Purchasing A Station

[JimmyJames]

I'm working with a non profit in an extremely rural area.

There is a construction permit there that has existed for three years and has seen little to no movement. The parent organization is a non profit also, with no currently operational website for their existing station. They also hold a few other CPs, none built in roughly the same length of time.

This group wants to make an offer on the station but has no idea how to go through the process. Would one go through a lawyer, or a broker, and are there any who are known for understanding the unique situation of non profit, truly community oriented groups?

The same would also apply to operating a local noncommercial translator - there are a couple of candidates owned by organizations that may be feeling a pinch in donations and might be open to something.

 

[Prais]

"a lawyer, or a broker"

Is this the joke about who gets the only parachutre in a crashing plane?

also....you said,"there are a couple of candidates owned by organizations that may be feeling a pinch in donations and might be open to something."

Not sure I understand. Why would you get into radio when donations are ALREADY "pinched?"

 

[JimmyJames]

Their position is they're locally funded enough if the right deal came along, and with station values down, now would be the time. They're extremely confident about local radio. Part of their reasoning is that there are so few choices in their area and they sense an opportunity.

 

[aaronread]

Use the FCC's CDBS to search on the CP's file number or facility ID, or call letters if they've picked some. Or even the frequency, city of license, and state if you know nothing else about the facility in question (usually that last one will narrow it down enough to help you find the needle in the haystack).

Most applications are filed with a specific person as the contact info on the Application itself; often a lawyer. Have your lawyer contact this person...a phone call is fine...with a formal offer to purchase the CP. Do your homework beforehand and find out what sales have been made for comparable facilities in that market (or comparable markets) so you can make a fair offer that doesn't shortchange yourself or the other person; remember, they're under no obligation to sell.

Be advised, though, even in really depressed markets, a CP will usually sell for at least $5000. Often 5x or 10x more than that. And that's just to get the CP, not to build the actual facility out...and you may have to build in very short order. The FCC will allow a tolling letter to get a little more time to build in the event of a sale but it's usually less than a year, IIRC.

Also, if the CP was assigned via a point system out of an MX group, then it CANNOT be transferred or sold. Only if it was "singleton" can the owner sell it; otherwise they will have to build it and operate it for 3 or 4 years (I forget which) before it can be sold.

If you don't have a lawyer, you should get one. There are many out there, although the two I hear most frequently are Garvey Schubert Bayer and Pillbury Shaw Pittman. Neither are cheap, but both are VERY knowledgeable about non-commercial radio.

 

[88.9 Miracle]

Use the FCC's CDBS to search on the CP's file number or facility ID, or call letters if they've picked some. Or even the frequency, city of license, and state if you know nothing else about the facility in question (usually that last one will narrow it down enough to help you find the needle in the haystack).

Most applications are filed with a specific person as the contact info on the Application itself; often a lawyer. Have your lawyer contact this person...a phone call is fine...with a formal offer to purchase the CP. Do your homework beforehand and find out what sales have been made for comparable facilities in that market (or comparable markets) so you can make a fair offer that doesn't shortchange yourself or the other person; remember, they're under no obligation to sell.

Be advised, though, even in really depressed markets, a CP will usually sell for at least $5000. Often 5x or 10x more than that. And that's just to get the CP, not to build the actual facility out...and you may have to build in very short order. The FCC will allow a tolling letter to get a little more time to build in the event of a sale but it's usually less than a year, IIRC.

The FCC has a new rule for non-comms. If your non-profit entity meets their non-profit Small Business guidelines then they will extend the CP for up to 18 additional months.

Also, if the CP was assigned via a point system out of an MX group, then it CANNOT be transferred or sold. Only if it was "singleton" can the owner sell it; otherwise they will have to build it and operate it for 3 or 4 years (I forget which) before it can be sold.

It's 4 years.

If you don't have a lawyer, you should get one. There are many out there, although the two I hear most frequently are Garvey Schubert Bayer and Pillbury Shaw Pittman. Neither are cheap, but both are VERY knowledgeable about non-commercial radio.

I personally do not trust attorneys. Ask 4 different ones and you'll get 4 different answers (and have to pay them all). I own several non-comms and do all of my own work, successfully I might add. I'd be happy to help and at much less rates than an attorney.

 

[aaronread]

I personally do not trust attorneys. Ask 4 different ones and you'll get 4 different answers (and have to pay them all). I own several non-comms and do all of my own work, successfully I might add.

Of course. I don't automatically take any consultant/attorney/etc's word as absolute gospel; you always gotta do your homework so you can know that what the lawyer is telling you is the right information/interpretation for your needs.

But three things lawyers are very good for are: doing research for you, impressing the other side during negotiations, and providing some ass-coverage if needed. All three may be of varying usefulness to a given person in a given situation, of course. But I've been in various situations where a lawyer was worth every penny (and it was a lot of pennies) I spent for one or more of those three things.

To give an example: I used to do spectrum analysis for NCE FM facilities for a living, but nowadays I hire a firm to do it for me. I still check their work, and often I work with them because I know my local area (terrain, towers, existing facilities/owners, politics, etc) a lot better than they do. But it still saves me time to have them do most of the work, and they can prepare & submit the final report for me (something that would ordinarily take a couple days to do "right" by my standards). And it's often good to have an extra set of eyes on a project; I'm not ashamed to admit sometimes they catch stuff that I miss (and vice versa).

 

[bturner]

A Communications Attorney is what you want...one that knows FCC Rules.

If the Construction Permit was the result of an MX situation (more than one applicant for the frequency), a purchase could be some time off. It would likely be more expensive because to weed through an MX sometimes takes more attorney fees.

If the frequency had multiple applications, it might be worth considering an agreement where your non-profit provides programming after donating the equipment and labor to built out the facility and cover monthly operating expenses. Then, when the license can be transferred, a token donation is made. Certainly this all has to be legal and proper.

If the frequency had no other applicants, I'd look up the applicant, call them and try to work a deal. Only then would I have an attorney that knows FCC rules draw up the agreement.

Most non-comm applicants see their CPs like a card game and trade for better CPs elsewhere. It would be interesting to know what value they see in the frequencies around you. When windows open, they file lots of applications hoping some will 'stick'. So, this might be a very undesirable CP for them. I know one Spanish-language Church with an application covering only a few hundred people...all English speakers. They cling to it like they'd wither on the vine without it.