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Pacifica ordered to cut to the bone
- Thread starter uncamark
- Start date
Here is an interesting article about the drama at Pacifica, specifically WBAI.
http://www.thevillager.com/?p=6864
http://www.thevillager.com/?p=6864
As an example, if they were to sell Class B 99.5/WBAI in NYC, then turn around and buy Class B 90.7/WFUV from Fordham, how much cash could they bank? What are New York City Class B FMs going for? $30 million? How much are New York City Class B NCE FMs worth? $10 million? Is there a $20 million upside waiting for Pacifica, sitting in NYC--just for moving down the dial?
A: Selling a license will not solve the problem. The problem is that they have no audience. With no audience, not only do you have no means of direct fundraising from listeners, but you cannot demonstrate mission impact to any major donors, either. Give Pacifica $20mil and they'll piss it away in less than five years and be right back where they started from, because they've got structural problems far deeper than a simple cash crunch. I mean, christ. They've got full-market signals in five of the biggest markets in the country and they're still bleeding red ink despite their minimal overhead? Gimme a break. At some point reality has to intrude and they have to see the problem is staring back at them in the mirror.
B: I don't believe there is a $20mil upside. First off, don't assume that non-comm signals are worth less in NYC; they're not. They're worth as much, or more, because NOBODY who holds a full-market non-comm license in NYC is gonna be willing to sell. So you'd have to overpay by a lot to convince them to sell. Enough so that it'd probably wipe out any real profit margin. Second, like you said, station values have dropped by a lot in recent years. I doubt WBAI is worth more than $50mil, and that's being generous. $30 to $40mil is more likely, IMHO. And then you'd have to find another, lessor signal (a Class A, if there is one) to buy and that's probably going to run for at least $20 to $30mil to purchase. Plus all the other associated costs, and at the end, they'd be lucky if they came out with enough to settle their existing debts. Never mind have a cushion for the inevitable new debts.
milton77 said:Here is an interesting article about the drama at Pacifica, specifically WBAI.
http://www.thevillager.com/?p=6864
The comments are far more interesting than the article, and really gives insight into the situation.
You're right, and the whole situation remains incredibly stupid.
Radio listeners don't care whether you're broadcasting from $300K yearly rental Wall Street digs or some guy's free garage in Newark. For the listener, the place of engagement is their radio.
And a million in moving costs? I have moved entire, functioning, commercial radio stations several times over my career at nearly zero cost. How many volunteers does WBAI have? Anybody got a truck? Hey, you guys, grab that desk! (Am I missing something obvious--like required union movers)? $1 million to move--even a large--radio station from Manhattan to Brooklyn?
Still it boils down to "leaders" with no authority... held ransom by folks with a passion for niche programming but no real stake in whether the organization lives or dies. They'll let it die, and go off to find another place to hang around--rather than compromise an iota.
Radio listeners don't care whether you're broadcasting from $300K yearly rental Wall Street digs or some guy's free garage in Newark. For the listener, the place of engagement is their radio.
And a million in moving costs? I have moved entire, functioning, commercial radio stations several times over my career at nearly zero cost. How many volunteers does WBAI have? Anybody got a truck? Hey, you guys, grab that desk! (Am I missing something obvious--like required union movers)? $1 million to move--even a large--radio station from Manhattan to Brooklyn?
Still it boils down to "leaders" with no authority... held ransom by folks with a passion for niche programming but no real stake in whether the organization lives or dies. They'll let it die, and go off to find another place to hang around--rather than compromise an iota.
A million dollars might be excessive but it's hard to say. You've got up-front rental costs, costs to breaking a lease, costs involved in restoring a rental space back to its original state (that depends on the clauses in the lease, but I wouldn't be surprised if WBAI is on the hook for that), renovation to make a NEW rental space into a broadcast-quality space, and then after all that you might find it more cost-effective to buy new equipment than to have downtime due to moving old equipment...although with WBAI I concede that a week of downtime might not be all that painful.
If I were building a modern, full-function public radio studio facility with offices FROM SCRATCH, I'd budget a few million dollars. That's what it cost KCLU a couple years ago ($2.9mil, to be precise). For a station on a budget I'd pare that down considerably but even a half-million can be spent pretty quickly. And in NYC? Where EVERYTHING is more expensive? Yeah, I could see a million.
If I were building a modern, full-function public radio studio facility with offices FROM SCRATCH, I'd budget a few million dollars. That's what it cost KCLU a couple years ago ($2.9mil, to be precise). For a station on a budget I'd pare that down considerably but even a half-million can be spent pretty quickly. And in NYC? Where EVERYTHING is more expensive? Yeah, I could see a million.
