Steve Brown's Letter to WBAI Supporters regarding Democracy Now!

Dear WBAI Supporter –

 

A significant part of Pacifica’s current financial difficulties stem from the debt it owes to Democracy Now, which is owned by Amy Goodman’s corporation. A number of listeners have written to ask how much Pacifica owes to Democracy Now, and how the debt came about. I will try to answer both questions below.

 

How much money does Pacifica owe to Amy Goodman &Democracy Now?

 

First some background

 

Democracy Now was created in 1996 by WBAI Radio, the New York station of the Pacifica Radio Network, which also owned the program and paid its production costs and the salaries of its employees. The program featured news, analysis, and opinion, focusing primarily on stories that were underreported or ignored by mainstream news coverage.

 

Recipient of numerous awards – including the Gracie Award from American Women in Radio & Television, the George Polk Award, the Robert F. Kennedy Memorial's First Prize in International Radio, and (for its host, Amy Goodman) the Right Livelihood Award – Democracy Now is one of the best, and justifiably one of the most popular, programs on the Pacifica Network.

 

During the years in which Pacifica owned Democracy Now, it was the only program that actually made money for the network, over and above what it raised during the network’s regular on-air fund drives. This income comprised approximately $500,000 a year in syndication fees from more than 100 non-Pacifica stations (averaging $2,000-$5,000 a year per station), and approximately $250,000 a year in fees from listeners who wanted CD copies of past or present broadcasts (at about $10 per CD). The combined revenue for Pacifica from Democracy Now totaled approximately $750,000 per year.

 

Amy Goodman attempts to take Democracy Now away from Pacifica

 

However, all this changed in 2001, when Amy Goodman, the producer and primary on-air host of Democracy Now (and a salaried employee of Pacifica), dropped a bombshell on the Pacifica National Board. Goodman told the astonished board members that she would quit Democracy Now -- and stop raising money for the network’s on-air fund drives -- unless Pacifica turned over total ownership of Democracy Now to Goodman’s private corporation, free of charge, along with its entire 7-year archive of Pacifica-produced Democracy Now programs.

 

This was not a threat the board could ignore. Democracy Now was one of the network’s most popular programs, and Amy Goodman was the network’s No. 1 fundraiser, generating as much as 25% of Pacifica’s total revenue during its fund drives. However, another reason the board was devastated by Goodman’s threat – and felt powerless to resist it -- was that Pacifica was at a very low point in its history. It had just emerged from a grueling, and very costly, two-year court battle to democratize its governance structure, and as a result was weak and financially strapped; and its new officers, unsure of themselves and of their new roles, were desperately trying to stabilize the foundation and regenerate its revenue stream.

 

Pacifica caves in to Amy Goodman’s demands

 

So the almost prostrate Pacifica submitted to Goodman’s demands. It accepted a contract that was dictated almost entirely by Goodman’s own lawyer, who was also named as the contract’s sole arbiter, in case of any disputes. The contract not only turned overDemocracy Now to Amy Goodman – free of charge -- along with its priceless 7-year archive of historic programming; but also obligated Pacifica to pay, to Goodman’s corporation, a fee of $500,000 a year for the right to broadcast Democracy Now on Pacifica stations; it also gave Goodman the right to keep some or all of the approximately $500,000 a year in licensing fees (which used to go to Pacifica) for syndicating the program to other stations; plus it gave Goodman the right to keep the approximately $250,000 a year (which also used to go to Pacifica) for selling to listeners CD copies of past and present programs at $10 each. It also gave Goodman the right to solicit donations for her corporation from Pacifica’s own mailing list, which Pacifica was required to turn over to Goodman for her own use, in periodically updated copies.  

 

The contract that literally gave away Democracy Now to Goodman’s corporation was signed by only one representative of Pacifica, its board chair. However, before signing the contract, she had not consulted with any of the other 21 members of the board about the terms of the contract, nor did any of the other board members even see a copy of the contract or know what was in it before the chair signed it. (It was later discovered that, during the contract negotiations, the Pacifica chair was actually being supported financially by Goodman’s personal lawyer, and at the time of the signing was given $30,000 that had been collected for her by Goodman’s lawyer from his private mailing list.)

