Dear Colleagues and Friends:
In the past few days there has been a lot of impassioned debate about the proposed sale of KPLU to KUOW. There has also been a lot of misinformation and misinterpreted facts. Following is some context:
This is a strategic decision based on careful analysis of the future of radio and a concern about how best to sustain public media in the region for as long as possible. The reality is that there is a finite audience that is willing to fund public radio in the greater Puget Sound region, and right now each station operating independently is not fully engaging, and rather competing for, that audience. We think it only makes sense for the two stations to pursue a shared vision for developing and funding content.
KPLU’s jazz listeners will have full-time jazz at 88.5, and news listeners will still have the NPR programming they love, better signal coverage on KUOW (thanks to the greater reach of KPLU’s network) and more resources for local news programming at 94.9. KPLU and KUOW currently have EIGHT hours a day of duplicated NPR content, and KPLU programs only ONE hour of original news programming per day. Since the stations have considerable overlap in listeners and donor base, donors are supporting two stations, which are spending millions on duplicated programming. Freeing that up allows the news teams to pursue more original, local programming. So not only will listeners have the signal strength they enjoy today, they’ll also have more news resources put into the issues that matter to our region.
As with all business transactions and personnel decisions, confidentiality is standard and required. The proposed sale was discussed at length, and voted on, by PLU’s Board of Regents, the UW Board of Regents, and several knowledgeable alumni and donors examined it over a nine-month period. It also requires review by the Federal Communications Commission, which includes a public comment period.
PLU is in fine financial shape. Our 2015-16 total enrollment is above expectations, our graduate student enrollment is at a historic high, we ended the past fiscal year with a substantial surplus, and our endowment is at an all-time high of more than $85 million. Meanwhile, for Fall 2016 admission, undergraduate inquiries, applications, admits—and declines—are at five-year highs, continuing positive trends from last year.
In reviewing information sourced from Standard & Poor’s and Moody’s, PLU’s debt per student is well below that of our peer institutions, including those with stronger debt ratings. Our debt service coverage of 3.96 times total debt last year is far above our debt covenant requirement of 1.1 times (a measure of our ability to cover our annual debt service cost).
It is quite common for institutions to have debt as part of their capital structure, especially given current interest rates, and in fact, very few organizations of any kind operate debt free.
PLU’s debt per full-time equivalent student is $16,998 vs. a median of $22,132 among BBB-rated, investment-grade small private institutions. Among Washington state peers, debt levels run from $18,921 – $39,242 per student. Among the eight largest independent colleges in the state of Washington, PLU has the second lowest total debt outstanding, and the lowest debt per student.
I know many of you have come to depend on the voices and quality programming at KPLU, and I encourage you to join me in sharing your thoughts on what you appreciate on KPLU, as KUOW contemplates the task of staffing for an all-jazz station and increasing its news resources.
Thomas W. Krise, Ph.D.
President and Professor of English