Broadcast Diversity: It’s Good Business
By David Honig -- Broadcasting & Cable, 2/11/2007 7:00:00 PM
There is a saying that gauges how well our nation is providing equal rights and opportunities to all citizens: You can’t just talk the talk; you must walk the walk.
Often, the “walks” that make major improvements happen far from the spotlight. These are true examples for success in our democratic experiment.
Recently, the Minority Media and Telecommunications Council (MMTC), Clear Channel Communications and the National Association of Broadcasters Education Foundation hosted a conference to ensure that minorities and women have information and resources to buy the significant number of media assets Clear Channel is selling.
Other broadcasters, like CBS Radio and Emmis, also have sought diversity when selling broadcast assets.
This is a welcome development. The nation can’t walk the walk when groups representing a third of its people—minorities—and over half of its population—women—can’t unlock their full entrepreneurial and management potential in influential industries.
Minority ownership still accounts for only 1.5% of broadcast-industry asset value; for women-owned stations, it’s about the same. In the midst of the current media-ownership debate, we can agree these statistics are unacceptable.
Recruiting minority and female station buyers is not just right, it’s smart business. More bidders mean more money, which means higher multiples paid by all bidders, including non-minorities. It’s not charity, nor is it supposed to be. It’s a great opportunity for all parties involved.
Seven years ago, in 2000, MMTC helped Clear Channel market 110 stations to minorities. Private-equity firms and banks were eager to help. Financial institutions regarded Clear Channel’s willingness to offer high-quality assets to minority broadcasters as a powerful endorsement of their potential, helping them raise capital and present competitive offers
Ultimately, Clear Channel sold 40 stations to eight minority-owned or -controlled companies for over $1.6 billion. That deal increased minority broadcasters’ asset value by 26%.
There’s a domino effect. A diverse bidding pool helps sellers find buyers for diverse markets at optimum prices. It lifts broadcasters’ stock price, because diverse industries respond better to demographic and cultural trends—a necessity in a business reliant on demographics and culture. A diverse industry will develop personalities and programming that every broadcaster can leverage. And diversity is the best defense against Internet radio and Webcasting.
For free, over-the-air broadcasting to thrive, it must play its best hand: its tradition of openness, of a fair chance for everyone to participate and win. All broadcasters must walk the walk to pick up the pace of minority broadcast ownership.
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