In Ron Schiller’s famous video, he says that if NPR can’t get taxpayer money, smaller NPR stations would have to shut down. The prospect of smaller stations shutting down is being discussed now that the House has voted to cut off the river of tax dollars (cnn.com story; will try not to link to nytimes.com anymore due to impending subscription wall).
I don’t see how this is possible. NPR stations have been given an enormously valuable asset, i.e., spectrum, for free. They can and do make money from this asset by selling corners of the spectrum to digital data services. They can make money by selling commercials, as nearly all NPR stations seem to. Even with no tax dollars or donations, shouldn’t an NPR station be financially unsinkable? They might not be able to pay executives $400,000 per year, but it should be more profitable to keep the station going than to shut it down, since they get their #1 asset (the spectrum) for free. What am I missing?
I’ve read that for the larger stations in relatively affluent areas, the support from CPB (funded by taxes) is around 2 percent so losing that does not seem to be that big of a deal. Maybe the finances of some of the smaller stations where there aren’t that many wall street traders or silicon valley ceos to support them rely on the tax-derived support to a much greater amount.
The stations don’t have much content to speak of. They mostly buy their content from NPR and PRI. It’s not really that the stations will have to shut down but that they won’t be able to run All Things Considered and Morning Edition and whatnot. After that, with no distinctive programming, they’ll have to switch to a commercial music format–i.e. they won’t be NPR stations anymore.
So, yes, you’re technically correct that they won’t have to close their doors and turn off the transmitters, but they’ll effectively disappear without the NPR and PRI programs to run.
I had the same question… On The Media (on NPR) reported that it was something like a single percentage point that Congress contributed to the NPR budget. It seems that between listener donations and advertising (sponsors, whatever) – they could easily carry on without too many “painful” cuts.
Demetri: If the area served by a station is smaller or poorer, that shouldn’t force them to shut down. Spectrum still has value. They might have to employ fewer people or pay employees less, but not exploiting the free spectrum wouldn’t make economic sense.
Bill: Why wouldn’t they be able to buy content from NPR or PRI? The current prices presumably reflect supply and demand. If the local stations have less money, NPR and PRI will have to charge them less. The marginal cost of supplying All Things Considered is zero. NPR and PRI sell some ads in their programs, so having a larger audience and whatever money they can get from the smaller stations is still a plus for them. To say that smaller stations won’t have NPR programs is like saying that Hollywood movies can’t be shown in Nicaragua because Nicaraguans can’t afford to pay $10 per ticket. In fact, the movies are shown in Nicaragua, but not for $10 per person (see https://www.facua.org/es/noticia.php?IdAmbito=22&idioma=1&Id=4901 ).
Some programs may stay, some will definitely go. Presumably the current cost of NPR and PRI shows is apportioned per listener, so small-market stations pay less per program than others, naturally. (I never made a distinction between small and large stations.) And although the marginal costs are negligible, the fixed costs are large and amortized across the stations that pay for it. If the stations have less to pay in and Congress makes its cuts, that will require some shows to be cut back or canceled. Journalists stationed around the world will probably be among the first to go from the news shows. That seems like a shame.
Bill: Yours is not the argument that people are making. They are saying that small market stations will stop transmitting. They will go dark and leave their free government-issued spectrum idle. Obviously it is the case that with less money being fed into the whole system they won’t be able to employ as many people or at as high salaries (our local NPR station is WGBH and, according to their Form 990 filed with the IRS and available at guidestar.org, they pay their top 20 employees between $161,000 and $426,000 per year (with 5 earning over $300,000/year); if the river of taxpayer money dries up, presumably the $426,000/year guy might have to settle for $400,000).
NPR, like the BBC, is quite a plush outfit. Their fundraiser-in-chief shouldn’t be taken too seriously, but other execs are fairly sharp (and yes, well-paid).
Station statements are readily available.
WNYC (http://www.wnyc.org/about/review/) receives virtually nothing from the government, with 99% of revenue coming from members, underwriting, and private foundations.
They also hold their surplus in US debt, generating a criminally low 0.3% rate of return last year. Any improvement whatsoever in asset allocation would replace their grant funding many times over.
Interlochen Public Radio appears to be the smallest affiliate ( http://www.interlochen.org/support )
and got less than 16% of their funding from the CPB. They’re already returning 14% on a broad portfolio, so unlikely to do much better. CPB’s contribution is very small compared to their non-radio operations and overall surplus, so they have many options to fill the gap.
Maybe someone else has better candidates for disaster?
“The sky will fall if you…” arguments are always suspect. My first-year property law prof at Harvard Law School back in 1964-65, W. Barton Leach, used to say that when your opponent uses a rhetorical question in an argument, nine times out of ten one of your best responses is to simply answer the rhetorical question. I think the same can usually be said of “sky will fall if…” arguments. I think there may be better arguments that can be made in favor of direct (and indirect, as by deductibility of gifts to public broadcasting) public subsidies of public broadcasting. I think, for example, that the BBC, which I listen to in my sleep via its transmission via my local Minnesota Public Radio all-news channel, is about as good and as cheap an advertisement for England as one could think of. Perhaps the same can be said of the effect of NPR, assuming people in foreign countries have access to it. And I’d feel better about subjecting all charitable beneficiaries of direct and indirect subsidies to the sort of focus the ideological wing of the GOP is directing at CPB (and NEA) rather than just CPB (and NEA). There are good reasons SCOTUS has interpreted Amendment 1 as prohibiting content-based regulations of speech. I’m not saying there’s a First Amendment issue here, but it seems clear the ideologues who now run my Republican party (yeah, I’m a R-I-N-O), are ideologically motivated in their attacks on CPB (and NEA).
Bill & Philip: ha, so essentially when the NPR fundraiser said smaller stations will have to shut without tax money, what he really meant was “without taxpayer money, smaller NPR customers will not be able to afford their existing hefty payments to NPR.” I guess his ability to rephrase this way is how he earns his living.
(Similar: people like Paul Krugman arguing we need federal train subsidies to provide an alternative to plane travel, because plane travel has been ruined by – wait for it – federal TSA rules.)
(and I actually like NPR and high speed rail, almost as much as I like forthright rhetoric.)
He probably thinks they’ll shut down because the big-time NPR programming is expensive (at least they tell us so during every pledge drive), and it’s inconceivable to him that they could produce local programs of interest.
On the other hand, I remember a decade or two in the past, where you could find things like drive-time bluegrass on Washington DC’s WAMU…. still haven’t quite forgiven them for dropping that programming (now it’s All All Things Considered).
Les: In terms of connecting people within communities, I would think that an NPR station could do a much better job with local programming and discussion than by paying for All Things Considered. Perhaps they’d have a smaller market share, but I thought one of the good things about being a non-profit is that you don’t have to maximize your return on investment. Broadcasting All Things Considered doesn’t serve much purpose because (a) people can get the program streamed on their computers, and (b) the news on All Things Considered is very similar to the news available from other sources (as a government-funded enterprise, presumably NPR is somewhat more pro-government than average, but the typical media outlet is also unlikely to question the benefits of Big Government (because Big Government is great for everyone? Or because Big Government has the power to pull the plug even on a private media outlet?).