NPR Makes Budget Cuts

As one walks from NPR's basement garage inside to the elevator, a sign asks to make sure the door shuts tightly. "We don't want the bliss to escape," it says.

Well, last week, some of the bliss escaped when management announced it was laying off 64 people, eliminating 21 unfilled slots and ending two California-based programs, Day to Day and News & Notes. That's a 7 percent cut of 889 employees.

The sadness, confusion and anger inside and outside NPR are palpable. Many names on the list have been at NPR for more than two decades. Vicky O'Hara, who now edits "The Impact of War" series, is on the list. She joined NPR in 1982, when it was still an adolescent network trying to figure out what it wanted to be.

O'Hara famously covered the 1989 massacre of pro-democracy demonstrators in Beijing, stuffing a radio cassette down her pants to save it from confiscation. Others on the list have equally storied careers, but don't all want to go public.

Some inside NPR have demanded the 64 names be shared, but I agree with NPR's general counsel that it is their story to tell. It's never easy being laid off, and it's hard to not take it personally — even if it is not meant to be.

The layoffs are not surprising in an economic climate where practically every day, a new lion is felled. Many, but not necessarily all, NPR employees seem to accept the rationale that big cutbacks were needed to ensure the company's long-term financial health. Assertions by senior executives that the layoffs were not targeted at getting rid of specific individuals have not been as widely accepted, however.

I'll take the company's word on both counts. But wouldn't buyouts have been a more humane way to go — such as many news companies have been doing for the last few years as troubles descended? NPR's financial situation has been deteriorating for more than six months, so there has been time to make adjustments, as the company did in July when it dropped the experimental Bryant Park Project.

Targeted buyouts were considered and rejected, said NPR's interim President and CEO Dennis Haarsager. "It could take months and months and leave you with a lot more expenses if people you don't want to leave, leave," he said. "Then you have to deal with recruitment and possibly hiring temporary employees. I don't believe we have the time and money to do that."

While I believe buyouts still would have been preferable, NPR did give those laid off a 20-day notice including holiday pay and severance packages based on Jan. 1, 2009 salary levels, which will include merit increases. NPR also will keep Day to Day and News & Notes on air until March 20. I doubt anyone losing his or her job, though, would say these concessions greatly ease the pain.

Listeners quickly reacted with emails and phone calls — especially to canceling two shows. A petition drive was started to save News & Notes, a show hosted by Farai Chideya and aimed at an African-American audience. "People in public radio are passionate about their programs," said Ellen Weiss, senior vice president for news. "These decisions are not reversible. These are economic decisions. They are not about the quality of the programs or the quality of the staff."

Repeatedly listeners have expressed two concerns that indicate NPR needs to better explain how public radio works and what NPR has done with a generous bequest five years ago from Joan B. Kroc, widow of the man who built the McDonald's hamburger empire.

Why hadn't NPR let listeners know that it faced financial difficulty?

"NPR should have given listeners a warning that Day to Day & News & Notes were in trouble and we could have had a bake sale type of fundraiser to save these good shows," said Mike Smith. "This is another sign of NPR's disrespect of listeners after yanking Justice Talking and Bryant Park Project (in July) without advanced warning to rally to save it." [Editor's Note: NPR didn't produce Justice Talking; it only distributed it.]

If only it took a bake sale. When one donates money to public radio, you donate it to your local public station. Your station then uses it to buy NPR's programming or to pay for locally-produced shows (Fresh Air, for example, or local news segments) or to buy other programming produced by Public Radio International (This American Life) or American Public Media (Market Place and Prairie Home Companion.)

About 50 percent of NPR's operating budget comes from donations to stations. The rest comes from corporate sponsorships, foundations and the Kroc endowment. Because of the way the current system is structured, NPR couldn't hold a bake sale. The stations would have to do that, but they are experiencing their own financial woes. Chicago Public Radio's WBEZ just announced it laid off 9 percent of its staff.

Another listener expressed frustration at not being able to find a "donate" button on NPR's website. In fact, there's no donate button because local stations, which ultimately control NPR, don't want the network accepting direct donations from the public. The board expressly forbids NPR from soliciting individual contributions on its website. Nor is NPR allowed to solicit money through direct mail, on-air fundraising or telemarketing unless it's done in collaboration with the stations, according to a board document.

It's important to note that NPR is not a radio station. It depends on local stations to buy and air its content.

Now to the Kroc pot of money.

"Didn't NPR receive one billion dollars in a bequest from Joan Kroc?" asks Bill Diunbgfelde. "Doesn't such largesse insulate you from having to make cuts? Please let me know."

I'm sure management wishes it were $1 billion.

Mrs. Kroc gave NPR $230 million in 2003; $193 million was consigned to a restricted endowment from which only investment interest could be spent. The rest is held in ready reserve for costly contingencies such as covering wars, natural disasters, etc. Up until this year, NPR earned about $10 million annually in interest off the gift. That money helped support the $150 million operating budget.

But like many bequests, it came with legal restrictions that prevent NPR from dipping into the endowment's principal for short-term needs. As any investor knows, if you dip into the principal, then each year subsequently you earn less interest. This year, the financial downturn wiped out even the expected interest on the Kroc money.

While other news organizations have contracted, NPR has been growing steadily over the last 10 years, both in terms of its audience and its news-gathering. It now has 18 foreign and 18 domestic bureaus, and no plans to close any. NPR also has been expanding its online offers to continue to be relevant.

Weiss promises that cutting the staff through layoffs won't mean cutting quality. Let's hope the network, and those who support public radio, can make sure that promise is kept.

Other stories about the layoffs: Morning Edition, Day to Day, News & Notes, New York Times, Ellen Weiss on WAMU, NPR announces cuts.

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