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Wednesday, June 3, 2009 07:39 am

Under a mountain of debt, WSEC-TV struggles for survival

Public TV station hopes for federal rescue to make it through summer

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Host Mark McDonald with a guest on “Illinois Stories,” a popular locally produced program that could be jeopardized by WSEC-TV money woes.

Public radio and television stations across the nation have been hit hard by the recession, losing membership support, program sponsorships and grant funding. Dr. Jerold Gruebel, president and CEO of Network Knowledge, the nonprofit parent company of WSEC/PBS Springfield and its sister stations in Quincy and Macomb, says that his television stations are also struggling to escape economic woes and have recently requested aid from the Corporation for Public Broadcasting.

In 1985 Gruebel founded Network Knowledge, a roughly $3.2 million operation that broadcasts in 29 western and central Illinois counties, 12 Missouri counties and one Iowa county. The organization operates with 13 full-time and five part-time employees and, in the past three years, has increased its audience from 65,000 to 130,000 viewers.

“We’ve become an integral part of the community,” Gruebel says. “There’s nobody else that’s doing in-depth programming about the people, places, issues and events in central Illinois.”

Despite its success, the organization first ran into financial trouble in 2002, he says, due to unfunded federal mandates to convert to digital television. Network Knowledge raised more than $15 million to fund the conversion, but was forced to borrow nearly $5 million to pay the rest of the bill.

“That created a debt we’d never had before,” Gruebel says. “We’d never borrowed before. We grew as we raised money; we grew as the need dictated.”

Network Knowledge still owes $4.17 million on the loan and also struggles to pay other debt. The organization has two additional lines of credit, Gruebel says, the first for $400,000 and the second for $200,000 — both are maxed out.

The national economic crisis has compounded the organization’s financial situation. Network Knowledge mostly relies on grant funding instead of membership support (only six percent of the viewing audience donates to the three stations). Gruebel points to the region’s demographics as the reason: 45 percent of all households in 29 Illinois counties served have a total household income of less than $30,000.

“We are mostly poor and mostly rural,” he says. “That’s tough to raise funds in.”

This year Network Knowledge also lost its grant support. The organization receives an annual average of $750,000 from three foundations in Quincy and one foundation in Decatur. Due to their own economic shortfalls, Gruebel says, none of them gave grants to the stations.

The Corporation for Public Broadcasting, a nonprofit organization that funnels federal funds to 177 noncommercial public radio and television licensees, conducted a study last summer that analyzed the financial returns of public television stations to gauge the stations’ health. The findings were not made public, but according to Gruebel, WSEC-TV and its sister stations were included on a “watch list” of the most financially distressed.

CPB recently unveiled a financial distress program for community stations facing the possibility of going dark within the next 18 months. Limited funds are available for the initiative, so the nonprofit instead assists applicants by working with their staff and directors to create business plans that would preserve service.

Mark Erstling, senior vice president for system development and media strategy for CPB, says stations have made tough choices, from reducing or limiting local programming to reducing broadcast hours to laying off staff, in order to stay in operation.

“They know it’s cyclical,” Erstling says. “They know that when things improve they can make investments back into local programming. They appreciate that maintaining the service at some level is most important for the community they serve.”

Network Knowledge applied for assistance from CPB’s financial distress program, and about a month ago, Erstling and CPB chief operating officer Vincent Curren traveled to Springfield to begin talks with the organization. Financial and technical experts have also met with Gruebel to offer advice on a new plan for WSEC-TV and its sister stations. CPB funds all consultation.

Network Knowledge can choose to accept or decline the new business plan. CPB funds public television and radio stations, but doesn’t control their decisions. Gruebel has already publicly criticized a change in service, especially the idea of subscribing to national content that would temporarily discontinue its signature local programs like Illinois Stories and Capitol View.

He’s asking U.S. Sen. Dick Durbin, D-Ill., and other elected officials to support an additional $307 million appropriation for emergency reinvestment in public broadcasting for fiscal year 2010. Public television made the request to Congress to mitigate funding deficits related to the current recession. If Network Knowledge receives its share of the funds, Gruebel says, service and programs can remain the same.

“It would get us through this rough period before other grant funds come through,” he says. “We know we ought to do well come August, so we’re looking for that gap in June and July.”

Contact Amanda Robert at arobert@illinoistimes.com.

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