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Radio deal needs Hail Mary

A proposed $1.3 million sale of the Community Wireless of Park City AM station appears to have fallen through.

Community Wireless, the non-profit group that owns KPCW-FM, has been trying to unload its Salt Lake frequencies and was successful in selling its KCPW-FM to Wasatch Public Media for $2.4 million. But the sale of 1010 AM to a Catholic broadcasting group in California has stalled and Community Wireless board members have begun to wonder if the deal will ever close.

"Community Wireless set out last spring to divest itself of its Salt Lake City assets," Community Wireless spokesman Joe Wrona said in a telephone interview Friday. "At this point we are convinced that IHR is no longer negotiating in good faith and that IHR has no intention of completing the purchase of the 1010 AM radio station."

Fair Oaks, Calif.-based Immaculate Heart Radio Educational Broadcasting, which operates radio stations focused on Catholic programming, has negotiated to purchase the AM band since March, Wrona explained.

"I have no reason to believe that IHR intends to complete the sale," Wrona said. "One of the things that Community Wireless is going to have to consider is whether to take legal action against IHR."

Today the AM frequency constantly transmits the British Broadcasting Service, KPCW General Manager Tina Quayle said.

"It’s always been BBC, 24/7," Quayle said in a telephone interview Friday. "It’s got a following [but] it’s not a business that we want to be involved in right now."

But the downturn in the national economy makes selling a non-commercial AM radio frequency difficult, she said.

"The economy is just nipping in every direction," said Quayle, who began work for KPCW in September 2007. "It’s been for sale since I’ve been here."

Community Wireless still owes Park City Municipal about $500,000 for its new studios in Swede Alley. Money from the sale of the AM band was earmarked for that debt.

"They were going to use that to pay the remaining obligation to us," Park City Manager Tom Bakaly said. "Council is very interested in them paying their true costs, and what we’ve been told is they think they will be able to sell it to someone else and be able to do it by April."

Until then Community Wireless will pay the city rent for the building, which will be applied to the purchase price until April, Bakaly explained.

"If it doesn’t sell they will need to continue to pay us rent and it won’t go toward the purchase price," Bakaly said.

But the market for non-commercial AM stations is weak, Wrona said.

"In a perfect world we would have been able to negotiate that sale quickly and easily," he said. "It’s disappointing to Community Wireless. We’ve invested eight months into the attempted sale of the 1010 AM station to IHR."

Since summer Community Wireless has tried to execute a roughly 200-page asset purchase agreement with the Catholic broadcasting firm, he explained.

An IHR spokesperson wasn’t immediately available to comment for this story.

"The delays just are never ending We have detrimentally relied on IHR’s promises of good faith," Wrona said.

The primary assets for the AM station include its frequency and leases to access some physical broadcasting equipment, he explained.

"We have to determine whether we want to continue broadcasting material on 1010 AM or whether we want to take the station dark while we look for a new buyer," Wrona said. "We’re going to have to roll up our sleeves and renew our search for a buyer."

The decision to purchase the AM frequency was motivated by a desire at the time to more aggressively compete with KUER for Wasatch Front listeners, Wrona said.

"The current board of Community Wireless would unanimously agree that the decision by the organization several years ago to purchase the 1010 AM station for several million dollars was a very poor business decision in hindsight," Wrona said.

But Blair Feulner, who oversaw Community Wireless at the time, said buying a 50,000-watt station for $2.4 million was "considered a terrific bargain" in 2003.

"As recently as 2006, an AM station in Salt Lake with similar facilities sold for twice that amount," Feulner said in a prepared statement Friday. "At the time the board viewed the purchase of 1010 as a matter of survival."

KUER had just changed its format to compete with KCPW with a 100,000-watt signal that covered the entire state, Feulner countered.

"Neither Mr. Wrona nor any of the current Wireless board members were on the board at the time of the 1010 acquisition and have no knowledge of the facts," Feulner said. "It is unfortunate that Mr. Wrona feels compelled to disparage the business decisions of those dedicated Wireless board members."


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