Diversity in the Spotlight

Trio of top industry vets takes stock of gains achieved and what remains—sometimes glaringly—undone

Why This Matters

WHY THIS MATTERS
Diversity of media voices is good business as well as good social policy

Police shootings of unarmed African-American men. Campus unrest over racial issues that brings down chancellors. Community activism asserting the value of black lives to shaken politicians. All these trends put a spotlight on unresolved racial tensions in a country that has come a long way, but still has a ways to go in its march toward a more inclusive society. That divide extends to the media, where minority ownership continues to lag a general population that is becoming a “minority majority.”

B&C and Multichannel News reached out to three business and policy leaders who have blazed trails for others. They shared frank and candid stories about how diversity efforts work in the real world, how relationships in Washington can be a powerful tool for diversifying media properties, and what still needs to happen.

Adonis Hoffman, currently chairman of Business in the Public Interest and adjunct professor at Georgetown University, is the former chief of staff to FCC commissioner Mignon Clyburn; Alfred Liggins is president of Radio One, whose properties include 55 broadcast stations and a cable network; and Michael Powell is former FCC chairman and currently president of the National Cable & Telecommunications Association.

In a wide-ranging interview conducted at NCTA headquarters in Washington, D.C., the executives spoke candidly about life in a not-quite-post-racial world.

What is the current state of media ownership diversity?

Alfred Liggins: It is beyond dismal. There has been significant rollback due to industry consolidation and a lack of any policy catalyst to further increase the minority ownership ranks. One of the things I have always taken an issue with was people who sort of banged the diversity gavel solely for the sake of making a quick buck. We take stewardship of the assets we own pretty seriously as a communications link to our community. We like being in the business; it’s part of our identity and we have done what we could to stay competitive. There are other people who will take advantage of a diversity opportunity to get an asset, turn around and sell it to somebody else and make money. But you might as well be buying Viacom or Time Warner stock if you want to do that.

Michael Powell: I would agree with Alfred, particularly if your metric is in the classic lens of the traditional media. It is relatively dismal. But I would also say that these have become very big businesses. They require very substantial economic wherewithal and require enormous amounts of capital, particularly if you look through the traditional lens of, “does somebody own a set of radio stations or television stations or an entire cable network?”

But media is evolving and exploding in all kinds of new and iterative ways. I think it is very hard to simply characterize the role of minority significance only in terms of ownership— while ownership is a pretty weak story. In the cable industry, for example, minority employment and participation in the business is a relatively positive story over time. We’re proud that in the cable industry, 39% of that population is minority and that is something that is very concertedly worked on.

Getting minorities into C-suites and onto boards and into companies and into management also has a very dramatic effect on whether the public stewardship, that is serving the greater needs of society around the representation of diverse points of view and voices. Those people can play an important role. And as things become even more innovative through digitalization and technology and Web properties and streaming, we’ll have to have evolving conceptions of what it means to be an owner and what the significance is.

It’s going to be pretty hard if you want to have a black Google, but it doesn’t mean that that ecosystem doesn’t provide some profitable opportunities to be good stewards and to express those voices. Although I personally think that’s in its infancy and we should have a sense of dissatisfaction with the growth and pace of that at the moment. But I think it’s a new frontier that should be fully explored.

Liggins: There are many more black-owned websites now than there ever were radio and TV stations. Those are media outlets as well.

Adonis Hoffman: With respect to participation not just as owners but as content providers and content creators, those in front of, those behind the cameras, the ones that do the deals, those numbers, while there is some improvement in terms of the impact of, particularly African-American and, to a lesser extent, Latino influences in content, you don’t see the same with respect to ownership or participation in the deals or the financing.

It is a big business. It’s a big-dollar industry. When you talk about big-dollar industries, at some point there has to be some parity. And there are some opportunities. As my boy and my daughter and their millennial generation gets into the business of business, they’re not looking to buy television stations. They’re not looking to buy radio stations. They’re not looking to buy newspapers or magazines. They’re either looking to do an app or something along those lines that resonates with their media consumption habits. And I think those are where the opportunities lie now.

So, looking backwards to legacy issues, it’s bad. Looking forward to opportunities on the horizon, then I think the future is bright. It needs some nurturing, though, to get where we want to get.

You touched on programming. There is much discussion about diverse programming. But there have been waves of diverse programming in the past that then receded. Are we in one of those cycles?

Hoffman: My biggest concern is with the success of Empire. Advertisers are jumping on the Empire bandwagon. With that success, we’re going to have the same sort of situation we had when President Obama came into office. That is: “Black President, we gave at the office.”

