KFWB - FCC Decision Allows it to Remain in a Trust

[david]

Radio-Info's front page reports this afternoon (9/9/11) that the FCC has decided that CBS can keep KFWB in a trust, which also forbids a format change. This should put an end to the expectation of a station sale to a foreign language broadcaster. Does this mean that we should expect to see more efforts invested into rebuilding KFWB back up from a 0.5?

http://www.radio-info.com/news/cbs-can-keep-las-kfwb-980-in-a-trust-and-forbid-a-format-change

 

[K6JHU]

So exactly what is the format they can't change

 

[davideduardo]

Radio-Info's front page reports this afternoon (9/9/11) that the FCC has decided that CBS can keep KFWB in a trust, which also forbids a format change. This should put an end to the expectation of a station sale to a foreign language broadcaster.

A new owner can program whatever they want.

 

[w9wi]

Radio-Info's front page reports this afternoon (9/9/11) that the FCC has decided that CBS can keep KFWB in a trust, which also forbids a format change. This should put an end to the expectation of a station sale to a foreign language broadcaster.

A new owner can program whatever they want.

The FCC decision (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-11-1519A1.pdf) states the trust agreement prohibits a format change.

The revised agreements included language prohibiting the Trustee from changing the format of the station.7

7
Id. at Attachment 5, Attachment A: License Trust Agreement Section 5(c)(iii); Attachment B: Asset Trust
Agreement, Section 5(e)(iii). They both state, “Without limiting the generality of the foregoing, during the term of
this Trust Agreement, except as contemplated by this Trust Agreement or the KFWB Asset Trust Agreement, the
Trustee shall not:...(iii) change the format of the station....”

That provision would indeed go away if CBS retrieved the station from the trust & sold it to someone else.

 

[ChannelFlipper]

I've never understood what happens to the profit of the station if it is in a trust? Does it just accumulate there? Does CBS see any of it?

And what are CBS' fiduciary responsibilities with regard to the trust? They have to have some requirement of due level of care; they can't do something stupid like program Air America and watch their entire audience go away...

The decision to allow it to remain in a trust is nothing more than a complete disrespect for the rule, on both CBS' part and their regulators part. They could sell the station if they wanted to or were forced to, and had they done so when they were first ordered to divest, they would have made much more on exit for the value of the station then they will get now.

The whole thing is bizarre to me.

 

[ChannelFlipper]

Speaking of KFWB, this was in the Times yesterday, so you probably missed it.

There is so much puffery in this piece, Andy should have to pay for it.

http://www.latimes.com/entertainment/news/la-et-kfwb-20110908,0,7643573.story

The world according to the Times:

KFI - Bad! Bad station, KFI! Nevermind those ratings, pay no attention to them, and DO NOT LISTEN!

KFWB - Good! What a great station, with heartwarming hosts and no conservatives to hassle with, especially now that they have vanquished the Wicked Witch of the West, that Nasty Dr. Laura. Nevermind their lack of ratings, this station is GOOD! (note which paragraph in the story actually mentions their 0.5 share!)

 

[thesj]

But KFI and the Times are always bad-mouthing each other.

Also, isn't KFWB's entire lineup brokered? I suppose you could call that "hyper-local"...

 

[davideduardo]

That provision would indeed go away if CBS retrieved the station from the trust & sold it to someone else.

Exactly. The format preservation only applies until CBS finds a buyer, and the station is sold. The trust is to isolate the station from CBS management, as absurd as that seems in the real world.

 

[w9wi]

That provision would indeed go away if CBS retrieved the station from the trust & sold it to someone else.

Exactly. The format preservation only applies until CBS finds a buyer, and the station is sold. The trust is to isolate the station from CBS management, as absurd as that seems in the real world.

I probably should have asked *which* "new owner" you meant... as arguably, the trust is a "new owner" who obviously doesn't have the right to flip the format.

I think to some degree Mr. Levine (the party whose complaint resulted in the referenced FCC document) has a point. It seems difficult to argue that CBS doesn't "control" KFWB when the trust that *theoretically* controls it doesn't have the right to make such a basic decision. It would probably look different if this trust had only existed for a few months -- nine years tends to color impressions a bit differently.

But in the end, since none of us are on the Commission, none of our opinions really count

 

[davideduardo]

I probably should have asked *which* "new owner" you meant... as arguably, the trust is a "new owner" who obviously doesn't have the right to flip the format.

But the station has been in the same trust since 2002; all that changed is that the FCC clarified some aspects because of the complaint.

The astounding thing is that, as the complaint asked, the station has not been sold long ago.

 

[davideduardo]

But KFI and the Times are always bad-mouthing each other.

Let's see... KFI's audience is increasing, and is now much larger than the circulation of the Times. The Times' circulation has fallen by about 40% in the last decade, and the paper now costs $1 for the daily edition... no wonder I do not see a single copy being delivered at any house on my block!

It sounds like the Times is jealous.

 

[nmoore6676]

Well as the esteemed Mr. Eduardo often expounds AM Radio is a dying medium so I suppose that the trust is a way to keep CBS from losing money on the sale of a broadcast property that isn't worth very much anyway. Kind of like in "Catch 22", "when Major major is out Major Major is in and when Major Major is out he is in". So the continuation of this arrangement is a head pounder however in several markets Clear Channel has a similar arrangement where they own too many signals in the same market and their "extras" also remain in a trust. So where does any money go or are they all allowed to generate a loss, which they likely are doing anyway.

The only people buying AM stations now appears to be the God Squad folks but maybe even they don't want KFWB.

As for the Times they also represent a dying medium and I quite honestly probably wouldn't pay a dollar an issue but the local rag here just went up to 75 cents daily and $1.50 Saturday as they don't publish on Sundays. So I am faced with a decision on continuing my subscription but I still like a printed paper even though I do extensively use online news sources.

