For Immediate Release
February 16, 2002
Contact: Verna Avery Brown - 202.588.0999 X 351

Pacifica Radio Moves To Restore Financial Stability

Non-Profit Network Announces Reorganization, Broad Cuts

Pacifica National Board Hires Financial Team To Address Debt

WASHINGTON, DC (Feb. 16) - The Pacifica Radio network announced a series of sharp budget cuts and staff lay-offs at its national units this week in an effort to close huge deficits and restore the 53-year-old network to financial health.

A recently-concluded independent review of the non-profit network's finances, which had been ordered by its new interim board of directors, revealed an unprecedented working capital deficit of $4.8 million and a projected budget gap for the 2002 calendar year of $1.5 million. The five-station network is slated to bring in some $10.5 million in total revenue this year.

To stop the financial hemorrhaging, the nation's oldest listener-sponsored network will reorganize it's satellite distribution service and national programming division, thus saving more than one million dollars over the next year.

The Pacifica Network News (PNN), a half-hour news show that airs on four of the five Pacifica stations and on more than a dozen affiliates nationwide, has been closed entirely and its nine member staff has been furloughed. The last day of operations for PNN news was Friday, Feb. 15.

In addition, Pacifica's flagship program and top fundraiser, Democracy Now!, is being reorganized to save some 25 percent in costs to the network, and Pacifica's other national units, including the Pacifica Radio Archives, the national office, and the finance department, will be absorbing cuts of 20 percent. Likewise, the network's senior managers will be taking a 10 percent pay cut and Pacifica's acting executive director has agreed to a 25 percent reduction in salary. The budget cuts, in combination with expanded fund raising plans, are expected to close this year's $1.5 million budget gap without impinging on Pacifica's core operations at its five sister stations - KPFA in Berkeley, KPFK in Los Angeles, KPFT in Houston, WBAI in New York and WPFW in Washington, DC.

"We have to make some tough choices," said Acting Executive Director Dan Coughlin. "But together with the entire Pacifica community - with listeners, local and national board members, senior managers, and our unions, we're going to bring this network back to where it has been the last half century - at the cutting edge of American political and artistic life."

An agreement on those cutbacks and lay-offs that affect unionized employees has been negotiated between management and the American Federation of Television and Radio Artists (AFTRA). AFTRA represents paid staff at Pacifica stations KPFK in Los Angeles, WBAI in New York, WPFW in Washington, DC, and at Pacifica's national programming unit in Washington, DC.

In addition, the Pacifica National Board, during an executive session on Feb. 15, approved the hiring of Squire, Sanders & Dempsey to handle the network's relationship with its large creditors. Pacifica has been billed some $2.2 million by a range of top-tier law firms, public relations firms, and security companies during the past year.

"We are bringing clarity and order to Pacifica's financial crisis," said Pacifica Board Chair Leslie Cagan. "We will meet the Foundation's obligations as we revitalize its mission of free speech, corporate-free community radio."

The network plunged into deep crisis following the 23-day lock out of staff and community at Pacifica station KPFA in Berkeley in the summer of 1999 and the so-called "Christmas Coup" at Pacifica station WBAI in New York in December 2000, which led to mass firings.

Listeners around the country, National Board members, and Local Advisory Board members filed a series of lawsuits charging malfeasance and the undermining of Pacifica's mission.

Coupled with a nationwide grassroots campaign aimed at ousting Pacifica's leadership, the lawsuits led to a December 2001 settlement that created an interim board, changed the network's leadership, and mandated revisions of the by-laws and empowerment of the Local Advisory Boards with listener-member elections.

But in the year before the settlement was reached, network executives went on a spending spree never before seen in network history - hiring the most expensive professional service firms in the country and handing out huge pay raises to loyalists. As a result, Pacifica went from a $600,000 surplus in September 2000 to a working capital deficit of almost $5 million by December 2001, a decline of $6 million in 15 months.

The squandering of listener resources was punctuated by a series of golden parachute severance packages handed out by the previous leadership, costing the network some $500,000.