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(EDITOR’S NOTE: Main story, “The Fight For FOX 47,” follows an introductory “Cast Of Characters” sidebar immediately below. Click here to skip to main story.)
The Cast of Characters Phyllis Lovrien and Paula Baird Steven Pruett Cathy Balthrop Walt Corcoran Shirley Ashby Fred Mohs and Nate Brand Ronald Koeppler Jim Arnold Bill Schereck and Wayne Woock
 The Fight For Fox 47 By Chuck Nowlen
It was nothing more than a marriage of convenience from the start, an unlikely collection of corporate investors linked only by a common thirst for success. And, except for a few rocky moments here and there, the arrangement worked like a charm for the first few years – that is, until a financial crisis brought out an ugly undercurrent of frustration and suspicion. Then came a bitter break-up, followed by a tangled web of litigation over who gets custody of “the kid,” which in this case is arguably the hottest television station in Wisconsin. Who knew in 1983, when Oscar Mayer executive Phyllis Lovrien and Chicago media veteran Paula Baird merged to launch WMSN Channel 47, that it would all turn out so badly – that they would be stripped of their enterprise by an arbitrator last April amid fiercely contested charges of fraud, misconduct and material breach of duties? Certainly not the investors themselves. In fact, given the Federal Communications Commission’s preference for women and minority station owners at the time, it seemed like a marriage made in heaven. Lovrien’s group had a strong local presence, loads of financial experience and the backing of respected city developers Fred Mohs and Nate Brand. Baird was an outsider, but she had decades of clout, her husband’s top-notch media management company and the backing of Shirley Ashby, a black Chicago-area US Postal Service executive. With the help of Oconomowoc native Ron Koeppler, who raised $3.3 million in start-up money from some 85 other investors, the combination blew the competition for FOX 47’s license out of the water and went on to post the highest start-up ratings of all time in 1986. In the years that followed, FOX 47 grew quickly from upstart to mainstay in the crowded Madison media market, a standing it still enjoys, albeit from a position of administrative receivership. In spite of their removal, Baird and Lovrien take much of the credit for the station’s success. “If you really look at our record, you’ll find that it’s immaculate,” Baird says from her current home in a Phoenix suburb. “We did a bang-up job, and we’re really proud of it.” In hindsight, many say the break-up was inevitable – that the FCC’s sex- and race-oriented ownership policies were doomed to create unworkable alliances. Others call it a simple partnership dispute, the kind that’s common in board rooms from one coast to the other. This is how Baird and Lovrien describe it, although they also charge that sexism was a factor. “I think it all comes back to being two women operating in a field dominated by men,” Baird says. “Let’s just say it was really, really tough for us in a lot of ways.” She notes, for example, that her own male partners, Mohs and Brand, supported her and Lovrien’s ouster, which was originally sought only by Koeppler. Whatever the case, the matter has escalated into a legal nightmare. Lovrien and Baird have filed to regain FOX 47, insisting that their stewardship was ethical, hands-on and highly competent, and that Koeppler wanted to remove them for one reason only: to gain control of the station himself. The current management, in turn, has sued Lovrien and Baird for contempt of court (the arbitrator’s decision was upheld by a Dane County district court) for allegedly blocking transfer of ownership to Koeppler and for hindering efforts to refinance the station at favorable interest rates. And, last but not least, one of the attorneys in the arbitration proceeding has sued both the new and the old owners for more than $39,000 in legal fees, naming himself both plaintiff and a co-defendant in the process. That bizarre affair alone could take years to resolve. In the meantime, FOX 47’s license technically was scheduled to expire in December, but it remains under the interim custody of station General Manager Jim Arnold, the court-appointed receiver. All parties involved are extremely civil when discussing the case publicly. But, if recent court documents are any indication, the rancor has not subsided. Lawyers for the station describe Baird and Lovrien as “arrogant and contumacious individuals who believe themselves above the law,” for example, while Lovrien counters that the station is trying to “harass or maliciously injure” her. In many respects, in fact, the situation resembles a “Dynasty”-type TV series. Call it “Divorce, FOX 47-syle.” Expect a final cliffhanger episode in anywhere from 60 days to two years. * For all the legal wrangling, the station itself seems remarkably healthy and unaffected by the dispute; and Arnold reports that WMSN had one of its best years ever last year, cashing in on its mainstay demographic, viewers aged 18 to 39. The