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PBS pledges spending cuts, reforms
Station leaders 'are worried and frustrated — they want change'

Originally published in Current, July 5, 2004
By Karen Everhart

Facing stations' insistent outcry for fiscal relief, PBS cut $5.85 million from proposed annual assessments to be paid by member stations, adopting a compromise budget and pledging to move quickly on reforms to make its decision-making more visible and accountable to stations.

With PBS restraining fee increases to 3 percent and few new corporate underwriters to cover costs, the network canceled the occasional series National Geographic Specials, Flashpoints and Secrets of the Dead and may trim Scientific American Frontiers to a 30-minute format. The network also reduced spending on advertising, promotion and websites.

The dues reductions will bring a new round of downsizing at Braddock Place and re-examination of how PBS sets its fees for stations. PBS President Pat Mitchell promised an overhaul that will make "a pretty dramatic difference in what PBS does."

The budget changes, adopted by the PBS Board at tense meetings in Arlington, Va., quelled objections by 95 station leaders who declared in a petition that stations are receiving a "declining return on [National Program Service] investments." Several petitioners attended the board meetings to argue for cutting station fees and adopting clear standards for program performance.

"We're going to do this or otherwise we are the caretakers presiding over the beginning of the end," said Mitchell during the meetings.

Mitchell, whose outward optimism has rebounded since the board adjourned, said in an interview last week the meetings were "nothing short of historic" and "an absolute vindication of the process." PBS and stations were able to work through the conflict and arrive at a compromise unanimously adopted by the board, she said.

"I see it as a restatement of the fact that we have a representative government that works and also — if I may be so bold — an affirmation of faith in the leadership of PBS on behalf of the board," Mitchell said.

Mitchell's future has now been clarified on one point: The Motion Picture Association of America last week hired Dan Glickman, a former congressman and secretary of agriculture, as its president. The association had interviewed Mitchell, among others, for the job. Mitchell withdrew her name from consideration several weeks ago and said she had refocused on her PBS job and her commitment to public TV.

Budget surgery, not slaughter

PBS announced the three canceled primetime series last week after the Board's Finance Committee approved the revised fiscal 2005 budget. All of the programs "are excellent and we wish we could keep them on our schedule," said John Wilson, senior programming v.p. "We do not have the funds to do everything, so we have had to make some difficult decisions.” Scientific American Frontiers may be reversioned into half-hours that combine new production with material from the series library, according to a PBS spokeswoman.

PBS also sliced $2 million out of its promotion budget — cutting significantly into spending for its "Be More" institutional positioning campaign, according to Wayne Godwin, c.o.o. It will end its Share a Story promotion and an advertising grant program for stations. PBS Interactive reduced the number of websites it will refresh and produce this year.

"It was a challenge to go in and make cuts that are surgical and not slaughter," Godwin said. PBS didn't want to cut spending in ways that would "damage the schedule or stations' ability to benefit from the schedule."

New corporate sponsorships for Antiques Roadshow relieved PBS of its previous commitment to cover a $2.6 million underwriting shortfall for its most popular primetime series. Liberty Mutual, an insurance company that also sponsors American Experience, signed a one-year contract to underwrite the antique appraisal series. Producing station WGBH in Boston anticipates a third sponsor will sign on with the Roadshow soon. "It will be wonderful to have a program that is sold out," said Suzanne Zellner, who directs WGBH's Sponsorship Group for Public Television.

Less secrecy at PBS Board

With a dozen station managers in town, the June meetings were a rare display of openness by the PBS Board, which usually deliberates in executive session and opens its doors to deliver prepared statements and vote with little public discussion.

When station managers arrived June 21 to observe the Finance Committee's work on its final budget recommendation, PBS opened the meeting. The board reworked its agenda to meet in public early the next morning. At both meetings, board members heard directly from station managers, including those who signed the petition and those who had not.

Although the petitioners asked the board not to raise dues at all this year, they didn't object to a carefully crafted increase coupled with several policy changes:

The unanimous board resolution adopted a National Program Service dues increase of 3 percent instead of the proposed 7.5 percent. The NPS fees cover primetime, news and children's programming and promotion costs.

The board also increased member services fees by 3 percent instead of the proposed 5 percent. The fees primarily cover interconnection costs.

With the smaller increases, PBS cut its proposed NPS budget by $5.3 million and its member services budget by $550,000.

The board's resolution also exempted stations with budgets of $2 million or less from any increase and capped increases in all stations' dues at 5 percent. The latter provision responded to complaints about inequities in PBS's dues formula, which the network tried to address last year.

In a dues tussle in January that may have set the stage for this spring's budget brouhaha, state networks objected that the proposed formula change put a higher dues burden on them. PBS dropped the formula change. But the formula and its great variation in fees galled many stations during consultations on the new budget. Mitchell said later she regretted the board didn't push harder for the formula change but acknowledged, "maybe we didn't have the right answer."

Petitioners and PBS leaders alike acknowledged that PBS's dues woes are symptoms of deeper, endemic problems.

"This resolution is a beginning point, but I don't think it will solve all of our problems," said David Dial, president of WNIN in Evansville, Ind., who spoke to the PBS Board on behalf of the Small Station Association. "It's not simply about the dues structure. We need to take a very wide look at change."

Station execs weren't petitioning the board out of anger, Dial said. "People are worried and frustrated. They want change."

"There's no doubt in any of our minds that all of us are facing some significant financial crises, and I think many of us believe that our industry is certainly at a crossroads," said Steve Bass, president of Nashville PTV, who led the petition effort. Station execs recognize the importance of the NPS, but many question PBS's choice of program investments.

"Obviously, each of us has a different take on how we would like that money to be spent, but the key thing is that as individual licensees we have to rely on PBS to serve us," Bass said. "We are not being served in the way we feel we need to be served, and obviously the increase has become a harder thing for us to pull off each and every year."

Mitchell noted that many of the reforms stations had asked for were already under way. PBS planned to reassess its staffing and realign its services this year. "We realize we can't keep doing everything," she said.

Programmers have established new performance measures for every primetime series, she added. Series that don't meet these goals at the end of their contract will be canceled.

PBS execs plan a series of talks with station managers this summer about tiered programs and services to "get a sense of what their expectations are and how responsive we can be," Godwin said. Those conversations will determine how PBS revises its dues system for next year. PBS also will ask station execs to weigh in on the reorganization so that PBS aligns itself according to their priorities. Management will recommend a slate of reforms to the PBS Board in October, he said.

"This is ambitious, but we want to take it as far and as fast as we responsibly can," he said.

In other developments, the PBS Board:

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Much of the previously proposed dues increase would have gone to keep two popular series afloat.

Programmers and producers hope PBS will use ratings floors selectively. PBS program chiefs elaborated in a wide-ranging Q&A.

With corporate underwriting down a third, PBS leaders warned in May that some series will not survive.


Text of petition signed by 95 station execs.

Text of PBS Board resolution, June 22, 2004.


PBS will spend less on its "Be More" image campaign [video clip on ad agency's site].