On October 24, 2004 the Minneapolis StarTribune ran an article by Terry Fiedler and Deborah Caulfield Ryback titled "Bill Kling, Public Radio King". Because the article is no longer available to the general public on the StarTribune site, we include it here for historical purposes:
Bill Kling, public radio king
MPR chief `sings his own song' in creating a national powerhouse
By Terry Fiedler amd Deborah Caulfield Rybak
Staff WritersBill Kling insists that Northfield's WCAL-FM, soon to become the 36th station under the Minnesota Public Radio umbrella, is the last one he intends to buy in Minnesota.
But anyone who thinks that marks the limits of Kling's ambitions for Minnesota Public Radio, and public radio in general, hasn't been paying attention.
Tune to California, where Kling's company converted a money-losing college station into the No. 2 public radio station in Los Angeles by adopting a programming and fundraising model honed back in Minnesota. Another Los Angeles acquisition is helping fortify MPR as a leading public radio program provider, second only to National Public Radio.
For Kling, these aggressive forays beyond Minnesota's borders are necessary to ensure the strength of his growing public radio empire. They help finance quality news, music and cultural programming, scarce commodities in the commercial broadcast world.
Over the years, those ambitions, and his willingness to realize them by pushing boundaries, have drawn fire from legislators skeptical about Kling's for-profit businesses, competitors worried about the homogenization of public radio, and even some listeners.
But one out of every eight Minnesotans listens to MPR, and other public radio executives try to emulate its operation. This weekend, Kling will become the first public radio executive to be inducted into the state's Pavek Museum of Broadcasting's Hall of Fame.
"There is no other public radio organization in the country, whether in New York or L.A. or Boston, that is as wealthy as MPR, as innovative or as ambitious,'" said Tom Thomas, co-CEO of the Station Resource Group, a trade group for 45 public radio organizations.
"We've created $175 million worth of value for Minnesota Public Radio over the years with all of the ventures we've been criticized for," Kling said in an interview. "There was a lot of politics, and we took a lot of hits. The important thing was that it worked."
Radio powerhouse
By any standard of public radio, St. Paul-based Minnesota Public Radio is a powerhouse.
Its fiscal year 2003 revenue was about $55 million. The industry average was just under $2 million per public radio organization, according to the Corporation for Public Broadcasting.
MPR has 35 stations; the average public radio system has two. MPR's average audience per week is 650,000 vs. a public radio average of about 70,000, according to Arbitron.And MPR, with its national production and distribution arm, America Public Media, is just one subsidiary of the American Public Media Group. The others are Southern California Public Radio (KPCC-FM in Pasadena), with about $10 million in annual revenue; and the for-profit Greenspring Co., which includes KLBB-AM and Minnesota Monthly magazine and generates $14 million annually.
Kling's 2000 acquisition of "Marketplace," public radio's third-most-popular show, helped solidify MPR's status as the country's second-largest producer of national programming. From its Los Angeles base, Marketplace Productions just rolled out a new national program, "Weekend America," and is considered to be one of MPR's main incubators for new talent and program ideas.
To help support these expansions, Kling hopes to launch a new for-profit Web-based business that he said could rival the success of the parent company's former catalog business, Rivertown Trading Co., which was sold in 1998 to Target Corp. for $120 million. About $85 million of that remains in a permanent endowment that throws off about $4 million a year for the organization. Kling received $2.6 million from the deal.
The complicated for-profit/nonprofit structure has made for a messy corporate diagram and genuine controversy over the years, but the reality is that all lines lead to Kling.
No coziness here
The lanky, gray-haired 62-year-old gives interviews infrequently, and when he does have something to say he'll often do it on MPR. He shuns talk about himself. Commanding, analytical and impatient, he doesn't fit any warm and fuzzy stereotype about public broadcasting. This is nobody's Mr. Rogers.
Part of his disinclination for slow thinkers is Kling's ability to look so far ahead that he has often identified, dissected and discarded ideas on markets and products that others are just beginning to explore.
Kling's love of public radio isn't just about ambition. When the 9/11 attacks brought down public radio station WNYC's transmitter atop the World Trade Center, Kling led a campaign in the public radio system to raise money for a new one. When a public radio station on the East Coast needed management advice, Kling invited the entire board to Minnesota. "We answered their questions and now they're doing very well," he said.
Still, Kling seemed to be a man of uncommon ambition even in 1967 at age 23, when the president of St. John's University in Collegeville, Minn., called on him to start a radio station. In MPR, Kling created one of the first independent public radio organizations. A whimsical little show launched in 1974, "A Prairie Home Companion," became one of public radio's biggest successes ever and provided the financial base for MPR's growth.
Kling was a founding director of National Public Radio in 1969, but in an audacious move helped establish a rival distributor, Public Radio International, after NPR snubbed "Prairie Home" for national distribution.
