Intro from Jay Allison: Looking at the photograph of Jim Russell on Transom, you'll note that one side of his mouth turns up and the other side down. This may reflect the attitude necessary to make a life in public radio. Jim has done pretty much everything... produced All Things Considered, substantially created Marketplace and Weekend America, and the concept for The World. He has recently become an independent consultant. Now, on Transom you can avail yourself of Jim's advice for free! Perhaps you'd like to start your own public radio show? In Part One of his Manifesto, Jim will tell you the questions you should ask before you do. In Part Two of his Manifesto, Jim provides the one thing that most would-be Executive Producers ask for most. A budget. And how to write one. Jim lists all imaginable line items, plus contingencies and overhead. So sharpen your red pencil and start budgeting. This is a great chance to prepare for the big time in public radio, such as it is.
Developing New Programs
Inventing a Program
For a producer, inventing a program — creating the concept and then being able to make it happen — is an amazingly fun and fulfilling thing to do. It is also incredibly hard: frightening because it is so easy to fail and so difficult to persuade anybody that you can do it and that it will work. Malcolm Gladwell, the author of Tipping Point and Blink captured the fear well when he wrote that we’ve trained ourselves to expect dazzling new ideas, “But if you’re the one responsible for those bright new ideas there is no such certainty. You come up with one great idea, and the process is so miraculous that all you do is puzzle over how on earth you ever did it, and worry whether you’ll ever be able to do it again.”
Andy Warhol used to say we’d all be famous for fifteen minutes. Now, I think, you only get 15 minutes to become famous … 15 minutes to go from zero to full success before people start saying “You have failed.” What surprises me is that no matter how many times you have done it, successfully, you begin from scratch each time.
People wonder if program creation is an art or a science. Is it inspiration or research? Is it a mission or a business? I think the answer to all of these is, “Yes.” Great programs of course need the creative spark that comes from imagination and artistic experience. But too often, these great ideas die on the vine because they do not have an organized, rational business plan — a way of evolving the program’s design that makes sense to all involved in creating and supporting them. In the end, the process can only succeed if the producer finds the perfect intersection of a brilliant idea — a compelling reason to produce the show, and a terrific plan to develop that idea into a sustainable program.
A good example of how “opportunity” can get out in front of program was the case of Weekend America. The research made it absolutely clear that public radio was experiencing a striking dip in listening in the middle of Saturdays. And also that there were over 100 single-subject, hour long programs being distributed nationally — a pattern of programming that appeared to create a kind of “jerky” unconnected listening experience for the audience. What was needed, we believed, was programming that provided a constant public radio magazine sound, but with a weekend sensibility. And if it could provide stations an easy way to insert local material, all the better. This was the opportunity.
But, where was the show? What was it about? What was its center? What did it do uniquely well? What was its consistent sound? Despite years of planning and piloting, in the early days of Weekend America, it was a huge burden to just get the two-hour live program on the air every week. To their credit, the staff persistently demanded a clearer, deeper definition of the program, but the distractions of producing the show, funding it, marketing it, defending it and keeping partners and stations as happy as possible — all of these delayed the program’s full conceptual definition. In retrospect, it is clear that in the early days, the opportunity outpaced the program. The sad irony is that I could “hear” a very particular program in my head, loud and clear as a bell! But, because I was the Admiral commanding a fleet, I was not on deck frequently enough to do daily proselytizing of the staff, teaching and reminding them of what show they were producing. My friend and a really great Executive Producer, Car Talk and Wait, Wait’s Doug Berman says, “Understand that an idea is just an idea. You have a lot of work to do before you even know whether it’s going to be a show.”
Hopefully, Weekend America has gotten its second wind and, with it, clearer definition. This all becomes tangible when the task is crystal clear: write the program’s vision and mission and be able to state its concept in a simple, short “elevator speech” (30 seconds). And the lesson is clear too, if somewhat heretical. Shows can evolve their quality: Marketplace, Wait Wait, Car Talk, Morning Edition, and many more programs are much better shows today than at their start. But, you really do only have Andy Warhol’s “15-minutes” to get the show concept straight. You cannot successfully preach a confused sermon.
