WCRB / WGBH Sale

[Dan.Strassberg]

If you accept the thesis that, as far as a sponsor is concerned, an
underwriting announcement is as useful as a commercial spot (and I'm
sure that, for many advertisers, that is the case) and the
underwriters are therefore willing to pay as much for an underwriting
announcement as they pay for a spot of the same duration, it sounds to
me as if going non-comm may be a no-brainer for non-profit
organizations that acquire commercial stations. Commercial stations
pay federal corporate income tax on the difference between their
revenues (ad sales) and their expenses. In Mass, they also pay state
corporate income tax. As I understand it, non-profit organizations pay
neither tax. So if the revenues can really be the same for a given
station that had been commercial and becomes a non-comm, the
organization that owns the non-comm can pay out what it would have
paid in income taxes as salary or bonuses to its management and/or
talent and will wind up at the end of the fiscal year with the same
number of $$$ in its kitty either way. And, of course, this little
back-of-an-envelope analysis doesn't even try to account for the
revenues the non-comm can derive from fuund raising.

-----
Dan Strassberg (dan.strassberg@att.net)
eFax 1-707-215-6367

----- Original Message ----- 
From: "Scott Fybush" <scott@fybush.com>
To: "Gary's Ice Cream" <gary@garysicecream.com>
Cc: "Boston radio e-mail list" <boston-radio-interest@bostonradio.org>
Sent: Monday, September 21, 2009 6:12 PM
Subject: Re: WCRB / WGBH Sale
>
> And, honestly, given what's now allowed in underwriting
> announcements, and given the weak ad market, it's hard for me to
> imagine that they'd take in that much more in commercial ad revenue
> than they'll get anyway in underwriting. It's not as though the
> current WCRB sponsors will have a lot of other places to go to reach
> that audience.