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Marketing Strategy of Corporation for Public Broadcasting -
December 16th, 2010
The Corporation for Public Broadcasting (CPB) is a private non-profit corporation created by an act of the United States Congress and partially funded by the United States Federal Government to promote public broadcasting. Historically, 15% to 20% of the aggregate revenues of all public broadcasting stations have been funded from federal sources, principally through CPB.
CPB was created on November 7, 1967 when U.S. president Lyndon B. Johnson signed the Public Broadcasting Act of 1967. The new organization initially collaborated with the pre-existing National Educational Television network. In 1969 CPB talked to private groups to start the Public Broadcasting Service (PBS). In 1970, CPB formed National Public Radio (NPR), a network of public radio stations.
CPB provides some funding for PBS and NPR, but much more of its funding goes to public television and radio stations that are members of PBS or NPR, as well as to other broadcasters that are independent of those organizations. In more recent years, CPB has started funding some Internet-based projects.
Operating Revenues: $282.4 million
SICs: 4833 Television Broadcasting Stations
The Corporation for Public Broadcasting distributes government money to public television and radio stations and to organizations that create programming for them. While nearly all of its funding comes from Congress, it is not a government agency.
During the 1960s, during a period of intense scrutiny and criticism of television, a report by the Carnegie Commission outlined measures to improve the quality of television by increasing the quantity of educational programming. The report recommended that funding for public television be increased and that an organization be formed to funnel funding to public broadcasting stations. Initially, this funding was to come from a tax on television sets like that used in Great Britain. Partly because of opposition from television manufacturers, the funding source was changed to Congressional appropriations.
A large number of public radio and television stations already existed. The earliest had been founded by universities around 1917. The first radio station run by a nonprofit community group was started in Berkeley, California, in 1949 by the Pacifica Foundation. The first noncommercial television station began broadcasting in Houston in 1953. In 1962 the federal government began helping to fund educational television through the Educational Television Facilities Act.
CPB was founded by the Public Broadcasting Act of 1967, with the support of President Lyndon Johnson and most of Congress. The Act set up the CPB as a government-sponsored corporation whose funding came through the Department of Housing, Education, and Welfare through the Office of Education. The CPB was allowed to make its funding requests directly to Congress. Because it was not set up as an independent agency or given long-term financing, the CPB was required to continually approach Congress for funding approvals--an arrangement that has influenced much of its history.
Under the terms of the Public Broadcasting Act, the CPB set up a fifteen-member board of directors that was appointed by the president with the consent of the Senate. This board could not have more than eight members from the same political party as the president, and its members were forbidden from engaging in political activity. With the sponsorship of President Johnson, the CPB was highly centralized under its first president, John Macy, and first chairman, Frank Pace, and it enjoyed a great deal of autonomy in decision making.
As part of its mandate to create an interconnected system of broadcast stations and to distribute and sponsor programming, the CPB quickly set up two further organizations: the Public Broadcasting Service, established in 1969 to create and distribute television programming, and National Public Radio, created in 1970 to handle radio news and features. While CPB set up PBS and NPR, they were never its subsidiaries. The CPB received money from Congress and distributed it to PBS and NPR, as well as to independent producers who created programming for public broadcast stations. Many of the programs now most closely associated with public television, including Mister Rogers' Neighborhood and Sesame Street, appeared between 1968 and 1970.
The CPB's vulnerability to political pressures became apparent after Richard Nixon was elected president in 1968. By 1971 the Nixon Administration was in conflict with the CPB over controversial programming, perceiving anti-Administration bias in such programs as Washington Week in Review, Bill Moyers, and The Great American Dream Machine. The documentary Banks and the Poor, which alleged that many major banks discriminated against poor customers, also alienated members of Congress by displaying a long list of the names of members of the House and Senate who had ties to the banking industry.
Soon public broadcasting was being denounced by Vice President Spiro Agnew, local stations were being encouraged to be more autonomous, and Nixon vetoed the CPB's appropriations bill for 1973. CPB bowed to pressure from the administration, agreeing to restructure itself and its dealings with other parts of the public television system.
