1990sA.
The Growth of Black-Owned Radio
Radio ownership by African-Americans dates back to 1949 when 2 stations were established. The Civil Rights Movement stimulated interest in ownership, and by 1970 there were 16 Black-owned radio stations.
By the end of the 1970s there had been a mercurial rise from 16 to 140 stations. In his landmark book, “Voiceover: The Making of Black Radio,” William Barlow points out that this dramatic increase resulted from intense lobbying by several Black media advocacy groups as well as the Congressional Black Caucus. In addition, the Carter administration developed policies, such as tax certificates, distress sales and revised Small Business Administration regulations that assisted ownership.
In 1995 there were 274 Black-owned stations, according to figures from the National Association of Black-Owned Broadcasters (NABOB) and a study by the DuBois-Bunche Center for Public Policy at Medgar Evers College in Brooklyn, NY. That study, titled “Blackout: Media Ownership, Concentration, and the Future of Black Radio,” found that by 1996, 26 of those stations (eight AM and 18 FM) had been sold to white-owned companies. Clear Channel, one of the largest radio companies in the country, acquired 17 of the 26 stations.
“Today, there are 240 Black-owned radio stations,” said James Winston, Executive Director of NABOB.
According to Kofi Ofori, co-author of the study “Blackout,” the main cause of the decline in Black radio ownership is the passage of the 1996 Telecommunications Act. This legislation lifted prior restrictions on radio ownership and allows for an unlimited number of stations nationally and up to eight stations in major markets.” The legislation also eliminated the requirements that stations include public service programming in their formats.
The Telecommunications Act hit the radio industry like a tidal wave. Before 1996, no single company owned more than 80 stations nationally. By 1997, one privately-held investment firm controlled 320 stations, and the top 10 radio groups owned 821 stations. Clear Channel currently owns 1,200 radio stations.
“The Clear Channel company’s purchase of US Radio, the Black-owned chain of 17 stations, is a good example of how the Telecommunications Act benefited large firms and put small and minority stations at a disadvantage,” Ofori said.
“African-American station owners, even those with multiple holdings like US Radio, are unable to access capital quickly and make new acquisitions,” he continued. “Furthermore, after the 1996 legislation, station prices doubled, making new purchases beyond the reach of small entrepreneurs, including African-Americans.”
The Syracuse Example
The radio landscape in Syracuse, New York changed dramatically after the 1996 Telecommunications Act. The city’s population is 143,000, of which 37,336 are African-American.
“Before 1996 no company had more than 2 stations,” said Robert Short, one of two Black radio station owners in Syracuse. “By 2000 Clear Channel owned 7 stations, the Citadel Company had 4, Galaxy 7 and both Black stations were out of business,” he continued.
Short opened his station, WRDS-FM in 1995, one year prior to the passage of the Telecommunications Act. It was that city’s first radio station not only with programming relevant to the Black community, but that engaged in community outreach activities.
“We organized health and job fairs, Family Day and Unity Day,” said Short. “We had a good signal, 40,000 listeners and had the top afternoon share in the 18-34 age category and the number two rating in the evening for the same age category.”
Why did he sell the station? “In addition to general undercapitalization, the competition brought on by the Telecommunications Act was devastating. And even before the Act was passed, advertising was a perennial problem,” he said.
Short indicated that although many local Black businesses bought advertising time directly, many white-owned businesses contracted out to advertising agencies. “After 1996, ad agencies preferred to buy packages for multiple stations belonging to one company, like Clear Channel’s 7 stations rather than buy time on a single station like mine.”
African-American as well as Hispanic owners throughout the country were voicing the same complaint as Short. Furthermore, in his brief on-air announcement of the leasing of WLIB to Air America, Pierre Sutton said that advertising had been a major problem.
The Advertising Dilemma
In 1999 Sutton reported to the NABJ Journal (a publication of the National Association of Black Journalists) that PetCo had canceled its commercials with Inner City’s San Francisco station. The reason given was that the company did not want to continue buying time on ethnic stations.
The issue exploded in 1999 when a memo from the Katz Radio Group, an advertising sales and marketing firm, was leaked to the Rev. Al Sharpton and other individuals. It recommended that advertisers avoid “urban” stations and instead buy time on those that would offer “prospects, not suspects.”
In the aftermath of the memo, two summits were held in New York City. One was organized by the Rev. Al Sharpton and New York State Senator Efrain Gonzalez (RCC). The other was sponsored by the Federal Communications Commission and the American Advertising Federation. Then-Vice President Al Gore (D) spoke at the latter and encouraged diversity in broadcasting.
The FCC also released a report in 1999 on advertising practices in broadcasting. The central finding of the report was that radio stations that are successful in attracting large minority audiences still do not attract the dollars commensurate with their ratings.
According to the report, the code phrase “no urban/Spanish dictate” is used in advertising for refusals to buy time on stations with minority formats. Among the anti-minority dogma the study found were:
- “Hispanics don’t buy or lease cars.” That’s what an account supervisor told a major New York City Spanish-language radio station. The same supervisor said that an ad agency refused to buy time for a Macy’s department store commercial because they were afraid “the pilferage will increase.”
- “One ad agency told our account executive that Black people do not buy linens,” said a senior manager at an East Coast radio station.
- “Black people don’t eat beef,” an advertising representative for the Beef Council had told salespeople soliciting advertisements for minority-oriented radio stations.
