College Radio and the Grim Reaper

S. J. Antonucci of the group looking to preserve jazz at WDUQ in Pittsburgh sent along this link to a post from Michael Marcotte on the MVM Consulting site. Michael blogs on the story about nine New Jersey non-commercial FM stations being auctioned off. A familiar co-conspirator, Public Radio Capital, is hip-deep involved:

Public Radio Capital of Colorado is the financial advisor to the New Jersey Treasurer’s office, which is handling the contemplated sale, pursuant to December 2010 Senate bill 2406. It “authorizes transfer of certain assets of the state’s public broadcasting system to an entity eligible to operate a public broadcasting system.” In this case, “public” probably means “non-commercial.” Because there will surely be interest by non-commercial religious operators (paging “K-Love”). Pittsburgh-based broker Ray Rosenblum is watching the process and says he’s already working with two “well-financed potential bidders.”

His conclusion is worthy of noting:

Of course Public Radio Capital was involved in the recent sale of WDUQ in Pittsburgh. Sources say the deal had the stench of insider advantage which helps explain why the most publicly active and transparent group got the shaft not the signal. I hope someone is covering Public Radio Capital up close!

A blogger named Ernesto Aguilar, a producer for KPFT, posted here last September on PRC in regards to the takeover of KTRU, the student radio station at Rice University, calling them the “quiet undertaker”:

The role of PRC — which incidentally isn’t mentioned in any of the Rice media materials I found or Rice President David Leebron’s letter on the KTRU sale — is to help organizations in acquiring stations.

PRC does the legwork, negotiates deals, appraises value and even loans money through a Public Radio Fund it administers. It’s also done some good work, such as its involvement with the National Federation of Community Broadcasters, Native Public Media, Common Frequency, Prometheus Radio Project, Pacifica Radio and others in the Radio For People coalition, which sought licensees for an FCC filing window a few years ago; cynics could say PRC had an interest in seeing those licensees turn up, since they could be future clients.

But when a station owner is ready to unload a station, as Rice University did with KTRU, think of PRC as public radio’s Grim Reaper — if a station is disappearing, PRC is one of the groups likely involved in ushering it to the beyond, generally to a new owner.

Such exercises are big business, though UH and Rice have not said what PRC was paid for the KTRU effort. If current history is any indication, probably a good amount. Duquesne University and The Pittsburgh Foundation each paid $10,000 to PRC in consulting fees to assess the value of university station WDUQ. Not unlike KTRU, that sale has not been pretty either, with listeners raising concerns over localism.

Escorting a public or community radio station to its death is not without controversy, of course. With a few exceptions, PRC generally keeps itself out of the headlines, however. The station sellers take the heat, but PRC, which oftentimes is the facilitator of these sales, is relatively unscathed.

PRC riled up the faith community a few years back with its involvement in the sale of WJTM in Maryland. Listeners had their regular locally produced fare converted to NPR programming (carried on four other stations in the listening region) in the course of an afternoon. The Associated Press report at the time noted, “NPR’s affiliates have become more aggressive bidders for licenses since 2001, when the federally funded Corporation for Public Broadcasting helped establish an organization to broker and finance station acquisitions. That organization, Denver-based Public Radio Capital, helped negotiate the $5-million deal that created WYPR two years ago. It also was the intermediary in WYPR’s agreement to buy WJTM.”

PRC is a major player in the station sales game, having been involved in station transactions across the United States. PRC has been accused of having a cozy relationship with National Public Radio, whose programming has ended up the benefactor in several sales. Many of the station sales PRC helped with have turned into NPR-programmed outlets.

Brokering of deals that result in NPR’s extended reach present larger questions for local communities, which are nationally losing community stations, faith-based programming or unique spaces for the arts like KTRU.

Matthew Lasar says the FCC is inquiring about ownership issues. The PRC/NPR quandary is a bit more complex, in that NPR is a content provider as opposed to an owner. Nevertheless, the matter of localism is as much about content as who owns the signal. No community is served when four separately owned stations all broadcast the same content, nor is a city served when it loses a community-rooted voice like KTRU and sees a net loss in local programming. As a consultant, PRC almost certainly knows exactly what buyers intend to put on their new properties and plows through the sales anyway.

More of the public should be talking about Public Radio Capital and should hold the non-profit institution accountable for its impact on communities. Its behind-the-scenes position and efforts to curtail localism have  troubling implications. Recent KTRU activities should prompt the public to ask more about these relationships.

Good work, Ernesto. Heather Olson, writing here on the website for the student newspaper, the Rice Thresher, added more:

The behind-the-scenes brokering of the sale by an organization called Public Radio Capital . . . shows the loss of KTRU to be the latest casualty in a countrywide shift toward radio controlled by business interests.

Public Radio Capital’s role in the sale of KTRU has not been mentioned in any of President David Leebron’s communications, even though it was the party responsible for organizing the sale. Initially funded by the Corporation for Public Broadcasting as a business resource for public radio, PRC has since led its clients through more than $240 million in radio transactions across the country, according to its website. PRC is contacted by a station owner — in this case, the Rice administration — with the desire to sell, and then proceeds with the work of assessing value and finding a buyer.

In the case of KTRU, PRC was contacted as much as a year prior to the announcement of the sale and was probably paid up to $10,000 for their services. These transactions are in the domain of big business. With the size and clout of entities such as the Corporation for Public Broadcasting and PRC, there is little hope for the interests of local media or a devoted community fan base. Missing from these business deals are the ethical considerations of shutting down an FCC license created in the educational interest of the community.

When the fate of KTRU is put in business terms — the liquidation of an asset, prioritized spending — the community should be alarmed. This language is the calling card of a nationwide trend that has seen local programming replaced by providers such as NPR, which, incidentally, has had a close relationship with the Corporation for Public Broadcasting for the last 30 years. The distinct cultural value of a station that provides its listeners with content that challenges societal norms is lost in translation.


2 Responses

  1. You might want to try to confirm if the following is correct.

    Rice retained their own seller broker, Patrick Communications. Rice has disclosed that 5% of proceeds of sale (or approx. $475,000) is to be set aside for “transaction fees”. The majority of that will almost certainly go for broker commission fees, although sometimes there might be a few other outside service providers involved such as an attorney to review the purchase contract, which could eat up a few ten grand of that amount.

    In addition, UH retained their own buyer broker PRC (whose primary mission is extend the NPR brand) who got paid $200k from the UH side.

    The primary beneficiaries to this deal appear to be the brokers. Rice is selling an asset at below appraised value. UH is acquiring an asset it doesn’t have the budget to maintain.

  2. In regard to the sale of Rice University’s KTRU, Texas Watchdog just forced the revelation from the University of Houston that the UH paid PRC $200K plus expenses to be a broker for the acquisition of the KTRU.

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