NPR and budget scrapes: Public radio has been here before

House Republicans Thursday aimed to strip NPR of federal funds by voting on legislation that would bar the US from subsidizing a public radio network that conservatives believe is biased against them.

GOP ire at NPR rose last week after a hidden camera sting taped an NPR official making derogatory comments about the tea party agenda and acknowledging that the network might be better off without federal funds. The head of NPR, Vivian Schiller, resigned as a result of the uproar.

Right now federal money, which is channeled through local stations for the most part, makes up about 10 percent of the public radio economy, according to NPR data. Losing that cash could hurt – particularly at rural stations without other ready sources of funds.

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But would it be the worst financial crisis in public radio’s history? Nope, far from it. That occurred not in 2011, but in 1983.

National Public Radio suffered a horrendous financial meltdown in the early Reagan era Overexpansion and lax management combined to produce a deficit that nearly sank the public-radio system a few years after its founding.

For NPR, it was a worse crisis than the one it faces today. Yes, today is bad: In mid-March a hidden-camera sting caught an NPR official saying that NPR would be better off without public funds. But in ’83, NPR had to be saved by an infusion of federal cash.

Ironically, the disaster came about in part because of “Project Independence” – an attempt by NPR officials to position their network to make do without federal subsidies.

Back then, NPR got about 70 percent of its money from Uncle Sam, according to a 1983 Congressional General Accounting Office report. (Today, federal funds account for about 10 percent of the total public radio economy.) But that subsidy was ramping back due to concern about the deficit.

At the same time, NPR program hours were exploding. And all those commentators and foreign bureaus and whispery-voiced anchors cost a lot of money. Expenses more than tripled in that period, to $27 million a year.

So NPR’s then-chief, Frank Mankiewicz, came up with the idea of tapping more foundations and corporations for grants, among other cash-generating efforts.
The plan was to get $7.3 million in these grants in 1983. But nobody bothered to tell the newly hired chief fundraiser that they needed that much. And two anticipated big donations fell through.

Uh-oh. By December, National Public Radio needed a loan of $7 million from the Corporation for Public Broadcasting (CPB) to make payroll. Mr. Mankiewicz stepped down and 60 lower-level staffers got laid off.

NPR agreed that from then on the CPB subsidy would go mostly to the stations, which would then pay NPR for programming. That’s the financing structure that’s in place today.

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