After The Shoe Dropped

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Berkeley – To no one’s real surprise, a NY court ruled on October 4 that the Pacifica Foundation owed $1.8 million dollars plus attorney’s fees to the Empire State Realty Trust, the multimillion dollar real estate firm that owns the Empire State Building, where Pacifica has lodged WBAI-FM’s antenna since 1966. A 15-year contract signed in 2005, after the collapse of the World Trade Center, made antenna space in NYC a hot commodity, and featured soaring prices and a 9% annual escalation, which left the price of the rental by 2015 at more than 4 times the market value and in excess of $500,000 a year, a vast amount for a listener-sponsored radio station.

The contract was signed by an interim executive director, WPFW’s Ambrose Lane, who held the position briefly between outgoing ED Dan Coughlin and incoming ED Greg Guma. By most accounts, he was a fine programmer, but a somewhat absentee interim director. It isn’t clear if the full Board of Directors in 2005 ratified the contract before or after Lane’s signature or at all, but the commitment to pay some $7.5 million dollars over 15 years through 2020 was made. Pacifica, with some struggles, paid the contract in full through 2013 and began defaulting in the 2014 fiscal year, eventually running up the $1.8 million debt cited in the lawsuit over the next three years. Interim ED’s Margy Wilkinson and Lydia Brazon, and WBAI GM Berthold Reimers made vague references to negotiations in progress with the Empire State Realty Trust in the 2014-2016 period to lower the monthly rental cost by 2/3.  Despite Pacifica proceeding to make the partial payments as if negotiations had worked, no actual agreement was ever obtained. Several million dollars in future liability remain on the duration of the contract.

The contract’s “elevator clause” (the large annual increases) were known to be a disaster waiting to happen for several years. The failed negotiation effort and the secrecy surrounding it for several years, obscured the scale of the problem. By the time the lawsuit was filed in December of 2016, it was too late. Pacifica attempted, with some reason, to make an “unconscionability” defense in the lawsuit, stating the lease was non-responsive to the free market and unreasonably oppressive. But the law does not often protect from the consequences of poor decisions, and it did not do so in this case.

The amount of the judgment, as well as the other acculmulated debts, is sobering. But Pacifica is in the position that its assets are larger than its debts, so the decisions facing the organization are about which assets to retain and which will have to be accessed to settle debts. 4 real estate properties in 3 different cities total at least $10 million dollars in value and 5 major market broadcast licenses represent at least $150 million. Board and executive discussions on the matter by necessity occur in closed session. No notification to the network’s members is expected until a decision is arrived at. Any proposed broadcast license transfers would be subject to an up or down vote by the network’s donors, in addition to the governance board. The summary judgment, if not paid, would open the Foundation to eventual collection efforts, which could take the form of bank account sweeps or real estate liens, so action will have to be taken fairly soon to avoid that.

In other news around the network:

LA’s KPFK has been heavily fundraising, but showing improved results with a robust $700K+ fund drive result in May. The fall drive underway was at $300K at the 10 day mark and is averaging receipts of more than $30K a day under GM Christine Blosdale.

Houston’s KPFT is slowly recovering after a contentious management change following the 2016 retirement of long-time manager Duane Bradley. The station lost staffers and has been operating at limited capacity. Long time music programmer Larry Winters is working as the interim GM without taking a salary, and restored some popular music programs to attempt to stabilize dwindling receipts that had been noticeable for some time. The station’s local board has been locked in factional struggles and is spending much of its time arranging trials in attempts to kick one or another person off the local board.

At NY’s WBAI, the summary judgment for Empire State Realty Trust has been the major topic of concern as the culmination of the station’s decline from being the financial powerhouse of Pacifica to its weakest financial link. Partially due to being burdened with expensive leases and longstanding tensions between premium-based and program-based fundraising that never seem to get resolved.

Berkeley’s KPFA has also had recent fundraising success. The station chose to cut its last fund drive short after raising $588K rather than continue to the fund drive’s scheduled conclusion. That management decision was worthy of note after a routine title search revealed that property taxes for the station’s main studio building at 1929 Martin Luther King Jr Way had not been paid since the 2014 fiscal year, showing a $273K lien on the property from the County Assessor.

Pacifica is also struggling to resolve unpaid pension payments for employees dating from the 2014-2016 period. The network maintains, as a historical accident, two different retirement plans for its low paid employees, a 403(B) plan that provides an employer match on employee contributions and a defined benefit pension plan that provides an additional 2% of salary employer match. The 403(b) plan was intended to replace the defined benefit pension plan back in the 1990’s, but due to some administrative ineptness, both retirement plans were written into a union contract and neither employee union, CWA nor SAG-AFTRA, has been willing to allow the plan replacement for the last 20 years. Pacifica has periodically been late on the pension payments before, most noticeably in 2011-2012, when a few months delay caused scathing national denunciations of then ED Arlene Engelhardt from the California Labor Federation, but the complete defaults in 2015 (on the 2014 contributions) and in 2016 (on the 2015 contributions) seem to be unprecedented. The three year liability (as the 2016 contributions also need to be paid this year) represents about $300K in back payments. The payments are overdue because of being mandated in the union contracts. The pension plan itself was written as a voluntary profit-sharing plan based on employer financial health. The parallel 403(b) retirement plan is fully funded. Some resolution of the 20 year old double-retirement plan snafu would assist with Pacifica’s financial stability going forward.

