MEDIA WEEK

Pacifica Re-Activates
August 16, 2015 By Louetta Hillman, Staff Reporter The Pacifica Foundation is one of the oldest public radio organizations in the US. But two years ago, it was actually on the way to the grave. Beset by financial problems and political infighting, the network was literally staring bankruptcy and dissolution in the face. As the owner of five non-profit radio stations in five major cities (Berkeley, Los Angeles, New York, Washington, and Houston), Pacifica owned valuable airwave licenses. But its bylaw-mandated board, composed equally of members from each of the five stations, was not able to function harmoniously, and its business model was antiquated. The board went through 5 executive directors in ten years. In August 2013, Pacifica was forced to lay off all paid staff at its New York station, WBAI, in order to survive. While the organization had long resisted changes to its business model, by 2013 it was apparent to almost everyone that change could no longer wait. Pacifica’s board undertook a re-organization that had once seemed unthinkable. “To be honest,” says Summer Reese, Pacifica’s Executive Director, “we were terrified. We didn’t think we could get agreement from our board, didn’t think we could get the necessary regulatory approvals, and frankly didn’t know if it would even work.” Two years later, the verdict is in. “Not only is it working,” says Reese, “Pacifica is back and better than ever.” A Vital Voice Pacifica’s first radio station, KPFA in Berkeley, was founded in 1949 by Lewis Hill, and was the first listener supported radio station in the United States. Hill started the Pacifica Foundation to support KPFA’s operations. Pacifica and its stations built its appeal among left wing listeners, a listening audience among such communities as ex-hippies, political radicals, alternative music junkies, minority rights activists, and environmentalists. In time, Pacifica came to own five stations: KPFA, WBAI, KPFK in Los Angeles, WPFW in Washington DC, and KPFT in Houston. It also produced shows and distributed them through an affiliate network of almost 200 community radio stations. Pacifica’s best known show became Democracy Now, begun by journalist Amy Goodman at WBAI. But Goodman and WBAI went splits in a bitter divorce, and

not only was Democracy Now not obligated to pay any royalties to Pacifica in return for release of the show. While the model enabled Pacifica to survive over the years.” Tapped Out Like other public radio stations. by 2008 and the global financial crisis its revenue. With the advent of Internet radio and ongoing revolutions in media. without any interference by Pacifica. National grants from major foundations never materialized.” But. Sighs Reese. owing over $1 million in overdue payments. The final settlement required Goodman to raise funds for Pacifica’s stations and to brand the show as “from Pacifica. Democracy Now had full rights to market itself to anyone interested.Pacifica Re-Activates MEDIA WEEK Page 2 Goodman took full control of Democracy Now. by 2013 there was nothing Pacifica about Democracy Now except its origin. with a certain percentage shipped to the national headquarters in Berkeley.” says KPFT Houston General Manager Duane Bradley. was falling. But perhaps the biggest problem that Pacifica faced was the Byzantine structure that had been built with the 2003 bylaws. Democracy Now had built its own distribution through community radio and TV stations and the Internet. What many had hoped would be a permanent solution . the remaining listeners had to pony up increasing amounts to keep the stations on the air. “people didn’t want to spend $300 anymore on a mug or t-shirt. Any other good shows being born around here need to be found and nurtured. and its station listenership was atrophying. By 2013. “Our listeners were tapped out. and listeners exhibited clear evidence of pledge fatigue. Goodman and Democracy Now had become the flagship broadcast for left leaning community radio and TV stations (DN had later added a video version) across the country. Incredibly.” Many of the documentaries and music CD’s that the stations hawked as “thank you premiums” were available at a fraction of the cost over the Internet.’ But instead it was just business as usual. in an amazing blunder. While Democracy Now was contractually obligated to announce at the top of each show “From Pacifica. “When Democracy Now flew the coop. By 2013. Pacifica’s stations raise most of their revenues from direct. Further. everyone at Pacifica should have sat up and said ‘We can’t let that happen again. over the air pitches to listeners. but Pacifica was itself obligated to pay for ongoing broadcast rights to Democracy Now. As Pacifica and its radio stations’ fortunes continued to diminish. this is Democracy Now”. like other nonprofits. Pacifica found itself. like all media forms. not an archaic foundation that operated a few radio stations through a dysfunctional structure. it was faced with a vicious negative cycle: as listeners peeled away. facing a new reality in competition for listeners. Most concerning of all. DN had also become Pacifica’s largest creditor. it lived hand to mouth and never built any endowment. as charitable donors were only interested in a well functioning organization that produced content. On air fund drives went from 30 days a year to 60 days a year.

