NJN’s Two Parts
NJ Public Broadcast Authority - has statutory authority to operate NJN, Board appointed by Governor
Foundation for NJ Public Broadcasting – all corporate/all upper class. Supposedly the fundraising arm of NJN, but now largely calls the shots. 25 plus employees many who perform non-fundraising (even programming) functions. Non-union
Foundation Privatization Proposal
NJN change from state agency to non-profit (community licensee)
Foundation or similar non-profit to run NJN openly
State to either give assets to Foundation (licenses) or allow continued use (buildings?)
Four year “transitional” state funding of $11million/year (in fiscal ’08 the state provided NJN with $14-15 million in direct and indirect support)
After four years NJN would contract with state to provide news, public affairs programming and emergency services – state support would not end
Other Non-Profits Purchased Stations/Licenses from Government
WNYC Radio
KOCE-TV (Huntington Beach, CA) $25.5 million
State and Public University Run Public Broadcasting Systems are Commonplace
Over 20 states run such systems directly as state agencies including states such as Maryland, South Carolina
In many other states, public universities are the backbone of public broadcasting systems such as NY (outside NYC), New Hampshire, NC, etc
NJN is Unique
State system established to prevent “squeeze-out” of NJ by NYC and Philly broadcasters
Non-profit sector was not and is not as robust in NJ as in NYC and Philly – note the inability of the
Foundation for NJ Public Broadcasting to raise funds to purchase NJN
NJN was established as a state system to prevent market forces from dismantling NJN into Philly and NYC oriented pieces
Foundation and NJN Exec Says that NJN Assets aren’t worth much
In response to questions from the legislature in Spring 2008, NJN stated that its licenses may only be worth $5 to 7 million
They claim they have assessed the value of the licenses many times and the value is low
However, in August 2007 NJN had the value of one type of license, 5 EBS licenses, professionally assessed for $22.5 million.
Even this assessment is likely to be low at this time – Sprint/Nextel offered NJN $20 million upfront and $3 million a year for thirty years to lease the EBS licenses ($110 million)
The Digital conversion presents many opportunities for additional leasing deals
NJN Assets
Use of two broadcast facilities – Trenton and Newark
Transmitters towers (space leased to other broadcasters) with property surrounding them
Broadcast and other equipment
Licenses – most valuable asset
NJN Licenses and Lease Deals
NJN has over sixty total licenses – many for internal use
EBS Licenses – perfect for Wi-Max (wireless broadband.) NJN has 5 licenses covering 12 million including practically all of NJ and the entire Philly metropolitan area. Most public broadcasters have already signed lease agreements for this spectrum. Nextel/Spring offered NJN $110 million over 30 years to lease this spectrum.
Some critics believe that non-profit EBS license holders have not gotten proper value in these lease deals
NJN is working on a EBS lease deal (through Sam Crane);
NJN Radio Licenses serve an area with over 1.5 million potential listeners; $7 million is a reasonable value for these license
NJN has four TV broadcast licenses – with the digital conversion much of this spectrum will become available for lease arrangements
At least two public TV licenses have been sold recently (KOCE-TV for $25.5 million and KDTN for $20 million) giving NJN’s broadcast TV licenses a minimal worth of $80 to $100 million
The digital conversion opens the possibility of leasing arrangements using the current Broadcast TV stations/licenses to provide new data/information services such as mobile TV, remote programming of digital billboards, remote bridge and accident inspection by NJ DOT, use for broadband/information services by OIT
At the current time, it is difficult to asses the leasing value of the broadcast TV licenses but it is substantial
Possible sale of one TV broadcast license – NJN’s New Brunswick transmitter may be transferred to NYC making the Montclair transmitter redundant. If the FCC declared the Montclair transmitter unneeded for public broadcasted and allowed its commercial sale, the value would likely exceed $250 million.
Public Policy Considerations
Is giving the licenses and other assets to an undemocratic non-profit a value proposition for the state
Will the state be charged substantial sums for the use of these licenses when needed by NJ DOT, OIT, local governments in the future?
Should a state agency NJN obtain the new 3.5mhz spectrum for use as the wireless broadband backbone for state and local government and community services?
Should the status of NJN be changed within the state system to allow better procurement, hiring, and leasing arrangements? Perhaps similar to the Sports and Exhibition Authority
Communications Workers of America Local 1032
