2024-11-13 WS & CC Packet - Revised

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NORTH METRO TV TO: CABLE COMMISSION FROM: ERIC HOUSTON & DANIKA PETERSON SUBJECT: MERGER REPORT DATE: 9/5/2024 On July 29, representatives from the Operations Committee and North Metro TV staff met with representatives from the NWSCCC Executive Committee and CCX Media staff to informally discuss a potential merger. The Operations Committee subsequently authorized the Interim Co- Executive Directors to work with the CCX Executive Director to create a document comparing the two organizations. The full comparison document appears on the following pages. This is a summary of some of the most pertinent points from that document: - Our two cable commissions are governed by different legal statutes. o NMTV negotiates the cable franchises for its member cities, but each member city grants its own franchise. o NWSCCC/CCX is itself a franchising authority and grants a single cable franchise for the entire territory of its member cities. - The membership and voting structures of our two cable commissions differ. o NMTV has a 7 member commission, 1 member for each city. Voting is weighted, with each member city receiving 1 vote for every 1,000 cable subscribers or fraction thereof. Matters are decided by 51% of the votes cast and the affirmative vote of a majority of the commissioners or the affirmative vote of ¾ of the appointed cable commissioners. o The NWSCCC/CCX cable commission is made up of 18 members, 2 members for each city. Matters are decided by a simple majority. CCX itself (the television production arm of the NWSCCC) is governed by a separate board of 15 members: 1 member per city, 4 at large members, and 2 board members elected by public access volunteers. - Both commissions derive their budgets in the same way: each city contributes all of its Franchise and PEG fees to the commission. - The two commissions have different PEG Fees. The PEG fee is a per subscriber fee paid by the cable company to the commission. o NMTV Ós PEG Fee is $3.30 per subscriber. Thanks to an agreement with the cable company, it may be used for both capital and operational expenses. This would likely change during franchise renegotiation, but will remain as is with the proposed five year extension. o NWSCCC/CCX Ós PEG Fee is $1.36 per subscriber. It may only be used on capital expenses. - The two commissions are experiencing different rates of decline in cable subscribers. o NMTV is seeing a 4.2% annual decline in cable subscribers. o NWSCCC/CCX is seeing a 5.7% rate of decline in cable subscribers.