“they thought we actually wanted to shut down the network and destroy it. we were trying to save it and help it. “What’s the old saying? If you love something. in which Pacifica would spin off its five stations and re-focus on content syndication. Pacifica’s board began to open up to alternative ideas that were being offered from within. Efforts were undertaken to meet with local community groups and work on development of shows potentially of interest to their constituents.” says Reese. “No one wanted to even listen at first.” Now many were coming to the conclusion that such an idea was unavoidable. but we had refused to consider such a thing with our own network and stations.Pacifica Re-Activates MEDIA WEEK Page 3 for Pacifica. had instead turned out to be an albatross. Now they began to consider it in earnest. We hear that kind of refrain all the time on our shows. . Outside business “underwriting” was standard at NPR affiliates.” says Nancy Henschel. They were aided by the fact that there was simply no other cohesive plan being presented. And others began to think deeply about the future of Pacifica’s structure. in the absence of any other good ideas. and listening audiences resulted in differences that could only be managed at the local level. where we preach the need for peace. Some ideas were focused on creative ways to generate revenues at the local stations. had a fiduciary obligation to consider a plan of re-organization. No less than five Executive Directors turned over in the job. the same model that had been proven to work with NPR and PRI. Many accused of us treason. Set It Free Several people within the Pacifica ranks had become convinced that a voluntary reorganization had become mandatory. set it free. Says Teresa Allen. and the Pacifica national and local boards regularly found themselves riven with conflict.” “We had to convince everyone that we weren’t trying to hurt Pacifica. histories. but Pacifica stations had rejected it.” says former KPFT and PNB board member Richard Uzzell. another former Pacifica board member. It became apparent that the board. By 2013. a former Pacifica board member. the logic of such a plan had begun to register with many in the organization. Faced with a true existential crisis. that our geography. “It became clear to a number of us that while our five stations had much in common in terms of our political beliefs and orientation.

Still.” says Reese. Content was responsible for that success. if they even knew what it was. musical appearances and other radio bits with the likes of Malcolm X. could become a key centerpiece in a new Pacifica catalog. With hugely popular shows like All Things Considered. The financial crisis. especially among a younger generation. that would regularly and strongly appeal to a network of affiliates and which they would pay for? Part of Pacifica’s problem was an image more suited to Haight Ashbury in 1967 than American metro areas in 2013. while many local stations were NPR affiliates. Public Radio International. our listeners didn’t care at all about Pacifica. growing income inequality.” says Reese.” . as it is called. Pacifica’s board also felt that. the other networks were able to attract network affiliates all over the country. Martin Luther King. Pacifica’s board judged that the changing demographics of the United States and a greater public openness to new ideas.Pacifica Re-Activates MEDIA WEEK Page 4 Breathing New Life The model to consider had long existed. Pacifica also possessed a rare asset: over the decades it had amassed a treasure trove of speeches. At my station. would work in its favor toward finding audiences. and American Public Radio are all content networks that had proven the success of the network/affiliate model over decades. and A Prairie Home Companion. environmental problems. and social issues further served to enhance the value of Pacifica’s potential content. but did Pacifica have content. Pacifica had long produced content that wound up on its affiliate stations. National Public Radio. these other networks had grown far larger on the strength of their syndication and network models. This American Life. or the ability to source and develop content. “Our brand had once stood for something clear in listeners minds. and many others.” says Bradley. Houston’s GM. shall we say…than what was being offered by the competition. “but after all these years of neglect the Pacifica label was on its way out. They only cared about KPFT. many other local community stations were less affiliated with NPR’s content and were hungry for Pacifica to step up into a content leadership position. interviews. “We thought there was a market opening for public radio listeners who wanted their information more…opinionated. The Pacifica Archive. But Pacifica would have to decide that it was not exceptional from that model. So we all had only a limited time to try to breathe life back into the Pacifica brand before it died completely. “It’s not like we had to set out to re-invent the wheel. Even though Pacifica was founded earlier.

