Friday, September 12, 2008

Quiet Meltdown on Planet Pacifica

Two years ago it looked as if Pacifica Radio, the original listener-supported network, was on the road to reconciliation and renewed relevance after a decade of internal warfare. New national shows had been launched, the number of affiliates was increasing, a mood of collaboration and mutual respect was taking hold, and, in September 2006, the CFO reported the highest revenues in the organization’s 57-year history. A year later, the financial news was less encouraging, but Pacifica was about to hire a new Executive Director, Nicole Sawaya, returning to Pacifica after nine years with enthusiastic support from the Board and community.

Cut to September 2008. As Pacifica approaches its 60th anniversary, it faces the most serious organizational and financial crisis in years. Sawaya has resigned – for the second time in ten months – effective September 30. Meanwhile, the network is considering budget cuts of more than $900,000, including at least 10 staff positions at stations and possible layoffs from the national staff.

Pacifica is also grappling with the need for multiple bylaw amendments and the high cost of lawsuits. The National Board is split down the middle, the Human Resources Director has left, a line of credit has been secured from Wells Fargo to cover recent expenses, based on a C.D. held by KPFA, and another loan is being sought.

Nevertheless, those waiting for an official announcement, especially concerning personnel changes, would be well-advised not hold their breath. Although critical of the mainstream media, Pacifica’s managers and Board are often late and consistently coy when the subject is their own internal activities. Concerned about the staffing implications and potential for panic, recent meetings of the National Finance Committee have been conducted in executive session. The term “transparency” is used frequently, but, in part due to the crisis, is being selectively applied.

As Sawaya’s predecessor, I’m not that shocked by recent developments. Things certainly weren’t easy or conflict free during my two years in the job. But the rapid pace of the decline does raise at least two questions: How could so much go wrong so fast? And, what do Pacifica’s leaders hope to do about it? The second question may be answered, at least in part, at the in-person meeting of the Pacifica National Board scheduled for next weekend, Sept. 19-21, in Washington, DC. But before digging into the financial, programming, and structural challenges confronting the organization, it may help to recap the last year.

Nicole Sawaya worked as General Manager of KPFA in the later 1990s, until she was abruptly dismissed during the struggle for the network. For years after that many people in the “Save Pacifica” movement eagerly looked forward to her return, certain that she had the radio know-how to give the organization what Pacifica historian Matthew Lasar called a “second chance.” The enthusiasm was so great that she was the only person interviewed face-to-face for the job last September, and quickly won both unanimous Board approval and a multi-year contract.

Complications arose almost immediately. Pacifica was in the midst of a Board election year – they happen two out of every three – and complaints emerged over how the National Election Supervisor and Interim CEO, who was also corporate counsel, handled disputes. Phasing in on a part-time basis, Sawaya meanwhile hit problems in the national office, particularly over control of finances. In early December, after only weeks on the job, she announced her resignation.

As negotiations proceeded to woo her back, Pacifica stations found it harder to keep pace with rising costs, particularly health insurance, legal fees, and governance. On-air fund drives, which bring in over 80 percent of the network’s income, weren’t meeting projected goals, most stations had meager cash reserves, and one – WBAI in New York – was both a half a million behind its target and mired in an internal power struggle that had been building for several years. After the elections, a lawsuit was filed by one faction at WBAI against the network and its representatives.

In early March 2008, Sawaya agreed to return. What changed her mind wasn’t revealed, but the fight over financial control did result in a Board decision to give her the right to directly supervise the national financial staff. Unfortunately, after a three month absence she faced a rapidly worsening picture, predicted by CFO Lonnie Hicks and me more than a year earlier. Like myself, Sawaya was frustrated by an organizational structure that was costly and often blocked change. She openly called the approach “unsustainable.”

One of her first major decisions, made with Hicks’ agreement, was to cut the budget for Free Speech Radio News (FSRN) by 25 percent. What shocked Pacificans wasn’t so much the cutback (about $11,000 per month) on an agreement to produce a half hour daily news show that some questioned, but the fact that it was done without prior discussion. Sawaya explained that the financial crunch required strong and immediate action, and the Board decided to let it stand. Her other big decision, the hiring of a new General Manager at KPFK in Los Angeles, was met with more enthusiasm.

The next surprises came in July, just as budgets for the next fiscal year were being developed. The National Board had voted to convene in person that month, but national office management failed to follow up and the meeting had to be cancelled. Then, without explanation, Hicks disappeared from the national office. The Board made no announcement, but news leaked out that he was on “paid leave to deal with family matters.” Later, there were rumors that an investigation of his activities was being pursued, and also that he might sue. Meanwhile, Sawaya assumed responsibility for budget development, pushing for staff and other budget cuts. Managers at some stations responded, others – most notably at WBAI – didn’t.

Sawaya announced her decision to leave again in early August, but asked those who knew not to say anything for a month. At meetings, she meanwhile tried to convince the Board and National Finance Committee that Pacifica needed to act like a network and “centralize” various functions, especially accounting and reporting. Directors listened, but not much changed.

As the national political conventions approached, she turned her attention to Pacifica’s coverage of those events. It had been a high priority for her from the start. But some were surprised by her decision to attend herself at a time when the main business of the network was resolving its financial crisis. What the public didn’t know was that Sawaya had already announced her decision to leave.