- “Black people don’t eat mayonnaise,” ad reps for a major mayonnaise manufacturer gave as a reason for refusing to buy commercial time on a Black-owned radio station.
The FCC study also found that when presented with market research indicating that African-American and Hispanics represent a substantial number of consumers and that communities should not be correlated with crime, the advertising representatives still refused to buy air time. Some advertisers also regularly engage in “minority discounts” when purchasing air time, meaning they pay a fee disproportionately lower for air time on stations with minority audiences.
Based on interviews and an analysis of radio industry data for 3,745 stations, the FCC study found that stations owned by “majority” firms -- those that air general market programming -- collected about 29 percent more revenue per listener than minority-owned stations targeting largely minority audiences. In a survey of 64 minority-owned stations, 91 percent said they had encountered advertiser “dictates” not to buy ads on their stations. They further stated that 61 percent of the advertisements purchased on their stations were discounted. The average amount of the discount was estimated to be 59 percent.
Six years after the 1999 fanfare, advertising practices appear unchanged. “The ‘no urban/Spanish’ dictate code phrase is still in effect,” said Sherman Kizart, director of Urban Marketing at InterRep, an advertising sales and marketing firm. “Advertisers continue to contend that African-Americans and Hispanics are not aggressive consumers.”
What Is to Be Done?
Kofi Ofori contends that the reinstitution of a federal tax certificate policy is a solution. “Between 1978 and 1994, over 288 radio licenses were sold to people of color because of the now-repealed tax certificate policy of the Federal Communications Commission,” he said.
“The policy permitted the deferral of capital gains tax to broadcast station owners if they agreed to sell to minorities,” Ofori said. “The program was previously touted as the cornerstone of the Commission’s policy to remedy the under-representation of people of color in the broadcast and cable TV industries.”
The tax certificate policy was repealed by Congress in 1995 because of legal challenges to the preferences for minorities and women. Nonetheless, Ofori said he believes that a new policy can be worked out.
Not everyone, however, agrees with Ofori.
“The tax certificate policy collapsed and there is no interest in reviving it,” said Pluria Marshall, Sr., founder and Executive Director of the National Black Media Coalition, a 30-year-old media advocacy organization based in Washington, D.C. Marshall is generally pessimistic about the future of Black radio and foresees more stations going out of business.
Ironically, Marshall’s namesake, Pluria Marshall, Jr., a radio station owner and newspaper publisher, is optimistic.
“Radio works,” he said confidently. “People listen to radio while driving, for one thing. So there has to be a way to make it work,” he continued.
He emphasized the cultivation of salesmanship as well as management skills. “Salesmanship is all there is because advertising revenues determine the success of a station.” He also encourages that potential owners buy small stations and remain small as long as necessary and focus upon local advertisers instead of corporate sponsors.
His two radio stations are located in College Point, Texas and a Chicago suburb, and his newspapers are located in Houston and Los Angeles.
New Horizons
The success story “extraordinaire” in Black radio is Radio One, the handiwork of Cathy Liggins Hughes, Chairman of the company.
Beginning as the sole owner of WOL-AM radio in Washington, D.C. in 1980, Hughes became by 1999 Chairman of the largest company that primarily targets African-Americans and urban listeners. Radio One is also the nation’s seventh largest broadcasting company.
Today the company owns and/or operates 69 stations in 22 cities across the country. In most of these locations, Radio One owns between 2 and 5 stations.
In 1999 Radio One became a publicly-traded company, and in January 2005 the company bought 51% or a controlling interest in Reach Media, Inc. which was founded and chaired by radio host Tom Joyner.
Radio One has purchased some African-American stations that were experiencing financial difficulty. The potential exists, therefore, to save other Black-owned stations around the country.
The Future of Black Radio
“It’s a positive sign that for the past several years the number of African-American-owned stations has remained 240,” said James Winston, Executive Director of NABOB.
Yet, Black station managers continue to complain about the financial havoc brought about by advertising practices. Furthermore, the FCC has approved further relaxation of ownership regulations, although there are several legal challenges pending.
While the success of Radio One is encouraging, Cathy Hughes’ company is not the only entity buying Black-owned radio stations.
“There is another phenomenon,” said Jerry Lopes, director of Affiliate Relations for the American Urban Radio Networks, which produces and distributes programming to nearly 500 stations. “Some white investors either buy a station and institute a Black music format, or they switch to a Black sound on existing stations,” he continued.
WBLS-FM, Inner City’s music and entertainment station that had a number one market rating for many years, dropped to number 16 and lost both staff and revenue when two white-owned companies instituted the same format on their New York City stations.
“White owners who adopt the Black music format tend to resist news and information programming,” said Lopes. “And the Black community needs information programming as much now as 30 years ago.”
Lopes also expressed concern about the impact of the loss of the news and information requirement in the Telecommunications Act of 1996. “Many Black-owned stations are leaning toward strictly music and entertainment format,” he lamented. He attributed that to pressure from advertisers and financial institutions. “It’s easier to get money for a music format.”
The good news is that the decline in the losses of Black-owned stations seems to have reached a plateau -- for now. However, the factors that have caused the decline in numbers -- continued deregulation with no consideration of the general lack of financial resources in the African-American community, adverse advertising practices that have defied FCC scrutiny and the financial ease with which corporations can force out Black-owned stations -- remain. Unfortunately, there is almost nothing in place to stem the potential for a future decline in Black radio.
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