recused themselves permanently from their local boards during the negotiation period. “I don’t think any of my colleagues were thrilled at having to cast a vote. These members. keeping sections that still pertained and producing a proposed new version to complement a new business model. The Pacifica national board decided to establish a task force from its ranks of its most qualified members to represent Pacifica’s interests. Negotiating With Itself By late 2013. The problem was that the internecine relationships between the stations and Pacifica’s national board (which after all was composed of the stations) made it important to eliminate conflicts of interest.Pacifica Re-Activates MEDIA WEEK Page 5 In the fall of 2013. the local station boards had gathered to hear the news together. one of the only times that Pacifica’s fractious board had ever produced a unanimous vote. waded through the finances and budgets.” says board member Jessica Apolinara. studied the NPR model. The plan looked good on paper. and who for the radio stations. the old Pacifica would be gone. We knew that things would never be the same.” At the five stations. Many members were undecided up until the last minute. At 5 pm – Pacific time . It had gone over the old beloved Pacifica Mission Statement with a fine tooth comb. and gotten a handle on governance and legal issues. the task force had met with management at Pacifica and at all five stations. The local boards then appointed two members each to a station task force to negotiate on behalf of the stations. who were elected to the national board from the local boards. Pacifica’s board appointed a task force composed of board members and other Pacifica players with business skills to proceed full speed ahead on developing a plan for a reorganization based on spinning off the stations and focusing Pacifica full time on content development and syndicated distribution. In December. But we also knew the alternatives were not appealing in the least. The Vote On February 1. and that if the vote passed. but who knew how it would turn out in reality. One of the task force’s most difficult tasks was figuring out who was going to negotiate on behalf of Pacifica. as WBAI and WPFW’s financial problems reached a full boil. 2014 the Pacifica Board met to vote on the re-organization plan. the task force published its report to the Pacifica Board.the board announced its decision: the vote had passed – unanimously. which decided to take up a vote on it after a two-month period to allow members to study the report and ask questions. . “We knew we were basically jumping off the cliff.

which after several meetings. “At heart.” Independent Stations Once the re-organization was complete. the national board held veto power over any objectionable clauses. the biggest changes occurred at the boards.Pacifica Re-Activates MEDIA WEEK Page 6 Reorganization The first step in the reorganization was the spin-off of the radio stations. And by the time of the re-organization. “we always hoped a viable entity would emerge. Now the local boards gained full control over the operation of their stations. The task force and Pacifica’s lawyers had met with the FCC to find out if it would agree to permit Pacifica to lease separate licenses to each of the five stations. At the stations. to change their bylaws. the FCC agreed to allow. While the local boards had large degrees of autonomy in the new entities and bylaws. the leases provide for a base level of financial support for Pacifica: in return for the lease. but also for the good of national listeners. ironically. “I had come to believe that there was no way the money would ever be re-paid. Goodman was impressed with the steps being taken by Pacifica. and really Pacifica itself. Goodman had become doubtful that the debt would ever be re-paid. By leasing the broadcast licenses. Each local station board took responsibility for establishing a new holding entity and a set of bylaws. She agreed to take a haircut on the debt in order to give the organization and its stations a new lease on life. her old home. among other things. It wasn’t easy financially. Pacifica receives a monthly rent. managers would attend board meetings and. Pacifica maintains the master license with the FCC. “Before then. it was time for the new business model to be implemented. Critically. however they got there. has always been about giving people in unfortunate positions. and is able to ensure that its traditional focus and mission carries through to the newly independent stations. our show. but it was the right thing to do. to Democracy Now. while they worked with the local boards. the network had just become too dysfunctional.” says Apolinara. or to govern their own budgets. The final issue in the restructuring was a $2 million debt owed. not just so we would get paid. So it made all the sense in the world that Democracy Now would play a constructive role in Pacifica’s reorganization. Any restructuring of Pacifica would have to be approved by Democracy Now’s founder and leader Amy Goodman. The local boards had previously not possessed the power to hire or fire station management. “The changes were felt immediately. they didn’t feel . a fresh chance.” says Goodman.” But in the end.

” Managers and local boards started to work much more collaboratively in the operation of their station. “I think every single affiliate picked up at least one show. And at Pacifica itself. “Same thing there”. And the local communities became much more aware of the importance of electing qualified individuals to the local boards. just lying in plain view waiting to reach the rest of the country. who had been the Executive Director under old Pacifica. Reese. “It was just nuts. the changes were much more dramatic.Pacifica Re-Activates MEDIA WEEK Page 7 completely accountable to them. says Ruedenberg. That changed literally overnight. No longer was Pacifica involved in the operation of the stations. The first place they looked was in the same five stations that had been spun out. Reese set out to hire three regional reps who hit the road to sign up affiliates. to make it easy for stations to get there from all over the country. all we were was interested. Now that they had such authority. Her first task was to set up and staff the new Pacifica departments. You name it: local politics. Next a programming group was established. but it was atrophied. but “we were completely stunned by the response. the programming group started to hit paydirt.” says Ursula Ruedenberg.” . and well-known social justice non-profits. staffed with three talent scouts whose job is to canvas all the affiliate stations looking for diamonds in the rough ready to be polished. and some of the most important music shows in the world – all of it within our affiliate network. 150 showed up to survey the wares. so they could behave irresponsibly and get away with it. And who could blame them? The local boards themselves had little direct responsibility. everyone understood that their productive operation was vital. and chose to do so with a big splash at its first annual convention and trade show. And when we got interested. Reese and her team expected a small turnout for the first convention. held in Denver. The affiliates department already existed to develop new affiliate relationships. Because the local boards had mostly served in advisory roles. “the average was three a station. absolutely floored. they had rarely operated as authentic decision making entities with binding authority. A New Day A new Pacifica board was selected from a variety of sources including the five stations.” After the five stations were covered. Almost immediately.” Of the 180 affiliates. Pacifica was ready to introduce its first catalog. national politics.” says Reese. “these shows had been there all along. it was amazing what we discovered. other community radio stations. Suddenly.” Six months after the re-organization. “diamonds all over the place. was retained in the new Pacifica. but the previous Pacifica couldn’t be bothered to take an interest. the talent scouts headed to the other affiliates. freeing it to focus on its new mission of creating national content. lifestyle.