In 2000, in a move regarded as equally audacious for a mainly local and regional industry, Kling went to California, where Pasadena City College was looking for someone to operate KPCC-FM. In return for a 15-year agreement to run KPCC-FM, MPR's parent company provided a $3 million interest-free loan to KPCC, established a local board, upgraded the facilities and built a news staff, which now numbers 24.
Not everyone applauded
"[Kling] told me what he intended to do, and I told him why I thought it wouldn't work, and that's all you could do," said Ruth Seymour, the legendary general manager of Santa Monica's KCRW-FM, long the No. 1 public radio station in the market. "Bill Kling sings his own song, so it really doesn't make too much difference to him what I say."
Seymour says Kling turned KPCC, which sounds a lot like MPR's KNOW-FM outlet in the Twin Cities, into a "gray" station. But KPCC listenership has grown 45 percent, and operating revenue is expected to increase sevenfold, to $10 million, in the current fiscal year. By tapping MPR's exceptional fundraising and direct-mail membership expertise, KPCC station executives were able to raise $1 million from listeners in last spring's pledge drive, triple the amount raised in 1999.
"We're able to access a level of managerial depth and competence that very few public radio stations anywhere in the country can access,"' said Bill Davis, president of KPCC's parent company, Southern California Public Radio. "That is a significant, significant competitive advantage for us."
Kling emphasizes that no funds raised for Minnesota Public Radio end up in California. KPCC pays for its management services in Minnesota, and any money that it gets from Minnesota comes from an investment fund established after the 1998 sale of Rivertown Trading.
Davis thinks MPR's parent company should take the Minnesota Model to other cities. "I am probably the most vocal advocate within the company for doing this again," he said, "whether it's in Miami or some other metro area."
Marc Hand, managing director of Public Radio Capital, a Denver-based nonprofit that provides consulting and brokerage services, said that public radio licensees, such as universities, have come under financial pressure in recent years. Some decide to sell their stations. MPR's financial and management strength puts it on every broker's short list of possible buyers, he said.
Kling is more circumspect. Moving into other metro areas, he said, is "not a strategy yet."
Acquiring a jewel
The same year KPCC was acquired, MPR also bought Marketplace Productions from the University of Southern California. The cost was under $10 million, said MPR Executive Vice President Tom Kigin, who declined to be more specific.
Marketplace produces the business program of the same name that is one of the crown jewels of public radio. Its executives, Jim Russell and J.J. Yore, are two of the industry's most high-profile names. Marketplace moved from a windowless cinderblock bunker near a freeway to a $3.5 million airy, stylish office-studio complex in the heart of downtown L.A. that it shares with KPCC. MPR "recognized that what we did was really valuable, which was energizing," Yore said.
In return, Kling is counting on Marketplace Productions to launch public radio's next big thing, said Russell, who created "Marketplace" and the recently launched "Weekend America" "The hard news is based in Minnesota," said Russell. "But we're finding lots of support for new programs on arts and culture."
Marketplace Productions gave MPR direct access to some of the top creative talent in the country, but the purchase also roiled the genteel world of public radio.
Public Radio International, the Minneapolis-based nonprofit distribution firm Kling helped found in 1980, sued in federal court to block the sale. PRI CEO Steve Salyer said his company spent $500,000 on the "Marketplace" show in its first year, 1989, and solicited its first big sponsor, General Electric. PRI eventually spun off "Marketplace" to the University of Southern California in return for long-term distribution rights.
" 'Marketplace' is one of the most popular shows in public radio, [and] PRI had taken all of the risks," Salyer said. "MPR wanted to be a leader on the national scene, and they had a lot of money to invest. They don't have many programs that could help them do that, and this is one."
The matter was settled out of court for an amount Salyer would not disclose. But relations between the Twin Cities organizations turned even frostier earlier this year when MPR severed its distribution agreement with PRI and began selling its shows through its own company, American Public Media.
PRI lost about 20 percent of its gross revenue because of the split, Salyer said. In June it laid off five people from its 60-person staff. Meanwhile, MPR added about 15 people for its new distribution company.
MPR just "wants the power of having all of the parts within its grasp," Salyer said. Kling said new times called for a new strategy.
"We needed a single, common brand, which is where [MPR's] American Public Media comes in, which will appear on the Web, will appear on radio, which will appear on satellite, which will go to events," he said.
But the separation has been hard for onlookers.
"It's the most bitter fight I've seen," said Ira Glass, host of "This American Life," which is distributed by PRI. "Several times [at a recent public radio conference] I was talking to someone from PRI when someone from APM walked up. The two of them didn't say a word to each other – and we've all known each other for 15 years."
