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BU Sells WRNI for $2 Million

Rhode Island Public Radio to own, operate NPR station

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06-1535_018oconnor.jpg

Joseph O'Connor, general manager of WRNI.

The sale of radio station WRNI by Boston University to Rhode Island Public Radio became final earlier this month, ending a multiyear process and marking the first transaction completed in accordance with a 2005 Rhode Island law requiring the attorney general to protect the state’s charitable assets.

“Now, finally, we can say that WRNI is owned and operated by Rhode Islanders,” says Joe O’Connor, the station’s general manager since 2006. The agreement gives WRNI, Rhode Island’s first National Public Radio news station, administrative and financial independence from Boston University and its WBUR Group.

The station, formerly WRCP 1290AM, was acquired by WBUR and BU for $2 million in 1998. The sale of the station was first proposed in 2004, but was delayed by an extensive review process by Rhode Island Attorney General Patrick Lynch; Lynch closed his inquiry in 2006, citing BU’s fulfillment of its pledge to hire a full-time general manager for the Rhode Island station, to reengage with a local public radio advisory board, and to implement consistent allocation of Rhode Island charitable donations to WRNI. Lynch’s office again undertook a review of the sale in 2007 pursuant to the requirements of the state’s Public Radio Conversions Act, as well as to the office’s civil law responsibilities to preserve and protect charitable assets in Rhode Island.

“Every ‘i’ has been dotted and every ‘t’ crossed,” Lynch says. “WRNI has become a prized community asset and a trusted source of public information. It’s great for Rhode Island that this station will remain in Rhode Island.”

The new owner, Rhode Island Public Radio, is a nonprofit corporation that is the successor to the Foundation for Ocean State Public Radio. The WRNI Foundation and BU agreed to sell the license, tangible property, contracts, station records, and real property to Rhode Island Public Radio for $2 million, a purchase price significantly below WRNI’s appraised value. The sale was finalized on January 15.

O’Connor says the station plans to hire more local reporters and increase the quantity of local stories and segments that mirror the quality of NPR, the mainstay of WRNI’s program schedule.

“We are indebted to Rhode Islanders everywhere, without whose support we would simply have not stayed on the air,” he says. “Boston University and WBUR deserve our thanks for founding WRNI as well as their continuing and generous commitment to assist Rhode Island Public Radio in the years to come.”

Paul LaCamera (COM’66, MET’74), the general manager of WBUR, says that the station and the state will be better served by local ownership.

“We are confident that WRNI will thrive going forward,” he says.

7 Comments

7 Comments on BU Sells WRNI for $2 Million

  • John J. Aslanian on 01.30.2009 at 5:42 am

    $2 Million for Outdoor Ed

    Let’s take that money and put it toward saving a vital part of BU: The Sargent Center for Outdoor Education (http://www.bu.edu/outdoor/). Partner with other urban universities in Boston, use the $2 million from WRNI, and show that the ‘sustainable’ and ‘green’ way forward for BU does indeed include fresh air…

  • Anonymous on 01.30.2009 at 11:13 am

    Why would BU sell something for a price so below it’s appraised value during times when CGS faculty are being laid off, a $10m budget gap is creating problems, and we have to close programs, such as SCOE, that are completely self-funding?

  • Anonymous on 01.30.2009 at 3:09 pm

    wtf why would BU buy some thing then sell it for less than they could have gotten…
    The WRNI Foundation and BU agreed to sell the license, tangible property, contracts, station records, and real property to Rhode Island Public Radio for $2 million, a purchase price significantly below WRNI’s appraised value….

    thanks college tuition at work

  • Laurence Glavin on 01.30.2009 at 3:49 pm

    CBS Just Sold Its Denver Stations At A Loss

    Many assets are being sold at below cost, or accession costs, including radio stations. CBS recently sold its Denver cluster of full-power FM outlets for 19-million dollars, much less than each each would have fetched a short time ago.

  • RC on 01.30.2009 at 4:09 pm

    It’s political. The RI legislature passed special laws regulating public-radio sales back in ’04, to stop a proposed sale at the time.

    After four years of official delays, it’s surprising that RI let BU get their purchase price back out, let alone collect any gain to make up for inflation.

    OTOH, if RI goes and sells the thing for a profit, then you’ll really have something to howl about.

  • Anonymous on 01.30.2009 at 11:25 pm

    Idiocy

    BU bought WRNI for $2 million in 1998 and then sold it for $2 million now (2009) after having to hire a full time manager (and pay him or her)???? And you wonder why BU has a $10 million deficit! With this kind of management of assets, its a wonder that anyone has a job here. Great job administrators of BU — you clearly are worthy of your hefty salaries.

  • Aaron Read on 01.31.2009 at 2:20 pm

    Why would BU sell something...?

    Three reasons: first, the sale was originally consummated well before the recession destroyed a lot of Universities’ endowments.

    Second, any sale of WRNI to a commercial broadcaster, under the law in Rhode Island, would’ve forced BU to pay taxes on the sale valued on all the donations to WRNI while it operated as a non-comm, plus two years’ operating expenses (I think that’s the rule).

    It was a very narrowly defined rule designed specifically to thwart Jane Christo in her surprise announcement that WBUR was selling WRNI. An announcement that infuriated a lot of local Rhode Islanders and made for quite the saga.

    http://www.providencephoenix.com/features/top/multi/documents/04141909.asp

    (note: I am not bashing Jane Christo here. Yes, one could say “mistakes were made” but she also took a sleepy college station and turned into a world-class NPR powerhouse…I give her a TON of credit for that)

    Essentially this law forced WBUR to sell WRNI to an organization that would keep WRNI operating as a non-commercial station. And pretty much the sole group willing and able to do that was Rhode Island Public Radio.

    Interestingly this law COULD also be applied to other stations, namely the religious simulcast on 1220 and 93.7 (WSTL and W229AN). I don’t think it applies to WBRU, though, since WBRU – despite being owned by Brown University – has always operated as a commercial station on 95.5FM.

    Third, I suspect BU (and WBUR) is happy to see WRNI go at this point. It was a giant financial albatross around their neck. As you say, they could’ve maximized their fiscal ROI by selling to a commercial broadcaster (if that law wasn’t there) but the political fallout…as was demonstrated…would be substantial.

    I should also point out, that as of about three months ago, a lot of “highly valuable” radio stations got a whole lot less valuable. Virtually no buyer has enough cash on hand to buy a station outright, and NOBODY is extending credit for radio station purchases these days; there’s too much debt load floating around in the commercial radio world already.

    While I have no hard evidence about what WRNI’s signal could be valued at in any potential commercial sale (sans the law mentioned above) I would not be surprised if it’s noticeably below a million dollars right now. Hell, it only sold for $2mil back in the prime high-roller days. Any seller would be better off waiting for the market to recover to maximize the ROI on any sale anyways.

    And I didn’t even begin to talk about how public radio, in general, is still doing better financially than many commercial radio outlets are. And the various artistic and cultural benefits a public radio outlet bring to a community. Despite the fiscal problems BU is facing today, I would still say that – hands down – this deal makes the best possible result for all involved.

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