After I had worked on the creation and development of a great many shows, Minnesota Public Radio|American Public Media asked me to be its Senior V.P. of New Program Development. It was in this role that I began to start writing down the recurring steps that new program development takes. I really am not a big fan of process, not a “process geek.” But, I don’t like reinventing the wheel over and over again. So, I am not in love with process, but — plain and simple — it works.
The first time I used the process, it probably took six months to walk through the steps as we tested the process while using it. Shortly after I left MPR and hung out my own shingle as a consultant, I had the opportunity to try out the process on a new client. Radio Netherlands Worldwide had approached me to help them develop a new English-language weekly show. I spent a week in Hilversum at RNW’s offices, working with the staff. By the end of that week, we had developed the superstructure of the new show, The State We’re In, a weekly show monitoring human rights around the world. It was clear the process worked. Subsequent to that experience, a number of stations and other organizations have asked me to lead their staffs through what has become a 1 1/2 day “Intensive” version of the process. We did it for a new MPR program on cross-generational relationships, How’s the Family; a new public affairs show based in Washington, DC; the daily magazine show Lake Effect produced by WUWM, Milwaukee, and I just finished a similar session for Iowa Public Radio. In all of these cases, the process held up and worked very well, producing clarity of mission, vision, style and editorial direction, and an accurate portrait of the resources needed. Perhaps most importantly, it pinned down management’s expectations from the start, and intersected them with staff’s aspirations, so that the result would not be a total or unpleasant surprise to anyone.
I don’t mean to suggest that this process is a panacea for the woes of new program development. “NPD” is a tumultuous and very emotional activity; circumstances and morale swing wildly, and this is simply not a game for the faint of heart. But, after creating new programs a few times, most producers conclude that they need to organize their thinking so they don’t forget important steps (I’ve been part of too many 11th hour discoveries like “Do we have rights to the title?”) and devote their creative energy to inventing the program, not reinventing the process.
So, what follows is my outline of what the process can look like. I’d be very interested in seeing your comments and answering questions.
As you read the following, please append the words “creative impulse” and “artistic vision” in EVERY step.
(Not all programs will involve all steps.)
- THE SURVEY: Comparison of attitudes and beliefs being brought into the process. I actually develop a survey of staff, with questions like Why do you think your company wants to produce this show? Who is the target audience and how do you know that people are interested in this subject? What are the most important qualities of a new program? Are there cultural or institutional restraints that might impact the success of a new program? It can be an amazingly revealing document, showing schisms right down the middle of a staff or unexpected but universal staff consensus.
- THE DEVELOPMENT TASK. The “Suits” issue “the charge” — define the expectations, the givens, the measures of success and the reporting chain of command. This may seem like a quickie step, but it is absolutely crucial. I believe that more new programs die because of a lack of real senior management commitment than any other cause. Many years ago, I developed with an independent producer a television show called “Your Children, Our Children.” It had an important and provocative thesis: that we in America assumed our children were well cared-for, but the truth was that many foreign nations did a significantly better job in areas ranging from health care to education. It was to be a real wakeup call, but … who would fund this “downer” subject? What corporation would link its name to a series about our failures in caring for our kids? The program producers believed that a little-known (then) national retail company was a prime candidate, but the Development Department said “no way.” We had a real stalemate, but one broken by the General Manager who told the Development Department that the series was a station priority and to make the approach. And that is how Target put more than $1-million into the 7-part TV series. And went on to embrace it even more fully, with promotion and advertising.
- INSTITUTIONAL STRENGTHS AND WEAKNESSES: Who is producing the program and why is it being produced? What is the institution’s overall mission? Its motivation in creating this program? Its culture as it affects this program? What are the strengths, weaknesses, threats and opportunities? Who is the competition? This is a classic SWOT (strengths, weaknesses, opportunities and threats) grid, easy to do and helpful to remind everyone of what is ahead and what to look out for.
