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Phil Kabler: State invests in local radio

CHARLESTON, W.Va. -- With the Federal Communications Commission giving final approval last week to the sale of Fantasia Broadcasting stations, long owned by late former Delegate Nick Fantasia, to Spectrum Radio LCC of Fairmont, the state of West Virginia is now in the commercial radio business.

With a $285,000 investment in Spectrum, the West Virginia Jobs Investment Trust owns about a nearly one-quarter share of the new radio network, which operates WMMN and WTCS-AM and WRLF-FM in Fairmont, and WZST-FM in Westover.

While one generally thinks of WV-JIT investing in manufacturing enterprises and high-tech operations, Michelle O'Connor said the West Virginia Capital Access program allows the fund to invest in small business ventures such as Spectrum.

"The company that is coming in and buying Fantasia radio is coming in with some very good people, and is going to work on improving the stations," she said.

She said the JIT board also recognized the importance of preserving locally staffed and operated radio stations at a time when the trend is for large, national corporations like Clear Channel to absorb local stations into their networks.

"In West Virginia, we have that opportunity," she said. "Local stations play into our daily lives and this investment allows these stations to continue on, and provide local service to the area."

Initially, O'Connor noted, that local service includes providing West Virginia University sports broadcasts to the region, with three of the four stations being Mountaineer Sports Network from IMG affiliates.

Indeed, with John Raese's empire of stations boycotting IMG, residents of north-central West Virginia otherwise would be unable to pick up WVU gamecasts on terrestrial radio.

The Spectrum stations also are the only really viable commercial competitors to near-monopoly in north-central West Virginia, assuming the FCC allows Raese to buy WCLG-AM/FM in Morgantown.

(That deal hit a bit of a hiccup with FCC filings to first transfer ownership of the stations from the estate from Garry Bowers to Linda Bowers, prior to the transfer of ownership to Raese front organization AJG Corp.)

Spectrum Radio was formed on April 30, 2012, ironically by two out-of-staters: managing partners Alan Michaels of Potomac, Md., and Robert Woodward of McLean, Va.

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Speaking of Raese, in a nutshell, his lawsuit to overturn WVU's $86.5 million deal to sell its third-tier broadcast rights to IMG alleges that WVU tailored the bid specs to assure IMG would get the contract -- thus also assuring that IMG "partner" West Virginia Media Holdings would be enriched.

Then the IMG proposal was made public, and it was clear West Virginia Media was less a partner and more of a subcontractor, limited to producing and airing coaches' shows.

(Apparently, the deal closed too late to get a Dana Holgorsen TV show on the air this fall.)

That became even clearer Saturday, when the Georgia State game - about as third-tier a game as is possible in the NCAA - was produced by and telecast on IMG's other subcontractor, Root Sports Pittsburgh.

• • •

Meanwhile, trade magazine Radio & Television Business Report thought highly of WV-JIT's investment in Spectrum, stating: "For would-be station buyers out there, the mission of the  WV-JIT board deserves a mention. It was formed by the West Virginia state Legislature "to make investment funds available to eligible businesses that would stimulate economic growth and promote or retain jobs in the state." It's nice to see such a government entity being put to good use for a radio deal. Maybe there's a similar organization in your state, and if there isn't, maybe there should be."

The mission of the Capital Access Program is to leverage $13 million (mainly of federal stimulus funds) into $130 million of small-business investment.

Some of its other less-conventional investments include Loftis Lanes bowling alley in Grafton and Small World Day Care in Fort Ashby.

• • •

Finally, some time back, I wrote about the cable television service at Mount Olive Penitentiary, with bid specs requiring a minimum of 47 channels, including such popular channels as TBS, TNT, ESPN, MSNBC, Fox News and Comedy Central, suggesting that the inmates probably have a better cable lineup than many taxpayers.

Inmate Paul Varney wrote that when he was on the outside, if he knew inmates were getting taxpayer-supported cable TV, he wouldn't have liked it either.

However, he pointed out that a portion of the cable costs are paid from the Inmate Benefit Fund, funded through inmate purchases at the prison commissary.

"On top of that, those of us that have brought our own TV pay a small monthly payment to also help pay the bill," he wrote.

Meanwhile, the cable service contract is being re-bid, apparently after getting no bidders in August, with the new bid opening set for Oct. 1.

Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.


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