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Started in 1946 by conscientious objector Lew Hill, Pacifica’s storied history includes impounded program tapes for a 1954 on-air discussion of marijuana, broadcasting the Seymour Hersh revelations of the My Lai massacre, bombings by the Ku Klux Klan, going to jail rather than turning over the Patty Hearst tapes to the FBI, and Supreme Court cases including the 1984 decision that noncommercial broadcasters have the constitutional right to editorialize, and the Seven Dirty Words ruling following George Carlin’s incendiary performances on WBAI. Pacifica Foundation Radio operates noncommercial radio stations in New York, Washington, Houston, Los Angeles, and the San Francisco Bay Area, and syndicates content to over 180 affiliates. It invented listener-sponsored radio.

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9 thoughts on “After The Shoe Dropped”

  1. The antenna contract wasn’t the only secret deal — obligating large sums over years — made by Ambrose Lane just before I replaced Dan Coughlin as ED. In 2007 questions were raised about their legality, since most of the Board had been kept in the dark. The clique that controlled things, whoever became ED, was big on rules and process, but often broke its own rules and utimately violated the bylaws put in place to prevent an outside takever. Instead, the coup proceeded from within.

    1. Happy to hear more from you on this Greg. Feel free to post more extensive comments when you get a chance. I am sure readers would find them helpful

  2. As always, this site has the most factual information about what happens to all Our Pacifica Stations, so thanks for you diligent all the work here.

    you write: “LA’s KPFK has been heavily fundraising ”

    but w/o mentioning the long 30 dreary days of Oct in LA – in full haranguing, mode with infomercials and sales. as there is no other ‘factual’ word for what is heard on air most of this time….

    that means in a year: there are about 3-4 month-long ‘fund-raising’ periods ? Which can be better calculated by those who can get to actual stats, as listeners cannot.

    so then, that comes to maybe ¼ of a whole year -that is devoted to selling and getting $$$ ? and that’s about 25% or more of yr’s on-air broadcasting ? – plus also add in the ‘extra special times’ when $$$ is again the entire theme of programming there ?

    How does that sit with most of those who are already-paid-up donors ?
    and those who tire of the same stuff being advertised on this ‘non-profit’ ?
    and the repetitively replayed blurbs / exhortations / faked exaggerations of value – of what is being sold,
    on air ?

    Can this really attract new, or different audiences ?
    once they get stuck in paying for lengthy weeks, a month of mainly money-getting – or is it just too much ?

    with no other methods of being financially stable ?

  3. I was just in LA and as i listened to kpfk, i can tell that christine blosdale has the support of a good many programmers which in turn creates a much better environment for the programmers and thus us listeners. While undoubtably there are issues and complaints, it seems that Christine wants to succeed and cares about kpfk. It is a hard, thankless job im sure. Bringing back Roy has helped and earning the trust of the donors will take time.
    As far as wbai transmitter antenna debacle, trying to get out of a legal contract might have been worth a shot, but who would ever expect a company to make an exception for BAI, just because they’re good guys? Three more years and the contracts up. Bad call, figure out a payment plan, cause its already time to start working out a plan for where ‘bai is going to transmit from next, and if you dont pay your bill, no one’s gonna want to deal with you.

  4. Before Larry Winters was iGM at KPFT, Obidike Kamau was iGM. He was fired by Bill Croisier because of personnel issues. He is now on trial before the KPFT LSB because of ‘racism’ due to the firing of Dr, Kamau. The other trial is of Robert Mark, who gave a seig heil salute to Nancy Saibara-Naritomi when she was ranting during her input to the LSB. Bill could be covered for his actions if the PNB officially approves his personnel decisions. Robert needs to go through sensitivity training, like Hank did for calling DeWayne Lark ‘boy.’

  5. Q re : At KPFK = is Christine Blosedale a GM or iGM ?
    those are not same level nor have actual power or permanance, or do they ?
    do interim have same salary & benefits as full termed staff/GM ?
    one is temp and other is selected /voted in ? how doeos all that work out legitimately ?
    and who all choses/determines staff hires at station top level anyhow? like GM or PD ?
    thanks for clarifications from those who know more
    and for more updates with info not revealed about Pacifica before…as no one else write/ shares what is done here…
    why is that ? any ideas ?

    1. Christine Blosdale is an interim GM. The difference mostly relate to the processes for evaluation and retention, which are more casual for an interim hire than a permanent hire. Station GM’s are always chosen by the ED, but in a permanent hire, a full process is gone through with an open listing, multiple applications and a hiring pool developed by the lcoal station board for the ED. In an interim hire, the ED just appoints and its usually done when there is a management change and there is no time for a permanent hiring process.

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