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The greening of the MMTC

Minority Media Telecommunications broker turns public-interest profit 9/08/2002 08:00:00 PM Eastern

When Rep. John Conyers (D-N.Y.) takes the stage Tuesday before the annual Washington meeting of the Black Broadcasters Alliance, he is expected to inveigh against media consolidation and the resulting loss of stations owned by African-Americans. Many black owners of broadcast properties, though, are much more ambivalent about consolidation.

Although the number of stations owned by African-Americans has dropped 26% since the deregulatory 1996 Telecommunications Act spurred a conglomerate buying spree, scores of black owners benefited, cashing out of their businesses after years of hard work and investment.

Nothing typifies the conflicted sentiments more than the brokering business launched by the Minority Media Telecommunications Council, a Washington advocacy group that lobbies the FCC to increase opportunities for minority owners and employees.

MMTC has traditionally fought for stronger EEO rules, lobbied Congress to reinstate tax breaks for firms that sell to minority buyers, challenged mergers and offered legal representation for Jesse Jackson's Rainbow/PUSH coalition on media issues. But, in the past four years, it has entered a new line: brokering station spin-offs by large broadcast conglomerates to win government approval for megamergers.

Entering the brokerage business has put MMTC in the odd position of sometimes siding with giants accused of crowding minorities out. The country's two largest radio groups, Clear Channel and Viacom's Infinity Radio, have been its biggest clients.

MMTC backed Clear Channel's expansion of its TV holdings with the $775 million purchase of Ackerley. MMTC provided persuasive evidence cited by the FCC when it granted Clear Channel a year to divest stations in five markets. Although other advocacy groups complained that Clear Channel was stalling in hopes that ownership rules would be lifted, MMTC Executive Director David Honig told the FCC extra time would give minority buyers a better shot at securing capital.

Honig laments the consolidation wave and the impact on minority station ownership. But until the law changes, he says, the best source of minority ownership is big conglomerates willing to give minority buyers a chance at buying their stations. "Lowry Mays of Clear Channel and Mel Karmazin at Infinity have bent over backwards to make sure minorities are taken seriously."

Since setting up a for-profit brokering business in 1998, MMTC has earned more than $2 million brokering deals from the two companies. Charging commissions far lower than traditional brokers', it handled five sales resulting from the Viacom/CBS merger and 40 sales to nine minority owners resulting from the Clear Channel/AMFM merger spinoffs in 2000 and 2001. The largest was the $400 million transfer of KKBT(FM) Los Angeles to RadioOne.

The Clear Channel/AMFM spinoffs alone boosted the number of minority-owned stations 26%, Honig said. His compensation also rose, from $41,125 in 1998 to $105,000 in 2000, according to IRS filings.

He opposes clients' efforts to relax ownership limits further but says there's no reason not to make the best of a regulatory climate. "We've shown you can disagree on a matter of policy and still work with each other."

He has left some of the fight against consolidation to others. When Sen. Russ Feingold (D-Wis.) in June unveiled legislation aimed at curtailing abusive business practices allegedly practiced by Clear Channel and rolling back ownership deregulation, standing beside him was James Winston, executive director of the National Association of Black Owned Broadcasters (which also holds its Washington conference this week), and Andrew Schwartzman, president of Media Access Project.

Privately, some public advocates question whether the brokerage business has made Honig less likely to fight mergers, but both Winston and Schwartzman say he needs offer no apologies for making the best of a bad situation. "The brokerage business is a legitimate way," Schwartzman said, "to fulfill MMTC's mission of getting broadcast stations into the hands of minorities."

 

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