Financial backer says CapRadio should merge with Sacramento’s PBS affiliate KVIE

You've heard CapRadio stories on KRCB local newscasts; here's the latest about our news partner in Sacramento. photo credit: Chris Hagan
CapRadio's current headquarters sign on the campus of Sacramento State University on Sept. 28, 2023.

You've heard CapRadio stories on KRCB local newscasts; here's the latest about our news partner in Sacramento:

Should Sacramento’s two largest public media organizations join as one?

That’s the urging of the independent nonprofit Capital Public Radio Endowment Board, which shares the station’s name but is a separate philanthropic organization.

The board requested in a public letter last week to Sacramento State President Luke Wood that CapRadio should merge with Sacramento’s PBS television affiliate KVIE.

CapRadio is an auxiliary of Sac State, which owns the station’s operating license.

Members of the endowment board say separating CapRadio from Sac State — through a merger with KVIE — would spur growth and a sustainable future for the NPR affiliate following months of financial instability, including layoffs last year and continued staff attrition.

“We are concerned about the future of this station in the hands of the university. We believe strongly that the most healthy, journalistically flourishing climate for CapRadio is in an integrated format with KVIE,” endowment board member Buzz Wiesenfeld said in an interview.

“The station is a community asset, a community treasure. And the interests of the station go well beyond the confines of the campus,” Wiesenfeld added. “We just have watched as the station has been under control of a bunch of accountants who are measuring everything in terms of metrics.”

Sac State took control of the station’s financial operations last fall after an audit found widespread financial mismanagement at CapRadio.

CapRadio officials acknowledged this week they’ve had informal discussions with KVIE about forming a partnership. But they emphasized there are no plans to combine with the television station and that CapRadio’s immediate priority is getting its finances in order. KVIE’s general manager David Lowe declined to comment for this story.
Meanwhile, Sac State officials say they have no intention of giving up the license to CapRadio, which is an auxiliary of the university.

Tom Karlo, who served as CapRadio’s interim general manager from August through last month, said he told the station’s governing board of directors last year that he supports working with KVIE.

“I had said something to our board at the time that I felt that if we are going to be successful and really be a viable entity in the future that some sort of a partnership or a collaboration or sharing content or even some sort of an acquisition or a merger with KVIE was a very good idea,” Karlo, who remains a CapRadio consultant, said in an interview this week.

“I was the one that started the whole idea [of partnering with KVIE] to put it on the discussion plate,” Karlo added, while noting a merger could take years and should not be CapRadio’s immediate priority.

“We have so many issues that CapRadio has to deal with,” Karlo said. “We have an operating budget for this year that ends on June 30th that we're not balanced for. We have two downtown facilities that we still don't have a plan of what we're going to deal with.”

CapRadio management announced this week the station won’t be moving into a long-planned and costly new headquarters at 730 I Street in downtown Sacramento, though it has yet to resolve its long-term lease commitment on the building.

Instead, the station — and its staff — will remain at the Sac State campus.

“This allows us to continue delivering quality services to our community and offer more educational opportunities that are accessible to Sacramento State students,” CapRadio leadership said in a statement. “We will continue working with Sacramento State on finding a resolution to our lease obligations at the downtown Sacramento locations.”

Plans for the headquarters were formally announced in April 2019, but the project was beset by delays and a lack of funds. Last fall’s audit found CapRadio was behind payment by $1.8 million plus interest on an $8 million loan Sac State took out to help the station pay for tenant improvements at the new headquarters.

CapRadio officials had no update this week on the station’s plans for a separate live event space at 1010 8th Street. That project has also been stalled for years.

Sac State ‘bullish’ on CapRadio’s future Mark Wheeleris senior advisor to Sac State President Luke Wood. He rejected the idea that Sac State should relinquish control of CapRadio to another nonprofit organization, saying the university and its “one billion dollar a year budget” represent a far better financial steward for the station.

“We're very bullish about the future of CapRadio as a 501(c)(3) auxiliary producing the best public media in Northern California, in spite of all of the negative news and the difficulties we’ve faced,” Wheeler said.

“The organization is a sound organization,” he added. “We've got a situation with some debt that we've got to work out. The audit findings that we've got to work out. But the suggestion that we would forgo the opportunity to serve the public with outstanding public media going forward — it just doesn't make any sense.”

Wiesenfeld, the endowment board member, said he’s grateful Sac State has guided the station through the tumult of recent months. But looking to the future, he said, the best home for the station would be with KVIE.

Given the state’s multi-billion budget shortfall, funding for campus auxiliaries like CapRadio could be in jeopardy. A merger would also “generate donor excitement,” he predicted.

“The most durable business model for the future is to put [CapRadio] in combination with another nonprofit doing substantially the same thing for public television,” Wiesenfeld added. “Sac State’s core mission is educating students, not running radio stations.”

Disclosure: This story was reported and written by Housing & Homelessness Reporter Chris Nichols 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.