B&C: Pappas Selling 10 Stations

[BossRadioDJ]

I'm reporting that Broadcasting & Cable reports that the Wall Street Journal has reported that Pappas Telecasting is putting ten stations up for sale:

Pappas Telecasting will put 10 stations on the bankruptcy auction block Dec. 11, reports the Wall Street Journal. Thirteen of Pappas’ stations have been operating under Chapter 11 protection since May. (...)

The stations to go on the block include outlets in El Paso, Omaha and Sioux City, as Pappas continues to pay down a heavy debt load.

Full story at:

http://www.broadcastingcable.com/index.asp?layout=articlePrint&articleID=CA6615917

I've also heard from two unimpeachable sources that Pappas has raised the rent for the Modesto Radio Museum from $1 a month to $5000 per. One of my sources says that the museum has told Pappas "thank you but no..."

My phone should be ringing in about two minutes.

 

[1069_KIFR]

What? no rent control?! That is one heck of an increase money and per centage wise!

Sounds like what Sarah Palin 'allegedly' about the bridge to no where, "Thank you, but No Thank you"

 

[kenrayc]

Does this include Pappas's home town stations KMPH 26 (FOX) and KFRE 59 (CW),also KTRB 860 and KMPH 840.

 

[RadioStarOne]

Whats the deal with these stations?

 

[LKellerIII]

I've got a suggestion to encourage the sales in a tough economy:

If the buyer agrees to purchase 2 stations, Pappas will get Young Broadcasting to throw in KRON at no extra charge.

 

[DavidKaye]

My phone should be ringing in about two minutes.

I think you're right: radio museums are where it's at. It makes sense, too. There's always a market for nostalgia.

 

[BossRadioDJ]

I've also heard from two unimpeachable sources that Pappas has raised the rent for the Modesto Radio Museum from $1 a month to $5000 per.

I stand corrected. It was $1 per year originally (not per month).

The increase, however, was to $5000 per month.

 

[radioguybroadcasting]

Does this include Pappas's home town stations KMPH 26 (FOX) and KFRE 59 (CW),also KTRB 860 and KMPH 840.

This is just their TV stations.. no radio stations involved as far as I know....

 

[newsperson]

Newsperson responds:

Word on the street is that KTRB will sell. They want more than the market will pay so it may take a little longer.

There is no way that Pappas is going to sell all of his profitable TV stations and keep the stations that cannot make money under their structure.

Any guess as to the real value of KTRB? I heard they are asking 28M except that kind of money just isn't available now.

Who could buy KTRB now? It can't be Citadel as they are just hanging on by a thread.

Entercom doesn't need it so who does and can they pay for it?

I will look for you replies.

Newsperson

 

[DavidKaye]

Who could buy KTRB now? It can't be Citadel as they are just hanging on by a thread.
I will look for you replies.

Brokered time blocks or LMA to someone doing brokered time blocks.

 

[Jim P. Pappas]

For the record, Harry Pappas has wanted to sponsor a radio museum for at least 10 years. Until recently, the intent was to provide the facilities for the museum in the old KTRB building in Modesto virtually free of charge. Unfortunately, due to the Chapter 11 referenced in this thread, he was compelled to change the parameters of the contemplated lease with the Modesto Radio Museum as follows:

$1.00 per year for the first two years, commencing on completion of the improvements and the Museum’s occupancy of the premises and opening for public viewing of the exhibits. For years 3 through 5, the Museum would pay only $0.50 per square foot and $1.00 per square foot for years 6 through 10. Thereafter, the Museum would have an option to renew for an additional multi-year term at the base rate plus an annual CPI (Consumer Price Index) adjustment.

As everyone should note, the $1 per year would not have started until the Museum actually began operating out of its portion of the premises. Then, after two years, the rent and shared expenses would have likely totalled approximately $2,500 per month. The $5,000 per month amount would not have begun to apply until years 6 through 10. In short, the lease would still have been well below the market for the first five years, and at the low end of the market in terms of cost for the next five years.

 

[BossRadioDJ]

The $5,000 per month amount would not have begun to apply until years 6 through 10. In short, the lease would still have been well below the market for the first five years, and at the low end of the market in terms of cost for the next five years.

With all due respect ... Well below what market?

We're looking at several properties in San Francisco, and the market is so depressed that several brokers have told us we could, essentially, name our location and price. And, for the record, the prices we're looking at in San Francisco (on Market Street) are about the same as what Harry's asking in bucolic Modesto (in a pasture-turned-residential neighborhood) over the same term.

Which tells me that the real estate market is either (a) significantly better in Modesto than in S.F., or (b) it's going to get better in Modesto a lot sooner than it will in S.F.

Option C is that somebody saw that the sweetheart deal originally offered to the museum fellows was a bit too $weet, and that boosting the price might force the museum in a different direction. That would free up selling the property to a developer, perhaps, which would bring in substantially more than a little old radio museum would.

And, in spite of how generous the revised offer is perceived to be by you, the museum still turned it down, didn't they?

Are you, Harry and Kevin Barrett going to continue as members of the museum's board?

DISCLAIMER: my only knowledge of this situation is from various parties on the museum side. They did not get into base rates, multi-year terms and annual CPI with me -- just that they ain't gonna be in the building they were hoping to be in.

