Would Ads Hurt Focus of PBS? : Television: The debate is heating up with one side wanting advertising revenue and the other warning against the pursuit of ratings.

Under the gun of congressional budget slashers, public television is debating a long-simmering matter that now threatens to be its hot-button, wedge issue of the ‘90s: advertising.

To PBS President Ervin S. Duggan and many others within the system, a move toward dependence on ad revenues would violate the very nature of public television’s mission, changing it from the pursuit of quality programming to the pursuit of ratings.

“Choose ye this day whom ye shall serve. No man can serve both God and mammon,” Duggan warned in a recent issue of Current, a trade journal for public broadcasting.

To others in public television, however, ads--with certain restrictions, such as no program interruptions--are seen as a necessity, given the hard realities of a reduction or possible elimination of federal support and increasing competition for corporate backing from cable.

“I do not believe the American public is nearly as concerned (by ads) as the people who are within the industry,” says Raymond K. K. Ho, president of Maryland Public Television. “If public television doesn’t look at alternative financing (including ads), it will end up being a bunch of ‘beg-a-thons,’ interrupted by a few programs.”

The Assn. of America’s Public Television Stations last week ordered a study to be conducted of various funding options for the system, including commercials.

While commercials on a noncommercial network appear to be a quintessential oxymoron, the issue has history. In the early 1980s, after then-President Ronald Reagan threatened to cut federal money substantially, public television was mandated by Congress to experiment with commercials. Nine stations participated in the 18-month trial.

At the conclusion in 1983, the Temporary Commission on Alternative Financing reported that there were “significant financial risks” to commercials and that there was no “good way to fund public broadcasting except through pledge drives and federal funding.”

But the study led to a loosening of underwriting policies, permitting public television to identify the financial backers, or underwriters, of a program “by using brand names, trade names, slogans, brief institutional type messages and public-service announcements.” Within the system, this became known as enhanced underwriting . Previously, underwriters could be identified by name only.

Now a growing number of officials, including those at some of the nine stations that participated in the experiment--among them the outlets in Chicago, Philadelphia, Miami and St. Louis--want to go beyond enhanced underwriting. About 20 stations are calling either for a revival of the commercial experiment on a broader scale or a comprehensive re-examination of the entire ad issue, leading to significant change.

Even KCET-TV Channel 28 President William H. Kobin, who has been a supporter of current PBS guidelines governing length and content of underwriting credits, now suggests that PBS is interpreting the rules established by the Federal Communications Commission “too conservatively” for funders of national productions.

“The guidelines themselves should be examined--the FCC and PBS guidelines--to see how they could be made more flexible and give us room to navigate,” Kobin said. “I would like to see some relaxation, and don’t ask me for specifics. . . . We have lost corporate underwriters to cable because they feel we are not a good enough buy. We have to figure out a better way.”

Substantive changes in underwriting beyond FCC regulations would require congressional or FCC action.

Opponents of advertising fear public TV would be put on a “slippery slope” toward commercial-type programming and that it could never compete with commercial networks for ads anyway. They argue that certain financial advantages--such as lowered union fees and various copyright privileges, particularly for music--would disappear, and that viewer contributions and traditional underwriting support would decline.

Victoria Devlin, vice president for marketing and development at WGBH-TV in Boston, said that viewers are already turned off by “creeping commercialism” of underwriter spots with clever slogans.

Proponents maintain that advertising is not a “magic bullet” and say they have no intention of going all-commercial. But they see having some ads as necessary to their financial well-being--part of a diversified funding base that would include other revenue streams.

A spokesman for Chicago’s WTTW-TV said that during the commercial experiment in the 1980s, “our viewers (and) revenue increased, in underwriting and all other nongovernmental sources of income. . . . Members are the cornerstone of our revenue (45%), and we are not going to offend them.”

The advocates are hardly united on how they would implement new ad policies, and with what limitations. For example, many say they would not allow commercials to air near children’s programming, but Michael Hardgrove, president of KETC-TV in St. Louis, said he would “not necessarily exclude” such spots. Not cereal ads geared to children, but perhaps “a message for investment services” for mothers, “since women control most of the money in the country.”

The extent of debate can be seen in a report of the Assn. of America’s Public Television Stations, the system’s lobbying organization.

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Patrick T. Fitzgerald, general manager of WBGU-TV at Bowling Green State University in Ohio, suggests “ ‘very enhanced’ institutional advertisements” for national underwriting, such as one or two 30-second spots preceding or following PBS programs.

William J. Grigaliunas of WCMU-TV at Central Michigan University in Mt. Pleasant, Mich., recommends allowing public stations to carry paid political announcements: “Congress could mandate that a percentage of federal funds given to candidates . . . must be spent on public broadcasting.”

At its annual meeting in Washington last week, the association was confronted with four choices on advertising: no change, study the potential for advertising, a demonstration like the one in the early ‘80s, or go for it now. Members chose to go with a study that will deal with a batch of funding options including an endowment, a trust fund, increasing earned income opportunities, structural changes within the system and whether to keep the present underwriting rules or move to what an association official described as “full advertising.”

Due date on the report, being done by Lehman Bros. in New York and Paul Bortz Associates in Denver, was pushed up from the end of May to the end of April, at the request of Rep. Jack Fields (R-Tex.), chairman of the House telecommunications subcommittee, which oversees public broadcasting.

The debate comes at a time when there is escalating division between PBS and some of its stations over current underwriting rules. It will come to a head in June, as PBS seeks to impose fines on stations that violate the network’s existing requirements on the length and content of underwriter credits.

No one knows how many stations currently are in this category--they include Chicago, Philadelphia, Houston and St. Louis--or how many will comply by the July 1 deadline for stations to sign new agreements with PBS.

Peter Downey, PBS vice president for program and business affairs, explains that PBS’ board decided to impose fines because it has lost or not gotten national underwriters, who figure they would have a better deal with longer spots in targeted local markets. Some local stations are “selling out for a few pieces of silver, and putting at risk $200 million a year,” he said.

So PBS toughened its stance internally. Stations that go beyond PBS’ ad policies in local underwriting will be assessed a premium equal to 20% above what it would otherwise pay for PBS programming. Non-conforming stations say that to achieve parity between local and national underwriting, PBS should be the one to change its rules.

Frederick Breitenfeld Jr., president of WHHY-TV in Philadelphia, insists the fines “won’t happen.” “The proof will be in how many stations will want to negotiate that agreement before they sign it. (It’s) unacceptable.” Terming the situation “an implosion more than a civil war,” Breitenfeld says he hopes PBS’ board “reconsiders (and) that the law of the land should prevail--the FCC guidelines.”