how they got into the mess they are in --- WQED Pittsburgh

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: xxx 
Date: Mon, 14 Apr 2003 17:27:40 -0400
To: dave () farber net
Subject: Re: [IP] WQED Pittsburgh

After seeing the comment below, I've rethought my previous request not
to publish my off-the-cuff remarks on WQED  (repeated below).  Please
remove identifying remarks, and send it out to the list.


Dave:

I've been watching the situation with WQED develop for quite a few
years.  Here's my off-the-cuff understanding of what's been happening.

Please note:  I DO NOT intend this to go to the IP list, as it's based
on hazy recollection rather than hard fact!  That said, here goes...

Some years back, WQED was a thriving PBS television station.  They
broadcast lots of good programming over two separate channels -- WQED13
and WQEX16.  But there were a few worms in the apple.

Most notably, the senior management of WQED communications paid
themselves **unbelievable** salaries.  At one point the president of
WQED was making more money than the any of the presidents of the big-3
national TV networks!  At the same time, WQED's management was not
running a tight ship financially.  Deficits were common, and growing.

Eventually the donors and community woke up and noticed that WQED had a
financial problem.  A BIG financial problem.  There was a shake-up on
the board of directors.  I dimly recall that something more than 1/2 of
the board was replaced.  The new BoD fired the entire senior management
team at WQED, and hired new management at MUCH more reasonable
salaries.  The new management took one look at the books, and started
slicing expenses to the bone.

This change happened too late, though, in terms of fundraising.  For
some reason, most donors don't want to give to a charity that spends
their money on top-flight hotels, first-class plane tickets, and
outrageous salaries.  Go figure.  Those kinds of expenses don't seem to
happen any more, but the image sticks.

At any rate, the new management quickly realized that they could no
longer support the expense of two channels worth of programming.  As an
interim measure to cut costs, they terminated WQEX's programming
schedule, and ran the WQED signal over WQEX as well.  They also
realized that they needed a way to raise 10s of millions of dollars in
a hurry, in order to pay off WQED's accumulated debts.  To this end,
they hit upon the idea of selling channel 16 to a commercial
broadcaster to raise the money needed to stay afloat.

Now the fecal matter REALLY hit the rotating impeller!  Lot's of people
in the community were truly P.O.d at the termination of WQEX's
programming.  Great public outcry ensued, along with a further drop in
fundraising.  Secondly, they found that they'd need to swap licenses
with another station in order to wind up with a salable channel, as
WQEX16 was licensed for community use only.

Your FCC contacts can fill you in on the saga of WQED's attempts to
work the swap/sale far better than I can.  Suffice it to say that
between community outcry and various  bureaucratic issues no such
transaction has yet taken place.  It's been 4 or 5 years now, and still
drags on.

So, the current situation is that WQED's current management and board
are trying desperately to get out from under the debt load brought on
by the profligate spending of the previous management and board.  IF
they could sell/trade/swap WQEX for a station whose license is
commercial, and then SELL that other station they could raise
$30Million to $40Million -- which would come close to covering the
roughly $50Million debt they're trying to deal with.

My impression is that the current management and BoD are generally good
folks who are struggling with an incredible mess.  The problems that
you've complained about should, in my view, be blamed on the *previous*
bunch of bozos who racked up the huge debts that are now the problem.

If you can figure out a reasonable way for WQED to clear most of it's
debts in a timely fashion, we might see more reasonable programming
once again.


On Monday, April 14, 2003, at 04:55 PM, Dave Farber wrote:

> Why can't the FCC just yank WQEX's license and give it
> to a group that would actually make use of the
> frequency? Simulcasting of WQED is obviously not in
> the public's interest, and as far as I am concerned
> WQED should NEVER profit from the WQEX license.


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