Public Radio

In Danger of Losing Its Voice?

Published in: GIA Reader, Vol 17, No 2 (Summer 2006)

Vince Stehle

For classical music lovers in East Texas and Western Louisiana, KTPB-FM has been the only source of classical music programming for the past fifteen years. From its first broadcasts, KTPB has offered the live presentations of the Metropolitan Opera alongside concerts of the Longview Symphony and the East Texas Symphony Orchestra. Unfortunately, fans of Placido Domingo and Renee Fleming will have to find something else to do with their Saturday afternoons next season, now that station owner Kilgore College Announced that it is going to sell KTPB’s station license to the Educational Media Foundation, which operates the K-LOVE radio format. After the switch, the station expects to offer a combination of Christian music and commentary by James Dobson and others.

What Is Public-Radio?

In response to a Reader editor’s question about the distinction between “public radio” and “non-commercial radio,” Marc Hand and Erik Langner of PRC offered the following.

The overall universe of noncommercial stations is defined by the FCC designation for the reserve FM band (all stations from 88.1 to 91.9), which was established as the educational part of the FM band when FM was invented. To own a station in the reserve band a licensee has to be a nonprofit corporation, though it does not have to be tax-exempt.

Within this universe of about 2,500 stations are CPB qualified public radio stations (those that receive funds from the Corporation for Public Broadcasting); these total about 800. There are other public radio stations that might not receive CPB funding. These range from KEXP in Seattle and KCLU in Thousand Oaks, which would, from a listener's perspective, appear to be public radio stations. We are not sure how many of these stations there are. There are a large number of other non-commercial stations, which would include student-run college stations not affiliated with any of the public radio programming services. KZSC—at the University of California at Santa Cruz—for example, is a student-run non-commercial station. There are probably about 700 or so of this type. Other stations constituting a big non-commercial group are the non-commercial religious stations – such as those owned by the Educational Media Foundation. We estimate that there are probably about 850 of these stations, the fastest-growing segment of the non-commercial world. The remaining stations are a handful of community-owned non-commercial stations that are somewhere between public/CPB qualified and college stations, such as KAFM, a successful 16-watt community station in Grand Junction, Colorado. Some public radio stations are up in the commercial part of the FM band, such as
WNYC and WBAI in New York, or KUOW in Seattle, and are not included in the 2,500 non-commercial total.

Currently, universities and school boards hold a majority of the public radio licenses, and because of budget constraints and shifts in focus, these are the public radio stations that communities risk losing when colleges and school boards decide to sell these assets, as they increasingly are. There is an opportunity for PRC to work with local organizations to acquire the licenses for and operate these stations instead of allowing them (and therefore their programming) to be lost to their respective communities.

For public radio advocates, the sale of KTPB may be seen as the canary in the coal mine, the early warning signal that more stations may be lost in the coming months and years. Or worse, it could be more like the early onset of avian flu, and we may lose a whole class of stations if we don’t take dramatic steps to protect the species. (See sidebar for a discussion of what constitutes “public radio.”)

By some measures, public radio is healthy and growing stronger every day. Over the last fifteen years, public radio audiences are way up, from around 14 million listeners per week in 1990 up to nearly 27 million listeners in 2006. It is no longer the case—if it ever was—that public radio reaches a small, elite audience.

But public radio is in danger of losing its strong and growing position, unless it quickly organizes adequate capital to preserve existing and expand the number of station licenses needed to serve a growing demand for diverse programming.

The challenges are daunting, however. First is the pressure of consolidation. Before the Telecommunications Act of 1996, a single company could own only two stations in one community and no more than twenty-eight nationwide.

Afterwards, one company—San Antonio-based Clear Channel, which held just seven radio stations a decade ago—went on a $30 billion spending spree. Now it owns over 1,200 radio stations and more than thirty television stations across the country. And Clear Channel is not alone. In the religious broadcasting arena, commercial powerhouse Salem Communications owns 104 stations, 39 of them acquired in just the last five years. Likewise, the nonprofit Educational Media Foundation owns 178 stations, with a total of 328 owned or affiliated stations, of which nearly 95 have been purchased in the past five years.

Other factors may accelerate the trend of consolidation in the marketplace for noncommercial licenses. As the value for station licenses increases, educational institutions, which hold about two-thirds of all public radio licenses, may be pressured to sell off those assets in response to other fiscal pressures.

Securing capital

Fortunately, there is an organization—Public Radio Capital—focused on securing funds to acquire stations. Over the last five years since its inception, PRC has been involved in over $80 million worth of transactions preserving and acquiring public radio licenses for stations that reach a potential audience of 22 million listeners.