the station that created the show got a third. they wouldn’t even talk to us. and are eventually paid for from within the same network. and it should be no surprise that we eventually found ourselves in the poor house. and it creates an incentive for Pacifica to go out and find the best shows. But Pacifica was not in any position to recognize it. Whenever Pacifica picked up a show from an affiliate. they just rolled their eyes when we called on them. Our new structure completely solves that issue. It took the re-organization to free Pacifica to finally see what was right under its nose. For the longest time we took vows of poverty. “Before our reorganization. it creates an incentive for show producers to up their game. and the show’s producers got a third. Reese knew that one day that support would end. We were always concerned about being tainted by outside financial interests. there had to be a financial incentive. Foundations that are well disposed to our many concerns – economic justice.” Its shows are sourced within its affiliates network. are found and picked up by Pacifica.” she explains. and that gets their attention. we tell them we have the ability to distribute content to over 200 local affiliates and growing. “It’s a virtuous cycle” says Reese. “our shows begin in our affiliates. Our reputation was so poor. as many believed that show producers and hosts should work only for free. who served as KPFT’s board chair at the time. “it creates an incentive for our affiliates to create and produce good shows so that Pacifica can pick them up. There were great shows being done by great hosts.” Now. In an age of instant podcasts and Youtubes. KPFT’s community affiliates and their listeners were used to a more homegrown sound. and Pacifica found that this worked to help get shows to air faster. These payments were controversial. and she had to put in place other financial supports. .” Pacifica even discovered it had a major advantage over NPR and its other competitors.Pacifica Re-Activates MEDIA WEEK Page 8 Comments Bob Mark. who pay a fee to receive a show. “Creating a way for a good show to get paid works in everyone’s interest. Pacifica benefits from what it sees as “clean money. Now. While the support from its former stations was critical. and then returned through our affliates. much less do anything about it. keep production costs much lower. “The content was there in the affiliate network all the time. Financial Incentives None of it would have mattered if Pacifica couldn’t find a way to sustain itself financially. Pacifica seems to have made its weaknesses into strengths. She first set out to make Pacifica’s syndication effort pay off by setting up a rational payment structure.” A few months ago Reese began meeting with large national foundations. it would make an agreement to split the eventual revenues earned on it three ways: Pacifica got a third. but Reese knew that to increase the quality of programming.

as people hustle and bustle around the new larger Pacifica offices and studios.” she says leaning forward and looking around to see if anyone else is listening. “Our past experiences probably make us all feel like we are never really out of the woods. Colorado Springs. affiliate sales.“ she says. On a beautiful early fall day in Berkeley. and Android products. it set its rates at rock bottom to attract interest. Reese can finally sit back and reflect on Pacifica’s trials by fire. social issues. has a new station. affiliates appreciate the value that the Pacifica shows offer to their listeners and are willing to pay to get them. but frankly. Pacifica is adding employees to all of its departments – content sourcing. with the phone ringing off the hook from affiliates and those wanting to become affiliates seeking Pacifica’s suddenly in demand content. not exactly a hotbed of liberalism. Pacifica’s new media offerings are doing well too. they are well designed and highly functional. which is in turn driving revenues at the stations. The Way Up Pacifica is in growth mode. they are attracting users from all over the world who do not live in cities with affiliates. Most importantly.” Reese has closed several major national grants and expect more to close. .” No sooner does she finish than one of her colleagues rushes in. Its technology group has steadily produced and upgraded its app for iPhones. and more – now want to hear more about how their funds can support our mission. and while they may not have quite the design savvy of NPR’s world class apps. and charitable grants. When it began its distribution program. “You’re not going to believe this. Pacifica even found that it could raise rates a little for its shows. iPads.Pacifica Re-Activates MEDIA WEEK Page 9 environmental issues. “And they are asking for our catalog. production.” Reese just smiles. “I think we just might be. Listenership at its affiliates is up 50% with the new Pacifica generated content. Now that the model has proven itself.