PBS 39 Received $82 Million from 2017 Airwave Auction; How Was It Used? Was Putting It in a Mattress Considered?

— Jeff Ward, Lehigh Valley News Briefs

PBS 39 took in an $82 million windfall in 2017.

The federal government held an auction of the broadcast spectrum to provide bandwidth for wireless communications (mobile phones, Internet). That money went to broadcast television stations, including public WLVT in Bethlehem.

“These funds will help ensure we continue to serve the Greater Lehigh Valley for decades to come,” Tim Fallon, then chief executive officer of PBS 39, said in a statement at the time.

PBS 39 saw a chance to add offerings, while increasing its endowment.

Today, that endowment is around $80 million. That’s a big chunk of money, but $2 million below the announced windfall, and that doesn’t include any funds from before the airwave bonanza.

Has it been invested and spent wisely over the years?

I don’t know when PBS 39 (now known as Lehigh Valley Public Media) received the money, but here I will assume it was Jan. 1, 2018.

Options:

1-Put it in a mattress. Take the $82 million, convert it into 820,000 $100 bills (it’s all about the Benjamins) and stuff them into a mattress, probably a king.

Today, PBS 39 would have an endowment of at least $82 million.

2-Invest it wisely, operate off the proceeds along with grants, donations, etc. A return of 6% for a big endowment is not unreasonable over the long term. That would generate almost $5 million per year, close to $100,000 per week — $100,000 per week — and the endowment would still be at least $82 million.

3-The middle ground. Invest it at 6% annually, spend 3%, or $2.5 million in the first year, and put another $2.5 million back into the fund. The endowment would grow at roughly 3% annually and would have been worth about $98 million at the beginning of this year.

That pile of money could have grown while funding operations. Returns can vary but a 6% long-term target is not a reach. Some years will be good, some bad, but the goal is reasonable. Even assuming 4% or 5%, there was an opportunity to boost the pot.

After fiscal 2023’s financial debacle — PBS 39 took in $6.49 million, spent $15.15 million, for a deficit of $8.66 million — it is reassuring to see that $80 million is left.

So, what is PBS 39’s endowment strategy? Has the money been well-spent? The appropriate return can be argued, but the media outlet’s funds have declined.

That is another reason to request an operations audit from the federal Inspector General for public television.

Since the windfall, PBS 39 embarked on a television news program that it hailed as a great success, but the show quietly disappeared. How much money was burned?

That was just for practice. On June 22, 2022, the station announced a digital news venture.

“This platform will ensure that local news and information has a sustainable future in the Lehigh Valley,” Fallon said in a press release.

Sustainable? Remember, there was an $8.66 million deficit in the year ending June 30, 2023.

There was a flurry of hiring in 2022.

The venture officially began — or as PBS 39 likes to say, was “launched” (this outfit is addicted to jargon) in October 2022.

At some point, somebody noticed that more than $2 was going out for every $1 going in. The staff of PBS 39, which includes the media initiative, the television station and WLVR radio, was around 80. Now, it’s 58, and the organization is ready to cut more expenses if needed.

Based on the July 2024 board meeting, more cuts will be needed. Revenue is falling short, the operating loss is going to be bigger than expected, and some people who are supposed to bring money in are being reminded of their goals. Really.

The LVPM Board of Directors hasn’t done a good job of overseeing this mess, but members did recognize that the fiscal 2023 results were “unacceptable.” The board has also put limits on who can tap into funds.

So when confronted by an $8.66 million deficit, they acted. A little late, though. PBS 39 now has no executive management, and its mission statements and plans are nothing but grab bags of buzzwords, hot air and blathering.

Ask for an audit now. See the above link or send email to OIGemail@cpb.org.

Contact PBS 39 too, and any board members you know.

It’s time for a “Sunny day, washing the clouds away.”

Let the sun in.