PRC operates in a variety of ways in different situations, generally serving as a financial advisor to public radio stations seeking to add a license. Frequently, it will serve as a broker between a seller and a community group or public broadcaster. And it sometimes will help to establish tax-exempt bond financing if the circumstances permit. PRC has operated with support from foundations and a handful of individual donors and it earns fees on some of the transactions it works on.

In Denver, for example, PRC helped Colorado Public Radio acquire a second signal so it could split its joint format of classical music and news and information into two separate formats, one focused entirely on classical programming and the other for news and information. Almost immediately, the new audience and the resulting increase in listener revenue covered the increased costs of operations and the debt service
on $6.5 million in tax-exempt bonds. And there are many more communities where PRe could do the same thing if it had the resources to take action.

In the coming months, with support of the Ford and Calvert foundations, PRC is seeking to establish a special investment fund of upwards of $15 million to maintain as a pool of funds available for rapid deployment in cases like the Kilgore College sale of KTPB,where it would be good to have money
up-front to help preserve stations that might be lost in a quick sale.

Why should grantmakers care?

Local ownership. Public broadcasting serves a variety of vital functions in American society. Because public broadcasting is generally organized under local ownership, it has always offered a relatively large portion of local content. Now, in the era of massive consolidation of the media, the local flavor of public broadcasting is even more distinctive. Indeed, localism is public broadcasting's chief overarching strength. Of course, it is also the source of its greatest weakness, since the fragmentation of ownership makes it difficult to obtain capital for strategic expansion of the public radio network, among other things.

Quality and integrity of journalism. Another great strength of public broadcasting is the quality and integrity of journalism carried out at the local and national levels. Much of the growth of public radio's audience is driven by the popularity of its news and information programs, especially the flagship programs All Things Considered and Morning Edition, produced by National Public Radio. How important is quality of
journalism? The future of our democracy depends on it.

A recent study by the University of Maryland's Program on International Policy found that people who obtained most of their news from commercial networks frequently held false beliefs about key factual issues relating to the war in Iraq, such as the notion that there were links between Iraq and Al Qaeda and that weapons of mass destruction have been found in Iraq. In the most extreme case, 80 percent of the people who get most of their news from the Fox News Channel held at least one false impression concerning the issues identified by the Maryland study. By contrast, nearly 80 percent of the people who get their news from NPR and PBS did not hold any false beliefs about the issues covered in the study. Perhaps, if we can somehow greatly expand the reach of public broadcasting, more Americans will have access to news and information programming that is thorough, thoughtful, and accurate.

Cultural programming. But the case for preserving and expanding the role of public radio is strongest for those of us concerned about promoting cultural programming.

A widely quoted report commissioned by the Knight foundation has demonstrated that the most common way people are exposed to classical music is through classical radio—more common than listening to personal recording collections and far more than those who attend live performance. Indeed it's easy to see how classical radio can be considered an essential component of a healthy ecosystem for classical music. If not on classical radio, where will potential audiences hear about upcoming performances? What will inspire them to purchase recordings of particular pieces of music or particular artists? Where will young people become inspired to take up the study of classical music, if their exposure to the form is completely absent from the broadcast dial? And by implication, the same questions would apply for jazz as well.

Trends in music radio are not encouraging, though. According to the Future of Music Coalition [see GIA Reader, Fall 2005, page 18], the number of stations focused completely on classical music dropped from 246 in 2001 to 197 in 2005. The number of stations that play classical music, along with other content, rose from 68 stations to 111 in the same period. Likewise, there were 71 jazz-only stations in 2001 and that number fell to 56 in 2005. The stations that offered jazz a long with other format choices rose from 11 to 23 in that time period.

In recent years, we have learned that people prefer stations that offer a predictable selection. Classical and jazz listeners want to be confident that they will hear the music they are expecting to hear, rather than a mix of music and news. At the same time, in communities where there are a variety of public radio formats, the total audience share for public radio is significantly larger than where there are fewer choices. Expanding the number of public radio licenses is the only way we are going to be able to provide a full range of cultural programming to the audiences who are demanding it.

For grantmakers concerned about accuracy in journalism, local programming, and promoting culture, the effort to preserve and expand access to public radio should be a cause of great concern. While we may feel powerless to do anything about it in the face of large commercial interests, it is possible to successfully bid for licenses if we organize our capital effectively.

After all, it's not enough to have a broad range of choices for public radio listeners on the Upper West Side of Manhattan; the same range of programs must be available for those who want to hear them on the Upper East Side of Texas.

Vince Stehle is program officer for Nonprofit Sector Support, Surdna Foundation.
For more information about Public Radio Capital, go to publicradiocapital.org or contact Marc Hand or Susan Harmon at (720) 304-7274.