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Wednesday, September 14,2011

WKAR facing serious debt

Ten employees laid off after deficit reaches $635,000, records show. Higher-ups refuse to be interviewed.

by Nyssa Rabinowitz

WKAR was in the hole $635,000 at the end of the 2010 fiscal year, records provided by Michigan State University show.


The broadcast operation laid off 10
people last month as part of a reorganization effort, they also show.
The university had refused to give a specific number previously.


The information came from documents the
university provided after City Pulse filed a Freedom of Information Act
request. The university was unwilling to provide the information
previously and is still refusing to grant interviews with higher-ups
about the situation that led to the layoffs.


A letter from the university
accompanying the documents said that figures on WKAR’s budget for the
2011 fiscal year, which ended June 30, will be made available in
November, following an audit.


MSU provided numbers for WKAR for the 2009 and 2010 as well as on the layoffs. 


Financial records from the 2010 fiscal
year, which ended on June 30, 2010, show that WKAR-TV and WKAR-Radio
reported significant losses for operating revenues and increases in
operating expenses. WKAR-TV’s records show that operating expenses were
over $456,000 higher than operating revenues while WKAR-Radio’s records
reported a difference of almost $179,000. However, both of these losses
are lower than the losses reported in 2009 when WKAR-TV’s operational
expenses were nearly $667,000 more than incoming revenues and
WKAR-Radio’s expenses topped revenues by $260,000.


WKAR’s operating expenses were also
higher than operating revenues in 2008, though those differences
resembled the 2010 amounts as compared to the 2009 amounts. 


The documents also shed light on the
recent layoffs at WKAR. Until it provided documents, MSU was unwilling
to confirm how many employees were laid off or who they were. Documents
show that two supervisors, two technicians, two clerical workers and
four additional employees, including two producers and radio reporter
Rob South, were affected by the cuts. Employee salaries ranged from
about $35,000 to just over $67,000 annually. Cutting these positions
will save the organization and the university over $526,000 in salaries
alone.


In addition to salaries, the university
also saves on retirement and health care costs. The university
contributes 10 percent of an employee’s annual salary toward
retirement, with the employee contributing an additional 5 percent,
according to MSU’s Department of Human Services. Social Security and
Medicaid costs will also be saved as well as health insurance costs,
which averaged about $8,650 per employee during the 2010-2011 fiscal
year, according to MSU’s Human Resources Department.


Efforts to interview Gary Reid, the new director of WKAR, have been unsuccessful.


Also, efforts to interview Pamela
Whitten, the dean of the College of Communication Arts and Science,
were rebuffed by a spokeswoman for the college, Kisten Khire. WKAR was
moved into the college this summer. Until then, it was autonomous.


 Khire
said she had no specific information about the state of WKAR’s
finances, directing all budget questions to Reid, who was named over
the summer to replace DeAnne Hamilton, who had been running WKAR since
2004. Calls to Reid about the situation were never returned.


Khire also deflected attempts to reach
Whitten, saying she spoke for college leadership on the WKAR issue and
Whitten would not provide any new information. Attempts to arrange an
interview with either Reid or Whitten through the University Relations
Department at MSU were also unsuccessful. In addition, simple questions
about how much the university contributes to employee retirement funds
or how much it spends on health insurance per employee were bounced
from department to department, even though the retirement numbers were
found on a university website. The figures were finally confirmed a day
later. 


The only information that Khire would
release about the situation was that the college needed to take
immediate action to try and stabilize WKAR’s finances, which were
experiencing a “long-term deficit trend.” She added that no additional
layoffs were expected.


While WKAR’s situation is unfortunate,
it is not atypical, said Steve Schram, director of Michigan Public
Media at WUOM in Ann Arbor. He said WUOM has been financially
successful in part because it sold its TV station, which contributed to
the majority of the organization’s expenses.


“Television overall, whether it’s
commercial or non-commercial, is an expensive operation to maintain,”
Schram said. “I think WKAR is going through that analysis and
recognizing that they have to make some difficult decisions.”


Schram said public television is most
useful to audiences when it offers local programming. Unfortunately,
local programming is expensive to produce and maintain over time.
Television production requires significantly more employees compared to
radio, which increases expenses. On the other hand, an increase in
cable and satellite programming has diverted audiences away from public
television, which decreases revenue.


“You really are hard pressed to start local programming until you have funding secured,” Schram said.


Rather than splitting the organization’s
resources between TV and radio, WUOM sold its TV station to Central
Michigan University last June and concentrated on maintaining its much
stronger radio programming, Schram said. Currently, the organization
has 42 full-time employees, half a million listeners per week and over
28,000 members providing financial support. No layoffs have occurred at
the station. 


Schram said the best thing public media
organizations can do is show their university hosts that they still
have value to both the university and the community.


“We’ve been fortunate to be the most
listened to public radio station in the state of Michigan,” Schram
said. “With that great support and loyalty from our listeners we’ve
been able to manage the business successfully.”


Records show that WKAR’s TV budget is
about double that of its radio budget, but Khire said that, as far as
she knew, WKAR had no plans to sell its TV operations. Instead, the
organization is in the process of reorganizing to provide new
programming options and new opportunities for students, which Khire
hopes will help the station long term and attract more audience members.


“We’re doing a lot of work to reshape and rework WKAR,” she said.


One of the biggest changes is that CAS
students have increased opportunities for internships and volunteer
positions at the station now that WKAR is a part of the college, Khire
said. The college drastically expanded internship opportunities to
include all aspects of the station, including management, rather than
limiting them to traditional production areas.


“(Students) will have more direct access
to upper management so they will be contributing and really learning
from talented WKAR staff,” Khire said.


The college hopes to increase
college-age involvement in the station as both workers and audience
members, she explained. The move infuses a younger demographic into the
station, which can bring new ideas for programming and outreach in both
radio and TV.


WKAR also plans to launch new
programming in an effort to attract new audiences, Khire said. However,
she had no details about what the new programming would be.


Despite the recent cuts and bad press,
Khire said the college is hopeful that the changes will help WKAR
improve. She asked the public to be understanding and patient during
the reorganization.


“I do hope (the changes) will be enough
to truly engage our community,” Khire said. “We are very hopeful
there’s a bright future.”



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