Hit by recession, NPR to lay off seven percent of staff

by Paul Farhi, Washington Post

Faced with a sharp decline in revenue, National Public Radio said today it will pare back its once-flourishing operations, and institute its first organization-wide layoffs in 25 years.

Washington-based NPR said it would lay off about 7 percent of workforce and eliminate two daily programs produced out of its facilities in Culver City, Cal. The shows include "Day to Day," which was aimed at younger listeners, and the newsmaker-interview program "News & Notes," which NPR hoped would attract African Americans.

The layoffs of 64 of NPR's 889 employees is designed to close a $23 million shortfall in NPR's current fiscal year, said Dennis Haarsager, NPR's interim president and chief executive in an interview. The cutback will affect all departments, including reporters, producers, researchers and digital media employees.

Until very recently, NPR has bucked the consequences of the shrinking economy, finishing its last fiscal year in September on budget, with operating revenues of about $158 million. Its programs, especially the daily news shows "Morning Edition" and "All Things Considered," have remained popular, reaching some 26 million listeners per week. In July, its executives were projecting revenue growth in the new fiscal year, and additions to the organization's staff.

But the bad news has caught up in the past few months, as all four of its major funding sources have taken hits, leading the organization to revise its financial projections downward. It projects revenue this year to fall to $145 million, an 8 percent decline.

NPR employees were to be told of the cutbacks in a staff meeting this afternoon.

NPR relies on corporate underwriting, membership fees from more than 800 public radio stations, donations from foundations and income from an internal endowment funded primarily by a $230 million bequest made by the late Joan Kroc, the widow of McDonald's mogul Ray Kroc, in 2003.

Underwriting -- the public broadcasting equivalent of advertising -- accounted for about a third of NPR's annual budget, and is the most seriously impaired. In particular, the decline of support from companies in the entertainment, automotive and financial fields prompted NPR to cut its projected underwriting revenue from $47 million to $33 million this year, according to Dana Davis Rehm, NPR's senior vice president of strategy and partnerships.

At the same time, some of the stations that carry NPR's programming are themselves in trouble, threatening NPR's fees from its member stations. For example, WBEZ-FM, a Chicago station that hosts production of the weekly program "This American Life," on Friday announced a round of layoffs amid expectations of a drop in revenue from pledge drives and other sources.

In July, NPR dropped a weekday news and features program called the Bryant Park Project after only six months on the air. The program, produced in New York City, was another attempt by NPR to attract a younger audience. But despite a $2 million budget, it was heard on only five stations nationwide.

Combined with the elimination of "Day to Day" and "News & Notes" the cutbacks constitute a retreat from NPR's efforts to reach new listeners, especially young people and members of minority groups who are not part of NPR's "core" audience. The diversification effort started in 2002 with the opening of NPR West, the organization's first major production facility outside of Washington and New York. The facility will remain open after the cutback, but with about half of its 60 employees.

Meanwhile, NPR will receive no income from the Kroc gift this year because of declines in its investment value. Kroc's gift had spun off about $10 million in revenue for NPR last year, but legal restrictions required and NPR's investment advisors recommended suspending that revenue source as the gift's value declined. NPR said it will make up the lost revenue by dipping into its reserves this year.

In a memo to NPR's news staff in May, Ellen Weiss, vice president of news, signaled that harder times might be ahead when she warned, "NPR is also seeing a serious slowdown in the sponsorship market (underwriting) and this year we reduced the prime time program license fees for member stations so the revenue side of NPR is also projected to be far less optimistic than it was last year."

The memo led to cutbacks in travel and overtime and some restrictions on filling vacant jobs.

NPR had a modest staff cutback in 1996, according to Rehm. But she said the only comparable cut to this one was in 1983, amid a financial crisis at NPR, when it eliminated 27 percent of its employees.

article originally published at http://www.washingtonpost.com/wp-dyn/content/article/2008/12/10/AR2008121002064.....

The media's job is to interest the public in the public interest. -John Dewey