Berkeley-based radio station network strategizes financial solutions in threat of default

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A strategic planning working group — formed by the Pacifica Foundation Radio National Board of Directors, which oversees a network of nonprofit radio stations headquartered in Berkeley — held a planning meeting Thursday to try to keep its business alive.

At the meeting, the board’s leaders discussed the financial struggles ailing the company and potential contingency plans in case of short-term default. Jose Luis Fuentes-Roman, a member of the Pacifica National Board, or PNB, mentioned the selling of the Berkeley office — which serves as the national office — and financial swaps of broadcasting rights as possible ways to raise money in the face of mounting debt.

Fuentes-Roman recommended that Pacifica’s lawyer, John Crigler, give a talk to the PNB to educate the board about debt reorganization, especially the benefits and risks, before it carries through with any property sales or swaps.

Pacifica Network is composed of five radio stations — KPFA, KPFK, KPFT, WBAI and WPFW — which are located in Berkeley, Los Angeles, Houston, New York and Washington D.C., respectively.

At the meeting, board members noted that every station but KPFA has been failing to meet its financial requirements, compromising the overall financial stability of the network.

“It would be a stretch to say (KPFA doesn’t) have problems,” said Brian Edwards-Tiekert, director and chair of the board’s finance committee and member of KPFA. “We just have fewer problems than other stations.”

In February, the network received a bequest that prompted questions about whether the money should be appropriated to KPFA specifically or to Pacifica Radio as a whole. The confusion arose when the bequest was sent to KPFA’s P.O. box, though the bequest was specified to go to the Pacifica Foundation.

According to Edwards-Tiekert, the endowment could have been interpreted as belonging to Pacifica’s national operation rather than KPFA. At the time, however, the management of Pacifica, including then-interim executive director Margy Wilkinson, granted the money to KPFA as it discovered the donor had regularly donated to KPFA in the past, not to Pacifica.

KPFA has since lent out more than $400,000 to assist the other stations, particularly the New York station, which owes $1 million to the Empire State Building.

According to KPFA chair Carole Travis, support from KPFA isn’t an uncommon occurrence, because KPFA has been supporting Pacifica in fundraising for the past few years.

Edwards-Tiekert said the question now is if KPFA will get paid back for its prior support of other stations via the $400,000 or if that money will get funneled to the national office.

According to Wilkinson, who is a member of both the KPFA Local Station Board and the PNB, the financial decline that Pacifica is experiencing is due to a decline in radio listeners who support the stations and to a systematic reduction in donations to nonprofits.

Wilkinson said she believes that the problems facing Pacifica are exacerbated by the fact that the PNB is not functional and is drenched with too much bureaucracy because of its size.

“The boards are too large,” Wilkinson said. “One of the things we’ve learned over the years is that smaller boards work better. There are less opportunities for factionalism and internal dispute.”

The California attorney general is auditing Pacifica, with results expected to come out in 2016.

Contact Alok Narahari at [email protected].

Clarification(s):
A previous version of this article may have implied that the $400,000 bequest was ambiguously directed and could have been meant for KPFA. In fact, the bequest was specified to go to the Pacifica Foundation, but was sent to the KPFA’s P.O. box, which was the source of the original uncertainty.

Correction(s):
A previous version of this article incorrectly stated that the Pacifica Foundation Radio National Board of Directors held the strategic planning meeting. In fact, the meeting was held by a strategic planning working group, formed by the board in July.

A previous version of this article also incorrectly stated that Brian Edwards-Tiekert is the chair of the Pacifica National Board. In fact, Edwards-Tiekert is a director and chair of the board’s finance committee.