Why Fox's Stuart Varney Is Wrong About Firing Big Bird


Fox Business host Stuart Varney argued that cutting the federal subsidy to public broadcasting would not harm programming, because "Big Bird would still be around." In fact, cutting funding to public broadcasting would put many public broadcast stations in peril and do almost nothing to stem the tide of federal debt.

Fox Business: Public Broadcasting Can Raise Funds Elsewhere, "Profit Center" Big Bird Will Survive

Varney: "Big Bird Would Still Be Around Because It's A Profit Center In And Of Itself." Discussing Mitt Romney's statement during the October 3 presidential debate that he would "stop the subsidy to PBS" if elected, host Stuart Varney claimed that the government spends $444 million a year on public broadcasting, adding, "If we took that subsidy away, Big Bird would still be around because it's a profit center in and of itself."  Varney later said, "If we take it away, Sesame Street, Big Bird stands, profitable." [Fox Business, Varney & Co., 10/4/12]

Fox Guest Carol Roth: PBS Can Make Up For Lack Of Government Funding By Bringing In Sponsors, Advertisers, Or Subscribers. Responding to Varney, guest Carol Roth said: "You can bring in corporate sponsors, you can bring in advertisers. Look, HBO is a great station, they do it by subscribers. There are other ways for PBS to remain." [Fox Business, Varney and Co., 10/4/12]

But Loss Of Federal Funding "Would Severely Diminish, If Not Destroy Public Broadcasting"

Most CPB Funding Goes Directly To Local Stations. Patricia Harrison, president and CEO of the Corporation for Public Broadcasting (CPB), told a House appropriations subcommittee that approximately 70 percent of federal funding administered by CPB goes directly to local public broadcasting stations, adding:

Stations use CPB funding for local operations and to produce and acquire programming, which allows them to raise additional operational funds from corporations, foundations, state and local governments and from individual contributions, which are the largest source of non-CPB funding for public media. On average, every federal dollar invested in CPB is leveraged by stations to raise six dollars locally. This successful public-private partnership is uniquely entrepreneurial and uniquely American. Though models vary, funding for other countries' public broadcasting systems comes almost exclusively from their governments, from licensing fees or from dedicated taxes. At $1.39 per American, the cost of our country's service is proportionally small compared to other developed nations. [Corporation for Public Broadcasting, accessed 10/4/12]

CPB Study: Federal Funding Cut Would Put Many Public Broadcasting Stations In Peril, Many In Rural Areas. A study released June 20 by the Corporation for Public Broadcasting, requested by Congress, and conducted by management consulting firm Booz & Company, reviewed alternative funding options for public broadcasting if federal funding is removed. It detailed the detrimental effects of withdrawing federal funding:

1) Ending federal funding for public broadcasting would severely diminish, if not destroy, public broadcasting service in the United States. Noncommercial radio and television stations in many localities would struggle to survive without the national impact, high-quality content and accountability that federal funding has made possible for the last 45 years.

2) Fifty-four public television stations in 19 states are at high risk of no longer being able to sustain operations if federal funding were eliminated. Of the 54 stations, 31 serve predominantly rural areas, and 19 provide the only public television service available to viewers in their service area. If these 54 stations ceased broadcasting, more than 12 million Americans would lose access to the only public television program service currently available to them over the air.

3) Seventy-six public radio stations in 38 states are at high risk of no longer being able to sustain operations if federal funding were eliminated. Of the 76 stations, 47 serve rural communities, 46 offer the only public radio service available to their listeners, and 10 provide the only broadcast service -- radio or television, public or commercial -- available over the air to their listeners. If these 76 stations at high risk ceased broadcasting, nearly 3.5 million Americans would lose access to the only public radio program service currently available to them over the air. [Corporation for Public Broadcasting,  6/20/12]

CPB Study: Conventional Advertising Model Would Have "Dramatically Negative Consequences" For Small, Diverse, And Rural Markets. The CPB/Booz & Company study also states that shifting to a conventional advertising model would have "dramatically negative consequences" for many of the communities served by public broadcasters:

A shift from a noncommercial model to a commercial advertising model would have dramatically negative consequences for many of the communities that public broadcasters serve. In the absence of federal funding, there are small urban stations, small-market stations, rural stations and stations that serve diverse communities that will likely fail because they do not have the capacity to either shift to a commercial model or raise the revenue to replace the loss of CPB funding. [Corporation for Public Broadcasting,  6/20/12]

ABC News: While 15 Percent Of PBS Budget Comes From Federal Funds, That Percentage Is "Much Higher" For Many Rural Public Stations. According to ABC News, although roughly 15 percent of the PBS budget comes from federal funds, that percentage is "much higher" for many stations in rural areas:

About 15 percent of PBS's budget comes from federal funds. But for many rural stations, that percentage is much higher.

