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Big Bird Goes Cold Turkey

Saturday, April 1, 1995

W hen Bell Atlantic Chairman Ray Smith offered to help Congress find alternative sources of money to replace federal funding of public-television broadcasting, PBS supporters protested en masse. And when Jones Intercable--which already distributes adult-education courses through its Mind Extension University--offered to take over programming for PBS, the cries of outrage grew louder. Public broadcasting, which has always presented itself as an impoverished charity case throughout years of on-air beg-a- thons, was suddenly described by PBS president Ervin Duggan as a valuable business enterprise that should not be "sold off for scrap."

A similar contradiction surfaced when House Speaker Newt Gingrich (R-GA) first announced on National Empowerment Television (which receives no tax money) that he'd like to "zero out" federal subsidies for the Corporation for Public Broadcasting. Lobbyists attacked him for wanting to "kill" public broadcasting. This same lobby counters criticism of its reliance on tax money by pointing out that the federal share of its revenue was only 14 percent of the total.

The conflicting arguments of public-television advocates against the privatization of the industry illuminate the broad contours of the debate: Congress is now debating proposed cuts in appropriations for public broadcasting of 15 percent for 1996 and 30 percent for 1997. But the issue is about more than just $285.6 million in tax money; it is also about the role and reach of the federal government and an elitist culture determined to manipulate it for its own purposes:

Plenty of Money

Public broadcasters maintain that the federal share of their income is sacrosanct, the "seed money," and quite unlike the remaining 86 percent that comes from other sources. But, in fact, the federal matching formulas work precisely in the opposite manner. It is the non-federal money which is the "seed money" for public broadcasting, as anyone who has ever watched a pledge-week special will recognize. The federal government offers to match the amount of private funds each station succeeds in raising. This is the reason large urban stations with wealthy viewerships perversely receive more money from the Corporation for Public Broadcasting than do small, rural stations. It all prompts the question: Why are CPB advocates so certain the rest of their income could not be generated outside of federal coffers?

It was a curious thing to watch this hostility to businessmen displayed by representatives of an institution that usually, at least in public, sings honeyed praises of "public-private partnership." These same elites point to the many Fortune 500 corporations that enjoy enhanced prestige through their association with PBS: General Motors, Mobil, Exxon, GTE, New York Life, and Ford Motor Co.

Indeed, private-sector benefactors who offered to raise money for the educational broadcasting system were described by Frank Rich, a columnist for the New York Times, not as generous philanthropists, but rather as "circling vultures." The privatization that had once been described as impossible is now denounced as being all too likely.

The availability of private funding sources reveals that the fundamental issues are ideological and not financial. Proponents of federal support for public broadcasting want the government to be involved because they dislike private enterprise. They claim to fear the "trash" that a market-based broadcasting system could produce. They say they want to make television "safe for kids."

What they dislike, however, is not poor-quality programming, but the very idea of the market. If it were the former, then how can PBS justify Tales of the City, a campy soap opera; Tongues Untied, which was both crude and lewd; Frontline's Death of a Playboy Centerfold and Death of a Porn Queen, subjects more suitable to tabloid television; and Yanni: Live at the Acropolis, which some might consider of doubtful value? Clearly such programming is not intrinsically superior to A Current Affair or Inside Edition. In fact, trash is not in the least offensive to the fans of public broadcasting--commercial trash is.

In the PBS world view, exposure on public television can even elevate commercial television into art. Take the case of I'll Fly Away. A CBS drama starring Sam Waterston and Alfre Woodard, it did well critically, but poorly in the ratings, and was canceled after one season. PBS picked it up, producing one new episode and then airing a full season of repeats. The series depicted the effect on one family of the civil rights movement in the South, and flattered the sensibility of the liberal professionals who make up the core PBS audience. No doubt they could identify with this well-educated Southern family, which was manifestly superior to the backwards rednecks who made up the rest of the white folks in the series.

The program was among the highest-rated shows ever broadcast by the network. If anything, the success of I'll Fly Away has indicated that a show by commercial producers was just what public broadcasting needed. But that was not what happened. Despite the series's appeal, no further commercial drama has appeared on the network. Indeed, PBS even canceled a development deal with producer Brandon Tartikoff, who had been president of NBC when it was at the top of the ratings.

Commercial-drama producers were not welcome at PBS even after the success of I'll Fly Away, just as Bell Atlantic is not welcome as a replacement for Uncle Sam. The reason is simple: Public broadcasters see themselves as an aristocracy and, like aristocrats everywhere, they find commerce beneath them. No matter that the U.S. Constitution prohibits titles of nobility; public broadcasters see themselves like the Dons of 18th- century Spain, with neither dust on their boots nor soil of commerce on their hands.

