Pacific Lutheran University Announces Intent To Sell KPLU 88.5 FM To UW’s KUOW Public Radio
May 26, 2016, 11:00 a.m.
We offer our congratulations to the Friends of 88.5 and their supporters for reaching this first step toward converting 88.5 to a community licensee. The community has shown tremendous support, and all involved have worked hard toward this milestone. UW/KUOW’s goal was always to preserve a public radio frequency for the listening public and we will be happy for that preservation whether it comes to us or a new community licensee.
What happens next?
UW/KUOW is still contractually bound by the Asset Purchase Agreement (APA) signed with Pacific Lutheran University until an alternative APA is signed between PLU and the community group. The deadline for signing the alternative APA is June 30, 2016. Presenting the $7 million in immediately available cash is not the lever that releases the UW from its legal obligation to purchase. The UW will be released when Pacific Lutheran signs an APA with an alternative group.
Here’s the text from the binding purchase agreement the UW has with Pacific Lutheran:
31. ALTERNATIVE COMMUNITY BUYER OPTION: If presented with a written Matching Offer by an Alternative Community Buyer to acquire the Assets (an "Alternative Offer"), Seller, until 5 p.m. Pacific Time on June 30, 2016 (the "Alternative Offer Deadline"), may elect in its discretion to accept the Alternative Offer and enter into a definitive agreement with an Alternative Community Buyer (an "Alternative APA").
A "Matching Offer" is an offer to purchase the Assets from Seller on terms substantially as those contained herein, including payment of $7,000,000 in immediately available funds at Closing and $1,000,000 in Seller Messaging.
The Parties agree that if Seller and the Alternative Community Buyer enter into an Alternative APA by the Alternative Offer Deadline, this Agreement will be deemed terminated.
In the event Seller and the Alternative Community Buyer fail to enter into an Alternative APA by the Alternative Offer Deadline, Seller will terminate negotiations with the Alternative Community Buyer and the Parties will proceed to Closing upon the latter of (i) ten (10) business days after the Alternative Offer Deadline or (ii) the satisfaction or waiver, if permissible of all conditions to Closing under this Agreement, including that FCC Consent shall have become a Final Order.
Under these terms, UW/KUOW is obligated to complete the purchase unless PLU and the community group reach an agreement. We have every confidence that Pacific Lutheran will negotiate in good faith with the Friends of 88.5. This is a huge milestone, and they’re to be congratulated for reaching it.
May 14, 2016, 9:00 p.m.
Dear KUOW Friends:
I’m writing to clarify how our pending agreement to acquire 88.5 FM from Pacific Lutheran University came about.
In January of 2015, a senior PLU official approached me with the news that the university wanted to divest itself of 88.5 so it could focus its attention and resources on its core educational mission. We were told that the university had already offered the frequency to at least one other potential buyer outside of public radio.
For context, KUOW and KPLU have had discussions about consolidating operations for many years, including as recently as 2014. But when PLU informed us of its intent to sell the station outright, we felt we needed to act to preserve 88.5 for the public radio listening public. We do acknowledge that such an acquisition would enhance KUOW's market position, but this was not our sole impetus.
At PLU’s insistence, KUOW entered into a non-disclosure agreement with the university to negotiate the terms of the acquisition. Such agreements are commonplace; it would be impractical to negotiate such a large, complex and sensitive deal in public.
However, as KUOW’s license is formally held by the University of Washington, the acquisition ultimately required the approval of the university’s Board of Regents. The board gave that approval in a public meeting on Nov. 12, prompting a robust discussion of the purchase agreement, which was not finalized for nearly three months thereafter. Since the Nov. 12 vote, KUOW has been as transparent as possible about its plans for 88.5 should we acquire it. Those plans are detailed below.
Ultimately the deal was revised to allow for a competing bid from a community group that intends to buy the station and preserve KPLU and its programming. That group is currently engaged in a fundraising drive, and we wish them well. KUOW/PSPR and the UW want 88.5 to succeed — either through the Friends of 88.5 or us. PLU fully intends to sell it, and whichever of us ends up purchasing it, the “win” will be preservation of public radio service to the citizens of Puget Sound and the Pacific Northwest.
Caryn G. Mathes
KUOW President & General Manager
Here’s the quick version of what’s happened so far:
- UW agreed to purchase 88.5 from PLU and convert it into an all-jazz radio station. PLU accepted UW’s offer. The acquisition requires FCC approval.
