NAB tightens its beltTrimming expenses will still leave $7 million surplus in 2003 1/20/2002 07:00:00 PM Eastern
The weak economy has caught up with the National Association of Broadcasters. Meeting in Palm Beach, Fla., last week, its board adopted a leaner budget for fiscal 2003, which begins April 1.
According to board sources, the new budget calls for revenue of $54.4 million, down 7% from the $58.2 million it took in the current fiscal 2002 and down 20% from the $65.3 million it had budgeted for 2002.
By freezing hiring and eliminating some minor programs and conferences, the NAB expects to trim expenses in the upcoming year to around $47 million. That would leave a surplus of at least $7 million, more than the $4 million to $5 million it expects to end this year with but significantly less than the $12 million it had budgeted.
The board sources blame several factors for the shortfall: (1) disappointing revenue from the 2001 convention, (2) falling interest rates (interest income dropped about $2 million), and (3) Viacom's decision to yank its radio and TV stations (and about $1 million in dues) out of the organization.
One source said the budgeters cut revenue projections for 2003 because of uncertainty about the spring convention. NAB is concerned that the convention may suffer a significant decline in attendance as other trade shows have.
But NAB remains in good financial health. By accumulating its surpluses over the years, it has amassed a rainy-day fund of around $80 million.
In other action, the NAB named a committee to develop a "comprehensive EEO proposal" that broadcasters, the FCC and the courts can live with. The FCC's previous set of minority-employment rules, which broadcasters opposed, was thrown out by a federal court. On the committee: Marilyn Kushak, Midwest Family Broadcasters; Mickey Luckoff, KGO(AM) San Francisco; Madelyn Bonnot, Emmis; and Jerry Fritz, Allbritton.
The NAB board also directed staff to try to strengthen the prohibition against satellite radio companies' broadcasting local content over their terrestrial repeaters.
Also, the association said that AOL Time Warner's Dick Parsons will keynote the April 6-11 convention.