In Spring 2005, the Stanford University Social Innovation Review published a case study by James A. Phills and Victoria Chang about Minnesota Public Radio (MPR) titled "The Price of Commercial Success: Minnesota Public Radio: social purpose capitalism" [PDF, 10 pages]
The study, based on publicly available sources, is revealing and breathtaking. And it's based on documented publicly available information.
We'll share a couple of the interesting items from the study.
The MPR story began at St. John's Abbey and University in Collegeville, Minn., in 1967, when a 26-year-old student named William Kling founded a small radio station at the urging of the university president[, Fr. Coleman Barry]. KSJR thrived, but by 1969, the cost of running the station led the university to spin it off into a separate nonprofit. "The university had two choices," Kling explained. "It could have cut KSJR back to being a mediocre station, but one they could afford, or they could give it away, which they did, to a nonprofit corporation."
Amazing. When St. John's University thought that their radio station was costing them too much money, they apparently gave it to a nonprofit corporation. When St. Olaf falsely thought that WCAL was "costing" them, they "sold" it — not to its builders and investors (WCAL donors), but to the MPR who had no intention of preserving WCAL but of using it for their own purposes.
The report continues:
And indeed they did. The Rivertown catalog generated so much revenue that MPR undertook a reorganization in 1987, placing Rivertown under the umbrella of a new for-profit holding company called Greenspring. Legally separate from MPR, Greenspring was designed to avoid potential problems with the IRS about the growing magnitude of MPR's unrelated (and hence taxable) business income from Rivertown – something that could jeopardize the organization's nonprofit status. . .
. . .Atop the pyramid was Minnesota Communications Group (MCG), renamed American Public Media Group in 2000, a tax-exempt, nonprofit, charity-supporting organization that provided administrative, financial, and human resources services to a range of subsidiaries [MPR, Fitzgerald Theater Company and the for-profit holding company, Greenspring for all of the profit entities..]. . .
Despite the distinct legal and organizational status, the entities were tightly linked by the overlapping management team led by Kling, who served as president of MPR and Greenspring. . . By 1998, the earned income from Greenspring was significant. In 1994, for instance, it amounted to $5.2 million – or about 24 percent of MPR's budget – and represented a figure that was higher than the entire budgets of 99 percent of public radio stations. [Emphasis added by SaveWCAL]
In the study, then National Publc Radio President Douglas Bennet called Bill Kling "perhaps the ablest manager in the public radio system" but went on to say "[b]ut [Kling] has tended to mistakenly view [the NPR - APMG/MPR] relationship as a competitive zero-sum game in which one party's gain is another's loss."
It's interesting to note that the case study stops just short of MPR's acquisition of WCAL in 2004.
[http://www.ssireview.org/site/printer/the_price_of_commercial_success/]