- UW signed a modified purchase agreement, allowing time for a community group to finalize an alternate offer for the station by June 30, 2016. If the FCC approves the license transfer prior to that date, UW will still hold off until June 30 to allow the community a chance to make its offer to PLU.
- On April 18, Planet Jazz, a pilot of the proposed jazz music service, will be available to the public via digital channels so KUOW programmers can collect feedback from interested listeners.
- The launch of Planet Jazz, which coincides with Jazz Appreciation Month, was announced by KUOW General Manager Caryn G. Mathes last January in an open letter to the Puget Sound Public Radio Board.
Read on for more details about each of these announcements. Or jump to our FAQ.
Update 02/05/16, 11:00 a.m.: The Asset Purchase Agreement for the sale of the license for 88.5 and its frequencies from Pacific Lutheran University to the University of Washington has been signed by both parties, and is posted (PDF): http://bit.ly/1PoOp4H.
Included in this agreement is the option for PLU to sell to a community group that makes a matching offer for the station and successfully executes its own Asset Purchase Agreement by June 30, 2016. This APA does not address the negotiation process between PLU and a community group (Friends of 88-5 FM). Because KUOW and UW have a vested interest, we are not involved parties to their negotiations.
The fact that the UW and KUOW are pursuing this process now is not in any way intended to interrupt or undermine Friends of 88-5 FM’s effort. But KUOW must be prepared to operate and preserve 88.5 for public radio listeners should the acquisition go through.
To keep the process on course, the next step was to submit a formal application to the FCC to transfer the license to the UW. The application was submitted on Friday, February 5, 2016. The FCC’s process is expected to take several months. Again, this step does not affect the effort by Friends of 88-5 FM to purchase the station. In the event that the FCC approves the license transfer prior to June 30, 2016, KUOW will wait until the stated deadline passes to take possession of the 88.5 frequencies.
Update 01/30/16, 8:00 a.m.: Friday, January 29, 2016 an Acquisition Purchase Agreement for the sale of the license for 88.5 and its frequencies was signed between Pacific Lutheran University and the University of Washington.
Negotiated in this agreement is the option for PLU to sell to a community group, should one make a competing offer deemed acceptable by PLU and if that group successfully executes their own Asset Purchase Agreement by June 30, 2016.
The application for the transfer of the license to the UW will now be submitted to the FCC for approval.
Update 01/15/16, 11:34 a.m.: Open Letter to PSPR on KUOW’s Intentions Toward the 88.5 Frequencies
In the interest of keeping the public up to date, we are sharing this letter from station manager Caryn Mathes to the PSPR board of directors, outlining the current vision of KUOW’s enhanced news and music programming should the deal to acquire 88.5 go through. To be clear, this outline is preliminary and subject to the board’s approval of a larger budget for the news operation going forward.
The vision outlined in this letter is in no way intended to derail the efforts of a community group’s opportunity to purchase KPLU. Rather, we need to be prepared to deliver more news and more music to the combined audience of the two stations as soon as possible after the acquisition, should it go through. We owe it to the many thousands of public radio listeners and supporters in the region to be excellent from the start, and so we will invest these ensuing months in listening to our community and utilizing its input to design the most relevant and resonant services possible.
Read the letter here.
The Letter of Intent and the deadline for execution of a Definitive Agreement have been extended to January 29, 2016. This allows both universities adequate time to review the agreement draft, as well as the necessary documents related to it.
Update 12/18/2015, 2:43 p.m.: KUOW and Pacific Lutheran University negotiating to allow a competing bid from KPLU listeners
KUOW's priority has always been to preserve 88.5 FM for the public radio listening public. However, the leadership of the station and of UW are aware that many KPLU listeners wish to preserve the station in its current form. It is in that spirit that UW and KUOW have asked Pacific Lutheran University, which owns KPLU, to agree to a modification of the pending purchase agreement to allow a KPLU community group to make an offer for the station.
This modification to the purchase agreement for 88.5 would allow a community-based group time to mount a competing offer. That period would largely overlap the time that KUOW's purchase of the station would be under consideration by the FCC. "It would allow a community-based group to submit its own competing bid. If that happens," said UW Associate Vice President Norm Arkans, “UW would stand down."
The Letter of Intent and the deadline for execution of a Definitive Agreement have been extended to January 15, 2016. This will allow both universities time to negotiate the terms of a clause that would allow a community group the option to purchase KPLU.
