Technology

Central-Casting To the Rescue?

New CPB plan encourages cash-strapped public stations to combine master controls 10/04/2010 06:15:00 AM Eastern

Saving money on staff and equipment
by merging operations and setting
up centralized master controls has long
been standard operating procedure in commercial
broadcasting. But now, the Corporation for
Public Broadcasting (CPB) is hoping that similar
combinations could help many public stations
weather a severe funding crisis and free up
money for investments in newer technologies
like mobile TV.

“As a result of the recession, we are seeing
a significant decline in non-federal income at
a station level, and that is putting enormous
pressures on stations,” forcing painful cuts in
staffing and programming, explains Mark Erstling,
CPB’s senior VP of system development
and media strategy. “So, about a year ago we
really began looking at the question of what can
be done to reduce the cost of the station’s infrastructure—
everything from television transmitters
to master control to back-office operations
like business and human resources.”

This September, the CPB board agreed to set
aside $24 million over a three-year period to encourage
stations to merge or combine their operations. Under
the proposal, the CPB is considering a sliding scale of funding
for 75%-95% of the cost of setting up a centralized master
control operation.

A variety of financial incentives would also be given to
neighboring stations that agree to coordinate the use of their
broadcast spectrum. This would allow stations with overlapping
broadcast signals in the same or adjacent markets to provide
a wider array of programming to local communities for
both broadcast and mobile.

The first grants won’t be available until fiscal 2012, which will
begin on Oct. 1, 2011, but Erstling says CPB will make money
available before that to help stations plan possible mergers.

Erstling believes mergers and close collaboration between
stations could address a financial crisis that has already forced
major cutbacks. Over time, these efforts would also free up
money for stations to invest in newer technologies such as mobile TV, and to expand their local programming.

Groups of two or three stations in states including New
York, California and Ohio have already merged operations,
but CPB’s plan envisions much larger combinations. “We won’t
be funding master controls that serve fewer than five stations,”
Erstling says. “Over the next year, we will probably take a look
at investigating central-casting models and explore whether it
might be possible to build out an affordable facility that could
control 25 to 50 TV stations at once.”

Nine stations in one state are already moving ahead with
plans to build a centralized master control, though Erstling
declined to name the stations, which are still in the middle of
delicate negotiations with their unions.

“We’ve vetted their cost-savings estimates very carefully and
believe it will probably save them a couple of a million dollars
a year,” he points out. “That is a lot of money
over 10 years.” CPB’s staff has also been talking
to stations in a number of states, including Florida,
where 13 stations are in the very early stages
of exploring the idea of centralizing operations.
Centralizing master-control operations could save
smaller stations $250,000 to $350,000 a year,
with larger stations saving “multiple millions,” Erstling
estimates.

While some of the cost cuts reflect lower spending
on equipment, central-casting will also produce
layoffs, which will obviously make the plan
controversial with staff and unions. “It is a very
emotional issue for stations because it involves
people they work with every day,” Erstling notes.
“But the last time I looked, we were getting close
to 1,000 layoffs in public television because of the
economy. We don’t expect to hit the bottom for
another year or two and when we do, it won’t be
a pretty place to be in. Ultimately, we are going to
have to figure out how to make operating reductions.
If we can reduce operating costs by a couple
of hundred million bucks, that will not offset the
loss of income, but it will sure help.”

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