A nearly two-year fight between Sacramento’s public media stations over a broadcasting tower has ended.
CapRadio, PBS affiliate KVIE and the Capital Public Radio Endowment, a separate nonprofit founded decades ago to support the radio station, released a joint statement today announcing a “comprehensive settlement agreement” had been reached following successful mediation.
“With this resolution, the parties are pleased to move forward focused on their shared commitment to public broadcasting, and their dedication to delivering essential news, information and cultural services,” the statement read.
CapRadio also thanked the endowment for “its years of support for public radio” and for help in facilitating the settlement between the NPR and PBS member stations.
Details around the settlement terms were not disclosed. All parties said they will offer no further comment on the deal. CapRadio reporters have filed a request under the California Public Records Act seeking more information about the settlement.
The tower
At the heart of the dispute has been CapRadio’s broadcasting tower along West Delano St. in Elverta and the land beneath it. CapRadio collected approximately $126,000 in rent per year from tenants on the structure, and its use of the tower at no cost was valued at $65,000 annually.
Disagreements around the tower and property emerged in the months following the start of CapRadio’s financial crisis, which saw layoffs and program cancellations at the public radio station and a devastating 2023 audit released by the California State University Chancellor’s office.
On March 19, 2024, the endowment’s board released a public letter addressed to Sacramento State President Luke Wood and senior advisor Mark Wheeler calling for a merger between CapRadio and KVIE to maintain stability amid the crisis. The university holds the licenses for CapRadio’s news and music stations.
The letter also said the endowment discovered “significant deferred maintenance” at the tower estimated to cost around $400,000, and that the university refused to communicate, claims both CapRadio and Sac State officials have denied.
CapRadio's broadcasting tower in Elverta.David Born/CapRadio
Just over a week later, on March 29, 2024, the Capital Public Radio Endowment donated the Elverta tower to KVIE, with the gift deed signed by the nonprofit’s Board President Dan Brunner.
The endowment’s 2024 Form 990 lists $67,589 in “non-cash assistance” to KVIE, with the description reading “tower and land.” The organization also lists $413,000 in cash grants provided to CapRadio that year.
KVIE President and General Manager David Lowe said in an April 2024 statement his organization accepted the donation only after confirming the endowment board would not transfer it to CapRadio and that it “could be sold into the commercial marketplace.”
“KVIE accepted the transfer to ensure that the property remained an asset for public media, an action which the management of both Sac State and CapRadio have since agreed was important,” Lowe wrote.
CapRadio has consistently maintained it owns the tower and the land, pointing to a 1990 lease agreement. The document is between KXPR/KXJZ Inc., a former name for CapRadio, and another nonprofit entity called Tower 91, which was founded in the 1980s to hold the title of the Elverta property.
Station management released a statement days after the transfer, saying the endowment had “overstepped in concerning ways.” CapRadio officials noted the attempt to “publicly force an ill-planned merger” and the donation of assets “that directly contradicts the Endowment’s stated mission to financially support CapRadio.”
After months of disagreement KVIE filed a civil lawsuit on Oct. 21, 2024 against CapRadio in Sacramento County Superior Court, seeking determination to the legal rights and duties around the Elverta tower. The PBS station’s complaint pointed to an ownership transfer from Tower 91 to the endowment.
It also references overdue maintenance cited by the endowment, though the lawsuit cites estimated costs at only around $35,000 instead of $400,000.
CapRadio countersued, arguing it was the sole fee owner of the tower and property and has an “irrevocable license” to access the structure.
CapRadio management declined to comment when asked which organization now owns the broadcasting tower.
The endowment
The Capital Public Radio Endowment was incorporated in 1986 as the KXPR FM91 Endowment, to provide financial support to the public radio station of the same name licensed to Sac State.
For decades the nonprofit operated as a self-sustaining funding source through donations, gifts and other methods of support, with CapRadio as the sole beneficiary. In April 2024, station officials said CapRadio provided around $130,000 annually in staff administration and fundraising support to the endowment, along with around $50,000 per year worth of on-air promotion.
“Over 20 years, CapRadio has raised more than $1.3 million that has gone to the Endowment and was meant to support CapRadio,” management wrote.