"Stations in rural parts of the country, where their parts of the federal funding is 40, 50, 60 percent, those stations will go off the air," PBS chief executive Paula Kerger told CNN this morning. "The reach of our work is so extensive and so deeply rooted in education ... the fact that we are in this debate at all is just incomprehensible." [ABC News, 10/4/12]

Sesame Street Producer "Receives Very, Very Little Funding From PBS." Sherrie Westin, executive vice president and chief marketing officer for Sesame Workshop, which produces Sesame Street, told CNN: "Sesame Workshop receives very, very little funding from PBS. So, we are able to raise our funding through philanthropic, through our licensed product, which goes back into the educational programming, through corporate underwriting and sponsorship. So quite frankly, you can debate whether or not there should be funding of public broadcasting. But when they always try to tout out Big Bird, and say we're going to kill Big Bird -- that is actually misleading, because Sesame Street will be here." [CNN, Starting Point, 10/4/12]

Advertising Could Jeopardize Current Sources Of Public Broadcasting Funding

CPB Official: Bringing Advertisers To Public Broadcasting "Would Significantly Limit" Other Funding Sources. Tim Isgitt, senior vice-president for communications and government affairs at the Corporation for Public Broadcasting, told Media Matters that "there have been a lot of suggestions that public broadcasters could just turn to commercial broadcasting, but this report shows that is not possible." Isgitt added, "The most surprising thing that comes out of this report is that advertising would significantly limit our other funding sources; foundations provide funding because it is a public good and mission driven. They wouldn't do that if we were a commercial model, and individual members would be less likely to give money to an entity that is commercial." [Media Matters, 6/27/12]

PBS President: "FCC Regulations Will Not Allow" Conventional Advertising. A New York Daily News article quoted PBS President Paula Kerger explaining that "blanket defunding would make it impossible for PBS to continue its mission." The article also noted that Kerger said that "FCC regulations will not allow" public broadcasting to accept conventional advertising, adding that she "cited a recent Office of Management and Budget study that showed it would be 'impossible' for ads to make up the deficit." [New York Daily News, 1/4/12]

Report: Budget Shortfalls Are Already Causing Cuts In Programming, Jobs, And Budgets. In 2011, Current magazine reported that PBS' budget for 2012 reflects "a harsh reality" that "[r]evenues from member stations are flat for a third straight year, and scant other income opportunities lie ahead," resulting in programming cuts and layoffs:  

For the first time in the past five years, there will be no new children's series. The News and Public Affairs Initiative is on hold. PBS is retooling its primetime schedule to attract more viewers and underwriters and negotiating to push down program production costs per hour.


Budget-cutters have been at work inside PBS, where layoffs are expected soon, and at producing stations that make programs for PBS distribution.

There's an enormous downward pressure on costs" in program budget negotiations during the past year, said a producer familiar with the discussions who requested anonymity because the talks are ongoing. PBS negotiators "want to bludgeon the system down to a preordained norm" closer to the per-hour prices that cable networks pay, the source told Current. Those reductions "will destroy the very thing that makes us distinctive," the producer said. "If we're not different from cable channels, why the hell would somebody pledge $40?" [Current, 6/16/11]

Public Broadcasting Funding Is A Miniscule Part Of The Federal Budget

PBS: Federal Contribution To Public Broadcasting Is About "One One-Hundredth Of One Percent Of Federal Budget." Following the October 3 presidential debate, PBS released a statement explaining why it believes federal funding of public broadcasting is important to the American people and noting that the federal contribution to public broadcasting "equals about one one-hundredth of one percent of the federal budget":

The federal investment in public broadcasting equals about one one-hundredth of one percent of the federal budget. Elimination of funding would have virtually no impact on the nation's debt. Yet the loss to the American public would be devastating.


Over the course of a year, 91% of all U.S. television households tune in to their local PBS station. In fact, our service is watched by 81% of all children between the ages of 2-8.

Each day, the American public receives an enduring and daily return on investment that is heard, seen, read and experienced in public media broadcasts, apps, podcasts and online - all for the cost of about $1.35 per person per year.


A key thing to remember is that public television and radio stations are locally owned and community focused and they are experts in working efficiently to make limited resources produce results. In fact, for every $1.00 of federal funding invested, they raise an additional $6.00 on their own -- a highly effective public-private partnership.

Numerous studies -- including one requested by Congress earlier this year -- have stated categorically that while the federal investment in public broadcasting is relatively modest, the absence of this critical seed money would cripple the system and bring its services to an end. [PBS, 10/4/12]

CNN Money: Federal Funding For Public Broadcasting "Pales In Comparison To The Roughly $3.5 Trillion The Government Will Spend This Year." A January 3 CNN Money article noted that federal funding for public broadcasting "pales in comparison" to what the government will spend in 2012:    

Stripping all federal funding for the Corporation for Public Broadcasting -- which helps fund PBS -- would save around $450 million a year.

That's $450 million with an "m," not a "b" -- and it pales in comparison to the roughly $3.5 trillion the government will spend this year.

And not much of that makes it to Big Bird. [CNN Money, 1/3/12]

Politico: Federal Funding For Public Broadcasting Is "About 0.012 Percent Of The Entire Federal Budget." Politico reported that in the 2012 fiscal year, federal funding for public broadcasting was roughly "0.012 percent of the entire federal budget":

The government funds the Corporation for Public Broadcasting, a private, nonprofit corporation that distributes the subsidy to local PBS stations. In the 2012 fiscal year, CPB was given $444 .1 million -- about 0.012 percent of the entire federal budget, as astrophysicist and radio host Neil deGrasse Tyson accurately tweeted Thursday. By law, CPB must give around 72 percent of its appropriation directly to stations, with lesser amounts going to PBS and other public TV and radio broadcasters. In the 2011 fiscal year, for example, PBS received just $22.3 million of CPB's total $429 million appropriation, according to the most current data available.

CPB estimates that for about $1.35 per American per year, "PBS stations return six times that amount in programming and services." [Politico, 10/4/12]

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Stuart Varney
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