Making Public Radio a Little More Private

A group of media investors, seeing a way to thrive without federal funds, is looking to acquire local stations in Southern California

By Ronald Grover

Public radio has had better months. In February the House of Representatives voted to slash the budget for the Corporation for Public Broadcasting, which provides money to NPR and local stations. On Mar. 17 the House passed legislation that would ban stations from using public funds to pay for NPR content such as Morning Edition. The Democratic Senate has yet to approve either bill and likely won't, but the world of public radio is growing anxious about a possible future with less or even no federal funding.

Some media executives in Pasadena, Calif., think they may be able to save public radio by making it less public. They're using business tactics rarely employed in the tame world of local public radio to create a megastation they hope will one day beam its signal from Santa Barbara to San Diego. By building a mini-empire of local stations, they say they'll be able to better distribute the fixed costs of radio broadcasting and draw on a much larger audience for the donations and corporate sponsorships that could keep them afloat if government funding dries up.

Those plans are taking shape in the $25 million, one-year-old studios of KPCC, the flagship station for Southern California Public Radio. SCPR already owns or operates three stations and is on the hunt for more. "We want to be a major player in providing news and information to Los Angeles in the 21st century," says Gordon Crawford, chairman of SCPR's board and a senior vice-president at Capital Research Global Investors. Crawford is one of the media industry's most prominent investors and advised Lionsgate (LGF) in the late 1990s as it grew into a major studio by rolling up smaller film companies. He joined the board more than a decade ago, when KPCC was a struggling Pasadena City College station. Among the 24 current directors are such media heavy hitters as Jarl Mohn, former chief executive officer of E! Entertainment Television; Fox Sports TV Chairman David Hill; and Louise Bryson, a former Lifetime Movie Network executive.

The board has given SCPR the financial muscle it needs to extend across Southern California. Crawford and Mohn each donated $4 million to build KPCC's new studios, while Bryson contributed part of the $1 million used to create a new talk show and lure NPR reporter Madeleine Brand to host it. While other news organizations are scaling back, SCPR plans to expand from 42 to 100 reporters covering areas including public education, the environment, and health care. It opened its own Washington (D.C.) bureau last year. "I call it the 'hit 'em where they ain't' strategy," says SCPR President Bill Davis. "We're not going to take on the Los Angeles Times on sports or TMZ on celebrity news, but we can give our listeners information on the ports or about their local high school that they need and aren't getting elsewhere."

SCPR's stations currently reach 14 million listeners, but the board hopes to nearly double that, to 25 million. "If we can buy a station, we will," says Crawford. "Where we can't, we'll build translators to boost our signal. This is a new business model for public radio." C. Douglas Kranwinkle, an SCPR board member and executive vice-president of Hispanic media company Univision Communications, says the group is considering providing free reports to Spanish-language stations to help build the public radio brand with new listeners.

The larger audience will mean more donations from individual contributors, says Davis, along with more of what he calls "noncommercial commercials," the 15-second on-air mentions for program sponsors that go for $650 apiece. Those commercials, along with ads on the stations' online properties, account for 42 percent of SCPR's $15.8 million annual budget and are its fastest-growing sources of revenue. SCPR receives $1.3 million a year from the federal government.

There are practical restraints on how big SCPR can become. Local news "is a vast, untapped territory if someone can crack it," says Amy Mitchell, deputy director for the Pew Research Center Project for Excellence in Journalism, "but there is also a lot of competition from news aggregators" such as AOL's network of local news sites, Patch. It's also difficult to find new partners and acquisitions, says Davis, since many local radio stations are sources of pride for the colleges or communities that own them.

Crawford says he envisions eventually merging with other public radio powerhouses such as Santa Monica's popular KCRW. "That's just a dream of mine," he says. "But you have to start somewhere."

The bottom line: Southern California Public Radio is targeting an audience of 25 million to attract more donations and advertising.

Grover covers the media and entertainment industry for Bloomberg Businessweek in Los Angeles.