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Minority Ownership A "Keen Disappointment"

Minority Ownership A "Keen Disappointment"

by Sherman Kizart

The Obama administration’s  Federal Communications Commission received sharp criticism and attacks from over 23 civil rights groups recently in the area of minority broadcast ownership and enforcement of EEO. The Minority Media and Telecommunications Council (MMTC) characterized the Obama administration’s track record as a “keen disappointment”  and went on to say that the Obama  administration at the FCC has not moved “any actionable proposals to improve minority ownership in the past 2 years. We’ve seen the numbers for the past 20 years dating back to the passage of the 1996 Telecommunications Act. Minority ownership of  Radio has continued a downward spiral. Today less than 2% of all commercial radio stations are owned by African Americans and Hispanics.

Minority ownership’s demise isn’t the blame of the FCC and its policies. Access to capital and Access to deal flow are the major  obstacles today, yesterday, and tomorrow to increasing the number of African American and Hispanic owners. There are no shortage of  terrific African American and Hispanic owners, senior minority executives with ownership aspirations, and new entrants that have strong desires and excellent business plans to acquire and operation radio stations. Every single one of them will tell you that “access to radio deals and access to capital to do these deals” are their greatest challenge.

How can we affectively address this issue and what role can the FCC play as a policy instrument? The answer is a collaboration between private industry giants and  minority ownership participants. The collaboration between private broadcast companies such as Clear Channel, Cumulus Broadcasting, CBS, Entercom and and minority owners has worked  before. It will work today. Clear Channel Communications strategic collaboration with Snowden Broadcasting at the outset of the 1996 Telecommunications Act was an excellent example of this collaboration. Clear Channel made its wide-array of resources including access to deals and access to capital available to minority owned Snowden Broadcasting. Snowden Broadcasting operated over a dozen stations for years until it choose to exit the industry.

What’s the incentive for Private and publicly held companies today to create such partnerships with minority owners?  Mega acquisition deals are returning to radio as top-line revenue has increased and multiples have come down to reasonable levels.  In 2011, Cumulus Broadcasting announced its plans to acquire Citadel for $2.5 billion. These deals always face tremendous scrutiny and numerous  regulatory hurdles.

Now is the time for the FCC, private and publicly owned media companies, and minority ownership communities to develop and implement programs that recognize award collaboration in this area.When everyone comes to table with one common goal regardless of their varying  interests, progress can and will be made. Now is the time to make real progress in the area of boosting minority ownership participation. Everyone has skin in the game.     

Sherman K. Kizart is Managing Director of Kizart Media Partners. He can be reached at (312)371-4127 or shermankizart@att.net
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