All Unquiet on the Western Front

Minnesota Public Radio's empire- building purchase of Marketplace Productions hits a snag

A tidy bankroll, in other words. MPR first floated the idea of expanding to California in 1998. This past December the board of Pasadena City College voted to turn over the operation of its radio station, KPCC, to MPR on January 1. At the time of the vote, the Los Angeles Times reported that MPR would invest some $15.7 million over five years and add 25 staffers, with an emphasis on reporters; Bill Buzenberg, MPR's vice president for news, would do the hiring. "Rarely have we seen an opportunity with the potential of this one," MPR chief Kling told the Times. Last month KPCC's eclectic musical mix was abruptly replaced by a news/talk format. (For more about the repercussions on the L.A. radio scene, see this week's installment of Sound Check).

But MPR has been branching out--and attracting attention--for quite some time. In the early Nineties the organization added a second FM frequency to its local stable, drawing criticism for hogging the dial. The move was funded in part by MPR's expanding for-profit arm, Rivertown Trading. As the catalog business continued to grow, critics continued to raise questions about the complex relationships between MPR's nonprofit and for-profit elements. In 1995 state legislators passed a law that required the disclosure of salaries paid by for-profit organizations to executives who also worked for affiliated nonprofits--a law that was largely aimed at Kling and others who worked for both MPR and the Greenspring Company, Rivertown's parent.

In 1995 three dozen MPR employees were laid off owing to rising costs at the for-profit; that same year at Christmastime, a stink ensued when employees of MPR were asked to help fill orders at Rivertown. The latter incident spurred an investigation by the Minnesota Attorney General. The report, issued in January 1998, found no illegalities but urged that more detailed written policies, including conflict-of-interest disclosures, be put in place. When Rivertown was sold, Kling got a $2.6 million windfall through what amounted to a stock-option plan.

Jeff Tolbert

These days Greenspring's ventures sport a lower profile, but they're still bringing in money: Projected fiscal 1998 revenue (the most recent figure available on MPR's Web site) for the MNN Radio Networks and Minnesota Monthly Publications was $8.2 million. Last year grain scion Jim Cargill and his wife Susan donated two commercial AM stations, KLBB and KLBP, to MPR; the stations, which broadcast old pop tunes, are under lease to MNN Radio.

Is William Kling now attempting to position MPR to go head to head with National Public Radio? Bill Davis, senior vice president for programming at NPR in Washington, D.C., acknowledges the "potential" for competition. But NPR had no interest in buying Marketplace Productions, he says. "Most of the territory that MPR has staked out is complementary to what NPR is doing currently," he adds. The two organizations are already partners in a couple of ventures, eXploreRadio (an Internet resource for public broadcasters) and American Radio Works (a documentary production unit). "I think there may be opportunities in the very near future for MPR and NPR to work even more closely than we already do," Davis adds cryptically.

NPR Online vice president M.J. Bear says eXploreRadio's services are designed to provide content for public-radio Web sites. At present, she says, they don't charge affiliates any fee for the services. "There are a bunch of different revenue streams down the line," she offers, "but not necessarily from stations paying for things." Bear declines to say what those streams might be.

As to why National Public Radio chose to partner with MPR, Bear says, "There was a lot of synergy. National Public Radio and Minnesota Public Radio wanted to do a lot of the same things on the Internet--they're one of the larger national program producers aside from National Public Radio. When we looked at the programs that both entities created, it was a no-brainer."

While USC's Harris won't talk about the current lawsuit, she does shed some light on why the university sold to MPR. Harris says Marketplace Productions was essentially outgrowing USC. "We really needed to invest heavily in new technology and we needed to put a lot more money into salaries to keep them competitive," says Harris. "The amount of investment needed to keep it viable and healthy was more than the university could put into something not central to its mission." At first, she says, the school was looking for partners. But after talking to four or five different groups (whom she declines to name), the decision was made to sell the whole thing to MPR. "This is what they do. They do national productions, they do it very well," Harris says.

The production company, which employs 35 people, has an annual budget of nearly $6 million. Revenue, according to Harris, is about the same: "It's totally break-even. If they make a huge amount of money from it, that's fine. We want to be sure that they invest in the company and grow it. The thing that USC gets out of this is that we keep our names on the programs. We need the programs to keep being at the high quality that they are for a long, long time."

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