in: News & Features

March 27, 2010

WGBH to BMInt, “We decline to respond.”

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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:

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?

WGBH:……….

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?

WGBH: ……….

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?

WGBH: ……….

BMInt: Has WGBH assumed any of WCRB’s debt?

WGBH: ……….

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?

WGBH: ……….

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?

WGBH: ……….

BMInt: Some of the WGBH bonds are so cheap that they are yielding 6.9%. Is your borrowing sustainable?

WGBH: ……….

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?

WGBH: ……….

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?

WGBH: ……….

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.

WGBH: ……….

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?

WGBH: ……….

BMInt: Were the real reasons for cutting the Friday BSO broadcasts more related to marketing than finances?

WGBH: ……….

++

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.

21 Comments

  1. Lucy Sholley’s is one of the best transcriptions of scat singing I’ve ever seen.

    Comment by Richard Buell — March 27, 2010 at 1:36 pm

  2. Does that make the transcriber a scatologist?

    Comment by Lee Eiseman — March 27, 2010 at 4:03 pm

  3. Losing the Friday p.m. BSO concerts is not the major issue for me. Losing classical music on WGBH, the station with one of the strongest signals in New England, is. I’m sure your analysis of these issues is correct, including the promercials. I can’t stand to listen to this station any more. And living in Quincy, I can’t get CRB (though by all accounts it’s no replacement for what GBH was). The people running this “public” station should lost the license. The license should be given to a new non-profit entity.

    Comment by R. C. Knox — March 27, 2010 at 5:44 pm

  4. Perhaps if enough people fail to renew their WGBH membership…the message may eventually hit home. I WILL NOT renew after 30+ years.
    WSCAT..would be appropriate call letters for this poor excuse for a classical music station. Cathy Fuller’s 20 hours er week is the only bright spot.

    Living just south of Boston means reception is very poor.

    Dropping the Friday afternoon BSO broadcasts is further proof that the WGBH management has little use for Classical Music. This fact is quite evident too on WGBH-TV where endless performances of Celtic Women, Andrea Bocelli, Andrea Rieu, Yanni. 5 Priests and 4 Tenors are touted up as great music instead of what it really is… nothing more than modern day Lawrence Welk.

    Comment by ed burke — March 27, 2010 at 6:28 pm

  5. Q: In 2008 some of WGBH’s bonds were declared defeasant and a $9 million dollar loss was declared for re-capitalization. Can you explain?

    A: I believe the answer is the collapse of the auction-rate securities market in February 2008. There was an article in the Boston Globe around this time about how the collapse of that market was forcing WGBH to refinance the portion of their debt in this market into other forms. Presumably far more people in a given week in February 2008 wanted to sell their little piece of WGBH auction rate securities than those wanting to buy them, which would typically cause the interest rate for the entire auction rate debt to rise to an awfully high, pre-set value.

    Note that the issuers of action-rate securities debt (totalling $330 billion), including WGBH, were acting as non-bank financial institutions — the so-called “shadow banking system” — according to Timothy Geithner, then-head of the NY Fed Reserve Bank, in a June 2008 speech. These institutions were effectively acting as banks, while not being regulated like banks (with specific capital requirements, etc.). Welcome to the Great Recession.

    Comment by Michael Pahre — March 27, 2010 at 8:08 pm

  6. BMInt thanks Mr. Pahre for his response to one of the unanswered questions. It’s a pity that the WGBH spokesman took such a defensive posture and refused to enlighten our readers.

    Comment by Lee Eiseman — March 28, 2010 at 8:20 am

  7. i live in provincetown, mass., the very end of cape cod for those of you who don’t know… and i get a clear signal on WCRB, even though technically i’m out of range of the broadcast. The fact of having cape cod bay between my radio and the tower makes propagation over salt water and unobstructed paths the key. Anyway, just wanted to say that listeners can greatly improve reception by knowing how to set up a dipole antenna, like the one that came with my radio. try different locations in your house, too. Small adjustments can be significant.

