Relations with the campus leadership is always high on public radio's agenda, since two-thirds of the stations are licensed to educational institutions.
One of the few substantive actions of NPR's 1994 membership meeting was to adopt a resolution urging the network to help stations prove their educational value to their licensees. And CPB President Richard Carlson plans to meet June 15 with his counterparts from NPR and other national organizations to start shoring up relations with colleges, according to CPB Director of Station Relations Rick Eiswerth.
In some cases, however, the preferable solution is a clean divorce. Current asked Roger Sarow, g.m. of WFAE-FM, for a report following-up his station's divorce from the University of North Carolina at Charlotte.
What Mother should have told me about
Going it alone
Originally published in Current, May 9, 1994
Commentary by Roger Sarow
April 12th  marked the first anniversary of the new WFAE. One year as a community licensee. One year on our own. As my Mother would say, there comes a time when you have to sink or swim, based on your own abilities. And swimming along we are, though we find ourselves spitting out a stalk of seaweed now and then.
I've been asked to comment on the lessons we learned the hard way through our two-year transition--things that Mother never told us about this particular kind of life transition. Here goes:
- You can turn some institutional radio stations into community licensees, and it can work out fine. We're the the third example that I know of, following in the footsteps of KCFR, Denver, and WBEZ, Chicago. These stations can now coachs through the process. We can anticipate the costs of going it alone. We are pleased to say that WFAE--nine months into its first independent fiscal year--is actually running about 3 percent below budget on the expense side.
Here's a partial list of the indirect services you may now take for granted but which you will have to fund yourselves if you are divested: unemployment insurance, FICA taxes, workers' compensation, hazard insurance as well as general liability coverage for your staffers and your new board; all utilities (you'd be surprised how many thousands of dollars your 100-kilowatt transmitter consumes). You've got to make sure you have good libel insurance, because you don't have a university's legal department to fall back on.
And you must cough up the monthly payments for that all-important employee benefits package: disability, life, pension and the greatest of all headaches, a small-group health plan. Just wait till you try to find health coverage for six employees, or even 24. It can be done, but WFAE almost had to postpone the sign-over of the station until we knew absolutely that our health coverage was in place.
These issues teach a station manager very quickly what she/he doesn't know. We benefited greatly from hiring (as a trade-out, or when necessary for cash) the following professionals: attorneys (both local and FCC); accountant; auditor; payroll service bureau; fee-only insurance consultant and employee benefits consultant.
If Charlotte can do this (as Chicago and Denver did), so can other stations. All it takes is time, money and planning. You'd better have significant quantities of each if you want to start the divestiture process. This leads me to the next issue.
- Divestiture may be a live option only for the bigger stations in the bigger markets.
Charlotte is the 38th radio market, and it's been no picnic here. If you are getting any help at all from your institutional licensee, it has to be replaced. Cash as well as in-kind. And you'll probably add a few percentage points to your costs for the items I listed. You will have two major ways to bring in the cash--lots of additional membership dollars or lots of additional underwriting.
Several stations have called us expressing an interest in getting themselves divested, but some had done little thinking about their ability to raise heavy additional income from their existing audience, transmission power, programming and population base.
You must also ask yourself if you have adequate staffing to become free-standing. I know of some community licensees who deliver fine community services with five or six staffers, but I think they will tell you that it's hard to do. If you have a one-person development staff, how are you going to get big income increases? If you don't have a business manager/accountant, how are you going to ensure that people get paid and that you are exercising prudent financial control?
- Public radio stations and their institutional licensees need to seriously talk about their futures. It should be done now, and not during the next national and regional recessions.
Our divestiture and some of the others in the late '80s and early '90s were triggered by financial crises at the parent institutions. Let's not try that again in a crisis atmosphere. When a recession arrives, the stations and institutions are least equipped to act for the long-term good.
