Tuesday, September 22, 2009

Arch City Chronicle story says
sale of KFUO will happen in October

The Arch City Chronicle has posted a story by media columnist Frank Absher citing "very reliable sources" who say that the sale of radio station KFUO (99.1 FM) will be announced officially in October.

KFUO's current owners, the Lutheran Church-Missouri Synod, want to sell the station to raise money. The prospective buyers, listener-supported station Joy FM, currently broadcast on 94.1 FM and 97.7 FM, two less-powerful signals located on the outskirts of the St. Louis metro area. Their plan is to bring the Christian contemporary music format currently airing on those stations to the KFUO frequency.

Classical music fans, fearful of losing the only radio station in St. Louis that plays their favorite music, have opposed the sale, and a group of supporters of the current KFUO format even made a counter-offer to buy the station. That offer was rejected, and last month the LCMS board of directors gave its representative the authority to complete a sale without further board action.

Somewhere in there, it also came out that that the proposed deal requires the LCMS to finance the purchase price, because Joy FM doesn't have the necessary cash. (You can read more of the back story here, here and here.) Deal structure notwithstanding, local jazz fans also have an interest in the potential sale, because KFUO also has been the home to longtime jazz radio personality Don Wolff's program I Love Jazz since May of 2008.

Absher's piece, titled "Why So Secretive About The KFUO-FM Sale?" also raises questions about the financial aspects of the deal:
"Why, you may wonder, is everything being done so quietly? After all, no information has been forthcoming on this since word came out the church was pursuing a rather irresponsible (from a business perspective) deal with a group that already has a couple Christian music stations in the market but doesn't have enough money to buy KFUO-FM...(snip)

...In fact, it's possible a couple of very influential folks within the LCMS have let the board members know the push by two of them to sell the station and finance the sale was as stupid as it appeared. In fact, the purported buyer didn't have access to enough money to pay the amount it had bid. Red flag, anyone?
Absher notes the recent $14 million sale of Boston's classical music station WCRB (99.5 FM) to public broadcaster WGBH as both an indicator of potential value and an example of a sale transaction done right, then goes on to say:
"Meanwhile, most members of the Lutheran Church are completely unaware of the business that is being conducted involving assets owned by the synod - assets that have been supported by money the church members gave to the synod. They're going to be very surprised and angry when this deal involving their money is announced."
St. Louis Post-Dispatch classical music critic Sarah Bryan Miller links to Absher's piece, noting:
"The MoSyn will have to finance the $18 million sale itself, thereby getting out of the radio business (none of my sources seriously expect the all-religious AM station to be kept going for long once the FM side is sold) and into the financing business instead. Joy also has a balloon note for $600,000 to meet in a little more than a year, for the purchase of its two present “rimshot” stations."
Miller's piece also features some skeptical comments from a couple of readers, best summed up so far by the remark, "This deal stinks like a month-old mackerel." Answering one commenter's question about why the LCMS seems to want to make a deal that offers seemingly less-than-optimal terms, Miller replies that it is her "understanding is that it’s about a determination to sell the station to self-defined “Christians,” as opposed to what one MoSyn blogger called “Jews, atheists, Unitarians and Episcopalians.

She continues, "There’s also a serious reverse snobbery and overt hostility to the fine arts (and the kind of people who like them) to be found in some quarters, like the indignant-but-anonymous posters who constantly refer to KFUO’s listeners as “rich” and its playlist as “pop classical.” Given that it’s the only station on the dial in this market that plays that genre, and given what I know about the listenership, I don’t understand the hostility - but there it is."

Ultimately, any sale of KFUO would have to approved by the Federal Communications Commission, where it conceivably could be challenged as being not "in the public interest."

As noted here before, the St. Louis metro area currently has 11 stations offering some form of Christian religious or spiritual programming, and one - KFUO - playing classical music. So there's certainly an argument to be made that the public could be better served by keeping KFUO in its current format, thereby maintaining a diversity of local programming and ensuring the free availability of classical music to all, rich and poor, over the publicly-owned airwaves. Will someone step up to make that argument, and would the FCC actually give it serious consideration? Stay tuned...


