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MINORITY OWNERSHIP OF RADIO & TV STATIONS.   Term Paper ID:25138 Click to get this paper

Essay Subject: Statistics, regulations, economics, licensing, impact of large corp., legal rulings.... More...

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Paper Abstract: Statistics, regulations, economics, licensing, impact of large corp., legal rulings. Paper Introduction: This history of minority ownership in American broadcasting is one of half-hearted efforts on the part of Congress and the Federal Communications Commission (FCC) to level the playing field between Blacks, Hispanics, Asian and other ethnic groups, and women, and the obviously more well-to-do nonminority owners of radio and television stations. The issues which directly affect minority ownership of broadcast outlets are, for the most part, akin to those which pervade the broader American scene, from housing to education to other entrepreneurial efforts. As of 1995, the latest year for which published data are available, there were 1,221 television stations licensed in the United States. A total of 37, or just three percent, were at least 51 percent minority-owned. Minority ownership of AM radio stations was 175 of a total of 4,906, and 118 of 5,285 FM Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. 1145-1162. Within two years, the number of stations whichwere minority-owned grew to about 15 , but the pace of growth slowedsignificantly; by 1992, there were still less than 2 station licensescontrolled by minority owners (Flint, 1992, p. Castro, whose El Dorado Communicationsowns seven stations, including the largest Hispanic station in Texas--KQQK-FM in Houston, admits that he couldn't start his company today, just sixyears later (Adelson, 1997, p. A. This may not happen in markets such as Los Angeles, Detroit, Chicago,or New York. The Metro decision gaveminorities a "leg up" over other applicants for the same license, as wellas permitting stations whose licenses were in danger of being revoked theopportunity to sell to minorities at less than market value. Diversity is going to go away" (Lesly, 1995,p. Jet, p. The New York Times, p. The authors of the law review note discuss the two primary minoritypreferences employed by the FCC. According to Adelson (1997), "theresult effectively lowered the acquisition costs of a television or radiostation for a minority owner" (p. Ragan A. D9). Viacom, Inc.attempted to subvert the policy by proposing to sell its cable televisioninterests to a black entrepreneur whose operations were actually nearly 8 percent owned by Tele-Communications Inc. Harvard Law Review, 1 8, pp. Radio, which hadgrown to 25 stations by the time it was sold in 1996. 35-36. D9). The number of licenses in the hands of minority owners rosedramatically after 1978, when just 4 stations were minority-owned(Adelson, 1997, p. Although small by comparison, these were the two largestminority-owned broadcast groups, with a combined total of 35 stations(Adelson, 1997, p. And tenpercent of all minority-owned radio stations in America were sold byLombard/Nogales Partners of San Francisco and U.S. Minority voice fading for broadcastowners. Jessell, H. . Communities will be better served when people from these groups have the ability to obtain a broadcast license from the FCC. 6. D9). Hiscompany, Granite Broadcasting Corporation, owned seven TV stations by theend of 1994; its stock valued doubled that year as cash flow "swelled 71percent to $25 million, on revenue of $63 million" (Lesly, 1995, p. ofPhiladelphia. D9). Radio was sold for $14 million to Clear ChannelCommunications Inc. 47). Taken together, the two general types of FCC preferences guarantee no results--they merely seek to enable minorities to compete for licenses on an equal footing in the assignment process (p. None of thepreferences guarantees minority ownership in any form--they propose neither a fixed number of licenses nor a fixed percentage of licenses issued, nut merely provide incentives for minority ownership. According to the authors of the note, both of these schemes meet thestrict scrutiny test required under the Metro decision, as opportunity-enhancing rather than outcome-determinative mechanisms. And W. (1995). Forty megahertz and a mule: Ensuring minority ownership of theelectromagnetic spectrum. Taken as a whole, minority ownershipaccounted for 33 of 11,412 broadcast licenses--2.89 percent (Adelson,1997, p. v.FCC, effectively foreclosing the FCC's affirmative action procedures forawarding broadcast licenses to minority applicants. . D9). D9).Radio giants have quickly emerged, as demonstrated in the combination ofthe CBS Radio network and Infinity Broadcasting by Westinghouse. But who will be there to champion the programming needs ofLatinos in Tulsa, Asians in Atlanta, or Blacks in Des Moines, if not theLatino, Asian, or Black broadcasters? Pena) to overturn its 199 decision in Metro Broadcasting, Inc. Lesly's article appeared just prior to final passage of thelegislation eliminating the broadcast tax credit. 