By Jim Schutze
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Strange stuff struts across the stage of life every once in a while. There just isn't time to stop and figure it all out. Like the oddly recurring story in Dallas every two to three years: "Proposed WRR Frequency Swap."
It's like clockwork. Every few years somebody wants the city to sell WRR-FM, the city-owned classical music radio station.
Nobody ever wants the city to sell sewage treatment plants or solid waste transfer stations. Is it because WRR is a big mess, costing the city all kinds of money, and we need to find a way to stop the hemorrhaging? No, that would be just about everything at City Hall other than WRR.
Get this. WRR makes money. It is owned by Dallas City Hall, and it makes money. I know. It's amazing. You'd think the entire rest of the city staff, led by the city council, would gather on the lawn outside the station's modest little headquarters at Fair Park at dawn every year on the vernal equinox and chant praises. But, no. People just want to get rid of it.
Gregory Davis, general manager of the station, really did not want to talk to me about this latest proposal to mess up his station. But I sent the station an open records demand anyway for its financial numbers. When I got them, it was hard to see what Davis was being so shy about.
In the last five years, WRR has posted profits averaging more than half a million bucks a year. In the best year in that period, WRR earned a profit of more than $1 million on revenues of $4.7 million.
So this is where we begin to see why this story keeps coming back. The WRR radio station is a very lucrative piece of property that we citizens of Dallas just sort of inherited when nobody was looking. There's an attitude out there--even among the so-called "Friends of WRR," and we'll get to that particular oxymoron in a moment--that WRR is just too good for City Hall to own.
It's the second-oldest commercial radio station in the country, according to some histories. WRR is not a public non-commercial radio station in the sense that KERA is. That has to do with the way radio signals are licensed by the federal government. KERA is licensed as a non-commercial station. It can't sell regular ads and must raise its money instead from fund drives and those strange half-ad/half-public service announcements it runs.
Even though WRR is owned by the city, it is licensed as a commercial station. That means it can and must go out into the commercial radio market, just like any other commercial for-profit station, and sell regular ads.
For a station that plays only classical music, WRR does pretty well. It was 22nd of 49 radio stations in the Dallas market measured by Arbitron last May--not too shabby.
So here's the deal on the table now. Salem Communications Corp., a giant Christian broadcasting conglomerate headquartered in California, wants to swap a radio tower it owns in Dallas for WRR's tower. From Salem's point of view, the motivation is obvious. WRR broadcasts from a 100,000-watt tower in the center of the North Texas market, reaching as far south as Waco and as far north as Sherman.
Salem wants that tower and the commercial signal that goes with it. Whether Salem keeps the tower or flips it to somebody else for a hip-hop station, once the tower and signal are out of city hands and in play in the private market, people out there stand to make a ton of money on WRR.
The deal would work like this: Salem swaps the city a tower owned by a non-commercial station. In trade, the city gives Salem the WRR tower and its commercial signal, which carries a license to sell regular ads.
Salem gets a very valuable commercial tower and commercial signal. The city gets a non-commercial tower and signal, worth much less because now the new WRR can't sell ads.
But--and this is supposed to be the gleam in everybody's eye--Salem gives the city an additional $50 million or so, which the city can sock away as an endowment to support the arts.
Less valuable radio station. But $50 million cash.
Marty Greenburg, the broker representing Salem, says the coverage area reached by the tower the city would get in the swap is pretty close to being the same area reached by the WRR tower now.
"My view is that this is a no-brainer for the city."
With the new tower, he said, "The city can provide the same service for Dallas-Fort Worth listeners of great classical music." And, he said, the city would have the option of operating WRR like KERA, with fund drives and so on, or without any fund-raising at all, relying on the endowment fund created from the extra $50 million.
But I told him I wasn't so sure about that. I'm still looking at these numbers I got from WRR. Their operating expenses every year are between $3 million and $4 million. Let's say the city puts the $50 million fund into something that returns 5 percent earnings every year. That's $2.5 million. By itself, that's not enough to keep the station afloat.
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