Head of Seattle's public-TV station to step down amid devastating debt
Seattle Times staff reporters
The president of Seattle's public-television station abruptly announced his retirement yesterday, noting "others may not believe I'm the one to lead the station" through its profound financial problems.
Burnill "Burnie" Clark, 61, who has led KCTS since 1987, said the station would also scale back production of national shows and would lay off up to 25 percent of its staff, about 35 jobs.
KCTS has piled up millions in operating deficits and cannot pay its bills. It owes $229,000 in rent to Seattle Center, $2.8 million in back dues to the Public Broadcasting System and its cash deficit tops $1.2 million.
And it has long stopped producing the kind of quality local programming that is its primary mission.
Clark blamed Channel 9's woes on the poor economy nationally and regionally.
But a Seattle Times investigation — which Clark knew was scheduled for publication this weekend — found instead that many people cite mismanagement and, in particular, Clark's leadership.
Employees, former executives and the station's own paid consultants say Clark runs the public entity like a private fiefdom. They say Clark, whose total compensation is $268,000 a year, does not tolerate opposing opinions and dominates a weak board of directors.
"The scandal of KCTS," said Barry Mitzman, who worked at KCTS for 19 years and hosted its "Serious Money" show until 2001, "is the failure to serve the public trust, to use its license effectively, or to create the kind of relevant, well-grounded programming that made people here feel proud and connected."
Vanessa Greene, a consultant who spent two months assessing KCTS last fall, said recently: "I think the people of Seattle should be up in arms about that television station. It's absolutely outrageous the way it's being run. If there were stockholders, these guys would have been thrown out years ago — particularly Burnie Clark."
Greene, a former CBS executive with 30 years' experience in television, said she told Clark at the conclusion of her work that for the good of KCTS he should retire immediately.
But two weeks ago, Clark insisted he would stay at the helm. And the station's board of directors expressed support for him.
Even yesterday, the board chairman, retired Boeing executive Doug Beighle, stood behind Clark — calling him "a courageous and visionary leader" — and said he was surprised at the retirement.
Clark said he decided to retire after having "an epiphany" two weeks ago at a conference in Las Vegas about the future of public television. He realized he didn't have enough time to refocus the station and had become "a target." He said his retirement will take effect at the end of October.
Clark conceded that his focus on national productions — expensive, ambitious projects that KCTS hoped to air across the country — didn't pay off.
"It was an ambitious effort that has not produced the results we hoped for," he said.
Eleven employees, mostly in production, were laid off yesterday. Five job openings won't be filled. Many of the other positions will be eliminated this summer as existing national production projects are completed, Clark said.
Tracing the problems
The history of KCTS' economic woes can be found in internal audits, tax returns, documents from insiders and ex-employees, and consultants' reports. Among the problems:
• The station has operated at a loss every year but one since 1996. The largest loss, in 2001, topped $3.4 million.
• KCTS compares poorly to seven public-television stations in other cities with similar viewer ratings. Comparatively, KCTS has unusually low cash reserves and spends much more on lawyers.
• The Corporation for Public Broadcasting, which provides some funding to PBS stations, is withholding nearly $750,000 in grants to KCTS until the station turns in required financial reports, already months late.
• Channel 9 programs suffer because the station often overcharges individual production budgets for station overhead, shortchanging show quality.
Clark blames KCTS' woes on what he termed a "perfect storm" of circumstances beginning in the mid-1990s: a decline in state and federal funding, the loss of Canadian viewers due to channel numbers changing in British Columbia, and the struggling Northwest economy.
"These are difficult times for the public-television industry and for this station in particular," he said yesterday.
Some of KCTS' money troubles are not unique in public television. Like other public TV stations, KCTS faces stiff competition from cable networks, underwriting cuts from corporations and foundations, and a Congress increasingly hostile to tax-funded cultural programming. But while other stations are weathering the challenges, the situation in Seattle has worsened.
Public TV's beginnings
The idea for a national public-television network originated in the 1960s. Educators and philanthropists — led by the Carnegie Corp. and the Ford Foundation — dreamed of a taxpayer-supported TV network, dedicated to public service, fostering a better society through quality, spirited local programming. In 1967, Congress passed the Public Broadcasting Act and the Corporation for Public Broadcasting was born.
Clark, working in educational television in Lincoln, Neb., joined KCTS as an assistant general manager in 1975. He was named president in 1987, a year after KCTS switched from a University of Washington station to a community-licensed station at Seattle Center.
