One of the Obama administration’s goals is to increase the number of minority and women owners of TV and radio stations. A laudable idea, but one that the FCC has tried before with limited success. The problem is not so much in getting stations into their hands, but keeping them once the minority owners decide they want to sell and cash out.
Acting FCC Chairman Michael Copps is cranking up the agency bureaucracy in an effort to increase ownership of TV and radio stations by women, African-Americans, Hispanics and other minorities.
His office this week announced that it wants to launch an inquiry into the matter at its April 8 meeting — a first step in the laborious and time-consuming policy-making and rules-writing process that could take many months or years to complete.
As Copps made clear in his Feb. 11 press conference, minority ownership is one of his top priorities: “The time to start moving on that is right now.”
And it will presumably be a priority of Copps’ successor, who will be Obama pal and Clinton-era FCC legal wiz Julius Genachowski unless something goes terribly wrong in the vetting and confirmation process.
The Obama White House has made minority ownership one of the planks of its technology agenda, to which Genachowski was a contributor.
I applaud Copps’ and the White House’s intention. We don’t need another inquiry to tell us that the number of minority and female owners in broadcasting is abysmally low. In TV, African-American ownership is virtually non-existent. Right now, I can think of only one or two. Ownership by women and Hispanics is only slightly better. It’s all well documented.
And it’s too bad. Who owns a station does affect what programming is scheduled and who gets hired. That minorities are underrepresented in ownership means that they are underrepresented in programming and among the rank and file.
But I really don’t think that there is much the FCC can do about it. In trying to increase minority and female ownership, the agency is overreaching. Copps and Genachowski should take a pass.
Over the past 30 years, the agency has implemented a number of policies aimed at increasing minority and female ownership. All have failed.
For several years, broadcasters under threat of losing their license at the FCC could sell their stations to minorities for 75 percent of their appraised value.
In the 1980s, when the FCC was still awarding licenses on the basis of public interest criteria, it gave extra credits to minority applicants — a big advantage.
The most effective approach was the tax certificate policy. Sellers of broadcast and cable properties could defer taxes on capital gains if the buyer were a bona fide minority. The certificate could be worth millions to sellers.
And then there are the EEO rules designed to increase the chances of minorities one day owning stations by giving them a better shot at working at stations and learning the business.
Despite all this, we are back where we started, somewhere around 1950.
By documenting the lack of minority and female ownership, Copps believes his new inquiry will be a call to action. In my mind, it will be strong evidence of the fecklessness of the FCC policies to date.
The basic problem with all of the FCC’s high-minded gimmicks is that while they can encourage minorities and women to buy stations, they can’t make them hang on to the stations.
It turns out that African-American and Hispanic businessmen and businesswomen are just like their white counterparts — something that apparently has never occurred to Copps or his predecessors.
They are in business to make a buck.
Sooner or later, most FCC-enabled minority owners will want to cash out. And when that time comes, they are going to be far more interested in how much money is being waved in front of them than the color or sex of the person doing the waving.
Thus, the minority-owned station can quickly revert to a non-minority owned station.
Minority ownership policies have other problems. They tend to be horribly abused. Congress shut down the tax certificate program in 1995 after concluding that some of the minority buyers were fronts for non-minorities.
And this isn’t the 1970s anymore. It’s going to be tough, if not impossible, to get any race- or gender-based programs past the federal courts. The FCC lawyers would have to broaden the description of beneficiaries, possibly to a point where they give minorities and women no real advantage.
The only barrier today to increased minority and female ownership of TV and radio stations is money.
Plenty of stations are in financial trouble and their owners would like nothing better than to find a buyer of any race, color, creed, national origin, ancestry, sex, marital status, disability, political affiliation, age or sexual orientation.
In his interview with me two weeks ago, BIAfn’s Tom Buono said that stations are trading at a historic low, six to eight time cash flow.
And this week, Lenard Liberman, executive vice president of Liberman Broadcasting, and, incidentially, one of the nation’s leading Hispanic broadcasters, said that he is currently sitting on the sidelines of the station trading market, figuring prices will continue to fall.
If the Obama administration wants to increase minority ownership, FCC policies won’t do it.
It’s going to have to come up with a big pile of money earmarked for disadvantaged or small businesses hankering to get into broadcasting.
The best of the applicants for the federal grants may be able to come up with the supplemental financing and buy some TV or radio stations on the cheap.
And if some are minorities or women, that’s a good thing.
But keep in mind that the increase in minority and female ownership will likely be transitory.
As I said, sooner or later, everybody wants to sell.
Harry A. Jessell is editor of TVNewsCheck. You may contact him at [email protected].