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PBS may start foundation to seek major gifts
Underwriting losses to swallow dues hike

Originally published in Current, April 12, 2004
By Karen Everhart

With the economy squeezing its funding sources, PBS is moving to create a fundraising foundation and further loosen its underwriting rules. The network also proposes to increase dues for its stations, but most of the gain would help two big series that have lost underwriting.

On March 23 [2004], the network’s board authorized a task force to develop operating principles for the foundation and present them at the board’s next meeting in June.

PBS leaders believe soliciting major gifts through a PBS Foundation would attract more “top-of-mind consideration” among philanthropists such as the late Joan Kroc, who bequeathed $200 million to NPR, said Wayne Godwin, chief operating officer.

“We’re all of the view that we’ve got to develop additional sources of revenue to support the wonderful work of public television and leave no stone unturned,” said PBS Board Vice Chairman Mary Bitterman, a task force member. The 501(c)(3) foundation would “complement and not compete with individual station efforts to solicit major gifts” and work with “the full engagement and knowledge of stations,” Bitterman said.

To raise revenues for next year, the board endorsed a 7.5 percent increase in program dues and a 5 percent increase in the smaller member services dues, which pay for interconnection and other PBS services.

Before the board vote, leaders of four state networks asked the PBS Board not to increase dues at all or to limit the increase to 3 percent. Other station leaders lobbied for a 10 percent hike in program dues, according to board members.
Dues typically have risen 3 to 5 percent annually in recent years. Last year, PBS President Pat Mitchell withdrew a request for a 10 percent hike, settling for 5 percent.

The board proposal, to be mailed to stations this week, would increase the total station assessment for programming and member services by $10 million to $156 million. Of that, $127.5 million would go to programming.

The $8.9 million gain in the programming budget would largely aid two popular series that have lost underwriters during the recession.

“Most of it is a commitment we have already made to help shore up Masterpiece Theatre and Antiques Roadshow,” said John Wilson, co-chief programmer, in an extended interview [text in large file]. “A small amount of it, $1.3 million, if all these numbers hold, will go to program development.”

Having to spend the money on two existing series is not progress, Godwin said. “It’s what I would call backfilling.”
The board deliberated the proposed budget in a closed session and voted in public without discussion.

Rod Bates, executive director of Nebraska Educational Television, was the only PBS director to vote against the plan. “I’m convinced that there are enough licensees undergoing significant budget challenges that this is not good for the system,” Bates told Current. Asking stations to cover 71 percent of projected National Program Service expenses in 2005 is “way out of balance,” he said.

Lyrics come to credits

To attract more underwriting, PBS loosened its guidelines for sponsorship credits in March, but after many liberalizations they remain more restrictive than the FCC’s.

he new guidelines, which don’t apply to children’s programs, allow several kinds of elements PBS previously prohibited in sponsor credits: people speaking on camera, lyrics, sound effects, people appearing with products, and well-established slogans that contain qualitative or comparative language.

Oregon Public Broadcasting President Maynard Orme was the only PBS director to vote against the plan, which the board did not discuss in open session.

“The guideline revision tries to make PBS a more hospitable environment to advertisers and corporations who are trying to have uniformity of message in various platforms,” said Rob Flynn, communications director for MacNeil/Lehrer Productions, which produces the NewsHour with Jim Lehrer. Underwriting spots will still have the feel of a soft branding message, he said.

As underwriting and other traditional revenue sources declined in the past several years, public TV leaders increasingly have been divided over the amounts stations should pay for the PBS National Program Service.

The higher-dues camp contends PBS and stations must pump more money into the NPS if public television is to stem audience and membership declines and argues that PBS programs deliver the best value for stations’ money. The low-dues faction values PBS but can’t pay the higher fees without cutting local programs and services.

Station leaders staked out positions on PBS’s latest dues request well before the board convened at Braddock Place last month. A letter penned by Mac Wall, executive director of Kentucky ETV, and cosigned by Georgia Public Broadcasting head Jim Lyle and UNC-TV chief Tom Howe
requested a moratorium on dues increases, according to station leaders familiar with the letter. Wall declined Current’s requests for an interview and a copy of the letter.
Moss Bresnahan, president of South Carolina ETV, wrote to WVIZ President Jerry Wareham, chairman of the PBS Board’s Content Policy Committee, asking that PBS limit its dues increase to 3 percent. He called on PBS to re-examine its “ancillary, non-NPS projects and rigorously determine their value to PBS stations.”

“Frankly, as much as we want to help PBS, at this point, we are not convinced that we should place our limited resources into new programming at PBS — at the expense of the educational services and local programming that research repeatedly has shown South Carolinians find of paramount importance to them,” he wrote.

The PBS Board received at least 10 different letters “expressing a variety of points of view,” all of which will be reflected in the forthcoming PBS budget proposal, Wareham said. “It’s the beginning of the process, not the end, and I’m confident that the presentation will be inclusive of the information and that the PBS Board will be responsive to its members.”

“The budget that was approved by the board was approved for distribution to the stations with the purpose of beginning the dialogue as to how appropriate that budget is for the resources to the system,” Godwin said.

Bates said the board has talked for three years about PBS’s need for new revenue sources. “But we always land at the end with the need to approve an annual budget” and turn to stations as the main source of NPS funding, he said. “At some point, we will weaken the station’s ability to sustain itself,” he warned.

Last spring, after the PBS Board recognized that many stations couldn’t afford the proposed 10 percent dues increase, the board asked management to propose a new formula for calculating station assessments. But in January the board rejected a plan proposed by PBS and a task force of station execs that aimed to spread the burden of dues hikes equitably and predictably among stations (Current, Feb. 9). Leaders of several state networks claimed the proposal raised their share of NPS dues disproportionately.

For discussion of the next budget, PBS plans web conferences, affinity group telephone conferences and a survey to measure station support for the spending plan. The PBS Board’s Finance Committee will review the feedback in June as it develops its final budget recommendation.

Web page posted May 11, 2004
Current
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in the United States
Current Publishing Committee, Takoma Park, Md.
Copyright 2004

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