The board of Wrangell’s public radio station last month approved a deal which would transfer its ownership to a regional corporation.
Following a decision by its governing board to do so in November, Wrangell Radio Group (WRG) on December 11 filed an application with the Federal Communications Commission to transfer its four channels to CoastAlaska in Juneau. Among the four would be KSTK, a source for news and entertainment on the island since the noncommercial station was first built in 1977.
CoastAlaska is a nonprofit corporation which provides administrative support and engineering services, coordinates news reporting and raises funds for seven Southeast Alaska radio stations and a public television network. KSTK was already a founding CoastAlaska affiliate, with two seats on its governing board allotted to Wrangell. Wrangell Radio Group board director Angie Flickinger explained the network has over the years assisted the station with its bookkeeping and administrative functions.
The decision to transfer ownership was made out of financial necessity. Compared to other CoastAlaska-affiliated stations in Sitka, Petersburg, Ketchikan and Juneau, Wrangell’s station has the smallest revenue share. Total support and revenue for the fiscal year that ended June 30 came to just under $400,000 for the station, which is 74 percent of Petersburg station KFSK’s and only 41 percent of Sitka’s KCAW.
While its expenditures are likewise more modest, last year totaling $383,400, the Wrangell station has been more heavily dependent on outside funding. Just over half of KSTK’s funding last year came from operating grants through the Alaska Public Broadcasting Commission and national Corporation for Public Broadcasting. A contribution from the state, amid ongoing spending deficits APBC grants have seen a reduction in recent years, dropping by 30 percent between FY16 and FY17.
Meanwhile, Flickinger explained that recent changes to employment and revenue generation thresholds to CPB grants have threatened that source of revenue, which last year topped $120,000.
“They changed the level of funding and it affected our whole budget,” she said.
Reductions to grant sources have thus made the station’s financial situation untenable, with slight gains in other revenue sources and cuts to expenditures unable to cover the difference. In terms of membership support the station received just over $37,500 from local listeners last year, while underwriting from various businesses and organizations contributed another $47,700. While its underwriting is slightly better than half that brought in by KFSK, at $85,000, Petersburg’s membership contributions raise about three times as much at $105,180.
Facing this, KSTK explored other options. At one point Flickinger said local radio board members had considered the possibility of partnership or consolidation with neighboring KFSK. However, acquisition by CoastAlaska struck them as a more attractive proposition because it would ensure the station maintains a local presence.
“We chose this route because it made the most sense,” said Flickinger. “It allows us to still exist.”
Since CoastAlaska’s incorporation in 1998, KSTK has been part of a compact with four other nonprofit corporations managing seven radio stations in all. Since 1999 members retained certain budgetary responsibilities, licenses and property, but transferred financial liabilities to CoastAlaska. Under the new arrangement Wrangell’s station would formally become an asset of its network.
Under the terms of its sales agreement with CoastAlaska signed on December 8, WRG would receive $10 for KSTK and its related assets. In its latest audit, the station has around $726,000 in assets, which includes property and equipment, though minus depreciation that figure was assessed at $155,500. The sale itself would only be finalized once consent to reassign its licenses was given by the FCC. An application to make the exchange was submitted on December 11, and a decision is expected after conclusion of a 30-day public comment period.
“That’s what we’re kind of navigating right now,” said Flickinger.
As for the KSTK board’s future, Flickinger said it would probably take on more of an advisory role rather than governance. For example, KSTK’s manager would work directly under CoastAlaska rather than the station’s board as currently done. But even in this reduced capacity, Wrangell’s board would still try to maintain its two seats on the network board and head up local fundraising efforts.
Due to the holiday season, both the KSTK station manager and CoastAlaska executive director were unavailable to comment further on the operational details of the change.
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