Posted on September 15, 2014 3:12 pm :: After suffering years of harsh budget cuts, LA Unified-owned public TV station KLCS could see a financial windfall next year should its recently announced plan to auction off bandwidth to the FCC go forward.
The potential value of the deal has been estimated to be worth tens of millions of dollars. The money would likely go directly to the station, not the district, and could be used to fund the station in perpetuity through the creation of a foundation, according to LA Unified spokesman Thomas Waldman.
“It is possible, given some of the numbers we are hearing about, is that just the interest alone could keep the station operating,” Waldman told LA School Report.
The deal would involve KLCS and independent public TV station KCETLink sharing a single over-the-air-broadcast channel while auctioning off 6 megahertz of spectrum to the FCC in June of 2015. The deal would have no direct impact to viewers, as the stations will maintain separate channels on the dial because it is essentially a behind-the-scenes technical move.
Aside from regular PBS-affiliated children’s and adult programs, KLCS broadcasts LA Unified school board and County Board of Supervisors meetings, and provides over-80,000 hours of annual instructional/informational content and 700 hours of original content, according to its website.
The school board approved a memorandum of understanding to move forward with the agreement at its meeting on Sept. 9. The memorandum stated that a recommendation regarding disposition of revenues from the auction will be subject to school board action in the spring of 2015. In the meantime, Waldman said district officials and others involved with KLCS are excited with the news.
“It’s a very bright development,” said Waldman, who himself hosts a show on KLCS called “Rock N Roll Stories.”
After peaking at an annual budget of around $10 million in the 2006-2007 school year, the station has suffered massive cuts in recent years and is operating this school year under a budget of approximately $2.7 million, according to Waldman. He added that the funds from the FCC auction would prevent board members from having to make future cuts to the station it has owned since 1972.
“Part of this effort is to establish financial sustainability. So during budget crises— and there will probably be another one soon enough—the station does not find itself in the same situation where the board members, while having to balance all sorts of priorities, decide they really can’t do much for the station,” Waldman said.
It is reasonable to assume, given the likelihood of another budget crisis in the future, that some will argue the auction money should be deposited directly into the district’s general fund. But KLCS General Manager Sabrina Thomas said the district has been asking the station for several years to come up with ways to generate its own revenue.
“The district mandated KLCS to become self sustaining so we could get off the general fund, and we believe we’ve come up with a solution to that,” Thomas told LA School Report. “And so this money should be dedicated to sustain KLCS. That’s what they asked us to do and that’s what we have done. To undermine that would be to undermine their own mandate.”
According to Current.org, media experts say the auction could generate funds as high as $32 million, which would be split evenly between KCET and KLCS.
“We believe more importantly that we have the potential now, with this agreement with KCET, to bring in the kinds of revenue that can keep the station fully funded for years without the district and the board to have to provide that money,” Waldman said. “What we propose is that it go into a foundation and that it fund the station, in essence in perpetuity.”
Waldman said while the occasional member of the public does question why the district spends money on the station, the school board has long supported its existence even while making harsh cuts. As a result of the cuts, Thomas said the station has gone from 80 employees to 24.
“I’m hopeful for the first time in a long time, because we have been subject to budget cuts in recent years,” said Thomas, who has been the GM for about three years and worked at the station for 30. “I’m really looking forward to restoring much needed positions and departments, and building and being on par with other stations of our scope. I’m just thrilled.”
Thomas said a station the size of KLCS typically operates on a $25 million budget, and that she is hopeful should the auction go forward and produce the expected revenue, the budget could be increased to around $15 million.
KLCS operated its entire lifetime without ever holding an on-air fundraiser until 2012, Waldman said, and ran completely from district funds and occasional grants. But even with the potential new funds from the sale, the plan is for active on-air fundraising to continue.
“The more revenue you bring in, the higher quality programming you can offer the public,” Waldman said. “You offer the higher quality programming and the public is more inclined to give money to keep the station going. There’s a lot of optimism around here.”
There is absolutely no guarantee beyond good intentions that the spectrum auction revenue will be deposited in a sustaining endowment for the station and not siphoned off by the general fund. Unless this revenue goes into a “lock box’ it will be another one-time-blip-in-the-general-fund-cash-flow and the station will again be a red headed stepchild and a burden on the general fund rather than the educational asset it should be..
This is a rare case where the District should operate like a business … but watch: It will immediately revert to being a school district!