- CONCEPT: Major brainstorm whose goal is to write the program’s vision and mission and be able to state its concept in a simple, short “elevator speech” (30 seconds). This step needs to result in the clearest possible statement of what the program is. But, it also needs to go beyond that to answer: What socially valuable goal will the program aim to solve? What noble purpose does the program have? How does it help humanity? Where’s the passion for this project? Who are its champions? Identify the personal goals that are important to the creative team.
- PRELIMINARY BUSINESS ANALYSIS:
- Demand: Who is the audience? Can you demonstrate that there is demand and opportunity for such a program? What audience do you intend to reach, and via which media platforms?
- Financial Analysis: Roughly speaking, what will this program cost and does the market/revenue plan appear to support such costs? A back-o-the envelope budget, just to get a sense of “scale” and whether this looks sustainable.
- Funding: How will this program be funded? What is the relationship between show design and funding? How will the design support efforts to underwrite the program?
- Key Talent: Who are the key talent and are they under contract? Is ownership clear? Is distribution agreed on?
- Matrix Analysis: Complete a “matrix analysis” for the program, examining matchup with weighted corporate priorities, likelihood of success, risk, other factors. I have developed a one-page model that allows companies to test their own willingness to take risk versus the likely payoff.
- THE DIFFERENTIATORS: What are the key characteristics and qualities of this program that differentiate it from others? What adjectives describe it best? What do you have that nobody else does (key talent, literary assets, music, etc.)? What resources do you have access to in your station, network, community? What one ingredient would make the difference between success and failure of your show? Can you get that ingredient? What’s the furthest out idea that we “would never try?”
- THE BIBLE: What are the 10 Commandments of this program — the things that every program must include, the qualities that every segment will be tested against? The style of speaking and hosting, the relationship with the audience? Refine these from broad philosophical statements down to very tangible everyday useful statements. Give lots of examples, and plan to use this “bible” with every segment. If it doesn’t work, revise it — rewrite the Bible rather than ignore it.
- THE CLOCK: What does the program’s format look like? The pieces of the programs are the “rooms.” Here we actually draw the program’s first clock. We argue about it — a lot. Some people wonder why you need a clock at all — why can’t each program have its own clock, depending on the content? Is the program “newscast friendly” (with a cutaway for NPR news right at the top?) If a national show, are there local cutaways? Clock.
- THE “FURNITURE”: What are the regular segments that always appear in the rooms, the segments that are the show’s signature elements? The predictable elements that you can plan for, so you don’t have to create the show from scratch every time? Can we also guess at the frequency of these recurring elements? Every week? Every other week? Once a month?
- REFINE PLAN & BUDGET: Based upon more detailed knowledge of the program, especially the staff it needs, construct a real budget and estimate revenue. Does it have a contingency and if so, what is the right percentage? 5% for a relatively easy show or one you have done before, 10% for a tougher show, 15% for a really hard, new program? What about corporate overhead? Consisting of all those things that you haven’t “line-itemed” in the budget, like security, accounting, etc. If you can identify a cost, line-item it. If it is part of the general support your company brings to the project, it belongs in overhead. If you don’t charge overhead, you’re not covering your company’s costs. If you don’t and you’re an independent producer, your company will go broke; if you’re bigger (i.e., a station), others will resent you for taking so much resource and not paying for it.
- STAFF: How will the right staff be secured? What inhibitions on staffing exist? Have you budgeted for recruitment expenses? Is the staff aligned to the right tasks? What isn’t getting done or isn’t getting done well enough? (If this is an issue, you can conduct a staff “alignment exercise” in which all of the duties are laid out in Post-it notes and moved around under the jobs until everyone agrees the right balance has been found.) What special rules exist that affect your staffing — i.e., university holidays, special HR hiring rules that will slow you down in hiring, etc.?
- LEGAL: Title search, rights considerations, acquisition contracts, etc. All key contracts signed?