Although local situations have their own nuances, I don't think it requires rocket science to determine whether an institution should consider working with its station toward divestiture. In my opinion, if an institution is contributing less than one-third to one-fifth of a station's income (cash plus genuinely useful in-kind services), it may be wise to explore divestiture. When you stop to think of it, station funding is like picking up the tab at a restaurant. Anything under 20 percent isn't a commitment. It's more like a gratuity.
This is the point where administrators at the parent institution need to show stewardship and courage. They may want a radio station, but if they're not funding the station significantly, then the station is not truly at the heart of the institution. Period.
I would like to see CPB and even the FCC step up to a new level of leadership on this issue in public radio. If an institution isn't putting significant cash into a station, I would like to see grants and even licenses tied to a bilateral planning requirement. Both station and licensee would have to participate fully in a five-year funding plan for the station, clearly laying out the institution's cash participation ... or its readiness to hand over its broadcasting properties to a more engaged owner.
The intention here is not to penalize an already-stressed station. But institutional licensees pay attention to state or federal guidelines. Several managers have mentioned that their pleas for funding--or at least rational planning--sometimes fall on deaf ears because they came from the ranks of the station.
- Even in the toughest of times, cool heads can prevail. Stations and licensees can retain a "win-win" relationship. This is one of the strongest assets we were able to take out of the WFAE divestiture. We are still close friends with our colleagues at the University of North Carolina at Charlotte, and we closely align our missions in community service.
To the benefit of all involved, we were able to keep two years' worth of discussions focused on one central question: "Given the current and future financial picture of our university, what is the most sensible way to fund and govern WFAE?''
- As I implied earlier, you should plan to ingest a little seaweed as you swim toward the shores of self-governance. We expected a 10 percent increase in on-air pledge income as a direct result of divestiture, when we told listeners we were going it alone.
You can guess what the Radio Gods arranged for us instead. No sooner did we split from the university than our next two fund drives fell about 20 percent under goals. We think we ran into some quirky local economic conditions. In addition, we probably had not educated the audience sufficiently on our station's long-term financial changes and the increased need for long-term parternships with our members.
As we close out the fiscal year, we will hit our overall membership goal or come very close. It has been a long struggle, and we have spent an exhausting amount of time on membership, both on-air and off.
Meanwhile, underwriting and other revenues have come in handsomely. Luckily, our plans were not based on having everything go right. As you know, it never does.
- Remember the obvious: your staff is your greatest asset as you go through this kind of restructuring. Staffers will have the only logical human reactions available to them: concern for their jobs, anxiety, confusion and a certain amount of skepticism. Make a concerted effort to communicate with your staff at every step of the process. No matter how much you communicate, it probably won't be enough.
When you are in the middle of the process you get so engrossed in the details that you forget that you haven't communicated developments to staffers. Remember that you are tinkering with the incomes and careers of many folks, and doing so in a very public arena.
Did WFAE make the right choice, on balance? Yes. One year after the fact, our budget is running in the black. We have both the responsibility and the authority to deal with changing circumstances. In the fall '93 Arbitrons we had the highest audience share of public radio stations in markets of our size. We have co-sponsored musical events with national headliners. Our news staff has won a series of journalistic awards.
One other change had some in-house symbolism. As a morale-booster we replaced our old, 1950s round-shouldered refrigerator. It had been doing a questionable job of keeping food safe for staffers and volunteers. In the old days procuring a new fridge seemed like more hassle than it was worth. Today, we're both no-frost and no-rust. If that doesn't prove we're headed in the right direction, I don't know what does.
In two years of talks with the university, Sarow says, WFAE was able to keep the focus on one question: "Given the current and future financial picture of our university, what is the most sensible way to fund and govern WFAE?" In my opinion, if an institution contributes less than a third to a fifth of a station's income (cash plus genuinely useful in-kind services), it may be wise to explore divestiture. Anything under 20 percent isn't a commitment. It's more like a gratuity.
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