Thursday, June 11, 2009

News Director's playbook: Anatomy of a budget, part one

Sometimes you hate your News Director for the wrong reason.

That penny pinching, bean counting, throws-nickels-around-like-manhole-covers manager drives you crazy with cuts, cuts, and more cuts. He or she may be a good news person, but money issues always seem to trump everything.

Guess what? A News Director can only spend what the company allows.

Television stations aren't run like Congress. You can't just print more money and bill the taxpayers. There are checks and balances, and if a ND goes over budget constantly or significantly, it's hasta la vista, baby.

Then again, if a ND comes in under budget, said ND sometimes gets a bonus called an "override." (You didn't know that, did you?) So while a News Director must adhere to a budget, there is often a reward for coming in a certain amount under that budget.

So let me give you an inside look at the money issues behind the scenes, since money is the main culprit that is causing so much pain in our business.

We're going to give our hypothetical News Director a one million dollar budget. Sound like a lot? Pffft. You can blow that just keeping a small station running in place.

Some of the big expenses are obvious. Salaries are always at the top, and since health benefits constantly go up, that adds to the problem. Many stations pay a significant part of your health benefits, so every time there's an increase, that means less money for salaries.

Let's take a closer look at salaries, because that is the one that affects people the most. Right now it's the middle of June, and our ND is short one reporter. The budgeted salary for this spot is $24,000. Does the ND hire someone immediately?

Not if the budget is tight. Because there's real money to be saved in this situation.

Since the next sweeps month isn't till November, most ND's wouldn't rush to fill this position. Now keep this in mind... every month this position goes unfilled, the ND saves two thousand dollars. See how that adds up? Now do you see why no one is in a rush to hire?

So, now we get to September and the ND has saved six thousand dollars. He finds a reporter he really wants, but that reporter is already making 25k. But since he's saved six grand, he can offer 26k and still be four thousand dollars ahead of the game. Creative accounting? Sure. But in this case he ended up with a better reporter and saved money to boot.

The flaw in this is that the station was shorthanded for three months and the product suffered, which translates into lower ratings when November rolls around. (You're in ratings every day, remember?) But in the land of beancounters, this is considered a proper way to manage a budget.

Here's another deal that's come up lately, the pay cut. Let's say you have a main anchor making 100k whose contract is about to end. The anchor is a "piece of the furniture"... one of those people without much talent but who has been around so long the viewers have grown comfortable with him. The ND knows the anchor can't go anywhere else, so the offer to renew is a pay cut. The anchor probably doesn't want to move anyway, and knows he really can't, so he accepts. In this case the ND has all the leverage. He does, however, run the risk of shooting himself in the foot if the anchor walks, thereby alienating long time viewers. But that's the game the beancounters play.

Then of course, there's what I call the "two-fer" hire, better known as the one-man-band. Some companies see this as a simple "two people for the price of one" and think "why hire a photog when a reporter can shoot his own video?" This is typical myopic beancounter logic, as these people have no concept of creativity. To them, we're all just beans. While this weakens the product, they only see the bottom line. Given a choice, I'd bet 99 percent of News Directors would want two person teams in the field, but if a ND is told by the company that he has to go the one-man-band route, he often has no choice.

Right now it's a buyers market, and managers know it. They don't have to offer the money they used to, because there a lot more talented people out there than there are job openings.

Next time we'll look at some other budget factors that affect you... some you deal with every day and others you never see. Any questions, fire away.


b_news said...

Have you ever gotten any negative feedback for "exposing" trade secrets??

-The Grape said...

Nope. I've gotten nice comments from former NDs out of the business.

But I'm sure I'm not on a lot of News Director's Christmas card lists.

The whole point of this blog is to keep you guys from getting the shaft. If I ruffle a few feathers by saving young people some headaches, so be it.