CapRadio is planning to end its operating agreements with public radio stations in Chico and Humboldt County by the end of this year, though questions remain about how the change will affect staffing at the stations and the journalism those communities rely on.
CapRadio has been managing daily operations for NSPR (KCHO 91.7 Chico/KFPR 88.9 Redding) and KHSU (90.5 Arcata) in Humboldt County since 2020 and 2021, respectively. Management of the stations would return to their individual license holders, Chico State Enterprises and Cal Poly Humboldt. CapRadio is a National Public Radio affiliate licensed to Sacramento State. The agreements were signed by CapRadio’s former general manager Jun Reina, who has been sued by the station for embezzlement and has denied any wrongdoing.
The news about the restructuring comes as the CapRadio Board of Directors prepares to vote on the station’s budget for fiscal year 2025-26.
The announcement was made to staff June 18 by CapRadio’s Interim General Manager and President Frankie Maranzino after the station’s monthly board meeting scheduled that day was postponed. The station’s budget was initially expected to be approved by the Board of Directors at the May meeting, which was also pushed back.
That meeting is now scheduled for July 2, at 5:30 p.m. It is open to the public.
“All parties are committed to building a strong, sustainable future for local public media so that the stations remain trusted and reliable news sources for their Northern California communities,” Maranzino wrote in the staff announcement. “We will ensure broadcasting continuity throughout the process. We look forward to sharing more details after the budget vote on July 2 and continuing discussions among the three university partners and license holders, Sacramento State, Chico State and Cal Poly Humboldt.”
CapRadio reporters have not seen a proposed budget for the station and recent finance committee meetings have been conducted in closed session.
Chris Bruno, CapRadio’s chief marketing and revenue officer, spoke with station reporters during a briefing about the plan. He said the move was a “business decision” being made to shore up finances at the Sacramento station.
“Our goal at the end of the day is to think about how we can be good partners and work collaboratively to transition operations back to the universities,” Bruno told CapRadio reporters in a briefing last month. “Our goal is to think about the future and the opportunity for CapRadio to operate sustainably and position ourselves for growth."
He said the restructuring plan has the support of the leadership of the three universities involved — Sac State President Luke Wood, Chico State President Steve Perez and Cal Poly Humboldt Interim President Michael Spagna.
“Our goal right now is to work very closely with the universities to work on transferring NPR programming and licensing arrangements, working with them to redeploy their membership program for NSPR, provide technical guidance and engineering support to ensure broadcasting continuity," Bruno said. “And also given that CapRadio has already invested quite a bit into broadcasting infrastructure for those stations, we're currently working on potential partnership opportunities between the two stations that could help streamline their operations and provide additional cost savings.”
CapRadio reached out to Chico State and Cal Poly Humboldt last week to confirm whether both universities were involved in conversations to return control of both north state stations to their license holders.
Representatives from both universities responded with the following joint statement on Wednesday, the same day CapRadio management informed staff of the plan:
As CapRadio shared with employees today, Chico State and Cal Poly Humboldt are in discussion with the organization to transfer the current operating arrangements of NSPR and KHSU back to our respective campuses. We are all committed to building a strong, sustainable future for local public media so that the stations remain trusted and reliable news sources for our Northern California and North Coast communities. We will ensure broadcasting continuity throughout the process. We look forward to sharing more details after the budget vote on July 2 and continuing discussions among the three university partners and license holders, Sacramento State, Chico State, and Cal Poly Humboldt.
Carrie Biggs-Adams is the union representative for CapRadio, NSPR and KHSU staffers. She said the union had not been officially notified of the proposed transition and that they are taking a wait and see approach.
“Something like this has serious ramifications,” she said. “The public owns those airwaves. You can’t just throw them around because you don’t like it anymore.”
Biggs-Adams said that the mechanics of the move might be allowed under the Public Service Operating Agreements (PSOAs) that were signed originally but that the Federal Communications Commission (FCC) would probably still want to weigh in.
“You can’t just put something together and then pull it apart. There are still rules. You sucked resources out of it, those resources belong in the Chico area. I don’t know if you can have an amicable divorce and take all the stuff.”
Susan Catron, vice chair of the CapRadio Board of Directors, said in a statement the board continues to prioritize sustainability.
“We care deeply about preserving the future of local public media, and we are committed to ensuring that CapRadio, NSPR and KHSU can serve their communities from strong, sustainable positions,” the statement reads.
Board chair Mark Wheeler, who also serves as an advisor to Sacramento State President Luke Wood, declined to comment.
Bruno said CapRadio did not reach out to employees at NSPR or KHSU prior to announcing the transition plan.
‘The current arrangement does not work'
Bruno said CapRadio loses money by operating the Chico and Humboldt stations. He cited an estimated combined loss of $280,000 for NSPR and KHSU during the first two months of the fiscal year. Bruno added that continuing to operate the smaller stations could prevent CapRadio from achieving greater financial stability and growth.
“The reality of the situation,” Bruno said, “is that the current arrangement does not work.”
“Based on our community-supported business model,” he added, “we would not be in a position where we would have enough support to sustain the current model as it exists.”
The move also comes as CapRadio has advertised multiple openings for reporter, producer and sponsorship jobs, some of which are meant to fill vacant positions.
Why now? Current financial picture unclear
As an auxiliary of Sac State, CapRadio is required to present an annual budget to its Board of Directors to be approved. A presentation and vote was planned for the May meeting, which was cancelled at the last minute.
At the time, Bruno said CapRadio was operating at a financial net gain, which he attributed to nearly $11 million in funding from members and local businesses, while NSPR and KHSU were operating at a net loss.
Bruno also said prior CapRadio management had arranged for a temporary revenue boost totaling nearly $1 million per year, which included Corporation for Public Broadcasting (CPB) funding as well as money from both Chico State and Cal Poly Humboldt.
According to NSPR’s operating agreement, Chico State Enterprises agreed to pay CapRadio $285,000 within 60 days of the effective date of the PSOA, as well as on the first and second anniversaries of the effective date. This money was “to serve the common good, needs and interests of the Stations’ communities of license” and support educational objectives.
Cal Poly Humboldt also agreed to pay CapRadio $250,000 annually for years 1-3 of the agreement, and $125,000 annually for years 4-7 under its operating agreement.
Bruno said CapRadio no longer receives supplemental funding to support either NSPR or KHSU’s operations.
Bruno said NSPR currently operates with 12 staff and KHSU has 2 employees. CapRadio had 53 employees at the time of the media briefing.
‘Local journalism has been greatly diminished’
Dani Anguiano is a journalist and author who has reported extensively in Butte County. She graduated from Chico State University and then worked as a local journalist for three years at the Chico Enterprise-Record. She’s worked as a reporter for the Guardian since 2021 covering wildfires and breaking news in the North State. She also co-wrote a book about the 2018 Camp Fire called “Fire In Paradise.”
Aguiano said local journalism has been greatly diminished in Butte County over the past two decades. And, with no guarantee that CapRadio’s transition plan will retain staffing levels at the Chico and Humboldt stations, she said she worries about more losses.
“Local journalism has just been so decimated here,” Anguiano said. “And there’s a lot of great work that goes on between the daily newspaper, the Chico Enterprise-Record, NSPR, some of the local TV stations. But it’s small enough that each person really counts. The stories that they deliver to these communities matter. And people are counting on them.”
She said journalists at NSPR “deliver really meaningful, tangible benefits” to their community during breaking news events and beyond.
“The folks at NSPR do that every single day,” Anguiano added. “And the idea that, even the possibility that there could be fewer of them is just heartbreaking. Because we need every one of them and more.”
How the stations became affiliates
CapRadio had eyed an operational expansion since at least 2019. A press release from that time noted CapRadio was “studying a potential partnership” with NSPR to support the Sacramento station’s “commitment to expand local journalism and tell more of Northern California’s stories.”
CapRadio said the “potential partnership” was based on existing relationships between the two stations, including collaborations on wildfire coverage and content-sharing agreements.
Cal Poly Humboldt reported in August 2019 it signed a “short-term, interim agreement” with CapRadio to provide programming assistance to KHSU including technical and engineering support, and operating as a designated station manager.
University officials noted that they were considering joining the ongoing partnership discussions between CapRadio and NSPR.
At the heart of the three stations’ partnerships are PSOAs. These are agreements between radio stations which allow one station to manage the operations of the other, in accordance with FCC regulations and guidelines.
CapRadio’s 2019 release said it already has a PSOA with Sac State to operate other public radio stations. The university owns the licenses to multiple stations in the Central Valley, Tahoe/Reno and Sutter/Yuba City, among other regions.
The operating agreement for North State Public Radio was signed Sept. 1, 2020 by Mary Sidney, CEO of Chico State Enterprises - an auxiliary of Chico State that holds NSPR’s license - along with then-CapRadio General Manager Jun Reina and Dr. Debra Larson, President of the board for Chico State Enterprises and Chico State Provost:
KHSU’s operating agreement was signed Feb. 26, 2021, by Reina and Tawny Fleming, Chief Procurement Officer for Cal Poly Humboldt:
Both operating agreements were for 10-year terms with the option for two, five-year extensions.
The Chico State Enterprises board of directors unanimously approved executing the PSOA between itself and CapRadio in a 12-0 vote on Aug. 27, 2020, according to meeting minutes.
A Cal Poly Humboldt press release dated March 30, 2021, noted the agreement for KHSU was formally approved in late February.
Both PSOAs acknowledge that the licensees, Chico State Enterprises and Cal Poly Humboldt, “shall at all times retain ultimate responsibility for the Stations’ essential functions” like programming and finances, while CapRadio would be involved in all aspects of day-to-day management, programming and operations.
They also note that through these arrangements, CapRadio also desires to “expand the reach of CapRadio programs in the areas served by the station” while also expanding local programming and news coverage for both NSPR and KHSU.
Both licensees could also appoint one individual to serve on CapRadio’s board of directors.
Backdrop of CapRadio's financial issues
As CapRadio management continues to work through the planned transition process, all three stations remain ineligible to receive federal funding from the Corporation for Public Broadcasting — a private nonprofit dedicated to distributing funding to public media organizations.
An audit released by the CPB’s Office of the Inspector General in late March found that CapRadio and its affiliates overreported funding, reported “questionable costs,” and were noncompliant with financial requirements and grant guidelines.
The audit was conducted after news emerged of significant financial mismanagement at CapRadio, and an internal audit was conducted by the California State University Chancellor’s office.
CapRadio was found to have overreported over $5.8 million in revenue, minus any federal funding across the 2021-2023 fiscal years. The CPB awarded the station over $125,000 in grants based on this self-reported income. Auditors also questioned over $73,000 in costs associated with CPB grants.
NSPR was determined to have overstated over $101,000 in Non-Federal Funding Support, received grant overpayments totaling over $4,800 and had over $2,000 in questioned grant costs. KHSU reported almost $14,000 in questioned grant costs. Both station’s expenses and grant revenues were also “commingled” with CapRadio’s in violation of CPB policy.
Auditors recommended the stations to repay the grant overpayments and questioned costs, as well as penalties for noncompliance with requirements and policies, inadequate recordkeeping and other financial issues.
CapRadio, NSPR and KHSU were also removed from the CPB’s Community Service Grant Program in October 2024. Auditors did note that 2024 fiscal year transactions for all three stations showed improved compliance and adequate documentation and support.
Disclosure: This story was reported and written by CapRadio Senior Producer Jen Picard, Politics Editor Chris Nichols, Editor Sally Longenecker and Producer Sarit Laschinsky. It was edited by Chris Nichols, Drew Sandsor and Sally Longenecker.
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.
