By Albert Samaha
By Darwin BondGraham
By Keegan Hamilton
By Anna Merlan
By Anna Merlan
By Tessa Stuart
By Tessa Stuart
By Albert Samaha
Salon founder David Talbot must have had a hell of a summer fending off the grim reaper at one turn and corporate suitors at the next. But then, just as it began to look like Salon would either fold or be sold, a bag of money landed on Talbot's doorstep, with no editorial strings attached!
On August 2, Talbot told me, 'We're in the final hours of completing a new round of financing that will assure not only our survival during this very tough year, but our eventual profitability." He plans to announce full details later this week.
Even with the new financing, it's been a long haul from June 13, when NASDAQ informed Salonthat its stock price had fallen so low that the company was at risk of being delisted. Salon's managers filed an appeal, and they made their case to NASDAQ on July 26. But while NASDAQ granted Salona grace period in which to get the stock price back to a dollar a share, that hurdle has yet to be cleared. Between July 26 and August 6, Salon's stock price rose infinitesimally, from 18 cents to 27 cents a share.
Talbot expects a final decision from NASDAQ in September. But after he announces the new financing, he believes the company will enjoy an increase in stock price and, eventually, a revenue boost. We shouldn't look for expanded Saloneditorial anytime soon, Talbot says, but "the question of whether Salonwill be around or not will be put to rest." Having escaped the "death watch," he plans to take a long vacation.
Aside from benevolent backers, Talbot says Salon's "other ray of light" is subscribers, a "significant and growing part of the budget" that he believes will help his baby survive the advertising downturn. Since Salonfirst began selling subscriptions to "premium content" this past April, he says, the site has attracted some 12,000 subscribers who are paying an average of $33 a year. That means an additional $400,000 so far.
But anyone who wants a course in number crunching should read Salon's latest annual report, filed with the Securities and Exchange Commission on June 28. It covers the company's fiscal year 2001, which ended March 31. In FY 2001, Salonreported revenues of $7.2 million, down 10 percent from $8 million in FY 2000. Operating expenses came to $26.8 million, down 13 percent from $30.9 million in FY 2000. As of March 31, the company had only $3 million in cash resourcesdown from $18 million a year ago. And yet, the company has no debt.
Of course, sacrifices have been made. As of April 1, Salon has been attempting to stanch the cash flow by reducing employees' salaries by 15 percent. And even the top managers have been tightening their belts, reversing a two-year trend. Salaries for both Talbot and CEO Michael O'Donnell increased to $175,000 in FY 2000 (a 20 percent raise), and then again to $225,000 in FY 2001 (a 29 percent raise). But this spring, Talbot says, they both took the cutwhich brings their salaries down to $191,250. That way lies profitability.
WBAI Is Burning
The last week of July brought yet another rally to 120 Wall Street, where loyalists gathered to protest the ongoing destruction of radio station WBAI. In the latest outrage, Earthwatchhost and award-winning reporter Robert Knight has been temporarily suspended from his post. Knight got the news on the night of July 25, when he arrived at the station to air a report he had just completed on racial profiling in Tulia, Texas.
"I walked in to do my show at 11:59," Knight recalls, "and was stopped at the door by a security operative who handed me an envelope." In the envelope was a memo from WBAI acting general manager Utrice Leid, citing complaints about Knight's performance, including a dispute over damaged equipment and questions about whether he has taken money from individuals or organizations that benefit from his coverage. Pending the resolution of these issues in a meeting scheduled for August 15, Leid has canceled Earthwatchand banned Knight from hosting, cohosting, producing, or contributing to any other WBAI programs.
Knight denies responsibility for the damaged equipment and says, "The only journalistic ethic I've ever violated is refusing to take a loyalty oath to Utrice Leid." He calls the complaints a smoke screen, adding, "I was kicked off the air because I told the truth about what was happening with Pacifica. . . . Utrice Leid is driving the station into the ground."
Founded in 1949, the Pacifica network is composed of flagship station KPFA in Berkeley, as well as stations in New York, Washington, D.C., Houston, and Los Angeles. Traditionally a bastion of progressive politics and free speech, the network has been in flux since the arrival of former chairperson Mary Frances Berry, whose cronies brought a corporate mind-set to the board.
The future of the network is at stake. Pacifica's five broadcast licenses are worth an estimated $200 million, but its programming has failed to bring in sizable revenues, and the new breed of board members is intent on appealing to a younger demographic, albeit at the expense of passionate politics and community participation.
Enter Utrice Leid, who took control of WBAI on December 22. In what is known as the "Christmas coup," Leid fired, among others, the popular host of Wake-Up Call, Bernard White, and changed the locks on the doors. In the ensuing seven months, she has banned or removed more than 20 WBAI regulars and installed security guards and surveillance cameras.