Here is the October 27th email from NAB Board Chairs to NAB members informing them of the special dues assessment:
We are now seven months into the pandemic and to say this has been a turbulent year is an understatement. We’ve had to face tough business decisions that have impacted the lives of our employees, and we’ve had to confront an unpredictable media landscape.
Like your own business, NAB is constantly reviewing its operating budget and has made tough decisions to reduce costs while ensuring continuity of operations during this period. These include cuts to executive compensation, significant budget reductions and instituting a hiring freeze. But the reality is that the costs needed to sustain our strong advocacy remain significant, and NAB member dues alone cannot entirely fund our efforts to defend your businesses and our industry.
For these reasons, the NAB Board of Directors unanimously voted today to approve a one-time assessment of its members. The assessment will be equal to each member’s annual membership dues and payable over three years. It is intended to make up for lost revenue due to the cancellation of NAB Show, which accounted for 70% of NAB’s operating budget, as well as the expected decline in future convention revenues as the result of COVID-19.
You will receive more information in the coming weeks from NAB’s membership team. They are also available to answer your questions at (202) 775-2555 or firstname.lastname@example.org.
As our nation prepares for possible changes in the government and we continue our ongoing battle against the pandemic, there is much at stake for our industry. With your continued support, we will keep standing up for you in our nation’s capital, ensuring your ability to innovate, thrive and serve your communities. Thank you for putting your trust in us to be your advocate.
Here is the full email from IBA President to IBA members November 3rd shaming NAB and Nielsen:
———- Forwarded message ———
From: Ron Stone <email@example.com>
Date: Tue, Nov 3, 2020 at 1:16 PM
Subject: My apologies for a long update…thanks for reading…please don’t forget to read the attached also!
Wow! Where to start.
Nielsen announces a change that potentially impacts the revenue of every radio station and the buying community’s ability to make intelligent decisions based on full market data. That is unless non-subscribers subscribe, or agencies sign up for pricier service. Nice way to grow one’s own revenue! As if that was not enough in one week, the NAB announced they are assessing every member with an extra year of dues because they are having a rough time during Covid. Perhaps they do not realize that hard hit radio stations do not have the same ability to just create additional cash by asking their clients to pony up more. I honestly do not know which announcement is more insulting to independent radio struggling to survive.
The IBA is now working with multiple organizations to design a system that will have significant impact on future ratings services. This new system just moved up on our list of what is important to independents and has our full focus. We cannot sit by and watch our industry be held hostage by organizations that believe they have more control of your business than you do. Many in the ratings business may say a new service is not going to be accepted by agencies and the only acceptable service is existing service. Remember when taxi cabs ignored Uber and hotels thought Airbnb was a joke? Time and time again out of necessity comes ingenuity!
If you missed the news on what Nielsen is doing find it here: https://www.allaccess.com/net-news/archive/story/201502/independent-broadcasters-association-iba-issues-st
Notably missing from their original press release:
“This additional step in our subscriber first policy is an efficiency-minded, business-driven decision designed to encourage non-subscribing stations to invest in the service to become subscribers.” (ironically new subscribers equals more revenue) “Notably, minority-owned broadcasters (Black, Hispanic, Asian, Female, and non-profit) with revenue less than $7M and non-profit stations either publicly owned or holding 501(c)(3) tax status will be reported regardless of subscription status.” (is this fair to other broadcasters that are struggling?)
As for the new NAB assessment on members, one would think they could manage this crisis like the rest of us by reinventing themselves in times of trouble. If only the answer to all our revenue issues were as simple as the solution the NAB has announced for itself. Imagine the response you would get from your clients if you asked them to “up their spend with an extra year of advertising” so you could get through Covid. They would think you have lost your mind. The NAB has enjoyed over the past three years average annual revenue of $84 million and ended 2018 with $172 million in assets. They recently purchased a new building in Washington for $68 million. At the end of 2018, the NAB had 166 employees, earning $29 million annually, or 40% of 2018 revenue, and the top 12 executives earn 45% of that $29 million. I would say most broadcasters would love to have numbers like these to work with as they search for ways to keep their operation moving forward. Here is the official announcement:
Here is a link to their federal tax return form 990s – public information and worth reviewing: https://www.erieri.com/Form990Finder/Details/Index?EIN=530114600
And finally, the link to the story on their beautiful new building…
On a more positive note, please read the attached and learn what the IBA has already accomplished for the members. Please consider being part of the solution and join the IBA today www.iba.media Together, we can rebuild our industry and serve our audiences for another 100 years!
President & Executive Director
Here is the November 9th email from NAB to NAB Members addressing Ron Stone’s email:
Dear NAB members:
I was disappointed to read a recent communication from the Independent Broadcasters Association mischaracterizing NAB’s membership assessment, and I am writing to set the record straight.