Sure, but I don't think that's really the major cost source. The actual moving and re-wiring of equipment is the easy, fast and cheap part.
The hard part is going into their current STUDIO space and removing all the infrastructure (soundproofing) to return the space to something that can be rented as regular OFFICE space. That's a lot of work and it can't ALL be legally be done by unlicensed volunteer help. Not if you want it to be to code, which any landlord of a Wall Street address is going to want. That's going to be a serious wad of money.
As mentioned, that may or may not be an issue. Depends entirely on WBAI's lease (which they may have substantial penalties for breaking, too). But I'd be surprised if the landlord just gave them carte blanche to do heavy construction in the space without a clause requiring them to return it to its original condition if they move out.
Then there's going to be another serious wad of money at whatever new space they move to, assuming it's just another office space and they need to renovate IT to add proper studios/soundproofing. Again, a good landlord is going to demand it be done to code and you can't have unlicensed volunteers do that.
OTOH, it's true that given WBAI's financial shape and paucity of audience, maybe having proper soundproofing doesn't really matter much. I've volunteered at crappy little college and pirate stations whose entire station was a 12x14ft closet with one window that was filled with a noisy air conditioner. Ya make do with what ya got. It sucks for staff morale but things could hardly be worse for WBAI on that front, right?
So yeah, maybe a million bucks is overkill if you go super el-cheapo on the new space. But I have to assume that dealing with the old space will not be as cheap. And yes, technically you can run an entire radio station from one Behringer board, a couple mics, a computer, and a pair of CD players. That can be very cheap. But it does kinda put a cramp on the how high your ceiling for total quality is. A former coworker of mine once astutely remarked that non-comm radio doesn't have to sound like crap in order to be authentic.
The hard part is going into their current STUDIO space and removing all the infrastructure (soundproofing) to return the space to something that can be rented as regular OFFICE space. That's a lot of work and it can't ALL be legally be done by unlicensed volunteer help. Not if you want it to be to code, which any landlord of a Wall Street address is going to want. That's going to be a serious wad of money.
As mentioned, that may or may not be an issue. Depends entirely on WBAI's lease (which they may have substantial penalties for breaking, too). But I'd be surprised if the landlord just gave them carte blanche to do heavy construction in the space without a clause requiring them to return it to its original condition if they move out.
Then there's going to be another serious wad of money at whatever new space they move to, assuming it's just another office space and they need to renovate IT to add proper studios/soundproofing. Again, a good landlord is going to demand it be done to code and you can't have unlicensed volunteers do that.
OTOH, it's true that given WBAI's financial shape and paucity of audience, maybe having proper soundproofing doesn't really matter much. I've volunteered at crappy little college and pirate stations whose entire station was a 12x14ft closet with one window that was filled with a noisy air conditioner. Ya make do with what ya got. It sucks for staff morale but things could hardly be worse for WBAI on that front, right?
So yeah, maybe a million bucks is overkill if you go super el-cheapo on the new space. But I have to assume that dealing with the old space will not be as cheap. And yes, technically you can run an entire radio station from one Behringer board, a couple mics, a computer, and a pair of CD players. That can be very cheap. But it does kinda put a cramp on the how high your ceiling for total quality is. A former coworker of mine once astutely remarked that non-comm radio doesn't have to sound like crap in order to be authentic.
"OTOH, it's true that given WBAI's financial shape and paucity of audience, maybe having proper soundproofing doesn't really matter much. I've volunteered at crappy little college and pirate stations whose entire station was a 12x14ft closet with one window that was filled with a noisy air conditioner. Ya make do with what ya got. It sucks for staff morale but things could hardly be worse for WBAI on that front, right?"
Right. You got it, now.
aaronread, most of us live in a world a tad closer to this than the one in which we could whip out $2.9 million for any kind of facility project.
As Big A noted, the norm is closer to the "all hands on deck" pick-it-up-yourself method.
Bottom line is that WBAI can find a perfectly usable space to rent somewhere in the NYC metro far from Wall Street for, say, a grand a month--or, if they have any true "friends" among the 18 million people in the region, donated space at zero dollars a month. And if any of the "friends" own moving companies, they can get out of the financial district at another zero dollars.
So, they're out in Corey Booker's Downtown Newark or maybe Queens in a formerly-empty retail space of maybe 2500 square feet. It works.
But, when they leave Wall Street, the best thing Pacifica could do is turn the SOB off for maybe six months or a year--airing occasional bits to meet the minimum FCC requirement.