The challenge wasn't simple. KCTS no longer had access to university resources. Unlike peer stations such as KOPB-TV in Portland, it was not affiliated with a public radio station that could partner on local productions and fund-raising. And in the early years, the region had few corporations or foundations with the money and hometown interest to support local series.
But that didn't stop the development of local shows, including documentary specials that garnered national awards.
KCTS produced some weekly series, including "Seattle Week in Review," a free-wheeling political program that ran from 1987 to 1995, and "Serious Money," a local version of "Wall Street Week."
Throughout the 1980s, PBS attracted audiences, corporate underwriters and foundation money for its programming. By the early 1990s, though, ratings were declining as such cable competitors as Discovery and A&E siphoned off viewers. Membership was flat at many stations. Congress began to question the system's program choices and tighten purse strings.
If one year could be called a watershed for KCTS, it was 1995. By then, a former Boeing employee named Bill Nye was starring in a children's science series that won the attention of no less than Disney as a production partner and distributor.
The series, "Bill Nye, the Science Guy," won awards, brought fame to KCTS and opened doors for new project proposals. It introduced the station to a headier, big-league environment and offered KCTS a way to increase revenue.
"That was a huge project, a tremendous boon to the station," recalled Elizabeth Brock, KCTS' vice president of national and international production when "Bill Nye" became a hit. "It won 17 national Emmys, including Best Children's Series. It was the crown jewel."
The surprise success of "Bill Nye" offered a seeming solution to money problems: Go national, where the income potential and the exposure were larger. But the Nye show also brought problems.
"What I didn't fully appreciate at the time was that it was both a tremendous boon and also a very divisive element within the station," said Brock. "It exacerbated the rift between national and local production."
It also apparently put stars in Clark's eyes. He envisioned KCTS reaching the level of big public stations such as Boston's WGBH and New York's WNET. He believed that programs with national prominence would be more likely to attract big-name corporate underwriters and foundations outside the Northwest.
Grumbling steadily arose within KCTS over the national emphasis, which some felt came at the expense of local shows — and the local audience. But Clark insisted yesterday that KCTS presented excellent local programs.
Ironically, even as KCTS was emphasizing national, Seattle in the 1990s was fast becoming a town full of newly rich residents with an inclination toward philanthropy. Donations soared for the local United Way and for artistic and medical institutions — but not for KCTS.
"KCTS was out in the cold," said Mitzman, who now works in corporate communications for Microsoft. "It was not hip, not well-grounded in the changing local culture. It hadn't created the goodwill of being a unique community organization for many years."
Meanwhile, it became increasingly clear that KCTS' national programming push was built on unrealistic estimates of the amount of money it could bring in. In addition, year after year, the station planned for revenue for which it had no contracts or projects under development. But KCTS counted on that revenue anyway and spent money as if it would materialize, putting the station in the red.
Even "Bill Nye, the Science Guy" wasn't a moneymaker. It went over budget by at least $200,000 and in the last two seasons, Clark struggled to find corporate sponsors. The show's best money-making potential, syndicated reruns, vanished when the cash-strapped station sold the series to Disney.
The end result was more money going to pay expenses at the station and less money going to productions, both national and local.
In the late 1990s, KCTS raised more than $2 million from the public to create the Fund for Programming Excellence. The idea was that the fund, which eventually reached $3 million, would be used to lend money to producers for original programming. The shows, once they made money, would then repay the fund with interest and the cycle would begin anew.
Of $3 million borrowed from the fund between 1997 and 2001, KCTS has repaid only $856,102, internal documents show.
A bequest for science and math programs from the estate of Sperry Goodman, a Boeing engineer, was supposed to provide a revolving account of nearly $1 million for such shows. But the station borrowed that money this year to cover its deficit.
Goodman's sister, Elizabeth Hantel of Scottsdale, Ariz., said she was "disappointed in finding out that they haven't fulfilled my brother's wishes. If they don't get out of debt or out of their problems, where are they going to get the money to put it back?"
Meanwhile, Channel 9 pulled the plug on two half-completed science shows, "Rare Earth" and "The Story of Blood."
Other avenues for revenue
In the mid-1990s, Clark launched a series of expensive initiatives — all unrelated to programming — in hopes of increasing revenues.
One was to build the station's digital broadcasting capabilities and then market that service to other public stations for a fee. He hoped also to sell data-transmission services to private companies.
Both efforts foundered. In 1997, Clark brought in Barry Martin as a consultant to market KCTS' digital broadcasting services. Martin characterized the service's business plan as "a joke" and his efforts as a waste of KCTS' resources. He said fees paid to him and others totaled $300,000 over two years and Clark rejected virtually all their suggestions.
