Wednesday, May 4, 2016

MAY 4th IS DECISION DAY FOR KUSP


On Monday [link] we reported on the dire situation at KUSP, Santa Cruz. Just seven months after KUSP changed its format to Triple A, the end of the station as is now may be near.

KUSP just finished MAYDAY!, an emergency fundraising effort. The goal was to raise $300,000 so the station can keep operating for the next six months. KUSP received only about a third of the money needed. Now it is up to KUSP’s Board of Directors to decide on the way forward. KUSP’s Board will next meet on Wednesday, May 4, at 6 pm at the Community Foundation building in Santa Cruz.

KUSP has informed listeners that current programming will be provided through Saturday May 7, three days after the pivotal Board meeting. KUSP is now operating the station at what they say is minimum expense.  They are still trying to raise money but the uncertainty about the future makes it a tough sell to listeners.

The KUSP Board will like look at a menu of options including selling the license and the station’s worldly possessions. The Board is dealing with a debt of over $800,000 caused by years of denial, inept governance and wishful thinking. The estimated sale value of KUSP is around $1 million.

KUSP’S OPTIONS FOR THE FUTURE


OPTION #1: Play for more time.

As KUSP has done before, postpone making a decision. If the past predicts the future, this is a likely choice. Unless the financial pressure is too overwhelming, the Board might decide to keep going with a cheaper version of what KUSP is doing now. With this choice, KUSP will keep the Triple A format and have a less professional sound until an eventual decision is made.

OPTION #2: Sell the license to USC Radio.

USC radio owns KDFC in nearby San Francisco. According to several reports, USC offered a million dollars for KUSP in early 2015. USC certainly has the money to make this purchase. Under this scenario KUSP would become a fulltime classical station that repeats KDFC. This is similar to what USC did when it acquired KDB, Santa Barbara a few years ago.  This is a very likely choice.



OPTION #3: Sell the license to KAZU.

One of the many reasons for KUSP’s past problems is the rise of NPR News station KAZU. Over the years KUSP tried to compete with KAZU with NPR programming.  KAZU became the dominant NPR voice in the market; KUSP dithered and failed.  Discussions were held between KAZU and KUSP about a merger. It was never pursued because of KUSP’s dysfunctional governance system.

Maybe now KAZU can purchase (not merge) KUSP and keep the Triple A format.  Triple A remains the best option for KUSP other than Classical.  Combining the stations would reduce operating expenses and give the Triple A format time to establish itself.  To me, this is the best option but I have no idea if KAZU could get the money to make it happen.


OPTION #4: Sell the license to the highest bidder, probably EMF

There is one noncommercial broadcaster who has the dough and maybe the desire to buy KUSP: The Educational Media Foundation (EMF).  In July 2015 EMF paid over $21.7 million for Classical noncom WKCP in Miami. EMF has two national satellite-delivered Christian Contemporary Music (CCM) formats: K-LOVE and Air1.

EMF owns 90.7 KSRI in Santa Cruz, which plays Air1 format. But K-LOVE is available only on an FM translator with limited market coverage. EMF might be tempted to pay top dollar because KUSP’s four FM translators would likely come with th deal. Don’t be surprised if this happens.

2 comments:

  1. Oof. I didn't realize the total debt was $800k. That's a princely sum.

    On KUSP's facebook page I suggested they sell off three of their four FM translators. There's never been a better time to get maximum value for them, thanks to AM Revitalization, after all. And while it's always iffy to sell off capital assets...especially assets directly tied to your revenue stream...it seems the lessor of two evils at this point. And those translators could be moved to rebroadcast AM stations from Sacramento to Ventura (at least). No doubt there's SOMEONE out there willing to buy.

    The rub, of course, is the sale price. Typically these translators are selling for $25,000 to $75,000 each. That's good money, but it's nowhere near enough to pay off $800,000 in debt. Probably enough to buy a little time, though...maybe that'd be enough?

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  2. FWIW: I wouldn't sell K207CN 89.3 in Santa Cruz proper, just because KUSP proper doesn't cover Santa Cruz proper...and also any FM translator going to an AM station has to be moved to the commercial band (92-108MHz) first.

    Granted, that's a stumbling block for K206BQ and K217EK, too, but not an insurmountable one. It's more that if you're gonna be a Santa Cruz station in name, you HAVE to have a strong signal in deed, too.

    And K237EV could be sold right now; it's already in the commercial band.

    Also I have no idea if any of those translators are super-serving specific audiences that include key major donors. I'm assuming they are not, but if they are? Then obviously it gets counterproductive to try and sell them.

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