Create a break from the past. WBAI has to leave the past behind.
Then open up a process to entertain programming proposals from listeners/members/ex-staffers and the general public... "the people."
And return to the air with something that will allow them to survive.
Right. You got it, now.
aaronread, most of us live in a world a tad closer to this than the one in which we could whip out $2.9 million for any kind of facility project.
As Big A noted, the norm is closer to the "all hands on deck" pick-it-up-yourself method.
Bottom line is that WBAI can find a perfectly usable space to rent somewhere in the NYC metro far from Wall Street for, say, a grand a month--or, if they have any true "friends" among the 18 million people in the region, donated space at zero dollars a month. And if any of the "friends" own moving companies, they can get out of the financial district at another zero dollars.
So, they're out in Corey Booker's Downtown Newark or maybe Queens in a formerly-empty retail space of maybe 2500 square feet. It works.
But, when they leave Wall Street, the best thing Pacifica could do is turn the SOB off for maybe six months or a year--airing occasional bits to meet the minimum FCC requirement.
Create a break from the past. WBAI has to leave the past behind.
Then open up a process to entertain programming proposals from listeners/members/ex-staffers and the general public... "the people."
And return to the air with something that will allow them to survive.
Update: Tom Taylor (radio-info newsletters) floated an idea that may be in the works involving Pacifica, CBS & Family's 94.7/WFME.
CBS would buy WFME from Family and then swap it for 99.5/WBAI and cash. CBS wants an FM for (sports) 660/WNBC and, of course, has plenty of cash. Family is getting out of radio... and Pacifica needs the moolah.
Both are full class B facilities, but 99.5's Empire State Building antenna site is superior to the Newark-licensed 94.7 stick in West Orange. WBAI would end up with coverage that isn't quite as good as now, but not bad... and a bagful of money.
A Happy Ending? Well, Taylor also says that a tie vote by WBAI's board effectively defeated a move to prevent the GM from renewing a three-year lease to keep their gold-plated Wall Street studio location.
Hey, radio just sounds better coming from Wall Street than it does from Newark.
CBS would buy WFME from Family and then swap it for 99.5/WBAI and cash. CBS wants an FM for (sports) 660/WNBC and, of course, has plenty of cash. Family is getting out of radio... and Pacifica needs the moolah.
Both are full class B facilities, but 99.5's Empire State Building antenna site is superior to the Newark-licensed 94.7 stick in West Orange. WBAI would end up with coverage that isn't quite as good as now, but not bad... and a bagful of money.
A Happy Ending? Well, Taylor also says that a tie vote by WBAI's board effectively defeated a move to prevent the GM from renewing a three-year lease to keep their gold-plated Wall Street studio location.
Hey, radio just sounds better coming from Wall Street than it does from Newark.
Bottom line is that WBAI can find a perfectly usable space to rent somewhere in the NYC metro far from Wall Street for, say, a grand a month--or, if they have any true "friends" among the 18 million people in the region, donated space at zero dollars a month. And if any of the "friends" own moving companies, they can get out of the financial district at another zero dollars.
This is the third time so this time I'll shout it: IF THEY HAVE TO RESTORE THE EXISTING STUDIO SPACE TO BE "REGULAR" OFFICE SPACE AGAIN...AND IT SEEMS VERY LIKELY THEY WILL BE REQUIRED TO DO SO...THEN THERE WILL BE SUBSTANTIAL CONSTRUCTION COSTS IF WBAI LEAVES THEIR CURRENT SPACE.
Where are you people getting this concept that they can just pick up and walk away from the Wall Street studios for zero dollars? That almost certainly is NOT GOING TO HAPPEN no matter how many free volunteer help or how much "free rent" at a new space they might get. I cannot believe that any Wall Street landlord is going to let them just walk away without returning the space to its original state, and that WILL cost money to do.
"If"...
Admittedly, I do not have a copy of their lease. You may be right. I may be crazy.
But if CBS lays, say, $20 million on them to swap Manhattan for Newark and they have to drop a million to get the hell out of there, it still leaves $19 million. And, frankly, if as suggested, they piss it away in five years, well, it buys Pacifica five more years to figure things out. Or not.
For reference sake, CBS paid Family Stations $8 million for their Annapolis Class B, an FM serving both DC and Baltimore, which IIRC are markets #7 and #21 with a combined CSMA population of 8 million-plus. So, FWIW, $20 million for a parallel non-comm-operated B (oddly, also on a commercial channel) seems about right for NYC. Elsewhere on this site, a price tag of $30 million was being guessed for CC's purchase this week of 710/WOR(AM), so $40 million for a commercial B FM should be in range.
