Why Has Minority Media Ownership Declined?

WHY HAS MINORITY MEDIA OWNERSHIP DECLINED?
by Tanya K. Hart

A recent study from Nielsen is showing that African Americans watch television more than any other group in the country. African Americans used their TVs an average of 7 hours, 12 minutes each day — above the U.S. average of 5 hours, 11 minutes. Asians watched TV the least, at just 3 hours, 14 minutes a day on average. African Americans used DVD players and video game consoles more than average, but whites were more likely to use DVRs. Some 40 percent of white families own DVRs, which is higher than average.

No matter how the statistics read, it is clear African Americans have always watched more than a fair amount of television. This single fact led to a plethora of ‘minority’ owned media properties during the past 40 years. But suddenly there has been a complete backward slide. As it turns out we are seeing minority owned TV and radio stations being sold off, or going bankrupt in unprecedented numbers. According to the National Association of Black Owned Broadcasters (NABOB), “There’s been only a handful of big ticket radio deals so far in 2013, but the buying and selling of TV stations has been pretty active. The NABOB says African Americans are being “shut out” of the deal-making. “These recent transactions will clearly exacerbate the dearth of minority owners in the industry and increase the excessive consolidation of the industry,” NABOB says in a newsletter to members.

The association was organized in 1976 by a small group of African-American broadcasters who desired to establish a voice and a viable presence in the industry. The two principal objectives: first, to increase the number of African-American owners of telecommunications facilities, and second, to improve the business climate in which they operate. These days the organization has a lot on its plate. In the past year at least 20 black-owned stations have been forced into bankruptcy and some of those stations have been sold to non-minorities. “Radio has regressed back to the pre-1978 days, when minorities were never given an opportunity to participate as station owners,” NABOB says. All media properties are fueled by advertising dollars but because of ongoing undervaluation of the African American consumer by major advertisers, Black owned stations and networks must charge lower rates than other stations and networks reaching the same size audiences. A bigger problem is an un-even playing field with the nation’s largest buyers of advertising; the federal government. A 2012 Congressional Research Service (CRS) report, “Advertising by the Federal Government: An Overview,” estimated that the federal government spent $750.4 million on commercial advertising services in fiscal year 2011. Two out of five departments include: • Department of Defense: $473.6 million • Department of Health and Human Services: $87.6 million. “Of these expenditures, Black owned broadcast stations and networks receive a very small share or no federal ad dollars.” said NABOB Executive Director, Jim Winston. “Because there is no obligation on the part of the federal government departments or their separate divisions and offices to publicly report where or when the advertising expenditures will be placed, Black-owned stations frequently learn about advertising bids only after the advertising expenditures have been made.”

Needless to say the organization plans to focus on the federal advertising issue at its 37th Annual Fall Broadcast Management Conference and the 13th Annual Power of Urban Radio Forum set for October 2-4, 2013, in Washington, DC. NABOB is working to convince Congress to revive the minority tax certificate program that gave a tax break for companies that sell to minorities. They also intend to put pressure on the FCC to consider the potential impact of this recent string of large transactions, as well as take steps to help advance minority ownership. According to a recent article in the, The Louisiana Weekly newspaper, for the African American-owned stations that remain, obtaining a fair share of federal advertising expenditures could mean the difference between survival and failure.

“There are some who believe rather than fighting for more tax certificates that we may be better served carving out a space/place on the digital platform in some of these newer technologies that are reaching radio listeners,” says Jerry Lopes, President of American Urban Radio Networks. “The truth is we need an all of the above strategy.” Ronald Davenport Jr., General Counsel and President of the Radio Division at Sheridan Broadcasting Corporation, whose family founded the network some 45 years ago, agrees adding “Sheridan Broadcasting Corporation supports the efforts of NABOB to increase the number of black owned stations.”

Minority owned telecommunication companies are usually the only owners that help African-Americans stay informed about life altering issues like health care, education and economic opportunities. More importantly these are the owners that give back financially to the community they serve. Fifty years ago at the historic March on Washington, the original demonstration was to be titled “March for Jobs and Freedom”. Fifty years later African Americans still have the highest unemployment rate in the nation. Mainly because Black owned business have not been given support from financial institutions, and do not have access to the ‘clubs’ where the larger deals are made.

The next frontier for minority owned telecommunications operators is to make sure they are getting their fair share of the $967 billion dollars African Americans are currently spending on products that are often advertised on Television, Radio and other forms of digital media. When that playing field is leveled, America will have truly ‘Overcome’. ”

Tanya K. Hart
Secretary, The Caucus