Current Online

WQED again asks FCC approval to sell reserved channel

Originally published in Current, Jan. 15, 2001
By Steve Behrens

More than four years after its first try, Pittsburgh's WQED is again petitioning the FCC to let it sell its second TV channel to help it get out of debt. If the FCC agrees to remove the noncommercial educational reservation on Channel 16, WQED will sell it to broadcast exec Diane Sutter for $20 million.

President George Miles gives several reasons why the FCC could okay de-reservation this time after turning it down in 1996. By dealing with Sutter, "we have enhanced our public-interest argument," he says. She would become one of the relatively few female station owners, and she grew up in Pittsburgh. She was president of American Women in Radio and Television in the late 1980s.

Also, the station has no Plan B this time. In '96, the FCC apparently lacked a majority willing to straightforwardly de-reserve a public TV channel, and seized on WQED's back-up plan to swap its reserved channel for a religious broadcaster's unreserved channel and sell that one. Persistent opposition by local media activists delayed FCC action on Plan B until 1999, and, even though Plan B won approval, the commission's deliberations scared off the buyer.

And there's another reason why Plan A might fly this time. "There is a change in Administration," says Miles. "That may help — who knows?"

"WQED apparently is hoping to cash in on their Republican connections," says Jerold Starr, leading critic of the station sale and now executive director of a national media lobby, Citizens for Independent Public Broadcasting.

Starr and CIPB's local activists met last week to plan their own initiatives to block WQED's new FCC petition and object to its continued simulcasting of the same programs on two Pittsburgh channels.

WQED attempted to head off one likely parry from Starr. The station asked the FCC to de-reserve Channel 16 without opening it to competing applications. Starr has joined in past efforts to apply for the license.

Starr and Miles look at Channel 16 quite differently. Starr regards it as a priceless public resource that should be given to another nonprofit if WQED finds it too expensive to operate. And Miles regards the channel as a valuable asset that WQED can sell to get his station out of debt and improve its public service. The station told the FCC it "will not permit the loss of Channel 16 to a third party."

In their Jan. 9 petition to the FCC, Miles' lawyers went so far as to abandon public TV's usual reverence for reserved channels, telling the commission that the expansion of cable and other media developments have "rendered reliance on reserved channels obsolete."

Is Pittsburgh losing a noncommercial channel? It depends how far you look back. Starr looks back at the 1980s, when WQED proudly offered a second schedule on Channel 16 for niche audiences. WQED now points back before 1958, when it had Channel 16 converted from a commercial license to a noncommercial one.

The new deal to sell Channel 16 is a little better for WQED than Plan B, but also much better for the buyer. Sutter would pay $20 million for the channel, compared to the $35 million that would have been paid by the eventual buyer in Plan B, Paxson Communications. But because the religious broadcaster, Cornerstone, is no longer involved, WQED would net $5 million more than under Plan B.

Sutter, owner of ShootingStar Broadcasting in Sherman Oaks, Calif., was manager of Shamrock Broadcasting's WWSW-AM/FM in Pittsburgh for 11 years and later president of its TV division. She and partners bought Shamrock's KTAB, the CBS affiliate in Abilene, Tex., and sold it again last year.

WQED contends that it still needs to sell Channel 16 to relieve its "financial distress." Even though it has halved its staff since 1993 and has been saving money by simulcasting on its two channels for the last three years, it is still $9.32 million in debt, according to its petition. Of that sum, $1.65 million is bank debt, $3.17 million is overdue bills, and $4.5 million is borrowed "restricted assets" that should be repaid to its own capital campaign, the petition said. The station's losses since 1992 have totaled $12 million, the petition said.

Worse yet, WQED told the FCC, it needs to spend $8.7 million on DTV conversion of the two channels and $3 million for renovation of facilities.

With the collapse of WQED's national production business — once one of the busiest in the system — revenues have tumbled from $38.3 million in 1991 to $18.2 million last year.

. To Current's home page
. Earlier news: WQED's previous bid for FCC permission was eventually successful, but the religious broadcaster backed out of the channel swap at the last minute.
. Later news: FCC approves dereservation of WQED's second channel, July 2002.
. Outside links: WQED and Citizens for Independent Public Broadcasting.

Web page posted Jan. 21, 2001, revised July 22, 2002
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