by Ernest T. Sanchez, Esq
It has been observed, with great insight that divorces as well as marriages, can fail. So too the transfer of an existing non-commercial broadcast station is full of many possibilities for failure as well as success.
Based on my 40+ years of experience, I would like to offer the following suggestions as to how one can go about maximizing the successful outcome of a license transfer. My starting assumptions are that:
- At least one party has decided that a license transfer is desirable and
- Even major modifications to the status quo will not permit the current arrangement to survive and operate for the long term
Don’t Make This into an Adversarial Activity
Not withstanding what some attorneys will tell you, I believe that bitter conflict is vastly overrated as a mechanism for achieving necessary change in a licensee/broadcast station context. Basically, neither party can ever hope to convincingly win a public argument. The Federal Communications Commission considers the licensee to have absolute legal power and authority and yet the station has a direct, high visibility channel to the general public. While the broadcast licensee can always win such an all-out fight legally, it may be at the expense of receiving two black eyes and an avalanche of bad publicity and public ill will. From the station point of view, public martyrdom may have a certain perverse appeal but is highly unlikely to provide any usable basis for transition. To put it another way, both parties have a lot to lose by fighting in public, including credibility, political, and financial support.
It is too bad that this is where experience brings us. After all, many university administrators consider it a matter of sacred honor to publicly assert their authority over any wayward part of the university empire. This can be not only psychologically satisfying for the administrator, but also a useful warning to other university enterprises operating at the periphery of the academic function. From a station point of view, visions of David vs. Goliath are certain to make hearts race faster, with mental visions of the French Revolution, barricades and thousands of listeners coming to rescue freedom of the press.
Both parties should purge themselves of all such fantasies, as well as from knee-jerk reactions that than encourage such fantasies. Clearly in a situation involving the potential transfer of a broadcast station license the answer is to turn toward compromise and cooperation.
The Station and the Licensee Should Develop a Joint Strategy
Even though the impetus for change will usually come from one party, it is important that development of a transfer strategy be made into a cooperative, two-party process.
Don’t reinvent the wheel and do make every effort to tap into existing expertise at the national level.
Take Stock of what Both Parties Have to Gain/
Try to Appreciate the Other Party’s Point of View
A broadcast station leaving an institutional licensee could expect to gain:
- Reduced bureaucracy
- Freedom to seek funding/support from the entire range of community entities
- Freedom from civil service and similar employment restrictions
- Flexibility of governance, usually not found in large, complex bureaucracies.
From an institutional standpoint, the transfer of a license can offer the following advantages:
- The prospect of saving significant funds in the long term
- Appreciation from the public that the station continues to serve the public rather than commercial/religious interests
- Freedom from the oversight requirements imposed by the Federal Communications Commission
- The lessening of tension in the university community over support and resources allocated to non-primary functions such as a broadcast station
- The opportunity to take credit for a successful spinoff.
Plan for an Orderly Transition
Absent a full scale emergency, a transition period of 2-3 years is often optimum. Ideally, during that time the institution should provide continuing, but perhaps, declining support. This could be cash but can also be a wide variety of in-kind support including office space and other support services.
Prepare the New Board of Directors Properly
The new board of directors should have three additional characteristics beyond competence. They should be:
- Hands-off on a day-to-day basis
We began this discussion with the observation that there are a great many pitfalls associated with transferring a non-commercial license and that there are as many ways to do it wrong as there are right. Nevertheless, the stakes are high and the public benefit considerable, with a successful effort.
Perhaps the least we can hope for is that the transition to a new license will permit both parties to feel that they have won as the result of a transfer. As New York newspaperwoman, Liz Smith, once said in a different context, “The marriage didn’t work out but the separation is great.”
Ernie Sanchez has specialized in public broadcasting law since 1973 and served as Secretary and General Counsel of National Public Radio from 1974 to 1981. He has been involved in many high profile public station transfers during the past 45 years.