The Expensive Expansion of KEXP

Last April, Tom Mara, executive director of the wildly successful public radio station KEXP-FM (90.3), received a letter from four department directors who constituted most of his senior staff. The directors—Kevin Cole, Gary Rubin, Courtney Miller, and Monica Ramsey—had just learned that Mara had accepted a $20,000 pay raise, retroactive to the preceding year. "It is hard to put into words the anger, hurt, betrayal, and outrage that we felt upon hearing that you awarded yourself a significant raise at a time when KEXP is facing it's [sic] greatest financial crisis to date," they wrote in the letter dated April 26.

A financial crisis at KEXP? How can that be? The University of Washington–owned music station seems to be soaring. Only a handful of years ago, the station then called KCMU-FM was a tiny operation run on a shoestring budget out of the basement of Kane Hall on campus. In 2001, billionaire Microsoft co-founder Paul Allen adopted the station as a pet project and, through his Experience Music Project, infused it with money and resources. The renamed station has grown exponentially into a $3 million enterprise that attracts fervent listeners all over the world and serves as a tastemaker for an eclectic mix of new, alternative, and international music. The total weekly audience has almost doubled since 2000, to roughly 100,000 listeners. Each of the past few years, the station has raised vastly more money than the previous, surpassing ambitious goals. Revenue from membership has more than doubled in two years, to $1.5 million. KEXP's star drive-time DJ, John Richards, better known as John in the Morning, made $120,000 last year.

Beneath the surface, though, KEXP has been under financial strain, according to a series of documents obtained by Seattle Weekly and to sources close to and inside the station. The reason is an ill-fated venture to expand into the Tacoma-Olympia area. In the spring of 2004, the station entered into an agreement that allowed it to operate KXOT-FM (91.7) in Tacoma, formerly owned by Bates Technical College. Costly payments ate into the station's resources to such an extent that by last summer, it was looking at a potential $200,000 cash shortfall in September and October and the possibility that it would not be able to make payroll, according to an internal report written by Mara.

UW loaned KEXP $250,000—technically loaning money to itself, since the station is owned by the university—which seems to have stabilized things. Allen apparently wasn't an option. According to a schedule aimed at making KEXP self-sufficient, the billionaire's financial contributions have decreased over the past three years and are supposed to end this year. Allen's EMP gave $175,000 to the station this year, down from $917,000 in 2003.

Last month, KEXP announced it would cease operating the Tacoma station as of Dec. 31. The decision seems to have put an end to the financial crisis. "KEXP is not imploding financially," Mara writes in an e-mail. Listeners continue to pour in money. Last month, the station held a "hit and quit" fund-raiser with a goal of $375,000. It raised the money in only four days and four hours.

Still, KEXP projects a shortfall of $72,000 for 2005, according to figures supplied by Mara, and has cut the budget in ways that have been painful for staff. Most notably, as it planned to pull the plug on KXOT, it laid off two of five department directors: Finance Director Darel Grothaus and Director of Business Sales Gary Rubin. Among a full-time staff of only 20 people, the layoffs deepened an already significant morale problem.

As the April letter to Mara indicates, emotions at the station have been running strong. The KXOT affair has put the staff in turmoil, not just because of the disappointment that it didn't work out, but because a significant number of employees felt that it never should have happened in the first place. "We couldn't afford it, period," says one inside source, who, like several interviewed for this article, spoke on condition of anonymity. The April letter and other documents reveal that all of the department directors advised Mara against going ahead with the KXOT arrangement. The fact that Mara did so anyway, under the oversight of the station's governing board, struck concerned staffers as an ethical issue: This was money down the drain that listeners, many of them young and without many resources themselves, had donated to the station because of their love for it.

At issue is the passion and values people bring to working at a public radio station. For some, the station isn't living up to their ideals, both in terms of financial stewardship and of the transparency they expect from a public station. At the same time, they feel an ardor for the station rarely seen in the workplace, which makes their disillusionment more deeply felt. "When people give their money to you, there's a certain amount of trust," says a staffer. "And the people at the top don't seem to get it."