    As for public radio: it sucks. It has become so commercialized and ratings oriented that i can’t listen anymore. there are programs that are good of course, but the incessant whining for money and the incessant sponsor ads and the incessant “listeners like you” bullshit is so torturing that i have gone to the internet, for good. bye bye broadcasting. the internet is the only place that will spawn the mission values that once made public broadcasting a treasure. [editor’s note: I copied this from an older comment chain]

    Comment by alannalla — March 28, 2010 at 9:29 am

  8. Thank you for the good investigational reporting! We need this sort of information.
    In the corporate world, the head of the organization is ultimately responsible for the fate of the company. I think that it’s time to seriously question Jon Abbott’s leadership of WGBH. Perhaps he should be replaced. The Trustees bear responsibility, too. Their roles must be questioned also. I hope that this station can be turned around!
    In the meantime, after many decades of support of WGBH, I am no longer contributing, in fact, no longer watching or listening to them.
    I would rather support WBUR and WHRB, who seem to get things right.

    Comment by Renata Cathou — March 29, 2010 at 9:49 am

  9. An echo of the above thanks for yr on-going hot interest & reporting.
    It does seem as if we’re in a “classical light’ or even “classical like” state on WGBH- fun, but pablum vs. fine dining. I finally switched my monthly support to TV only, as the non-music shows remain of interest.
    Re radio, I thank God for college stations, which while sparse in their coverage of classical, at least remember their mission is to serve the actual public with variety. WBRU, WERS, WRIU, WUMB, along with the for-profit WMVY are my current patchwork of accessible radio on the Southcoast of MA, even if I can only get them while driving! I so much miss the old 102.5 WCRB…

    Comment by Kate Marin — March 29, 2010 at 10:39 am

  10. I agree that the offerings are badly dumbed down (when I can get them: living in Back Bay our reception for 99.5 is very unsatisfactory) but there are 2 programs in addition to Cathy Fuller which I enjoy, both on Sunday evenings: Brian McCreath’s Bach Hour (some small compensation for the cancellation of the Sunday a.m. weekly Cantata) and Virginia Eskin’s First Ladies of Music program. But these are not enough to get me to resume my financial support. Sunday Baroque is a joke!

    Comment by Susan Ashbrook — March 29, 2010 at 4:06 pm

  11. Has WGBH assumed any of WCRB’s debt?

    Look up the purchase and sale agreement on http://www.fcc.gov. I believe you’ll find the answer is no.

    Comment by Al Majnoun — March 29, 2010 at 10:40 pm

  12. Kate Martin writes: “I so much miss the old 102.5 WCRB…”

    Essentially the same format is on WFCC 107.5, which should be easily receivable on the south coast.

    Comment by Al Majnoun — March 29, 2010 at 10:46 pm

  13. To the editors: your clock is still on Eastern Standard Time. It’s 11:46 right now.

    Comment by Al Majnoun — March 29, 2010 at 10:46 pm

  14. As I told before: the events that are taking place with WGBH-WCRB are NOT emblematic or characteristic but truly inspired but very specific idiocy of the very specific people somewhere in the WGBH administration. I do not see any rational to argue with them and for them – those people are idiots and they shall be treated accordingly. Those people who are responsible shall be traced, highlighted and fired. It is as simple as this, and then we will have and our Friday broadcasts back and the WCRB will stop to be lumpen entrainment station, and many other positive changes will take place.

    On a different note. With all imperfection that WCRB has it is hard do not note the irony that the descent of WGBH-WCRB down to drain is very affinity with BSO descent. A customary-boring play and the indifferent performances – ironically WCRB very accurately reflects it….
    I know that different people love to say that we Boston are unique and special and that we deserve something better. The fun part that we, the unique and special Bostonians are in a deep dark hole compare to what other cultured cities are offering and if to strip stupid Yankee pomposity and look at the facts then we in Boston will be in relatively deprived state.

    The deprived state? Talking about FM – if tomorrow those few managerial Idiots at WGBH will be promoted to a deputy of agriculture then we, FM listener in Boston, will be able to breathe freely and the direction of the WCRB will be changed.

    Comment by Romy The Cat — March 31, 2010 at 1:31 pm

  15. Re Ms. Ashbrook’s appreciation of “Sunday Baroque”: I listened to one portion of one program, so my sample is perhaps inadequate. But I was appalled.

