WQEX in play in PittsburghWQED fights flak as it labors to spin off its affiliate 12/30/2001 07:00:00 PM Eastern
Pittsburgh is home to a bitter, long-running battle to decide the fate of one of its two public-TV stations. WQED(TV) Pittsburgh has been fighting for half a decade to spin off WQEX(TV) ch. 16, the weaker of its two stations, to buyers offering enough cash to shore up the finances of the flagship.
Thwarting nearly every deal has been a coalition of local citizens and independent advocates for public broadcasting, who want federal regulators to solicit applications for WQEX's license from other public-TV operators.
Last week, comments from all sides arrived to help the FCC struggle through the legal issues surrounding WQED's request that WQEX be de-reserved as a noncommercial station and freed up for commercial use by a potential buyer.
But what's so hot about Pittsburgh?
Actually, the ferocity of the fight is understandable: Only nine full-power stations serve the Pittsburgh metro area, and commercial broadcasters have been eager to get into the market. At the same time, public-broadcasting advocates complain that WQED has underutilized its second channel by choosing to simulcast programming on both channels at a time when outlets for engaging noncommercial programming are in short supply.
The No. 20 DMA in the country, Pittsburgh trails similarly sized markets in the number of commercial-TV outlets. Whereas 18th-ranked Denver has 12 and No. 21 Orlando has 11, Pittsburgh has only seven commercial allotments, with one occupied by a religious programmer. The rest are O&Os or affiliates of the Big Four nets, The WB and UPN.
"There's room for a good, solid independent in that market," says Jesse Weatherby, a station broker in the Atlanta office of Media Services Group.
That's the thinking of Diane Sutter, chief executive of Shooting Star Inc., who calls her $20 million contract to buy WQEX "a great opportunity" if she can win FCC approval to convert it to a commercial station.
Until recently, the only affiliation available in the market was Pax TV, which has just signed a deal to be carried by AT&T and Adelphia cable systems there. Nevertheless, Sutter believes the market is ripe for a strong independent to provide a lineup of popular syndicated programs largely missing from the Pittsburgh market, along with local news and public-affairs programs.
Weatherby agrees. Because of the lack of outlets for non-network programming there, he predicts a commercial WQEX could air first-run and older syndicated programs for little money or simply for bartered ad time. The new owner should avoid the unnecessary expense of new off-network programs and should fill remaining gaps with paid programming.
That strategy, he predicts, could garner the station a 6%-7% share of the TV ad market and generate annual revenues of more than a million dollars annually by catering to local car dealers and other local advertisers that otherwise couldn't afford to buy anything but very late night time.
"Anything in top-25 national markets is going to be a profitable business," Weatherby says.
By that same logic, WQED's critics contend, there's no reason a second public station can't make it in Pittsburgh.
WQED argues that Pittsburgh's industrial decline—including the loss of headquartered corporations such as Gulf Oil, Westinghouse and Rockwell—has drained the pool of corporate donors that once funded National Geographic specials and other programming that WQED produced and sold to other public-TV outlets. But Citizens for Public Broadcasting and the Alliance for Progressive Action counter that Pittsburgh still ranks ninth in the number of U.S. headquarters, with USX, Alcoa Heinz and PPG offering a ripe potential donor base.
Instead, they charge that WQED has inflated the size of its $9 million listed debt and exaggerated the precariousness of its financial situation. They say the station is seeking FCC sympathy for a "windfall" profit from the WQEX sale rather than pumping resources into the operation or opening the market to competition from a competing public broadcaster.
WQED's critics want the FCC to retain WQEX ch. 16's noncommercial reservation and either force WQED to stop simulcasting or make the WQEX license available to other noncommercial applicants.
They note that, even though WQED says it has received no bona fide offers for WQEX, organization President George Miles has vowed to pull the weaker station off the market if the FCC opens the license transfer to competing applicants.
They also warn that granting WQED's request would give the go-ahead to public-station operators in 70 other markets where more than one commercial station operates to seek reward for "wasteful mismanagement" and avoiding competition.
Two earlier deals to spin off WQEX have fallen through. WQED's request to sell to a commercial owner five years ago was rejected by the FCC. A 1999 attempt to turn the station over to a religious broadcaster in a complicated three-way swap with Paxson Communications fell apart in the wake of congressional furor over FCC guidelines governing the operation of noncommercial stations by religious broadcasters.