University of Georgia-owned television station WNEG faces the real possibility of being taken off the air mere months after it started programming from the Grady College of Journalism and Mass Communication, the University’s student-run newspaper The Red & Black reported on Monday.
WNEG — previously located in Toccoa — has already burned through most of a five-year, $5 million grant and could “hit the brick wall” by September if woeful economic trends continue.
“It all depends on what happens in between now and then,” Michael Castengera, manager of the station now housed on the bottom floor of Grady College, told The Red & Black. “Then we’ll have to decide the next steps.”
“We’ve been in Athens effectively since Jan. 1, and it takes time to reorient,” said Culpepper “Cully” Clark, dean of Grady College.
“With all the factors, the cash has burned much quicker than we thought.”
With a fiscal year 2010 operating expense of $1.8 million and a projected annual revenue of $800,000 — which merely covers the $786,000 in staffing salaries — the station will incur a deficit of $1 million, the newspaper reported. The deficit will be drawn from what’s left of the grant.
To meet the projected revenue, the station needs $70,000 monthly in advertising revenue. However, the station underperformed in January and February, calling for an additional $60,000 drawn from reserve funds.
“We’re going on the basis now that we will make it through,” Castengera said. “Sales were so bad, and the economy was at its worst in December, and Georgia doesn’t recover as fast as the nation. We had to tough it out.”
At its acquisition in 2008, Grady College received $5 million from the University of Georgia Research Foundation to move the station from Toccoa to Athens and start operations. The money provided for the three stages of starting the project — $1.5 million to purchase the station, $2.1 million to build it in Athens and transform operations from analog to digital and $1.9 million as an operating subsidy. The grant, meant to last five years, is near depletion.
Shortly after the acquisition came a plunging economy and a decrease in media advertising everywhere, which caused the station to fall tens of thousands of dollars below budget month after month. Other factors — extended construction, a six-month delayed move, even theft of electronic equipment — forced managers to pull funds from upcoming fiscal years to foot the bill.
“With WNEG, before last June, we counted on the access to athletics,” Clark said. “With a same-day showing of football, you know somebody’s going to watch that again and again and all night long.”
Under contract to ESPN, football broadcasts were never available to WNEG. Station managers hoped to snag popular sports such as gymnastics, basketball and baseball to pull a large audience and advertising base. But beginning July 1, 2009, the Athletic Association reached an eight-year, $92.8 million agreement with ISP Sports for exclusive multimedia rights, including TV and digital media.
In the first quarter of this year, what Castengera called “the darkest hour,” gross revenue rolled in at $59,848 for January, $54,484 for February and $44,413 for March. Castengera said funds were projected to run out by May and proposed scenarios in February for different ways to move forward with station operations. The options included continuing regular operations, maintaining minimal programming or “going dark.”
For now, the group decided to maintain the current staffing and programming level with the hope that advertising revenues will pick up and a partnership with a media company may come to fruition in May. In an interview Thursday, Castengera and Clark seemed hesitant to predict “what’s next” but said they have “ideas with possibilities” as September approaches.
One idea is to make WNEG’s programming more “news intensive” and be “all news, all the time” during prime time hours, Castengera said. During the 6 p.m. to midnight programming hours, the 6 p.m. broadcast would be continuously re-broadcast until 10 p.m., when it would be updated and re-broadcast until midnight. Castengera and Clark also discussed involving student-generated content.
“Every step we take opens the door to revenue, and possible partnerships could help push the timeline back,” Clark said. “We’re feeling pretty confident.”