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Sunday, July 14, 2024

INSP’s pivot from religion to Westerns spurs ratings, raises questions

A version of this story originally appeared at MinistryWatch.com, which tracks the business of religion.

By Warren Cole Smith

One of the biggest ratings successes of the past decade in the U.S. television industry is INSP, formerly known as The Inspirational Network, which is led by CEO David Cerullo and based in Indian Land, South Carolina, just south of Charlotte.

In 2022, the network often appeared among the top-rated networks on television, including two weeks in the No. 6 spot in February. For 115 consecutive weeks, its ratings have been in the top 10 of U.S. cable networks according to Nielsen ratings, INSP officials say.

The mission of INSP, according to its annual federal tax filing, is “impacting people for Christ worldwide through media.” But INSP’s growth has surged since 2010, when it started a major rebranding that emphasizes family programming, rather than religious-oriented fare. Since then, household viewership has soared more than 10-fold, or 1,171%, the Variety entertainment industry publication reported in 2021.

The organization’s roots stem from the PTL Television Network, founded in Charlotte by Jim and Tammy Faye Bakker in 1978. David Cerullo’s father, Pentecostal evangelist Morris Cerullo, bought the assets of the network in a bankruptcy court-approved sale in 1990. For two decades, it carried primarily religious programming and relied on viewers’ charitable contributions for its funding.

Religious programming on INSP is now limited to 4 a.m. to 7 a.m., when it airs the long-running “Camp Meeting” teaching and fundraising telethon that features prosperity-gospel pastor Mike Murdock. INSP airs “25 hours of religious programming per week,” or about 15% of total programming, the network said in a response to questions.

INSP’s focus is almost exclusively western-themed shows from the 1960s and ’70s, such as “The Rifleman” and “Gunsmoke.” Last year, INSP changed its logo to include a cowboy hat and its tagline is now “Heroes Live Here.”

As part of its transformation, Cerullo has built a for-profit arm that made its biggest mark last August by acquiring 18 television stations in 12 markets from Atlanta-based Cox Media Group. The buyer was Imagicomm Communications, a for-profit subsidiary of INSP LLC. Media reports placed the value of the deal at $488 million. INSP won’t comment on the purchase price.

“It’s a blockbuster of a deal,” according to Radio+Television Business Report, an online publication. Imagicomm’s offer for the Cox stations “is among the largest divestments seen in recent memory,” it added.

When announcing the deal, David Cerullo said it was part of a “broad corporate strategy to expand our media ownership across multiple entertainment platforms. We’re excited to bring these stations into the Imagicomm family because we know they are important local-journalism brands.”

The Imagicomm stations range from Binghamton, New York to Eureka, California. The biggest markets include Memphis, Tennessee and Tulsa, Oklahoma.

The INSP organization has a complex structure. In a prepared statement, spokesperson Ronn Torossian describes INSP LLC as a “a for-profit, Single Member, Limited Liability Company ultimately owned by The Inspirational Network, Inc., a North Carolina Non-Profit Corporation and 501(c)(3) Religious Organization.”

The network took in $29.3 million in charitable contributions in 2021, while total revenue topped $43 million, including investment income. Torossian declines to disclose the combined organization’s total revenue. The taxable income of its for-profit subsidiaries are “not subject to public disclosure rules,” he says.

The not-for-profit network had net assets of $266 million, including $187 million held in cash or other investments, at the end of 2021, according to its most recent filing. There was no debt listed.

With the organization increasingly focused on secular programming and advertiser-supported TV stations, INSP’s identification as a nonprofit organization is curious, says Phil Cooke, a Burbank, California consultant who studies Christian media.

“I don’t have an issue with a Christian channel or networking featuring a mix of secular and religious programming,” Cooke says. “In fact, it might be a good strategy to help engage more nonbelievers, who then would encounter a gospel message.”

But there are “ethical questions when a ministry or nonprofit is built on millions (or hundreds of millions) of donor dollars and then is suddenly converted to what is essentially a secular programmer with leadership making enormous salaries,” Cooke says.

David Cerullo’s total compensation over the past decade exceeds $36 million, according to INSP’s filings. His wife, Barbara, has received more than $3.5 million in the same period. Of the 20 highest paid U.S. ministry executives in recent years, eight are INSP executives, according to a January report by Charlotte-based Ministry Watch, which tracks the business of Christian organizations.

Cerullo had $7.3 million of compensation in both 2019 and 2020, then $4.5 million last year. Four other INSP executives also earn more than the $741,000 compensation in 2021 of Franklin Graham, the CEO of Boone-based Samaritan’s Purse, a nonprofit humanitarian-relief organization with 2020 annual revenue of $898 million.

Attorney and non-profit expert David Bea says INSP can maintain its tax-exempt status if it provided a “public benefit,” such as “the provision of family-friendly entertainment.”

Torossian notes Cerullo “manages one of the most complex, multi-faceted organizations in the country.” His compensation is vetted by an independent committee of the company’s board of directors, who compare pay scales of similar organizations and their executives. He adds that Cerullo doesn’t get stock options that are common for other cable TV industry executives, nor does he receive royalties on the sale of his books, DVDs or CDs.

The Inspiration Networks has several for-profit subsidiaries, including Media-Comm, which provides “tele-production and distribution services to ‘INSP, LLC,’ and various national, local, and regional 3rd party (unrelated) companies,” Torossian says.

One of The Inspirational Network’s biggest vendors is partly owned by a company director. Doug Preudhomme is a minority owner of DPC&S , a Phoenix-based donor database administrative services company. “Because of his unique experience in business and ministry, Doug is particularly qualified to provide evaluation and guidance on directional issues for ‘The Inspirational Network, Inc.’ ministry,” Torossian says. He is recused from issues involving DPC&S related to the INSP organization, he adds.

Warren Cole Smith is a veteran journalist and author of more than 10 books about various religion-oriented topics. Since 2019 he has led Ministry Watch, which provides daily coverage of the business affairs of religious organizations.

 

 

 

 

 

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