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WTVI Shows Signs Of Improvement, But Deficits Forecast To Continue For A While

If a drama were to be made about Charlotte’s public television station, the script would go like this: After two years of withering losses and on the brink of closing, the station was saved by a hero who rode in and took over, restoring quality programming and ensuring the station’s survival.

Playing the role of the savior would be Central Piedmont Community College, which absorbed WTVI (Channel 42) in 2012 and set a goal, in the words of CPCC President Tony Zeiss, to make it the best public TV station in the nation.

While there are positive trends since the takeover – most notably, in just the first half of this fiscal year, WTVI has exceeded all of last year’s fundraising – the station remains in the red.

In its first year under CPCC, losses widened, and an audit presented to the college’s board of trustees last month said it will likely be at least three years before the station quits losing money.

At the time of the July 2012 takeover, WTVI was reporting annual losses of about $377,000. In the fiscal year ending July 2013, losses tripled to $1.1 million. Much of the increase was due to consolidation with CPCC’s longtime cable operation – Channel 17, carried by Time Warner Cable – and higher fees paid to PBS to get top-tier programming, hits such as “Downton Abbey” and “Sherlock.”

But excluding those two costs, the station still finished its first year under CPCC with a deficit of about $550,000.

“We knew it would be three to five years to get on firm financial footing,” said Jeff Lowrance, special assistant to Zeiss. “We expect the station to be self-supporting and we’re going to get there.”

To understand the station’s financial position, Lowrance said, one must consider where WTVI was when CPCC took over.

“It was on its last gasp,” he said, “within weeks of closing.”

WTVI’s precarious decline

WTVI has seen a steady decline in fundraising over the last decade. It had about 20,000 members, meaning core contributors, in 2005. By the end of 2011, that number had fallen to 5,963.

When the full impact of the recession began to be felt in 2009, the station went into a financial dive. Facing the closure of libraries and layoffs of teachers, Mecklenburg County eliminated its $800,000 annual grant to the station in 2010.

That same year, the station’s budget anticipated that viewers would donate $950,000. But WTVI raised $669,469 in 2010. In program underwriting, which is largely corporate sponsorship of shows, the station set a target of $300,000, but raised $101,406.

A direct-mail, fundraising drive to help close the gap in December 2010 brought in only $48,257, and 46 percent of that was kept by the New York-based fundraiser in expenses. Guidelines from the Better Business Bureau recommend that no more than 35 percent of a drive should be spent on fund-raising.

In 2011, it set similarly ambitious goals, and got similarly disappointing results. WTVI appealed to Mecklenburg County to restore its $800,000 annual grant, but the county declined.

CPCC to the rescue

By September 2011, WTVI was more than 60 days late paying bills and owed nearly $70,000, according to minutes of the Charlotte-Mecklenburg Public Broadcast Authority, which oversaw the station’s finances before the CPCC takeover.

Burning through cash reserves, WTVI was on the brink of going dark in winter 2012 when CPCC agreed to take it over and merge the station with the college’s cable operation. In March 2012, Mecklenburg commissioners approved the CPCC takeover on a 6-3 vote. It gave the college $357,000 to carry out the merger and $800,000 over four years to replace aging equipment such as routers, monitors and cameras.

In a confidential memorandum of understanding between the college and the broadcast authority in February 2012, CPCC agreed to accept up to $175,000 in debt. Lowrance said when the takeover occurred in July 2012, the college had to accept liabilities of about $195,000.

Station losses are paid by the college out of money it gets through student fees, renting out its conference center and other operations that generate income. Tax money that largely underwrites CPCC’s $218 million budget cannot be used for the station, Lowrance said.

One advantage of combining the college’s cable station and WTVI that was discussed before the merger was the possibility of using Channel 42 as a learning laboratory for students in the college’s video and digital production programs. A new classroom has been built at the station, and the college is pursuing academic accreditation for the curriculum.

College brings changes

After the takeover, CPCC moved its cable operation, which employs nine people, to WTVI to continue making shows, many of which air on Channel 42.

It launched a Friday evening public affairs program, “Off the Record,” hosted by David Rhew, a former Channel 3 reporter who is WTVI’s assistant general manager.

In the fall of 2012, the station resumed carrying the PBS first-run schedule with signature programs like “Frontline” and “Masterpiece,” which WTVI quit carrying in 2004 because it duplicated the programming on two other public TV networks carried in Charlotte, UNC-TV from Research Triangle Park and SC ETV from Columbia. Fees for getting the main PBS schedule increased WTVI’s program costs $260,000 a year.

That move came after CPCC surveyed about 400 viewers and found them in favor of returning to the best-known PBS shows and programs with a local focus.

At the end of 2012, WTVI hired Jay Ahuja, a veteran corporate underwriting specialist at WFAE-FM (NPR, 90.7), to bring in corporate support. That position had been vacant when WTVI was facing closure.

Finding a new leader

In April, Amy Burkett was hired as WTVI’s new general manager. She came from Bethlehem, Pa., where she oversaw the Lehigh Valley’s public TV station.

Like WTVI, that station faced steep financial challenges. After Pennsylvania quit providing subsidies to public TV in 2009 and donations fell during the recession, the station went $1.9 million into the red.