 

The Pacifica community is outraged at the giveaway

 

Announcement of the giveaway of Democracy Now was greeted with outrage by thousands of Pacifica staff members and listeners throughout the network; it was viewed as an act of betrayal. In the face of mounting protests, board members at first reflexively defended the contract (even though they still had not seen a copy, and did not even know what was in it). But as protests continued, some board members (among them, Carol Spooner) later publicly regretted their support of the contract, but nevertheless did not act to rescind it.

 

How much money did Amy Goodman make by taking Democracy Now away from Pacifica?

 

In the 13 years since Amy Goodman wrested Democracy Now away from Pacifica, she has billed Pacifica an average of $630,000 per year in direct fees, or approximately $8.19 million since 2001. During those same years she also collected licensing fees of $2,000-$5,000 a year from other stations – which, since Democracy Now claims that it is aired on more than 1,000 radio, television, satellite and cable TV networks, could amount to $5 million per year, or as much as $65 million since 2001. (However, this is only an estimate, since these income figures for Goodman’s corporation are not publicized.)

 

Goodman’s corporation also collects fees of $10 per CD from listeners who request copies of Democracy Now broadcasts. Using the figure of approximately $250,000 per year in CD requests, before Goodman took ownership, this could amount to as much as $3.3 million since 2001. (Again, this is an estimate, since these income figures for Goodman’s corporation are not publicized.)

 

To summarize the above figures:

 

The dollar amount that Democracy Now gained (and Pacifica lost or forwent) after it was given away to Amy Goodman’s corporation in 2001, is approximately $8.9 million in direct fees, plus approximately $68.3 million in licensing fees and CD sales, for a total of approximately $77.2 million. According to the limited public information available,Democracy Now reported its year 2011 income as $6.5 million, its assets as $13 million, and Amy Goodman’s salary, as corporation president, as $148,493. (All figures in this report are my own estimates, for which I will gladly apologize if incorrect, in the event that more accurate information is subsequently issued by Amy Goodman’s corporation.)

 

Are Pacifica’s payments to Democracy Now justified?

 

Many have asked how Amy Goodman can justify making Pacifica pay her corporation approximately $630,000 a year for the right to air Democracy Now, when other stations can air the program free of charge, for the first year, and then pay only $2,000-$5,000 per year thereafter. In other words, why does Amy Goodman charge Pacifica up to 315 times more than she charges other stations to air Democracy Now?

 

To my knowledge, no explanation for this extraordinary disparity in licensing fees has been provided by Amy Goodman’s corporation. However, in defense of Amy Goodman, it has been pointed out that she fundraises for Pacifica, free of charge, during its fund drives. That is certainly true. However, as stated on the Democracy Now website, Amy Goodman will also fundraise, free of charge, for any stations that air Democracy Now –but she does not charge them $630,000 a year for the privilege, as she charges Pacifica. All they have to pay is $2,000-$5,000 a year.

 

How much does Pacifica currently owe Democracy Now?

 

Regardless of what each subsequent Pacifica management team may have thought about the Democracy Now contract that was signed in 2001, nevertheless they have continued to pay its fees each year – until recently – when declining audiences throughout the network, and the cataclysmic Hurricane Sandy at WBAI in New York – placed the network under extreme financial pressure, and made it unable to keep up with its payments to Democracy Now. It is currently at least $2-$2.5 million behind in those payments.

 

There is no doubt that Pacifica owes this money to Amy Goodman’s corporation (which owns Democracy Now). But there is also no doubt that Amy Goodman’s corporation hasgained as much as $77.2 million as a direct result of taking Democracy Now away from Pacifica in 2001. (Which is exactly how much Pacifica lost by giving away Democracy Now to Amy Goodman’s corporation in 2001.)

 

What is the right thing to do ... now?

 

Many are now asking the question – Wouldn’t it be both generous -- and fair – for Amy Goodman to forgive this relatively small debt of Pacifica, in light of how many tens of millions of dollars she has realized as a result of acquiring Democracy Now from Pacifica, free of charge? Forgiving this debt will not harm her corporation, which is financially sound and supported by large foundation grants; but It could mean the difference between survival or destruction for the Pacifica network that launched her career, and has made her a millionairess many times over.

 

Stephen M Brown

sbrown13@...