More than six years after the divestment of JBC-TV and JBC Radio 2, government and the RJR Communications Group have finally brought closure to the sale agreement, but some details are still missing and it is also unclear how the deal with facilitate what’s left of government’s commitment to public service broadcasting.

Information Minister Burchell Whiteman confirmed that the long drawn-out negotiations were completed November and covered all outstanding issues, including final payment of the contract price, transfer and use of transmitter sites as well as access and control of the extensive JBC audio-visual archives.

So far, the only details have come from RJR chairman Lester Spaulding who told RJR shareholders on Monday (December 22) that the deal varies from the original agreement he signed with Prime Minister PJ Patterson and (then) JBC Chairman Prof Erroll Miller, on June 12, 1997.

Government, saying it was getting out of commercial broadcasting, sold JBC TV and Radio 2 for $70-million in a deal that attracted criticism from several sources, including the contractor general, as non-transparent because the sale was not open to bids. RJR was the only company invited to make an offer on what was first announced as a merger between JBC and RJR but morphed into a take-over.

The sale price was to be met by a first payment of $20-million on signing, $28-million in RJR shares, (10 per cent of the company) and a promissory note for the remaining $22 million.

Government retained Radio One, promising it would be developed as a non-commercial public service station, but this is yet to materialise for a variety of reasons, including a lack of cash.

RJR took immediate possession and has been operating the acquired entities as TVJ and Radio 2 but the agreement has been mired in controversy between buyer and seller over specific details, including continued tenancy of the JBC premises in Half Way Tree which should have been vacated within 18 months of the sale – that is, five years ago.

As director general of JBC at the time of the sale and for a few months during the winding up, I know that the dispute over some of the transmitter sites emerged because of government’s inability to transfer a few properties as required by the letter of contract as, in some cases, JBC was occupying the sites through informal arrangements with the owners, including government departments.

The legal conundrum did not affect day-to-day broadcast operations although RJR said the delay affected its long-term investment plans.

There was at least one major benefit to RJR which was able to record an “exceptional” gain of $93,183,257 in its December 2001 accounts from the sale of its own site at Naggo Head in St. Catherine and integrate all its operations at the newly acquired JBC site at Bernard Lodge.

As the dispute dragged, RJR sought compensation for the delay while the government sought rent from continued tenancy.

Now, Spaulding told shareholders Monday, “RJR will no longer pursue the demand for the government to provide security of tenure at a few of the transmitter sites envisaged under the original contract and which they have not been able to do”.

Government, he continued, “will set off their liabilities to us against our tenancy at Half Way Tree up until May this year” after which RJR will pay rental until it vacates the premises and moves into its new facility at Lyndhurst Road, expected by March 2004. The monthly rental fee was not stated.

It appeared, therefore, that the government gave up its claim for rent for the period January 1999 to May 2003 but it would be interesting for the public to know the exact nature of the injury caused to RJR and whether four and a half years’ rent was fair compensation or whether one of the parties blinked in the interest of a settlement.

On the face of it, though, it appeared that the delay benefited RJR as Spaulding told shareholders that the company was able to finance the new building from cash flow which would certainly have been strengthened by the rent-free tenancy.

Another contentious issue was the terms of access to the JBC archives over which government had sought to retain permanent ownership. Again, no details were forthcoming except Spaulding’s statement that, “rules for dealing with copyright issues concerning the use of the archives have also been finalised and this will now pave the way for close examination of how we can exploit those archives to increase our local content output.”

Now that the deal has been struck, RJR will issue the 8,624,424 ordinary stock units agreed in 1997 which, at the time represented 10 per cnet of the company. However, the government will also be allocated an additional 20,123,656 million shares, representing the equivalent of the two bonus shares issues between 1999 and 2002.

This will give government a total of 28,748,080 shares. Based on a share value of $4.51 on Christmas Eve this would be about $129,653,840. According to Spaulding the share allocation is to be approved at an extraordinary general meeting to be held by the end of January.

Spaulding also said RJR will now sign the promissory note of $22 million at an interest rate of 10 per cent repayable in the year 2013,

A major policy challenge for Whiteman and the Patterson administration is whether, and how, to proceed with its public broadcasting objectives in light of the huge changes in broadcast technology, the local media market and government’s own parlous financial situation.

There are now 16 radio stations in a fierce battle for ears and attention. Cable television is not only offering more international channels but an impressive array of community and specialty channels are offering community happenings, music, financial services and sports. When government allows advertising on these channels, as promised, this will further open up the media market for competition and choice.

Technology has made part of the challenge fairly easy. In the context of what’s now possible, it would be imprudent to try to crank up the old JBC Radio One transmitters which must now be almost useless by time and neglect. The new technologies have radically lowered the cost of start-up operations so it’s better to start from scratch. Just look at Radio Mona.

Also, since government, (through Aerotel) already owns KOOL-FM it would be inexpensive to piggy-back a new radio station on that infrastructure. Similarly, a PSB TV channel could be created out of the public access channels that cable operators are required to offer as part of their licence.

The harder challenge for government is how to make the decision to re-enter broadcasting and how to finance it. At the just-concluded World Electronic Media Forum in Geneva, (December 9-11), the legitimate role of public broadcasting was reaffirmed as an alternative in a commercial landscape of increasing sameness, despite the multiplicity of channels.

But the Forum also stressed that genuine PSB must include editorial independence, something which governments do not accept willingly and which, I believe, was the fundamental reason for the demise of JBC after 38 years. So, any re-start of PSB in Jamaica must be on a basis of law and practice that guarantees editorial independence.

The third challenge is funding. An attractive option would be to sell the RJR shares and use the proceeds to start the new station. Of course, Finance Minister Omar Davies, facing a yawning budget deficit, must be very tempting to put the proceeds of any sale of shares into the consolidated fund especially when he projects operating expenses down the road.

Yet another option would be to retain the 10 per cent shareholding, which comes with a seat on the board, and use that perch to encourage the RJR group to include a wider mix of public interest programming into its commercial fare.

In a previous column (September 22) I said government’s public media policy should not be an attempt at recreating JBC or building out expensive communications infrastructure but with “generating good quality Jamaican content for distribution on existing radio and TV stations” and other channels. It still seems to be a sensible place from which to begin to think about how to finally dispose of the JBC assets.