National Public Radio, Inc. History

Address:

635 Massachusetts Avenue NW
Washington, D.C. 20001-3753
U.S.A.

Telephone: (202) 513-2000
Fax: (202) 513-3329

Private Nonprofit Corporation
Incorporated: 1970
Employees: 700
Operating Revenues: $143.8 million (2000)
NAIC:513112 Radio Stations

Company Perspectives:

We're not a radio station. It's a common misconception that NPR is a radio station, but in fact we are a supplier of programming to public radio stations that have joined NPR as members. We produce and distribute programming to more than 550 member stations nationwide via satellite. It's those stations that actually broadcast NPR programs to the listener. Each member station designs its own format, combining local programming with offerings from NPR and other sources, to serve its particular listening audience.

Key Dates:

1949:: Pacifica Foundation forms a public FM radio station in Berkeley, California.
1967:: Public Broadcasting Act is passed.
1970:: National Public Radio (NPR) is founded.
1971:: All Things Considered debuts.
1977:: NPR merges with the Association of Public Radio Stations.
1994:: Delano Lewis becomes president and CEO of NPR.
1998:: Kevin Klose succeeds Delano Lewis as CEO.

Company History:

National Public Radio, Inc. (NPR) is the world's first noncommercial, satellite-delivered radio system. As an organization consisting of member radio stations, NPR serves over 17 million Americans each week through some 555 public radio stations in the United States and Guam by distributing cultural and news programming, providing training and promotional services, and representing public radio interests before the Federal Communications Commission (FCC) and Congress.

Emergence of Public Broadcasting: 1940s-60s

Public broadcasting got its first boost with the FCC's decision in the 1940s to reserve a segment of the FM radio spectrum for educational stations. While various noncommercial educational stations had already developed throughout the country in the 1920s, many at America's universities, their financial well-being and integrity was threatened first by the Great Depression and later by commercial pressures. The first nonprofit community group to establish a public FM radio station was the Pacifica Foundation, which established a public station in Berkeley, California, in 1949.

Prompted largely by severe criticism of the quality of television programming, President Lyndon B. Johnson and Congress passed the Public Broadcasting Act in 1967, which sought to provide the nation with noncommercial radio programming of an educational nature. Soon thereafter, the Corporation for Public Broadcasting (CPB) was formed as a government-sponsored corporation that derived its funding through the U.S. Department of Housing, Education, and Welfare.

Formation of NPR: 1970

In helping the many small educational radio and TV stations develop professional standards, CPB promptly formed two organizations: The Public Broadcasting Service (PBS) produced and distributed television programming, while National Public Radio (NPR) did the same for radio. The funds derived from Congress were allocated by CPB to PBS, NPR, and creative outsiders who helped introduce and implement new programs. NPR's original mission was to serve as a leader in national news gathering and production as well as to provide a national interconnection between local noncommercial radio stations. Incorporated on February 26, 1970, NPR soon boasted over 90 charter member stations.

NPR's first programming foray consisted of live coverage of the Senate Vietnam hearings, which first aired in April 1971. This was quickly followed by the debut of a daily news program called All Things Considered, which would steadily grow in listenership and eventually enjoy tremendous success in providing listeners with weekday drive-time news and information. In fact, in 1973, All Things Considered garnered its first Peabody Award for NPR, which then built on the success of this program by extending it to weekends with Weekend All Things Considered in 1974, mornings with Morning Edition in 1979, and Weekend Edition and Weekend Edition Sunday in 1985 and 1987, respectively. Thus, an NPR news presence seven days a week was ensured. Over the years, NPR news programs provided member stations with live coverage of the Watergate hearings in 1973, as well as extensive reporting on presidential and Congressional elections and Supreme Court nominating procedures, including the Senate hearings on Judge Clarence Thomas in the early 1990s.

During its first five years in existence, NPR focused on production and distribution for its member stations. Public radio further benefited when, following NPR's merger with the Association of Public Radio Stations in 1977, NPR began providing member stations with training programs, management, and lobbying activities in Washington, D.C. NPR developed the first nationwide, satellite-delivered radio distribution network in 1979. This enabled smaller stations in rural areas to receive programming as easily as their city counterparts. It also provided NPR with a larger audience.

Funding: A Perennial Issue

From their inception, NPR and public broadcasting in general were plagued by internal and external funding pressures. In the early 1970s, President Richard Nixon, Vice-President Spiro Agnew, and their administration expressed disapproval of programming they regarded as politically controversial and biased. In 1973, Nixon vetoed a planned endowment to the CPB and encouraged member stations to become more autonomous, believing that local stations would naturally shift to more conservative programming.

While CPB struggled with budget cuts and bureaucracy, eased somewhat during the Carter administration but reinstated during the Reagan presidency, NPR faced severe financial problems, ending 1983 somewhere between $7 million and $9 million in debt. Moreover, NPR's CEO resigned during this time under allegations of mismanaging funds, and Congress began pressuring NPR to stabilize its financial situation. In addition to staff layoffs and cutbacks on programming, NPR sought a loan from CPB in order to retire its debt and restructure its financial backing.

