Pacifica Update: July Board Meeting Postponed as Cash Crunch Escalates

Despite a recent decision by the National Board of Pacifica Radio to hold an in-person meeting in Washington DC during July, it won’t be happening. During a teleconference on July 7, members noted that the national office hadn’t followed up on the board’s decision, citing lack of money as the reason.

The progressive network’s national board is currently debating how to handle an escalating cash crunch. According to Chief Financial Officer Lonnie Hicks and Finance Committee Chair Mike Martin, Pacifica owed about $150,000 as of early July and hadn’t been able to make scheduled payments to Democracy Now! and Free Speech Radio News, among others. Hicks noted that the amount owed would increase to $320,000 before the end of the month. He has suggested seeking a bank line of credit and inter-divisional loans, mainly from KPFA in Berkeley, to handle the situation. If something isn’t done soon, he warned, “Vendors may take action against us.”

To address Pacifica’s overall problems – loss of listeners and reduced revenues – the National Finance Committee has recommended reductions in the cost of elections and governance, increased off-air fundraising, and programming changes by stations. “Lawsuits are killing us,” Martin added.

During a March teleconference, the board instructed station management to develop expanded off-air fundraising plans by June. At the July 7 meeting, however, some members said that hadn’t happened yet. In March, the board also asked its Technology Committee and Sawaya to look into web-based conferencing as an alternative to in-person sessions. But that could run afoul of the current bylaws.

The immediate cause of the cash crunch, Hicks said, is that Pacifica stations fell $400,000 short of Spring on-air fund drive goals. In addition, both WBAI in New York and KPFK in Los Angeles are running hundreds of thousands of dollars below projections and may not be able to pay bills or meet payrolls in the weeks ahead unless something is done.

Several board members questioned the assertion that there isn’t enough money to hold a board meeting before September, the end of the fiscal year, and expressed concern that the national office hadn’t acted on the board’s decision to meet in July. According to Pacifica’s bylaws, four in-person meetings of the national board are supposed to be held each year. Thus far meetings have been held in January and April. Over the last two years, attempts to amend the bylaws to reduce the number of in-person board meetings have failed.

A committee formed by the board developed a plan to reduce the cost of a summer meeting by more than 50 percent and found three economical locations. The board approved the July meeting in June and instructed the national office to proceed.

Executive Director Nicole Sawaya reported that she has contacted staff, unions and various vendors about the financial situation, but did not publicly take a position on whether the board should meet. She did note, however, that Pacifica seems to drift from crisis to crisis and urged board members to be practical. In March, Sawaya cited the cost of governance as a long-term problem.

The board will meet again by phone in about a week to review specific proposals from management on how to handle the short-term cash flow problem. The July 7 teleconference, on which this report is based, can be heard at KPFTX.