 

[jmtillery]

I've never understood what happens to the profit of the station if it is in a trust? Does it just accumulate there? Does CBS see any of it?

All profits go to CBS since CBS is the indirect owner of KFWB. The trust is simply a mechanism for removing CBS as the day-to-day guardian of the license since CBS may only directly operate up to 8-stations in the market without a television station or seven radio with one TV. Since direct management of KFWB by CBS would place CBS over the local radio cap limit, under the trust arrangment, KFWB is managed by a trustee on behalf of CBS.

 

[ronkaram]

Sitting in front of a computer most of the day, I enjoy relaxing in a comfortable chair to read the paper. I also get news on the internet but it's a nice change to do something besides sitting in front of a computer. As for the cost, there are enough coupons in the Sunday edition to pay for the paper for the whole week.

 

[nmoore6676]

I've never understood what happens to the profit of the station if it is in a trust? Does it just accumulate there? Does CBS see any of it?

All profits go to CBS since CBS is the indirect owner of KFWB. The trust is simply a mechanism for removing CBS as the day-to-day guardian of the license since CBS may only directly operate up to 8-stations in the market without a television station or seven radio with one TV. Since direct management of KFWB by CBS would place CBS over the local radio cap limit, under the trust arrangment, KFWB is managed by a trustee on behalf of CBS.

Like I said it is like the Catch 22 thing I cited about the elusive Major Major. In the KFWB case just like the similar deals with Clear Channel they are not directly managing a station that they ARE directly managing. In fact after the abandonment of the Yucca street studios for AM-980 and Columbia Square they are hall mates with KNX. The fair thing would be to force the sale and if they lose money, based upon what they likely paid for it then so be it. In business sometimes you win and other times you lose as many small businesses and radio stations are learning these days. CBS is not in accordance with either the law nor the spirit of the law and this is just another legal boondoggle to accommodate yet another big corporation.

 

[justpassingthough]

But KFI and the Times are always bad-mouthing each other.

Let's see... KFI's audience is increasing, and is now much larger than the circulation of the Times. The Times' circulation has fallen by about 40% in the last decade, and the paper now costs $1 for the daily edition... no wonder I do not see a single copy being delivered at any house on my block!

It sounds like the Times is jealous.

Is that even a fair comparision? Yes, traditional, home delivery, printed newspapers are dying, but how many page views does latimes.com receive in a typical month? The LA Times, through Tribune, runs bureaus (although far fewer than in the past) in other cities and is known throughtout the country. It is still a large source of news for millions of people. How many people outside of Los Angeles know of KFI?

 

[ChannelFlipper]

Is that even a fair comparision? Yes, traditional, home delivery, printed newspapers are dying, but how many page views does latimes.com receive in a typical month? The LA Times, through Tribune, runs bureaus (although far fewer than in the past) in other cities and is known throughtout the country. It is still a large source of news for millions of people. How many people outside of Los Angeles know of KFI?

I've felt for awhile now that properly managed, KFI could become a somewhat of a national brand, and that should really be their goal as their future local growth prospects are limited, outside of moving to FM, which will maximize local audience. I think that KFI has the basic infrastructure in place to be compelling both on radio and on the web. They could really so something quite unique in radio - be a local station with a national presence.

 

[LKellerIII]

Newspapers are in a death spiral, and circling the drain. Lack of advertising revenue means they have to continually slash content and lay off reporters while raising prices. So newspapers can no longer afford to do the in depth reporting that made them special. And this is happening while specialized in-depth online sources come on line to replace the papers without the need for newsprint, ink, or fleets of trucks to deliver them.

Last I heard, the SF Chronicle loses about $70 million a year for the Hearst Corp. Isn't the Tribune Corp (LA Times) in Chapter 11?

 

[uncamark]

And meanwhile, we've been thrown off the track of the topic, which is that Saul Levine was unsuccessful in getting the FCC to take KFWB away from CBS' trust, that KFWB has to stay news-talk of one form or another and that they've chosen in the wake of Dr. Laura moving to satellite--OF HER OWN VOLITION--to try a different direction for talk radio.

There is more and more evidence that listeners are getting sick and tired of screaming political talk--whether it be left or right (and the reason Air America never was successful is that most left-of-center people simply didn't want to listen to any kind of partisan talk radio and prefer what they perceive as the neutrality and civility of NPR, even if the extremes on both sides think that it's biased on the opposite from their respective views). KFI may still be at the top of the heap, but there is an audience that's looking for an alternative to biovators of both sides and I admire the fact that KFWB's trying to find something different--and doing local programming--instead of picking up another syndicated political talker.

 

[ChannelFlipper]

And meanwhile, we've been thrown off the track of the topic, which is that Saul Levine was unsuccessful in getting the FCC to take KFWB away from CBS' trust, that KFWB has to stay news-talk of one form or another and that they've chosen in the wake of Dr. Laura moving to satellite--OF HER OWN VOLITION--to try a different direction for talk radio.

There is more and more evidence that listeners are getting sick and tired of screaming political talk--whether it be left or right (and the reason Air America never was successful is that most left-of-center people simply didn't want to listen to any kind of partisan talk radio and prefer what they perceive as the neutrality and civility of NPR, even if the extremes on both sides think that it's biased on the opposite from their respective views).  KFI may still be at the top of the heap, but there is an audience that's looking for an alternative to biovators of both sides and I admire the fact that KFWB's trying to find something different--and doing local programming--instead of picking up another syndicated political talker.

Care to cite and quantify any of this evidence?

I'll take the first shot:

LA Arbitron 6+ August

KFI - 4.9
KFWB - 0.5