PBS’s budget for next year reflects a harsh reality: Revenues from member stations are flat for a third straight year, and scant other income opportunities lie ahead.
The all-important annual program budget, as projected for fiscal year 2012, will remain at about $200 million, where it’s been stalled for a decade.
For the first time in the past five years, there will be no new children’s series. The News and Public Affairs Initiative is on hold. PBS is retooling its primetime schedule to attract more viewers and underwriters and negotiating to push down program production costs per hour.
“We are finding ourselves focused more and more on what we can do,” PBS President Paula Kerger said in an interview with Current. That includes adding new episodes of programs already in the strong children’s lineup.
“Every year, there are projects that we just set aside,” Kerger said. “This year we told stations much more specifically what we aren’t doing.”
One project put on hold is the news initiative, proposed two years ago to upgrade public TV’s online news services. “I didn’t want to get partway into the project and realize we don’t have the resources to do it,” Kerger said.
Budget-cutters have been at work inside PBS, where layoffs are expected soon, and at producing stations that make programs for PBS distribution.
“There’s an enormous downward pressure on costs” in program budget negotiations during the past year, said a producer familiar with the discussions who requested anonymity because the talks are ongoing. PBS negotiators “want to bludgeon the system down to a preordained norm” closer to the per-hour prices that cable networks pay, the source told Current. Those reductions “will destroy the very thing that makes us distinctive,” the producer said. “If we’re not different from cable channels, why the hell would somebody pledge $40?”
“Our commitment to distinctive content is paramount,” PBS responded to Current in a statement. “Given the longstanding economic challenges of our nation and system, we must redouble our efforts to maximize efficiency and to seek new methods to stretch our limited resources.”
Kerger realizes the gravity of a flat budget for an organization tasked with constantly churning fresh content to multiple platforms. PBS anticipates spending around $202 million on content in fiscal 2012, down from $207 million this year.
“I am concerned,” she said. “We need capital.” That’s why she’s focusing more time on her PBS Foundation work while Chief Operating Officer Michael Jones runs the ship. “Part of it is to help the stations, and part is to begin to cultivate relationships with funders,” Kerger said. In the short term, “I don’t see the additional revenue coming from the stations.
But I really think that for us, longer term, we can best help the system if we can bring in additional money to do content development.”
‘These things are complicated’
The proposed budget, now at stations for comment, will be completed and adopted by the PBS Board in June. PBS is projected to barely break even, with $293.1 million in revenues against $293 million in expenses.
For the third consecutive year, PBS did not increase its dues and fees for stations. In fact, 2012’s expected assessments of $181.6 million are down $2.5 million from this year. PBS lost $3.8 million in dues from KCET in Los Angeles, which departed the system in January. The dip was partially offset by increases in dues from two stations that stepped up to full service: KOCE (now PBS SoCal) in the L.A. market, and KVZK in American Samoa .
The budget was drawn up before the announcement of the sale of member station WMFE-TV in Orlando (Current, April 18). PBS doesn’t yet know how that will affect the budget. “It will depend on the outcome of the discussions being held by the other Florida stations and how they decide to move forward,” PBS said in its statement.
PBS’s top budget priority is “primetime reinvention,” with the goal of increasing audience to build a larger potential membership base and rev up underwriting sales. Shows will be placed “horizontally” across the week, putting favorites on nights with the highest HUT (households using television) levels, as well as “vertically,” grouping similar content for better flow between shows. Breaks may move from top or bottom of the hour to five or 10 minutes into a program, to bring the audience along. Pubcasters will get specifics at the national meeting this week in Orlando.
PBS aims to minimize audience turnover when programs end. “The idea is to put content up against content,” Kerger said. “So you end one show, start a new one and put in the break a little while into the body of the show.” PBS also is looking at length of breaks. “If we have to reduce the time, we would carve off a little bit off national, a little bit off local, but not too much because we want to be able to give the stations the opportunity to bring in local underwriters and do all their station business.” Any changes would be tested one night a week before being adopted for the week.
“These things are complicated,” Kerger said. “This change will mean stations will have to agree to carry things in sequence. That is why I think it is going to be important to experiment and do some hard research as to whether it brought in new audience.”
NPS budget will now cover salaries
Another budget item sparking discussion: $2.9 million in staffing costs for the PBS programming team will now come out of the National Program Service budget instead of content administration coffers. Ron Pisaneschi, Idaho PTV programmer, said that if PBS is taking salaries out of the NPS, “even less money goes into the actual minutes of on-air and online content.”
PBS said it made the decision to “better align the actual costs of delivering the NPS.” Coming from the NPS will be payroll for “the core programming staff, the people who are the most directly involved in creative and editorial decisions,” which does not include Kerger or Jones.
