Two years after selling WXEL-FM in Palm Beach, Fla., for $3.85 million, Barry University has agreed to sell its public-TV sister station for $1.44 million. The buyer is the WXEL Public Broadcasting Corp., a nonprofit set up by the TV station’s present executives.
WXEL’s 15-year custody by the Catholic university in Miami Shores began in 1997 when the school rescued the Palm Beach FM/TV combo from perilous fiscal condition.
The stations attracted unsuccessful sale contracts, bids or at least inquiries from New York’s WNET, the Palm Beach County school board, competing Miami station WPBT and a longtime suitor, Community Broadcast Foundation of Palm Beach and the Treasure Coast.
The latter lost interest when Barry University sold the FM station, says Bryce Combs, a group member and digital media consultant who managed Milwaukee Public Television in the 1990s. The group would have been willing to buy both the radio and TV stations for the combined prices paid to Barry, but “for reasons that still escape us, we were shut out of the deal.”
In 2004 the school began trying to sell the two stations as a pair, but six years later sold the FM station alone to a Florida subsidiary of American Public Media Group. The university spent almost two more years shopping around the TV channel.
Why did the TV station go for less than half the price of WXEL-FM? Combs says the TV station had been underfunded for years by its university licensee and its weak revenues lowered its sale price. In contrast, among funders in the community, “we found that the radio station had a place at the table in many places where TV did not,” Combs said.
The tougher competition for noncommercial FM channels also raises their prices, according to Erik Langner, director of acquisitions and legal affairs with Public Radio Capital. “In radio there are more buyers around for noncommercial stations because there are several public radio formats that can thrive” as well as religious broadcasters. In contrast, public TV lacks “a second viable service” other than PBS, even though many markets have more than one public TV station, he adds.
Last year observers noted that a public TV station in Orlando, a market almost twice as populous as Palm Beach, went for $3 million — less than the price of WXEL’s FM station in Palm Beach.
There was less direct competition and upward pressure in the sale of WXEL-TV in Palm Beach. Its price was not set in “an open-market deal,” Langner said, because the price was negotiated between the licensee, Barry University, and its employees managing the station. To give them time to arrange the purchase, Barry gave the WXEL managers a period of exclusive discussions through December and then until Feb. 24, Henneberg said. The university’s board ratified the sale last week.
Public Radio Capital arranged financing for the purchase of WXEL-TV. The new licensee will take on debt payments of $200,000 a year. Barry University agreed to pay the station’s PBS dues for 2010, and the station took care of the dues for 2011, according to Bernie Henneberg, who has been g.m. of the station under Barry and is temporary chair of the new licensee board.
Henneberg served as WXEL’s chief financial officer for 13 years before he succeeded Jerry Carr as president two years ago.
Henneberg estimates that WXEL-TV to lose about $199,000 this fiscal year but expects it to break even next year. The station has upgraded equipment to high-def and will earn new revenues from technical services, he told Current. For example, ESPN has used its studio to produce Monday Night Countdown, hosted by NFL coaching great Bill Parcells, and a nearby TV station will share its tower.
The station also arranged for the county school board to co-produce three local series. In exchange for $165,000 in production services from the school board’s new cable-access facility, WXEL will give the school board one of WXEL’s digital multicast channels, Henneberg said. The local programs are Heritage, a half-hour local feature; Debra, a talk show hosted by WXEL marketing chief Debra Tornaben; and Your Healthy Community, backed by the local Quantum Foundation.