By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
All things considered, these are not great days for North Texas Broadcasting Company Inc., the parent organization of KERA-FM (90.1) and KERA-Channel 13. For the third time in the last two years, substantial layoffs hit both the radio and television sides, with 13 people getting the ax last Thursday and five vacant positions being eliminated altogether. In addition, two weekly programs were canceled: KERA-TV's roundtable news show On the Record, hosted by Sam Baker, and KERA-FM's People's Agenda, hosted by Marla Crockett, whose show was just honored by the State Bar of Texas for journalistic excellence. Crockett will replace ousted reporter Maria Hickey as local host of All Things Considered. KERA officials say the cuts should save about $1.1 million annually in salary and employee benefits.
The firings and cancellations, referred to in a press release as a "strategic realignment," come a mere two months after Forbes reported that KERA President Gary Ferrell was among the highest-paid bosses in public broadcasting, pulling in $257,504 annually--a sizable chunk of the $10 million raised during the regular pledge drives. Though Ferrell vehemently disputes the Forbes item, insisting its $10 million figure did not take into account the additional $7 million NTBC receives through government grants and other revenue sources, there's no denying the layoffs reveal substantial fiscal problems at KERA, which has been losing millions for years--even forcing the sale of KDTN-Channel 2 in January to a Christian broadcaster for $19.5 million. That money was put into an investment fund that will pay for new locally produced programming in the future, says a station spokeswoman.
According to the corporation's tax records, NTBC took in about $16 million during the fiscal year that ended in June 2003 and spent about $18 million, and that deficit appears to have doubled the next year. "Revenue has been pretty flat over the last several years," Ferrell says. One reason was the drop in donations after September 11, 2001, prompting the first round of layoffs in June 2002. "And we've suffered from expense increases," including rising health-care costs, a conversion to digital broadcasting and pay raises.
Ferrell says the station's executives and its 58-member board began trying to deal with the problems last spring. "We knew we were going to have to make some adjustments to our expense structure pretty early," Ferrell says. "What we were trying to do is to evaluate the services and activities that we're involved in and which ones are valuable and which ones maybe need to go away."
To that end, in June, Ferrell laid off senior vice president and chief financial officer Samuel Cheng and vice president and chief technical officer Rick Owen and eliminated their positions. Yet, he says, the company also doled out 3 percent merit increases in June, at the end of the fiscal year. When asked why raises were given during yet another year of substantial losses, Ferrell says, "At the time we gave the increases, we weren't contemplating we were going to be laying off people." He insists the layoffs came about only after he and other executives realized that expenses were, again, going to far surpass revenue.
But how did it come as such a surprise? After all, KERA's been operating with a substantial deficit since 2002, according to tax records. And if KERA did in fact make as much money as it had anticipated at the beginning of the fiscal year, and if it did know how much it was going to spend on, among others, in-house and National Public Radio-provided programming, then why were raises given just months before firings occurred?
"Well, I don't know that I am going to be able to answer that in a way that's easy to understand," Ferrell says. "Public broadcasting is, like any other business, a difficult business. We had anticipated some revenue coming in...but our expenses at the end of the year came in quite a bit higher than we anticipated."
It's an explanation that doesn't sit well with some former employees, especially considering that of the 106 employees left at KERA, 12 have "president" or "vice president" somewhere in their titles and pick up collective salaries (including employee benefit contributions) of more than $1.3 million--or more than a tenth of the revenue collected during pledge drives.
"I think the general feeling from others I've talked to who got laid off this time around is disgust," says one KERA-TV employee laid off last week. "Management screwed things up: They spent money on the wrong things, kept high-dollar salaries I didn't even know about till recently, and they got rid of people who weren't making very much...The only people left have 'manager' in the titles. This idea that cutting off the bottom of the food chain isn't reorganization. You're just getting rid of the people who do the work."
KERA spokeswoman Sharon Philipart (who makes about $90,000 a year) says despite the cancellation of On the Record, Sam Baker will remain as the local voice of Morning Edition. Crockett was on vacation last week and didn't get to say farewell to the estimated 19,000 people who listened to People's Agenda and were greeted instead on Friday with a second hour of The Diane Rehm Show. There will be a few other scheduling changes, too: The BBC News Hour replaces The World at 2 p.m. weekdays; The Tavis Smiley Show replaces The World's 9 p.m. broadcast; and an hour rebroadcast of Glenn Mitchell's locally produced show replaces Smiley at 8 p.m. on weekdays. --Robert Wilonsky