KCPW: Crunch Time 

• KCPW General Manager Ed Sweeney

Public-radio listeners know the drill. Stations ask them to open their wallets two to three times a year to help support their operations. But for Salt Lake City public radio station KCPW 88.3, this week’s fund drive is a matter of survival.

The station is facing a hard deadline of Oct. 31 to come up with $250,000 to pay off one of two loans the current ownership group took out in 2008 to purchase the station. If they miss that deadline, the first loan will go into default and the bank will accelerate the second loan, worth $1.8 million.

“That will effectively put us out of business,” says KCPW General Manager Ed Sweeney. “We’ve never been in default on the loan, and we’ve been able to reduce the principle amount by $100,000 since 2008. There’s no way I can come up with $1.8 million.”

When it first borrowed the money, KCPW held a capital campaign to retire the first loan so it could refinance the second loan at a lower rate over a longer period of time. During that first campaign, some donors did not honor their pledges, leading to a shortfall of $236,000.

Normally, KCPW sets a goal for each of its twice-a-year fundraisers of about $200,000, which covers operating costs for six months. This time, the station is shooting for $450,000.

“We have tried to raise capital, and it’s been rough,” Sweeney says. “If you yell ‘fire,’ people start to wonder where to put their dollars. This is the same situation we were in three years ago. We need to tell people we can’t do it without their help.”

Contrast the dire fiscal situation at KCPW with its public-radio big brother KUER. The past few fund drives, the station at the University of Utah set goals in the range of $500,000. This spring, it actually surpassed that goal. How? It’s a simple numbers game. KUER’s audience is statewide, while KCPW’s signal barely covers the Salt Lake Valley.

KUER General Manager John Greene agrees that their network of transmitters, which stretches from Pocatello, Idaho, to St. George, is a huge advantage for the station. “Our audience has tripled in size since 2001. People don’t donate unless they listen to you.”

Sweeney has an analogy for the two stations: “It’s like comparing the University of Utah and Westminster College. One has 200,000 alumni, the other has 17,000.”

One oft-quoted statistic in public radio is that it takes seven years from the time a listener begins tuning into a station until they become a donor. KUER has done a good job converting those listeners. They usually have somewhere between 4,000 and 5,000 donors per drive, with an average pledge of around $100.

Salt Lake City is not alone in having two NPR news outlets. Boston, Seattle, Denver and Cleveland all have more than one station that features public-radio news.

Veteran public-radio consultant Peter Domonowski, president of Market Trends Research, says there are two big factors that usually determine which of those stations come out on top: “Signal is a mammothly important issue. There are multiple ways to listen to content, but 90 percent of public-radio listening is over the airwaves. The other determiner is who was there first. In any sort of marketing situation, the supplier that gets there first owns the brand.”

KCPW comes up short in both areas. But Sweeney says it is making some slow but steady gains in audience share and programming. And, it’s not as though it is constantly on the edge of insolvency. Sweeney says the station is projected to end the current fiscal year with a small operating surplus. But that’s not enough to keep the bank off its back if the owners can’t meet the Oct. 31 loan deadline.

“We can’t just sit there and pretend it’s not here,” Sweeney says. “All we can do is see if the community rallies to our cause. It’s unfortunate that we need to do this. We’ve worked our ass off to make this [station] happen.”

Will KCPW be able to double its donations during this upcoming drive? Domonowski says it will be difficult. “Stations have tried it, but to literally, overnight, double your on-air goals is very, very, very challenging. It’s very daunting and challenging to have little change in the number of people listening to you and to expect to generate double the money out of that base.”

If it doesn’t make it by Oct. 6, when the station’s fall pledge drive is scheduled to end, Sweeney says it will have no choice but to continue using the airwaves to try and save the station.
And if they can’t, the only thing left may be fading tote bags and logo coffee mugs in the back of the kitchen cabinet.

Bryan Schott is an award-winning journalist, managing editor of UtahPolicy.com and blogs at BryanSchott.com. He worked at KUER from 1998 to 2002 and at KCPW from 2004 to 2007.