MINORITY COMMERCIAL BROADCAST OWNERSHIP
IN THE UNITED STATES
August 1997- August 1998
The National Telecommunications and Information Administration's (NTIA) 1997-1998 survey of minority ownership of full power commercial radio and television stations in the United States finds that 165 minority broadcasters own 337 of 11,524 commercial radio and television stations in the United States. Minority commercial broadcast ownership showed a negligible increase of .1%, from 2.8% in 1997 to 2.9% this year, a net gain of 15 stations.
Over the past year, the number of commercial AM radio stations in the industry decreased by 90 and the number of FM commercial radio stations in the industry increased by 123. By contrast, stations owned by minorities increased by five AM commercial radio stations and 16 FM radio stations for an overall increase of 21 stations.
The number of commercial television stations in the industry increased by 16 over the last year. In this same time frame, the number of minority-owned commercial television stations decreased by six from 38 to 32.
It is important to note, however, that while Hispanic-owned radio stations increased by 19, the number of Hispanic-owned television stations decreased by three during the past year. The number of Black-owned commercial radio and TV stations increased by one. Black ownership of FM stations increased by four, but the number of Black-owned AM stations declined by one. Blacks own two fewer TV stations than in 1997. Asian ownership increased by one overall: a gain of three AM stations but a loss of one FM station and one television station. Native American ownership declined by three from the five stations owned in 1997; Native Americans currently own one AM and one FM station.
Minority ownership reached its highest totals in California with 57 radio and television stations, followed by Texas with a total of 49 minority-owned radio and television stations. Minorities, however, do not own any broadcast properties in 16 states: Washington, Oregon, Idaho, Montana, Wyoming, North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Iowa, Vermont, New Hampshire, Maine, Rhode Island, and West Virginia.
Continuing Trends in Minority Commercial Broadcast Ownership
The 1998 minority ownership numbers offer discouraging news for minority broadcasters. Although minority ownership of broadcast stations increased by 15 this year, minority ownership has not kept pace with the developments within the industry as a whole, and Black ownership is losing ground. Minority ownership of commercial broadcast stations is at a lower level today than in 1994 and 1995. Minority broadcasters are finding it increasingly difficult to compete in the rapidly consolidating broadcast industry. Access to capital remains one of the most significant impediments to ownership for minorities. Large companies such as CBS, Chancellor Media, and Jacor Communications have increased their presence and holdings in the top markets, and station prices commensurately have increased substantially. Minorities have no presence as owners in many markets. NTIA's findings support several trends:
The total number of broadcast stations has increased significantly and steadily since NTIA began collecting this data in the early 1990's.
Over a five year period (1993-1998), the industry as a whole has gained 503 new stations. Over this same period, minority ownership increased by only 15 stations. Minority ownership had its largest increase of 21 commercial radio and television stations when ownership totals rose from 322 in 1993 to 343 in 1994. See Appendix B for a more detailed summary.
Minorities own more AM stations than FM stations although there are 867 more FM stations in the United States (4,724 AM stations compared to 5,591 FM stations). Minorities currently own 189 commercial AM radio stations and 116 commercial FM radio stations. In 1997 minorities owned 184 commercial AM radio stations and 100 commercial FM radio stations. AM stations reach fewer listeners and on average generate less advertising revenue. Minority broadcast owners report that due to a lack of access to capital they have a greater ability to acquire AM stations because of their lower prices.
Of the 305 commercial radio stations owned by minorities, 24 are in the top five radio markets, and 37 are in the top ten radio markets. At the end of 1997, New York was the number one radio market in the country followed by Los Angeles, Chicago, San Francisco, Philadelphia, Detroit, Dallas - Ft. Worth, Washington, D.C., Houston-Galveston, and Boston. NTIA's findings show that minority ownership in these markets is minimal, and has declined in recent years. The minority owners interviewed for the report maintain that stations in these markets increasingly are beyond the reach of most minority owners. Thus, most minority owners only can purchase small stations in smaller markets.
The following trends, if not reversed, have the potential to further weaken minority broadcast ownership in this country.
Minority owners report that the passage of the Telecommunications Act of 1996 ("Telecommunications Act"), which directed the Federal Communications Commission ("FCC") to eliminate the national multiple ownership rule and relax the local ownership rule for radio stations, has contributed to media consolidation, higher station prices, and more competition among broadcasters for advertising revenue. Many of the minority broadcast owners who participated in this year's survey report that their businesses are affected by media concentration spurred by the passage of the Telecommunications Act. Minority owners describe a broadcasting industry dominated by non-minority-owned companies that own three or more stations in a market. This market power allows these group owners to assume greater control over advertising revenues and programming, and gives them greater leverage in hiring the best talent to staff their stations. Seven of the top ten radio group owners have as many as eight stations in a single market, a level that has been reached by only one minority commercial radio station group owner.
