Major funder for Chicago Public Media 'saddened' by layoffs but still optimistic Sun-Times, WBEZ merger will succeed

The John D. and Catherine T. MacArthur Foundation, a significant Chicago Public Media financial backer, voiced its sadness over a round of deep job cuts at WBEZ and the Chicago Sun-Times, as the organization faced pushback on social media and from a Chicago alderperson over the decision.

The $8.2 billion foundation also expressed its continuing optimism for the merger of the two legacy journalism titles but sidestepped questions about whether it continues to support Matt Moog in his capacity as Chicago Public Media CEO.

Moog, who announced his resignation last December and said he intends to depart the organization in August, cited financial pressures Wednesday as one justification for pink-slipping 14 people across both news organizations.

Those cuts mean the elimination of WBEZ’s podcast unit and the conversion of the WBEZ-run Vocalo radio station — which has offered R&B, jazz and Spanish-language programming — into a streaming-only service.

Four nonunionized Sun-Times staff members also were among those laid off.

Chicago Public Media faced backlash on social media from supporters of the station and drew criticism from union leaders and from a member of the City Council, who questioned why company executives didn’t cut their own paychecks before laying off lesser-paid newsroom employees. But a leading journalism researcher said it’s too soon to write off the merger.

Since 1982, MacArthur has given nearly $5.8 million to Chicago Public Media, according to the foundation’s website. MacArthur on Friday night said that it also contributed $10 million toward the $61 million merger two years ago between the Sun-Times and WBEZ, which is Chicago’s NPR affiliate.

Now, the foundation is weighing in on the layoffs.

“As longtime supporters of journalism and media, and now a leading funder in revitalizing local news, we at MacArthur are saddened to hear about the cuts at Chicago Public Media and the elimination of Vocalo’s broadcast signal,” MacArthur said in a statement.

“We remain optimistic that this merger can ultimately be a model of success and financial sustainability in the news industry at a time when our democracy needs it most,” the foundation said. “We recognize there are precarious periods in any transition, and it’s in these times that patient philanthropic support is most needed.”

Moog and MacArthur President John Palfrey were important partners in arranging the deal to merge the Sun-Times and WBEZ into the country’s largest nonprofit newsroom and repeatedly have held it up nationally as a model to turn around journalism’s financial decline.

Manuel Martinez/WBEZ

The announced staff reductions coincided with a $6.4 million WBEZ studio renovation coming online and after what tax records show was a nearly 19% pay increase for Moog that boosted his annual compensation last year to more than $633,000.

In response to a question earlier this week, Moog said that he hoped to avoid more layoffs, but did not rule it out, saying, “No additional layoffs are currently planned, assuming audience growth continues and revenue grows to keep pace with expenses.”

This comes as the company’s most recent filings with the IRS show Chicago Public Media reported a nearly $9 million profit for the fiscal year ending last June. Moog has said the 990 filing doesn’t fully reflect the operational budget.

No hint of serious financial struggles was evident in two sets of Chicago Public Media meeting minutes released to WBEZ from the last six months, including as recently as Jan. 16.

During that board meeting, minutes show Moog provided a revenue forecast and indicated that “The organization is expected to meet the budgeted goal for net operating results, as expenses have been managed to offset soft revenue.”

And in a Nov. 9 meeting of the Chicago Public Media board’s finance and investment committee, meeting minutes reflect that company investments were “outperforming targets” during a one-year period.

The organization’s most recent tax filing showed Chicago Public Media’s investment portfolio grew by nearly 40% during the fiscal year ending last June, reaching a total of $74.1 million.

The news organization says on its website that its meetings are open to the public.

But a review of 15 committee and full board meetings since October showed 11 of them were completely closed to the public, including a March 5 board meeting where Moog has said a unanimous vote occurred in support of the layoff plan. The organization’s board has 26 members.

A Chicago Public Media lawyer indicated that minutes and an agenda for the March 5 meeting are considered confidential.

The lawyer also said that the Chicago Public Media board has authority to close its meetings when they involve employment or other matters.

Sun-Times, WBEZ merger needs more time, expert says

Meanwhile, one expert on declining economic conditions confronting local news operations across the country remains optimistic about the viability of the WBEZ/Sun-Times merger but said Chicago Public Media’s layoffs are part of a national trend, particularly among public radio outlets.

“It’s way premature to write off the merger based on the actions of this week, and I think we need to give it some more time. I think there’s still a lot of work that can be done, and there’s really terrific journalism being done by both news organizations,” said Northwestern University journalism professor Tim Franklin, who is leading a research and development project designed to bolster the sustainability of local news in America.

“What we’re seeing are seismic, historic changes in how people consume news, how news is produced and distributed and paid for. That’s putting pressure on WBEZ and all public radio stations across the country,” he said.

Franklin also acknowledged how public perception could be influenced locally by the timing of the layoffs in relation to boosts in executive pay and the opening of expensive, state-of-the-art studios at WBEZ.

“The optics are unfortunate,” Franklin said.

Chicago Sun-Times union: ‘We should not be talking about layoffs’

On Wednesday, the Sun-Times Guild, which represents the newspaper’s content creators, released a harshly critical open letter to board members of Chicago Public Media and the Sun-Times, demanding a halt to any other major personnel moves or business decisions by Moog.

“We should not be talking about layoffs just two years after having raised five years’ worth of philanthropic funding, when several initiatives and collaborations are just getting off the ground and the CEO repeatedly and publicly said we would not see layoffs during this merger,” said the letter, signed by Sun-Times Guild co-chairs Nader Issa and Bob Mazzoni.

“It is shocking and unacceptable that a lame-duck CEO is either making or signing off on such consequential decisions months after his resignation, on his way out the door and as his successor is being hired,” the union wrote.

Moog responded Friday with a renewed defense of the layoff plan.

“As a public service nonprofit organization, Chicago Public Media must be responsible stewards of the funds the public entrusts to us as we strive to serve our various audiences,” he said. “When programs do not succeed in reaching enough of an audience, it is our responsibility to make the hard decision to invest our limited funds where they will have the greatest impact.

“Vocalo and our podcast unit were important and innovative initiatives that consistently ran at a substantial loss and fell far short of the goals that we set for them,” he said. “We made the difficult decision to scale back these programs to focus on initiatives that have a sustainable model.”

Sun-Times file photo

Chicago 49th Ward Ald. Maria Hadden condemned the layoffs.

Hadden, a longtime WBEZ listener and donor, said she believes station executives and its board owe station members like herself a public explanation of why the organization has chosen to slash programming.

“Seeing the increases, seeing the benefits, and then knowing that this person is on their way out, making these types of decisions, it seems imprudent,” she said. “If your organization is not doing well, and this is the basis for making decisions around layoffs, I’d love to see those cuts start at the top.”

She added: “If the future is not continuing in these spaces, in podcasting and Vocalo, then what is the future vision they have for WBEZ in Chicago?”

Dave McKinney covers Illinois politics for WBEZ and is the longtime Springfield bureau chief for the Chicago Sun-Times. McKinney is a member of the SAG-AFTRA union at WBEZ. The story was edited by nonunion editors.