Save the LCMS!

KFUO Sharathon Week

In three days, KFUO will hold its annual on-air fundraiser called “Sharathon 2008.”

Since the removal of Issues, Etc. from the air on March 18, we have learned some sad facts regarding how business was being done at KFUO.

Here are six questions to consider before this year’s Sharathon:

1. Why does KFUO earn an ”F” grade for financial transparency with Ministry Watch, an organization that rates the 400 largest church ministries in the United States? Would you give to any other Christian media ministry that earned an “F”?

2. Why were significant KFUO-FM costs shifted to KFUO-AM as late as 2007?

3. Can you be sure that a check made out to “KFUO” will go to KFUO-AM and not to KFUO-FM?

4. Why does it cost the LCMS Foundation 38.4 cents to raise a dollar for KFUO? Why did the LCMS Foundation charge KFUO $361,604 to raise $941,739 in 2007?

5. Why does the Program/Development Director for KFUO-FM serve on the board of directors for, and raise money for a group that supports embryonic stem cell research?

6. If KFUO management disagreed with the cancellation of Issues, Etc., why haven’t they publicly stated this disagreement?

It's time for the LCMS and for KFUO to "share" the answers to these questions.

On April 17, 18 and 19 we would like to encourage you to call (800)730-2727 and ask them to share the answers to these questions with you.

These Figures Just Don't Add Up!?

We've spent some time yesterday and today speaking with people, who through committee connections, understand the costs associated with both KFUO AM and KFUO FM and after taking the information that we learned and then running it through our spread sheets we just can't make sense of what either David Strand or President Kieschnick are saying when they say that KFUO AM lost $620,698 in 2007.

If what they are saying is true, then the total costs associated with running every single show on KFUO AM is astronomically high. This post will show you what we've pieced together. Hopefully, one of you will be able to give us more information for solving this puzzle because the NUMBERS JUST DON'T ADD UP!

Let's begin our analysis by looking at the monies budgeted to KFUO from the synod.

That figure is $3,690,791. (You can find this figure by reading the Board of Directors Meeting Minutes.)

Fact: The AM station is only on the air from sun up to sun down while the FM station is on the air 24/7.

Fact: The AM station has roughly 7 to 8 employees while the FM Station has roughly 16 to 18 employees

Due to these facts the FM station receives roughly 2/3rds of all budgeted monies while the AM station receives 1/3rd. This is what we would expect so here is the first part of our spread sheet.

As you can see the total annual budget for the AM station is roughly $1,230,263 or 1.2% of the entire annual budget for the LCMS.

We know that KFUO AM also receives donations from Issues Etc. listeners as well as monies raised during Share-a-thons. We don't have access to real numbers. But, a former member of the BCS gave us some rough figures to work with. Below is our best guess regarding the total monies that KFUO AM receives each year.

All things considered, we estimate that KFUO AM receives roughly $1.55 million per year in total revenue.

We do not have a break down of utility costs, equipment costs, or management salaries. So, to compensate for that lack of data we decided to evenly distributed ALL Station costs to each of KFUO AM's programs with the exception of Issues Etc. Since, David Strand claimed that Issues Etc. was responsible for 40% of all of KFUO's losses we decided to assume that Issues Etc. was actually responsible for 40% of ALL of KFUO's other expenses.

So the next portion of our spread sheet shows how much it costs to produce each of KFUO AM's programs if the station was operating at the break even point.

This is where things get interesting.

If we take these figures seriously then we have to conclude that if KFUO AM we're operating at the BREAK EVEN point then the ACTUAL TOTAL production costs associated with broadcasting Issues Etc. from KFUO AM is $620,768 per year!

Furthermore, we have to conclude that each of the other programs on KFUO AM cost $232,788 per year to produce and broadcast.

THOSE NUMBERS SEEM OUTRAGEOUSLY HIGH TO US!

So, we decided to put together a simple spreadsheet that attempted to reconstruct the logical direct expenses for producing Issues Etc. Below is what we came up with.

Are we missing something??

The reason why we are asking is because we cannot account for $402,990 in production costs.

What was that money being paid for?

Who was that money being paid to?

Why is it so expensive to produce these shows when the show hosts are not being paid a competitive market salary?

Why is the station's overhead so outrageously high?

