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Wednesday, April 24, 2024

NC trend: TV network flips from gospel to westerns

One of the biggest ratings successes of the past decade in the U.S. television industry is INSP, which is based in suburban Charlotte, in Indian Land, South Carolina.

That success has led to robust paydays for CEO David Cerullo and other executives of the not-for-profit organization, formerly called The Inspirational Network. It has a mission of “impacting people for Christ worldwide through media,” according to its federal tax filing.

In 2022, INSP 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 ofU.S. cable networks, INSP officials say. 

INSP’s popularity followed a rebranding, kicked off in 2010, that emphasizes Western-themed, family-friendly programs, rather than religious-oriented fare. Over the past decade, household viewership has soared more than 1,300% with the network available to more than 60 million households, the company says.

Religious programming on INSP is now largely limited to 4 a.m. to 7 a.m., when the long-running “Camp Meeting” teaching and fundraising telethon airs.

Otherwise, INSP mostly airs 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.”

Amid INSP’s success, Cerullo established for-profit operations, including Imagicomm Communications, which bought 18 television stations in 12 markets from Atlanta-based Cox Media Group last August. Media reports placed the value of the deal at $488 million, which INSP officials declined to confirm.

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

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

When announcing the deal, Cerullo said it was part of a “broad corporate strategy to expand our media ownership across multiple entertainment platforms.” He called the stations “important local-journalism brands.”

INSP’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 funding.

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, its tax filing shows. Torossian declines to disclose the organization’s total revenue. Taxable income of its for-profit subsidiaries isn’t 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.

“I don’t have an issue with a Christian channel or network featuring a mix of secular and religious programming,” says Phil Cooke, a Burbank, California, consultant who studies Christian media. “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 report by Charlotte-based Ministry Watch, which tracks the business of Christian organizations. (The author of this story is president of MinistryWatch.)

Cerullo had $4.5 million of compensation in both 2020 and 2021, and $7.3 million in 2019. Four other INSP executives earn more than the $741,000 compensation in 2021 of Franklin Graham. He is 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 provides 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. 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, he says.

The Inspiration Networks’ for-profit subsidiaries include Media-Comm, which provides tele-production and distribution services to ‘INSP, LLC,’ and various unrelated companies, Torossian says.

       

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