Anonymous said...

The writer's hope that the FCC will intervene is in vain. The FCC is forbidden by its charter and precedent from granting or revoking licenses based on programming. The "public interest" a station is supposed to serve is very broadly defined and really boils down to airing the occasional public affairs program and public service announcements. There's no chance to FCC will challenge the sale based on KFUO's classical format being changed. Sorry.

Dean Minderman said...

Hey, this is Dean, "the writer," replying to your comment. You can tell I'm "the writer" because my name is over there on the right sidebar, and at the bottom of pretty much every single post on this site for last 4.5 years. I sign my stuff because I've found that people take it more seriously when they know who's written it. :)

Snark and/or sarcasm aside, I am aware that the FCC rarely, if ever, challenges license transfers or renewals and that, after the 1996 communications reform law, it's basically a rubber-stamp process.

The part about them being forbidden by charter to consider programming when granting or revoking licenses was unknown to me, though. Got a link?

And yes, I did go to FCC.gov to research the question of what, if anything, might cause them to deny a license transfer. In about 90 minutes of poking around, I couldn't find anything that lays out general conditions or criteria for approving or denying license transfers or renewals - there are lots of individual station filings, most written in impenetrable legalese, but nothing like an overall statement of policy that a layperson could understand. (If you know of such a thing, please point me toward it.)

I also did a general search of the Web, but the only recent accounts I could find dealing with a challenge to a radio license transfer had to do with one party in the transaction being a convicted felon, which obviously doesn't apply here.

Getting back to the specifics of the KFUO sale, though, the other relevant question would seem to be: Does the FCC take into account the financial condition of potential buyers - that is, their ability to actually pay the purchase price (or make loan payments) and to operate the station once they own it?

And if not, why not? Seems like demonstrated financial stability would be a necessary quality for any license holder...The FCC wouldn't want a license to be repossessed or lost in bankruptcy, would they?

Dean Minderman said...

One more thing: the request for a link was not because I doubt your veracity; the notion that the FCC would be format-neutral in determining licensing eligibility makes sense, in terms of both free speech and basic fairness.

However, I would be interested in seeing the precise wording, how they define "programming" and "format," and so on.

As for the public interest being "broadly defined" by the FCC - well, maybe it's matter of semantics, but any definition that can be satisfied by a few PSAs and a Sunday morning public affairs show that no one actually listens to actually seems rather narrow to me. There's much more to the actual "public interest" than that, or there ought to be...

fromwis said...

Used with the express premission of Dr. Paul L. Maier

Paul L. Maier, Ph.D., Litt.D, LL.D.
Department of History
Western Michigan University
Kalamazoo, MI 49008

(269) 387-4816 maier@wmich.edu Fax: (269) 387-4651


October 8, 2009

Selling KFUO-FM was a clear violation of Christian ethics. Primed with wrong information, the LCMS Board of Directors that authorized the sale ignored an appeal by 41 principal church leaders not to sell KFUO-FM, disregarded crucial ethical issues involved in betraying the trust of KFUO’s founders and supporters, and has now sold a vital mission of our church, gaining proceeds to which it was legally but not morally entitled. This was not Synod’s investment, but that of listeners across 85 years who prayed, worked, and gave sacrificially to support KFUO. Did the matter of basic ethics ever occur to board members, the obligation to do right rather than wrong? And in a church board, no less?

And all this while destroying one of our country’s great, pioneer radio stations and alienating the cultural community of St. Louis -- and the world.
Moreover, radio experts wonder why the Board relegated so important a decision to a small committee (one which avoided other options for Lutheran ownership), and are mystified that it would sell such an asset at the worst possible time economically. They deem the sales agreement “dead on arrival,” since the millions claimed in the sale have little chance of reali- zation. Joy-FM, the purchaser, is non-commercial and already owes $600,000 on its two “rim-shot” stations. One cannot escape the conclusion that this was one of the worst decisions ever made by any board in the history of our church body.

Paul L. Maier
Second Vice-President
The Lutheran Church—Mo. Synod