Tiny audience, debt service put Tacoma signal in jeopardy

Public Radio Capital is working to keep an FM station it owns in Tacoma, Wash., on the air after June 30, when Seattle’s KUOW will stop programming it.

In six years of operating as an internationally focused alternative to KUOW, KXOT failed to attract enough new listeners to support its operations.

PRC is negotiating with National Cooperative Bank, which backed the brokerage’s $5 million purchase of KXOT-FM in 2003. Payments on the loan have stopped while PRC tries to come up with a plan for KXOT.

When KUOW began managing the Tacoma station in 2006, its leaders hoped to buy it. Plans to create a differentiated public radio news format with programming from abroad seemed promising. But KXOT’s signal limited its reach into Seattle, and it was unable to draw much of an audience. On the advice of a consultant, KUOW decided against pursuing a capital campaign to finance a purchase of KXOT (Current, July 6, 2009).

KXOT’s audience share is just 0.2 percent, only slightly larger than its listenership when previous owner Bates Technical College was programming the station, according to KUOW. Most of KXOT’s current listeners also listen to KUOW, an indication that the second station failed to attract many new listeners. KUOW had counted on audience expansion to pay for KXOT’s operations.

KUOW’s decision to walk away from KXOT leaves PRC looking for a new strategy to keep the station within the public radio system — which was the reason why PRC bought the license in 2003 from Bates.

KEXP was the first Seattle-based pubcaster to operate KXOT. The Tacoma signal extended the reach of its contemporary music programming for a couple of years before KEXP dropped the contract.

Under its operating agreement with PRC, KUOW made capital payments on KXOT until last year, then stopped while PRC discussed the station’s future with National Cooperative Bank. KUOW was willing to continue operating KXOT only if it would not have to make loan payments, says Wayne Roth, president of KUOW.

Some listeners have told KUOW that they will regret losing the additional news programs that KXOT offers. Others have suggested that KUOW turn KXOT into a music station along the lines of The Current, Minnesota Public Radio’s station in the Twin Cities. But that would cost too much, Roth says. Until now, KXOT has required a minimal announcing staff.

With payments toward KXOT’s debt service required, “we just could not make those numbers work,” he says.

PRC continues to work with its lender in making decisions about KXOT’s future. A post on KUOW’s website says that PRC’s loan is in default. But when asked about the status of the loan, PRC Managing Director Marc Hand says only that payments have stopped on the loan. He cites PRC’s “good relationship” with National Cooperative Bank.

According to Roth, PRC’s bank also told KUOW in April that it would take over operation of KXOT within 30 days. Hand disputes that: “It’s a process of working with the bank, but they’re not taking over operations,” he says. Because the bank is a commercial entity, “the FCC wouldn’t be very happy about that.”

PRC hopes to upgrade KXOT’s signal by moving it to a new tower that would give it better coverage of Seattle. “We’re still excited about the value of the station and the impact it could have,” Hand says.

“I think all parties are sad that this has happened,” says Roth, referring to KUOW’s separation from KXOT. “We’ll see whether the frequency remains in public broadcasting or not.”