Marketplace Features

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At many public radio stations, corporate dollars are becoming more important. Members, who give an average $70 a year, contribute almost a third of stations' budgets. But as corporate sponsorship creeps towards 20 percent of public radio's revenue, so does concern about how it might affect the what you're hearing on the air. Today, in the second part of his series on public radio underwriting, independent producer Sandy Tolan examines the impact of underwriting on the sound of local stations.

Tolan: Have you noticed, in recent years, the increasing irony of the phrase, "commercial-free public radio?"

[Montage from local stations]

Tolan: Some local stations have tried to keep their restraint, while others, well...

[Resort promo]

Tolan: In the last few years, there's been declining support from federal and state governments. Of course we didn't speak to all 600 stations in the public radio system -- but of those we did talk to, it's clear that many local stations have felt compelled to turn to businesses in their efforts to grow, or some cases, even survive. Cathy Ives, director of corporate support for public radio's Development Exchange, puts it bluntly:

Ives: "If we took all of the underwriting that is currently happening to public broadcasting, both in television and radio right now, away, and said you could no longer do it, unfortunately you wouldn't be here interviewing me."

Tolan: Cathy Ives looks to double corporate support at 66 participating local stations in just three years. To help do it she's brought in a commercial radio guy, Jim Taszarek, former Phoenix ad person of the year. Taz, as they call him, is trying to show his public radio counterparts how much potential they have out there to raise money.

Taz Web site: "Here are some little things you can do, some fun things that we'll do that will have a giant payoff for you in the end..."

Tolan: About 15 public radio managers attended a Taz seminar in northern Arizona last fall. Marty Durlin, of community radio station KGNU in Boulder, was there. She said the man had a hard sell.

Durlin: "His presentation was laced with little jokes: we in public radio don't how to understand how to exploit our air time. I was pretty turned off by the entire presentation. It's just more of the same: let's turn public radio into a saleable commodity and sell the hell out of it."

Tolan: But the guy who hosted that seminar says corporate dollars, carefully managed, can help save public radio. John Stark, general manager of Northern Arizona Public Radio, says Taz is part of the industry's new facts of life.

Stark: "Newt Gingrich did us a tremendous favor, really, when he attacked public radio, because it really rallied support to the radio station, not only politically but also economically and so there has been a much stronger resolve in all public radio to increase this revenue stream."

Tolan: Yet John Stark also knows public radio stations are walking a potentially dangerous line. Some commercial stations have complained about competition from tax-exempt public radio. FCC regulations limit what public stations can say about an underwriter -- you can give product information, an address or phone number, but no outright promotion. Even so, some commercial stations have started to take notice. Stark cites a recent article in a trade publication that advised commercial broadcasters to carefully monitor public stations, and, if necessary, to go to the FCC to complain.

Stark: "This was very interesting. What it says is that public radio underwriting, which is essentially sales, is being noticed by the commercial radio stations. This was never the case before."

Tolan: Development staffs on many public radio stations are growing, and the new blood is often coming from commercial sales. People who used to sell Rush Limbaugh and Paul Harvey are now pitching Terry Gross and Garrison Keillor. But Stark says there's still a fundamental difference.

Stark: "Public radio makes money to make programming. Commercial radio makes programming to make money. It's a completely different paradigm."

Tolan: Yet the results of the money pressure can lead to some unusual practices. At least one station encouraged contacts between funders and journalists. Up to two years ago, New Hampshire public radio arranged news and information breakfasts between the news department and underwriters -- an insurance company, a law firm, an HMO, an electric utility. Over coffee and croissants, they'd suggest story ideas to the news director, Erik Nycklemoe.

Nycklemoe: "We'd get together in a fancy law firm or some fancy office building and we'd talk about what's happening in the news department and then we would open I us for discussion about story ideas they had. I was a little uncomfortable meeting with funders directly and discussing what was happening in the news department. I though it was a tad inappropriate, but I did it."

Tolan: Mark Handley, president of New Hampshire Public Radio, says he saw nothing wrong with bringing underwriters together with the news director. Rather, he says, it was a chance to consider the perspectives of major community players.

Handley: "Our whole intent in this was to try our best and make sure that there was no either implied or real pressure from anyone to do any particular story. It was simply an opportunity to hear some ideas on some issues that these people thought were extremely important. And we took notes."

