The Budget: Friend or Foe?
by Jerry Vigil
"It's not in the budget." These irrevocable words consistently bring a great idea to a screaming halt at stations everywhere. You can argue with, "No, you don't need it," but it's hard to argue with, "No, it's not in the budget." How many times have you heard these almighty words? Yet, the Sales Department has three new desks, and there are new CD players in the control room. Were these items in the budget? Maybe they were. Maybe they weren't. The problem is that you can use a new piece of gear in your studio, and, for some reason, "it's not in the budget." The question you must ask yourself is, "why isn't it?" Many Production Directors are well aware of the budget structures at their stations and know how to deal with them. For those of you who aren't into the numbers game in your boss's office, here are a few things to keep in mind next time you ask for money for your department.
The budget structure will vary greatly from station to station, but there are some basic rules that apply everywhere. Any well run business is going to have a budget. This budget is simply a projection of estimated income and expenses. It becomes a tool used to help stay in line with the projections. "Over budget" is a bad place to be, unless you are over your budgeted income. Likewise, if your expenses are under budget, that's good. There may be pages and pages of numbers and categories in this budget. Sales has their expenses, programming has theirs, and engineering has theirs. There's money for office expenses, money for pro-motions, money for the electric bill, and money for payroll. Someone is responsible for preparing this budget. One person may prepare the budget for the entire station, or, as is the case with larger stations, several department heads might each submit a budget proposal for their department. These separate budgets are then added together and set up against the estimated income. These estimates are then compared to the previous year's actual expenses and income, and if the proposed budget seems in line with realistic and desired expectations, the budget is approved.
The Production Department usually falls under programming, so you are at the mercy of your Program Director if he happens to be in charge of maintaining his budget. Let's say that he is in charge. If you hope to add some new toys to your studio, and you haven't been "in the budget" lately, you will have to get these expenses written into the budget. Before you can do that, you must know when budgets are prepared each year at your station. If you don't know, ask someone who does. Then, when budget time comes around, be prepared to state your case for the expense. Have all the facts and figures concerning your request on paper, and present them to the PD. If you convince him of your needs, he may include your expenses in his budget. What generally happens next is the approval of these departmental budgets. The GM, in this scenario, will look at all the proposed budgets from each department, total them up, and see if his goals can be achieved with the proposed budgets. If not, that's when a PD might get his budget proposal back and be told to shave a certain percentage off of it. If you're lucky, your expense won't get cut. Once the adjustments are made and the budgets are approved, money is allocated to those expenses over the course of the following year.
With larger corporate stations, the numbers game gets even more involved. The owners want a profit, so the budget reflects that. In order for this profit to be realized, expenses cannot exceed the budgeted amounts. Owners may set their station manager up with an incentive program that will pay the GM a bonus if the station is run within the budget. Likewise, the GM may put the department heads handling their own budgets on a similar program. The Program Director might be able to look forward to a fat Christmas bonus if he can keep his department within the budget, and so on. This could explain why you couldn't get something as inexpensive as some new tape. If the PD is just dollars away from going over budget, he's going to say no if he wants his bonus. Let's say for a moment that you, as Production Director, have your own budget and a similar incentive program. If getting your end of the year bonus meant not getting a new cart machine, would you be willing to work with that old one for one more year until you could put it in the budget? These incentive programs exist in many forms, but they all have one goal, and that is to keep a station running within the budget. These programs are not common knowledge around a station, so they may exist without you knowing about it. Just keep in mind that they may indeed exist at your station, and if so, understand that asking for $100 for tape may be asking for more than just $100.
Sometimes, you might be able to go to more than one person for money. For instance, if you need some basic supplies, like carts or tape, and your Program Director says it'll have to wait until next month, consider asking the Chief Engineer if there are funds in his budget for the expense. Let's say you need cassettes, and they're "not in the budget." If you use a lot of cassettes to dub clients' spots to, this is an expense you might be able to get the Sales Department to swallow; after all, the cassettes are for their clients, right?
There are very few, if any, Production Directors handling their own budget for their department, but we may well start seeing this more often in the future. The increasing demands for more and better production costs money, and because the Production Department works for the Sales Department as well as the Programming Department, it may seem unfair to the Programming Department to swallow all of the costs of running the Production Department. Many Production Departments now consist of two full time employees plus a part-timer or two. Not long ago, the average Production Department was the mid-day jock, and for many smaller stations, this is still the case; but, as production continues to become a more vital part of a winning station, the expenses of running the Production Department will be looked at more closely. Production Departments are becoming more of an individual department instead of part of the Programming Department; Separate management of this department, at least in terms of expenses, will be a consideration in the future if it is not already.
Once again, the budget structure will vary greatly from station to station. In small markets, the owner may also be the GM, and he'll write all the checks and allocate each expense to its own budget category. He will decide how much each department gets and how it is spent. In this situation, you must make all your pitches for expenses to the GM. In a larger station, several department heads might have their own budgets to work with. Find out who budgets money for your department and make sure your annual needs are figured into that budget. If it is your Program Director that has to figure in production expenses, prepare an estimate of costs and give it to him before budget time. Include all supplies you'll need along with any new equipment you think you can justify. The PD may very well knock a few items off the list, so pad it a little with some things you can live without. On a much larger scale, an upgrade of a studio can run into the tens of thousands of dollars. Expect this to take some time to get done, but if you lay the groundwork and do your homework, then make your pitch well in advance of budget time, you will get more consideration than you would if you just waltzed in to the GM's office and said you needed a new studio. Even if you are not asked to pre¬pare such a proposal, the figures on it will help the PD prepare his budget. Plus, the fact that you are aware of the budget system and went through the trouble to prepare a pseudo budget for your depart-ment will make a good impression on your superiors. Who knows? Maybe one day, management will realize that even Production Directors can prepare and stay within their own budget.
Unfortunately, it is very easy for management to overlook the Production Director's needs at budget time. He's seldom involved in department head meetings and seldom seen outside of the production room. At many stations there is no Production Department, just a production room and maybe a Production Director; but at stations where high powered production is a priority, it should be understood by all that this high powered production comes at a cost, and those dollars should be individually addressed in the budget.
The more you hear about something not being "in the budget," the more likely it is your station follows a very tight budget. Next time you are told that something isn't in the budget, think about why it isn't. Could it be because management was never told you would need this money? If so, that may be your own fault.