You have Empire, run with it, and oh, by the way, when Empire runs its course and all of that has happened, Fox will move on to another genre. So I am concerned there may be some “victimization of success” in terms of content and, like all fads, it will run its course.

Powell: I don’t disagree with that, but I think there is a big “but.” If content companies are anything, they are into aggregating audiences in order to make money. If you look at the socio-demographic trends in the United States, for better or worse depending on whose perspective you take, this country is becoming brown. Right now, for children who are in elementary school, they are already in a majority minority nation, and by various estimates, say 2040, you could have a country that is predominately one flavor or another of what you would call a “minority” today. And that trend is going to continue even more profoundly into this century.

So, they are going to be the audience. I mean, I have seen the thing Adonis is talking about with Empire. “You got yours, you’re done.” But it could also mean you are at the beginning of a turning point, which is: That’s who the audience is.

I think the thing about Empire I found so interesting is no one expected it to be the hit that it became. It was a stunning meteoric rise. And that might have indicated at least an appreciation of who the public really is in this day and age and what they are quickly becoming. It’s the same problem you see in politics. How are you going to be an effective political party if you don’t find a way to be a home to what we call “minorities” in America today?

Liggins: I think it actually is a turning point because there is something different today with what’s going on with black content in particular. In the past, you had the networks, and they would have their runs with minority content. Fox got launched on …

HoffmanIn Living Color.

Liggins:  And then Martin and Living Single, and then they switched to more mainstream programming. The same thing happened with the UP Network. All the networks have historically had their runs with minority content. The difference this go-round is the cable networks.

When we launched TV One in 2004, there was only BET and they were running music videos. Now you see a proliferation of black programming across the cable landscape. And it is not necessarily networks that are targeted to African Americans. WE has a slate of African American programming, The Oprah Network; Bravo’s biggest show is Housewives of Atlanta. So, you’ve got 300 cable networks out there all playing in the black space.

And the primary reason is, a), there are more back people today because the population is growing and b) they watch much more television than the general population. So, they are a great target market for a television network.

I happen to think Empire is faddish and the second season is kind of waning and it may not be here two seasons from now.  But I fully expect that Bravo will always have some black female-targeted show on the air given the success that they have had. Also, cable has grown in terms of audience size. Like AMC can have the number one show in television. There is more money being spent on cable networks, they have more money to program, so I think they stay in the game in this genre.  And I think that is the difference between now and, say, 15 years ago.

So, the important color is not black or white, but green?

Liggins: Black people don’t care whether a network is black targeted. If there is a great show, they’ll go there. Now, they may come back to my network (TV One) more often because I program to them 24/7 or they build an affinity for our tone and voice that one of the general market networks doesn’t have. But rest assured, if someone’s got great, entertaining and compelling shows, they will find that network.

Hoffman: Green is the color that matters, but it is being driven by brown and black eyeballs.

If you look at the Nielsen report that came out about the impact that African American and Latino consumers, particularly, have. We over-index on radio consumption, we over-index on TV consumption, packaged good consumption, and interestingly, in consumer electronics adoption, which should lead to greater participation in all the ancillary businesses that surround that.

So, if we know that black folks and brown folks drive the numbers for any given show, whether it’s cable or broadcast,  or even over-the top, then, ideally, those numbers should be reflected across producers, dealmakers, etc.  And those numbers we don’t see.

What I am trying to say is there is an outsized influence on the zeitgeist and the culture of this country provided by African Americans, primarily in terms of music and style and fads, and to a lesser extent, Latinos. And once we recognize that reality is here, right now--we don’t have to wait until 2040—and find a way to incentivize business opportunities as a result of that, then that gets us to where I think we want to be as a society.

Let me go back to the government a minute. Is there anything the government should do? Which brings me to the minority tax certificate [giving businesses a tax break for selling broadcast and cable properties to minorities]. Why doesn’t Congress reinstate it?

Powell: I have heard about this for the better part of my life and career and one of the reasons is that it actually is one of the few things that was ever done that created actual results. And, so, it was unceremoniously, and wrongly, repealed.

Tax policy is the single greatest lever of U.S. government activity that aligns and incents behavior. In a capitalist country like ours, that’s the way it’s done. If you want people to dig for oil you provide incentives and tax credits for people to do that. So, if you really cared about the objective those are the principal tools to make an impact. I think that is why it worked and why it remains talked about and popular.

So why isn’t it the law?

Powell: I think if we are being candid, I don’t have any real optimism that you will see a revival of that in the current political climate. For one, there is just this sort of war over government expenditures. And I don’t think the country’s economic temperament is suited to succeeding with this initiative.