However, a 2011 audit by the CSU system raised concerns about the “interrelationship” between CapRadio, the Capital Public Radio Endowment and Tower 91. Auditors wrote this “may provide unacceptable risk to the campus and the CSU.”
At that time, the endowment was identified as having the sole purpose “to provide funding to CPR. CPR is the only beneficiary of the endowment according to the CPRE bylaws.” Tower 91 was identified as holding the tower property’s title.
CSU auditors recommended Sac State reexamine the relationship between CapRadio and the nonprofits. In 2013, Tower 91 was merged into the endowment and all its assets were transferred to the surviving organization.
That same year, the endowment also changed its bylaws to no longer solely provide funding to CapRadio, but also to support other similar entities. The Sacramento Bee reports the change was made by CapRadio’s then-Chief Financial Officer Jun Reina, who is facing felony charges of embezzlement, grand theft and forgery related to his tenure at the station as both CFO and General Manager.
A decade later, the 2023 CSU audit again flagged the relationship between the two organizations. Auditors wrote that CapRadio “directed donations to an unauthorized endowment fund through a separate legal entity, CPR Endowment Inc. (CPRE), rather than use the University Foundation at Sacramento State,” referring to the campus auxiliary meant for investing and distributing funds.
Auditors said they could not “determine the necessity for CPR to utilize an endowment separate from UFSS,” especially given the financial mismanagement and lack of oversight. The report recommended integrating the Capital Public Radio Endowment with the campus endowment, which university officials agreed to do.
The endowment was said to be holding approximately $2 million in assets as of 2023, which CapRadio management described as “restricted use funds.”
The fate of the endowment and its funds following the settlement announcement is not immediately clear.
CapRadio’s board of directors voted on March 28, 2024, to provide the nonprofit with a 90-day termination notice of its operating agreement to comply with CSU recommendations. The notice had an effective date of July 17, 2024.
According to the California Department of Justice’s charity registry, the Capital Public Radio Endowment’s status is “delinquent” after its registration expired on Nov. 15, 2023.
Prior merger talks
The tower donation was part of a larger series of maneuvers to possibly see Sacramento’s NPR and PBS stations merge.
The Sacramento Bee reports in the months following the initial 2023 CSU audit, multiple discrete conversations between members of the Capital Public Radio Endowment, former CapRadio board members and KVIE strategized about getting the university to turn over control of the radio station.
Strategies included focusing on CapRadio’s financial crisis and potential benefits to Sac State. Later conversations also floated the idea of legal action or drawing the attention of NPR and the Corporation for Public Broadcasting to alleged “yellow journalism.”
In April 2024 former CapRadio Interim General Manager Tom Karlo wrote in an op-ed published in the Bee he had explored a potential partnership with KVIE. Karlo said this started shortly after he took over the reins at the public radio station in 2023.
“I wasn’t sure if CapRadio would survive at the time. I evaluated all opportunities to save public radio in the region,” Karlo wrote, adding that he began discussions with Lowe. The endowment board’s 2024 letter calling for a merger also mentioned two meetings with Karlo and current CapRadio Interim General Manager Frank Maranzino.
But Karlo added he broke off talks in February after CapRadio achieved “remarkable transformation in financial stability and operational efficiency,” adding the station no longer faced insolvency.
The former interim GM also said KVIE was not attracting younger audiences, and that “merging with PBS KVIE is a bad business decision for CapRadio.”
Seventy-five community leaders signed a letter in April 2024 urging CapRadio and KVIE to merge. Among them were multiple former board members who resigned the previous year in the wake of the 2023 audit.
CapRadio officials and a former endowment board president released their own op-ed days later calling this push “ill-conceived.”
Sac State and CapRadio ultimately refused to budge.
Disclosure: This story was reported and written by Senior Producer Sarit Laschinsky. It was edited by Editor Jen Picard.
Following NPR’s protocol for reporting on itself, no CapRadio corporate official or news executive reviewed this story before it was posted or broadcast.
You can read our independent ongoing coverage of financial issues at Capital Public Radio here.
Editor’s note: CapRadio is licensed to Sacramento State, which is also an underwriter.
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