Before she went to Denver, another confrontation further intensified the situation. A volunteer programmer, allegedly “banned” from KPFA, showed up on August 20. The General Manager wasn’t around, but the Business Manager felt that something needed to be done. Calling the National Office next door, she asked for advice from Human Resources Director Dominga Estrada, who advised her to call the police. According to several witnesses, when the cops arrived excessive force was used, and Sawaya herself attempted to block videotaping of the event.

The response was dramatic and deepened the existing divide at the station. Management defended its decision but said it wasn’t responsible for the overreaction of the police. Dozens of volunteers, and some on the staff, saw it as another example of a management team that was out of step with Pacifica’s values and mission. A letter of no confidence in General Manager Lemlem Rijio has since been signed by about 24 people.

In late August, the Human Resources director also decided to leave for a new job elsewhere, effective September 5, and the National Board began to discuss what was being calling a “national office collapse.” Actually, the term referred to one of several options for how to address the overall problems. One alternative was to struggle on as is, a decision apt to leave a large budget deficit. Another was to cut a few national staff positions and the salaries of others. The third and most radical option was to lay off almost everyone, retaining only enough staff to pay the bills and keep the governance structure functioning. This is one of many decisions the national board will face when it meets in person.

It will also have to decide what to do about Pacifica’s leadership vacuum. Some hope to quickly recruit a new Executive Director. But this process usually takes months, and pending recommendations to re-expand the CFO’s authority and apply strict performance standards to all managers (more about that in the next installment) could get in the way.

Another possibility is that Hicks might be asked to step in upon his return, or that Siegel might again be tapped. But Siegel has been criticized for his handling of (and billing for) recent personnel and election-related lawsuits, which have allegedly cost the foundation hundreds of thousands. Hicks has his own critics, and may not even want the job. Another possibility is Ambrose Lane, who served as interim ED before I was hired. Finally, the Board could ask its Chair, Sherry Gendleman, to fill in. But she’s said to be less than enthusiastic about that prospect.

Even if a new chief executive can be found – and the Board overcomes its divisions to agree – there is still the biggest elephant in the room. Pacifica hasn’t figured out how to resolve its current financial crisis, and, even more difficult, restructure its programming and management to reverse a long-term decline in listenership and income.

Part Two: Budgeting for Triage

Part Three: The Price of Democracy

Update: Nicole Sawaya's Resignation

A Pacifica National Board teleconference scheduled for Friday, September 12 was postponed due to Hurricane Ike. To access archived recordings of Board and Committee Meetings, go to Sources for this article include meetings of the Pacifica National Board, National Finance Committee, Coordinating Committee, and Personnel Committee, LSB minutes, and members of the Pacifica community who provided information on condition of anonymity. Updated September 26, 2008.

Next: Finances, Programming, and the Bylaws


RipRobbins said...

If the PNB was composed of different names, I would have more optimism about the radical changes that need to occur. Unfortunately, the names that comprise the majority give me the impression that selfish parochial politics will dictate the outcome of this opportunity. Unfortunately, I feel that the same names that were so opposed to the Guma tenure, and the same who opposed the move toward a national focus for the Foundation, are now going to 'hunker' down and try to wait out the storm. This leaves each station to act as though it is independent, but that will continue to split up the Foundation, weaken the effects of the progressive programming, and reduce the financial stability until the Foundation is forced to liquidate an asset. Perhaps this has been the goal of those who remain on the Board entrenched in stale policies that further tear apart the strength of Pacifica. They want to break the Foundation and take over their own local station. That is how they have governed in the past when I sat on the Board, and that is how they have governed in the past year, and so I predict that is how they will vote next week.
I only wish I am wrong about it.

Unknown said...

Hi Greg.

In response to your question:

"But the rapid pace of the decline does raise at least two questions: How could so much go wrong so fast?"

I think things have been "going wrong" for a while - this should not come as a surprise. WBAI, in particular, has been unstable for years. There was a recovery plan proposed for the station by national in late 2003. In 2004 WBAI took to fundraising three months a year.

Several of us took that as a really bad sign - why would a station do that unless it was desperate? Things have not improved since that time.

It's becoming more widely understood that as a result of WBAI's financial instability and inability to pay bills, network resources have been depleted.

Hopefully something good comes out of this. Our first job is to stop pretending everything is OK.

alaskaemwave said...

Hello Greg:

Whatever is happening within Pacifica, trends for "legacy" media point downward, leaving error prone Pacifica even less margin for error.

In particular, radio listening is diminished, and I suspect younger listeners have less free cash than before.

Just for reference, In the early 1960's I was a "scab" during a Pacifica strike. I took a position opposite of those on strike, not that I remember all that stuff, or care to. Just to point out; Pacifica strife is old stuff. And in spite of it, Pacifica has a history of providing working space for some very interesting creations.

I hope it survives the financial restructuring that is required. I hope we all do.

Vigdor Lurye-Schreibman said...

Pacifica has been a disaster case in survival mode for many years. The same can be said of the American promise of democracy. The war between democracy, which requires Union, and the libertarian ideology, which rejects Union, has torn the nation apart. I first wrote about the Pacifica disaster six years ago. Moving from Tyranny to Democracy Right Now!!/Fins-DRN-05.htm

Structured collaborative dialogue is the way forward. There are stupendous opportunities wherever such problems appear. This requires those in control to surrender their personal control in favor of the whole.

(1st in the GOOGLE list of two million pages devoted to that topic)