INSIDE THE SALE OF WAMU’S “BLUEGRASS COUNTRY” CHANNEL

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.