Updated 4:10 p.m.
CapRadio and an independent financial backer of the Sacramento NPR member station are at odds over the recent donation of one of its broadcasting towers — and the suggestion that the station should merge with KVIE, Sacramento’s PBS affiliate.
The Capital Public Radio Endowment Board, which shares the station’s name but is a separate philanthropic organization, donated the tower to KVIE earlier this month. The endowment was established in 1987 to create a self-sustaining funding source with the sole purpose of advancing the mission of CapRadio, according to its now-archived webpage.
At Wednesday evening’s public board meeting, CapRadio management said it can definitively show the public radio station owns the tower, including all rights to third party licensing and revenue. Sacramento State provided a 1990 lease agreement as well as audited financial statements from 2015 and 2022 that they argue proves CapRadio owns the transmission tower, and that the property is for the exclusive use of supporting CapRadio.
Thursday, endowment chair Dan Brunner said the tower was transferred to their organization from a separate not for profit entity set up by CapRadio called Tower91 in 2013.
The tower is part of a larger back and forth that has played out publicly over the past month between CapRadio and Sacramento State — which holds the station’s news and music licenses — and the endowment board.
A devastating audit commissioned by the California State University Chancellor’s office last fall found deep rooted financial mismanagement at the public radio station, which also operates North State Public Radio licensed to Chico State and KHSU licensed to Cal Poly Humboldt.
Auditors also challenged the relationship between the endowment and CapRadio, stating that as an auxiliary of Sac State an independent endowment is “unauthorized” with the Cal State system, and would need to be run through a university foundation.
Endowment treasurer Buzz Wiesenfeld said that the organization was purposefully laid out separate from the university to provide more financial flexibility, something that has not been an issue in previous audits.
“That’s been ignored through two university presidents,” he said. “This structure is not new and is being enforced now.”
The two sides did not publicly discuss the future of the endowment until last month, when the group sent a letter urging CapRadio to merge with KVIE, the PBS television station in Sacramento, writing that Sac State “repeatedly refused to respond to our telephone calls, emails and requests for meetings, this letter became necessary.”
CapRadio and Sac State officials deny that claim, saying that they have met with the endowment to present options to comply with CSU requirements and merge with the university foundation with financial independence — but that the board has rejected those proposals. CapRadio leadership added that there are currently 10 campuses with public radio stations and all others have endowments run through university foundations.
Here’s a timeline of the back-and-forth between the CapRadio Endowment Board and CapRadio and Sacramento State since then:
- March 19: The endowment sent a letter to Sac State urging a merger with KVIE, contending it would help stabilize the troubled NPR station. But Sac State and CapRadio say there’s no plans to merge.
- March 28: The CapRadio Board of Directors voted to provide a 90-day notice to terminate an operating agreement with the endowment to comply with CSU recommendations.
- April 1: The endowment transferred the broadcasting tower to KVIE, and the Sacramento PBS station accepted.
- April 5: CapRadio released a statement addressing the recent actions of the endowment and KVIE, saying in part that “the Endowment board’s motivation for these actions is unclear, but it is certainly not in the best interest of CapRadio and the community at large as it claims. It is also shocking and disappointing that KVIE — part of this community’s public media family — has worked with the Endowment to the detriment of local public radio.” They also contended that the station is on stronger footing after the university took over its finances following the audit.
- April 12: Seventy-five community leaders — including several CapRadio Board members who resigned in October — signed a letter urging CapRadio and KVIE to merge. Supporters pointed to the success of joint NPR-PBS organizations such as KQED in San Francisco, KPBS in San Diego and OPB in Portland, Oregon. They say the organizations would both benefit from shared resources, fundraising and other efficiencies. In a statement to the Sacramento Business Journal, Sac State said they “strongly believe that these are conversations between CapRadio and KVIE and not with external stakeholders who do not understand the complexity of what is being requested.”
- April 16: Several members of CapRadio leadership and a former president of the endowment board published an op-ed in the Sacramento Business Journal calling the public requests to merge “ill-conceived.”
- April 17: During a CapRadio board meeting, Interim General Manager Frank Maranzino said the station’s attorney found documents asserting that CapRadio owns the tower. At the same board meeting, it was also announced that the 90-day notice to terminate the operating agreement with the endowment would have an effective date of July 17.
KVIE President and General Manager David Lowe said in a statement on April 9 that his organization only accepted the tower donation only after confirming the endowment board would not transfer it to CapRadio and that it “could be sold into the commercial marketplace.”
“KVIE accepted the transfer to ensure that the property remained an asset for public media, an action which the management of both Sac State and CapRadio have since agreed was important,” Lowe wrote. “With the ownership of the property secured for the benefit of public media in our region, KVIE looks forward to working with CapRadio to ensure it has continued, uninterrupted access for its broadcast signal, just as it always has.”
Wednesday night, Lowe said KVIE was aware CapRadio had made a claim to owning the tower and that the organization would be “conducting our own due diligence on the claim.”
On Thursday, Brunner, the endowment board chair, and Wiesenfeld, its treasurer, appeared on Insight with Vicki Gonzalez.
Brunner said the endowment “is charged with accumulating funds, investing those funds and then making strategic investments back to Capital Public Radio” and added that the organization gave the station “an emergency payment” of roughly $400,000 last fall to fund three employee positions.
He also said the decision to transfer the tower to KVIE was made after the endowment discovered it would need to spend between $400,000 and $500,000 for deferred maintenance.
“We made an informed decision to protect the signal given the state of disrepair and put it in the hands of the appropriate party,” Brunner said. He added that the endowment, which has grown to around $2 million, plans to continue to support CapRadio.
“The endowment is prepared to support — with its funds — the ongoing operation of Capital Public Radio, whether that’s as an independent organization or whether that’s in some kind of combination with KVIE,” Brunner said. “That is our mission.”
CapRadio and Sacramento State were also invited to discuss this issue with Gonzalez Thursday but canceled a planned interview. KVIE declined to be on the show.
Sacramento State has also commissioned a financial examination of CapRadio, which they say is expected in the next few weeks.
Disclosure: This story was reported and written by Insight Host Vicki Gonzalez and Editor Chris Hagan and edited by Digital Editor Claire Morgan. Following NPR’s protocol for reporting on itself, no CapRadio corporate official or news executive reviewed this story before it was posted publicly.
Editor’s note: CapRadio is licensed to Sacramento State, which is also an underwriter.
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