$40 million minus $20 million equals $20 million... minus a million equals $19 million. And BTW, since 94.7 is ANOTHER New York-market Class B FM, when Pacifica runs out of money the next time, they could do this all over again! These babies don't grow on trees.
Pacifica shouldn't have to consult their Mensa Board to figure this one out.
Admittedly, I do not have a copy of their lease. You may be right. I may be crazy.
But if CBS lays, say, $20 million on them to swap Manhattan for Newark and they have to drop a million to get the hell out of there, it still leaves $19 million. And, frankly, if as suggested, they piss it away in five years, well, it buys Pacifica five more years to figure things out. Or not.
For reference sake, CBS paid Family Stations $8 million for their Annapolis Class B, an FM serving both DC and Baltimore, which IIRC are markets #7 and #21 with a combined CSMA population of 8 million-plus. So, FWIW, $20 million for a parallel non-comm-operated B (oddly, also on a commercial channel) seems about right for NYC. Elsewhere on this site, a price tag of $30 million was being guessed for CC's purchase this week of 710/WOR(AM), so $40 million for a commercial B FM should be in range.
$40 million minus $20 million equals $20 million... minus a million equals $19 million. And BTW, since 94.7 is ANOTHER New York-market Class B FM, when Pacifica runs out of money the next time, they could do this all over again! These babies don't grow on trees.
Pacifica shouldn't have to consult their Mensa Board to figure this one out.
amfmxm said:Pacifica shouldn't have to consult their Mensa Board to figure this one out.
Once again you're applying conventional business sense here. That's not where they're coming from at Pacifica.
They don't consider themselves broadcasters, they don't consider themselves businessmen, they're not doing this for profit, and they see CBS and companies like them as the enemy. They don't even like NPR.
LOL--I know, Big A. They're at the far end of the progressive wing of the liberal branch of the Democratic Party. Er, Green Party. Er... yeah, they hate everybody.
Still, I'm just fascinated by the deal-making possibilities (been hanging around radio too long). What I meant to say in my last post was this:
"And BTW, since 94.7 is ANOTHER New York-market Class B COMMERCIAL FM, when Pacifica runs out of money the next time, they could do this all over again!"
And that's not even considering the twin on the Left Coast...
Still, I'm just fascinated by the deal-making possibilities (been hanging around radio too long). What I meant to say in my last post was this:
"And BTW, since 94.7 is ANOTHER New York-market Class B COMMERCIAL FM, when Pacifica runs out of money the next time, they could do this all over again!"
And that's not even considering the twin on the Left Coast...
amfmxm said:LOL--I know, Big A. They're at the far end of the progressive wing of the liberal branch of the Democratic Party.
More like anarchists. Not that that's a BAD thing....
amfmxm said:There are so many simple ways to solve Pacifica's problems, but too many hard-liners within the organization who either believe that money will magically appear or... or, well, they'd rather go down with the ship.
* Allowing underwriting credits only for other non-profits--nothing commercial. In markets like NYC, SF, DC & Houston? Problem solved.
* Selling one of their two commercial sticks (NYC or SF) for shitloads of cash, then turning around and buying an NCE stick for a fraction of that--providing tens of millions for a longterm endowment.
I had the pleasure (?) of meeting with a group of them a few years ago, expecting to have a congenial conversation with a bunch of like-minded progressives. But what I encountered was a group of folks with very narrow interests, and whose only concern about money was why they weren't getting more (or any)--but combative about doing anything different to generate some. They seemed to be wishing for a financial "angel" to appear and drop a fortune in their lap.
In truth, the thing I remember the most is that the bulk of these folks seemed to have very specific programming passions, and were very protective of those niches. You know--"delta blues" or "fifties jazz"... like they were defending a music museum.
A "Looking Glass" moment for me--that is, I came out of it thinking "WTF?"
In 2005, Barry Klein with the Greater Houston Partnership invited me out to KPFT's studios. I kind of got the same feeling. They were anti-commercial, anti-establishment vibe at all costs.
Their building looked like it was in so much decay, so their financial troubles stretch for years. I really felt that U of H should have bought KPFT instead of that Rice University station.
willdav713 said:I really felt that U of H should have bought KPFT instead of that Rice University station.
Didn't matter. KPFT wasn't for sale. Still isn't.
TheBigA said:willdav713 said:I really felt that U of H should have bought KPFT instead of that Rice University station.
Didn't matter. KPFT wasn't for sale. Still isn't.
Since Pacifica is ordered cut to the bone, it might be :-\
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