"We have in some way, shape or form been burdened by financial issues for 30-plus years and this wipes it all away in one fell swoop.” said Deborah Acklin, President and CEO of WQED.
By Anya Sostek / Pittsburgh Post-Gazette
WQED’s fairy godmother has arrived, in the form of a Federal Communications Commission broadcast spectrum auction.
The public television station announced Thursday that it will reap $9.9 million from the sale of its broadcast frequency, enough to completely retire its long-term debt with a few million to spare.
“I’m thrilled, I’m excited, it’s miraculous,” said Deborah Acklin, president and CEO of WQED. “It’s a reversal of fortune for this community institution that is truly historic. We have in some way, shape or form been burdened by financial issues for 30-plus years and this wipes it all away in one fell swoop.”
In exchange for the payout, WQED will move to a lower broadcast frequency, likely in two to three years. The change will be almost entirely behind the scenes. The station will stay at Channel 13 on the broadcast spectrum and the move will not affect broadcast quality or availability, though over-the-air users may have to re-scan their televisions.
The one-time, first of its kind, two-sided auction was conducted in order to clear space on the broadcast spectrum for use with wireless devices. The shifting of television stations will make room for seven new license blocks in Pittsburgh, said Charles Meisch, an FCC spokesman, noting that each block will likely sell for $16.4 million.
WQED studied the issue for years and committed to participate in the auction last March. The station found out late last month that it would be receiving $9.9 million but was only able to share the figure this week, when the government lifted “quiet period” restrictions.
The station wasn’t sure how much it would reap from the auction, if anything. “The expectations of what it would be were completely undefined in the beginning,” said Tom McGough, chair of the board of directors. “As we were watching the auction unfold it oscillated wildly — everything from zero to considerably more. It literally went all over the spectrum, no pun intended.”
Dozens of stations in Pittsburgh were eligible to participate in the auction but at this point, it is up to each individual station to share whether they participated and if so, how much they will receive. Fairfax, Va.-based OTA Broadcasting, for example, which owns 11 Pittsburgh station licenses, declined to comment Thursday.
Stations had the option to sell their spectrum space entirely, share it with another station or move to a different frequency, as WQED did.
In the early 1990s, WQED was $17.5 million in debt, said Mr. McGough. Over the years, it has whittled that figure down to a bank loan with about $4 million remaining and $1.9 million that it had borrowed from its endowment.
With the $9.9 million, which it will likely receive in about a year, it will pay down that debt, and use about $1.5 million for transaction costs and equipment related to the frequency shift. That leaves a ballpark surplus in excess of $2 million, he said.
“That’s the money that we’re going to be engaging in an analysis and a discussion about with our constituents and communities,” said Ms. Acklin. “I think one of the likely proposals is that we add it to the endowment since this is a one-time gain. We’re not likely to blow it on a single project.”
The station has embarked on dramatic budget cuts in recent years, including layoffs, which will be unlikely to be reversed with this windfall, said Ms. Acklin, noting that the station still needs to stay within its annual operating budget. There will be some operational savings when the loans are paid, however, because the station won’t need to pay interest or debt service.
Ms. Acklin stressed that the station will still need to meet its operating budget by seeking government funding and fundraising from foundations and individuals. And yes, pledge drives too.
“We did not get rich today and we are not rolling in available cash and resources,” she said. “This clears up the past, gets us out of the hole and makes it clear that WQED will be here for generations to come. But public support continues to be extremely important.”
Anya Sostek: email@example.com or 412-263-1308.
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