Foundation to sell 87-year old commercial classical radio station

Public Radio Capital retained to broker deal

By Ben Mook

KDB in Santa Barbara, Calif., one of the few remaining commercial classical radio stations, has been put up for sale by the foundation that has been operating it at six-figure losses for several years.

Directors of the Santa Barbara Foundation, which has owned the license to broadcast on 93.7 FM for the past decade,  voted unanimously to sell the station, according to the Santa Barbara Independent. The station broadcasts on a commercial frequency, but the foundation opted to retain Public Radio Capital, which specializes in signal expansion for noncommercial public radio stations, to broker the sale.

“As much as we love KDB, it isn’t our core mission,” said Ron Gallo, foundation c.e.o., during a public meeting at which the sale was announced. The meeting was “attended by a who’s who of the South Coast arts scene,” according to the Independent‘s news account, and the mood in the room was “tense.”

The foundation hasn’t placed any requirements for maintaining KDB’s classical format as a condition of the sale, but it will consider selling at a lower price if a bidder offers to do so. Buyers who want to program other formats will be expected to pay market price, and proceeds from the sale will be invested in an endowment supporting classical music in Santa Barbara.

KDB G.M. Tim Owens has tried to cut expenses while preserving the station’s broadcast service, according to a post he wrote for a local arts website.  KDB’s budget projected a positive balance for the end of its fiscal year, but Owens acknowledged that the station wouldn’t be able to achieve that without a subsidy from the  foundation. Under a three-year master plan adopted in 2010, the foundation  planned to end its annual operating support to KBD by 2014.

The station’s business model combines advertising with direct listener support, but too few members of KDB’s audience have stepped up to make  financial contributions, Owens wrote.  Out of a weekly cumulative audience of 20,000, fewer than 1,000 listeners have become donors over the past four years.  “While our advertising sales have been on a gradual increase the past couple of years, taken together the combined donor and ad revenue still wasn’t enough to make KDB financially self-sufficient,” he wrote.

KDB went on the air in 1929 and adopted a classical format in 1980. The Santa Barbara Foundation took control of the license in 2003 through a donation from its previous owner.

The foundation’s audited financial reports reveal that KDB ran a $2.71 million loss in fiscal 2012. Of that, $2.34 million was a goodwill impairment charge, which reflected a writedown in the station’s  value since the foundation acquired it.

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