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NPR's New Chief Faces Tough Choices On Funding

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On Sunday, former NPR CEO Vivian Schiller tweeted a strong endorsement for the choice of Gary Knell to replace her. In the same 140 characters, however, Schiller characterized continued federal funding of public radio as "untenable."

Schiller has told associates the subsidy allows lawmakers to use NPR unfairly as a political punching bag.

Such are the challenges that will soon confront Knell, currently chief executive of the company that produces the beloved children's public TV program Sesame Street. He formally takes over his new responsibilities at NPR in December. And pretty much from day one, Knell will have to grapple with the financial structure of public radio.

According to two people who participated in the process that led to Knell's selection, he embraced a two-track approach: fight forcefully for continued federal support and plan actively for the day when such subsidies vanish, just in case. Those people spoke on the condition that they not be named.

In an interview Monday with All Things Considered's Melissa Block, Knell said federal funds are necessary for public radio stations to help ensure Americans are informed and engaged citizens.

"Certain rural parts of this country, for instance, when you drive across the state, and there is no commercial radio covering local news, [or] local and state government," Knell said, "the only place is public radio."

Knell pledged that NPR will continue to seek such funding — which polls suggest a majority of Americans support.

"We'll have to make up [our minds] as a country, and the Congress will need to decide, as well as state governments, whether this is something important enough to support," Knell said. "I happen to think it is. But we'll see what happens."

But Knell is unlikely to sit back and just wait to find out.

Beyond Taxpayer Support

In the past year, a series of scandals beginning with the termination of NPR news analyst Juan Williams' contract fueled opposition among many House Republicans to federal subsidies for public broadcasting. Large budget deficits added to the pressure. Phasing out taxpayer support for public broadcasting was among the recommendations that a bipartisan commission put forward last November to help balance the budget.

Behind the scenes, NPR executives quietly mapped out what the public radio system might look like without those federal dollars.

The questions were not easily resolved. What cuts would that entail? Which stations would falter? Would the creation of a major new endowment for NPR allow the network to reduce the fees paid by stations to carry its programs? Or would such an endowment better belong to the entire system?

NPR's board, which is dominated by member station officials, is far from unified on this subject. But the discussion itself was notable.

The varied actors in the public radio system — including 900 individual stations, 270 of which are NPR member stations — receive nearly $100 million a year in federal funds. NPR receives roughly 2 percent of its budget from such funds, but public radio stations rely on government money for about 10 percent of their funding. And many smaller stations rely on taxpayer support to a far greater degree.

Knell received a strong vote of support from Ernest Wilson, a past chairman of the Corporation for Public Broadcasting, the not-for-profit organization through which federal dollars flow to NPR and public radio and television stations. Wilson said Knell showed an entrepreneurial bent in his current post as head of Sesame Workshop — the parent company of Sesame Street. The children's show has gone global, and survived a burst of new producers of children's TV who are its competitors.

"Gary Knell brings to this post a proven ability to work effectively and efficiently — and to raise money — which is critically important," Wilson said Monday. "In other words, he's figured out a business model."

Knell's Roadmap

Knell said NPR should not only draw more nongovernmental funds from private donors, foundations and underwriters, but also tap the network's expertise and resources to generate new revenue. He said it would have to be done in a way that is consistent with the broadcaster's ethical standards, much as the Economist has done with conferences and custom-designed research for clients. He also told staffers Monday it might draw upon the new prominence of NPR Music's digital offerings.

Such a course might help provide a path for NPR and public radio if they were to confront a future without any federal subsidy. It is not a new concern, as some conservative lawmakers have sought to eliminate federal funds for public broadcasting for more than 15 years.

Last March, conservative activists secretly recorded NPR's top fundraising executive, Ron Schiller (no relation to former CEO Vivian Schiller), saying the network could easily survive the loss of federal funds. Schiller said many local stations would weather such cuts as well, though he noted smaller ones would be hit hard. House Majority Leader Eric Cantor pointed to those remarks to breathe new life into several efforts to cut off all funds for public radio or simply for NPR.

That drive ultimately fell short. But the politically tinged controversies over Juan Williams' termination and Ron Schiller's remarks cost the jobs of NPR's senior vice president for news, Ellen Weiss, as well as both Schillers.

Jeff Jarvis, the director of the Tow-Knight Center for Entrepreneurial Journalism at the City University of New York's Graduate School of Journalism, criticizes public radio for its reliance on federal funds and for the influence member stations have over the network's affairs. After Knell's appointment was announced Sunday evening, Jarvis tweeted: "Scandals are not NPR's problem. Structure is."

Carol Cartwright, vice chairwoman of NPR's board, acknowledged the tensions inherent in the organization's makeup. She said the board consistently acts to protect the strength of the network's journalism and of the stations on which its reports are broadcast to 27 million listeners each week. But Cartwright said the system has to consider some uncomfortable questions.

"I think we're going to have those conversations," Cartwright said. "There are a number of them already under way, and it's clear to us that we have to watch that landscape very, very carefully."

On Sunday, Knell referred to achieving possible savings by finding ways to share costs or eliminate duplication within the public radio system. But he cautioned that it is far too soon for him to know where to look.

Those musings may well be far from an academic exercise. Last week, a House appropriations subcommittee introduced legislation to bar the use of any federal money distributed by the CPB to stations to be used to pay program fees or otherwise support NPR. Such measures have largely been defeated in the past. But the network is not taking the possibility lightly.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

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