News, University News

WBRU alums contest sale of FM signal

U. students, alums butt heads over direction, medium, priorities of student-driven station

By
Senior Reporter
Tuesday, September 26, 2017

Updated Sept. 27 at 8:45 a.m.

Nearly a month after WBRU announced the sale of its FM radio signal, a group of the radio station’s alums have joined together to fight the sale, looking for legal loopholes and standing to challenge the $5.63 million deal.

Representatives of a group of alums concerned with the sale met with the R.I. Attorney General’s office seeking some intervention based on irregularities in the sale process. But state regulations prohibit such intrusion into a private deal.

“Attorneys from our office met with alumni and their attorney as a courtesy,” said Amy Kempe, public information officer for the attorney general’s office. “But as our attorneys explained, Rhode Island statute and regulation does not give the attorney general any legal authority to intervene, as is the case in nearly all private sales.”

Citing falling student participation, station revenues and the declining relevance of radio as a medium, station staff have debated the possibility of a sale for some years, according to station General Manager Kishanee Haththotuwegama ’19. In 2013, she added, students voted to take the word “radio” out of the station’s mission statement.

“Today’s reality is that young adults do not engage with music through FM radio as they once did,” Haththotuwegama wrote in an email to The Herald.

Recognizing some change was needed to ensure the station’s longevity, the Board of Directors of the Brown Broadcasting Service —  the entity which holds WBRU’s license — voted to authorize a sale of the station’s signal in January 2017, said Ted McEnroe ’89 MAT’92, a member of the station’s board of directors.  The sale, which will see WBRU’s terrestrial signal transferred to the California-based Christian contemporary nonprofit Educational Media Foundation, has proven divisive among both students and alums trying to forge a path forward for the historic station.

The sale

As students considered the station’s future, they were presented with two options: sell the station’s signal while it has its greatest value or attempt to save the station.

“I absolutely believe the station could be returned to profitability,” said Patti Galluzzi ’83, a station alum. “Selling it without trying one more time seems ridiculous.”

Galluzzi, a station alum, became involved in trying to save the signal after some alums reached out for assistance. Galluzzi, a former vice president of music programming at MTV, was not completely unfamiliar with the task, having been brought onto WBRU when the company was experiencing financial difficulties in 1992. The solution Galluzzi and other alums proposed was similar to those that had worked to turn around the station in the past.

To save the station, the plan would be to hire a new general sales manager and a staff of account executives to increase the station’s ad revenues. It would have additionally received a $600,000 line of credit from the University that would have been repaid over seven years, according to financial documents obtained by The Herald.

The station paid for an outside consultant to evaluate the potential of this plan. According to that consultant’s projections, the plan would have resulted in a return to profitability with a net cash flow of $16,000 by 2019. The same consultant estimated that the station would finish 2017 with a net negative cash flow of $259,000, according to the financial documents.

Haththotuwegama wrote to staff members that while the work of the consultants showed “there could be ways where WBRU could be financially viable in commercial radio … that financial success would come at significant cost to the student experience,” according to internal WBRU emails acquired by The Herald.

In those emails, Haththotuwegama wrote that increasing the influence of adult professionals would diminish the integrity of the station, which has been, at its core, a workshop for students. “WBRU has always been about student autonomy in the world of media and music and we remain committed to that model,” she added.

Considering this, Haththotuwegama penned a letter to over 800 alumni Mar. 2 informing them of the station’s intention to authorize a sale in concurrence with the board of directors’ vote.

Voting

The student vote was originally scheduled for March 11 but was delayed by a series of events until April. In emails obtained by The Herald, some station staff began bristling around this time at what they perceived to be preferential treatment of a sale as opposed to saving the signal.

In email chains with all the station members, some students objected to the fact that meetings discussing the viability of the turnaround were not mandatory while other meetings in which the sale was discussed positively were required.

The vote was eventually moved to April 24 and failed to authorize the sale, which required a super-majority, by a single vote. With 25 in favor of a sale and 14 opposed, it was impossible for students to move forward with a transfer of the signal. Haththotuwegama, noting that a majority of students had voted for a sale, notified station members that a second vote would be held three days later on April 27.

