Stations court, flirt, propose and part by Monterey Bay

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A proposed merger of two California pubradio stations fell apart last week when officials at California State University Monterey Bay, owner of KAZU-FM in Pacific Grove, voted to keep control of the station. The CSUMB Foundation’s unanimous board vote Feb. 28 disappointed execs at independent nonprofit KUSP-FM in Santa Cruz, as well as advocates who said a merger would strengthen public service to the Monterey Bay area.

KAZU broadcasts an all-news format from the south side of Monterey Bay, and KUSP, across the water, airs a mix of news and eclectic music. But the stations share listeners and identical coverage areas, and both air NPR’s newsmagazines and other programs. Merging would have allowed the stations to streamline operations and offer a wider variety of programming, proponents said.

The university’s decision to hold on to KAZU “doesn’t make sense from a community-service perspective, and it doesn’t make sense for the university from a financial perspective,” said Marc Hand, managing director of Public Radio Capital. Hand joined university officials, KUSP execs and local philanthropists in the year-long process of crafting merger proposals.

Terry Green, g.m. of KUSP, lamented the decision. Both stations’ listeners have called for  less duplicated programming, stronger news coverage and greater efficiency, he said.

“Our proposals to CSUMB offered multiple ways to accomplish those goals,” Green said in a press release. “I’m sorry the university has chosen to go it alone . . . .”

But university officials, who initially supported exploring a merger as a way to reduce the school’s subsidy of KAZU, expressed renewed support for the station. Jack Jewett, v.p. for advancement, pointed to KAZU’s increased underwriter and foundation support and its strong fall Arbitron ratings.

The university’s subsidy to KAZU has dropped from $160,000 in fiscal year 2005 to $75,000 in ’07, he said. Plans to move the station to the campus, also approved by the board last week, would help end the remaining subsidy, according to Jewett.

“The performance of KAZU has improved remarkably,” Jewett said. “And I think that certainly weighed on our board’s decision to maintain the local ownership, control and operation.”

By retaining KAZU, the university foundation’s board rejected two proposals from KUSP, presented Feb. 15. The Santa Cruz station offered either to operate KAZU under a local management agreement or to buy it  outright at an undisclosed price.

Those proposals capped two years of talks between the stations that began when Duncan Lively, a longtime friend of KUSP’s Green, joined KAZU as g.m. (Lively declined a request for an interview, deferring to CSUMB officials.) A campus leadership change also jumpstarted negotiations.

Early last year the two stations began formal merger talks in a joint committee including Green, Lively, Hand, members of KUSP’s board and reps from local foundations.

“There was a pretty significant sense among donors and listeners of ‘Why aren’t these stations together?’” said Hand. Community members who listen to both stations dislike having to choose between donating to one or the other, he said.

After six months, the committee unveiled a proposal to combine the licenses of KAZU and KUSP under a new nonprofit accountable to the school and KUSP’s community licensee. But the university foundation rejected that proposal in September, citing doubts that  the university could recover KAZU’s license if the new nonprofit foundered.

That concern and others cited by the board were addressed in the proposal, however, according to Green and Hand. “The initial response didn’t seem like a genuine response,” Hand says.

Last fall the university showed signs that it was considering partnerships with pubcasters beyond the Monterey Bay area. The school retained media broker Peter Mieuli.

Reps of KQED in San Francisco and KCBX in San Luis Obispo confirmed that Mieuli contacted them. Frank Lanzone, g.m. of KCBX, said he rejected the notion of a relationship with KAZU. KQED declined further comment.

In January, the university asked for another proposal from KUSP and got the two options that it rejected this month.

Lance Linares, executive director of the Community Foundation of Santa Cruz County, which helped pay for Public Radio Capital’s services last year, called the rejection   “a big mistake.”

“Donors are looking more and more for efficiency, and this offer represented a great opportunity for the community to enjoy a much more robust and healthy public broadcasting service,” said Linares.

Jewett disagreed: “We are definitely invested in this radio station, and we’ve found a combination here that certainly works for our market,” he said. “So we plan on continuing that winning combination.”