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WKAR facing serious debt

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

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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 10people 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 theuniversity provided after City Pulse filed a Freedom of Information Actrequest. The university was unwilling to provide the informationpreviously and is still refusing to grant interviews with higher-upsabout the situation that led to the layoffs.

A letter from the universityaccompanying the documents said that figures on WKAR’s budget for the2011 fiscal year, which ended June 30, will be made available inNovember, following an audit.

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

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

WKAR’s operating expenses were alsohigher than operating revenues in 2008, though those differencesresembled the 2010 amounts as compared to the 2009 amounts. 

The documents also shed light on therecent layoffs at WKAR. Until it provided documents, MSU was unwillingto confirm how many employees were laid off or who they were. Documentsshow that two supervisors, two technicians, two clerical workers andfour additional employees, including two producers and radio reporterRob South, were affected by the cuts. Employee salaries ranged fromabout $35,000 to just over $67,000 annually. Cutting these positionswill save the organization and the university over $526,000 in salariesalone.

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

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

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

 Khiresaid she had no specific information about the state of WKAR’sfinances, directing all budget questions to Reid, who was named overthe summer to replace DeAnne Hamilton, who had been running WKAR since2004. Calls to Reid about the situation were never returned.

Khire also deflected attempts to reachWhitten, saying she spoke for college leadership on the WKAR issue andWhitten would not provide any new information. Attempts to arrange aninterview with either Reid or Whitten through the University RelationsDepartment at MSU were also unsuccessful. In addition, simple questionsabout how much the university contributes to employee retirement fundsor how much it spends on health insurance per employee were bouncedfrom department to department, even though the retirement numbers werefound on a university website. The figures were finally confirmed a daylater. 

The only information that Khire wouldrelease about the situation was that the college needed to takeimmediate action to try and stabilize WKAR’s finances, which wereexperiencing a “long-term deficit trend.” She added that no additionallayoffs were expected.

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

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

Schram said public television is mostuseful 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 toradio, which increases expenses. On the other hand, an increase incable and satellite programming has diverted audiences away from publictelevision, which decreases revenue.

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

Rather than splitting the organization’sresources between TV and radio, WUOM sold its TV station to CentralMichigan University last June and concentrated on maintaining its muchstronger radio programming, Schram said. Currently, the organizationhas 42 full-time employees, half a million listeners per week and over28,000 members providing financial support. No layoffs have occurred atthe station. 

Schram said the best thing public mediaorganizations can do is show their university hosts that they stillhave value to both the university and the community.

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

Records show that WKAR’s TV budget isabout double that of its radio budget, but Khire said that, as far asshe knew, WKAR had no plans to sell its TV operations. Instead, theorganization is in the process of reorganizing to provide newprogramming options and new opportunities for students, which Khirehopes 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 CASstudents have increased opportunities for internships and volunteerpositions at the station now that WKAR is a part of the college, Khiresaid. The college drastically expanded internship opportunities toinclude all aspects of the station, including management, rather thanlimiting them to traditional production areas.

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

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

WKAR also plans to launch newprogramming 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 WKARimprove. She asked the public to be understanding and patient duringthe reorganization.

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


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