UNITED STATES PUBLIC TELEVISION STATION FINANCIAL ISSUES SINCE 1980 by EUNSOON CHO, B.A. A THESIS IN MASS COMMUNICATIONS Submitted to the Graduate Faculty of Texas Tech University in Partial Fulfillment of the Requirements for the Degree of MASTER OF ARTS Approved Accepted May, 1986 (l€>. II 9 ACKNOWLEDGEMENTS I wish to express my appreciation to Dr. Dennis A. Harp, my committee chairman, for his encouragement and guidance during the course of this thesis and to other members of my committee. Dr. Alexis S. Tan and Dr. Steve H. Swindel for their valuable advice and comments. I would also like to express my gratitude to my parents for their assistance through my thesis. In addition, I want to thank all the respondents who participated in this survey and Joyce who took time out to care. 11 TABLE OF CONTENTS ACKNOWLEDGEMENTS ii LIST OF TABLES V CHAPTER I. INTRODUCTION 1 Statement of the Problem 1 Objectives of the Study 9 II. LITERATURE REVIEW 12 Four Categories of Station Licensee 12 Federal Government Funding 14 State Governments Funding 18 Funding from Individual Contributors and/or Subscribers 19 Funding from Business 21 Funding from Other Sources 24 Research Questions 28 III. METHODOLOGY 29 Variables 29 Samples 33 Limitations of this Study 33 Procedures 34 Analyses 36 111 IV. RESULTS AND DISCUSSION 39 Descriptive Analysis 39 Zero-order Correlation 40 Spearman Rank-order Correlation . 48 Least-squares Mean Analysis 48 of Variance 62 V. SUMMARY AND CONCLUSIONS 62 Conclusions from Findings .... 66 Recommendation for Further Study 67 REFERENCES 71 APPENDICES 72 APPENDIX 1. Names of Network Stations 75 APPENDIX 2. Location (State) of Sample 76 APPENDIX 3. Population of Station Area 77 APPENDIX 4. Questionnaire IV LIST OF TABLES 1. Type of Licensee of Sample 37 2. Zero-order Correlation Coefficients Between Type of Licensee and Funding Sources (Comparing budget sources before 1979 and after 1980) 41 3. Zero-order Correlation Coefficients Between Type of Licensee and Funding Sources (Income in FY 1985) 43 4. Correlation Coefficients Between Type of Licensee and Funding Sources (Long-range solutions) 45 5. Mean of Long-range Solutions of Income Sources 47 6. Spearman Correlation Coefficients Between Dependent Variables Before 1979 and After 1980 49 7. Comparison of the Sources of Funding Before 1979 and After 1980 by Type of Licensee 50 8. Comparison of the Type of Licensee with Sources of Income in FY 1985 53 9. Comparison of the Type of Licensee with Long-range Funding Sources by Type of Licensee 56 10. Percentages of Station Licensee Type Employing Special Income Sources 59 V CHAPTER I INTRODUCTION Statement of the Problem In 196 4, the Federal Office of Education urged the creation of a national commission to study ways and means by which educational television could become a permanent instrumentality in the United States. The FOE identified certain specific needs: partial federal support for community service programs, more support and additional production centers for national programming, funding for program libraries, and the necessity for regional and national interconnection. The Carnegie Commission on Educational Television report, published in 1967, was a landmark in the develop­ ment of a national public television system. Since the Commission's origin, there has been basic agreement as to some of the goals it should seek to accomplish. This has been most eloquently stated by E. B. White in an often- quoted letter written to the commission: Noncommercial television should address itself to the ideal of excellence, not the idea of acceptabil- ity--which is what keeps commercial television from climbing the staircase. I think television should be the visual counterpart of the literary essay. should arouse our dreams, satisfy our hunger for beauty, take us on our journeys, enable us to participate in events, present great drama and music, explore the sea and the sky and woods and the hills. It should be our Lyceum, our chautaugua, our Minsky's, and our Camelot. It should restate and clarify the social dilemma and the political pickle. Once in a while it does, and you get a quick glimpse of its potential. (Carnegie Commission, 1967, p. 13). In recommending the establishment of a public tele­ vision system, the commission stated that the system of noncommercial television should include 1) more than 120 stations which are owned and operated by educational institutions or other nonprofit educational organizations and which carry no advertising; and 2) National Educa­ tional Television (NET), a nonprofit organization which provided most of the more ambitious programming and with which most of the stations were affiliated (Carnegie Com­ mission, 1967). Also, the commission separated educational televi­ sion programming