Thursday, June 15, 2006

A Goal for Station Financial Health

The title of a 2004 CPB report on station financial health says it all.

Having It All: How Public Radio Stations Can Provide Great Service and Live Within Their Means

Just in case the reader missed the point, the following headline tops the summary of findings:

Stations Can Have It All: Superior Service and Financial Health

The report goes on to state, however, that “56% of licensees did not achieve an acceptable level of financial health (net revenue at least 2% of operating revenue).”

I think this CPB-definition of station financial health is a great place to start when setting industry-wide financial goals.

It is such a strong concept. CPB should include it in the criteria for the Community Service Grant (CSG) incentive program.

Interestingly, the current CSG incentives do not address station financial health, even though their purpose is to help build local institutional significance. Stations continue to be rewarded under the basic CSG formula for growing their Non-Federal Financial Support. But there is no reward for managing that money well.

As it stands, the new CSG financial incentives are very likely to go to a number of stations that CPB’s Having It All report says are operating at an unacceptable level of financial health.

This begs the question; can a public radio station be a strong and significant community institution and not operate at an acceptable level of financial health?

The answer has to be “no.”

So I propose the following goal: By the end of 2010, 75% of all public radio stations will operate at the CPB-defined acceptable level of financial health (net revenue at least 2% of operating revenue).

The basic roadmap for achieving this already exists in the Having It All report. With proper focus and appropriate incentives for stations, public radio’s national leadership could help stations successfully navigate those roads.

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