- PILOTING: Who will audition and critique pilots? And, by the way, what is a pilot supposed to be?
Begin by piloting segments. Piloting = playing with ideas and sound. Experiment, take risks, play in the sandbox. Try out extremes so you can extend the envelope. Do a segment several different ways. Audition and critique, edit and redo. Aim to make mistakes — lots of them. This is the ideal time to do so. (See “The Value of Failure” link below.) Examples of segment pilots, for the show Weekend America, are located at weekendamerica.publicradio.org/about/pilots.
Produce an entire section of the show — a full “room,” with “furniture” in it, with host intros and participation.
Produce a full show. Listen and tear the hell out of it. Descend into hell and question all of your previous work? Climb back out, admiring those pieces that worked, throwing out or fixing those that didn’t. Plan your second pilot.
- MARKETING & PUBLICITY: I have one comment only. Somebody else is supposed to do this, right? Wrong. If you aren’t heavily involved, it won’t happen.
- To network/distributors;
- To partners and early adopters;
- To the media and the entire system;
- Inside the show (on-air branding).
- MEASURE SUCCESS: Based upon criteria articulated at the beginning of the process. Must be measurable, but it can be things like amount of media attention, underwriting received, audience size, listener response, etc. What would be a homerun?
- FINE TUNE PROGRAM: Quoting Doug Berman again, “Do your work, fix the show. You will inevitably get conflicting advice. You must take only the advice that rings true to you. If you take all of it, you’ll end up with a confused, soulless muddle. Consider all criticism, consult with people you trust, and then use what rings true to you. Fix the show.”
- LAUNCH (and pray): Don’t ever launch in January (Marketplace did) — nobody wants to work from Thanksgiving through Christmas. Consider a “soft launch” — meaning starting up in a few markets or, if a local show, without a lot of hoopla — under the radar. There will be time enough to celebrate and tout your show when you have a success.
Well, if you have gotten to this point, congratulate yourself. I warned you at the beginning that program production is not a game for the faint of heart. Program production is difficult, but success is a terrifically high “high.”
Hopefully, this approach hasn’t shut out all of the sunshine and joy that comes from program production. If the tools and approaches I have listed help you achieve more success, resulting in more excellent programming for the listener, then my goal has been accomplished.
If all of this has dissuaded you from producing, you are probably lucky and will live a calm and normal life. Otherwise, welcome to the institution.
“Oh, God, do I have to make a budget?”
“I didn’t get into this business to make budgets.”
“I want to make programs, not budgets!”
These producer questions remind me of the child’s question to her mother: “Do I have to brush all my teeth?” The mother gently responds, “No, honey, only the ones you want to keep.”
Producers always imagine that making budgets is some onerous bureaucratic task invented by management to torture creative minds. But, I have a different explanation. The reason for doing a budget is to avoid forgetting costs that will later rise up and bite you, the producer, in the ass. If somebody is paying to finance your program, you know he/she isn’t going to give you more money when you suddenly “remember” a cost you’d forgotten about in the beginning. When this results in your going over budget, you’re going to be forced to eat the cost, which of course is also true if you’re financing a program yourself. A budget, therefore, is a giant and crucial producer “reminder” device.
Here’s another thing. There is no uniformity of budgets or even of categories of allowable expenses. Different funders have different rules. And the same funders treat different applicants … differently. The big guys, the WGBH’s and NPR’s, PRI’s and APM’s and TV stations, for example, always remember to charge for overhead. Indies routinely don’t, as if the costs for those kinds of expense come from the IF Department: the “Department of Imaginary Funds.” That’s why the big guys get and stay big, and you know what – nobody tells them they can’t charge overhead, which is up to 20+ % of their production budget – in addition to the budget itself. But, guess what. When the little guys DON’T CHARGE OVERHEAD, nobody tells them they should! Same thing with “contingency.” So, if you want to take all of the risk of your production on your own shoulders – “help yourself” and ignore overhead and contingencies in your budgets. (How to charge for both “overhead” and “contingency” is described in detail below.)
So, a budget serves two purposes: it estimates what a project is going to cost and tells you how close you came, and it collects information so you don’t forget anything. Over the years, the budgets I developed for projects kept trying to remember more things. For example, if you have employees, don’t you need desks, computers, telephones and office supplies? Is there a way to standardize what this kind of support costs? And then, could the program count the number of employees and automatically calculate the right level of support? The purpose was to avoid sweeping any cost under the table, and then having it come out and bite you later on.
OK, but how?
“Hey, how do you learn to make a budget?” a young producer once asked me.
“Gee, I don’t know,” I replied. “You just … do it.”
I attended no class and nobody taught me how to make a budget, yet every person I ever talked with about money aided in my process of discovery. It was like learning French, one verb at a time!
I used to make budgets on yellow legal pads, with pencils. There were so many erasures that big holes would appear on the sheets. I got my station to buy its very first computer, an Apple II+ and, using the first spreadsheet program Visicalc, we immediately reduced the time to make a budget from days to a few hours. The company was so impressed it immediately went out and bought another Apple II+! We had entered a new age!
As budgets grew into multi-page templates, including every item we could identify, and adding “contingencies” for things that were unforeseen before production started, and “overhead” for costs that the company provided but couldn’t be itemized … the budgets became more and more realistic. They also got larger. In fact, instead of thanking me for my thoroughness, one of my bosses accused me of developing “only Cadillac budgets.”
Along the way, and without any higher math degrees, I also learned that there is more than one way to calculate things in a budget. Here’s an example:
Which budget is correct? They both are. In “A,” the Overhead of 20% is calculated only on the Total Expenses. But in “B,” the Contingency is added to Total Expenses — it is after all, just more production expense — before the Overhead is calculated. B costs $10,000 more than “A.”
Here’s another example. What is the hourly rate that you charge for an employee in a budget. Well, based on a 2,080 hour year (52 x 40 hours), a salary of $40,000 per year is $19.23/hour. But, nobody works 2,080 hours per year. If you are an employee, in addition to salary you get vacation time, holidays, sick leave, etc. By my estimation, your hours are closer to 1,800, which raises your hourly cost to over $23. That’s the true cost of your employee.
I now use a four page budget template that is very complete, and calculates startup costs as well as two years of production costs. These are the categories of expense that I use:
STARTUP BUDGET: Includes one-time only expenses that won’t recur every year, such as the cost of piloting, rights (registering a title), equipment, new media, furniture, office computers and machines, etc.)
The recurring costs include all of the following:
Overtime & Vacation Relief
Benefits & Taxes
Acquisitions (News spots, produced pieces, commentaries, etc.)
Miscellaneous Production (audio tape, music CD’s, etc.)
Studio & Facilities Rent (remote studios, ISDN)
Subscriptions, Wires, Dues & Fees
Transmission: Audio Data Delivery
Postage & Shipping
Printing & Duplicating
Recruitment & Relocation
What is the Contingency?
A production contingency serves two purposes:
- It protects the program’s budget against unforeseen expenses;
- It protects the company against a program’s budget overages.
A contingency is defined as funds set aside for expenditures which cannot be anticipated. If the expenses can be anticipated, they should be line-itemed elsewhere in the budget.
Timing: Naturally, a contingency is most important and most defensible when a new show is being started and the budget has not been road-tested by the experience of actually making the program. The need for a contingency generally declines all the way to zero, as the program staff gains experience over years of production.
Amount: Contingencies should be based upon the risk involved. Therefore, a very complex project with a large budget would call for a larger contingency than an easy project with a small budget. A rule of thumb that I have developed over the years is this:
Difficulty Level Contingency % Easy 5% Medium 10% Complex 15%
Funders, including CPB, may object to creating a Contingency, seeing it as a Producer “slush fund.” You will need a set of rules regarding its use in order to convince funders that a Contingency is justified. Among the rules I suggest are:
- The Contingency is managed solely by the Executive Producer. Any authorized overages of any budget line will have to be approved by the Executive Producer and tracked as planned-and-approved uses of the contingency.
- No expenses will be charged directly to the Contingency Account; instead, funds will be transferred to the accounts where the overage was incurred.
If the Contingency is not used, what happens to it? This is a decision for the company to make. The possibilities include:
- After reviewing the financial status of the program (on a quarterly basis?) and concluding that it does not require use of the Contingency, it might be released for discretionary spending. By the program or by the company.
- It might be applied to budget lines needing additional support.
- It might be retained until the end of the project’s funding year as protection for the project.
- The company might “bank” the contingency as a means of creating a company-wide production contingency fund, to cover all programs it produces.
- Painful as it is to contemplate (and the reason I list it last) —
the funder may require it to be returned as is the case with CPB.
What is Overhead?
This is from a memo I wrote in 2000 to the budget managers at Marketplace. If you’re not obsessively interested, just file this for the moment when somebody asks you – and they will – what the heck overhead is all about.
First, Overhead (also known as “G&A” for “General and Administrative expenses”) is designed to reimburse the corporation for a project’s fair share of existing corporate overhead. This is support the corporation already provides, such as the existing accounting department, existing janitorial staff, and existing telephone system. To the extent that a project makes use of these existing services, the project should pay its fair share of their cost. G&A relieves the corporation of a portion of its fixed expenses, allowing the corporation to spend its unrestricted funds elsewhere.
When a new project requires new expense, the project must pay for that new expense, and this payment is not corporate G&A or overhead, because it is not a payment for the existing core support services. In general, all discrete items, which can be identified as project-specific expenses, should be line-itemed; overhead is for capturing indirect expenses, which are usually a corporate expense.
Marketplace Productions General and Administrative Overhead rate is calculated at 20%. It is applied to all line items — salaries, benefits and non-personnel expenses. Should the corporation desire to invest in new projects, it does not do so by discounting the Overhead rate but rather by investing, which is shown on the Revenue side of a project budget.
What does Overhead cover? Here is a list of the types of existing expenses, which may be included in overhead. Remember: if new expense is required rather than the utilization of existing resources, then that new expense must be budgeted and is not included in overhead. In each case, Marketplace Productions provides defined “normal” levels of support and reviews each budget to determine if levels of use will exceed “normal,” requiring line-iteming in the project budget.
- Existing office space, building and grounds maintenance, operations and management, and land use;
- Existing janitorial and custodial services;
- Existing local telephone instruments and service;
- Existing communications services (voice and data, although new computers and computer LAN connections are always line-itemed);
- Power, heat and light in existing facilities;
- Insurance (except for production insurance which is line-itemed when purchased);
- Existing office furniture;
- Existing office equipment;
- Office supplies which are normally stocked;
- Metered postage (normal business mail);
- Existing support staff (administrative, accounting, personnel, buildings and grounds) including institutional overhead and indirects;
- Existing security service, escort service, hazardous waste disposal (but not special remote security services);
- Legal services (except where special or extensive services require line-iteming);
- Existing R&D, technical consultation, management and administrative staff;
- Project liability “insurance”;
- Miscellaneous other expenses not capable of being line-itemed in budgets.
One of the most frequent mistakes made by budget-makers is to consider Overhead a form of “profit.” As explained above, this is not the case and it is an invitation to financial error to make this mistake. Rather, what overhead does is to allow the corporation to fairly apportion its general and administrative expenses among all of its activities, thus allowing the corporation to maximize the use of its unrestricted funding on direct costs.
So, what’s this budgeting junk all about?
It is the best known way of covering your behind by assuring that you remember to count all of the real costs of making programs – so that you and I can get on with the part we love, actually making the shows. Right, Barrett? (Barrett Golding, E.P., of Hearing Voices, a recent convert.) And, if you’re going to be forced to go out and raise money to make shows – and who isn’t? – you might as well raise the right amount, huh?
The mass has ended. Go in peace.