The decision was a point of contention for many students who accused leadership of violating the will of students and regular voting procedures. Students debated the decision fervently over staff-wide email chains, occasionally in a personal manner. Many accused students with leadership positions of leveraging their authority to assert their own opinion.

Haththotuwegama defended the decision in an email to students, claiming that the station needed a definitive path forward for the summer or else risk a drastic loss of capital. When the second vote was held, enough votes had been made to authorize a sale.

Next steps

Without the intervention of the attorney general, alums have few options left with which to challenge the deal. Galluzzi said the University could have some standing in the matter, citing evidence that the original capital used to purchase the station’s license came from a University donation. But representatives from the University seem reluctant to wade into the matter.

“Throughout this process, our interest has been in the sustainable, long-term ability of Brown Broadcasting Services to fulfill its mission of running a vibrant educational workshop for students,” wrote Brian Clark, University spokesperson, in an email to The Herald. “Ultimately, the future of the station was a decision for the students and board members at WBRU to make.”

“As the station reinvents itself on a new digital platform, we wish the station members every success in creating a media workshop that proves as beneficial for future generations of students and listeners as WBRU has for more than half a century,” Clark wrote.

The ultimate character of that new media workshop is not yet entirely clear. WBRU is already operating dual streams of 24/7 content and is exploring new programming in news and music, according to WBRU spokesperson Art Norwalk.

The station is tentatively looking to acquire a smaller terrestrial signal to ensure its 360 Broadcast in Sound reaches incarcerated individuals at the Rhode Island Department of Corrections, McEnroe said.

The funds from the sale will be put into the station’s endowment, the returns of which are expected to annually generate about $250,000. A portion of that funding would go toward fixed costs, including $45,000 in annual rent to the University, utilities and payroll, Haththotuwegama wrote.

But the capital needed for the kind of redevelopment students have envisioned may not be available for some time. WBRU still owns the FM radio license while the deal awaits approval by the Securities and Exchange Commission, McEnroe said. Currently, the Educational Media Foundation is leasing the signal at a set price but funding from the deal itself won’t be available until the deal’s closure, which McEnroe anticipated to occur sometime later in the fall.

The delay in funding may prove problematic as some alums presented students with a lofty vision of the capital the station would be receiving from a deal, said Tucker Hamilton ’17, a former WBRU staffer.

“The way one alum put it to us is, ‘You’re going to get millions of dollars in an endowment … that is for you to use’,” Hamilton said. “The alum was saying, ‘You’re going to have hundreds of thousands of dollars to try new ideas. … You could fund three startups, and even if you lose that money, it won’t matter,’” Hamilton said.

Galluzzi concurred with Hamilton’s assessment and said that it was likely one of the greatest factors that led to the signal’s sale. “I can understand if you’re a student thinking you’re responsible for this business and thinking, ‘Our assets are losing their value so maybe the smart thing to do is cash them in while they have their greatest worth.’”

Haththotuwegama pushed back on these assertions in an email to The Herald, writing that expected returns from future investments in programming “(aren’t) purely financial, but based on what students in the workshop find fruitful and how we impact the communities we serve.”

While alums have justified their continued involvement with the sale as acting in the station’s best interest, Haththotuwegama maintains such an intrusion jeopardizes the station’s future.

“While the vast majority of alumni have shown us support, we are concerned about a vocal group of alums whose energy is focused on delaying or derailing the work we’ve been doing, rather than helping us move into the future,” Haththotuwegama and other station leaders wrote in a letter to alums.

In a separate letter to organizers of the “SaveWBRU” movement — a group not connected to the alums involved in trying to save the station — summer staff of the station responded broadly to alums pushing against the sale.

“We chose to sell because we no longer see a future for our student workshop in commercial radio,” the letter reads. “If you do not want to help us, or disagree with what we are doing, that is understandable. But the decision has already been made, so please respect our autonomy and do not stand in the way of our chance to create a valuable workshop that maintains the spirit that WBRU encompasses.”

Correction: A previous version of this article misspelled the name of Patti Galluzzi ’83. It is Galluzzi, not Galuzzi. The Herald regrets the error.

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