A "partnership agreement" established between CPB and PBS removed the Corporation from many programming decisions it had formerly made, giving these powers to PBS and individual stations. CPB was left to finance technical operations by means of a contract with PBS. CPB, in turn, took over from PBS the right to review controversial programs to make certain that they were balanced and fair. Further, the share of its funding that CPB gave as unrestricted grants to public broadcasting stations rose to 50 percent. This meant less power for CPB and more for local stations. CPB was rewarded for its capitulation to political pressure with an increase and stabilization of its funding, but had less control over what was done with this money. The Corporation's appropriation rose from $23 million for 1971, to $35 million for 1972 and 1973, and to $47.5 million for 1974.
As a result of these changes, CPB President John Macy resigned, as did many of his top aides. The changes also led to growing friction between the Corporation and PBS.
Over the next few years, the CPB was criticized by members of Congress, and by some of its own supporters, for not hiring enough minorities to meet the requirements of civil rights legislation. Of 29 managerial positions in 1975, only two were held by minorities. President Gerald Ford largely ignored the CPB during his two-year term, while Congress raised CPB appropriations to $103 million for 1977 (appropriations were usually allocated two years in advance).
The CPB had an easier time during the Carter Administration than during the Nixon and Ford Administrations. The Public Telecommunications Financing Act of 1978 returned some of the CPB's autonomy, eliminating the Office of Telecommunications Policy, which had overseen many aspects of the CPB, and setting up a separate account for the Corporation within the U.S. Treasury. As another result of the act, the CPB gave its grants for the production of programs directly to the producers of the programs. To do this, the CPB created the Program Fund, which defined the criteria for winning such grants and made the awards. Finally, the act opened the Corporation's board meetings to the public, and mandated that CPB annually submit a plant to Congress laying out its objectives for the next five years.
In 1978 President Carter tried to win $1 billion over a five-year period for CPB, but the plan met with opposition in Congress, partly because many in Congress felt the Corporation's mission was still confused, and also because it had a poor record of hiring minorities and women.
In 1979 the Carnegie Commission released another report on public television. This time the Commission urged that Congress spend $1 billion a year on public television--and also recommended that another organization be created to take the place of CPB. The report was critical of CPB, claiming that it was partly responsible for creating an unwieldy bureaucracy that wasted money that might have otherwise gone to programming. With Congress unwilling to pass President Carter's far more modest budget, the Carnegie recommendations went nowhere.
Nevertheless, CPB continued to fund the expansion of the public broadcasting network. In 1979, for example, it played a key role in financing the linking of 192 public radio stations to a satellite. This allowed National Public Radio to distribute its programming via satellite instead of via telephone or audio tapes that had to be mailed to stations. Approximately 20 percent of public radio programming was produced nationally, and could now be distributed more quickly and with better audio quality.
With the election of President Ronald Reagan in 1980, the U.S. government entered a period of budget cutbacks. The 1983 appropriation for CPB was quickly reduced to $137 million from $172 million, reversing a six-year trend of increases in CPB's budget. The Corporation was forced to make layoffs, and shrank its managerial force from 134 in 1982, to 102 in 1983, and to 92 in 1984.
Meanwhile Congress cut the CPB board from 15 members to 10, and required that two of these board members come from public television and radio stations. Congress also mandated that 25 percent of the CPB budget go to the Program Fund and instructed the Corporation to begin finding other sources of funding. Ten public television stations were allowed to try limited commercial advertising to help pay their bills.
In 1983, with National Public Radio facing a $9.1 million debt, Congress charged the CPB with putting the organization on a sound financial footing. Negotiations over a bailout loan were tense, as the two organizations vied for control of NPR's primary asset, its equipment. Finally, in late July, the Corporation gave NPR a $500,000 advance to meet its payroll. Further loans followed, with the proviso that ownership of NPR's equipment be shifted to a group of independent trustees to prevent their potential seizure by creditors. NPR also agreed to cut costs, raise the fee it charged member stations, and increase its contributions from listeners.