 

[Jim P. Pappas]

Read the terms, David. It goes to a dollar per square foot per month in year 6. Yes, I know that the market in currently depressed in both SF and Modesto, but most objective observers would agree that, taken as a whole, the offer was fairly generous. Do I think that a dollar per year forever would have been preferable? Of course! Do I believe that Harry Pappas would do it if he could? Again, yes!

Also, if boosting the price was part of some diabolical plot to send the museum "in a different direction," why not go with a dollar per square foot per month from the start? Why take the chance that the museum would have said "yes" to the offer?

David, you're searching for something that just isn't there. Harry Pappas wanted to essentially donate space to the museum, but now he can't. It's that simple. No one is happy about it.

As for membership on the board, I believe that Harry Pappas is still a member. Kevin reluctantly resigned his position because he was not able to attend Modesto meetings. For my part, I resigned my position when the lease offer was made because of a concern on the part of our counsel that there might be a percieved conflict of interest if I served on the museum board while still functioning as General Manager of Pappas Radio of Modesto, LLC, the company that would have been the Sublessor to the Modesto Radio Museum. Now that the museum has declined the sublease offer, I intend to re-apply to the board after the holidays.

 

[BossRadioDJ]

Read the terms, David.

David, you're searching for something that just isn't there.

Jim, I read the terms.

And Jim, I wasn't searching for something that wasn't there. You confirmed that Harry decided to raise the price on the property for the museum, Jim.

Oh, and tell Jack Chunn that -- when he posts on this board -- he might want to use his own name, as you did, Jim. It's disingenuous to bad-mouth other radio stations (like KGO) and people (such as myself) (oh, and Chris Edwards) (oh, and Mickey Luckoff) under an assumed name, then have Kevin Barrett call me up to complain about what I say about KTRB. Okay?

 

[RadioStarOne]

Gentlemen this discussion does not belong on this board. With all due respect to you both.

 

[BossRadioDJ]

Gentlemen this discussion does not belong on this board. With all due respect to you both.

Sure it does.

The topic is "Pappas Selling 10 Stations." Jim Pappas is a member of the Pappas family, and is involved in the day-to-day operation of KTRB in San Francisco, which is not among the stations listed for sale (which are, as noted, television stations) but is still elemental to this discussion.

I honestly appreciate that Mr. Pappas felt compelled to respond in this forum -- he certainly has nothing to gain from it, and I would understand if he has regrets about having done so.

But I think that his response speaks directly to the financial situation that the Pappas company is in ... it's the same situation that Citadel, Cumulus and many other station ownership groups are in. And that's too bad. Unlike nearly all the others, the Pappases are broadcasters at heart, and I'm certain that they'd rather be doing good radio and TV than worrying about money issues.

I have never met a member of the Pappas family (that I know of), but I have met dozens upon dozens of people who either have known or have worked for the Pappases, and the next person who says something bad about them to me will be the first person to have done so.

But the move to change the lease on the old KTRB building from $1 a year to $60,000 a year (whether it's now or six years down the road) is obviously symptomatic of something.

The simple question that any of us might pose to Mr. Pappas is: is KTRB for sale, too? But there's no reason to ask. Everything has a price. And if someone came along and made an offer and the price was right, I'm sure they'd sell it. Who wouldn't?

 

[BossRadioDJ]

Okay, so maybe the television stations being in trouble was a symptom of bigger problems at KTRB...

 

[JKBurger]

I'm reporting that Broadcasting & Cable reports that the Wall Street Journal has reported that Pappas Telecasting is putting ten stations up for sale:

Pappas Telecasting will put 10 stations on the bankruptcy auction block Dec. 11, reports the Wall Street Journal. Thirteen of Pappas’ stations have been operating under Chapter 11 protection since May. (...)

The stations to go on the block include outlets in El Paso, Omaha and Sioux City, as Pappas continues to pay down a heavy debt load.

Full story at:

http://www.broadcastingcable.com/index.asp?layout=articlePrint&articleID=CA6615917

I've also heard from two unimpeachable sources that Pappas has raised the rent for the Modesto Radio Museum from $1 a month to $5000 per. One of my sources says that the museum has told Pappas "thank you but no..."

My phone should be ringing in about two minutes.

That URL is to a story from 2008. Is there another sale pending now? Since I am no longer a Pappas minion I get my news from R-I like everyone else. -- John

 

[JKBurger]

I'm reporting that Broadcasting & Cable reports that the Wall Street Journal has reported that Pappas Telecasting is putting ten stations up for sale:

Pappas Telecasting will put 10 stations on the bankruptcy auction block Dec. 11, reports the Wall Street Journal. Thirteen of Pappas’ stations have been operating under Chapter 11 protection since May. (...)

The stations to go on the block include outlets in El Paso, Omaha and Sioux City, as Pappas continues to pay down a heavy debt load.

Full story at:

http://www.broadcastingcable.com/index.asp?layout=articlePrint&articleID=CA6615917

I've also heard from two unimpeachable sources that Pappas has raised the rent for the Modesto Radio Museum from $1 a month to $5000 per. One of my sources says that the museum has told Pappas "thank you but no..."

My phone should be ringing in about two minutes.

That URL is to a story from 2008. Is there another sale pending now? Since I am no longer a Pappas minion I get my news from R-I like everyone else. -- John

Never mind! I didn't realize I wasn't on the last post of the thread. Sorry. -- John