The NPS is funded largely by member station dues and CPB contracts. For fiscal 2011, the stations provided $184 million and CPB paid $42 million. “Generally, NPS money cannot be used to pay for internal costs” such as salaries, CPB spokesperson Nicole Mezlo told Current. “However, there may be, on individual productions funded by NPS and other monies, activities that are indirectly covered by NPS funds.” It depends on each specific contract, she said. PBS said no CPB money is being used for the salaries.
Also included in the budget is $1.4 million for the operating budget of PBS’s online fundraising initiative, now called “Prosper.” That pays for two full-time employees, campaigns, list development and web design, development and integration costs. “As this is a startup project, we have budgeted conservatively,” PBS said.
Haggling over a finite pie
With content money shrinking, lowering production costs becomes even more important. According to the draft budget, for the past year PBS has been “working collaboratively with key producers” to negotiate new production agreements, which will “enable PBS to continue delivering the outstanding quality content viewers have come to expect while also investing in the development of new content that has the opportunity to reach new viewers and raise ratings.”
The cost of producing an hour of PBS programming varies greatly by genre and producer, by all accounts, but the network considers those numbers proprietary; even PBS member stations don’t know them. Pisaneschi of Idaho PTV said that lack of data makes harder to evaluate shows. “My personal inclination would be to be more transparent,” he said. “What is Nova costing? What is Frontline costing? I just get the bill and I’m either happy or not happy.”
One program producer who requested anonymity estimated that an hourlong documentary on public TV generally costs between $300,000 and $600,000 per hour, with dramas starting around $600,000. Compare that with a typical reality show on cable TV, the producer said, which might run between $150,000 and $175,000 per hour.
The producer says the “prevailing sense” in the current budget discussions between PBS and producers — which drill down to each line item in budgets — is that public TV “is comparable to a widget factory, and they want to get the costs of widgets down. A lot of producers are very, very concerned” that quality will suffer, making PBS look similar to other cable channels. “This is dangerous,” the producer said. “It’s a bigger threat than House Republicans. It’s friendly fire from within.”
PBS responded: “We will never look like ‘just another cable channel’ — and our producers will never deliver anything less than the superlative quality that is expected of them and that they demand of themselves.” Other producers are more circumspect. “I do believe the PBS primetime programming production budget has to come down,” said Dave Davis, national program production v.p. at Oregon Public Broadcasting. “We can and have to produce high quality at lower costs. We can’t survive if we don’t.”
OPB’s History Detectives was lauded as a new type of pubTV show when it arrived in 2003: A less expensive but good-quality, highly engaging and educational reality-based series. The type of production and format keeps costs down, Davis said; episodes are shot and edited on a tight schedule. “We try to keep overhead down to stay lean and mean,” he said. “We just work at it. There are all sorts of ways to do it.” The show is about to enter budget negotiations, he said.
Jeff Bieber, WETA’s national programming v.p., said there’s “definitely more scrutiny over line items” in these budget negotiations than in similar discussions in the past. “But it’s not onerous,” he said. “It just forces us to think more sharply.” Other than the panel show Washington Week, WETA doesn’t produce ongoing series. The station develops limited series, such as the Latino Americans series scheduled for fall 2013. Bieber is also working on a similar project about Italian Americans.
It’s not just PBS that is paring back, Bieber said. Foundations and other underwriters are also pinching dollars. “That pool of money has really shrunk,” he said. Some foundations are no longer considering TV production proposals, and previously reliable sources for funding are now paying less. Bieber said that for Latino Americans, WETA requested $1 million from the National Endowment for the Humanities and received $400,000. The Italian Americans project got $500,000 instead of $770,000.
Bieber said he has repeatedly cut budgets on both projects. He originally planned the Latino Americans budget to hire producers in several cities; now, there’s just one, on the West Coast. The series has been scaled back from eight to six hours. For the project about Italian Americans, there are two producers instead of three and a more modest communications budget.
“There’s such a finite pie for resources in pubcasting versus other networks,” he said. “It’s important for us to produce smarter and maintain high quality. It is possible. It’s not easy, but it is critically important.”
A year earlier PBS President Paula Kerger warned that the network will lose impact if its main revenue stream doesn’t grow, April 2010.
PBS’s Los Angeles station quit the network in January 2011 in a financial dispute, putting a hole in PBS’s budget.
Public broadcasting systemwide revenues were down for the second year in a row in fiscal 2009, according to new estimates in a PDF posted by CPB.
CPB consultant sees no way to replace federal funds if they are lost, April 2011.