Chapman, USC in Talks to Buy KOCE

USC and Chapman University are in talks with KOCE-TV about buying the Orange County public television station in a deal that could be worth more than $30 million, officials confirmed Wednesday.

In a reflection of the seriousness of negotiations, the Coast Community College District, which holds the PBS affiliate’s broadcast license, recently commissioned an appraisal that valued the station at between $29 million and $35 million.

Gene Farrell, a district vice chancellor and lead negotiator, said he is leaning in favor of selling the station because proceeds from the transaction could be used to beef up curriculum and student services.

“It would provide cash to better serve the students we have, reduce our overhead by $1.5 million and allow us to expand our course offerings,” he said. “There are wonderful possibilities if you have more money.”

A new owner at the helm of KOCE would raise the prospect of additional money both to produce more original programs and to buy programming from PBS and other sources. Since its founding in 1972, KOCE has broadcast largely in the shadow of KCET-TV, the Los Angeles station with many more resources and viewers.

Buying the Orange County station would give a university the prestige of owning a broadcast station and allow officials to integrate KOCE both into its curriculum and to raise its community profile.

Gary Brahm, executive vice president at Chapman University, said the Orange-based institution was “seriously interested” in buying KOCE and that a formal offer could be made within the next few weeks.

“We have an excellent, rapidly growing film and television program,” Brahm said. “And we’re always looking for ways to enhance the educational opportunities available for our students.”

University of Southern California officials involved in acquisition talks could not be reached for comment Wednesday. Several USC executives, including the university’s chief financial officer and dean of its film and television school, met with Farrell and top KOCE staffers Tuesday at the studios.

The Coast Community College District’s Board of Trustees, which must approve the sale, is scheduled to discuss the matter for the first time Aug. 18.

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KOCE, located on the Golden West College campus in Huntington Beach, is among the 15 most-watched public television stations in America, with 2.5 million viewers per week. It has won 27 Emmy awards. The station’s signal reaches as far north as Van Nuys, as far south as San Clemente and as far east as Corona.

But its $5.5-million budget pales in comparison to KCET’s $49 million. The Los Angeles station is also a leader in producing original programs that are broadcast on public television channels across the country.

KOCE is one of 55 public television stations owned by institutions of higher learning. PBS has a total of 171 license holders who operate a total of 350 stations.

Armando R. Ruiz, president of the district’s Board of Trustees, said he has yet to decided how he would vote on a proposed sale.

“I think KOCE is a valuable resource to the Coast Community College District and to Orange County,” said Ruiz, whose board oversees Coastline, Golden West and Orange Coast colleges. “I’m going to look at what’s in the best interest of both of them,” he said.

Leaders of the district’s teacher association expressed interest in a possible sale, saying the station is consuming precious resources that could be used to improve instruction.

“The station has always been a drain on the general fund,” said Tina Bruning, president of the Coast Federation of Educators.

The district covers about $1.5 million of KOCE’s $5.5-million annual budget. The remainder is paid through proceeds from corporate and individual donations and others sources.

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Like many public television stations, KOCE must spend millions over the next few years to meet Federal Communications Commission standards on digital television. Moreover, the station will need to raise an additional $6.2 million by 2003 to invest in new digital-television equipment, said KOCE general manager and president Mel Rogers. The station has raised $800,000 so far toward that goal.

If fund-raising efforts fall short, the district would have to cover the shortfall.

“The district is asking itself whether it is willing and able to continue being the license holder,” Rogers said.

District Chancellor William M. Vega has recused himself from negotiations because he sits on Chapman’s Board of Trustees, Farrell said.

The meeting Tuesday between USC and district officials lasted one hour and concluded with a tour of the facility. The USC team asked its KOCE counterparts about the station’s equipment, audience and budget, Rogers said.

In May, Chapman and KOCE officials met at the university for a one hour meeting. James Doti, the school’s president, was in attendance.