Program managers also feel caught in the middle. Having to a pay a new distribution company an "affiliate fee" of between $8,000 and $20,000 (before buying the actual programs) "is definitely something that we are apprehensive about," said Abby Goldstein, program director for KERA-FM in Dallas.
A new format
While MPR tries to soothe the anxieties of public radio executives, it's gotten an earful from many listeners of WCAL. MPR announced in August that it would purchase the St. Olaf College classical music station.
MPR will borrow the $10.5 million to buy WCAL, which industry brokers said is probably one of the four or five highest prices ever paid for a nonprofit station. The deal is scheduled to close in December.
On Oct. 4, the group Save WCAL filed a petition asking the Federal Communications Commission to deny St. Olaf's request to transfer its broadcast license because it would give MPR "nearly total domination of public radio in the Twin Cities." MPR's response brushed aside those arguments by noting there were no fewer than 11 noncommercial radio stations operating in the Twin Cities that it didn't own.
Terry Moore, the attorney for the Minnesota Broadcasters Association, described petitions such as SaveWCAL's as "long shots."
"They have their best chance of succeeding if they're based on character issues or a failure to serve the public interest," Moore said. "You're stretching pretty far if you say MPR is not serving the public."
Kling has ruled out keeping a classical music format on WCAL. He's also ruled out importing a format, preferring instead to create something original, which would make MPR one of the first public radio organizations to have three different formats playing on different stations.
Thomas of the Station Resource Group thinks MPR may introduce a cultural format that would combine performances with discussions about music, art and theater.
While other public broadcasters envy MPR's clout, Kling is already looking to enhance it with the possible launch of a new for-profit venture based on what MPR "learned about the Web audience." He is purposely vague about the business, other than to say it's a project that's been in-house for eight years and, unlike Rivertown Trading, that he would solicit outside investment to help it grow.
His end game, Kling says, is always the same: to serve more listeners with strong programming.
"We have to grow, which requires that we deliver top-quality, expensive programming, but we're also expected to operate lean and mean," he said. "The only way that it's possible to do both is to spread the costs over more members and other financial supporters. Our back office in St. Paul has shown it's capable of supporting both a strong statewide network and creation of great local and national programming."
National Public Radio just got $225 million from McDonald's heiress Joan Kroc, Kling said, "and we have to catch up." NPR programs have 22 million listeners, while MPR programs have 12.1 million, so "we have 10 million we have to make up."
Michael Arnold, outgoing chairman of the Public Radio Program Directors Association, said MPR has a long way to go before it is a threat to NPR.
Still, "When it comes to MPR, you never know," he said. "I wouldn't underestimate them."
The writers are at tfiedler@startribune.com and dcrybak@startribune.com.
BILL KLING ON . . .
PUBLIC RADIO FORMATS
"It used to be that public radio stations programmed an hour of this and that: Lithuanian polka followed by an hour of opera. You thought you were serving all these individual audiences, but you had no audience because it was never what anyone expected it to be."ON WCAL'S NEW FORMAT
"We're not going to pick something up off the satellite. Whatever it is, it will be original, it will be local, it will connect with the community and it will have many of the attributes you're used to hearing on KSJN (99.5 FM) and KNOW (91.1)."ON SATELLITE RADIO
"There are a billion radios in the United States and 3 million subscribers to XM Radio. It's interesting technology, but a long, long way from being a challenge to anyone. Some people will make the argument that satellite radio is already outmoded by wireless Web devices."ON WEB RADIO
"I was in Korea about a month ago, and broadband there is about 100 times faster than what we have here. I was listening to [MPR] on a computer-based sound system and it was clear as a bell – it was just as good as sitting in my car."ON THE AUDIENCE
"When you look at who gathers around public radio, you have this incredibly powerful audience. They are the people who make things happen. They sit in legislatures, on school boards, they're heads of foundations, they run companies. They are people who want to learn, who want to be more involved."ON A FOR-PROFIT JOB
"It's always been much more challenging to do what I'm doing. . . . I've done what I wanted to do, and it made a difference."
MPR by the numbers
Minnesota Public Radio operates one of the largest public radio networks
in the country and is second only to National Public Radio in both revenue
and number of employees. Here's how it compares with other notable public
broadcasting outlets.
Oregon Public
MPR WNYC KQED# Broadcasting WHYY#
St. Paul N.Y.City San Francisco Portland Philadelphia
Total revenue (millions) $54.5 $28.1 $47.1 $32.1 $25.7
Public support (millions) 37.3 22.0 39.2 14.3 12.5
Expenses (millions) 47.3 23.4 48.6 27.4 28.6
Total employees 385 213 NA 160 157
Newsroom employees## 77 23 NA 8 7
# Company operates public radio and television stations
## Newsroom employees are for radio operations only
Sources: IRS Form 990; Star Tribune researchTHE MPR FAMILY OF RADIO STATIONS
Minnesota Public Radio broadcasts on 35 stations that serve Minnesota and its neighboring communities. Most areas are served by both a classical music station and a news and information station, and 16 local translators provide additional coverage for the region. An estimated 650,000 Minnesotans tune into an MPR station during the week.
