Saving money on staff and equipment by merging operations and setting up centralized master controls has long been standard operating procedure in commercial broadcasting. But now, the Corporation for Public Broadcasting (CPB) is hoping that similar combinations could help many public stations weather a severe funding crisis and free up money for investments in newer technologies like mobile TV.
“As a result of the recession, we are seeing a significant decline in non-federal income at a station level, and that is putting enormous pressures on stations,” forcing painful cuts in staffing and programming, explains Mark Erstling, CPB’s senior VP of system development and media strategy. “So, about a year ago we really began looking at the question of what can be done to reduce the cost of the station’s infrastructure— everything from television transmitters to master control to back-office operations like business and human resources.”
This September, the CPB board agreed to set aside $24 million over a three-year period to encourage stations to merge or combine their operations. Under the proposal, the CPB is considering a sliding scale of funding for 75%-95% of the cost of setting up a centralized master control operation.
A variety of financial incentives would also be given to neighboring stations that agree to coordinate the use of their broadcast spectrum. This would allow stations with overlapping broadcast signals in the same or adjacent markets to provide a wider array of programming to local communities for both broadcast and mobile.
The first grants won’t be available until fiscal 2012, which will begin on Oct. 1, 2011, but Erstling says CPB will make money available before that to help stations plan possible mergers.
Erstling believes mergers and close collaboration between stations could address a financial crisis that has already forced major cutbacks. Over time, these efforts would also free up money for stations to invest in newer technologies such as mobile TV, and to expand their local programming.
Groups of two or three stations in states including New York, California and Ohio have already merged operations, but CPB’s plan envisions much larger combinations. “We won’t be funding master controls that serve fewer than five stations,” Erstling says. “Over the next year, we will probably take a look at investigating central-casting models and explore whether it might be possible to build out an affordable facility that could control 25 to 50 TV stations at once.”
Nine stations in one state are already moving ahead with plans to build a centralized master control, though Erstling declined to name the stations, which are still in the middle of delicate negotiations with their unions.
“We’ve vetted their cost-savings estimates very carefully and believe it will probably save them a couple of a million dollars a year,” he points out. “That is a lot of money over 10 years.” CPB’s staff has also been talking to stations in a number of states, including Florida, where 13 stations are in the very early stages of exploring the idea of centralizing operations. Centralizing master-control operations could save smaller stations $250,000 to $350,000 a year, with larger stations saving “multiple millions,” Erstling estimates.
While some of the cost cuts reflect lower spending on equipment, central-casting will also produce layoffs, which will obviously make the plan controversial with staff and unions. “It is a very emotional issue for stations because it involves people they work with every day,” Erstling notes. “But the last time I looked, we were getting close to 1,000 layoffs in public television because of the economy. We don’t expect to hit the bottom for another year or two and when we do, it won’t be a pretty place to be in. Ultimately, we are going to have to figure out how to make operating reductions. If we can reduce operating costs by a couple of hundred million bucks, that will not offset the loss of income, but it will sure help.”
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