Managers cut their budgets last week at two West Coast stations with sharply contrasting economic situations.
Until this year, KQED glided through the Silicon Valley dot-com bust and economic downturn without major job losses. But a 25 percent decline in corporate and foundation gifts recently put the San Francisco station in the same boat as other stations forced to cut millions in salaries. KQED management slashed spending by $4 million, half from payroll.
KQED President Jeff Clarke consulted the staff before choosing among three money-saving options--40 layoffs, unpaid vacations for all staff or a shorter work week. Last week, he opted for the third choice, cutting the station work week from 40 to 36 hours and trimming salaries a corresponding 10 percent. The pay cuts taken by KQED's 234 remaining staff members will have a "maximum life of 14 months," said Clarke. In addition, nine staff members lost their jobs, five took voluntary separation, and four agreed to work part-time. The savings will reduce KQED's fiscal '04 budget to $40.5 million.
In Seattle, where this spring an unabated tide of red ink and mounting debt forced the ouster of long-term chief Burnhill Clark, interim President Bill Mohler last month appointed six senior managers to advise him as KCTS prepares to reduce its staff 30 percent, from 104 employees to 72. Mohler expects to announce the job cuts Aug. 6. The job losses, which the board postponed until he sized up the precariousness of the station's situation, were built into an $18 million budget that reduces KCTS spending by $4 million.
In 1995, the year before Clark began deficit spending, the Seattle station employed 265 staff. Since 1996, KCTS outspent its earnings every year except 1999.
"My pay was based on coming in with a balanced budget and a positive cash-flow, and as difficult as this will be, I really believe I'm saving jobs," Mohler said.
"What you can be assured of is that we won't use the prior practice of notifying someone and walking them out to their car," he added. "We'll attempt to do this with a heart and respecting the staff's commitment to this organization." Some employees may be given notice that their jobs will end in October. Laid-off workers will receive severance pay based on their longevity and extended health insurance benefits.
KCTS's $18 million budget is built on the station's predictable income--membership, pledge, underwriting, major gifts and federal funding--and minimizes "speculative revenue" to be earned from national productions, Mohler said. It also assumes that the station can pay off short-term debts by placing a $7.7 million lien on its building, reducing debt service from $2 million a year to $500,000.
PBS is among the debtors to be repaid with the loan. KCTS owes its major program supplier $3.5 million. "The fact is we've been living off of monies that we didn't have, and unfortunately our banker was PBS," said Mohler.
KCTS will continue to pursue national productions but under tightened criteria that require that funding be in place before any project gets the green light, Mohler said. The station will rely on outside contractors to mount new projects. KCTS didn't cut its local production slate in its '04 budget, but any new productions must secure funding upfront.
The six directors appointed to KCTS senior management last month are: Jackie Boettcher, c.f.o.; Randy Brinson, g.m.; Jay Parikh, marketing director; Kathy Agosta, director of development and community partnerships; Enrique Cerna, production director; and Diane Christiansen, human resources manager.
Web page posted Aug. 7, 2003
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