MEET THE KING OF NONCOM RADIO: EDUCATIONAL MEDIA FOUNDATION – PART ONE

Recently Northpine.com [link] reported that nonprofit Educational Media Foundation (“EMF”) is partnering with for profit iHeartMedia to bring two new INSTANT FM STATIONS to Des Moines. This alliance between one of the nation’s largest religious broadcasters and the nation’s largest commercial radio company has/is responsible for new INSTANT FM STATIONS in more than two dozen markets.

Here is how it works: EMF files for FM translators and gets the Construction Permits. iHeart puts programming on their HD channels. EMF leases FM translators to iHeart and repeats iHearts HD channel. Presto!  They've created a new commercial INSTANT FM STATION. iHeart fills EMF’s collection plate. Sweet deal!

This process is legal because of a series of loopholes in FCC rules. You might be asking: Who is EMF?

EMF: GOD’S FAVORITE MONEY CHANGERS

EMF is perhaps of the fastest growing nonprofit media organization in the nation.

EMF’s IRS 990’s from 2003 to 2013 (the most recent available) show the amazing growth of the nonprofit broadcaster:

	2003	2013	CHANGE
TOTAL REVENUE	40,887,000	141,031,000	+ 100,144,000 (+ 244.9%)
TOTAL EXPENSES	31,380,000	81,574,000	+ 50,184,000 (+ 159.9%)
OPERATING MARGIAN	+9,507,000	+59,467,000	+ 49,960,000 (+ 525.5%)
NET ASSETS	38,013,000	289,822,000	+ 251,809,000 (+ 662.4%)

Data sources: Guidestar.org & Propublca.org Rounded to the nearest 1,000

At a time when religion in general has declining in American society and most noncommercial broadcasters struggle for sustainability, EMF stands alone as a money machine.

EMF shares the bounty internally:

	2003	2013	CHANGE
OFFICERS & KEY EMPLOYEES COMPENSATION	257,000	3,228,000	+ 2,971,000 (+ 1,560%)
STAFF SALARUES	8,045,000	30,238,000	+ 22,193,000 (+ 276%)

Data sources: Guidestar.org & Propublca.org Rounded to the nearest 1,000

Scroll down to see names and details of 2013 compensation to executives at EMF.

HISTORY OF EMF

In the late 1970s Bob Anthony [I don’t know if this was an on-air name] was a rock radio DJ at KFRC, San Francisco. Legend has it that one day he was playing Sympathy for the Devil by The Rolling Stones and decided he could no longer promote satanic music.  So he quit the station and became a born-again Christian.  

Anthony was aware of the rising popularity of Jesus Rock stimulated by albums like Jesus Christ Superstar and Godspell. He decided to create a 24/7 Christian rock station.

In 1982, Anthony and partner Dick Jenkins purchased a bankrupt noncommercial station near Santa Rosa for a reported $67,000. Their new station signed on as KCLB-FM The Positive Alternative, licensed to the new Educational Media Foundation. The company upgraded KCLB’s coverage area to include Sacramento.

Anthony sold his share of EMF in 1986 to start his own radio ministry in Portland. Jenkins put KCLB’s programming on a satellite feed and called it K-LOVE.  In 1990 the FCC began allowing noncommercial FM translators anywhere in the country to use programming fed by satellite. The translators needed no local presence. EMF began filing for FM translators and built hundreds of K-LOVE repeaters nationwide with programming originating from Sacramento.

In 1998 EMF hired Mike Novak, a commercial station manager from San Diego who had extensive ties within the Country music industry. These ties led him to the folks who ran the growing Contemporary Christian Music (”CCM”) scene. Novak commented in a 2002 interview:

I think it is a symbiotic relationship. They serve us and we, in turn, serve them. We have had some high-level discussions and when we laid it all out on the table we found that we had a lot of common ground.

As it has turned out, part of that common ground was the opportunity to generate A LOT of money.  The bond between CCM stations and music companies is so cozy it would make Alan Freed blush.

2010: THE YEAR HD RADIO WENT ON FM

In 2010 it had become clear that consumers were not embracing HD Radio.  In an effort to help HD, the FCC began to allow HD channels to be repeated on FM translators.  This was similar to what the FCC had done a few years earlier to boost AM stations.

Along the way EMF had hired CCM consultant Alan Mason – the smartest operator in the CCM world. I did a profile of Mason in November 2014 [link]. Mason has lots of contacts in the commercial radio and television world from his time running Paxson Communications.

EMF took advantage of this FCC rule regarding FM translators:

Changing the station rebroadcast by an FM translator station.  If the licensee of an FM translator station wants to change the primary station being rebroadcast, it may do so without prior authority from the Commission.  If the translator is owned by an entity other than the owner of the new primary FM station, the owner must secure the permission of the primary station to rebroadcast its programming before commencing operation. 

EMF and iHeartMedia realized EMF’s FM translators and iHeart’s failing HD channels were a perfect match for new INSTANT FM STATIONS.  Today, this is a lucrative public/private partnership that is gobbling up the FM spectrum.

NEXT: EMF’s revenue growth since 2010 shows the iHeartMedia BUMP!

EMF EXECUTIVE COMPENSATION IN TAX YEAR 2013: