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News Budgets Busted by Cost of Covering Disasters

Exclusive: Networks are bleeding millions reporting on everything from the uprising in Libya to Japan’s nuclear meltdown


From Japan to Libya, disasters and political upheaval around the globe are wreaking havoc on the already-skeletal budgets of cable and broadcast news organizations.

“We've already had a year's worth of breaking news coverage, and it's not even the end of March,” David Verdi, NBC News VP of worldwide newsgathering, told TheWrap.

News organizations may have already spent their annual budgets for covering foreign events and still have nine months to go, one veteran cable news executive told TheWrap.

"If Saudi Arabia goes up in flames, all bets are off," the executive said.  (Story continues below chart.)

That's because each far-flung top story comes with an astronomical price tag.

NBC spent $1.5 million on its first day covering the Japanese tsunami, according to one knowledgeable individual. That’s roughly the total amount it spent reporting on earthquake ravaged Haiti over a period of several months.

But that’s hardly the only international disaster crying out for coverage.

In the Middle East, networks are spending on the level of $2 million to cover each fresh political upheaval, according to an individual with knowledge of those budgets.

“The first day of a catastrophe the costs spike — you have to fly your crew and your anchors in, and broadcasting equipment. That's a million-dollar hit right there,” Verdi told TheWrap.

Cable news organizations, which are dedicating many more hours to coverage of the earthquake in Japan and Middle East uprisings than their broadcast counterparts, are racking up bills that are significantly higher.

Broadcasters are mum about the numbers of reporters and crew members they are deploying to the far flung locales, but former ABC News producer Stuart Schwartz estimates that at least 20 people from each network have been sent to cover the various foreign catastrophes.

To fly, house and feed each crew member and reporter costs roughly $35,000 for about two weeks, according to the cable news executive. 

"Every network news president knows they've just got to do it. In the first few hours it's, 'Let's go,' then after a few days, it becomes, 'Let's figure out how to pay for it,'" the cable news executive told TheWrap.

Of the cable channels, Fox News sent its daytime star, Shepard Smith, to Japan, and has five correspondents on the ground in the Middle East.

MSNBC has been relying on the resources of NBC News to jointly cover the crisis in the Middle East and quake aftermath in Japan.

That pales in comparison to CNN. Within a few days of the Japanese quake, CNN had 50 people on the ground, according to a network spokesperson. It currently has 18 correspondents covering the situations in Libya, Yemen and Japan. 

“In terms of the distance and the opposite-ends-of-the world stories, this is quite unique. We haven’t seen something like this since 9/11, which radiated out to so many places around the world,” Schwartz told TheWrap.

As it is, there are parts of the Middle East, such as Yemen and Bahrain, that are barely getting coverage in this overheated international news climate. (The New York Times reported that no major news organization had staffers there last week.)

"The sheer number of stories piling up does put a strain on our budget," Jeffrey Schneider, senior vice president at ABC News, told TheWrap. "But we work for a large company that provides us with incredible resources."

This confluence of global tragedies could not come at a worse time. The major broadcast news divisions have gutted as much as 25 percent of their staff in the past few years and shuttered most of their foreign bureaus.

Networks that slashed their budgets to the bone are paying the price for their earlier thrift: They’ve had to spend millions to play catchup in Libya, Egypt and Japan, and still their ratings are lagging compared to CNN, the network with the most resources on the ground.

Moreover, cuts to staff have deprived the networks of the kind of correspondents who might be able to make sense of the shifting political situation in the Middle East and elsewhere.

“The loss is not in the ability to cover the event itself. The loss is in the amount of expertise and background knowledge that reporters covering the event have,” Richard Wald, a former executive at ABC and NBC News and a journalism professor at Columbia University, told TheWrap.

That loss of foreign affairs gravitas can also be felt in terms of audience. Thanks in part to its international coverage, CNN has been pulling in strong ratings: On Friday, March 11, the day the monster quake devastated Japan, CNN averaged 2.273 million viewers. That was its biggest audience since Jan. 20, 2009, the day President Obama was inaugurated.

Still that ratings bump might not off-set all the expenditures.

While CNN, Fox and the other major news organizations declined to offer specific figures, several current and former staffers told TheWrap that based on the costs of covering previous disasters, many broadcasters may find themselves with few resources down the stretch.

Satellite transmissions cost more than $1,000 an hour, one former TV executive said, and chartered flights for correspondents can range anywhere from $25,000 to $50,000, depending on the destination.

Add to that the security costs related to keeping correspondents safe in war zones like Libya or uprisings in Cairo — where dozens of journalists were attacked or detained — and the price tag for covering each world event soars.

The nuclear meltdown in Japan poses its own unique and expensive challenges.

“We bought 10 radiation monitors — those cost $1,500 a pop. Protective masks that cost a few hundred. Potassium iodine pills. And we hired a radiation expert on the first day and flew him to Tokyo,” Verdi said.  

One thing working in the news networks' favor: technological advances mean they can get by with smaller crews.

It's possible to get the story with a pair of satellite phones or even an iPad, particularly now that broadcasters have given up longstanding prejudices about the graininess of web video. 

"Ten years ago, in order to cover an event live, it would have required an amount of technology that is difficult to ship, expensive to buy, and requires a lot of manpower. Ten years later all of the equipment is suitcase-size and easily operable by people who are not MIT engineers," Wald said.

Sadly, the price tag for all this coverage hasn't shrunk along with the technology.