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Author: Subject: A Public TV station--perhaps its last days
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[*] Post 316352 posted on 15-1-2008 at 00:02 Reply With Quote
A Public TV station--perhaps its last days



I had a topic earlier on a public TV station that was behind iin its loans. It had a pledge drive, in which it urgently asked for donations "or you will lose our station." Employees of the station were on the air about every 15 minutes, effectively begging for pledges or they would lose their jobs.

When they had to meet with the banks (there were two), they were $2 million short in pledges!shocked_yellowshocked_yellow They could not make the payment schedule, and they asked that they be allowed to reschedule--even though they were still short by $2,000,000 (to be carried over another year? ) They could not meet conditions the banks set, so they made a counter-offer. Then they went on the air and broadcast the names and contact information for the banks, and urged their viewers to let the banks know how important the station is to the community. (I'm thinking, are the banks supposed to hear from hundreds of loyal viewers and think, "The good feeling we'll get from keeping out this defaulted loan is worth $2,000,000?")

How did the station get so far into the hole? Well, they borrowed the money to switch to digital broadcasting equipment. They would have to switch when everybody switches to digital, but they bought the equipment and started using it in advance. I have to wonder, if they were sooo short of money ($2,000,000), why did they think it would be a good idea to borrow and start the clock on the interest and payback. Why wouldn't they delay as long as possible, set high goals in the pledge drives, and make the largest down payment they could when they had to switch over? At the worst, they might find they really couldn't afford to make the purchase, and close down, instead of defaulting on the loans. (Or, if they could stay in operation by making some drastic cuts, perhaps they could do that.)

I just heard on the radio news that the banks have not extended the station's time. If it doesn't get an 11th hour reprieve, the station is supposed to turn over its assets to the banks January 15 for them to sell in an attempt to recapture as much as they can on the loans. [I wonder if they are thinking, "After every station switches to digital, this equipment won't be in much demand. If they can't pay the loan, we need to sell this while other stations need equipment to make their conversion to digital."]

I will miss a few shows, but I'm sure everyone with cable will just get PBS feed from another statin. I wonder, was the financial management really so bad? Did they have a big shortfall in pledges? Did they think the banks would just take whatever they could pay, even if they were millions short? Was the whole board ignorant as to what was going on, trusting one or two guys to be taking care of the business end? Did they think the government would bail them out?
:(:(:(
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[*] Post 316359 posted on 15-1-2008 at 04:47 Reply With Quote


I just saw this as a news item on another TV station news. The head of the station appeared almost in tears. He said the station is like a family, and he's so sad for the sake of the employees. He said he hoped someone would telephone him who could offer $2,000, 000 to save the station.

At the end of the news item, the news anchor said the station "would not go black," but there would be no local programming. Perhaps only digital TV cameras made to record in the newer format are what one of the loans was on. I had supposed it was an all-or-nothing deal (they sure made it sound like that with the "Save Our Station" pledge appeal). Perhaps as an under-financed station, it will only broadcast programs produced elsewhere (which was most of its programming, anyway). I wonder, will they be able to broadcast live during their future pledge drives? Perhaps they will only be able to put in commercials, pre-recorded at a borrowed studio.
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[*] Post 316395 posted on 15-1-2008 at 13:23 Reply With Quote


It certainly is a curly one. Depending on how corporate law is set up in their home country. The directors could be joint and severally liable for the debts of the company. They were in a difficult position, do they hang on to the old and hope for a last minute reprieve (highly unlikely) or do they press on with the new and hope that, by early adoption that they would steal a march on the other stations. The problem is really, when they borrowed the money, was there a reasonable expectation that they could service the loan with advertising and sponsorship deals? If not, and it eventuates that the loan was procured knowing that there was no ability to repay. The directors could well be charged with a) obtaining finance by deceit b) trading while insolvent and other corporate laws that are in place to protect the investor.
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