Changing frequencies: minority ownership of U.S. radio and TV stations remains stagnant

Black Enterprise, Oct, 1996 by Paula M. White

The telecommunications industry accounted for approximately $680 billion worth of revenue in 1995, and is expected to double its impact in the next decade. But minority ownership of commercial broadcast stations is an alarmingly low 2.9%, according to an annual Commerce Department report.

Worse yet, African American ownership of television and radio stations was 1.8% or 203 outlets nationwide, only a moderate increase from the 193 or 1.7% of outlets owned by blacks in 1994.

So while controlling the access and flow of information has become increasingly vital to business success, African Americans continue to be shut out of that crucial loop. With 80 million minorities in America, ownership of a mere 330 stations of the 11,412 chat exist nationwide is definitely cause for concern.

"That we own less than 3% of the established tools in the information age does not bode well for minority communities," says Larry Irving, assistant secretary of commerce for communications--and information, who helped prepare the report. "These numbers are not getting any better and if we don't start taking action now, it'll be too late--not just for opportunity in mature industries but also in new technologies."

The report cites limited access to capital as the most significant reason for the low ownership figure. While researchers found that communities with black-owned banks tend to have more minority-owned media outlets, they hesitated to say these banks necessarily lend money to black broadcasting owners. Rather, they noted chat the presence of a black-owned bank usually indicates a network of black financial institutions in the region, and thus greater networking opportunities for those looking to become owners of communications outlets.

Other key factors are the elimination of minority ownership policies and subsequent telecommunications reform. Last year, Congress put an end to a tax certificate program established in 1978 that had allowed owners who sold their radio or television stations to a minority buyer to defer their tax payment on any capital gain. Without chat financial incentive, the current telecommunications reform has led to consolidation in the commercial broadcasting industry. As a result, many smaller companies have been squeezed out.

"I don't think there is any policy in the current administration to help minorities in the broadcast field," says W. Don Cornwell, chairman and CEO of Granite Broadcasting (No. 9 on the BE INDUSTRIAL/SERVICE 100 list). "If my company was trying to stare up now-without the tax certificate--we would never be able to duplicate our current financial success."

The 1995 telecommunications bill also loosened restrictions on the number of communication outlets one company could own. Where before companies could own only two or three ratio broadcase stations in an area, they car. now own up to eight in some markets.

"Large white companies have bought up some of the largest black broadcasters in the country, ant that's a problem," says Lois E. Wright, vice president of Inner City Broadcasting ant Corporate Counsel in New York. While the music ant entereainment programming of the section may not change under the new management, editorial policies probably will, she explains. "When it comes to getting your message through at critical political times, you can't rely on station$. They are not going to welcome a Jesse Jackson or Al Sharpton from our communities."

Entrepreneurs interested in commercial broadcast ownership are encouraged to look at majority/minority partnering. Meanwhile, the Minority Telecommunications Development Program has an online resource center that can be accesses at http//www.ntia.toc.gov through the National Telecommunications ant Information administration's homepage.

RELATED ARTICLE: MINORITY-OWNED COMMERCIAL BROADCAST STATIONS LICENSED IN THE U.S. IN 1995

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