    Comment by Joel Cohen — April 1, 2010 at 10:02 pm

  16. We are attempting here to fill the major gap in WCRB’s ongoing repression of any recording made before 1985 by webcasting the music played by the BSO and recorded between 1947 and 1962. This means that the webcast is devoted to the Boston Symphony with Charles Munch and Pierre Monteux conducting. This Webcast started last month and is slowly gaining listening hours. “It is truly great” said one listener, “to listen to the BSO when is had a sonic signature of its own and for 7 plus hours non stop before the entire playlist repeats. Its big brother station has more than 1,600 hours per month which webcast 10 plus hours of well chosen recordings of some of Haydn’s 104 + symphonies. http://www.live365.com/stations/amorbach for the BSO and http://www.live365.com/stations/ppaquin for the Haydn.
    As for the WGBH / WCRB problems which are ongoing and predicted here, there is a very simple solution: Replace the enrire entrenchments fops and cliques of angolopholiacs at GBH and “lace curtain” classical music enthusuasts with people who are truly informed about newcasting and classical music programming.

    Comment by Pierre Paquin — April 3, 2010 at 7:25 am

  17. What the gentleman in the previous comment is doing is clearly the future not anything that is going on at Radio ‘GBH. Maybe someday it will be possible to wrest the signal from the current institution but right now WGBH is nothing more than a tax shelter with a transmitter.

    Comment by Edward Wagner — April 13, 2010 at 2:36 pm

  18. There is one reasonably simple solution to the WCRB signal problem in Boston and south–HD radio. WGBH broadcasts the WCRB programming on it’s 89.7 HD-2 frequency. I live in Needham–right on the edge of acceptable reception of WCRB 99.5 FM. But I get the WGBH HD-2 signal loud and clear, and there is no doubt that HD sound is superior to regular FM. I bought an HD tuner that connects easily to my stereo component system for about $100. There are also a number of stand-alone HD radios on the market. While the future of HD radio may still be an open question, I’ve not regretted spending the $100 for the tuner.

    Comment by Michael Normile — April 19, 2010 at 6:22 pm

  19. I had great hopes for this venture, but I am as disappointed as the rest of you. I play the on demand podcasts of the Bach hour while at work, as there is no way of knowing what is coming up on the radio to listen to. I cannot understand why they do not let people know what is on the program for the day. One minute I am listening to Mozart and the next I realize that I have been gnashing my teeth because Cathy Fuller thinks Scriabin is something that people would want to listen to. I would not purchase tickets to a concert that did not have programming I enjoyed. Why do Cathy Fuller et al think that we will listen to whatever is played? Does anyone else have an issue with this?

    Comment by Julie Duggan — April 22, 2010 at 8:15 am

  20. Living in Back Bay, I now hear WCRB only in the car, but since November my radio station of choice has become WHRB, which, during its hours of classical programming, and especially during orgy season, has in my opinion the most innovative playlist. Unfortunately, I must at times put up with Harvard hockey coverage, which possibly has a charm of its own which yet escapes me.

    Comment by Francine Crawford — May 4, 2010 at 4:14 pm

  21. Classical 99.5 is a “dumbed down” version of old GBH and only a minor improvement on old CRB. In addition, it’s signal does not reach Southeastern MA, the Cape and Islands (except Nantucket), and much of Western MA, Connecticut and Rohode Island. I am one of those who have called and told of my decision withdraw my support of GBH radio until it rectifies the situation. Their solution by phone was either to buy a digital radio (whose signal also will not reach many of these areas), or an Internet Radio Receiver, which would solve the problem. Both of these run in the range of $200+! I have seen this once before when WCLV in Cleveland changed FM location and lost its signal power and much of its audience. Unless all of us pull together and challenge the powers that be at GBH, who knows what will be next? How can they say they don’t have the money to put up additional towers to improve reception when they did have the money to buy CRB in the first place? Are any of its Board members on Nantucket?

    Comment by Robert Blacklow — May 24, 2010 at 1:51 pm

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