COMPROMISE On the morning of February 2, 1995, foundation trustees Tisch, Schneiderman, Darrow, Weymouth, and Keith Thomas gathered in the mayor’s conference room at City Hall to present their case to Mayor Giuliani and his advisors, including Richard Schwartz. After introduction of those who did not already know each other, the mayor thanked the trustees for coming and invited them to open the meeting. Tisch began with an apology for speaking from notes, observing that the topic was too important to risk overlooking anything, and presented a detailed summary of WNYC’s mission and the foundation’s history. She stressed in particular the importance of a comprehensive agreement with respect to all three licenses, and noted that the foundation concurred with the mayor’s stated goal of getting the city out of the broadcasting business. Schneiderman followed with a point-by-point recitation of the history of the city’s commitment to comparability as it related to the FM station. The mayor politely but forcefully asserted that the licenses were city property, that he had a mandate to sell them, and that “the marketplace” must determine the value of the licenses through an open auction. Darrow responded that this approach made the foundation a disadvantaged buyer in two respects. First, unlike a commercial buyer, the not-for-profit foundation could not just dip into its treasury for the cash to make the purchase. It needed an understanding with the city on price followed by time to raise the funding from its audience and other supporters. To hold an auction was therefore to reject the foundation as a buyer. Second, while agreeing that the marketplace had a role to play in determining value, Darrow asserted that the calculation should take into account something other than the level of commercial bids. Since the WNYC licenses had been used historically to broadcast non-commercially in the public interest, the relevant question for the city should be whether there was broad and substantial financial support from the public for the foundation’s purchase of the licenses. It was this public that was the mayor’s constituency, not commercial bidders. Thus, the relevant market involved the intersection of historical, political, cultural, and commercial considerations, not merely the level of commercial bids. After another half hour of back-and-forth on these and related points, the mayor announced his decision. While continuing to believe that the marketplace should be the starting point for a transaction, he also accepted that a discount from full financial value was appropriate in view of the public service provided by the foundation. Thus, he agreed that he would consider the city’s position further with Dyson, Schwartz, and Bauman, with a view toward developing a process by which a transaction might be agreed upon with the foundation. With that the meeting adjourned and the City Hall photographer was invited into the conference room to record the moment.
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