Pacifica Radio Releases FY01 Audit Financial Review Details Catastrophic Spending
September 9, 2002
For Immediate Release
WASHINGTON, DC, (Sep. 9) -- Fueled by massive legal and security
costs, expenses soared 42 percent at the nation's oldest listener-sponsored
broadcaster in fiscal year 2001, an audit of the five-station
Pacifica Radio network revealed.
The network posted expenses of $15.43 million for the fiscal
year ending Sept. 30, 2001, up from $10.88 million in fiscal
year 2000, according to an independent audit that was posted
on the network's web site today. [click
here for the audit; note this .pdf file is over 650 kb]
The jump was largely due to $2.42 million in legal and professional
expenses, some $833,000 in public relations and security costs,
and $327,000 in accounting fees. Total salaries also rose,
growing 17 percent from $5.07 million in FY2000 to $5.94 in
FY2001.
The former Pacifica National Board and executive leadership
had been battling listeners, staff, and their own board members
following the 23-day lock out of staff and community at Pacifica
station KPFA in Berkeley in the summer of 1999. That debacle
was followed by the "Christmas Coup" at Pacifica
station WBAI in New York in December 2000, which led to mass
firings.
Listeners and board members filed lawsuits charging violations
of the network’s bylaws and laws regulating non-profit
corporations, and a nationwide boycott campaign was organized.
Pacifica's free-lance reporters went on strike to protest
censorship. They also launched a strike news cast, Free Speech
Radio News, which aired at community radio stations nationwide.
Reformers called for accountability, editorial integrity,
and a return to Pacifica's peace and social justice mission.
A December 2001 legal settlement changed the network's leadership
and mandated an interim national board to guide the organization
through bylaw revisions and listener-member elections of board
members. Those elections are expected to produce a new, permanent
national board by March 2003.
The FY01 audit confirmed the decline in revenue caused by
the turmoil. Pacifica posted total revenues of $10.98 million,
down 4.3 percent from $11.48 million in FY2000.
Pacifica station WBAI 99.5 FM in New York, the network's
largest station, saw revenue decline some 9.6 percent, from
$3.14 million in FY2000 to $2.84 million in FY2001. Revenue
at Pacifica station KPFA 94.1 FM in Berkeley, the network's
flagship station, dropped some 11 percent, from $2.83 million
in FY2000 to $2.51 million in FY2001.
Revenue from the lease of Pacifica's side band carriers (SCA)
dropped sharply, continuing an industry-wide trend. SCA revenue
reached only $394,000 in FY2001, down from $604,500 in FY2000.
Pacifica's income from grants and community events also declined,
posting a drop of more than ten percent in FY01.
The $4.5 million gap between expenses and revenue was bridged
in part by the sale of $1.43 million in investments and a
$2 million spike in accounts payable and accrued expenses
for the year.
Overall, Pacifica finished the fiscal year with a staggering
70 percent decline in Net Assets. Pacifica started the year
with $6.4 million in Net Assets but ended with just $1.95
million.
The high FY01 accounting fees were due to the hiring of costly
outside financial consultants.
Pacifica's new leadership, which assumed control in January
2002, stopped the financial hemorrhaging. Pacifica's satellite
distribution service and national programming division were
reorganized, saving more than one million dollars for the
year. And the network's senior managers took pay cuts ranging
from five percent to 33 percent.
Pacifica's five stations, the heart of the network and the
main revenue generators, were largely spared cuts. And staff
and listeners at the local level responded emphatically to
the network's financial crisis. A record $7.2 million has
been pledged by listeners to the five stations in the last
seven months.
