell classical WPBI West Palm Beach, the big Class C1 at 90.7, to California-based Educational Media Foundation. EMF of course creates and distributes the contemporary Christian non-commercial “K-Love” format. As the Post says, “Palm Beach County could lose the only radio station that broadcasts National Public Radio.” That’s a reference to the HD2 signal of WPBI, which feeds a translator at 101.9 with non-commercial news/talk from NPR and other sources. The license is held by Classical South Florida, whose parent is Minnesota-based American Public Media Group. But the paper says “there’s a chance the sale might fail,” because of dissension on the board. They’re be looking for a different buyer, one who’d keep the format. It appears the parent in Minnesota is interested in the sale to EMF. Classical South Florida also owns classical WKCP Miami (89.7) and WNPS over in Ft. Myers (88.7). It bought Barry University’s WXEL four years ago for about $4 million and converted it from non-commercial news/talk to classical WPBI.

 

[Ai4i]

W270AD might not be part of the deal, but it were kept, would have to translate WKCP's main classical service because WKCP could not transmit anything on an HD sub-carrier (even if just to feed the translator) that WLRN has legal exclusivity over in Miami.

I am surprised by this because I thought Palm Beach county was affluent and had a well educated population. I wonder what the bottom line is.

 

[AMRocks]

They made a mistake with 90.7. They should have kept the NPR news on the big signal and put the classical on the translator.

Actually, it would be awesome if they sold to WLRN's parent company and made it a HUGE simulcast from the Treasure Coast to the Keys...but I doubt the Dade School Board, which owns WLRN, would care about Palm Beach

 

[Ai4i]

Before Classical South Florida entered Miami, WLRN had been running Classical 24 on their HD2 signal and 93.9, whatever their call letters were, had been running an iHeart classical service on their HD2 channel. If the Dade County school board were to acquire WPBI, they would likely run news-talk on 90.7's main channel and classical 24 on WLRN-HD2, WPBI-HD2, and W270AD analogue. I have always considered most of WLRN's XtraHD to be a waste.

 

[AMRocks]

Looks like classical is over for both West Palm Beach-Boca Raton AND Miami-Fort Lauderdale. Here is what Tom Taylor is saying from his newsletter this morning, Tom Taylor Now:

Half the board members of Classical South Florida resign – but can’t stop its $21.7 million sale to “K-Love.”
We knew there was dissension on the board about the fate of West Palm Beach-market WPBI/90.7 (June 26 NOW). Now it turns that that WPBI’s not the only Classical South Florida station being sold to Educational Media Foundation – it’s all three signals, including Miami’s classical WKCP/89.7. Ben Mook at Current.org says Minnesota-based “American Public Media Group is cutting its losses, with the $21.7 million sale of Classical South Florida, a three-station network and one translator, to a religious broadcaster.” Not just any “religious broadcaster,” but the Goliath of the sector, EMF, which owns hundreds of stations carrying its contemporary Christian “K-Love” or Christian CHR “Air1.” Current says American Public Media Group was losing more than $1 million a year in Florida, and it takes the all-cash offer from EMF. That gives EMF WKCP Miami, WPBI West Palm and WNPS Fort Myers/88.7. Current also says “half the board’s 14 members have resigned in recent weeks, according to treasurer Richard Rampell.” Mr. Rampell claims the Minnesota parent took the deal without consulting the local board. That’s because EMF required a decision in one day, and then sought a 45-day “no-shop” period. That meant APMG couldn’t seek another bidder. Rampell says “They’re basically selling it out from under us…They usurped our power.”

 

[TheBigA]

What a mess.

 

[Alan Michaels]

What a mess.

Check out www.MiamiClassical.com from SFLRadio

 

[Ai4i]

Someone who is more knowledgeable than I am on these matters, please explain how an org that has been doing this exact radio programming for so many years, has the staff and the talent, the music collection and rights to air it, and only has an office in downtown Fort Lauderdale feeding three transmitters plus a couple baby translators to feed, can lose two million dollars per year. All of the programming was imported from St. Paul, MN. Here!

 

[davideduardo]

Someone who is more knowledgeable than I am on these matters, please explain how an org that has been doing this exact radio programming for so many years, has the staff and the talent, the music collection and rights to air it, and only has an office in downtown Fort Lauderdale feeding three transmitters plus a couple baby translators to feed, can lose two million dollars per year. All of the programming was imported from St. Paul, MN. Here!

Big A concluded that the costs were principally the debt service (bonds and loans) on the roughly $29 million purchase of the three stations.

At "normal" interest rates for that kind of financing, we might be looking at $3 million a year in interest alone.

 

[Ai4i]

So, most of their "expenses" were from interest on previous debt?
They would have had to generate nearly $2 million/year just to stay level with very few new actual expenses.
What happens now, the debt is still there but the stations are not?

 

[TheBigA]

What happens now, the debt is still there but the stations are not?

SOME debt. They sold the stations for $22 million, so that does a lot to pay down the debt. Cut the losses, and run. As a friend of mine would say: This was not a bargain.

 

[davideduardo]

So, most of their "expenses" were from interest on previous debt?

It was mostly interest expense from the debt incurred when they bought the stations,
$20 million in 2007, and $4 million each in 2010 and 2012.

If they were losing money on operations, it's unlikely that they paid down any of the principal, so they were essentially "renting" the money.

They would have had to generate nearly $2 million/year just to stay level with very few new actual expenses. What happens now, the debt is still there but the stations are not?

The interest on $28 to $29 million is likely in excess of $3 million a year. While you can get a home loan for 3%, business loans such as this are likely to be in the 10% range. Think of it like the interest you would pay on a home improvement loan... I was just offered one of those on a 28.8% rate.

 

[AMRocks]

Update: From Tom Taylor's newsletter. This sale could have some trouble.

Florida A-G may investigate the $21.7 million secret sale of three FMs to K-Love.
EMF’s Contemporary Christian “K-Love” has already replaced classical on all three signals (Miami, Palm Beach, Ft. Myers), thanks to a mid-July LMA. But that doesn’t mean the sale by Minnesota-based American Public Media will go smoothly, because there’s a strong feeling that the local board wasn’t consulted. As we saw in the legal situation where Entercom offloaded the San Francisco classical format of KDFC onto a non-com owned by the University of San Francisco, challenges by even a single citizen can delay a deal closing by many months. That’s what the treasurer of Classical South Florida Inc. hopes to accomplish. The Naples News says he’s asking state A-G Pam Bondi to “investigate and potentially stop the sale” of three signals to Educational Media Foundation. You’ve been reading here about what a shocker the sale was, and how the Minnesota parent of Classical South Florida is taking $8 million to $9 million loss on the sale of Miami’s former WKCP/90.3 (now WMLV), the West Palm Beach-market’s former WPBI/90.7 (now WFLV) and Ft. Myers-market WNPS/88.7 (now WDLV). At least half the board of Classical South Florida resigned over the secret sale. Meanwhile, the Miami Herald says Miami-Dade school board-owned non-com news/talk WLRN/91.3 will step up and add classical music to its HD2 signal. GM John LaBonia says “we provided it before Classical South Florida arrived in 2007, and we are happy to provide it again.”