Rebuttals – PLU continues to argue for secrecy

The president of Pacific Lutheran University has sent a number of recent letters to alumni and some vocal members of the community. These letters are notable for their tone — dismissive and combative — and for their selective use of facts. The quotations below (in italics) are from letters sent in December from President Thomas Krise.

Krise: Maybe you can help me think of any example of a major business transaction that was carried out in public?  Recent buyouts like Plum Creek by Weyerhauser and Crosscut by KCTS come to mind, but both of those were done just as the KPLU/KUOW one was (and I’m a donor to Crosscut and I knew nothing about the deal until it was announced, which I find to be normal–KCTS is also a public broadcaster, so that provides an example of another public station carrying out business decisions the way all others are: confidentially).  And, for a fresh example of a privately agreed-to deal: I just heard on the radio that Kaiser Permanente is buying Group Health.  I’m a member of Group Health and PLU itself is a major client, but the first I or we knew of this action was hearing about it on the radio.  That’s how these things work.

Comment: These are all interesting examples.  But there are important differences.  Unlike any of these examples, the “seller” (PLU) is using a public resource — the radio airwaves.  Radio airwaves are licensed to serve the public and belong to the public. This is well understood, and it changes the expectations for public involvement.

Also, KPLU has been built almost entirely with public donations, small and large. The daily operations are paid for primarily by voluntary donations, not by transactions. The broadcast facilities were built with donations from individuals, along with a $733,000 allocation from state taxpayers. Together, these constitute a more public entity than any of the examples given.

While Crosscut recently emulated the public radio fund-drive model, it’s fundamentally a different type of organization, from its founding up until today. What’s more, in the past, when KPLU and KUOW did discuss whether it made sense to combine in some manner, they did involve stakeholders — it was not done in complete secrecy.

 

Krise: As to your offer to buy the license, you have had the opportunity to offer to buy it for the past 49 years.  Perhaps I missed a communication from you, but I am unaware of any such offer.

Comment: This argument cannot be taken seriously. There was no reason for anyone to make the huge effort to raise money and take the station away from PLU — because there was no indication that PLU saw the station as a burden.

Krise:  It is not accurate to say that that we don’t need the money–any institution (including a family) that is holding a major asset that is declining in value needs to think about what to do about it.  We intend to invest the proceeds in our endowment to fund scholarships (up to 16 full scholarships for needy students can be funded with this amount) and other important priorities of the university (salaries, facilities, investments in programs in jazz performance and mass communication, etc).  We’ve been thinking about this issue for a long time (many key players can remember discussions going back to 1987).  So, there is nothing in our current situation that requires this action; it is a strategic decision based on a long view of the situation.
Comment:This statement avoids inconvenient facts and mis-represents history. There is ample evidence the university badly needs cash, quickly. With a downgraded bond rating, the university’s ability to finance important projects is hampered. If PLU is taking the long view, then there is no rush to sell and no reason to block public input. As for selling the station in the 1980s or 1990s, the only examples known to staff have involved elaborate negotiations with KUOW, on at least two separate occasions. Under past administrations, the negotiations engaged a number of key stakeholders and involved the leaders of both stations — and the stations were unable to find a viable formula. But, this time, KPLU’s management was kept completely in the dark and unable to influence the terms.
Krise: It’s also inaccurate to imply that the university is anything but proud of the work our students and staff members have done at KPLU since 1966.  It is exactly that pride that was the reason we wanted a well-qualified buyer who intends to carry on that legacy (and one likely to hire as many of our great employees as possible).
Comment: The buyer has not described any understanding of the legacy of KPLU.  KUOW is interested in the broadcast towers and the rights to 88.5 frequency.  They commit only to continuing their own news product, not anything from KPLU (not even the highly regarded show, “Sound Effect”, which would easily blend into and enhance their Saturday lineup).  As for jazz, they commit only to doing something with jazz, without acknowledging that KPLU’s presentation of jazz might be an essential component to its success. This approach to legacy is akin to a demolition project that preserves a portion of a historic building’s brick façade, attached to an unrelated modern tower behind it — and claims to connect to the legacy.
Krise: We have been clear about the reasons for this action: declining value of a major asset and concern about the survivability of public radio in our region. … Other superb workers in other fields like bookstores, video stores, film stores, etc, have faced similar challenges of consolidation in the face of massive changes in the media consumption habits of the world.  It’s not that they were not great at their jobs; it’s that the industries were under stress.  That stress is reflected in the declining value of assets like bookstores, video stores, film processing labs, radio stations, etc.
Comment: This grossly overstates the threat to KPLU’s viability, by trying to lump it with video stores. There is absolutely no indication that the station is dying; in fact, it’s growing.  If radio itself is doomed, then even a combined station with KUOW would be doomed. This also reflects PLU’s continued attempt to see persuade us that the only value of KPLU is its “asset” value when sold. (More on this below.)
Krise: If we had chosen another buyer, like yourself, our region would still not solve the problem of overlapping, competing public radio, which the experience of stations around the country indicate would weaken the survival of the medium.  I know you disagree with our judgment of the current status of terrestrial radio and our estimation about its future (which is reinforced by the substantial decline in the valuation of the station over the last 12 years–a fact that is supported by other stations’ experiences across the country), but the best way to counter my argument is to offer evidence that contradicts it–together with an argument that supports that evidence, rather than simply declaring your disagreement ever more loudly.

Comment: Having competing stations is not a “problem” — the healthy competition has made both stations stronger, and continues to this day (more about this on another rebuttals page) And the reason Krise is not seeing evidence about the ongoing viability of KPLU is because he is only considering KPLU as a piece of property (an “asset”).  So even if it is financially self-sustaining and viable for the next 20 years, that doesn’t matter to PLU — if the potential sale value declines.  PLU did not launch and nurture the radio station as a financial investment, like a Mutual Fund or piece of commercial real estate.  Rather, it launched as a service.  And as long as it’s a self-sustaining service, then it has never before mattered if the “asset” value went up or down from year to year.  Does  the value of the college’s football team logo go up and down?Should PLU sell the all permanent rights to the logo after a good season, before it declines again? These are not traditional assets. Krise and PLU should let go of that framework. The radio station itself is viable — that’s what matters.