Recalling his experience with Clark, he said: "Tremendous ego and dishonesty. The public trust has been violated."
Clark portrays many of the costly initiatives he began in the mid- and late 1990s as logical responses to the ways in which television was changing.
He staked much of KCTS' future on high-definition television, known as HDTV, and spent millions of dollars equipping its studios. Clark thought the new technology would elevate KCTS within PBS.
His ambition seemed realized when PBS made the KCTS production "Chihuly Over Venice" its first nationally aired HDTV program, in 1998.
Like "Bill Nye," though, "Chihuly Over Venice" proved an aberration instead of a trend-setter. Viewer demand for HDTV wasn't there.
Clark made "a bad bet on the speed at which HD was going to come to the U.S.," said John Lindsay, a former vice president of KOPB, Portland's public station. "Three, four, five years ago was incredibly premature."
Clark agrees that HD and digital technology, which enables additional channels to be squeezed onto the spectrum, did not develop as rapidly as he had hoped. But he contends his decision was still the best move at the time.
"I think we made a good bet because I think we are well-positioned," he said last week.
Another try with Nye
Last year, KCTS hoped to reverse its bad fortunes by reprising its greatest success: a show starring Bill Nye.
Yet in many ways, "The Eyes of Nye" so far has been a summary of all that's gone wrong over the past decade. Its original director and producer were fired from the show. The initial pilot and half-dozen rough episodes took nine months and went well over budget, costing nearly $1 million.
KCTS so far has been unable to find a buyer for what it bills as a humorous science show for adults. And the station is embroiled in a legal dispute with one of the series' partners.
This time around, KCTS didn't have a glamorous partner such as Disney. Instead, it hatched a deal for money and distribution with a small Vancouver, B.C., company, Arlin Communications, and Omni, a troubled offshore bank that had to move the deal to another company, Progressive Consultants Inc.
The Nye project has been plagued with difficulties and finger-pointing. Progressive did not send a $624,000 final payment out of its $3 million commitment to finance "The Eyes of Nye" pilot and 12 other episodes.
Jim Green of Arlin said the final payment wasn't sent to KCTS because the station failed to meet its production schedules and misled him and his partners about other funding KCTS had lined up.
To Clark, the problem has been Green. The station never received marketing plans from him, he said. Green and others also have criticized the pilot's quality and concept. Aimed at thinking adults, some of the material in the "Eyes of Nye" pilot that Green used to lure backers featured bathroom humor.
A copy of the pilot was reviewed by former KING executive Dorrance, a KCTS advisory-board member. "Unfortunately, I'm not taken by the program," he said. "I'm not sure who they see as the target audience. It isn't adults because the information is too basic. It doesn't feel like kids — maybe teens."
Bill Nye, the show's executive producer, said the pilot was being reworked and the bathroom humor removed.
Many of KCTS' problems didn't come to public attention because of Clark's secretive style. Over the years, the station spent hundreds of thousands of dollars on consultants, but Clark kept some of their findings from the board of trustees.
In the case of Vanessa Greene — paid $14,000 last year — board members Don Nielsen and Jim Costello said Clark never told them of Greene or her work.
Nor did Clark share with the board a highly critical budget analysis, done for free by Andersen Consulting in 2001, several directors said.
When asked, Clark said he had shared the Andersen report with the board's executive committee, but its chairman, Doug Beighle, said he hadn't seen it.
According to current and former staffers, Clark excised negative comments from the board's meeting minutes and did not share them with his staff. He also discouraged high-level staff — including former Chief Financial Officer Jude Rosenberg, who was in that position for a decade — from attending board meetings.
Last year, several frustrated KCTS staffers sent unsigned letters to board members, complaining of Clark and the station's problems. They never heard back.
Lee Lewis, a member of a KCTS advisory board, said Clark is not the only reason for Channel 9's problems. "There are other problems. For one thing, you want a board that's there." He said some board members miss too many meetings and others don't live in the Seattle area.
"The issue of stewardship is not just a staff issue; it's a staff-board issue," said Putnam Barber, president of the Evergreen State Society, which works with nonprofits in the state. "I have no inside knowledge of KCTS but you just feel there might have been people just not willing to pull up their socks and say, 'OK guys, we have to talk straight about this. Now. We can't wait.' "
The KCTS board of trustees meets on Thursday to wrestle with the station's challenges and plan for a future without Clark.