NEGATIVE NUMBERS AT CHANNEL 9

In February, Jim Green, a financial wheeler-dealer in Vancouver's video industry, completed a deal that put $3 million into the bank account of KCTS-TV. The desperately needed money is funding a significant share of the shows in the pipeline at Seattle's public-television station. Never entirely explained to the staff or announced to the public, the investment has been the subject of confusion and dark speculation among present and former staffers. "Some people talk about them like an episode of The Sopranos," a former KCTS consultant says of the investors.

The money does not come from the mob. As Green confirms, it comes from an offshore bank based in the Caribbean called Omnicorp Financial Group (www.omnicorp.org). The company is on the brink of bankruptcy and has come under the authority of a controller at the request of regulators.

Raising even more questions is what seems to have led KCTS to this unusual source of funding in the first place. Public-TV stations nationwide are wrestling with the economic downturn to one degree or another, but Channel 9 is in the midst of a severe financial crisis that has some concerned about whether it can, in the words of Board of Directors member Don Nielsen, "sustain the operation." The individual support of viewers like you, so frequently encouraged by ubiquitous pledge-drive host George Ray, isn't enough to keep Channel 9 going.

A Seattle Weekly review of the station's financial audits, information from its president, and interviews with board members as well as current and former staffers reveal an array of perilous signs. The station ran an overall deficit in 1996, 1997, and 1998 and expects to log a deficit when the books close on the fiscal year that ended June 30. Its debt has grown, and it had to enter into a deferred-payment plan for $2.8 million worth of annual dues owed the Public Broadcasting Service (PBS). Meanwhile, donors and insiders wonder if money from a fund intended for production and program acquisition might have been used for basic operations.

Five months into its current fiscal year, KCTS has been operating without a budget. The board hasn't approved management's figures and has talked of cutting as much as half a million dollars, a significant chunk of a budget that in recent years has run around $20 million.

Meanwhile, the climate at and around the station is rife with a lethal combination of dissent, fear, and rumor-mongering. "I just think this place has been horribly mismanaged," says one staffer who, like many of the people interviewed for this article, pleaded for anonymity. Says another, in a reprise heard again and again: "The station has been in a lot of trouble over the years, and there have been a lot of scapegoats. But there's been one common denominator: the guy running the place." At least several staffers have written letters to the board questioning the leadership of president and CEO Burnill Clark, according to one board member. But many also are unhappy with a board they see as inexplicably in Clark's thrall.

LOSING INTRIS

Clark and KCTS' board members are striving to create an impression of normalcy, even while they admit they are taking unusual measures with this year's budget. "These are extraordinary times, and we are taking an extraordinary look at things," says board treasurer Jim Costello, a retired partner of the accounting giant then known as Price Waterhouse, now PricewaterhouseCoopers. Costello and board member Nielsen, the former Seattle School Board powerhouse, attribute KCTS' financial problems to the general effects of the economy and 9/11. "Like everywhere else, giving is down," Nielsen says. "The (Pacific) Science Center is facing it, the (Seattle) Symphony is facing it, you name it."

Yet the deficits at Channel 9 started as far back as 1996, when the economy was in fact booming, concedes Clark. (Clark refused to be interviewed in person but responded to written questions.) He ticks off a number of reasons for the fix KCTS is in, including declining support from the state and the Corporation for Public Broadcasting (CPB), as well as a nosedive in Canadian donations due, in part, to the loss of the station's Channel 9 designation on cable systems in British Columbia.

But for many, those explanations are getting old. "Clearly, things are not right," says Sturges Dorrance, a former KING-TV general manager who sits on the KCTS advisory board, which is separate from the main board and has no fiduciary responsibilities. "One year, two years—but we're looking at five or six years of continual red ink."

Dorrance's view of the problem echoes that of others. A variety of new media, most notably cable channels like the History Channel and A&E, is challenging public TV on its own turf. So, Dorrance says, "public TV is having a hard time figuring out what its niche is in this new world."

"Locally," Dorrance continues, "the strategy Channel 9 has followed is that it believes its current and future success is tied to being a supplier to other stations." So a lot of money and effort have gone into producing and acquiring national programs, which traditionally are the purview of PBS, WGBH-TV in Boston, WNET-TV in New York, and a handful of other public stations around the country.