Merging with PBS KVIE is a bad business decision for CapRadio. Here’s why | Opinion

When I took over at CapRadio as interim general manager after 47 years of public radio experience in San Diego, the situation was dire. There was a $7 million budget shortfall, a California State University audit showed glaring mismanagement and the station had millions more in future debt and lease obligations from a failed downtown relocation project.

I wasn’t sure if CapRadio would survive at the time. I evaluated all opportunities to save public radio in the region, including a formal partnership with Sacramento’s public television station, PBS KVIE. In fact, I initiated the discussions about a partnership with David Lowe, the station’s president and general manager.

I ended those discussions in February because CapRadio achieved remarkable transformations in financial stability and operational efficiency, and even improved and expanded local audience services. CapRadio was no longer facing insolvency, its weekly news listening audience rose 40% since September and donations were up 23%. Both CapRadio and Sacramento State were 100% confident that the organization would thrive on its own.

However, in March, the Capital Public Radio Endowment — a separate nonprofit organization created to help support CapRadio — began waging a public campaign in an attempt to force a merger between CapRadio and PBS KVIE. I won’t presume to understand the endowment’s motivations, but it occurred after the CSU audit found that CapRadio directed donations to an unauthorized endowment and would have to end its agreement to fulfill all fundraising, administrative and accounting services for it.

As part of that effort, the endowment colluded with PBS KVIE to “donate” CapRadio assets to the public television station under the pretense of saving public media. CapRadio was completely blindsided by the endowment’s move with PBS KVIE and was informed of it only after the fact.

Opinion

Let me be clear: The only way to save public media in Sacramento is to make sure that CapRadio and PBS KVIE stay separate.

Public media is now facing an existential threat. Rapidly evolving audience habits are seeing people move away from traditional public television and radio platforms. Local public media stations are also seeing a demand for hyperlocal content instead of national programming from PBS and NPR — especially among younger, more diverse audiences.

This is amplified even more for public television. According to data from Nielsen, a firm that analyzes consumer behavior, 76% of PBS stations’ prime-time viewing audience is over 65 years old, with only 7% under the age of 49. Prime-time linear viewing is down nearly 50% over the last five years — and with 80% of the core PBS membership audience over 65, it is estimated that more than half of that audience will be gone by 2028.

PBS KVIE is not attracting younger audiences, and that’s not a sustainable business. Simply put, merging with PBS KVIE is a bad business decision for CapRadio.

Yet, in recent weeks, the Capital Public Radio Endowment unilaterally sought to transfer a title to land underneath our radio tower to PBS KVIE. In response, we at CapRadio and Sacramento State have challenged its right to do so. All this comes after difficult but necessary efforts by Sacramento State, the owner of the radio station’s license, to take greater management responsibilities.

I call for the endowment board to stop its harmful actions that are impacting a valued local public media institution and to have good faith conversations about honoring its mission to support the future of CapRadio.

Public radio and public television operate fundamentally different business models. The success I had at the San Diego NPR and PBS station, KPBS, was because I invested heavily in producing daily multi-platform local news, information and culture content. That approach was radical at the time because I completely upended the traditional PBS business model. PBS KVIE continues to operate a traditional PBS business model that relies heavily on national programming. It doesn’t produce local news or enough original programming that resonates with younger audiences to build loyalty and membership for the future.

The high cost of television production and original local programming is a major barrier for PBS KVIE moving forward. So what benefit would a merger bring to CapRadio, which operates 32 fully licensed FM stations from Modesto to Eureka, or to the communities it serves throughout Northern California? It is far more likely that a merger would drain resources from CapRadio and reduce essential local news services that are becoming scarcer every year.

CapRadio, meanwhile, is reaching younger audiences with its own independent newsroom that offers daily local news and information across a wide variety of platforms. It’s also investing in hyperlocal digital products like its popular “SacramenKnow” newsletter. CapRadio needs to build on these successes and invest even more in local news and information to thrive in the future.

A better business approach for CapRadio is to partner with other digital-first local media outlets that share its mission and values to help it reach new, younger audiences. It also needs to leverage its partnership as an auxiliary of Sacramento State to establish a local journalism program that can develop the next generation of journalists while expanding local news coverage.

CapRadio’s long-term vision must revolve around expanding its local news, information and arts and culture services to reach new audiences in relevant and accessible ways.

Partnering with PBS KVIE will not advance CapRadio’s efforts to bolster its local news services or expand its content distribution in any way. If CapRadio is going to survive, it cannot merge with a legacy business that is at risk of losing half its member base in the next five years without providing any strategic value.

After dedicating my life to public service, I cannot in good conscience stand by and watch as the Capital Public Radio Endowment tries to publicly force CapRadio into making a bad business decision that may irrevocably harm the future of public media in this region.

Tom Karlo is CapRadio’s former interim president and general manager, member of the CapRadio Board of Directors, general manager emeritus at KPBS, member of the Board of Trustees at PBS Reno, former professional director on the PBS Board of Directors and 2016 C. Scott Elliott PBS Development Professional of the Year Award Winner.