TV Future Fund will die, but R&D thrust lives on at CPB

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The Television Future Fund is dead, long live the Television Future Fund.

CPB will discontinue the R&D fund this fall, redirecting about $4 million to public TV stations’ Community Service Grants for next fiscal year. The corporation has not decided the future of its Public Radio Public Service Competitive Fund, which gets some of its funding in a similar way.

The decision on the TV fund not only aids hard-pressed station but also defuses a political time bomb. Some stations contend CPB reallocated money illegally to set up the Future Fund nine years ago. Republican legislators have taken notice and asked for analysis in a forthcoming report by the General Accounting Office.

“There’s a lot of speculation that GAO will find it illegal,” says John Lawson, president of the Association of Public Television Stations. “Our view is that it was subject to interpretation.”

On Jan. 27, minutes after announcing its choice of successor for its president, Robert Coonrod [separate article], CPB said it was dismantling the TV fund, one of Coonrod’s major instruments to deal with a host of public TV problems. In the fund’s busy years of 2001 and 2002, it spent 40 percent of the grant money to upgrade stations’ fundraising capabilities and lesser amounts to develop technology, new service models and efforts to encourage collaboration among stations.

Now the fund “is going out with a bang,” said CPB Chairman Kenneth Tomlinson, by putting much of its remaining money into three large initiatives recommended by McKinsey & Co. consultants. For the first initiative, 89 public TV stations so far have signed up for help in soliciting more “major gifts” of $1,000 or more.

Beyond these initiatives, Tomlinson, Coonrod and his designated successor, Kathleen Cox, said CPB may someday bring back an R&D effort like the Future Fund, when there’s money and support for the idea.

Aggregating the R&D money has been very useful for public TV, Cox says. “We can reevaluate some time down the line whether it makes sense to reaggregate.”

The time was not right this year. Tomlinson had heard from station execs about revenue shortfalls across the country and wanted to come to their aid. “The wisdom is out there in the people in the system,” he told Current. “We had to let the system know that we trust them.”

In a closed session, the CPB Board reached consensus to redirect the money to the stations’ CSG pool, according to Beth Courtney, a new board member and president of Louisiana Public Broadcasting. If CPB puts the $4 million into CSGs, the 170-some station licensees will receive an average of $23,000 each.

CPB also opted to protect stations from a 0.59 percent rescission that trimmed all federal spending this year. Coonrod announced Feb. 3 that CPB would find ways to absorb the cutback and not reduce the March CSG payment to stations, the second of two installments this year.

Coonrod said past experience with Future Fund grantmaking has already helped CPB shape three large projects to benefit public TV, which will be bigger, better designed to suit station needs, and supervised more closely than projects backed previously by the fund.

In addition to the major-giving initiative, CPB is beginning work on new projects to help PBS refocus on programming that viewers value most and to promote efficiency in stations’ technical infrastructure. By freezing the Future Fund last year, CPB has squirreled away $18.3 million to pay for these multiyear initiatives.

Coonrod told Current that CPB hasn’t decided what to do with public radio’s counterpart to the Future Fund, but he said his staff may propose concentrating its oomph in larger initiatives, as the TV fund is doing.

Subject to interpretation

Creating the pot of R&D money stretched if not broke the spending formula that Congress imposed on CPB 23 years ago. The formula essentially requires CPB to send half of its federal appropriation to public TV stations, traditionally in the form of Community Service Grants, and a fifth to public radio stations.

When CPB created the Future Funds in July 1995, it took half from the station CSG pool and the other half from its discretionary System Support allotment, which the formula caps at 6 percent of its budget, or $24.6 million this year. That pot is already heavily committed to pay music royalties and satellite costs for stations.

A total spending figure for the nine years of Future Funds was not available from CPB, but the sum was in the tens of millions. In at least this fiscal year and 2002 and 2003, the TV Future Fund has amounted to $8 million a year.

The problem is that half of those sums came from the part of CPB’s budget it previously distributed among all qualified stations as CSGs.

In August, four station execs said in a letter to Coonrod that the diversion of the money is illegal and warned that they would “vigorously oppose” any effort to “confiscate” any more money from the CSG pool.

They were alarmed when Coonrod proposed in June that all CPB money, including CSGs, should be put “on the table” to be reallocated for the biggest bang. They expected stations would end up losing rather than gaining money.

“We’ve never argued about the value of those [Future Fund] projects,” says a manager who signed the letter, Tom Howe, director of North Carolina’s UNC-TV. “What they did was take money away from every station and gave it to some stations and a whole lot of outside consultants” — those stations and consultants that got project grants.

Three years ago, Howe’s complaint to North Carolina congressmen prompted CPB to change grant rules that had hurt the state network, and one of the legislators, Republican Rep. Richard Burr, joined in requesting the forthcoming GAO report.

“I think we are going to have our answer on this,” Howe says, looking toward the GAO report.

Howe notes that he didn’t complain to Congress back in 1995 when the Future Fund first tapped into the CSG pool because Newt Gingrich was then on the warpath against public broadcasting. “I decided to drop it,” he says. “I could have won, but . . . it would definitely have hurt a great deal.”

Also signing the August letter were Bill Reed, president of KCPT in Kansas City — who, with Howe, opposed the Future Fund at its start — and Ted Garcia, g.m. of KNME in Albuquerque, N.M.; and Peter Morrill, g.m. of Idaho PTV.

As Lawson says, CPB’s governing legislation is subject to interpretation. Howe’s lawyer says CPB redirected money illegally. David Brugger, Lawson’s predecessor at APTS, says the association’s lawyers said the law wasn’t clear enough to stake a fight. Brugger’s own take: “If it wasn’t breaking the letter of the law, it was the spirit of the law,” he told Current.

Cox says its lawyers say it spent the Future Fund money within the law.

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