station’s association with the innovative FOX network helped, of course, as it has from the time the fledgling network signed on in 1987, ending start-up programming that had been dominated by recycled sitcom reruns and movies. Live Bucks and Brewers game broadcasts have been a plus, too. Recently, the station also scored major victories by getting rerun rights to such popular series as ‘The Cosby Show,” “Roseanne” and “Full House.” Madison TV personality Gordy Young, who worked at the station in various positions from 1986 to 1991, says the current FOX 47 is a far cry from the new kid on the block that debuted in the early morning hours of Sunday, June 8, 1986. In the beginning, he notes, many expected the station to fold within a few months. “It was pretty exciting, especially in the first few years,” Young recalls. “There were lots and lots of challenges and lots of times when we were flying by the seat of our pants, creating a company as we went along. When we started, the ad salespeople were literally selling blue sky. They had no idea of what the ratings actually were.” Everyone close to the current dispute admits that Channel 47’s board meetings were sometimes stormy from the outset, but squabbles among the owners rarely extended beyond the board room, Young says. He adds that Lovrien and Baird took a decidedly hands-on approach to day-to-day affairs for the first couple of years – with great success. As time went by, management was left mostly in the hands of Station Manager Bill Schereck, who replaced Bill Franks in 1988 and who reported to Media Management Corporation, owned and operated separately by Baird’s husband, Steven Pruett. But Schereck’s departure in 1990 seemed to leave a management vacuum at FOX 47, Young says. Young also became aware somewhere along the line that three distinct factions had developed on the six-member board, with Baird, Pruett and Pruett’s financial guru Cathy Balthrop voting as a bloc, Mohs and Brand voting as another and Lovrien providing the swing vote. According to a transcript of the eventual arbitration proceedings, things began to unravel on October of 1990, when the station was up against the wall financially and was hoping to refinance a $5.6 million loan from the New York-based Phillips Credit Corporation. At the time, Pruett’s company’s five-year, $500,000 management contract also was up for renewal. But given the station’s tight advertising budget, several on the board – particularly Mohs and Brand – didn’t think FOX 47 could afford to keep Media Management Corp. on the payroll. Nevertheless, Pruett – accompanied by Baird and Balthrop – was the one who traveled to New York to negotiate a refinancing deal with Phillips, which was headed by Pruett’s longtime business associate, Walt Corcoran. Pruett was already troubled by the fact that Schereck and other key people had not been making payments that had been set by a previous handshake agreement with Phillips. Schereck would eventually resign under pressure, followed quickly by acting General Manager Wayne Woock. “It just seems like they failed to understand the need to pay our senior lender,” Pruett later told the arbitrator. “It caused me a great deal of pain and agony.” According to Pruett, he and Corcoran agreed on a deal that called both for lower payments and an additional $400,000 in new capital. As an afterthought, Pruett also made the following offer to Corcoran, “And as part of this restructuring, (Media Management Corporation’s) contract will not be renewed.” Corcoran’s reaction, according to Pruett: “That’s unacceptable … That guy Wayne Woock never returns our phone calls. We can count of Cathy (Balthrop).” Pruett was later accused of either fabricating the exchange or contriving it in an underhanded attempt to build support back home for renewing his company’s contract with FOX 47. Whatever the case, when he relayed Corcoran’s message to the board, Mohs and Brand flipped. “I was incredulous,” Mohs later told the arbitrator. “The thought of spending $100,000 a year of much-needed money for MMC was unthinkable.” Unbeknownst to Baird (who was the station’s president and 50 percent stockholder), Mohs, Brand, Koeppler and Woock then went to New York themselves to find out what the real story was. When they go there, Corcoran insisted that a new MMC contract was never part of the deal. Had Pruett really lied to the board? This was when the fur really began to fly. * Subsequent board meetings were heated, contentious and riddled with suspicion. Baird was absolutely furious over Mohs and company’s clandestine trip to New York, and she spoke of changing the board’s make-up – which some interpreted as a move to take over the station herself. Lovrien appeared worried that maybe Brand and Mohs “had something going with (Koeppler) to take the station away or something.” Koeppler was convinced that Pruett had lied when he said that Phillips had required renewing MMC’s contract as a condition of refinancing -- and Mohs recalled a previous statement by Schereck that Pruett had been “beating on us to make payments (to Phillips) because he was (also) refinancing another station.” (Pruett and Baird had a second station in Little Rock, Arkansas at the time.) In other words, if FOX 47’s ownership situation was tenuous before Pruett’s trip to New York, it was now completely in shambles. Everybody thought everybody else was trying to give them the shaft. “It just goes to show that once people have a willingness to pull a stunt, I mean, there’s no way you can protect yourself,” Mohs said at one point during the arbitration hearing. Added Koeppler, in something of an understatement, when he was asked whether he had any personal animosity toward Baird and Lovrien: “I think some of the love has dwindled.” The board ultimately voted not to renew Media Management Corporation’s contract, and Lovrien later came up with the idea of letting Balthrop handle major financial matter for a smaller amount. Some expressed doubts, since Balthrop was an MMC employee, but Koeppler was among those who initially seemed receptive. And while Baird and Lovrien sought the opinions of three attorneys about Balthrop’s potential conflict of interest, Balthrop wrote Phillips to say she would be the new contact person for FOX 47. In return, she got a letter from Phillips’s legal counsel saying, in effect, “What do you mean we have to talk only with Cathy Balthrop? We can talk with whomever we want.” That sent Koeppler, who attended board meetings as an ex officio member only, through the roof. “My concern,” he recalled to the arbitrator, “was obviously that when you have a $5.6 million loan with a lender and you do anything that triggers that lender to turn the matter over to their outside law firm to deal with, that that is a serious issue.” Before long, Koeppler was sending letters to the board charging that they were in breach of their fiduciary duties to the other investors. Formal removal proceedings targeting Baird and Lovrien – which were made even more contentious after it was learned that Baird had gotten a separate $80,000 loan from Phillips for her share of additional fresh refinancing capital – began in August of 1991. * According to Koeppler’s attorney, Joseph Owens, the matter boiled down to three issues: Pruett’s alleged attempted fraud in the MMC contract renewal dispute; a related alleged attempt to hide financial information from other board members; and the subsequent contract with Pruett’s employee, Cathy Balthrop, which was later abandoned after one attorney said it would involve a conflict of interest. Baird and Lovrien, of course, saw it differently. In their eyes, the MMC renewal episode was a simple misunderstanding; and there was no attempt to hide financial information, since the group’s partnership agreement stipulated that Koeppler and other investors would have no part in station management. As for Balthrop, Baird and Lovrien felt her expertise was needed in matters that could not be effectively handled by other station executives. Balthrop’s contract, they said, was structured in good faith to insulate her from conflicts of interest. In any event, after several days of testimony, an arbitrator removed Baird, Lovrien, Mohs and Brand as owners in a terse, one-page ruling that contained absolutely no rationale for the decision. The removals were pheld by Dane County Circuit Judge Robert Pekowsky last May in another one-page opinion. While Mohs, who is an attorney, insists that “the arbitrator reached the only decision he could,” Lovrien’s lawyer, Robert Kay, finds all this a little fishy. Kay, by the way, is an expert in ethics via his association with the state Board of Attorneys Professional Responsibility. “There’s something bordering on the strange about it,” he says. “In reviewing the transcript, I don’t see the essence of cause for removal in the evidence. All I see is an effort on the part of board members to make sure they had a handle of their finances.” Kay says his position in Koeppler’s contempt of court lawsuit will be that the arbitrator’s decision went beyond the scope of the original partnership agreement, which Kay adds also allows Baird and Lovrien to compete for the station’s license. Kay gives the pair “an excellent chance” of prevailing before the FCC. Owens, however, is equally confident. “We caught Pruett with his hand in the cookie jar,” he says. “They breached their contract, and they were removed.” “Our position is that removal is removal is removal,” adds current general manager Jim Arnold. “I think their challenge to the license is very serious, but I don’t think they have a chance of winning. * Madison media veteran Terry Shockley, who in a “totally coincidental” move is trying to acquire WKOW Channel 27, says FOX 47 might well suffer financially if the dispute drags on for very long. The biggest factor is the economy, which has allowed only meager growth in available advertising revenue that must be shared among five local TV stations, two daily newspapers, one weekly and two monthly magazines. According to Shockley, any weak link in an operation’s management chain could spell trouble, although he is quick to mention that the FOX network appears to be here to stay. “You really need to have your house in order and your organization well-oiled in order to compete,” he explains. “If you’re in a start-up position, if you’re in a reorganization position or an unstable ownership position, that’s not good in an era when the advertising pie hasn’t grown appreciably.” As the FCC gears up for hearings on FOX 47’s license, a larger issue might well come to the forefront, Shockley adds; namely, the commission’s policy on license renewal. Traditionally, station owners have been subject to “renewal expectancy,” which means that whoever has the station at renewal time is almost certain to prevail. That might not bode well for Baird and Lovrien, although Shockley notes that the FCC has recently shown signs of changing its renewal standards. Fred Mohs adds that the FCC appears to be backing off on its former preference for women and minorities as station owners, which he terms “social engineering.” “Since that policy was adopted, the story of broadcast media is replete with the weirdest collections of people you can imagine,” Mohs says. “You get all sorts of racial and sexual front people involved, and many combinations have come unglued because they didn’t produce the financial or business talent that it takes to run a station.” Several Madison media insiders note, for example, that Shirley Ashby – the African-American Postal Service executive who was part of the original FOX 47 team – was bought out very quickly after the station hit the airwaves. The rumor circulating in local media circles is that Ashby’s only compensation was a used car. Ashby, who has since left the Chicago area, could not be reached for comment. Baird, however, hotly denies the rumor. “It’s absolutely untrue,” she says. “Shirley left because she was moving to Ohio. As far as compensation, let’s just say that we helped her out a lot.” Baird also takes issue with Mohs’s characterization of FCC race and gender considerations: “I think the FCC has done an outstanding job of screening applications. They’re very thorough, and they’ve done the best they can, considering the enormity of the job. You have to remember that the FCC is made up of people in the private sector. They know what’s going on.” * While the FCC and the courts sort the mess out, the man on the bubble is General Manager Jim Arnold, who came to FOX 47 last year after a two-year stint at the CBS affiliate in Lubbock, Texas. Koeppler declined detailed comment on the entire situation except to say that “we’re in very good shape here; things are going very smoothly,” and to add that Arnold is firmly in charge. Program Director John Noonan is a bit more expansive, describing Arnold’s leadership as pivotal in keeping the station on an even keel despite a dispute that would drive other managers up the wall. “There has been no effect whatsoever,” Noonan says. “It’s been work as usual all along.” These days, Arnold has much more on his mind than who will ultimately own FOX 47. His staff is already working on programming for 1995. An additional night of FOX network programming debuted in January, and there could be more changes in the near future. FOX is putting together a regular news magazine show under former CBS News head Van Gordon Sauter, and there has been some discussion about a local news broadcast. (“If we ever do it, it’ll be 1995 or later,” Arnold says. “And please don’t ask how it will look. All I know is that if it’s a matter of Barbie and Ken reporting the news, why do it?”) Management also has been shaken up at the FOX network, with former Paramount executive Lucille Sahany replacing Jamie Kellner as president. Then there are the myriad other routine chores that a general manager needs to take care of – staff meetings, financial reports, equipment upgrades, viewer correspondence, etc. “Awhile ago, we took ‘The Brady Bunch’ off the air, and there were picketers out front when I got here the next morning,” he recalls with a smile. “Can you believe it? Ten or 12 picketers for a show that we thought very few people were watching.” Arnold says he has more flexibility than other general managers in town because FOX 47 is a bit of a hybrid – part independent, part network affiliate. Yet the rules of the game are changing constantly, and given the innovative nature of the station’s programming, the risks are high indeed. “It’s pretty edgy stuff. We are to 1992 what Archie Bunker was to 1972,” he explained in a late-December interview. “It used to be that if you just put on a test pattern, you could increase your business by 50 percent each year. Things are different now. I’d compare the economic picture to the oil crisis in Houston in the early ‘80s.” Success is not possible without cooperation from the staff, of course, and Arnold takes great pride in the tightly knit team he credits with working miracles at FOX 47 since he arrived. Still, you have to wonder if he’s learned any lessons from the ownership team that gave birth to the station in the first place. After all, that seemed like a marriage made in heaven at one time, too.
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