By July 1983, the situation was indeed bleak; NPR was advanced $500,000 by CPB so that the former could meet its payroll. Further loans followed, with the proviso that ownership of NPR's equipment be shifted to a group of independent trustees to prevent seizure of the equipment by creditors. NPR also agreed to cut costs, raise the fees it charged member stations, and work to increase its contributions from listeners. The restructuring also involved a change in operating arrangements with NPR's member stations. Specifically, NPR sought money from the public and private sectors, while its member stations received CPB funds directly.

The 1990s and Beyond

In 1995, a member radio station receiving all of NPR's programming paid 10.2 percent of its revenues to NPR, according to Marc Gunther of the New York Times. This meant that when key stations had unsuccessful fundraising drives, or when Congress voted to cut the annual budget for public broadcasting, NPR also suffered.

Such a scenario came to pass in 1995 when, in its zeal to reduce the federal budget deficit, Congress agreed to reduce public broadcasting dollars from $285 million to $275 million in 1996 and to $260 million in 1997. As a result, NPR's new CEO Delano Lewis was forced to eliminate 20 positions and drop several programs, including a minority-oriented news program entitled Horizons and other cultural programs.

Delano Lewis was hired as NPR's president and CEO in 1994. As the former head of Chesapeake & Potomac Telephone with 20 years experience in that industry, Lewis had no previous background in broadcasting. His business acumen, however, was viewed as crucial to NPR's success in a competitive broadcast environment. In addition, Lewis had also served as a lawyer under Robert Kennedy's Justice Department, which led to positions with the Equal Employment Opportunity Commission, the Peace Corps, former Senator Edward Brooke, and Congressman Walter Fauntroy. Such Capitol Hill contacts could only help an organization which depended on Congressional goodwill. Finally, Lewis was the first African-American executive at NPR and was expected to lead the organization in more cultural programming and broaden its appeal to a wider range of listeners. As of the late 1990s, however, Lewis's primary achievement was to keep NPR solvent. He helped do this by expanding NPR's reach into different markets and by pursuing corporate and foundation support to bolster dwindling public dollars.

Some forays into new markets had already been initiated, since, in October 1993, NPR began broadcasting for six hours each day in Europe via satellite. Later that year, NPR partnered with CPB and Public Radio International in a venture known as "America One," which extended NPR's broadcasts in Europe to 24 hours a day via direct-to-home satellite.

In addition to expanding its markets, NPR under Lewis pursued corporate and foundation dollars with increased vigor. This took several forms, including "enhanced underwriting." In the early years of public broadcasting, public broadcasters were forbidden by law from accepting commercials; as commercial pressures mounted, the FCC relaxed rules regarding what public stations could broadcast. Kathy Scott, an NPR spokesperson, told David Barboza in the New York Times in 1995 that the organization's goal was to become more self-sufficient and that its new guidelines were changed "with an eye toward not passing up opportunities." While NPR did not interrupt programming, permit "calls to action" or comparative or qualitative language, it relaxed its policies regarding the inclusion of phone numbers in underwriter acknowledgments and broadcasting slogans. It also accepted grants earmarked for coverage of particular issues. For example, in 1994, the General Motors automaking subsidiary Saturn began sponsorship of Car Talk, an NPR call-in program on cars and car repair. In the late 1990s, concepts such as "brand leveraging" were also being reviewed along with revenue generation in the form of a record label called "NPR Classics," a music-ordering service, and individual station fundraising initiatives.

Keeping abreast of technology, the NPR web site was established in 1994 and, beginning in 1995, pioneered the use of technology known as audio streaming or RealAudio to allow users to hear prerecorded audio files of NPR programs. In 1996, NPR began 24-hour service for the Armed Forces Radio and Television Service offering programs to military radio stations abroad. At that time, NPR broadcasted in over 140 countries around the world.

Lewis also worked to rid NPR of some negative publicity surrounding several discrimination lawsuits, hearkening back to the mid-1970s, when CPB was criticized for not hiring enough minorities to meet the requirements of civil rights legislation. A number of these lawsuits, alleging sexual discrimination against women, were settled out of court. In 1997, an African-American Muslim reporter based in Cairo filed a lawsuit alleging race and religious discrimination. After an April 1997 article summarizing the charges in Time, CEO Delano Lewis responded with a letter, quoting staff percentages of 29.2 percent minorities and 48 percent women and noting both minority and female representation in senior management positions. Said Lewis, "the advancement of minorities and women is an ongoing commitment, and our record compares favorably with that of other broadcasters. I have made it my objective to ensure that our employees are treated with dignity and respect."

