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With its future back up in air, what options can WQED take?

Tuesday, February 15, 2000

By Barbara Vancheri and Rob Owen, Post-Gazette Staff Writers

Just when George Miles, president of WQED Pittsburgh, thought he'd hit a home run, someone comes along to yell "Foul!" So, instead of rounding third and heading for home, where $18 million awaited, he finds himself unable to turn the corner.

    Related article:

Analysis: Will Pax TV find peace in Pittsburgh through cable or low-power?


More to the point, Cornerstone.

Within the span of a month, Miles went from celebrating the Federal Communications Commission approval of a three-way deal with WQED, Cornerstone TeleVision and Paxson Communications to watching the plan collapse. Now the question is: Where does WQED go from here?

In mid-December the FCC approved the elimination of WQEX, the transfer of Cornerstone's WPCB from Channel 40 (a commercial license) to Channel 16 (a noncommercial educational license) and the entrance of Pax TV into the market on Channel 40.

The deal was intended to be a way for WQED to pull itself out of debt, start a programming fund and brace for digital conversion. WQED and WPCB would have split the $35 million Pax TV intended to pay to buy WPCB's spot on the dial. When Cornerstone -- fearing new FCC educational guidelines -- withdrew from the deal, it fell apart.

That leaves the future of WQED, once again, up in the air.

Miles is cagey about WQED's options. The only alternative he dismisses out of hand is suing former partner Cornerstone, insisting, "I don't want to spend my time doing that."

Sitting in his office on a recent snowy morning, he said, "We're just letting the dust settle. We're not going to turn off the lights yet or go off the air."

Miles takes solace in the advances WQED has made -- reducing debt, realigning the organization, launching "On Q" -- even though the station has had "our ankles tied and one arm tied behind our backs" waiting for the FCC to rule.

"We've made progress, but that deal would have helped us," Miles said. "We need to get this albatross off our shoulders. We also need to have a permanent endowment here, where long after George Miles and [this] board are gone, this place is permanently endowed, just like the symphony and museums."

Not all options are created equally; some will bring money to WQED, others programming to WQEX. The ideal solution would do both. Among the options WQED could consider:

Return to Plan A. Go back to the FCC and ask, again, to convert WQEX's license to a commercial one, so it can be sold. This is risky since the FCC said no in 1996 and is on record as opposing switching TV station licenses from commercial to noncommercial.

"There's no doubt in my mind that's on the table," Miles said. "But I'm not even sure if Plan A is viable."

Salvage Plan B. Convince Cornerstone the deal is palatable again since the FCC scrapped new, thorny rules about when religious programming is educational.

Oleen Eagle, president of Cornerstone, said yesterday, "I think we've reviewed all of the options and our advisers tells us this is not the time to be doing that, because of the climate at the FCC." Cornerstone also would find its programming under a constant microscope from critics.

Cornerstone may have lost $17 million, but its viewers have opened their hearts and wallets. "We had absolute, unbelievable response" in the last televised drive, she said yesterday. "We serve a God that is the God of the impossible. We have to believe it as well as preach it," she said, of facing the challenge of going digital without the windfall.

Continue to run the same programming on both stations.

"A year from now we may do some other stuff. The way our financial picture is, we've got to simulcast. But I'm not going to say we're going to be simulcasting for eight years," Miles said.

"But the other side of the story is, I have to convert Channel 16 to digital. So come 2003, I've theoretically got eight channels going out. Do you need eight channels? That's eight programming channels for the 20th largest market in the country. We had two channels when it was the 10th largest market."

Let WQEX temporarily go dark. WQED, however, runs the risk of having outsiders use this as leverage to gain control of the license.

"We are absolutely not going to shut it down," Miles said. "We're never going to go dark."

Sell Pittsburgh magazine.

Miles rules this out.

Work with a coalition of universities, colleges and arts groups, such as Pittsburgh Filmmakers, to make WQEX a laboratory for students, a showcase for local artists and performers, and an outlet for the sorts of small, distinguished films that never play mainstream theaters. Under this option, WQED might lease the channel or transfer the license to another nonprofit group.

"We have not moved onto anything yet," Miles said. "We haven't even terminated our deal with Paxson, so theoretically we're still in it. I can't talk to the universities until we terminate the deal. But clearly those are part of the scenario of options."

Other plans WQED could contemplate:

Give WQEX a separate lineup again, but spend the bare minimum on programming. This may satisfy no one.

Pull out all the stops and make WQEX a full-bodied, viable second station. Mend fences with alienated, angry watchers. Ask viewers who loved Channel 16 to support it again; use that money to buy the best programming or cult classics available.

Make a case with foundations and deep-pocketed donors for support for more local shows. Also use Channel 16 to rerun 'QED favorites, from cooking marathons to Rick Sebak documentaries. Package selected, timeless features from "On Q" for 'QEX.

Turn Channel 16 into an outlet for the PBS Kids Channel, a repackaged collection of its most popular programs such as "Teletubbies" and "Arthur." Or let Channel 16 be the home of PBS You, telecourses from PBS Adult Learning Service.

Brainstorm with technogeeks to find out what the Next Big Technology will be. Figure out how to make WQEX part of it and defer cashing in on Channel 16. This is like the plan from onetime WQEX station manager Ken Tiven has advanced. He suggested 20 of the most successful high-tech businesses and institutions in the city come together to get the channel going. Each company puts in $500,000 in cash and contributes $500,000 in stock. Interesting, but ambitious. Very ambitious.

