By Dudley Burdge, Senior Staff Representative
First, let me thank you for the opportunity to address you and to explain the position of our members at NJN concerning the fiscal crises and the proposed privatization.
Let me start by discussing those areas of agreement that we share with NJN management.
We agree that the cut in state funding to NJN in the $3 to $4 million range, while only a little above 10% of the total NJN budget of $30 million, is a very tough cut for a small state agency like the NJ Public Broadcast Authority.
We absolutely support restoration of as much of the cut revenue as possible and stand ready to work with you to achieve the restoration.
We also agree that changes are needed in the structure of NJN. There are problems in the length of time that procurement and hiring take. The type of leasing arrangement that appear to be a significant source of future revenue could be more readily achieve with a different structure.
We agree that NJN should use the new leasing possibilities to benefit NJN and, as our members say, also the State of New Jersey that has sustained and supported public television for decades and is the owner of the broadcast licenses.
Indeed, we recognize the need to accelerate the leasing opportunities. We are aware, that most public broadcasters, both non-profit and governmental, have already signed lease agreements concerning the spectrum associate with the Educational Broadband Services. (Though this delay may accrue to our advantage as the value of this asset has increased.)
CWA and the our members at NJN part company on the issue of privatization/ transfer of assets to a non-profit.
We strongly oppose this initiative.
To understand why, we need to look at a little history and ask a question – why was NJN set up as a state agency?
The reason that it was formed as a state agency was that it was the only way to ensure that NJ news and public affairs received broadcast coverage.
When NJN was formed there was no strong non-profit sector in New Jersey like that in Philadelphia and New York.
There still isn’t.
So NJ joined with some 20 other states to directly run public broadcasting in their states. In many other states, including NY and PA, publicly owned universities are major players in public television and broadcasting.
So public broadcasters directly run by public agencies isn’t unusual – in fact it’s probably the most common form of ownership.
Our members don’t believe that the Foundation or some new non-profit has the ability and financial wherewithal to effectively run NJN.
In 1995, a non-profit group purchased WNYC-FM from the city of NY for $20 million. In 2003, a non-profit group purchased KOCE-TV in Huntingdon Beach, CA for $32 million form Coast Community College.
During the last decade quite a number of Public Broadcasting licenses have been sold to non-profits.
But here, the Foundation for NJ Public Broadcasting wants the people of the state to give it the broadcast licenses.
Frankly, we believe that this reflects the financial weakness of the Foundation and the NJ non-profit sector in general.
In strength, NJ non-profits can’t compete in the non-profit marketplace with Philly and NYC, raising concerns with possible dismemberment of NJN if it goes non-profit.
Similarly, our members have not been impressed by the legislative strategy employed by the Foundation and NJ management. Many legislators have told us that they do not regularly hear from public television supporters in the same way they hear from other groups.
A legislative strategy that has not provided legislators with accurate information about the main objectives of the privatization/change in status has created a well of mistrust in the legislature.
Here are two examples:
In testimony before the Senate Budget Committee, NJN representatives failed to even mention the primary force that would allow privatization with reduced state funding – leasing. Did NJN managers actually think that the legislators on the budget committee would not figure this out and ask the appropriate questions concerning the transfer of state assets?
When asked in writing by legislators about the value of its licenses, NJN responded with the ridiculous and disingenuous claim that perhaps the licenses might be worth $5- 7 million.
Ridiculous, as the previously mentioned sales indicate a value in the hundreds of millions for NJN licenses.
Disingenuous in that at the time NJN answered the legislatures question it had an assessment of the value of the EBS licenses of $22.5 million – this just for one sub-set of licenses. Clearly these EBS licenses are worth more now than in August 2007. We understand that Nextel has offered $110 million over 30 years to lease these licenses.
We also think that the privatization idea will be problematic for the legislature in that many of the potential “customers” for future leasing arrangements are state government agencies such as DOT and OIT. Would the state give up the licenses it now owns to turn around and lease the licenses?
We in CWA do not foresee a possibility that state Assembly and Senate leadership and members will approve a simple transfer of assets.
We think its time for this board to assume leadership form the Foundation and craft a “plan B” to address both the current financial crisis and the need for structural changes.
CWA and the NJN staff are ready to help in that effort.
We believe that any solution needs to address the following:
Slim down the Foundation and transfer resulting savings to support NJN broadcasting. We don’t understand why the Foundation needs four high dollar vice presidents and a large personal staff for the Executive Director.
Why is money being spent on glossy, expensive mailings to thousands with no clear fundraising focus in the midst of a fiscal crisis?
Within the state structure, find a way to facilitate leasing arrangements perhaps by granting autonomy to NJN to more easily enter into leasing arrangements and streamline procurement and hiring. Another route could be to amend state bidding procedures to facilitate leasing arrangements.
Use current NJN licenses and potential licenses to ensure that basic wireless broadband services are available to all state are available to all state residents regardless of location, income, or status.
NJN broadcast licenses and potential licenses can and should be the background for data and broadband services needed by state and local government.
We hope these comments will start a discussion on a realistic plan to help NJN achieve a better financial base for the future.
