VPR's budget takes hit
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By JOSH O'GORMAN Staff Writer - Published: March 1, 2009
In a trend that mirrors a nationwide struggle for public radio, plummeting revenue from business underwriters has forced Vermont Public Radio to cut its annual operating budget by more than 11 percent.
"Public radio has not been spared by the economic crunch," said VPR's President and Chief Executive Officer Robin Turnau. "We've been hearing from businesses who are long-term underwriters who are saying they are having to cut back on their support — or cut it out entirely."
On Feb. 11, VPR's board of directors approved a revised budget for fiscal year 2009 of $5,743,156, a decrease of $732,419, or 11.3 percent, from the original budget of $6,475,575.
VPR had gone into the fiscal year, which began Oct. 1, anticipating revenue from business underwriters would increase slightly from the previous year, from $2,045,181 to $2,094,425. Instead, underwriting revenue is $544,245, far below expectations. With the revised budget, VPR is hoping to generate $1,550,000 in business support.
That means a dramatic shift: VPR will rely less on underwriting support.
While underwriting comprised 32 percent of the budget, VPR is projecting business support will make up 27 percent of revenue. To make up for the shortfall, executives at VPR took a 7.5 percent pay cut. The remaining 43 full-time employees received a 2 percent cut in pay, and the pay cuts will save VPR nearly $274,000.
VPR has eliminated training, conferences and the listener picnic, but there are no proposed cuts to programming, Turnau said.
"Now, and in the future, we need to protect our greatest asset, which is our programming," she said.
While Vermont is a small market, with nine full-power stations and about 182,000 listeners who tune in an average of eight hours a week, what's happening here mirrors what's happening to public radio nationwide.
In December, National Public Radio announced a projected $23 million shortfall was forcing them to cut staff by 7 percent, and eliminate two programs entirely.
"We received most of our support from the auto and financial industries and they're cutting back on their advertising and marketing budgets," said Anna Christopher, senior manager of media relations for NPR.
NPR's percentage of decline on corporate support is very close to the VPR's.
Business underwriting was projected to make up about $47.8 million of the $165 million budget for fiscal year 2009. Instead, underwriting support has declined about $14 million, a drop of 29 percent, similar to the 27 percent decline seen by VPR.
NPR's belt-tightening has been more severe than VPR's. It cut 64 employees from its 889-member workforce and left 24 vacant positions unfilled. Also two programs, "Day to Day," which is broadcast by VPR, and "News & Notes" will go off the air after March 20.
Neighbor woes
Across the Connecticut River, New Hampshire Public Radio also is seeing a decline in underwriting support. "We are anticipating revenue will be down about 10 percent overall," said NHPR's President and CEO Betsy Gardella.
NHPR is comparable in scale to VPR, with 13 stations covering about 90 percent of the state and about 160,000 weekly listeners. Of NHPR's $5,360,000 budget for fiscal year 2009, $2,160,000, or 40 percent, comes from business underwriters. That expectation has been revised downward $210,000 to $1,950,000, said Jim McCann, director of corporate support for NHPR.
"We're certainly off from what our budget projections were," McCann said. "For some (businesses,) when it's renewal time they stop. Others are just reducing their support."
Gardella said NHPR's shortfall, small by comparison to others, will not force layoffs, pay cuts or changes in programming.
Other public radio networks around the Northeast are apparently bucking the national trend and not seeing a decline in business support.
"In terms of receipts, we're definitely holding on," said WAMC Northeast Public Radio's CFO David Galletly. Underwriting comprises about $2.7 million, or 40 percent, of WAMC's $6.8 million budget for fiscal year 2009. Northeast Public Radio draws about 400,000 listeners to 18 stations spanning Massachusetts, New York and Pennsylvania.
"Last year, for the first time, corporate underwriting exceeded individual donations," said WAMC President Alan Chartock.
Successful model
Some networks are pitching underwriting as a smart business decision.
"For the first 40 years of our existence, underwriting was thought of as an act of philanthropy. Now, we say advertising is not just good for the community, it's good for business," said Lou Morin, sales manager for the Maine Public Broadcasting Network. "The good feeling you get from supporting us should be the frosting on the cake, not the cake itself."
Morin said beginning Jan. 1, Arbitron, which rates the popularity of radio stations similar to the way Nielsen rates television programs, included public radio stations and found MPBN is the most popular radio in the state. As a result, Morin said, they have raised their underwriting rates and in some cases doubled them, such as during Saturday mornings when popular programs "Car Talk" and "Wait, Wait … Don't Tell Me!" are broadcast.
Morin said he expects to meet the $1.2 million in projected underwriting income for the fiscal year, 10 percent of the total $12 million budget. MPBN includes both public radio and public television stations.
Likewise, VPR has changed the way it is approaching businesses for support. Before, an underwriter had to sign a three-month contract. Now, VPR is offering commitments as short as a few weeks.
Despite the decline in corporate support, Turnau said she remains optimistic. While underwriting makes up 27 percent of the budget, individual donations make up 52 percent. For the time being, those donations are holding steady. Turnau said she is looking to the next pledge drive, starting March 10, as a sign of VPR's economic future. "That will certainly give us an indication of how individual support will be going forward," she said.
josh.ogorman@rutlandherald.com
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