WQED is like a homeowner who realizes that maybe he won't get rich selling his house. Once dreaming of $50 million, it was willing to settle for $18 million -- but now might be content with $10 million or even $7 million, which would wipe out WQED's debt. Even those figures may be inflated, given the value of a noncommercial license.

As Miles weighs his options, the Save Pittsburgh Public Television campaign has a new rallying cry. "Stop the Swap" has been retired. Enter "Use It or Lose It."

The deal may be dead, but the battle for WQEX lives on. On Jan. 31, the campaign asked the FCC to reconsider its approval of WQED's application for license renewal for Channel 16.

Opponents don't think WQED deserves Channel 16's license, especially because it's been airing the same programs on both channels since November 1997.

"The frequency, Channel 16, was awarded to the people of Pittsburgh for educational purposes, not as a supplementary revenue generator, and we intend to see it used for that purpose," vows Jerry Starr, executive director of the Citizens for Independent Public Broadcasting in Washington, D.C.

Starr, now splitting his time between Pittsburgh and the nation's capital, formed the watchdog QED Accountability Project in the early '90s. He spent the latter half of that decade battling WQED's efforts to sell or swap Channel 16.

"If Miles continues to insist, as he has for four years, that WQED cannot afford to program two channels, then he has an obligation to give it up to someone who can," Starr says.

He suggests WQED needs to do several things: Open any meetings about WQEX's future to the public; seriously weigh suggestions from the community; and look to other stations, such as San Francisco's KQED, for ways to dig out of debt.

The California station, facing long-term debt of $13 million and short-term debt of almost $5 million, slashed staff and sold its magazine, plus its books and tapes division. It got $3.1 million for its San Francisco Focus magazine, plus another $1.2 million for KQED Books and Tapes.

Then it sold $13.4 million in 25-year, tax-exempt bonds issued by the California Economic Development Financing Authority. It also launched a massive fund-raising campaign to raise money for digital conversion and a program production fund.

Starr and others have no shortage of ideas for WQEX. "What I would love to do is get a consortium that would involve all the institutions of higher learning with broadcast training programs, Pittsburgh Filmmakers and other cultural institutions that would provide a laboratory, give hands-on experience to students learning the craft of television production.

"It could be a showcase for local filmmakers and theater and a forum to discuss issues of the day, featuring perspectives of those who are supposed to be on public television -- but rarely are."

If Starr has lots of ideas for WQEX, so does Charlie Humphrey, executive director of Pittsburgh Filmmakers. He runs an organization with a budget of more than $2 million and oversees the Harris and Regent Square theaters, plus the Melwood Screening Room.

"I'd like to use the existing partnerships that Filmmakers already has with Carnegie Mellon University, the University of Pittsburgh, Point Park College, La Roche College, Duquesne University, Robert Morris and Carlow colleges to try to establish a teaching facility that could be sustained -- in part -- by a progressive educational program" or curriculum.

"I'd really like to see the approach be something completely different ... and think of the broadcast arts, where there might be a real opportunity -- particularly in light of digital conversion -- to reinvent the way traditional public television has been viewed."

He envisions pulling independent media (such as Tony Buba's "Lightning Over Braddock") from all over the country and making such works available to WQEX, other public broadcasters and even cable-access operators like PCTV.

Humphrey, who met informally with Miles last week, says he would not propose a plan "without reasonable, significant compensation for 'QED." He says he doesn't pretend to have a magic bullet. "I just have ideas and lots of friends."

One person who knows how difficult it can be to program two stations -- and make money doing it -- is Jim Wiener. He was program and operations manager for WQEX before joining Greater Dayton Public Television as manager of program services.

Dayton, coincidentally, also has two stations, and Wiener was hired to bolster the second.

"I spent a bit of money on acquisitions, and the ratings for it have gone up over the years, but it's still become this situation of how do you make money. God knows, we're spending money. We once tried to do some pledging on that second station; one of the huge handicaps is you don't have access to the PBS pledge inventory," such as the Ken Burns blockbusters.

Using the lesser, more specialized programs as a pledge hook can bring in money -- but it's a modest amount that may not offset pledge production costs.

In Dayton, the second channel is home to such syndicated British series as "Ballykissangel" and "Eastenders." Wiener says, "The growth on that second station has been 10 to 15 percent over the last couple of years. On one hand, that's fine. On the other hand, we come down to that same thing, if we're not making money, we're just spending money on it."

Wiener probably spends $180,000 to $200,000 for programming for the second station. Both licenses are just like the ones for WQED and WQEX: noncommercial, educational, which means they can't be sold to a commercial broadcaster.

The Dayton stations originally were licensed to universities; now they're community operated. Asked about switching licenses from community to university, Wiener says, "A university would not touch one of these things with a 10-foot pole. What you have to gain is minimal, compared to what you have to put into it, especially with digital" conversion on the horizon.

Talking about the days when WQED and WQEX had separate schedules -- and, sometimes -- audiences, Wiener quotes former colleague Michael Fields: "People like 16. They value 13."

It would be easy to see the collapse of WQED's deal with Cornerstone as a critical blow, but Miles said he's not deterred.

"I'm more committed now than ever," Miles said. "Coming here was a bigger challenge than this deal."

Miles said when he arrived WQED's money problems were worse than he expected and the organizational structure was bloated and dysfunctional.

"When I got here, the first couple nights I looked at this thing and I'd go home and be alone in my apartment and I literally started crying, saying, what have I gotten myself into," Miles said.

But the ongoing battle has left Miles drained and ready for vacation, planned before the deal disintegrated. He's taking three weeks off over the next month, and after that, he'll figure out WQED's next step.

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