Burkett was able to restore the station to profitability through budget cuts, layoffs and increasing income from grants, corporations and viewers.

She also cut the station’s PBS dues by reducing mainline PBS programming provided in the region by the Philadelphia PBS affiliate.

Why show the same programs?

For years, WTVI has wrestled with the same issue. Should it air the main prime-time schedule from PBS, which viewers favored in the CCPC survey, or differentiate its schedule and let the statewide networks provide the best-known PBS programs?

When WTVI broke from the mainstream schedule, it selected other popular programs for prime time, including nature and historical projects and an evening of British comedy. It paid off at first: Among cities where more than one public TV station was available, WTVI ranked second in percentage of viewers, behind the station in Provo, Utah.

But as WTVI’s income faded during the recession, so did the quality of shows it was able to purchase. It fell behind UNC-TV in ratings share, and because it dropped the Nielsen ratings service to save money, it wasn’t able to say how many viewers tuned into any program.

Burkett said the success of differentiating programming at the Lehigh Valley station was a result of the high quality of shows. Her former station kept the most popular PBS series and used top-rated BBC programs like “Doc Martin” for the rest of its schedule. Viewers applauded the changes, she said, and corporate underwriting surged.

She wants WTVI to consider whether providing high-quality alternate programming would be a better long-term strategy against the statewide networks.

Burkett said she believes another key to WTVI’s success is in creating local programming. She has started a magazine show called “Carolina Impact” on Thursday nights, which she hosts.

She has launched an initiative for this spring that will recognize top students in the 13-county region the station serves for their abilities in science, technology, engineering and math – the so-called STEM subjects.

Getting back in the black

Burkett said her main challenge is stabilizing WTVI’s finances.

Without anyone pursuing corporate underwriting in fiscal 2012-13, the station brought in $45,000. In the first six months of this year, the station raised $108,623, a 140 percent increase over all of last year.

“Ask and ye shall receive,” Burkett said. “And last year they didn’t ask.”

A problem with WTVI’s fundraising appeals last year was that they were poorly framed, Burkett said. They were negative in tone, stressing the station’s financial straits. “Nobody wants to throw money to a sinking ship,” she said.

Burkett has launched a monthly direct-mail marketing campaign that stresses what the station is doing in the region – its literacy initiative run by Beverly Dorn-Steele that has served 11,000 children this year, workshops for 300 educators and locally-focused shows.

Burkett said the station is now on pace to raise about $700,000 from viewers this fiscal year, a 36 percent increase.

She estimates the station’s overall deficit will fall by about a third to $800,000 next year, to about $400,000 the following year and will be on the verge of break-even in 2016.

Burkett said she is also looking for ways to raise the station’s income by increasing rentals of production facilities for corporate or independent projects and renting space on the station’s broadcast tower to telecommunications companies or radio stations.

“I am 100 percent sure we can restore this station to a thriving community asset,” she said.

Audience remains small

Public television has always presented itself as an alternative to commercial broadcasting, offering cultural shows, children’s programming and other offerings such as historical series from Ken Burns and the current buzz-worthy hit, “Downton Abbey.”

But like other public TV stations, WTVI has only a small slice of the audience. Its highest-rated show, “Classic Gospel” on Saturday evenings, attracts an estimated 19,600 viewers, about the seating capacity of Time Warner Cable Arena.

By comparison, the lowest-rated program in Charlotte on a commercial network is “Beauty and the Beast” from the CW network, which airs at 9 p.m. Mondays on WCCB (Channel 18) and draws three times the audience of the gospel program.

During prime time in October, WTVI averaged 3,390 viewers at any one time, according to the ratings agency Nielsen. Of the three public stations serving Charlotte, it had the largest share of audience, 41 percent.

Other views

Bill Walker, the longtime WSOC (Channel 9) anchor who retired in 2005, serves on the 23-member WTVI advisory board. He supports examining the alternative programming idea.

“I’m a big supporter of public television because it does offer on the programming and news side options that commercial television is never going to offer,” he said. “In a perfect world, the best way to compete is to offer local broadcasting that the local commercial stations are not going to offer because the ratings would be too low and the financial return would be too low.”

Bill James was the most outspoken Mecklenburg commissioner in opposing county stipends for WTVI and favored it going out of business. WTVI had repeatedly asked the county for money but showed no ability to become self-supporting, he said.

“For years, the county struggled with the fact that WTVI was a money loser,” James said. “I’m glad to be rid of the doggone thing. There shouldn’t be three PBS stations in the market. It’s like having three CBS affiliates.”

James said he watches the PBS shows “Nova” and “History Detectives,” but he doesn’t know which PBS affiliate he sees them on. “I don’t look to see if it’s WTVI. I don’t know anybody who does that. If you had your choice of four CBS stations for ‘NCIS,’ you wouldn’t care which one you got it on.”

James said WTVI’s value in broadcasting county commissioner meetings has diminished. “We broadcast our meetings on the Internet. Their business model is from the ’60s – put up a big transmitter and use all that power. People today hardly even use antennas. When they want to see TV, they pick up their iPad and go to Netflix or Hulu.”