In the past we have
featured noncommercial stations for sale examining them from a business
perspective. Today we don’t have a station on the block but rather a format – Bluegrass Country – that is currently on
WAMU’s HD2 channel and a translator at 105.5 FM in Washington, DC.
WAMU is trying to
find Bluegrass Country [link] a new
owner who will pledge to continue the format. Though Bluegrass Country receives high praise for its heritage and
uniqueness, it reportedly has been loosing money since it began about ten years
ago. What follows is NOT a discussion of
the historical or cultural significance of Bluegrass
Country. I am providing a business assessment of “the property” and the
likelihood it will be sustainable in the future.
BACKGROUND
Not all that long
ago WAMU and WETA shared NPR's newsmagazines in the DC market. Morning Edition was on WAMU and All Things Considered was on WETA. In
afternoon drive WAMU aired bluegrass music.
Format focusing
became inevitable and WAMU and WETA came to an agreement around 2000 to
discontinue sharing NPR News. WETA
became a full-time Classical music station and WAMU began carrying both ME and ATC. This move displaced bluegrass, causing fans of the music to publically
protest. It became a very public black eye for an organization.
WAMU decided to
save face by creating a full-time Bluegrass
Country service on its then-new HD2 channel. There was great hope for HD
Radio at that time but before too long everyone figured out that HD was an
over-hyped boondoggle that few people ever use.
WAMU then crafted
an arrangement for Bluegrass Country on
HD2 to be repeated on 105.5 FM via a translator owned by a private party. This
made Bluegrass Country an FM station
with pretty decent coverage (map on the right). On FM, Bluegrass Country gained some listeners
– maybe 20,000 people during a typical week. Many more people have visited
the Bluegrass Country website
[link].
Fundraising for Bluegrass Country has always been based
on the appeal and credibility of its hosts and ethnomusicologists such as Dick
Spottswood, Eddie Stubbs, Jerry Gray, Ray Davis, Katy Daley, Lee Michael Demsey
and others. As many of these personalities retired or passed away, fundraising
became more difficult. Now WAMU has
decided to part company with Bluegrass
Country.
If WAMU is unable
to find a new owner, the station will end the service as of December 31, 2016.
WHAT IS THE BUSINESS VALUE OF BLUEGRASS COUNTRY?
The following
information is from WAMU’s Request for Proposals For the Future of Bluegrass Country, which can be
downloaded here.
The RFP describes
the assets that WAMU will make available to the new owner of Bluegrass Country (BGC) as part of the deal:
• Intellectual
property rights to the name “Bluegrass Country” and any related branding and
trademark rights.
• The BGC music library.
No physical assets,
equipment, cash receivable or other “tangibles” are being offered to the new
owner. The value of the name Bluegrass Country is
impossible to assess. No appraisal is available for the value of the music library.
WAMU is keeping the
FCC license for the HD channel. They will lease the channel to the new owner
for no charge through the end of 2017. Then the new owner will pay an
undetermined amount.
The FM translator
broadcasting BCG at 105.5 FM is not part of the deal because WAMU does not own
it. But, WAMU promises to introduce the new owner to the translator’s
owner. That’s it.
Plus, the new owner
will have to pay undetermined Sound Exchange fees, staff and programming costs.
KEN’S BOTTOM LINE ASSESSMENT
I know WAMU and others
associated with Bluegrass Country are
proceeding in good faith and have the best of intentions. It is hard to imagine
anyone, other than a well-healed bluegrass fan, will pursue this agreement. Maybe I am wrong. From a business point of view there is
“there” there.
Want to know what
could be? Below is a proposal I made to
WAMU’s management in 2011 regarding WAMU’s HD2 channel repeated on FM 105.5.
Proprietary information has been redacted.
PROPOSAL
FOR A NEW “TRIPLE A” FM
STATION IN WASHINGTON, DC
September
24, 2011
Prepared by
Ken Mills
The
Situation:
WAMU has a
historic opportunity to expand its public radio service in the Washington, DC
by establishing a new Triple A music station via the translator at 105.5 FM
repeating the HD2 signal.
The Plan:
Ken Mills
proposes a plan that to establish this new radio service with a minimum of time
and investment by WAMU. The plan includes:
+ Provide
proven radio format techniques and coaching that will compliment the music and
talent-management skills of Chris Teskey.
+ Work with
WAMU management to develop a brand and target audience for “the “new 105-5 FM.”
+ Provide
ways to promote “the new 105-5 FM” for minimum cost.
+ Be
inclusive and in harmony with current bluegrass hosts and other stakeholders.
The Benefits:
+ Establish
a second with a proven format that compliments all-news WAMU.
+ The new
Triple A station will be a new source of listening and revenue.
+ Promote
expansion of WAMU’s “halo” by expanding public service.
WAMU’s management
in 2011 had no interest in this proposal.
"WAMU is keeping the FCC license for the HD channel. They will lease the channel to the new owner for no charge through the end of 2017. Then the new owner will pay an undetermined amount."
ReplyDeleteAFAIK, the rules regarding Time Brokerage Agreements/LMA's for an NCE license apply to the HD multicast channels as well, and those rules are that you can't make a profit off them. You can only recover your operational costs. So while it's an undisclosed amount, it's not going to be a lot of money. Probably $75k-$100k per year, at most.