At our recent meeting, the NAB Board of Directors unanimously approved an immediate assessment of its radio and television members, equal to each member’s annual dues. Recognizing the financial situation of our members, it was decided that this assessment would be payable in installments over three years. This action by our board was a vote of confidence in the value proposition of NAB and its work on behalf of the broadcast industry.
In recent years, NAB has secured significant public policy wins for broadcast radio saving the industry hundreds of millions of dollars. Among its many accomplishments for all radio broadcasters, NAB successfully stopped Congress from altering the tax treatment of advertising – if passed, this could have doubled advertising costs for stations’ clients, resulting in less ad revenue. The association spent millions in litigation to secure a substantial reduction in the streaming rates assessed by the Copyright Royalty Board and paid by stations simulcasting on the internet. NAB secured $1 billion from Congress to make radio and TV stations whole during the broadcast spectrum repack. The advocacy team has repeatedly thwarted attempts to impose a performance royalty fee on broadcast radio that would especially impact independent broadcasters. NAB also paved the way for AM stations to use FM translators across the country, and to streamline the process for disputes between translators and FM stations. NAB has worked with industry stakeholders and auto manufacturers to ensure radio’s continued place in the automobile dashboard, create the best listening experience for drivers and passengers and develop hybrid radio systems to allow the seamless switching of broadcast to streaming when cars move out of range.
This year, as broadcasters have faced unprecedented financial challenges during the Covid-19 pandemic, NAB has worked tirelessly on Capitol Hill to secure support for local radio and television stations in economic stimulus legislation. The team has secured support from influential members of Congress to expand broadcaster eligibility and access to Small Business Administration lending programs. They have pushed for federal advertising dollars to be directed towards local broadcasters and advocated for designating a portion of stimulus funds provided to businesses for advertising on local media. NAB also worked with the Federal Communications Commission to provide regulatory relief during the pandemic and correct errors in its initial calculation of 2020 regulatory fees. The legal team helped numerous radio stations comply with political advertising regulations and avoid fines. And NAB also unveiled new member benefits to help radio and TV stations’ bottom lines, including a full human resources solution – a turnkey benefit inclusive of healthcare insurance, compliance and payroll.
Like many other businesses – my station group included – NAB has seen its finances affected by the pandemic. While it has offered virtual events that have provided value for the broadcast industry, the cancellation of the 2020 NAB Show, which accounted for 70% of NAB’s operating budget, as well as the expected decline in future convention revenues as a result of the pandemic, has forced the leadership to make some difficult decisions, including cuts to executive compensation, significant budget reductions and instituting a hiring freeze.
However, winning in the halls of federal power is costly. Our opponents are powerful and well-funded. NAB needs resources to remain an effective advocate on Capitol Hill, as well as a unified industry standing strong in the face of adversity. The one-time dues assessment unanimously passed by the Board of Directors will allow NAB to continue its successful work on behalf of all broadcasters.
The head of the Independent Broadcasters Association criticizes the NAB board’s decision with little credibility since he has benefited from our success without paying NAB dues or being a member. Instead of working together to our mutual benefit, he has chosen to draft on your commitment to the future of the industry. Radio’s history should teach us that nothing of value is won without cost; that those who would divide us with promises of something for nothing should not be believed or followed.
The broadcast industry is most effective when it stands united. Divisive rhetoric and opposition within our own industry will ultimately only hurt radio stations. I hope that going forward, the Independent Broadcasters Association will join NAB in keeping the industry’s best interest at heart and providing important value to broadcasters of all sizes.
NAB Radio Board Chair
Start of a NASBA email chain on November 16th suggesting State Broadcast Associations make a donation to NAB if they are able to:
From Alabama’s Sharon Tinsley:
Our board has voted unanimously to make a significant contribution, by our standards, to the NAB to support them during their financial hardship. My board views the NAB board’s action as a clear sign that they believe the NAB is doing everything possible to be fiscally responsible during this unprecedented time. Therefore, our assistance is warranted.
I’m writing to encourage to urge your own boards to do something similar. As everyone knows, we need the NAB to be successful!
From Illinois’ Dennis Lyle:
It’s no secret that a few state associations have stepped up to the plate in giving a generous donations to NAB in addressing NAB’s financial woes brought about by COVID and the cancellation of this year’s many “live” revenue-producing events, so my board plans on looking at options to address NAB’s woes at our Q4 board meeting. I’ve heard from two states that have each given $25k, one state that’s given $20k, another that’s given $10k, one that has given $5k, another that’s planning $4500.00 (represents half of what the state would have spent going to next year’s now cancelled NAB SLC,) while one other (smaller) state said they were planning on giving $1k so, as you can see, the dollar amounts are “all over the place.” I also heard from a couple of states who said they were not planning on contributing.