Something is WAY WAY OFF with these numbers. They JUST DON'T ADD UP!

An Open Letter to Tom Kuchta

An Open Letter to Tom Kuchta, Treasurer of the Lutheran Church Missouri Synod (LCMS)

and

to Dennis Stortz, KFUO Financial Manager

Regarding the Cancellation of Issues, Etc. and the Terminations of the Todd Wilken and Jeff Schwarz

Tuesday, April 1, 2008

Dear Mr. Kuchta and Mr. Stortz,

On Tuesday, March 18 2008, David Strand, Executive Director of the Board for Communications Services (BCS) of the LCMS cancelled the Issues, Etc. radio program and terminated the show’s host (the Rev. Todd Wilken) and its producer (Jeff Schwarz). No reason for the cancellation or terminations was given at the time.

On Thursday, March 27 2008, Mr. Strand issued a public statement on the LCMS website regarding the cancellation of Issues, Etc.

In this statement, Mr. Strand wrote, in part:

“In fiscal year 2007-08, KFUO-AM’s operating deficit was $620,698. Since 2001, the accumulated deficits at the station have been in excess of $3.5 million. The LCMS budget, entrusted to our care by members of our Synod’s congregations, has absorbed these shortfalls for years. After long and prayerful consideration, it became clear that measures had to be taken to stop the ongoing, staggering losses."

"Although some are under the impression that “Issues, Etc.” was profitable and self-supporting, the fact is the program lost approximately $250,000 in the last fiscal year. While airing for only 18 percent of KFUO-AM’s programming week, “Issues” accounted for more than 40 percent of the station’s total deficit. These figures are based on the audited financial statements of the LCMS.”

Mr. Strand’s statement raises several questions that only the Treasurer of the LCMS and the Financial Manager at KFUO can answer fully:

1. Do Mr. Strand’s figures include Issues, Etc. revenue from Underwriters ($60,000), Church Sponsors ($18-20,000), Bott Radio Network support ($18-20,000), Issues, Etc. 300 support ($5,000 so far) and all Reformation Club support (they usually omitted about $20,000)? (Total: $121-125,000)

2. Can Strand calculate how much of KFUO-AM's general revenue was attributable to Issues, Etc?

3. Why was Issues, Etc. cancelled just as it was launching a major development initiative (The Issues, Etc. 300)? This campaign had the potential to eliminate the entire fiscal year deficit for KFUO-AM.

4. Were Issues, Etc. losses the primary factor in KFUO-AM losses?

5. Did Rev. Wilken and Mr. Schwarz bear primary responsibility for the reported $3.5 million losses at KFUO-AM over the last seven years?

6. Did a recent partial audit of KFUO (AM and FM) conclude that approximately $100,000 of KFUO-FM costs had been shifted to KFUO-AM?

7. Why was Issues, Etc. the only KFUO-produced program required to raise and account for its own revenue?

8. Were you consulted regarding the decision to cancel Issues, Etc. and terminate Rev. Wilken and Mr. Schwarz?

9. Do you now consider Mr.Strand’s stated reason sufficient justification for the cancellation of Issues, Etc. and the termination of Rev. Wilken and Mr. Schwarz?

We believe the questions above fall within the purview of your offices, and that you are able to provide satisfactory answers to these questions.

We await your response.

LCMS Foundation Fees

We have confirmed that the LCMS Foundation (LF), the bureaucracy responsible for fund raising for KFUO AM including the Issues Etc. program was charging 40¢ per dollar that they raised. (The industry standard is only 10¢)

That means for every $100,000 that the LF raised for Issues Etc. they pocketed $40,000 for themselves.

That left Issues Etc. with only $60,000.

This leads to another question for those who claim that the decision to cancel Issues Etc. was a business decision based upon financial considerations,

"If profitability was so important, why didn't the synodical executives find a cheaper solution for fund raising for Issues Etc. and KFUM AM?"

David Strand claims that Issues Etc. was responsible for more than 40% of KFUO AM's operating deficit. But, we'd like to know how much of a difference it would have made if KFUO AM and Issues Etc. would have been allowed to keep 90% of the money raised for it rather than the meager 60% that was left under the forced arrangement that it had with the LCMS Foundation?

This leads to yet another question...What was the LCMS Foundation doing with all of the money they were pocketing from Issues Etc. and KFUO AM?