Saddled with debt, Iowa college moves to sell public station
Originally published in Current, Dec. 4, 2000
By Mike JanssenIowa Western Community College in Council Bluffs, Iowa, has announced it will take bids for its financially troubled noncommercial station, KIWR. The expected high price tag—possibly in excess of $4 million—presents a challenge to observers in public radio who want to keep the station out of the hands of deep-pocketed religious broadcasters.
Later article
Expected fat bid for Iowa FM falls throughOriginally published in Current, Dec. 18, 2000
Iowa Western Community College in Council Bluffs, Iowa, will probably reject a surprisingly low offer for KIWR, its triple-A and alternative FM station, after a more promising bidder backed off. Iowa Western trustees will meet Monday to consider the station's future.
KIWR, which also serves Omaha, Neb., had been valued at $4.5 million despite the relatively small size of its market. The college expected a high offer but got just one bid, $352,000 — from Calvary Salvation Network, based in Santa Ana, Calif. President Dan Kinney told the Omaha World-Herald that the bid was "ridiculously low," and that he would tell the board to reject the offer.
With its powerful 100,000-watt signal, KIWR, often called "The River," broadcasts triple-A and alternative rock music to western Iowa and across the wide Missouri to the Omaha, Neb., market, which is served by two other public stations.
Despite its range and a recent rise in audience, Iowa Western President Dan Kinney said the station has lost money for years, and finished last year $100,000 in the red. "That causes us to have to support it with general fund dollars, which are tuition and tax dollars, so that's not very attractive," he said.
The college's board of trustees started considering a sale after receiving an offer in September through Kalil and Co., an Arizona consulting group. Kinney would not disclose the source or amount of the offer.
"The bid was enough to cause the board to say that we should consider [a sale]," he said.
Since then, five other parties have expressed interest in buying KIWR, though Kinney does not know how many will bid when the process begins Dec. 13. A religious broadcaster also asked the college to donate the station and Kinney refused, calling that a "dumb idea."
Kinney said the bids are likely to have "different kinds of elements to them." He expects one bidder to offer another station as part of the payment. Another bidder would develop a contractual arrangement to keep Iowa Western students involved with operating the station. Students hold down airshifts late at night and on weekends on KIWR, and also work alongside professionals at the station.
Kinney is considering applying for a low-power FM station to use for educational purposes.
The community college flirted with selling KIWR in the early '90s, but the highest bid was $540,000, not high enough for trustees to move ahead with a sale. This time around, a Missouri accounting firm appraised KIWR's worth at $4.5 million. "Obviously, $540,000 was not a good bid," Kinney said.
KIWR General Manager Vicki Jacoba said listeners have made "a huge outcry" over the possible sale. The Omaha World-Herald reported that a station promotional event turned into a "Save the River" rally. Some listeners told the paper they value the station for its support of local bands.
The high appraisal value and Kinney's brisk schedule for the bidding process worry observers in public radio, who doubt that they can rustle up the necessary millions to buy the station in such a short period of time. Iowa Western seems averse to partnering with a more successful public radio station in Iowa, as Iowa Central Community College in Fort Dodge did late last year when it started taking programming from WOI-FM in Ames.
In a Nov. 16 letter to Kinney, WOI General Manager Bill McGinley urged him to slow down and consider a partnership similar to Iowa Central's. "I believe KIWR has significant, permanent value to the people of southwestern Iowa as a noncommercial public radio station," McGinley wrote. "To dispose of this irreplaceable asset may permanently deprive thousands of Iowans public radio service of any kind, as neither of the other Omaha public stations or our own WOI services provide reliable signals to a large part of that region."
McGinley's letter had little effect on Kinney. "Quite honestly, to consider giving the management of the station to WOI is a ridiculous idea," he told Current. "One of the reasons to keep [KIWR] is because of the format and listenership," which are both strong.
McGinley sent copies of his letter to the college's trustees, and addressed the board at the meeting where it decided to take bids. He came away frustrated. "This is an asset that was created and is owned and ought to be retained by the people of Iowa," he told Current. "The community college is not acting as good stewards by rushing through without participation, and selling KIWR to the highest bidders, especially when it would disallow other qualified Iowa institutions to be competitive."
Both McGinley and Marc Hand, managing director of the Public Radio Capital Fund, both say that public radio buyers face a challenge if they want to snap up KIWR. Hand pointed out that $5 million, not far from the KIWR's appraised value, was the starting bid for WDCU in Washington, D.C.—a far larger market than Omaha.
"For that population coverage of about 800,000, it's hard to figure out whether the economics could work for public radio at a purchase price of $5 million or more," Hand said. "It would be unfortunate to essentially lose that as an asset for public broadcasting."
McKinley says he can't imagine any nonprofit generating enough revenue to pay off a debt of that size. He expects that only religious broadcasters will be able to afford it.
McGinley joined his counterparts at other stations licensed to state universities in urging the state's Board of Regents to intervene, but so far, they haven't.
Web page updated Dec. 17, 2000
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