Colorado Public Radio will bolster its Triple A station OpenAir with the purchase of a commercial FM signal from Front Range Sports Network, LLC.
The Denver-based pubcaster will pay $5.75 million for 102.3 FM, and plans to initiate broadcasts on the frequency Jan. 27. Public Media Company represented CPR in the transaction, which provides a signal to extend OpenAir’s reach to FM listeners in the Denver-Boulder metro area.
OpenAir first launched in October 2011 on 1340 AM, a channel that previously broadcast CPR’s news and talk programming. To give the all-news station a better shot at building its listenership, CPR moved the service back to its flagship channel, 90.1 FM in Denver, in 2008. CPR couldn’t find a buyer for the AM station and began using it as a testing ground for new formats, including OpenAir.
As with CPR’s earlier trial bringing news listeners to AM, OpenAir has struggled to build an audience. The listenership was too small to be measured by Nielsen’s Portable People Meters, according to Max Wycisk, CPR president.
“There are not a lot of people that know that AM radio exists,” Wycisk said. “It’s very hard for people to get to that side of the radio dial.”
He sees opportunities for OpenAir to gain footing through FM broadcasts. “There’s still a lot of people listening to radio, particularly on FM.” The programming itself is solid and won’t be changed.
Like other noncommercial Triple A stations, OpenAir focuses on the Colorado music scene with commentary and insights on local musicians, albums and events. It also records and broadcasts studio performances by local artists. Around 200 local bands have performed in its studio.
Wycisk sees benefits in OpenAir’s three-year run as an AM-only station, even if it didn’t build much of an audience. Most importantly, it gave programmers and talent a platform to develop the format before taking it to a wider audience, he said.
To bring OpenAir’s tiny listenership to the FM station, its music will continue airing on AM through June. From there, CPR will look at different options for the signal, including the possibility of continuing to use it as an incubator for a new station.
Pay to play
As with its past signal expansions, CPR will finance the FM purchase of the signal through tax-exempt bonds.
Wycisk prefers bond financing because it provides access to capital that can be repaid with the listener-sensitive revenues that accrue from audience growth. Plus, it’s a good time to borrow money.
“Coming out of the last five years, interest rates across the board are very low,” he said.
Pubcasting’s traditional model for raising money to purchase broadcast frequencies is a capital campaign, Wycisk said. “We can’t wait three years for a campaign. It happens now or doesn’t happen at all.”
After CPR issues the $5.75 million bond to purchase 102.3 FM, it will carry bond debt totaling $16.25 million. The pubcaster refinanced a number of bonds from earlier signal expansions into a single $12 million, 20-year bond issued in 2012. That bond has since been paid down to $10.5 million.
Though ratings firms downgraded CPR’s bonds in 2009, the revised outlooks didn’t have a negative impact on CPR, Wycisk said.
Taking out bonds was “a worry when we did the first one 15 years ago, but the track record we’ve done over the years is so firm” that he no longer has reservations about the tactic.
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