Recession dims the glow at WGBH

Today, the nonprofit is coming to grips with the economic realities of operating radio and television stations in a recession. While WGBH produces some of the Public Broadcasting Service’s marquee programming, including “Frontline,’’ “Nova,’’ and “Antiques Roadshow,’’ it must trim about $7 million from its budget this year. That means layoffs, wage freezes, and unpaid furloughs.

“We’re making a lot of difficult choices,’’ said chief executive Jonathan C. Abbott.

The health of WGBH, which started in 1951, is especially important to PBS. The network depends on the station for over a third of its prime-time TV lineup, and WGBH produces more programs than any of the 349 other PBS stations.

Not long ago, cutbacks seemed inconceivable. In a sign of its preeminence, the station commissioned the architects who designed the Clinton presidential library to draw up plans for the new headquarters - two sleek, cantilevered buildings connected by a skyway. The most striking feature is a 30-by-45-foot digital LED screen that juts over the Massachusetts Turnpike. The station uses it to display images of musicians, dancers, nature scenes, and other content culled from programs. WGBH president Henry Becton Jr. touted the screen as a new landmark created to rival the Citgo sign in Kenmore Square and the National Grid gas tank painted by Sister Corita Kent in Dorchester.

But shortly after it was activated, the device malfunctioned - it’s since been fixed, but WGBH is suing the manufacturer - and a year after the headquarters opened, the station was already pulling back because of a slowing economy. Shrinking contributions from corporations, foundations, and viewers led to the elimination of about a dozen jobs. Top managers took furloughs and 5 percent pay cuts this year. More reductions are on the way, officials said, although they have not offered specifics.

As a result, some now view the Brighton headquarters as a monument to excess.

Mark Hoffman, a design department employee laid off last January, said he and other employees worried the new building sent the wrong message to the legions of small donors, on whom WGBH relies for about $20 million annually in contributions.

“The question many employees had was, what is the benefit of building this relative sort of palace?’’ Hoffman said. “And what’s the message to people donating to ’GBH?’’

Despite the troubles, WGBH still has an enormous budget. Overall, it received more than $231 million last year from sources such as corporations, foundations, grants, individuals, an endowment, and the Corporation for Public Broadcasting.

Jim Lewis, an Oregon-based fund-raising consultant who has worked for WGBH and other public TV and radio stations around the country, said the Boston station’s plight is not unusual.

“The entire public TV system is under great stress right now,’’ Lewis said. “All its traditional sources of revenue are strained. Major donors have lost money in the stock market and those who are coming back have psychic poverty; they’re thinking poor. Corporations aren’t making grants to organizations to do anything. And endowments have shrunk.’’

Part of WGBH’s problem is that membership has declined, from 196,000 in 2003 to 170,000 this year. In addition, its endowment has suffered because of the recession. It’s valued at about $50 million, down from $67 million two years ago.

The station has also faced some unique financial issues, including the alleged embezzlement of $500,000 by a former account manager.

WGBH officials said the new building had “little effect’’ on the operating budget, noting that its capital campaign and proceeds from the sale of its old location in Allston to Harvard University helped fund the project. (WGBH did not disclose the sale price of its old location on Western Avenue, citing a confidentiality agreement with Harvard.)

Besides, building a new headquarters made more sense financially than renovating the Western Avenue facilities, officials said. “It would have been significantly more costly to retrofit our existing studios to meet federally mandated digital transition requirements,’’ spokeswoman Lucy Sholley wrote in an e-mail.

But the cost of repaying construction debt for the headquarters and other projects has taken a toll. In 2002 and 2005, bonds related to the project totaled $164 million. This year alone, bondholders are owed $12.3 million.

Additionally, WGBH lost $9.4 million in the latest refinancing of the loan because of the credit crunch.

The station is also involved in the prosecution of its former accounting manager, who is accused of embezzling $500,000 over several years. Last year, Philip McCabe of Reading was charged with making false entries in corporate books and using the money for golf outings, clothes, and liquor. The attorney general’s office said the case is pending. McCabe could not be reached for comment.

The Association of Employees of the Educational Foundation - which is part of the Communications Workers of America Local 1300 and represents 360 of WGBH’s 950 employees - is negotiating with management over a proposed pay freeze as a way to achieve some of the $7 million in savings needed. Even if the union agrees to the concessions, a projected $5.7 million deficit will remain, station officials said.

Joe Montagna, union business agent, said WGBH officials will not discuss financial details unless union leaders sign a confidentiality agreement promising not to disclose the information to its members. Montagna said he would not agree to such an arrangement.

“I have never seen the morale and the spirit [at the station] as bad as it is,’’ he said. “If the economy wasn’t so bad, you’d see a mass exodus.’’

On a recent Saturday afternoon during a public tour of its facilities, however, there were few outward signs of WGBH’s struggles. A guide showed off a recording studio large enough to seat 75, along with an in-house movie theater for exclusive screenings.

Even the windows are deluxe - outfitted with expensive soundproofing to block street noise.

Still, it was impossible to keep the outside world from intruding: The guide ended the tour with a plea for donations.

“We need all the help we can get these days,’’ he said.

Megan Woolhouse can be reached at mwoolhouse@globe.com.