President Reagan's CPB board appointments were often controversial. In 1984 he chose the former head of the organization Women for Reagan-Bush, Sonia Landau, to replace Sharon Rockefeller, who had been appointed by President Carter, as chair. Rockefeller remained on the CPB board, however, and she and Landau quickly engaged in a heated public debate, with Rockefeller and some other directors charging that Reagan appointees had politicized the CPB. Edward J. Pfister, president of the Corporation during Carter's term, resigned from the board after it voted to cancel a trip he was to make to Moscow to investigate the suitability of some Soviet television programs for American broadcasting. He, Rockefeller, and others alleged that the trip was canceled for political reasons, while the Landau faction said it was canceled to avoid wasting taxpayer money. When Landau's term expired in 1986, Reagan reappointed her, but the Senate declined to act on her nomination, and William Lee Hanley, Jr., an oil company executive, was eventually elected chair. At about the same time, Martin Rubenstein became the second CPB president in two years to resign over policy differences with the Corporation's board.
In 1987 Congress ordered CPB and PBS to settle their differences. The two organizations reached a compromise the following year in which the Corporation took responsibility for new programs and authority for the Independent Television Service and the Minority Initiatives production group, both of which had been created by Congress the previous year. CPB agreed to split its remaining programming money with PBS. The agreement was an attempt to streamline public broadcasting, allocating more money to programming and less to administration.
The 1990 appropriations bill once again restructured how the CPB allocated its money. The bill ordered the Corporation to form the Independent Production Service and give it a budget of $6 million a year. It also gave $3 million for minority programming, and specified that 25 percent of CPB's interest income go to public radio and the other 75 percent to public television. Finally, the bill ordered the Corporation to spend no more than $10.2 million on its administration, plus, in following years, either four percent or the percent rise in the Consumer Price Index, whichever was greater.
In 1992 Senate conservatives attempted to reduce the CPB budget by nearly $400 million over a three-year period. They contended that the programs shown on public broadcasting reflected a liberal bias and were sometimes obscene. The conservatives were defeated by a vote of 75--22, and a $1.1 billion authorization was voted for 1994 to 1996.
By 1994 the public broadcast community for which CPB provided funding had grown to 629 radio stations and 351 television stations. The Corporation's allocation for fiscal 1995 was $285.6 million. Its administrative costs were $13 million, or 4.5 percent of its budget. It made $143.5 million in community service grants directly to local television stations and $44.6 million in community service grants to radio stations. Grants for national programming for radio and television totaled $67 million, and were the largest single source of financing for public television and radio programs. About six percent of its budget, or $17 million, went to general system support, which included training and technological research and development. The CPB and public broadcasting received praise in some quarters because of the educational and cultural value of some of its programming, as well as the low level of violence compared to that of commercial broadcasting.
However, despite Congress's own criticism of violence in commercial broadcasting, congressional hostility to the CPB had never been higher. Some members of Congress called for the privatization of the CPB, asserting that the government should not be supporting broadcasting, and that the diversity of programming the CPB was created to foster was now being provided by cable television stations. They argued that public broadcasting could survive on greater private and corporate donations (particularly with more advertising allowed by corporation underwriters), and the marketing of characters from popular programs like Sesame Street and Barney & Friends.
The mood on the local level was sometimes similar to that in Congress. In 1994 New York Mayor Rudolph Giuliani began drawing up plans to sell two of the city's public broadcast outlets, WNYC-TV and WNYC-FM, prompting the CPB to warn him that it would seek millions of dollars in reimbursement costs if the city went ahead with the sale.
The Congressional elections of 1994 turned CPB's situation from bad to worse as the Republican Party gained control of both the House and the Senate. Attempting to cut federal spending--and objecting to what many saw as liberal or immoral programming--Congress soon directed the Corporation to look for ways to completely replace its federal funding with other sources of revenue. Representative Peter Hoekstra of Michigan introduced a measure to eliminate the CPB's funding for 1998.
The CPB, along with public television and radio leaders, began a major grass-roots effort against a funding cutoff. CPB president Richard Carlson formed a task force with executives from PBS, NPR, and other organizations to increase public support. PBS stations began airing commercials warning that its programming might disappear if the CPB's funding were cut off.
The Corporation hired Lehman Brothers Inc., a New York financial firm, to investigate possible sources of new revenue. Lehman looked at ways to cut costs throughout public broadcasting, by methods including limiting funding to one public broadcasting station in each market. It also considered generating revenue by marketing toys from popular public broadcasting programs, selling broadcast spectrum, and increasing the amount of corporate sponsorship. Lehman's report concluded that all of these means together could not replace federal government funding, leaving the Corporation's future murky.
Last edited by anjalicutek; December 16th, 2010 at 12:53 PM..