WXEL in play
Bidders prospect for licenses on Gold Coast
Applicants from as far away as New York are expected to bid for custody of an orphaned public broadcaster that had been taken in by a nun but is out looking for new parents.
The would-be licensees are competing to run WXEL-FM/TV in West Palm Beach, which broadcasts to Florida’s affluent Gold and Treasure Coasts.
Among the contestants expected to submit bids today for the license are WPBT, a freestanding public TV station in Miami that competes with WXEL for viewers and members; Florida Atlantic University, a state school that sees an opportunity to enhance its communications program; and New York’s WNET, a deep-pocketed producing station with experience in pubcasting mergers and a sizable contingent of donors who winter on the Florida coast. Fort Lauderdale-based Nova Southeastern University expressed an interest in the Palm Beach operation this summer, but did not respond to Current’s inquiries about its plans.
Also expected to seek the license is the Community Broadcast Foundation of Palm Beach and the Treasure Coast, a nonprofit founded this summer by real estate attorney and WXEL volunteer leader Richard Zaretsky. He aims to put community fundraising muscle behind a bid to protect local programming and services. He said the group would consider going into partnership with other entities.
Barry University in Miami Shores, a private college sponsored by Dominican nuns that since 1997 has held WXEL’s license through subsidiary Barry Telecommunications, announced this summer that it would re-examine its relationship with WXEL. Sister Jeanne O’Laughlin, who recently retired as the university’s president, led a rescue of the station after a period of near-fatal financial and management problems.
The radio-TV combo thrived under Barry’s stewardship and now is worth nearly $6.2 million, according to the school’s September request for proposals. WXEL ended fiscal 2004 with net revenues of $1.7 million.
“Our plan is not to do something rash that would put the station out of business or take a community asset and make it something else,” said Timothy Czerniak, Barry’s senior v.p. business and finance. The university is revisiting its strategic priorities and considering whether the stations fit into them.
“Their biggest problem with the station is not that it’s a financial drain,” said Zaretsky, a board member of the university subsidiary that now runs WXEL. Both the radio and TV stations are operating in the black, but university officials devote “people hours” to their support, he said. Because of the 40-mile [correction] trek between the university campus in Miami Shores and WXEL headquarters, Barry’s communications students have been unable to use the stations for training.
The university wants assurances that potential licensees would “continue to serve the community and operate the stations as traditional public broadcasting outlets,” said Patti Dodgen, managing partner of Florida-based Transformations Consulting Group, which is managing the request for proposals. “They are seeking to enhance service to the community.”
The state of Florida’s investment in WXEL and a land lease agreement with the city of Boynton Beach virtually rule out selling to religious or commercial broadcasters.
If Barry chooses a new licensee, the license transfer would have to be approved by the Florida Department of Education, the Florida Cabinet and the FCC.
The university most likely would not want to be seen as a profiteer in the sale, especially with these public investments. Its RFP dances around the question of an asking price. It points to recent multimillion-dollar sales of pubTV licenses held by Butler University in Indianapolis, KERA in Dallas, and Coast Community College District in Orange County, Calif. Religious broadcasters bought the channels in Indianapolis and Dallas and competed for the one in O.C.
Market size and educational levels of the audience are key factors in determining the value of a public radio license, the RFP said. The document asks bidders to consider the tangible and intangible assets of public broadcasting licenses.
WXEL is licensed to West Palm Beach — Nielsen’s 39th-largest designated market area with 729,010 TV households — but the station’s proximity to Miami and its affluent service area give the license considerable value even as a noncommercial operation. Twenty-nine percent of Palm Beach County households earned annual incomes of at least $75,000 and 30 percent of adults 25 and older had at least a bachelor’s degree, according to Census Bureau figures for 2003. Education and income levels are key factors in determining whether individuals contribute financially to public broadcasting. Miami-Dade County has nearly twice as many people, with 20 percent of households earning $75,000 or more and 26 percent of adults holding college degrees.