The aristocratic pose of public broadcasting, and protestations of independence from mainstream American tastes, is curiously dependent precisely on the patronage of the federal government. Otherwise, the status of the enterprise is no different from that of any other broadcasting entity. Indeed, the aristocratic pretension even informs the refusal of the public-broadcasting lobby on Capitol Hill to submit CPB to the Freedom of Information Act. To disclose information to the American public--to mere commoners-- would be to lose stature. The mystery of the enterprise would be disturbed, and without the mystery, there would be little majesty.

The aristocratic conceit also undergirds broadcasters' refusal to ensure, as the law requires, that programming is objective and balanced. The Public Broadcasting Act of 1967 specifically calls for such balance in all matters of public controversy. This was necessary for the same reason Congress passed the ban on domestic dissemination of the Voice of America--that it would be dangerous to allow the federal government's power over the press to be exploited by a victorious political faction.

In 1992, after complaints of imbalance and the intercession of Senator Dole (R- KS), Congress strengthened the statute to provide for a procedural review of programming and commissioning of remedial fare whenever public broadcasters violated standards of objectivity. Yet, after almost three years, the CPB has never admitted a single mistake, nor commissioned a single hour of remedial programming.

A desire to wear a cloak of status and prestige is the only explanation for this otherwise inexplicable phenomenon. For to admit error would be to place public broadcasting on the same plane as the commercial press. The New York Times prints corrections every single day. The Washington Post has an ombudsman. When NBC was caught rigging a crash test on Dateline NBC, the company fired the president of NBC News. But when PBS aired the fraudulent Liberators, which falsely gave credit for the liberation of Buchenwald to African-American troops instead of the 6th Armored Division, WNET in New York retracted it after substantial public pressure from Jewish groups and World War II veterans. Yet not a single head rolled, and no corrective programming was aired.

The aristocratic conception of status also thrives in the relation of CPB to Congress. Although dependent on the federal government for its annual appropriation, the CPB regards its role as a "heat shield" against Congressional critics rather than a regulator. That is, public broadcasting must be permitted to receive federal funds and commission programming with no questions asked. The government-weary electorate demands accountability for tax money spent on every other government program. Yet public broadcasters stand with the National Endowment for the Arts as one of the few recipients who claim a special exemption.

Kids as Shields

PBS's attitude is bad enough when it is programming for the "new class" of professionals and educators. But it is even worse when it hides behind supposed concern for the sensibilities of children. Commercials, one of the engines of revenue, are deemed hazardous by a cadre of "experts" in education and media, who need to certify shows as "educational."

But here's the rub: When advertising aimed at children became increasingly restricted on the networks, PBS became the venue for licensing bonanzas connected to its shows. For example, over 5,000 products connected to Sesame Street are grossing almost $1 billion in annual sales. Yet the show is nevertheless considered "non-commercial" because it is certified as such by "experts" in educational psychology, such as Gerald Lesser, a founder of Children's Television Workshop (which created Sesame Street) and a professor at Harvard University's School of Education.

PBS executives try to have it both ways. On the one hand, they shun commercial television because of its commercializing influence on children. On the other hand, those with the franchises for PBS shows enjoy exclusive advantages no other toy vendors can claim--for they carry the noble title, "educational," and the PBS seal.

Big-Bucks Programming

In public broadcasting, the democratic institution of Congress, which is responsible to the taxpayer, relinquishes the power to approve programs to an unelected bureaucracy. In deciding who gets grants, the Corporation for Public Broadcasting has depended on judgments from expert panels of industry insiders, rather than the board of directors appointed by the president and confirmed by the Senate. Again, the principle is clear: CPB should be accountable neither to the marketplace nor to the taxpayers and their representatives.

In fiscal year 1993, CPB distributed some $289.4 million to 200 affiliated television stations and 490 affiliated radio stations. That was about 14 percent of the total--about $2 billion--spent on public radio and television. By way of comparison, in fiscal year 1993, CBS was the number-one rated television network in the country, with a prime-time Nielsen rating of 14.0, and earned broadcasting revenues of about $2.3 billion. At that time, public television stations spent about $1.2 billion for an average prime time rating of under 2.5. In other words, CBS was paying $164 million for every ratings point in 1993, while PBS was paying about $480 million per ratings point.

Were PBS viewers three times as valuable as network audiences, or was the federally-subsidized network simply paying three times as much to reach the same people? Rather than reaching the most people for the least amount of money--a democratic mission--public broadcasting strives to reach a select group of people, no matter the cost. Such targeting of consumers happens all the time in the commercial marketplace. But it's hard to justify for a democratically funded organization.

