Radio clash

Capital Public Radio General Manager Mike Lazar knew something was up when he got a call from Jo Anne Wallace, general manager of San Francisco public-radio giant KQED. Wallace wanted to have lunch. Lazar figured it was about the station they were both trying to buy, but Wallace would only say she wanted to talk about ways the two independent National Public Radio (NPR) stations could work together.

KQED and Capital Public Radio, the company that runs news and jazz station KXJZ 88.9 and classical station KXPR 90.9, both had entered sealed bids to purchase a small religious station last year.

Capital Public Radio’s long-range plan had been to buy a third Sacramento station, turn it into an all-jazz format station and then rename and reformat KXJZ as a station with only news and information.

In the course of bidding, Lazar learned that KQED was one of the other parties trying to buy the small Christian station. Competition between two public-radio stations isn’t new, but the field has become increasingly competitive in recent years as more and more public-radio stations grow and mature.

Lazar agreed to have lunch with Wallace, and they met February 5 at Sacramento’s Esquire Grill, each bringing two other honchos from their respective stations. When they sat down, Wallace whipped out a press release set to go out the next day announcing that KQED’s bid had come out on top and that it would start a new station in Sacramento this spring. Through the deal, KQED will pay $3 million for KEBR 89.3, which zaps out 3,100 watts. That’s modest compared with KXJZ’s 50,000 watts or KQED’s 110,000 watts, but it’s enough for a toehold in a new market.

Losing the bid was awkward and disappointing for Lazar’s team, and so was the lunch meeting. Radio stations rarely come up for sale, so Capital Public Radio’s expansion plan would have to wait indefinitely. On top of that, Lazar’s station suddenly would be going head to head with one of the biggest and best public-radio stations in the country.

To soften the blow, Wallace offered to cross-promote each station’s offerings on the air. KQED also picked up the tab for lunch.

“Our dream of getting that additional station is now put off,” Lazar said a few days after the announcement. “We’ve been trying for two years, since we took the daytime jazz off [KXJZ] in 2001.” Sounding diplomatic but indignant, Lazar added that Capital Public Radio isn’t interested in KQED’s offer to cross-promote. “We think that might be a little much for us,” he said.

Since losing the sale, Capital Public Radio has been gearing up to take on the new competition when it starts broadcasting in about three months. The new station, which doesn’t have call letters yet, will simulcast most of what’s on KQED, but it will have news, weather and traffic reports customized for the Sacramento market. KQED also is considering a new local talk show.

Both stations are expected to air Morning Edition, Talk of the Nation and All Things Considered.

KQED’s move didn’t really turn its Sacramento colleagues into enemies, but it did put a chill on the relationship between the two NPR outlets.

“What troubles us is the inconsistent message they were sending. They told us that one of the main reasons they wanted to do this was because they had a hole in their coverage area,” Lazar said. “If that were true, then why aren’t they just broadcasting the KQED signal? Why are they trying to customize it for Sacramento?”

Lazar said KQED took pains to assure Capital Public Radio that it didn’t intend to do any harm and that the KQED board only approved the purchase because it had been told the new station wouldn’t hurt Capital Public Radio.

“I have to question what their board was told,” argued Lazar, who said about 80 percent of his station’s non-jazz programming is the same as KQED’s. “They’re acting like we’re a music station and they’re not going to interfere with our music. That’s just not true. We’re a news station that just happens to have music after 7 p.m.”

KQED President Jeff Clarke sees the situation differently. “There really has not been a unique or premier news and information service in the Sacramento market. Our colleagues at Capital Public Radio are running NPR product, and they do a fine job with their news, but we’re going to be offering different service,” he said.

Clarke said KQED’s signal has a blind spot in Sacramento. It can be heard from Monterey to Ukiah, but it fades out on the I-80 corridor at Dixon before picking up again in the hills around Auburn.

Filling in that coverage area will put KQED on the air in some potentially lucrative markets. Davis, as a university town, is a haven for the type of people who pledge the most to public stations. Sacramento is also desirable real estate as far as public radio goes. The Sacramento market is ranked No. 27 in the country by population, but it’s also educated and affluent, the kind of listeners who usually tune in to public radio.

