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In one of the sadder things you'll read about NPR and radio journalism in general, The Washington Post has a depressing report with details of the organization's financial decline--like the fact that NPR finished the first six months of its financial year with a $2.6 million deficit.

The Post's Paul Farhi interviewed Gary Knell, chief executive of NPR, about its problematic financial state (NPR has operated at a deficit in three of the past four years), its flattening ratings, and looming expenses (the Olympics promise to be very expensive).  So what's the problem?  Well, not unlike The New York Times and a lot of NPR's paper cousins (and please stop us if you've heard this before)--It all boils down to advertising ... or in NPR's case, corporate sponsorship:

Knell noted in the interview that all of NPR’s traditional sources of funding are under pressure and that reducing expenses is critical. “NPR has been withdrawing from the bank and we can’t keep doing that,” he said. “We have to be at break-even or be in a positive position on an annual basis, or I can tell you at some point we’re going to have to turn the lights off.”

NPR, which is a nonprofit organization, derives its revenue primarily from “dues” paid by affiliated stations for its programs; corporate sponsorships; and institutional donations and major gifts, such as the blockbuster $200 million contribution from the late McDonald’s heiress Joan Kroc in 2003. Less than 2 percent of its revenue comes directly from federal taxes.

The weakest area, Knell said, has been corporate sponsorship, which pumped about $50 million into NPR last year but has fallen off 2011’s record pace.

For the full story, head on over to The Washington Post.

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