Sherman Kizart's Open Letter
March 1, 2011 at 1:43 PM (PT)
SHERMAN KIZART, Managing Dir/KIZART MEDIA PARTNERS offers an open letter to the industry:
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 two years.
We’ve seen the numbers decrease 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 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 operate 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 effectively 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 minority owners has worked before. It will work TODAY.
CLEAR CHANNEL COMMUNICATIONS' strategic collaboration with SNOWDEN BBROADCASTING at the outset of the 1996 Telecommunications Act was an excellent example of this kind of 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 chose 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 fact, recently, CUMULUS MEDIA announced its plans to acquire CITADEL for $2.5 billion.