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WQEX sale falters, as Sutter backs out

Tuesday, November 19, 2002

By Rob Owen, Post-Gazette TV Editor

Anyone for Plan D? WQED's plan to sell WQEX has hit another roadblock, but not an impassable one.

Diane Sutter's Shooting Star Broadcasting has backed out of a deal to buy WQEX for $20 million, according to WQED Multimedia president George Miles. Sutter was unable to secure financing to buy WQEX after getting seven deadline extensions from WQED.

"She terminated the deal," Miles said, "but we've been back and forth thinking we could get it back together. ... I'd love her to do this deal, but at the moment it looks like she won't be able to."

For her part, Sutter said she's still hopeful her company will be able to buy WQEX.

"I remain committed to doing the deal," Sutter said in a phone interview from her California office.

In a Nov. 6 letter to the Federal Communications Commission, Sutter terminated the agreement after WQED's board of directors rejected her request for a further extension or, alternately, a modification of the terms of agreement. She said the official termination notice was necessary so Shooting Star would not be liable for monetary liquidated damages.

"That in no way suggests my intent or desire to do this deal has lessened."

Sutter said that early next year it will be three years since she began her attempt to buy WQEX.

"It is a very different economic environment today, and that environment has an impact on anything economic," she said.

Unlike past deals that have faltered, Miles and WQED are not back to square one. The FCC approved the conversion of WQEX's license from non-commercial/educational to commercial in early October, making it attractive to conglomerates that own commercial stations. Now WQEX is on the open market.

"We are looking at our options, and this week we start talking to a number of other potential buyers of the station," Miles said. "We're not starting at ground zero. We have an unencumbered commercial license."

Miles said the station is exploring various options, from outright sale to setting up a Local Marketing Agreement in which WQED would retain ownership of the station, with another broadcaster operating and programming WQEX.

"Somebody could run it and we'd have an annuity of some sort," Miles said. "There are a number of different things we'll look at over the next couple of days. There are a lot of potential buyers, some folks who are in the market and some folks who are not in the market at the moment.... We'll look at the offers to see that we do as well as we did with Diane, if not better."

Steven Lerman, communications attorney for WQED, said the station will send out an information packet to potential buyers within the next 10 days. He would not identify which companies have expressed an interest in buying the station.

Sutter said she still wants to be one of those in the running to buy WQEX.

"I'm hoping to have something for them that the board of directors finds attractive in the very near future."

WQED has wanted to sell WQEX since 1996, petitioning the FCC in that year to change the license from educational to commercial. The FCC turned down WQED's request.

WQED's Plan B was a three-way deal involving Cornerstone TeleVision and Paxson Communications. The FCC approved that deal, but Cornerstone pulled out because of strings attached by the FCC.

Plan C was to again petition the FCC to change the license and then sell the station to Sutter.

The collapse of the Sutter deal could mean that the group opposed to the sale of WQEX may ask the FCC to revisit WQED's license and whether it should be in jeopardy because of the prolonged simulcasting. It's been five years since one lineup began appearing on both stations.

"I'll probably give the lawyers a call this afternoon," said Jerry Starr, who has been leading the charge to save Channel 16 for six-plus years. However, he has been devoting his time and energy toward creating programs -- one, a showcase of the local cultural scene and the other, a public-affairs show -- for Pittsburgh public access, with possible pickup on outlying cable companies.

"We've taken it as far as we can. We're not going to get anything creative or substantial out of [WQED]," Starr said. "Let's do our own."

Post-Gazette Staff Writer Barbara Vancheri contributed to this article.

Rob Owen can be reached at rowen@post-gazette.com or 412-263-2582. Post questions or comments to http://www.post-gazette.com/tv under TV Forum.

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