KCET-TV used to be the place to go for Sesame Street, NewsHour and Frontline. But since breaking with PBS in 2010, the station has struggled to find an audience and stay afloat financially. Now things appear to have taken a very grim turn, with the station's auditor expressing "substantial doubt" that the station can stay in business.
KCET lost $12.5 million last year, according to the financial statement recently posted on its website. It lost $7.4 million the previous year - meaning the situation is going from bad to really, really bad.
KCET, which now calls itself KCETLink, has only $25 million in net assets, including things like the transmitter and office furniture, so obviously things can't continue like this for very long.
"KCETLink has suffered recurring losses that raise substantial doubt about its ability to continue as a going concern," the auditor reported.
In a statement, a KCET spokeswoman said the report offers a "snapshot of past performance," and does not reflect the station's current financial condition. The report was submitted to KCET on Dec. 6, and covered the fiscal year ending June 30, 2013.
"The 'going concern' reference was our auditor's opinion based on financial statements for last fiscal year and what they knew as of last June," spokeswoman Ariel Carpenter said. "In the six months since the close of KCET's fiscal year, we've addressed our operating budget, bringing expenses more closely in line with projected revenues. We're seeing a substantial uptick in major gifts, as well as some positive trends in viewership."
The financial report does note that KCET recently slashed its operating budget by 35 percent. The auditor also raised concerns about a $2.9 million loan that KCET had taken from restricted funds in order to pay for its operations. KCET said it would make it a priority to repay those funds.
The station is considering selling off some of its broadcast bandwidth in an upcoming FCC spectrum auction to stay afloat, according to the report.
KCET also is looking forward to new programming, which it hopes will boost its fortunes. Nowadays the station airs a lot of international news, such as BBC World News, Japan's Newsline and France 24, as well as nonstop Huell Howser reruns. Plus Borgen, for fans of Danish-language political drama.
Since a financial dispute led to the split with PBS, KCET has partnered with Link Media, which runs a digital satellite channel. It has tried to rebrand itself as the nation's largest independent public TV station. Clearly public television is a difficult business to be in, but management also deserves some scrutiny here.
Can't help but think that some of this might have been averted if this guy were still on the payroll:
Update: One other grim note. The financial statement notes that in April, KCET was notified that it was named "the sole beneficiary of the estate of a loyal KCET viewer who is in poor health." The estate is worth $6.7 million. So there's that.
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Update 2: Yet another statement from KCET spokeswoman Ariel Carpenter:
"KCET has repaid all of the money it had borrowed from restricted funds. Since the financial statements were issued (Dec. 6, 2013), KCETLink has received $3 million in major donations and $1.4 million from the Corporation for Public Broadcasting, which have significantly improved our liquidity. In addition, KCETLink has received a $1 million grant from the Ahmanson Foundation to fund the new season of SocCal Connected."
At the FY2013 pace, $1 million would cover one month's worth of operating losses.
Update 3: Things must be really bad. Al Jerome, president and CEO of KCET, has taken a $100,000 pay cut since 2011. He now makes $357,000, according to Carpenter.