This phenomenon of elitist and parochial disdain, then, begins to explain the unwillingness of the public broadcasting lobby to engage in the debate over the specifics of public broadcasting. The problem is not lack of money. It is simple snobbery on the part of public broadcasters. Federal tax dollars are considered "clean." Private donations, sponsorship, or underwriting is considered "dirty."

Could the public broadcasting system become self-sufficient? Of course. The money is already there, within the same system that has been growing for more than 27 years. As President Clinton himself told Brian Lamb in a C-Span interview during the 1992 campaign, the public broadcasting system is pretty healthy, and he "didn't know that we needed to spend any more money on it." The president's own budget line item for CPB has been essentially frozen since he took office, and his administration actually proposed a 6 percent cut for public broadcasting in its 1996 budget.

Drawing from the Well

Where could taxpayer funding find a substitute? Any number of combinations and permutations of replacement funders spring to mind.

  • More than 5.2 million members contribute some $391 million annually to public- broadcasting stations. That's about $75 each. Since public-broadcasting membership represents the top stratum of the socioeconomic ladder, were each subscriber simply to pledge $56 additional each year, it would yield public broadcasting $290 million--the entire federal share. Not too difficult a challenge, considering that the average net worth of the membership of WETA, a PBS station in Washington, D.C., is $627,000, according to USA Today.
  • The private foundations that support public broadcasting are among the richest entities in America today. They include the multi-billion-dollar Ford, MacArthur, Warhol, and Rockefeller foundations. Certainly these vast accumulators of wealth could increase their contributions to public broadcasting as well. The Ford Foundation alone has a $6 billion endowment. If public broadcasting were a genuine priority for them, private foundations could make up the $290 million annual appropriation from their own bank accounts.
  • The commercial radio and television networks that benefit from the fact that PBS and National Public Radio serve to crowd out potential competitors could fund public broadcasting in the same way that cable companies pay for C-Span, as a cost of doing business and a way of increasing corporate goodwill. Split between NBC, ABC, CBS, and Fox, the sum required would be about $75 million each, and no doubt the networks could barter programs onto the schedule as part of the contribution. This system was actually used by Margaret Thatcher's government in Great Britain to establish Channel Four--originally proposed as taxpayer-supported. A private corporation owned by the other commercial television companies and known collectively as Independent Television (ITV), Channel Four was so successful at nurturing alternative and diverse television programming that it has actually begun to support itself, even attracting commercial sponsors. It frequently draws better than the BBC's arts and cultural channel, BBC-2.
  • Hollywood stars are quite vocal in their support of public broadcasting, lining up to testify at congressional hearings. But they haven't yet confessed that they are in a better position than most to make up for the federal share. Entertainer Barbara Streisand, who makes $10 million to $15 million per picture while warning about the deleterious effects of cutting public television funding, admitted in a recent speech at Harvard that Americans spend about $340 billion annually on the entertainment industry. A donation from the Hollywood moguls totaling only one-half of 1 percent of those receipts would amount to more than five times the federal share to all of public broadcasting.

What's going on here? Are CPB and its offspring, NPR and PBS, hapless paupers dependent on the federal dole? Or are they sophisticated business ventures whose profit potential remains untapped? Which is it? Although Streisand denounces conservatives for emphasizing the private sector, she has chosen to work with commercial Hollywood studios and record companies. Stars like Streisand, along with other "arts advocates" from groups like the Creative Coalition such as Blair Brown, Christopher Reeve, Ron Silver, and William and Alec Baldwin, could agree to donate their time to do one television special a year for public broadcasting. They could get their Hollywood friends to join them, and the programming could be used as pledge specials. If such stars appeared for free on PBS, their shows could be used for fundraising, much like The Three Tenors is used now.

How much money could Hollywood raise for public broadcasting? You do the math: Streisand brought in a cool $1 million for then-candidate Bill Clinton at a 1992 fundraiser. In 1986, she raised $1.5 million for a group of six Democratic congressional candidates. Forbes magazine estimates Streisand earned $52 million in 1994.

Other big-money show-business stars (according to Forbes) include Oprah Winfrey, who made $53 million last year, Bill Cosby ($34 million), Harrison Ford ($27 million), Bruce Willis ($19 million), Tom Hanks ($16 million), Kevin Costner ($15 million), Tom Cruise ($14 million), Eddie Murphy ($13 million), and Roseanne ($13 million). The richest of them all is Steven Spielberg. Forbes magazine estimates Spielberg makes $165 million to $170 million annually.

