Bad news for radio powered by the people. On Wednesday, Pacifica lost a lawsuit filed by Empire State Realty Trust.

According to WBAI—one of five independent, listener-supported radio stations owned and operated by the Pacifica Foundation—the dispute was over rent to house WBAI’s transmitter at the Empire State Building in New York City. The outcome could cost Pacifica more than $1.8 million (Judge Gerald Lebovits’ summary judgment in addition to attorneys’ fees).

Real Estate Weekly reported:

Pacifica has accused Empire State Realty of price-gouging. The two sides agreed to a leases renewal in 2005, with monthly fees said to increase at four times the rate of inflation. According to Pacifica, they agreed to the deal because the 9/11 attack destroyed the antennas at the Twin Towers, which gave ESRT a “near monopoly” for antenna space. Over the past 12 years, Pacifica said that antenna rental costs jumped nine percent per year. The station also said that their current rent of over half a million dollars per year is four times the going rate in Midtown Manhattan.

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In addition to WBAI in New York, Pacifica broadcasts in Washington, D.C. (WPFW), Houston (KPFT) and California (KPFA in Berkeley and KPFK in Los Angeles). Meeting the terms of the ruling will not be easy for the nonprofit organization, and Pacifica is considering its options, including declaring bankruptcy.

In a note to staff, Pacifica interim Executive Director Bill Crosier explained what’s next. KFCF in Fresno, Calif., a station unaffiliated with Pacifica, reported:

From: *Pacifica Executive Director*

Here’s the news from court in NY – not good.

But *we will get through this*, and *please continue doing what you are doing.*

Obviously, what happened in court is public, so you can tell everyone you wish. I don’t want to scare away donors in our fund drives with the word bankruptcy, but people need to know what when/if we go into bankruptcy (more likely now), it will be *chapter 11 bankruptcy* (look it up), in order to continue operating. *It will NOT mean that we’d shut down*.

Ch. 11 brings with it additional problems but would stop collection efforts by ESRT and allow us to keep operating while we develop a plan to pay off the debts. It’s possible we might get some more time from ESRT to come up with money, if they know we’ll declare bankruptcy to stop collection activities, so that might finally give us a little leverage in negotiating with them for more time (a few months perhaps).

The PNB [Pacifica National Board] will discuss this tomorrow night, and I’ll keep you updated.

But again, just keep doing what you are doing at your stations, and I hope your fund drives do great.

Bill

Click here to learn more about the ruling and what you can do to help.