FCC INCENTIVE AUCTION

FCC INCENTIVE AUCTION

Future of TV Operations // FCC Incentive Spectrum Auction video // WUSF Overview // Vision for the future // Financial overview // Spectrum Auction Procedure // Discussion

WUSF-TV WUSF-TV // Created in the 1960 s as educational TV students could take classes via TV. The 60 s version of on-line education. // The station became a PBS affiliate in the 70 s. // From fall 1966 to Summer 2009 WUSF-TV Broadcast open University telecourses that served thousands of USF students and attracted community members. In 2009 the courses were migrated to the internet. // Tampa Bay is one of the few areas with two PBS TV stations. WEDU is the primary PBS affiliate offering 75% PBS programming, WUSF offers 25%. // PBS programming can be accessed via WEDU and other delivery methods like Apple TV. // WUSF reaches a diverse audience. WUSF reaches 73% of Hispanic Households, 69% of African American Households. // Viewers like WUSF shows including quilting, sewing, crocheting, Love Miss Fisher, Father Brown, Call the Midwife and Nova.

Post Spectrum Auction Vision If WUSF s broadcast license is forfeited in the upcoming FCC Channel Auction the following would be possibilities for the University: // Vision: Providing a great learning experience for our students is key: Video content isn t going away, in fact it is increasing. Mobile devices are today s delivery system like TV was in the past. YouTube, Facebook and Snapchat deliver hundreds of millions of videos every day. Brands are increasing their use of digital media and we can help develop our students in this area by providing top of the line video and digital production learning experiences by redeveloping the television facilities to provide an outstanding learning experience for students, and excellent video and digital production capabilities for USF and the Tampa Bay region. // Create cost efficient content and production management. Improve our production facilities by investing into a combined entity with the remnants of WUSF-TV, USF Sun Dome production capabilities and others across campus into one organization operated by UCM in cooperation with the Muma College of Business, The College of Arts & Sciences, Innovative Education, M.I.T. and The ZAP Program. Provide opportunities for students to learn by getting hands on experience utilizing these facilities. All on campus athletic events video needs can be produced from a central master control area. All video production for internal use and for on-line classes can be produced from a centralized system without competing with each other. // Entice a local Television Station to move their facilities to the WUSF Facilities. Station would rent facilities from the University. A local station(s) may be interested in the possibility of relocating from their current facilities. WUSF has superior production facilities a co-mingling of capabilities could provide significant revenue for both entities. A larger station s parent company could be a good career launching point for student careers via internships.. WUSF Radio would still broadcast from their current facilities.

Post Spectrum Auction Vision Develop cutting edge learning opportunities for our students // Partner with a company like HSN as a consultant to assist us in developing the following: Advice on intellectual and equipment capital. Company executives advise USF on the latest content and production techniques and trends, train our students accordingly. Partner with the company to help us provide the latest in technology needed to provide students with a top tiered educational experience. Partner to provide internships for students at their facilities. // Generate revenue from the production facilities. There are limited commercial production facilities in the Tampa Bay region. Revenue could be generated by renting the facilities or providing the actual production. Sales force could be a collaboration between WUSF-FM and Broadcast TV sales staffs. // Generate content development to enhance the brand reputation of the University. Giving up a television station does not mean we give up content generation. Content can be developed by our production facilities and content can be delivered via a variety of digital means across a variety of channels. Reach more people in the ways they currently experience content.

Financial Analysis // WUSF Television Financial Position WUSF Television Net Income/(Loss) WUSF Television Net Cash Flow WUSF Outstanding Loans

WUSF Television Net Income/(Loss) * // FY 2012 $ 65,609 // FY 2013 $(224,921) // FY 2014 $(182,564) // FY 2015 $(279,659) * Includes Depreciation

WUSF Television Net Cash Flow // FY 2013 $ 222,417 // FY 2014 $ 306,794 // FY 2015 $(775,373)

Outstanding WUSF Loans* // WUSF TV Original Amount $ 920,000 Balance $ 715,696 Due Date September 2016 // WUSF FM Original Amount $1,275,000 Balance $ 730,483 Due Date November 2020 USF Foundation Loans

First FCC Incentive Auction Process An incentive auction is a voluntary, market-based means of repurposing much-needed spectrum for flexible use, including mobile services. (i.e. sale of licenses) Greenhill Whitepaper (Feb. 2015)

Flexibility Factors // Voluntary Market based approach allows participants to reject all offers without penalty // Optional sale of spectrum usage rights; Channel Share; move to VHF (new tower reimbursement); stay on air as repacked // Self-determination of walkaway price(s)

Anticipated Key Auction Dates // 10/12/15 FCC expected to announce Timeline // Nov/Dec 15 FCC expected to accept applications Quiet Period (runs until auction ends, no further public meetings re: auction) // 3/29/16 Auction Begins

Participation Timeline Fall 2015 F&A Workgroup Recommendation BOT Authorizes Participation Liaison Trustee Watkins Spring 2016 Implementation

Unique Opportunity // Potential for Significant Upside Full Power Station in Tampa-St. Pete Actually transmits on Ch. 34 (not Ch. 16) in the heart of incentive auction spectrum (600MHz) Market demand for more spectrum

Strategic Concerns // Post-Auction Realignment and Improvements for students and our Tampa Bay Community // USF s Strategic Reinvestment of any proceeds // Public Perception and Messaging // Potential Tax Consequences // Silent Period [Application Deadline to Results] // Participation does not guarantee sale

Preparing for Auction: March 29, 2016 // Retained outside valuation expert to determine value of spectrum usage rights and reasonable walkaway price // Retained outside legal counsel to represent USF in Incentive Auction process through to conclusion // Post-auction planning (whether sale or no-sale)