Judge rules against Pacifica, WBAI in $1.8M lawsuit

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Anthony Quintano

The Empire State Building is home to WBAI's transmitter.

The Pacifica Foundation has lost a dispute over unpaid rent for the transmitter of WBAI, its New York City station.

Samuel Himmelstein, the attorney representing Pacifica and WBAI in the case, confirmed to Current that summary judgment was granted Wednesday against Pacifica. The California-based radio network owes the Empire State Realty Trust just over $1.8 million in unpaid rent.

In an audio segment about the ruling on WBAI’s website, Himmelstein said he offered a new settlement to ESRT before the arguments “and they’re going to consider it, but this was about as bad a result as we could have expected.”

The judgement allows ESRT to “seize assets of Pacifica, they can place liens on its real estate, then can seize its bank accounts, unless we work something out with them,” Himmelstein told WBAI.

The judge denied Pacifica’s defense that ESRT was price-gouging WBAI, according to a Pacifica press release. ESRT’s most recent invoice to WBAI was for $2.4 million including fees, according to the release.

Pacifica’s board of directors met in executive session Thursday to discuss how to deal with the judgment, according to Bill Crosier, Pacifica’s interim executive director. He declined to detail the options under consideration.

ESRT must wait “a few weeks” before it can collect on the judgment, Crosier said.

“Some people are panicking,” he said. “I want to reassure people that WBAI is not going to go off the air. … We’ll get through this and we’ll be continuing to bring all the news and public affairs, music that people can’t hear anywhere else.”

“The board is clear that we want to get this resolved,” he said.

  • Duncan Lively

    What would prevent sale of the 99.5 frequency at market value to a commercial operator, followed by purchase of lower power frequencies with equivalent tri-state coverage?

    That would:
    – transfer the problematic ESRT lease to the buyer,
    – wipe out the arrears,
    – leave a cash balance that could, perhaps, offer all of Pacifica a chance to do a full reset fiscally and in its governance.

    • Brad Deltan

      If you haven’t, I highly encourage everyone to go read Scott Fybush’s “North East Radio Watch” (it’s a paid subscription, but it’s worth it for the quality of analysis) as he lays out all the options far better than I can. But the short version is that Pacifica COULD, quite easily, sell off 99.5 to either a commercial operator and purchase something else (1190 WLIB is a oft-cited option) that’s cheaper to operate. The profits from such a sale would likely be enough to retire all of Pacifica’s debt (not just WBAI’s) and have enough left over to keep things comfortable for a few years…in theory.

      Similarly, there’s been talk about trading 99.5 to New York Public Radio for WQXR’s smaller B1 signal, plus cash to Pacifica. Again: retires the debt, provides some operating capital, and still keeps them on the air in NYC on a decent signal.

      The problem is that pretty much everyone left at Pacifica is completely insane.

      The partisan rancor, the egotism, the utter disconnect from reality is thoroughly pervasive in Pacifica. And the old adage of bad money pushes out good is very true here: anyone with the savvy, skills and temperament to run Pacifica’s finances in a way that might be sustainable has long since left because they can’t stand the crazies.

      It’s so bad that forget about that even if they pulled off a deal like this, that they’re incapable of modifying their operational schema to take any influx of cash and turn into a sustainable business model (you’re in LA, right Duncan? Take a listen to KPFK and you’ll hear what I mean pretty quickly…their programming is practically designed to push everyone away except for a tiny audience of hard-core devotees; too small to provide sufficient revenue for the long run.).

      No, forget about that: they’re so dysfunctional that they can’t even bring themselves to realize that they desperately need to make a move like this and seriously change things about how they run their business. If they were capable of doing so, they already would’ve; this problem has been at crisis level for a couple years now.

      At this point, the conventional wisdom is that they’ll only change when they’re forced to by law.

      And, of course, remember that an FCC license is worth nothing in the eyes of bankruptcy court. A license is not “owned” by the licensee; it is assigned by the FCC for a multi-year period and must be renewed. And can be taken away by the FCC at any time for cause. So the court cannot say to Pacifica “you must surrender this asset”. Which is unfortunate, in a way, because it means this drama is just going to drag itself out longer and longer.

      • Duncan Lively

        There is a culture of entitlement baked into some nonprofit radio organizations — a fervent belief that a station is so deserving of love and adulation that it cannot and will not fail. Here is where that thinking leads:
        https://current.org/2016/10/kusp-license-assets-wine-sold-off-to-religious-broadcaster/

        • MarkJeffries

          It should be noted that Pacifica had momentum during the anti-war movement of the late 60s and early 70s, where they could have been *the* public radio network instead of NPR. But when the troops returned, the libertarians dropped out, the remaining left became mired in identity politics and the Pacifica programmers were more interested in territory-marking than compelling radio. And the ratings and subscriptions dropped, the audience became calcified and the staff so set in their ways that the famed public radio consultants couldn’t do anything with the station group other than put “Democracy Now!” on the air. And that’s why Pacifica has been one foot in the grave for years–the remarkable thing is how long they’ve stayed one foot in the grave.