CapRadio’s high-volume crash haunts Sac State
By R.E. Graswich
Capital Public Radio was a beacon of objective news coverage and thoughtful analysis sailing blissfully amid the sea of blather, bile and self-promotion on commercial radio.
Beyond the microphone, CapRadio was Sacramento State University’s version of Animal House.
Unpaid loans for millions of dollars. Unauthorized contracts and purchases. Gifts of $56,794 and $10,000 not properly documented. All problems that point to negligent leadership at KXJZ and KXPR, the main call letters that comprise CapRadio.
Nobody knew the stations were run like a freshman dorm. Now we know.
Vlad Marinescu, vice chancellor and chief auditor at Cal State University headquarters in Long Beach, set a fiscal investigation team loose on CapRadio this year. The auditors discovered 27 pages of disaster related to disengaged leadership.
The audit revealed endless examples of incompetent management. The investigators dealt with numbers, contracts and receipts. Personalities were avoided. The result is a meal with only appetizers served.
Thanks to the audit, we know more or less what happened at CapRadio. But we don’t know why the local NPR, classical
music and jazz outlets became such a mess.
The audit bulges with incriminating evidence. Titles are noted—executive vice president and GM—but no names. One GM quit when auditors showed up. Chains of guilt are left unlocked.
After the audit was released, new Sac State President Luke Wood took operational control. He forced CapRadio’s board of directors to resign, an excellent if overdue response.
But questions remain. The board included several Sac State administrators and professors, local attorneys, business leaders and developers. Did their AirPods play just static the last few years?
Answers are important, given the prestige and authority CapRadio enjoys in Northern California.
Local residents pay the stations millions of dollars in gifts and donations throughout the year and at pledge drives.
While Sac State holds the broadcast licenses and lends its name every hour when the stations identify themselves, the university doesn’t program content.
CapRadio operated as a Sac State auxiliary, allegedly following protocols but more or less running itself. The board of directors oversaw the stations, but clearly didn’t spend much time examining the books or raising money. In an act of kindness, the audit offered no discussion about the board’s accountability.
But the audit exposed a huge leadership gap between Sac State and its radio stations. Into that gap tumbled CapRadio’s ability to make responsible decisions.
Trouble started in 2019 when CapRadio decided to leave its campus studios and move to a building at Seventh and I streets. CapRadio also leased a performance space at Eighth and J.
University officials endorsed the move. Sac State secured an $8 million commercial loan to outfit the new headquarters. CapRadio promised to repay the loan, then devoured the cash in two gulps. After three payments, the loan fell delinquent.
The audit is hazy about what happened next, but in June the university gave a Downtown contractor $1,153,956 to cover CapRadio’s unpaid construction bills. Sac State also swallowed the station’s rent for the campus studios, plus debt service on the $8 million loan.
The audit says, “It is unclear whether (CapRadio) will be able to make payment on its obligations to the campus, or even continue to make payments on the new downtown locations and associated leased equipment and furniture.” Sac State confirms the stations are nearly insolvent.
Other problems involved games people play with donations. CapRadio deposited gifts into unauthorized accounts, violating university rules. Then there’s the piano. CapRadio decided it needed a concert-ready grand piano. It found one for $175,000.
The owner agreed to sell the piano for $90,000 and take an $85,000 tax write off. Trouble was, the IRS didn’t accept the $175,000 appraisal because it was done by the seller’s business partner, not a qualified appraiser.
No problem, said CapRadio, which booked the theoretical $85,000 as a gift to bolster its fund-raising profile.
Amid the wreckage, President Wood hopes to keep CapRadio on the air. Salvation will cost the university millions of dollars.
Wood can start by rewriting CapRadio’s “core values.” Focus on the one that says, “We never take ourselves too seriously.”
R.E. Graswich can be reached at email@example.com. Follow us on Facebook, Twitter and Instagram: @insidesacramento.