Shifting to a "virtual station," Binghamton's WSKG flees the "death spiral"

Originally published in Current, June 2, 1997

By Steve Behrens

Every pubcasting station is trying some new ways to hype its income and trim costs, but few can boast a menu of schemes as long and audacious as WSKG-FM/TV in Binghamton, N.Y.

Mike ZieglerWhen executives from the station ran through a list of their projects at the CEN/EEN Conference last month in Baltimore, their spiel left the crowd exhausted but impressed.

Michael J. Ziegler, president of the station for 16 years, warns of a "death spiral" that could engulf WSKG. With most revenue lines flat and its aid from New York State down by $1.5 million in recent years, the station could take the usual course--cutting services, reducing its value to supporters, pushing harder for pledges and watching revenues inexorably fall.

Instead, the Binghamton operation has remade itself as a "virtual station"--contracting out its scheduling, financial management and major parts of its fundraising oversight, while embracing automation, starting a second FM station, developing a production house to generate revenues and even contemplating the purchase of a commercial TV station.

As a small-market station that lost a lot of state aid, WSKG may be feeling the squeeze in a way that will hit bigger stations later on, says Gary Reinbolt, chief operating officer. "I think we're the canary in the coal mine," he says. "Stations that don't think they have to do this will sooner or later have to do it."

By going virtual, WSKG has cut payroll and imported in top-quality fundraising expertise that may help boost revenues.

In a rare and nervy move last summer, the station outsourced its finance office. Since then, its chief financial officer has been Bert Schmidt, who works at WCNY in Syracuse and holds the same position there. The shared c.f.o. pays the bills, keeps the ledger and handles payroll, taxes and CPB reports, according to Reinbolt, while Binghamton staffers administer staff benefits, keep member records, deposit receipts and handle receivables.

WSKG also signed with Tucson-based TRAC Media Services to handle scheduling of its TV channel starting last fall. The former scheduler moved to other responsibilities, and TRAC does the job for less than a full-time salary, says June Smith, chief programming officer.

Fundraising duties also have been dispersed widely. The station engaged Rick Hicks, v.p. of development at Rochester's WXXI-FM/TV, who routinely reviews WSKG data and gives monthly guidance. "I just execute the nuts and bolts," says Reinbolt. Starting soon, Reinbolt will also get guidance on renewal mailings from the California marketing firm of Dodd Smith Dann.

Ziegler reorganized the fundraising function last year when the development v.p., Susan Lee, announced she was getting married and leaving town, says Reinbolt. The managers split up Lee's job: Ziegler himself leads the pursuit of major donors; Reinbolt coordinates direct mail tasks; and Mark Polovick, v.p. of technical and business affairs, oversees underwriting sales.

On the revenue side

Like many stations, WSKG's biggest money-making venture outside of normal pubcasting economics is audio/video production services. Reinbolt estimates they will provide 6 percent of the station's $3.9 million budget next fiscal year.

To extend its capabilities, the station allies itself with other local specialists--a high-end graphics house, for instance, and an audio recording expert. WSKG put the audio expert on its payroll, and he brought in better digital audio gear than the station had. For outside jobs, he and the station agreed to split the billings.

The station has also begun earning revenues from the many TV translators that had covered its 200-mile-long border region in south central New York and northern Pennsylvania. With increased numbers of viewers receiving WSKG via cable, the station has stopped using all but 18 of its 53 translators, according to Reinbolt. It's now leasing some to the Fox network and may rent others to the Home Shopping Network.

Probably the biggest venture tempting WSKG's leaders at the moment is the idea of acquiring WMGC, currently a struggling ABC affiliate in Binghamton. The station would do better if it switches to NBC and shares overhead and facilities with the public TV station, Reinbolt speculates. If WSKG took that plunge, however, it would have to avoid using its tax-exempt status for advantage in commercial broadcasting, he says.

TV: not the favorite child

In its pubcasting service, WSKG operates in three separate media--TV, radio and online.

The station has assigned Barb Schneider as fulltime webmistress, and she maintains a special members-only section of the web site as an extra benefit for members. To get the password, which changes every month, members need only look at the WSKG program guide.

