Just released monthly (February) Arbitron ratings, respected indicators that track radio listenership, show that since the November changes, audience at the new all-talk WGBH has remained flat and at the new all-classical WCRB has declined. It seems timely therefore to revisit the issue of what is going on at these stations. BMInt recognizes WGBH management’s commitment to providing classical music broadcasting in Greater Lowell, Nantucket and Southern New Hampshire. BMInt also concurs with WGBH management that the programming on Lowell’s WCRB has continued to improve since the purchase by the WGBH Educational Foundation. There are some in the geographically diminished classical audience who agree, especially those who contributed the recent WCRB all-day-fundraiser which, according to our sources, set records for such an event.
But BMInt continues to have major misgivings about current operations at WCRB:
- Large parts of Boston and South cannot receive the signal.
- There’s too much airtime devoted to banal and relentless promercials
- The music selection is still rather limited except during Cathy Fuller’s approximately 20 hours per week (12% of airtime)
- But our major bugbear remains the cancellation of the 18 Friday afternoon BSO concerts.
Assuming the figures supplied by WGBH Radio General Manager John Voci at the BMInt sponsored panel discussion on January 5th are correct, the cost of producing the live Friday afternoon Boston Symphony broadcasts — which were suddenly discontinued after some 58 years — amounted to a minuscule fraction of the station’s budget. To be exact, $25,000 against some $13,000,000 or 0.2%.
Therefore Mr. Voci’s rationalization based on budgetary constraints begs the question: What is WGBH Radio doing with that $13,000,000? BMInt has been trying to find out what is the fiscal situation at WGBH/WCRB. It is, after all, a publicly-supported entity. And supporters should know how their contributions are used.
This article will consider troubling aspects of the entire WGBH budget inasmuch as teasing out the radio portion from the TV and production areas is challenging with the data available to the public. Readers wishing to attempt their own analysis may look at WGBH’s Form 990’s on the website, guidestar.org and find other information at charitynavigator.org. This article was based on information from those sources as well as WGBH consolidated financial statements.
BMInt has consulted several non-profit corporate lawyers and fiduciaries for this article. We posed the resulting 12 questions to the designated WGBH spokesperson, Lucy Sholley, on March 23rd. On March 25th she responded:
WGBH has been very responsive to all of your requests over the past months: John Voci, Jon Solins and Jeanne Hopkins have all given interviews for your online journal; John Voci participated in your public forum; our Board of Trustees welcomed you to their meeting and gave you an opportunity to present; Emily Rooney featured your colleagues on Greater Boston; and I have answered your many inquiries.
However, it’s clear from this list of questions, with their negative implications and references to our internal, confidential information, that you have moved beyond constructive reporting about our classical music service and are now pursuing an agenda of your own. We therefore do not feel it is productive to continue to engage with you, and we decline to respond to these questions. Information about our classical service is always available on our website.
The unanswered questions follow.
BMInt: The 2009 tax year ended months ago and WGBH is still on an extension for the filing of its form 990. Can you tell me when it will be filed?
BMInt: From 2006 to 2007 to 2008, total salaries and benefits increased from $79 million to $82 million to $90 million. In 2008 the 16 VP’s each earned from $180,000 to $392,000. Have the VP’s taken any cuts in 2009? Has the total salary and benefit figure dropped from the $90 million for 2009?
BMInt: WGBH is carrying approximately $185 million in long term debt as of the end of 2008. That does not include the $14.7 million borrowed from a $15 million line of credit for the purchase of WCRB. Has the debt situation remained similar though the end of 2009 and into 2010?
BMInt: Has WGBH assumed any of WCRB’s debt?
BMInt: The Boston Museum of Fine Arts also had $185 million dollars of long term debt at the end of 2008. WGBH pays $9 million in annual interest on its debt while the MFA pays $1.3 million in annual interest. What does that say about how the market views the quality of the two institutions’ bonds?
BMInt: In 2008 some of WGBH’s bonds were declared defeasant and a $9 million dollar loss was declared for re-capitalization. Can you explain?
BMInt: Some of the WGBH bonds are so cheap that they are yielding 6.9%. Is your borrowing sustainable?
BMInt: There are some interesting comparisons with other respected non-profits which I would like you to respond to. According to Guidestar, WGBH’s fundraising costs amount to 10% of the monies raised versus 6% for the BSO, 7% for MFA, 14.5% for WETA (radio and TV in DC) and 11.1% for WNET (radio and TV in New York). Can you explain how your fundraising costs are allocated?
BMInt: On the 2008 year end form 990, WGBH’s debt is 35% of net assets compared to 1% for BSO, 19% for MFA, ½% for WETA and 0% for WNET. WGBH pays 3% of its annual income to cover interest, compared to .02% for BSO, ½% for MFA, .8% for WETA and .2% for WNET. Does WGBH have a plan to lower this substantial debt load?
BMInt: According to BMInt’s reading of the WGBH audience service reports from October to December of 2009, hundreds of individuals have canceled their support over anger at the changes in classical music presentation. Please tell us how support is doing overall.
BMInt: Has WGBH factored into its financial projections for next year any amount for a cutback in donations from the public in response to cutting the broadcast of Friday BSO performances and curtailment of broadcast coverage? If so, might the expected reductions in contributions be greater than any savings from the $25,000 stated cost of the 21 cancelled Friday broadcasts?
BMInt: Were the real reasons for cutting the Friday BSO broadcasts more related to marketing than finances?
In closing BMInt appends a March 3 colloquy between BMInt and Ms. Sholley
Lee Eiseman (to Lucy Sholley on march 3): Thanks very much for sending this material. After I digest it a bit I may get back to you with some questions. I guess my only question based on my superficial scan is whether you used the $15 million LOC to buy WCRB. That will appear, no doubt, in your 2009 form 990. Were there any additional bond issues in 2008-2009?
Lucy Scholley: Hi, Lee. The answer to both of your questions below is No.
Lee Eiseman (to Lucy Sholley): Marita told me that GBH used the $15 million LOC to buy WCRB. Are you contradicting her?
Lucy Scholley: The liquidity needs of the business fluctuate on a daily basis and our CFO and Treasury department use a combination of various instruments, including the LOC, to meet the cash needs of the business. In the case of the acquisition they have determined the right balance between use of internal capital and the LOC and make changes on a daily basis to ensure the right balance and the cash needs of the business are adequately met.