That’s going to mean increased competition for pledges, too, though Lazar said he expects longtime KXJZ listeners to listen to both stations but support Capital Public Radio at pledge time.

To gear up, KXJZ may accelerate plans to start a talk show of its own. Capital Public Radio will break ground any day on a new building on the campus at California State University at Sacramento, which holds the license for KXJZ. The plan had been to start the talk show when the building is completed about a year from now because there isn’t enough room at the current location. But the show may make the leap from development to airwaves before the move.

Right now, KQED has a single reporter based out of the KXJZ bureau near the state Capitol, but that will end as soon as KQED opens an office in town for the new station, which will have a small staff. One twist is that KEBR’s antenna is on KXJZ’s tower, so Capital Public Radio will continue to be a landlord to KQED until that lease runs out in two years.

KQED officials, for their part, say they will focus on bringing their own original programming to Sacramento. KQED produces a California news show, an Asian culture show and a public-affairs talk show.

Jim Bennett, general manager of KPFA, the powerful left-leaning public-radio station out of Berkeley, said the only way KQED and KXJZ would be able to share the market effectively is if one station carved out a niche with a format that was an alternative to the other.

“There are only so many listeners to go around, so you are in essence dividing the pie further,” Bennett said. “It doesn’t seem like it will really be a peaceful coexistence. [KQED] probably will take away some of the audience from the other stations. Even if they have the best intentions, it’s still going to happen.”

In addition to being the most-listened-to public-radio station in the country, KQED also gets the biggest drive-time audience of any Bay Area station. The station announced last year that it showed a 20-percent jump in Arbitron ratings in two years. KQED has more than 740,000 cumulative listeners a week, and it hopes to add another 100,000 in Sacramento.

KQED does cast a big shadow, but Wallace said her board of directors didn’t want to go into Sacramento if it would hurt Capital Public Radio. Wallace added that because the bidding was confidential, KQED didn’t know that Capital Public Radio also was trying to buy the station until after KQED’s bid had been entered. KQED expects to finalize the sale and begin broadcasting as soon as it gets FCC approval, which is usually a slam-dunk process, sometime in May or June.

Capital Public Radio won’t challenge KQED’s application, Lazar said, though it did get several letters from angry listeners who said they would challenge the transfer.

In anticipation of things like that, KQED tried to do a lot of homework before taking a shot at getting into the Sacramento market.

When KQED found out the Sacramento station was up for sale, KQED hired Marc Hand, a Denver-based broker who specializes in buying and selling public-radio stations. They also asked him to research whether the purchase would hurt Capital Public Radio.

Hand said he has tracked the effects of having more stations on the air, especially in the country’s top 100 markets. He said he’s never seen a situation in which more public-radio programming on the airwaves hurt one of the stations.

“I haven’t been able to find a circumstance where it hasn’t increased audience and increased revenue for all the stations in the market,” Hand said. “Essentially, it’s not a static pie. You don’t say for any given market there are X number of public-radio listeners, and if you add more service, it’s just going to divide those listeners up.”

The reason, according to Hand, is that radio works much differently from TV stations or daily newspapers. Radio is more segmented, and many of the choices on the dial—both commercial and noncommercial—have adopted formats that are more focused.

As a result, public-radio stations that have focused on one format have increased in number and audience; the same trend toward focus means some commercial listeners are turning to public radio because they’re not served by commercial radio as well as they used to be.

Capital Public Radio is an example. When Lazar dropped the daytime jazz, it generated a lot of complaints, but listenership started going up. KQED went through a similar metamorphosis more than a decade ago.

Clarke said KQED kept that in mind when weighing the purchase. “The research we know of in the industry is that people who listen to news and information formats all the time tend not to go and listen to music formats and vice versa.”

Though Lazar doesn’t necessarily buy the notion that competing with KQED will be a great thing for the station, he said what it would do is force Capital Public Radio to improve.

“We’re not going away. Nothing’s going to change—except competition always makes you better.”