INSP Pivoted From Religious Programming to Westerns, and Created Ratings Bonanza
One of the biggest television ratings successes of the past decade has not been one of the legacy networks or a streamer such as Netflix. Rather, it has been INSP, formerly known as The Inspirational Network, led by David Cerullo and headquartered on a large campus just south of Charlotte, N.C.
In 2022, the network often appeared among the top-rated networks on television, including two weeks in the No. 6 spot in February. A statement from INSP said, “For 115 consecutive weeks it has been rated as a top 10 cable network by Nielsen.”
The entertainment trade publication Variety reported in 2021 that INSP’s household viewers were up 1,171% since 2010.
INSP has its roots in the old PTL Television Network, founded by Jim and Tammy Faye Bakker in 1978. David Cerullo’s father Morris Cerullo bought the assets of the network out of bankruptcy. It carried primarily religious programming for years, though it began branching out and doing “lifestyle programming” in the late 1990s and early 2000s.
In 2010 the network began a major rebranding, emphasizing family programming but airing less content that was specifically religious. Eventually, the programming transitioned to almost exclusively western-themed shows, such as “The Rifleman” and “Gunsmoke.” Last year, INSP changed its logo to include a cowboy hat. Its tagline is now “Heroes Live Here.” Other marketing materials say it has “entertainment the whole family can enjoy.”
The organization remains a non-profit organization that took in about $30 million in charitable contributions in 2021. Its organizational structure is complex. According to spokesperson Ronn Torossian, INSP, LLC, “is 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.”
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The $30 million in charitable contributions is not the whole picture, however. Total revenue for The Inspirational Network, Inc., topped $43 million in 2021, according to the most recent Form 990 available. It had more than $10 million in investment income. It is not clear how much of that total, if any, is advertising revenue. The organization spent about $4.1 million on fundraising that year.
It continues to air its long-running “Camp Meeting” from 4-7 a.m. each day (longer on weekends). The “Camp Meeting” program is a teaching and fundraising telethon. Some of the programs are years old, and feature prosperity gospel preacher Mike Murdock. In total, according to a statement sent to MinistryWatch, INSP includes “25 hours of religious programming per week.” That number represents about 15% of its total programming.
With so little religious programming, and so much secular and advertiser sponsored programming, it is fair to ask why it is still a non-profit organization—especially since the mission of the organization, according to its Form 990, is “impacting people for Christ worldwide through media.”
Attorney and non-profit expert David Bea said it could maintain its tax-exempt status if it provided a “public benefit,” such as “the provision of family-friendly entertainment.”
Christian media expert Phil Cooke said even if the shift away from religious programming is not a legal problem, it does raise ethical issues. “I don’t have an issue with a Christian channel or networking featuring a mix of secular and religious programming,” Cooke said. “In fact, it might be a good strategy to help engage more nonbelievers who then would encounter a gospel message.”
But Cooke said he has “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.”
Lucrative for Senior Executives
A number of INSP’s executives do command big salaries.
In addition to being a ratings juggernaut, it has also become very lucrative for its senior executives. Its president, David Cerullo, has made nearly $40 million in the past decade (more than $40 million when combined with his wife Barbara’s compensation), according to the organization’s Form 990s. Of the 20 highest paid ministry executives in the nation, according to publicly released Form 990s, eight of them are INSP executives.
Ronn Torossian, the spokesman for Inspiration Ministries, defended Cerullo’s salary:
Mr. Cerullo manages one of the most complex, multi-faceted organizations in the country. David Cerullo’s compensation is and always has been established by a fully independent executive compensation committee appointed and approved by the Company’s Board of Directors. This committee compares Mr. Cerullo’s compensation with other executive compensation of similar organizations with similar levels of responsibility, including cable television network CEOs, senior media company executives, CEOs of faith-based national ministries, and pastors of churches. Unlike most media executives, Mr. Cerullo receives no additional compensation by way of stock options which is normal and customary in the determination of total compensation for CEOs within cable television networks. Further, he receives no royalties on the sale of his books, DVDs, or CDs.
Attorney and non-profit expert David Bea reviewed Torossian’s statement and said, “The IRS-recommended procedure for establishing executive compensation in an exempt 501(c)(3) organization has three elements: independent decision makers, comparable data, and contemporaneous documentation (meaning they prepare minutes documenting the decision at the time it is made). If they are really independent, look at comparable data, and document the decision in writing, then presumably the compensation would be reasonable.”
But is it fair for executives to receive this kind of compensation from an organization built with donor funds? Bea said, “‘Fairness’ is in the eye of the beholder. If the donors know what they are giving to, and are not maliciously manipulated, then it’s probably fair.”
“Complex, Multi-Faceted Organization”
The Inspiration Networks, Inc., has indeed become a “complex, multi-faceted organization,” to use Ronn Torossian’s description. It has at least a half-dozen for-profit subsidiaries.
The Inspirational Network also owns Media-Comm. Media-Comm provides “tele-production and distribution services to ‘INSP, LLC’, and various national, local, and regional 3rd party (unrelated) companies,” Torossian said.
One of The Inspirational Network, Inc.’s biggest vendors is owned by one of the ministry’s board members. DPC&S is a Phoenix-based donor database administrative services company that is partly owned by Doug Preudhomme.
Torossian said, “Doug is a minority owner of DPC&S; he is not the owner. 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. He is fully recused from any and all issues that involve DPC&S or the executive leadership compensation of both ‘INSP, LLC’ and ‘The Inspirational Network, Inc.’”
A television network with the kind of ratings enjoyed by INSP should be bringing in far more money than what The Inspirational Network, Inc. reports on its Form 990. The online information company Rocket estimated the revenue of INSP at $773 million. Rocket told MinistryWatch a “data partner” provided that number. A spokesperson would not release the name of the source, but did say, “We have confidence in our data partner.” Other networks with similar ratings have revenue figures that range from $300 to $700 million.
INSP spokesperson Ronn Torossian would not confirm the number. He said, “INSP, LLC’s income is taxable and reported, along with the taxable income of other for-profit subsidiaries, on a C-Corporation Federal Form 1120, which is not subject to public disclosure rules.”
But what The Inspiration Network is required to disclose shows that the organization has $298 million in assets, up from just $145 million in 2017.
A Blockbuster Deal
In August of last year, INSP, LLC, announced it had acquired television stations in 12 markets from Cox Media Group. The buyer was Imagicomm Communications, one of INSP’s subsidiaries. Financial terms were originally not disclosed. However, subsequent media reports placed the value of the deal at $488 million.
“It’s a blockbuster of a deal,” said Radio+Television Business Report. “According to the Asset Purchase Agreement, Cox will earn $488 million from the divestment — plus the working capital amount, minus any deficit if applicable. This makes Imagicomm’s offer for the Cox spinoffs among the largest divestments seen in recent memory.”
At the time of the acquisition, David Cerullo said, “This acquisition is part of our 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. We look forward to working with the talented staff at each station and building upon their rich legacy of serving their communities, advertisers, and audiences.”