into two parts: 1) instructional television, directed at students in the classroom or otherwise in the general context of formal education, and 2) public television, which is directed at the general community. All television, including commercial television, provides news, entertainment, and instruction. All television also teaches about places, people, animals. politics, crime, science. However, there are clear differences: 1) commercial television seeks to capture the large audiences; 2) instructional television calls on the instinct to work, build, learn, and improve, and asks the viewer to take on responsibilities in return for a later reward; and 3) public television includes all that is of human interest and importance which is not at the moment appropriate or available for support by advertis­ ing, and which is not arranged for formal instruction (Carnegie Commission, 1967). The commission stated the criteria that programs on public television should meet: The programs we conceive to be the essence of Public Television are in general not economic for commer­ cial sponsorship, are not designed for the class­ room, and are directed at audiences ranging from the tens of thousands to the occasional tens of mil­ lions. (Carnegie Commission, 1967, p. 3) The report of the commission concluded that a well financed, well directed educational television system, substantially larger and far more persuasive and effec­ tive than that which existed in the United States at that time, must be brought into being if the full needs of the American public are to be served (Carnegie Commission, 1967). The commission's recommendations became a major impetus for the passage of the Public Broadcasting Act of 1967, which allocated $38 million dollars to the improvement and construction of facilities for noncommer­ cial radio and television in the United States. To over­ see allocation of the funds, the Corporation for Public Broadcasting (CPB) was created by the act. The Corporation for Public Broadcasting is a quasi- governmental company which manages the funds appropriated for public broadcasting by Congress. The major role of the Corporation is to underwrite the costs of program production--with an emphasis on innovative and quality programs--for public broadcasting in the United States (Corporation for Public Broadcasting Annual Report, 1979). In addition, the CPB has responsibility for the following: 1) to facilitate the full development of educa­ tional broadcasting in which programs of high quality, obtained from diverse sources, will be made available to noncommercial educational television or radio broadcast stations, with distinct adherence to objectivity and balance in all programs or series of programs of a controversial nature; 2) to assist in the establishment and development of one or more systems of interconnection to be used for the distribution of educational television or radio pro­ grams so that all noncommercial educational or radio broadcast stations that wish to may broadcast the programs at times chosen by the stations; 3) to assist in the establishment and development of one or more systems of noncommercial educational television or radio broadcast stations throughout the United States; 4) to carry out its purposes and functions and engage in its activities in ways that will most effectively assure the maximum freedom of the noncommercial educational television or radio broadcast systems and local stations from interfer­ ence with or control of program content or other activities. (Bittner, 1985, p. 259) All noncommercial television stations which became known as "public television," imply their ability to secure income from the public as well as from companies, foundations, and government agencies. The Public Telecommunications Financing Act (PTFA) of 1978 was signed into law by President Carter. This act was a series of amendments to the Public Broadcasting Act of 1967. The Public Telecommunications Financing Act required the Corporation to conduct their future activi­ ties for the development of public telecommunications. The PTFA act was enacted in the context of a number of proposals designed to alter the structure of public broadcasting and its mechanisms for financial support at the national level. The act emphasized the funding of program production by independent producers. Also, the new legislation needed CPB's research and planning activities. The Station Financial Model was one of the research projects which was supported by the planning funds. This computer model uses information from the CPB annual surveys to describe how revenue changes influence the operations and services of public television stations (Corporation for Public Broadcasting Annual Report, 1981). In 1980, the CPB Program