Minority broadcasters also report that they are facing increased competition in securing nationally syndicated programming. For example, Black broadcasters, some of whom own the number one ranked station in their respective markets, report that they have lost or are at risk of losing nationally syndicated programming because such programming is being offered to group owners who can reach a larger number of listeners. For many of the Black broadcast owners faced with this problem, losing popular syndicated programming would mean a loss in ratings, money, and market power. Some minority broadcasters report that their general managers, sales managers, and on-air talent are being hired by competing non-minority group owners who can offer higher salaries and wider exposure. In the case of one Black broadcaster, 60 percent of his station's staff was hired by a non-minority competitor.
NTIA's 1998 survey results indicate an overall loss of 17 owners. The number of stations owned by minorities increased because incumbent owners acquired additional properties rather than because new owners entered the marketplace by building new stations or by purchasing broadcast properties. In other words, the increased consolidation noted in the broadcasting industry generally, now is increasingly becoming a factor with regard to minority ownership as well.
In the last year, there has been a loss of 15 Hispanic commercial broadcast station owners. One Hispanic broadcaster sold five stations to another Hispanic broadcaster. No new Hispanic station owners acquired stations.
There also are 15 fewer Black owners. Asian broadcasters lost one of three owners. The three Native American owners from last year's report all sold their properties. One owner transferred his station to another Native American who, in turn, acquired an additional station. The nation currently has only one Native American broadcast station owner.
A FCC staff report, entitled "Review of the Radio Industry, 1997," which examined data from March 1996 to November 1997, found that the number of majority and minority owners of commercial radio stations has declined by 11.7 percent and that this decline is due primarily to mergers between existing owners. The FCC report also states that in the first year of the Telecommunications Act, 2066 radio stations changed owners compared to 988 in the prior year.
Few minority owners purchased multiple stations. Twenty-two of 165 existing commercial radio and television station owners purchased one or more additional stations since August 1997. Again, the owners who participated in this year's survey blame media concentration and lack of access to capital as the primary barriers to acquiring additional broadcast properties.
Over the past eight years, minority ownership in commercial TV has hovered at or below 3.2 percent. Since August 1997, three of the largest and most experienced minority television station owners sold all of their stations to non-minority-owned companies. Whether or not these sales were the result of lucrative business deals or minority owners succumbing to market pressures of cost, competition, and consolidation, minority owners report that, given the high prices of commercial television stations, those owners that were lost are unlikely to be replaced by new minority entrants.
The nominal increase noted in this report is the result of an increase in Hispanic ownership of commercial radio and television stations of 16 stations, from 120 in 1997 to 136 in 1998. The overall increase in 1998 minority ownership totals is the result of purchases by a small number of Hispanic broadcasters.
The findings of NTIA's 1998 minority commercial broadcast ownership survey reveal that of the 884 commercial radio station group owners in the United States, only 53 radio group owners are minorities (Black - 27; Hispanic - 23; Asian - two; Native American - one). Ninety-six minority broadcasters own single stations and 53 minority broadcasters own two or more stations. NTIA's data finds Willis Broadcasting is the largest minority-owned broadcasting entity with 21 commercial radio stations. By contrast, Capstar is the largest radio group owner with 299 stations followed by Jacor Communications which owns 204 stations. (See Appendix C for a complete listing of the top ten radio groups and Radio and Record's web site (http://www.rronline.com/rrup-a.htm) for a complete listing of group owners).
Conclusion
NTIA's findings indicate trends that most likely will continue to have a negative impact on the future of minority commercial radio and television. If media concentration continues at its current rate, small and less well capitalized minority broadcasters will find it increasingly difficult to compete with group owners and will be more likely to sell their stations and exit the industry. Financial barriers, increased competition, and higher station prices, are likely to be significant obstacles to new minority entrants to this marketplace. A significant loss in the number of minority broadcast owners may result in fewer employment opportunities for minorities in broadcasting and a less diverse broadcast media.
Ensuring a diversity of viewpoints is a cornerstone of our nation's broadcast policy. The continuing and emerging trends in minority commercial radio and televison are chipping away at a valuable, indeed essential, means of achieving this goal and our nation's historic commitment to localism. The collection of data on minority ownership is a critical first step to identifying new policy initiatives that promote greater minority ownership of broadcast properties, which will in turn enrich our marketplace of ideas.