Bidding for Barry’s favor
Rick Schneider, president of WPBT since June, has been talking up the benefits of a merger between the Miami and Palm Beach stations. “It’s a historic opportunity to strengthen public broadcasting in South Florida,” he told Current. “The market would be better served by two stations collaborating rather than competing, and by having the same parent organization.”
The public TV stations’ broadcasts overlap along the northern edge of Miami and WXEL is widely available on cable systems in Miami, Schneider said. In addition, 26 percent of WPBT’s members reside in Palm Beach County, he estimated. Viewers would benefit from less duplicated programming and the combined production resources of the stations could deliver more local programs and services, he said.
Jerry Carr, president of WXEL, sees two very separate communities. “Miami is absolutely not my market,” he said. “I program for this community.”
“The fact that my signal gets in there results from cable rules governing PBS stations,” Carr said. “WPBT serves that market and as far as I’m concerned, we don’t compete with them.”
“WPBT has a lot to lose or gain as a result of how this ends up,” Zaretsky said. “They could loose a significant donor base from Palm Beach, and if they gained the license then they would be able to maintain and expand their base in Palm Beach.”
Local control remains a point of pride for Zaretsky, who has assembled a board of former broadcast execs and philanthropists to run the nonprofit. “Much smaller communities than ours have supported good public broadcasting,” he wrote in a letter to the Sun-Sentinel. “Our local community, enhanced by its influence, would be second rate without its own local public broadcasting facility.”
Frank Brogan, president of Florida Atlantic University in nearby Boca Raton and a former lieutenant governor, views a takeover of WXEL as appropriate since most stations in Florida are operated by state universities, he said. “The deans of our colleges see direct tie-in opportunities for faculty and students to be part of the operation and glean the opportunities of being affiliated with a high-quality public TV and radio station.”
The university’s board endorsed its bid to acquire the stations and two influential state legislators pledged to support an appropriation to cover the costs of the transfer.
WNET is bidding at the invitation of Transformations Consulting Group, which worked with the station during its merger with Long Island’s WLIW, according to Carmen DiRienzo, v.p. WNET already knows the challenges and benefits of consolidating two stations.
“The real efficiency is not so much physical consolidation as the sharing of assets that larger stations can invest in and smaller stations can’t,” DiRienzo said. “WNET has made significant investments in fundraising infrastructure and the value of those investments can be expanded without regard to the geographic distance.”
Beyond its interest in serving Palm Beach viewers with New York connections, WNET has a larger interest in the health and strength of local public broadcasting, DiRienzo said. Since the two New York stations merged, WLIW is stronger and has a more distinct identity than before, she says. “To me, that’s a huge win.”
Florida's state university regents and the Catholic-affiliated Barry University agreed March 25  to share in running financially distressed WXEL-FM/TV, the Palm Beach pubcaster that had sparked controversy in January by giving control to Barry.
Shortly after the regents and Barry President Sister Jeanne O'Laughlin settled on the consortium plan, the state Board of Education approved transfer to the new consortium of the state-owned facilities leased by WXEL.
The university system's role will depend on whether it comes up with funds to help support WXEL, said Mike Olenick, general counsel of the State Board of Education. "I think it's really down to money."
WXEL earlier chose not to seek refuge with stronger WPBT in Miami, and WPBT's Miami rival, WLRN-FM/TV, came to the state board to make sure WPBT didn't end up managing the Palm Beach station. WLRN's licensee, the Dade County schools, urged that the whole deal be reopened if WPBT became involved.
A Barry spokesman said reports of a supposed WXEL deal between Barry and Florida Atlantic University, in the Palm Beach Post on March 20, was "totally premature."
Short of cash on a stretch of Florida coastline known for opulence, Palm Beach's WXEL-FM/TV plans to give control to a subsidiary of Barry University, a private institution near Miami that has lent it money.
