Schiller's NPR Exit: Diversified Revenue Sometimes Means Diversified Problems

Media Shouldn't Over Rely on Advertisers, but Government Support Presents Its Own Complications

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Vivian Schiller's resignation as president-CEO of NPR today presents a reminder to media executives trying to reduce their reliance on advertising: Diversifying your revenue can also multiply your headaches.

Vivian Schiller
Vivian Schiller
"The fact that we have four sources of revenue -- listeners, philanthropy, corporate and government -- helps ensure that public media is not beholden to any one source of revenue," Ms. Schiller told the National Press Club on Monday, according to the text of her prepared remarks, as she tried to counter Republican broadsides against government funding for NPR.

After the Great Recession, nobody in media wants to get caught relying solely on advertising again. Many newspaper executives across the country, including Ms. Schiller's former employers at The New York Times, are considering or planning online pay schemes meant to extract financial support from web readers. The Miami Herald even briefly added a "tip jar" link to the bottom of stories in December 2009, but reader donations for a for-profit enterprise didn't take off.

NPR usually does benefit from its mix of revenue sources, although the government piece is a little less direct and substantial than the controversy might make it seem. The national NPR that Ms. Schiller headed until today doesn't directly receive dedicated government funds. It gets 2% of its revenue from grants from the Corporation for Public Broadcasting -- a federally funded private corporation -- and agencies like the Department of Education. And it gets 36% of its revenue from member stations, which in turn get 10.1% of their revenue from the Corporation for Public Broadcasting and 5.8% from local, state and federal government.

"Modest as it is -- government funding is critical because it allows taxpayers to leverage a small investment into a very large one," Ms. Schiller said at the Press Club. "It is seed money. Station managers tell me that 10% plays a critical role in generating the other 90% that makes their broadcasts possible."

After member stations' fees and dues, NPR's biggest leg of support is sponsorships, which contribute 22% of its revenue.

But for NPR it's the government leg that got too wobbly to sustain Ms. Schiller's role at the top any longer. NPR had already been under increased government scrutiny after the Republican majority in the House of Representatives repeatedly called for cuts. But the high-profile firing of political analyst Juan Williams last fall over comments he made regarding Muslims in airports, and Tuesday's release of an ambush video showing an NPR executive criticizing the Tea Party -- and saying NPR "would be better off in the long-run without federal funding" -- were ultimately too much for Ms. Schiller to defend.

Joyce Slocum, NPR's senior VP-legal affairs, will serve as interim CEO of the company while NPR's board searches for a replacement.

"The Board accepted her resignation with understanding, genuine regret, and great respect for her leadership of NPR these past two years," NPR board Chairman Dave Edwards said in a statement. "Vivian brought vision and energy to this organization. She led NPR back from the enormous economic challenges of the previous two years. She was passionately committed to NPR's mission, and to stations and NPR working collaboratively as a local-national news network."

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