“We’ve heard from the community that they were not given an opportunity to try to step forward and purchase the station for a community-based group. And so now what we want to do is try to give them the opportunity to do that.”
If PLU received a viable offer, KUOW and the UW would defer to that group. The details of such a sale would be worked out between the new group and PLU. If a viable community organization does not coalesce and an offer is not made, KUOW and the UW will purchase KPLU as planned, so that either way 88.5 can be maintained as a public radio resource for the Puget Sound community.
Read/listen to: "KPLU Supporters Get Chance To Buy Station"
We understand that with this big news come many questions. We aim to keep listeners well-informed during this complex transition. The Q&A drafted here is just the beginning. We will post updates to this page as we have them. We’re also interested in including you in this process as much as possible. Be sure to fill out the survey at the bottom of this page.
Read the official press release from 11/12/2015. FAQ last Updated 11/25/15, 11:30 a.m.
Pacific Lutheran University plans to sell its broadcasting licenses to the University of Washington. A formal agreement has not yet been finalized, however, it is expected that KUOW/Puget Sound Public Radio will operate 88.5 FM and its other frequencies and there will be two stations: one for National Public Radio and Northwest news (94.9 FM) and one dedicated to jazz music (88.5 FM).
The transaction is expected to close in 2016 subject to approval of the Federal Communications Commission (FCC).
Will it still be called KPLU?
Pending FCC approval of the license transfer, 88.5 will assume a new call signal and name that reflects the jazz programming. The new call signal is still to be determined.
Are there plans to sell 94.9?
KUOW will not sell 94.9. KUOW intends to purchase 88.5 and convert it into an all-music station and keep 94.9 as a news and information station. We are preserving the core formats of both stations for the listening public into the future.
What can we expect to hear at 88.5?
KUOW is committed to continuing high quality and comprehensive jazz and blues radio at 88.5. After the sale is final, all news and information programming will air on KUOW frequencies, and 88.5 will become an all-music station.
Here are some of our goals for the new format:
- Maintain 88.5 as a primary source of jazz music and related information and interests.
- Support local musicians, local businesses, jazz music education and music industry professionals seeking to expose their ideas and initiatives.
- Be a source of information and enlightenment for all ages via various community engagement programs.
Learn more about our music service pilot project, Planet Jazz.
Why change to an all-music format?
In the Puget Sound region there is significant crossover of NPR content on both stations. Approximately 65 hours per week of news and information programming currently heard on 88.5 also airs on KUOW. Evolving the format of 88.5 to all-music programming gives listeners two distinct public radio stations – one for jazz and the other for National Public Radio and locally produced content. This mirrors a structure that is being adopted successfully across the public broadcasting landscape nationwide. It strengthens our radio community with a dedicated jazz station, and broadens the reach of our news and information station.
Will I still be able to hear news if I’ve been listening at 88.5?
Pending FCC approval of the license transfer, with few exceptions we will be able to use our expanded signals to ensure that if you currently listen to news at 88.5, you should still be able to hear news now on KUOW.
What’s happening to KPLU staff?
Both stations will operate separately and independently well into 2016. Because PLU is a private university, and UW is a public university, they have very different structures and acquiring staff as part of the sale was not possible. KUOW will be hiring for both our newsroom and for the new music service. Positions will be posted through the UW as they are available. All jobs at UW must be publicly posted, and recruited openly in accordance with state guidelines. Jobs are also posted on KUOW's website when they become open.
How will this affect news coverage?
We are committed to continuing the excellent level of journalism for which KUOW and KPLU news staff are known. Public radio news will continue to be strong with this acquisition. We’re going to stay true to our name: Puget Sound Public Radio. Our news coverage will continue to reflect that.
Will 88.5 still be involved in community events and activities throughout the Puget Sound region?
Absolutely. Our community engagement team plans to work closely with 88.5’s current jazz constituents to continue elevating jazz music throughout the Puget Sound region.
How much was the purchase price?
The purchase price for the station and its assets is $8 million, comprising $7 million in cash and $1 million in sponsorship messaging over 10 years.
- $4.5 million will come from KUOW’s Undesignated Reserve,
- $2.5 million from a loan from the UW Treasury,
- $1 million in sponsorship messaging for PLU over the next 10 years.
Does KUOW fundraise for its reserve?
No. There are no donations made to reserves. Individual donations, grants and underwriting are budgeted for and used each year to fund the operations of the station. KUOW financial reports are always available on our website. To learn more about KUOW’s financial management, visit this page.
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