The dual-licensee spurned a competing takeover bid from Miami's WPBT, whose signal reaches up the Atlantic shore via cable systems and draws more viewers and members in the region than WXEL does.
The state Board of Education, which owns WXEL's facilities and those of most pubcasting stations in Florida, must still determine whether the new licensee would be eligible to lease them, but the board did not discourage the merger in its meeting last week.
WXEL's Board of Directors unanimously agreed Jan. 24 to apply for transfer of its FCC licenses to Barry Telecommunications Inc., a new offshoot of Barry University, a 7,000-enrollment Catholic university in Miami Shores, north of Miami.
Mary Souder, president of WXEL, told Current that the university would appoint eight of the 12 initial board members and WXEL's present board would name four, though she predicted most of the new board would come from the Palm Beach region.
WXEL ended last fiscal year with a deficit of $185,000 ($407,000 if you count depreciation). Last fall, to overcome a cash-flow crunch, the station borrowed $275,000 on a line of credit from Barry University and has since repaid most of it, according to Phil DiComo, v.p. for external affairs.
The station, built in WPBT's long shadow, has always lived close to the edge, said DiComa, but has lost about a third of its members since lightning struck its antenna in June 1994, causing repeated equipment failures and limiting its power for most of the next three years. This compounded the usual cash-flow problems that come each summer as the region's seasonal population goes north, he said.
WXEL also suffered from instability before and after a 1992 staff mutiny that overturned a former chairman/c.e.o. (earlier article).
In a search for institutional partners, WXEL found that Barry University has a compatible mission, but would not compete with it for state funding or Palm Beach-area donations, DiComa said.
The university also seeks to offer for-credit telecourses on WXEL to supplement its extensive off-campus adult enrollment in the Palm Beach area, said Barry spokesperson Michele Morris. And communications students from Barry could serve as interns at WXEL.
The university's president, Sister Jeanne O'Laughlin, is meeting with public college officials and is interested in creating a consortium to work with the station, Morris said.
"I've believed all my life in public TV, and it seemed at the time
worth trying to save," O'Laughlin told Current.
DiComa said Barry and WXEL share an educational mission, while Miami's WPBT pursues a mission "something more like 'quality broadcasting'."
Backed by an advisory panel of Palm Beach viewers, WPBT offered Jan. 23 to acquire WXEL for $200,000 and assume some or all of its liabilities, according to the Palm Beach Post. WPBT said it would probably simulcast its Miami signal in Palm Beach most of the time but would air separate local programming part of the time.
The Florida Board of Regents, which runs the state universities, expressed interest in taking over the station as well, and the Post editorialized against WXEL's "secret decision" to merge with Barry instead of talking with the public colleges.
Would-be suitors restated their case Feb. 25 before the state Board of Education, but it made no decisions. Its legal advisers will report back by March 11 on whether the Barry subsidiary is an "educational or noncommercial broadcasting entity authorized by the state of Florida" and therefore eligible to lease the state facilities, according to the board's counsel, Mike Olenick.
WXEL-FM/TV, a financially pinched pubcaster in West Palm Beach, Fla., signed final merger papers Aug. 18  with Barry Telecommunications Inc., a nonprofit subsidiary of private Barry University in Miami Shores, as proposed last winter (Current, March 3, 1997). The FCC has approved transfer of the WXEL licenses, and on Aug. 12 the Florida Board of Education approved transfer of the state-owned WXEL building to the new nonprofit.
That approval marked the end of unsuccessful attempt by state education officials to buy into WXEL. Barry has already invested more than $1.5 million in the station, and the state was trying to raise the same amount, according to university spokeswoman Michele Morris. Though the state legislature put up $500,000, the state was unable to raise the remaining $1 million.
Correction: Mileage between Barry University's campus and
the station is closer to 40 miles than the 65 miles cited in this 2004 article.
Web page posted March 9, 2006
Copyright 2004 by Current Publishing Committee