From the day the deal became public, PLU officials have said the university is not selling the station because it needs the money. Typical news coverage looks like this (from Crosscut.com):
When asked if the desire for the money was a sign of some trouble at PLU, Gibbs said “absolutely not.”
But, since then, these facts have come out:
- PLU’s bond rating was downgraded in September, leaving the university apparently in danger of defaulting on $54 million in bonds.
- The bond agency (Standard & Poor’s) noted PLU has faced declining enrollment and hasn’t been able to keep enough resources on hand relative to its debt. This is the second consecutive year of this failure.
- The bond agency also noted, “We understand that if the waiver is not granted, the university has identified adequate potential liquidity sources to meet any acceleration demand.” What “assets” could PLU liquefy to meet the terms of its bonds?
- Other signs of financial stress include a dormitory on campus that’s been shuttered, without any current plan to renovate or replace it, apparently due to lack of resources.
- The University’s response to these facts is to dodge the question and say, in summary, Our debt situation is better than many other small colleges. Whether that’s true or not doesn’t matter – what matters is how badly they need $7 million. As Crosscut confirmed, a decline in enrollment has put severe pressure on the budget.
It appears PLU needs cash. Unfortunately, the university has been trying to avoid this fact and instead claim that selling KPLU is about serving the public. But the leaders betray themselves every time they talk about KPLU as “an asset” as opposed to “a service.”
For decades, the radio station has been announcing every hour that KPLU is a “service of Pacific Lutheran University” — they have never announced “KPLU is an asset of Pacific Lutheran University.”
That’s because the station was not and is not an “investment strategy.” The service remains vibrant and financially self-sustaining. The only reason to rush a sale forward, in secrecy, is if you need the money ASAP.