Ziegler gives as much attention to radio as to TV, and Reinbolt refers to radio and online as the "appropriate technology" for many kinds of local production. WSKG-FM has a higher standing in the region than the TV outlet. It's the top radio station in nearby Ithaca and ranks fifth or above in most of its region, says Reinbolt.

"If I had to give up one of the three media," says Ziegler, "it would be television, in a flash."

In keeping with his goal of "fishing where the fish are," WSKG added a second radio service in 1995--the jazz/news station WSQX-FM--and has expanded both radio services to 24 hours a day.

With heavy automation, WSKG can turn out both FM services with a staff of five--one-and-a-half more than required for the original classical/news service alone. Deejays record a four-hour shift in about an hour and a computer merges their remarks with music from an automated "jukebox" that holds some 130 compact discs. The result sounds canned and has served up some "wildly inaccurate" weather reports that were recorded hours earlier, he acknowledges. Overnight, the stations switch to Minnesota Public Radio's classical service and WFMT's new jazz service, which come in by satellite.

Eventually both FM services will cover the region through a series of FM repeaters.

The new FM frequency became available with the failure of volunteer-run Uhuru Communications in Ithaca, according to Ziegler. After Uhuru let the station go dark for months, the FCC withdrew Uhuru's license, and WSKG applied for it. WSQX went on-air in January 1995.

Incentives for success

Ziegler has done most of his tinkering with the station in the last few years, since he took a course in "transformational leadership" at Binghamton University.

He came to believe salaries are a pretty primitive way to motivate people, and, during a gloomy time of state cutbacks and layoffs, began to propose new employee incentive plans.

"If people can participate in a success," he says, "they are far more willing to create that success."

In 1993, WSKG instituted an incentive compensation plan for all staffers and included it in union contract for technical employees. The station pledged to put half of station earnings beyond a target amount into bonuses for the entire station workforce.

In the first and second years, every staffer got $1,000 cash plus a bonus of up to 3 percent; in the second, WSKG also had some additional money to equalize salaries and pay merit raises; and in the third year, the bonuses were down to $1,000 per employee, according to Ziegler.

He now has mixed feelings about the compensation plan. "It has paid off to a reasonable extent, but not nearly as well as expected."

For one thing, the sums available for bonuses depend a great deal on how much annual revenue the board of trustees declares to be surplus. WSKG's trustees haven't rebelled under the pressure, but are "unhappy," he says in an interview with Current.

Some staffers, meanwhile, harbor doubts that the board is freeing up as much revenues for bonuses as it could.

Ziegler is more enthusiastic about direct incentives, such as a finder's fee that pays any employee for bringing in business. He tells how a building services employee found a $40,000 production job for the station. "Everyone on our payroll is a salesman," says Ziegler.

Keeper of the mission

If everyone is a salesman, who is watching out for the stations' public-service mission? In the heat of fundraising, who prevents the deals from hijacking the mission?

Ziegler assigned that job to June Smith, the station's chief programming officer, a longtime colleague. He calls her "our truth squad." Again, it's a matter of incentives.

"Because I'm not responsible for revenue-raising, I don't have a conflict of interest," says Smith. "If I think we are doing something that is shorting the mission, I can jump up and down."

Though she regards Ziegler and other managers as mission-oriented folks, she does sometimes argue with them on resource allocation, for instance. She blows the whistle if she sees staffers being pulled off a local broadcast production early so they can work on a money-making shoot. In scheduling, she's especially wary of squeezing out narrow-audience programs for those with broader appeal. There's an enthusiastic audience for high-tech programs in the region, she says, but it's a small audience and needs protection.

"It's very important," Ziegler says, "to have somebody to really hold your feet to the fire and constantly advocate for why we are raising this money--not just because it's fun to raise money."



To Current's home page

Current Briefing on efforts to boost efficiency in public broadcasting.

Later news: Binghamton stations discuss merger with Syracuse's WCNY, 1999.

Outside link: WSKG's web site.


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