Financial Challenges
The decoupling of the original 5 station network design in the late 1980s presented financial challenges, as expected, for all participants. Specifically, the unfunded federal mandate in the late 1990s to migrate from analog (NTSC) to digital (ATSC) television transmission in United States. Since 1993, the FCC auctions of former television spectrum to the wireless (cellular) telephone and broadband service companies generated $52 billion dollars. That revenue was not used to mitigate the digital transition for the non-commercial, educational television stations.
For comparison, Iowa Public Television, which operates 9 high-power digital transmitters and 8 translators spent $47,000,000 to complete the digital television conversion. That capital expenditure was financially supported by the State of Iowa, the U.S. Department of Commerce and the Corporation for Public Broadcasting. More than 1,000,000 viewers watch IPTV each week. Contributing membership to the IPTV Foundation (Friends of Iowa Public TV) consists of approximately 55,000 households. In January 2008, WTVP in Peoria faced financial difficulties after their digital television upgrade and studio relocation from Bradley University, an original member of the Convocom consortium, to a new Peoria Riverfront studio and offices. A special campaign, Save Our Station, generated thousands of special contributions and led to an agreement with the bank.
In July 2008, WQPT, owned by Black Hawk College, an original member of the Convocom consortium, lost financial support when the station was removed from the college's FY2009 fiscal budget. By May 2010, WQPT was sold to Western Illinois University-Quad Cities, with the primary objective to return WQPT to its original mission of creating more local and public affairs programming. The station moved from its longtime home on Black Hawk's campus to new studio completed on WIU-QC's Riverfront Campus in 2012.
In May 2009, Network Knowledge applied for assistance from the Corporation for Public Broadcasting's financial distress program. Mark Erstling, senior vice president for CPB System Development and Media Strategy and CPB Chief Operating Officer Vincent Curren traveled to Springfield to begin talks with the organization. Despite the early success, Dr. Jerold Gruebel, president and CEO of Network Knowledge said, "the organization first ran into financial trouble in 2002, due to unfunded federal mandates to convert to digital television". Network Knowledge raised more than $15 million to fund the conversion, but was forced to borrow nearly $5 million to pay the rest of the bill.
Network Knowledge largely relies on grant funding instead of membership support (only six percent of the viewing audience donates to the three stations). Network Knowledge also lost its grant support in 2009. The organization receives an annual average of $750,000 from three foundations in Quincy and one foundation in Decatur. Due to their own economic shortfalls, Gruebel said, none of these organizations gave grants to the network.
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