Tolan: Handley says the news and information breakfasts ended two years ago. He says a couple of the ideas ended up as award-winning stories. Nycklemoe, now program director in Flagstaff, says he doesn't recall that, but he does agree he wasn't required to work on any stories that came out of the meetings. Still, he says,

Handley: "It can have a chilling effect in the sense that you're becoming kind of chummy and friends with these people. It's opened the door to a relationship that you wouldn't establish yourself if you didn't have that kind of meeting."

Tolan: That kind of meeting doesn't happen at most stations, nor at the national level. NPR would never invite Archer Daniels Midland, one of its key funders, into an editorial relationship, nor does GE get to suggest story ideas to Marketplace. This kind of mingling is also taboo at places that run real ads, like The Washington Post and The New York Times. In public or commercial news, journalists argue that their credibility is protected by keeping the news side separate from the money side. Former NPR Managing Editor John Dinges.

Dinges: "If you routinely encourage your reporters to sit down with underwriters and have schmooze sessions, that puts a great deal of pressure on those reporters. You've broken the firewall."

Tolan: Dinges has worked with local station to build editorial guidelines -- first at NPR and now as a professor at the graduate school of journalism at Columbia. He helped to produce a guidebook for public radio journalism. But no local stations are required to live by it, and Dinges says as local stations scramble to replace lost revenue from federal and state governments, some are face increasing conflicts with underwriters who want to influence the coverage.

Dinges: "I know of several cases where people have complained that people take the attitude that they can buy time, that they give you a grant and you will cover their subject. That, I think, is really insidious because that goes tot the heart of news judgment and to journalistic balance."

Tolan: In some cases it's more subtle, like the American Airlines radio news edit suites at the station in Dallas, headquarters for American. Or elsewhere, when the development staff tells you to please let us know when you're doing a piece about an underwriter, so we can give them a heads up, or, hey, this underwriter has a great story idea. Ten years ago some stations in Alaska were faced with a dilemma in covering the Exxon Valdez spill. After the spill, Exxon gave money to Alaska Public Radio and some local reporters were furious. Others working in Alaska at the time say their news coverage of the spill was comprehensive and uncompromised.

Tolan: But public radio news veteran J.P. Muntal says money is increasingly driving programming decisions at many stations. At Hawaii Public Radio, where he's now news director, Muntal says a weekly "health minute" sponsored by a local hospital could have been mistaken for news, but until recently was written by the hospital staff.

Muntal: "It's very difficult to tell the difference between an underwriter and someone who is actively involved in programming. Let's be honest. A lot of programming decisions often are made and function upon whether it can generate funding."

Tolan: At Hawaii Public Radio, a new general manager, Michael Titterton, is on board, and he's put a stop to those hospital messages.

Titterton: "The culture that we're trying to introduce here is that we are a programming-driven service first, and underwriting follows programming, rather than the other way around."

McChesney: "And that's really where get into that very slippery slope and it becomes extremely difficult over time to remain a public broadcaster, because in effect you're a non-profit commercial broadcaster."

Tolan: Yet many in public radio would say the most successful stations are the ones that protect their credibility from those kinds of influences. And Jane Christo, general manager of WBUR in Boston, says credibility is what the underwriters are looking for.

Christo: "Companies don't want to underwrite, to influence our programming. What they want to do is to become affiliated with a radio station that has such enormous public goodwill. And they want some of that public goodwill to rub off on them."

[WBUR spot]

Tolan: For years WBUR has been one of Boston's most successful stations, commercial or public, especially in afternoon drive time. They got that way, says Christo, largely because of a strong and credible news operation.

Christo: "We do not go out to get underwriting for programs. We do programs and then attract underwriters because of the listeners we have for those programs."

Dinges: "Sure we're gonna get pressure. But I don't think that's more of a problem in public radio than it is in any news organization. That's what the profession is all about: being able to stand up to those kinds of pressures."

Tolan: But it will take more than journalistic courage to resist the heat of sponsorship. Without support from their local stations, individual journalists, well aware of who pays the piper, will have a lot harder time not looking over their shoulder. That's why Dinges and others also advocate strong firewalls between the money side and the news side. They say as the money from businesses and foundations increases, so does the potential for journalistic compromise. And public radio managers must understand that without support from the top, the credibility of the entire industry could be at risk.

Tolan: I'm Sandy Tolan for Marketplace.