MPR’s Parent Co. Unloading Deficit-Saddled Classical South Florida
St. Paul-based American Public Media Group, parent of Minnesota Public Radio, has a deal to sell off its money-losing Classical South Florida, which has consistently posted operating deficits since APMG began building the three-station network in 2007.
APMG confirmed the pending deal on Tuesday morning. The nonprofit’s statement noted, “efforts to build a sustainable classical music radio service in South Florida have not succeeded.”
APMG will take a loss on the sale. The nonprofit is slated to sell its three Florida stations for $21.7 million to California-based Educational Media Foundation, a nonprofit religious broadcaster. APMG spent $28.3 million to acquire the stations in three separate transactions.
Angie Andresen, a spokeswoman for APMG, said that the broadcaster expects approval of the sale from the Federal Communications Commission in the early to late fall.
APMG’s statement said that it received an “unsolicited offer” for the stations. The deal first drew coverage last week from the national Current newspaper and web site, which covers public and nonprofit media. (Current has no connection to The Current, Minnesota Public Radio’s alternative music station in the Twin Cities.)
APMG is known in Minnesota for its empire-building nonprofit business acumen. But Classical South Florida has been a financial headache. According to its most recent financial statements, Classical South Florida had an accumulated deficit of $8.93 million through June 30, 2014, “due largely to operating deficits.”
For the fiscal year that ended on June 30, 2014, Classical South Florida had $4.28 million of support and earned revenue, contrasted with expenses of $5.98 million, posting a deficit of $1.7 million.
“We’ve been working to build Classical South Florida since 2007, and we’ve not succeeded in providing the distinctive value that motivates a sustainable level of support,” said Jon McTaggart, president and CEO of APMG, said in a statement.
Classical South Florida has been a relatively small corner of APMG’s operations. The nonprofit’s web site details the fiscal year 2014 operating budget for Minnesota Public Radio at $93.4 million and the operating budget for its Southern California Public Radio subsidiary at $28.2 million.
The Florida stations include WKCP-FM in Miami, WPBI-FM in West Palm Beach and WNPS-FM in Naples. The stations in Miami and Naples air classical music, while the West Palm Beach station airs a mix of classical music and news. In its statement, APMG said that it would be moving classical programming for south Florida listeners to its YourClassical.org service.
Classical South Florida board member Richard Rampell has been speaking out against the pending deal. He said that as recently as early May, McTaggart voiced strong support for continuing the mission of Classical South Florida. But shortly thereafter, he said, the Classical South Florida board was presented with a deal that had already been negotiated, which they were then expected to rubber stamp.
“Our local board didn’t even get an opportunity to see if we could have gotten a better deal,” Rampell said.
“They were supposed to give us local control, which they did not. This is a mess of their own doing,” said Rampell. “They stacked our board with a bunch of people from Minnesota who have winter homes down here.”
Rampell said that six board members of Classical South Florida have resigned from the board, now down to seven members, within the last two months. The Classical South Florida board voted 3-2 to approve the sale on June 25. McTaggart is also on the Classical South Florida board.
Rampell, who is CEO of Palm Beach-based accounting firm Rampell & Rampell, is also a trustee on the National Public Radio Foundation board.
“I am sympathetic to the people at American Public Media,” acknowledged Rampell. “They’ve been supporting us to the tune of over $1 million a year.”
But he sees the deal as a loss for South Florida.
“Palm Beach will not have a public radio station when the deal goes through,” said Rampell.