We know where at least some of their money goes. Spielberg donated $161,000 to Democrats running for Congress. Five studio political-action committees gave $866,798 to Democrats (compared to $187,050 to Republicans). MCA chairman Lew Wasserman gave more than $230,000 to Democrats in 1992, compared to $6,000 to Republicans. In 1992 Disney's Jeffrey Katzenberg (now partnered with Spielberg and music mogul David Geffen in a new company) gave over $100,000 to Democrats and $2,000 to Republicans. Disney's Michael Eisner gave $19,000 to Democrats and $3,000 to Republicans. Eisner, it should be remembered, sold almost $200 million worth of Disney stock after the election of Bill Clinton because he feared higher taxes. That one transaction was worth almost the entire amount the Corporation for Public Broadcasting spent on PBS in 1992.

With the biggest names from the silver screen appearing on PBS, there is no question but audiences would rise to the occasion. In fact, PBS President Duggan, in a speech to affiliates last year, said he would love to have a Barbra Streisand special on PBS for pledge week. No doubt CD sales alone would make a startling contribution to the PBS budget. Yet so far, Barbra is still operating in the commercial sphere. Why?

Underwriters would surely love to be associated with top stars, and so private support would no doubt more than make up the federal shortfall. Indeed, producers like Norman Lear (founder of People for the American Way) might even agree to produce series for PBS and donate their fees as contributions, with residual rights reverting to PBS.

  • As Senator Larry Pressler (R-SD) showed, the telephone companies seem to be willing to provide free over-the-air educational and cultural programming in exchange for the right to enter the broadcasting business. Certainly regulators and corporations could arrange to make duplicate television stations available for other purposes while maintaining the core mission of public broadcasting as a cost of doing business.
  • Cable companies like Jones Intercable also appear ready to step into the breach, providing public-service broadcasting in order to expand their activities. Such offers should be seriously considered. Another cablecaster expressing interest is the Discovery Network, which also runs The Learning Channel.
  • Finally, PBS could strike better deals with the producers of Barney, Sesame Street, The Civil War, The Frugal Gourmet, and the dozens of other extremely lucrative programs with merchandising tie-ins carried on the taxpayer-subsidized airwaves. Valuable air time is now given away for free to these producers, who know what to do with it. Producers of Sesame Street, for example, use the subsidized exposure to sell $800 million worth of some 5,000 licensed products annually. The show's producer, Children's Television Workshop, has about $70 million in stocks and bonds and pays its top executives more than $300,000 a year. Barney was estimated to sell about $500 million worth of products in 1993, and Shining Time Station garnered $250 million. Intelligent licensing deals alone could probably make up the lost federal subsidy from products connected to PBS's children's programming.

The recent announcement that CPB would get a share of Barney's net profits is unfortunately mere window dressing. In show business, only gross points are real dollars, and CPB does not share in the gross under any known contract. One reason that producers connected to public broadcasting have enjoyed such sweet arrangements is that the system is federally subsidized, There is no incentive to strike the most profitable deal. As media critic Brent Bozell noted in recent congressional testimony, it is very hard for public-broadcasting executives to go up to Capitol Hill and ask for increasing amounts of taxpayer money if they are making millions from selling T-shirts.

And they are. The Wireless and Signals catalogs produced by Boston's WGBH and Minnesota Public Radio, for example, yield about $150 million in total. On the East Coast, PBS stations are partners in the Learningsmith chain of stores, pioneered by WGBH and WETA. On the West Coast, KCET owns a chain, The Store of Knowledge. Both are private firms that benefit from the cross-promotion, advertising, and corporate goodwill of their association with PBS. But their books are sealed to the public, exempted from the Freedom of Information Act.

Public broadcasting can survive, indeed thrive, without a penny of scarce taxpayer dollars. There are many alternative sources of revenue, from station members, to corporate underwriters, to alternative programmers. Better deals can be struck with those who are exploiting the present system. The opposition to self-sufficiency is based not on practical considerations, but rather on an ideological commitment to the role of the federal government as the guarantor of culture and education--much as in Britain, where there are jams and jellies carrying the emblem, "by appointment to Her Majesty."

That is why the current debate over public broadcasting is so fierce. It is a struggle between those with an "unconstrained vision," in the words of economist Thomas Sowell, of an all-powerful central government run by an educated elite that does everything, including decide what is cultural and educational television. On the other side are those who feel a commitment to limited government. As Representative John Kasich (R-OH) recently put it, "the vast majority of people we hear from say, as we go into the 21st century, government doesn't need to run a television station."