From its inception, NPR has become famous for the high sound quality of its programs and its engaging radio personalities. Professionals such as Morning Edition's host Bob Edwards, interviewer Terry Gross of the program Fresh Air, former All Things Considered host Susan Stamberg, reporter Nina Totenberg, and many others have received several awards for their work with NPR. NPR is also known for its "quirky" features such as Stamberg's perennial Thanksgiving presentation of her mother-in-law's cranberry relish recipe and David Sedaris's retelling of his stint as a Christmas elf at Macy's. Moreover, NPR has cultivated the distinctive sound of its broadcasts in such features as Radio Expeditions, which takes listeners on "audio journeys" to remote areas and includes wildlife recordings.

By the late 1990s, about 60 percent of NPR's operating income was derived from member stations' dues and fees, 2 to 3 percent from CPB and other governmental sources, with the remaining funding coming from corporate and foundation contributions. Funding concerns continued to vex NPR and public broadcasting in general. Ironically, contrary to its original purpose of serving as an outlet for alternative programming that could not survive commercially, NPR has needed to become more commercial in order to continue to provide that programming. Liberty Media, a subsidiary of Tele-Communications Inc. (TCI), which already had a two-thirds interest in public television's Macneil/Lehrer Productions in 1996, expressed serious interest in similar funding of public radio programming in exchange for "content." Such offers led to questions regarding the amount of control corporate sponsors would have on editorial and news coverage, as well as concerns over a possible backlash from listeners in the form of reduced donations.

In the convergence of electronic media (cable, computer, radio, television), public radio has also been looked to as a possible starting point for the National Information Infrastructure (NII), due to its existing network, listener base (according to Mitch Ratcliffe in Digital Media, 85 percent of U.S. homes can receive public radio), and proven abilities in community building. While the NII could certainly prove to be a boost for NPR, many industry observers regarded this as an unlikely scenario, due to the probable involvement of media conglomerates with more dollars and power than public radio. Given the competitive media climate of the late 1990s, however, it was certain that NPR would need to continue to search for options in its never-ending battle for funding.

The Changing Face of Public Radio: NPR in the Year 2000

In the late 1990s NPR undertook a series of unique business ventures aimed at capitalizing on the company's reputation for quality programming. In September 1997 NPR reached an agreement with Borders Books and Music to promote books and compact discs that had been featured on NPR. The plan called for the installation of specially designed Town Square kiosks in Borders retail outlets. The kiosks, which resembled radio towers, bore the NPR logo and included listening stations. In July 1999 NPR reached an agreement with America Online to allow its news stories to be carried on AOL's News Channel, a popular online news source. The integrated programming featured audio highlights from NPR broadcasts, and allowed listeners to submit their own commentary.

Meanwhile, the growing presence of corporate sponsorship in connection with NPR programming raised a number of questions about the path the company was taking. On the one hand, the Congressional budget cuts from the mid-1990s had inspired a movement away from federal funding altogether, something CEO Delano Lewis, with his business background, was supposed to spearhead. The challenge lay in striking a balance between NPR's tradition of unbiased reporting and the political agendas of its corporate backers. While NPR asserted that it maintained complete autonomy over the manner in which its stories were covered, certain grants, such as the Lila A. Wallace Fund's sponsorship of news coverage of campaign finance reform, clearly had an influence on the content of NPR's programming.

In April 1998 Delano Lewis suddenly announced his intention to retire. While he cited personal reasons for his decision, many in the industry speculated that the difficulty of establishing workable financial partnerships with major corporations ultimately proved frustrating to Lewis. Lewis's successor, Kevin Klose, took over in November 1998. From the start, Klose worked to improve relations with members of Congress, in an effort to reestablish the federal government's support for public broadcasting. Klose also devoted attention to expanding NPR's audience among younger listeners, and led a campaign to commit more money to creating web sites for affiliate stations, which would both help broaden exposure for popular programming and enable them to explore the retail possibilities of e-commerce. However, many local stations were wary of such a move, believing that Internet access to national programming would siphon listeners away from regional offerings.

The relationship between NPR and its affiliates became further strained in October 1999, when the company began charging the stations based on audience-base, rather than operating expenses. The increase in fees injected some much needed capital into the company's sagging budget, but it also weakened the financial stability of many of the smaller stations. However, supporters of the new system felt that increased accountability would inevitably result in stronger programming and greater choice, improving the company's product without undermining its commitment to unbiased reporting.

In the midst of these shifts in business strategy, NPR celebrated some significant milestones. The year 1999 marked the 20th anniversary of Morning Edition with Bob Edwards, and All Things Considered turned 30 in April 2001. The durability of these popular programs was crucial to maintaining NPR's reputation as a reliable source of intelligent radio broadcasting. At the same time, the company continued to seek out new opportunities to broaden its reach, particularly through the Internet, and in February 2000 NPR launched All Songs Considered, its first program created exclusively for web broadcasts. Heading into the heart of the technological era, NPR was clearly committed to exploring the possibilities of new media, but without sacrificing the integrity of its programming.

Principal Competitors: Infinity Broadcasting Corporation; Jones Media Networks, Ltd.; Westwood One, Inc.

National Public Radio, Inc. History

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