In addition, MPR owns and operates a radio station in Sun Valley, Idaho.
The California station, KPCC-FM, is operated by Southern California Public Radio, a subsidiary of MPR's parent company, American Public Media Group.Classical music News & information Translator stations
Station Frequency Station Frequency Station Frequency
Albert Lea KGAC 103.9 FM
Alexandria KSJR 90.9 FM
Appleton KRSU 91.3 FM KNCM 88.5 FM
Austin KNSE 90.1 FM KLSE 103.3 FM
Bemidji KCRB 88.5 FM KNBJ 91.3 FM
Brainerd KBPR 90.7 FM KBPN 88.3 FM
Collegeville KSJR 90.1 FM KNSR 88.9 FM
Decorah, Iowa KLCD 89.5 FM KLNI 88.7 FM
Duluth/Superior WSCD 92.9 FM WSCN 100.5 FM
Ely WSCN 101.7 FM
Ely WIRR 89.5 FM
Fergus Falls KCMF 89.7 FM KNWF 91.5 FM
Grand Marais WMLS 88.7 FM WLSN 89.7 FM
Grand Rapids KCRB 104.1 FM
Grand Rapids WSCN 107.3 FM
Houghton, Mich. WGGL 91.1 FM WGGL 91.1 FM
International Falls KCRB 97.7 FM
International Falls KNBJ 88.1 FM
La Crescent/
La Crosse, Wis. KXLC 91.1 FM KLSE 88.1 FM
Minneapolis/St. Paul KSJN 99.5 FM KNOW 91.1 FM KLSE 88.1 FM
Moorhead/Fargo, N.D. KCCM 91.1 FM KCCD 90.3 FM
Owatonna KGAC 105.7 FM
Owatonna KNGA 103.9 FM
Rochester KLSE 91.7 FM KZSE 90.7 FM
Roseau KQMN 90.9 FM
Sioux Falls, S.D. KRSD 88.1 FM
St. Peter/Mankato KGAC 90.5 FM KNGA 91.5 FM
Thief River Falls KQMN 91.5 FM KNTN 102.7 FM
Virginia/Hibbing WIRR 90.9 FM WIRN 92.5 FM
Winona KLSE 101.9 FM
Winona KZSE 107.3 FM
Worthington/Marshall KRSW 89.3 FM KNSW91.7 FM KRSW 88.9 FM
Sun Valley, Idaho KWRV 91.9 FM
Source: Minnesota Public RadioUNRAVELING THE RELATIONSHIPS
American Public Media (APM): Minnesota Public Radio's national production and distribution arm. APM, established this year, took over from Public Radio International the job of distributing programs it produces such as "Weekend America" and "Prairie Home Companion," "The Splendid Table," "Speaking of Faith," and American Radioworks documentaries to public radio stations around the country.National Public Radio (NPR): The nation's oldest and largest public radio program producer/distributor is based in Washington, D.C. NPR doesn't own any radio stations, but it produces the daily news shows "All Things Considered" and "Morning Edition" and is public radio's largest distributor of other shows such as "Fresh Air" and "Car Talk." It also operates the satellite system that delivers programming to public radio stations.
Public Radio International (PRI): The nation's second largest distributor of public radio programs is based in Minneapolis. Like NPR, it owns no radio stations. It distributes shows such as "BBC's The World," "This American Life" and "Whad' Ya Know."
- American Public Media Group, Not-for profit
Provies financial and management support services to its nonprofit
subsidiaries Minnesota Public Radio and Southern California Public
Radio, and to its wholly owned for-profit subsidiary, Greenspring Co.
Together, companies under the APMG umbrella are expected to generate
$79 million in revenue for the fiscal year that ends June 2005.
– Minnesota Public Radio, Not-for-profit
Produces and acquires programming that it broadcasts through its
35 stations and nationall. Owns American Public Media, the national
program production and distribution division that includes Marketplace.
$50.9 million in projected operating revenue for fiscal 2005,
exluding investment income.
– Southern California Public Radio, Not-for-profit
Operates KPCC-FM through an agreement with the Pasadena Area
Community College District.
$10.2 million in projected fiscal 2005 operating revenue
– Greenspring Company, For-profit company
Operates Minnesota Monthly & affiliated magazine & KLBB 1400/1470 AM. $14 million in projected fiscal 2005 operating revenue.
.
Source: American Public Media Group
Copyright 2006 Star Tribune. All rights reserved.
