Once-wary stations take their vows in Indianapolis
Originally published in Current, Aug. 30, 1999
The two public TV stations in Indianapolis will announce this week a unique joint operating agreement that they--and CPB--will surely crow about.
Brought together by CPB--both by its carrots and its sticks--the independent nonprofit WFYI and Butler University's WTBU will consolidate their program decision-making, fundraising and master control functions at the larger WFYI under a five-year contract. However, the university will hold on to its license for WTBU and contribute to its upkeep, produce programs for it and raise the money for its new digital transmission system.
In WFYI offices where there was formerly a single monitor displaying the product, now there are two. (Awww!) A wedding party is planned Sept. 8 [1999].
The Indianapolis combo is one of the two closest public-TV collaborations achieved so far by CPB's Overlap Market Fund--the other being the pact between Denver's two stations, which are maintaining separate programming control but will consolidate master-control operations in October. David Clark, manager of CPB's fund, says several other public TV collaborations are nearing announcement this week.
"It took a real statesmanlike perspective for both Lloyd and Ken and their governing bodies to look beyond the short-term picture," said John Hershberger, a consultant with BMR Associates who was hired with CPB money to shepherd the series of talks that led to the deal. He refers to Lloyd Wright, president of WFYI, and Ken Creech, g.m. of WTBU.
With its agreement to help support WTBU, Butler University isn't saving money in the short-term, Creech observes. He says Butler will lay out about $200,000 a year, and shoulder digital transmission equipment costs of $3 million, with help from the state and other funding sources. "But we are saving money compared to what it would cost in the long run to kick the station into high gear." For instance, Butler will not have to build digital production studios; it will share WFYI's.
The arrangement was custom-crafted for the partners. "It's essentially a contractual arrangement where WTBU will continue to make an investment in services," says Wright. "We have made a case that their investment will be less and less." The project's official estimate is that the two stations will save $660,000 in the first five years, according to Hershberger. And with a stronger fundraising machine, Wright says, there's more potential for revenue.
WFYI also made concessions in the deal signed July 20. Though the two stations will share the same program director--Richard Miles from WTBU has already moved to WFYI--the larger station agreed to guarantee that Butler could control up to 12 hours a week of programming, at the times of its choosing. Butler will still have its name on the channel, and it will continue producing Butler Basketball and Nuestra Musica, among other shows.
At the same time, Butler President Geoffrey Bannister told Wright he wasn't looking to put university people on WFYI's board. "His reaction was, it was nice but not necessary."
Just as the cost advantages of the combo will grow during the DTV era, so will the service advantages. WTBU initially went on-air as a low-power TV station, and its signal is still much weaker than WFYI's, so the combo can't reach the whole community by simply splitting its programming between two evenly matched signals, according to Wright. But they will be nearly equal technically when both switch to their digital channels in coming years.
That's when the combo will be able to multicast eight or more DTV program streams on the two channels. The two stations and two other central Indiana stations--WIPB in Muncie and WTIU in Bloomington--are already planning to develop DTV streams for each other, according to Hershberger, who has been facilitating talks. If there are four channels to assemble, for all to broadcast, each will handle one of them.
Laissez-faire no more
The Indianapolis agreement results from a turnabout in CPB policy. For years, CPB gave Community Service Grants to nearly any nonprofit that could start a public TV station, meet modest financial minimums, and find an unclaimed channel--even if that created a second or third station in the same city. But overlapping stations became a symbol of waste during the 1995-96 congressional uproar over CPB funding, and the corporation promptly got religion.
In 1996, the corporation established the Overlap Market Fund to encourage station collaborations--subtracting the money from the Community Service Grants of the overlapping stations themselves. Over three years, the Overlap Market Fund amassed more than $400,000 in Indianapolis, according to Hershberger. Some is going to consultations; much will be spent on equipment for new joint facilities.
WFYI and WTBU may provide an example of duplicative infrastructure, but they didn't often duplicate each other on the air; WTBU was never a PBS member.
Nevertheless, CPB's new grant policies--reducing both stations' CSGs--served as a "stick" to push them toward collaboration, while the Overlap Market Fund offered a "carrot" to subsidize talks and collaboration.
"We would not have been able to do this without CPB's help," says Wright. One obstacle to making major changes, he explains, is that understaffed institutions don't have anyone with spare time to concentrate on such big projects. Having Hershberger keep the project rolling, at CPB's expense, "made all the difference in the world." It was a "definite plus" that Hershberger himself was a former public TV manager, who ran Sacramento's KVIE for 15 years.
WFYI Senior Vice President Alan Cloe says CPB didn't drag the two stations to the table with any particular outcome in mind. But CPB had promoted talks between the stations since a few years after WTBU went on the air in 1992. In the tense first round of discussions, WTBU felt the older stations were demanding that it justify its existence, recalls Creech. "Everybody vented, and there were some ugly moments," he says. When the second round of talks among the four stations began more than a year ago, the managers were more trusting, according to Creech; they were now asking each other, how do we deal with this overlap issue?
Creech and Wright got along well and last September began talking about a joint operating agreement. The arrangement they worked out won't require any layoffs, because both stations have lean staffs. Creech will continue as g.m. of WTBU, legally responsible for the station, but most of its functions will be handled two miles away at WFYI; his direct spending will be 15 percent of what it is now, he predicts. He'll also have more time for his other job--chairman of Butler's Department of Telecommunication Arts.
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