altered the prospects for their proposal. Rothschild’s valuation work suggested that the offer of the WNYC-TV license was expected to attract bids in excess of $75 million (it eventually sold for $207 million). It thus became clear to the foundation that, even at a steep discount, its current proposal with a $10 million cash purchase price could not include the TV license. The city had become too focused on the potential substantial proceeds of an outright sale. Darrow quickly confirmed to Schwartz that the foundation recognized that “the television license is worth far more than you and we had anticipated” and that “inclusion of the television license in our proposal as currently structured is inappropriate in view of the estimated value.” Darrow asked Schwartz to meet to discuss “alternatives ways of dealing with the television license.” Two weeks later, on December 1, the parties met again. Schwartz formally rejected the foundation’s offer, declaring it to be “interesting, but not sufficiently convincing to be preemptive,” and announced that the city’s immediate objective was the sale of the FM license to realize the “$35 million to $40 million locked up in the license.” Thus, he told Schneiderman and Darrow, the EDC would develop a process to seek bids for WNYC-FM and would simultaneously commission an engineering study of the quality and scope of the Board of Education’s WNYE-FM frequency.5 As to the standard against which WNYE was to be measured, the EDC asserted that the test was “comparability, not equality” with WNYC’s 93.9 frequency. Furthermore, the audience to be measured was only that within the five boroughs of the city, a retreat from the mayor’s commitment declared in May that comparability was to be assured as to WNYC’s “full listening audience.” In the course of the following week, however, the city also reversed its priorities and made the decision to offer the television license immediately and postpone offering FM until an engineering study could be completed. Steve Bauman reported to Wilbur Ross that meaningful engineering tests as to comparability would require field-testing and thus some delay, and potential bidders for FM already contacted were therefore advised that there would be a postponement of the process to early 1995. Schwartz advised the foundation of the city’s new priorities and asked to attend the upcoming trustees’ meeting to present them to the full board. In the meantime, he presented the foundation with a draft agreement by which the foundation was asked to express its “full support and cooperation” with regard to the immediate sale of WNYC-TV. The city would agree that it would not seek indications of interests for WNYC-FM until two weeks after receipt of the engineering study and a “discussion” of comparability with the foundation, with a view toward reaching “a mutually agreeable solution to the transfer of the station’s programming.” Two days before the foundation board meeting, the city issued a press release stating that the foundation and the city had so agreed. While the mayor’s press office immediately told reporters that the release was an error, the foundation pounced on the opportunity to begin
5
Unbeknownst to the foundation, the EDC had already begun to contact potential bidders.
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