25-26. Radio'sfinancial backers had become "eager to lock in their gains and wereunwilling to put up more money to buy increasingly expensive stations. Minorities see an indifferent FCC.Broadcasting, pp. 1145-1162), prior to thedecision in Adarand, is eloquent in its libertarian defense of "equality ofopportunity," while simultaneously supporting the eventual position of theCourt, which held that regulatory schemes designed to promote an "equalityof outcome" was too broad to pass constitutional muster. 47.----------------------- 9 References Adelson, A. And, as is prevalent in many minoritycommunities, access to capital is either limited or expensive. According to thedirector of the FCC's small business office, Catherine Sandoval, withoutthe tax credit, "the entry barrier is definitely higher" (Adelson, 1997, p.D9). The issues whichdirectly affect minority ownership of broadcast outlets are, for the mostpart, akin to those which pervade the broader American scene, from housingto education to other entrepreneurial efforts. (1998, February2). This is what the FCC had in mind.Business Week, p. D9).As James A. Writing forthe Court, Justice Sandra Day O'Connor stated, "To the extent that MetroBroadcasting is inconsistent [with the 'strict scrutiny' test], it isoverruled" (Jessell, 1995, p. To me, theharm is in the broader sense. Given thecurrent conservative political climate in Washington, it is unlikely thatthe FCC will receive any genuine guidance in this area from Congress. But the broadening of station ownership was directly attributable toa single policy change--the granting of tax credit certificates by the FCC--which took effect in 1978. Castro has found it difficult tooutbid larger, public companies which have the ability to obtain financinga much lower interest rates. Minority ownership of AM radio stations was 175 of a total of4,9 6, and 118 of 5,285 FM stations. Henry, with the benefit of the broadcast tax credit, foundedand assembled the largest black-owned radio group, U.S. As minority ownership of broadcast outlets dwindles across the UnitedStates, the predictions of decreased diversity are likely to be provencorrect. He was forced to pay more than 13 times cashflow for a station in Duluth, Minnesota, and about 1 times cash flow foranother station in Peoria, Illinois. The first deals with the auctioning ofspectrum and the special incentives provided to minority bidders, such as"reduced up-front payments, bidding credits, and installment payments,"which were not generally available to nonminority bidders (HLR, 1995, p.115 ). D9). Kennard stated: As we design new rules to begin auctioning off new broadcast station licenses, we have an opportunity to develop policies that create opportunities for participation by minorities, women, and small businesses, all who have faced rough times with the increasing consolidation in the broadcast industry. Hundt: FCC committed to minorityownership. (1997, May 19). In June 1995, the Supreme Court ruled 5-4 (in Adarand Constructors,Inc. Congress, however, in a climate hardly conducive to affirmativeaction, "threw the baby out with the wash water," stated lobbyist PluriaMarshal, founder of the Black Media Coalition (Adelson, 1997, p. of San Antonio" (Adelson, 1997, D9). The second was the tax credit mechanism discussed at length above. Radio Inc. Through mid-1995, the FCC had issued some 479 tax creditcertificates, 75 percent of which "went to minority owners in deals thataveraged $4 million for a radio station and $38 million for a televisionstation, according to Commerce Department figures" (Adelson, 1997, p. v. Broadcasting & Cable, pp. These proposed new broadcast station license auction rules can be an important vehicle for making this possible (Jet, 1998, p.6).But will they pass the test of "strict scrutiny" demanded by the SupremeCourt in the absence of any leadership from Congress? 35). 36). 1147). Atotal of 37, or just three percent, were at least 51 percent minority-owned. Hispanic broadcaster Thomas H. Winston, executive director of the National Association ofBlack-Owned Broadcasters, remarked, "It was the single most importantpolicy in increasing ownership" of radio and TV stations by blacks andother minorities (Adelson, 1997, p. (1995, June 19). U.S. FCC pushes to increase minority broadcast ownership. An editorial "note"published in the Harvard Law Review (1995, pp. 1153). At that time, Cornwell'sassessment was that, "When the FCC program began in 1978, only .5 percentof the 1 , broadcast properties were owned by minorities. These numbers are declining, and they are expected tocontinue to do so. The FCC reasoned that it could promote agreater diversity of viewpoints, and expand minority ownership, by makingavailable tax credits to sellers of radio and television stations tominority buyers. D9). This history of minority ownership in American broadcasting is one ofhalf-hearted efforts on the part of Congress and the Federal CommunicationsCommission (FCC) to level the playing field between Blacks, Hispanics,Asian and other ethnic groups, and women, and the obviously more well-to-dononminority owners of radio and television stations. Asa result, U.S. Radio'sacquisitions (Adelson, 1997, p. Both the "note" and the later Supreme Court decision maintained thata standard of "strict scrutiny" applies to governmental policies which aredesigned to be "outcome-determinative," while also asserting that a lesserstandard of "intermediate scrutiny" applies to regulations which are"opportunity-enhancing" (p. Don Cornwell, formerly an investment banker with Goldman,Sachs & Co., who left the security of Wall Street in 1988 for a TV stationon Main Street, makes no bones about the value of the tax credits. Lipson, a senior managing director of Blackstone Capital Partners(which had invested $3 million in U.S. Radio in 1994), noted that pricesfor broadcast stations had risen to 15 times cash flow, far above theroughly 8 times cash flow that characterized most of U.S. D9. (1992, August 24). But this was all "swept aside" by Congress in 1995. As of 1995, the latest year for which published data are available,there were 1,221 television stations licensed in the United States. Conceding that "if you're not able to buy, you ought to be selling,"Howard A. . These 1988 acquisitions were made ata time when similar broadcast properties were on the block for only eight-and-one-half times operating cash flow (p. The new Chairman of the FCC, William E. And both of these events occurred priorto Congress' abolition of the broadcast tax credit. This transaction would have created a$6 million tax credit for Viacom and TCI (Adelson, 1997, p. (TCI is the nation's largestcable television systems operator). 47). D9). These certificates would permit a seller to defer capitalgains taxes if their proceeds were subsequently reinvested into anotherbroadcast outlet within two years. Lesly, E. 25). 47). Kennard, has indicated theCommission's inclination to continue to seek ways to encourage minorityparticipation in license auctions. However, the concept of "strict scrutiny," as reiterated by the Courtin Adarand, means that regulations will only be deemed constitutional ifthey "further a 'compelling' government goal and are the least intrusivemeans of obtaining it" (Jessell, 1995, p. (1995, February 27). "The tax credit was critical to his early deals--mostly as a way foran upstart to get in the door," Lesly writes, noting that Cornwell did notget any bargains early on. According to Adelson, the Telecommunications act of 1996 "set off atorrent of mergers in the radio industry by relaxing the limits on radioownership to as many as eight stations in a single market" (1997, p. When agencies such as the FCC are given a mandate from Congress, inmost cases the Supreme Court defers to the intent of Congress indetermining the constitutionality of such specific regulations. Just as concentration of banks has led to a decline in the numberof branches in inner cities, increased fees for customers, and fewerservices, so, too, will the concentration of radio and TV stations in thehands of nonminority owners shrink the amount of programming offered toBlacks, Hispanics, and other minorities. D9).Instead of simply tightening the authority of the FCC to grant tax creditsin order to prevent such egregious abuses, Congress eliminated the taxcredits altogether--over the objections of the FCC. Flint, J. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.