And even though they pay lip service, you really haven’t seen a champion emerge in the Congress to really go to war for it.  You get people saying they like it. But in my career I’ve never seen anyone double down and fight for it.

And I am worried that it is stale. It was yesterday’s idea and had value, but can’t we be more creative, more innovative. And I think it also occurred at a pre-Internet time.  I am not really sure that is the right thing to be incenting anymore.

One thing I wanted to layer in here is that nothing is ever guaranteed or assured. For the better part of 60 years, diversity of voices and perspectives has deeply woven itself into what you would call the traditional incumbent communications sector. But that sector now is being largely dwarfed by a new sector to which these norms and the extension of that long government dialogue has not been extrapolated.

If you go into the tech space, which by far is driving the future, look at it from an employment standpoint. In this day and age, when there are 39% minorities in this country, Google has 1% black employees. Maybe Apple has 7%. They produce all kinds of content, all kinds of product, all kinds of activities, and you won’t find a huge presence of this whether you look inside a Netflix frame or you look inside Facebook or Amazon Prime.

I’m not saying these companies are necessarily hostile, but I do think you’re getting into world in which these values get swept up into this euphoria of what it means to be tech, what it means to be cool or hip. And I worry significantly that diversity has not yet found any foothold in that part of the emerging economy.

When I look at students today that are complaining about the degree to which their culture is fairly represented, Whether in Missouri, or Claremont McKenna. These are kids growing up in the social networking era that was supposed to be this nirvana for communications and understanding and actually seems to be having the opposite effect in significant ways.

I don’t know how to have that conversation yet, but it’s time to start. What does diversity mean for the 21st, 22nd century. We are quickly not going to be talking about—God bless ‘em, radio stations—[turns to Liggins sympathetically, who laughs], or God bless me, good old fashioned cable channels. Like Adonis said, my children are ap-driven people. There are young black men who have grown up in a world that is dominated largely by that atmosphere and where do they see themselves there?

So, should the FCC just punt on all this legacy diversity action it has yet to take?

Liggins: My view on the FCC and their diversity efforts is that they regulate industries and businesses that have control of assets of the nation. Individuals don’t own the spectrum. The nation owns the spectrum and we have licenses for it. So, I think the FCC does have a role in making sure there are diverse voices and opportunities.

Hoffman: I spend  a lot of time talking to boards and investors these days about diversity and corporate responsibility. And the point I try to make, and it is analogous to government, is that leadership starts at the top.  You get a CEO who says: “We need to be more diverse, let me see what I can do. “

The best example I have seen of FCC leadership in terms of diversity has been transaction specific. 

So, you have a transaction, whether a merger or disposition of assets, and some enlightened commissioner or leader—perhaps a member of Congress—says: “We have an opportunity to make an impact right here, right now. We don’t have to go through the APA [Administrative Procedures Act] CHECK, or through a rulemaking or anything other than: I know Alfred is in the business of broadcasting or cablecasting, and I know these guys have a need to either dispose of something, why don’t I give them a call and say, ‘Hey, you guys get together. You’ve got my blessing. Go find a way to make something happen. And then when you get done, come back and we’ll stand up and take a photo for the press.‘”

I think that as simple and informal as that sounds, that’s the way stuff happens. And the bottom line is that the guys who just got TV stations recently as the result of a spin-off of assets, I think it sort of happened that way. Somebody said: “Oh, by the way, X company is looking to do a deal. They might be interested in selling some assets to a minority. Do you know anybody?” Boom, it happens.

That happens in the business world all the time. It’s informal and it’s hard to leave progress to such informality, but that leads to progress.

Liggins:  It does happen in the business world, but it’s usually to a friend, another business associate, a banker’s friend, who says: “Heyl I’ve got this assignment to spin off these assets and we’ve been doing business so I’m going to look in your direction.” I see it all the time. And that is probably the number one reason why there isn’t deal flow in the minority communities, because they are not in those circles where the business ultimately gets transacted.

Powell:  Look, when I was chairman of the FCC I cared about diversity a lot. I tried to do a lot of things. But I will say one of the things that quickly settled into my mindshare was that the FCC should understand what it can’t do.  It is fundamentally an economic regulator. It is not a social regulator.

The problem the commission has is structural. No matter how good-hearted or how committed, the problem is it doesn’t really have the tools and assets to make the kind of scale-sized impact it is often encouraged to try. And, by the way, they have several niches in which they have profound obligations, as Alfred mentioned in broadcasting.

I think they owe the country answers on things that have been sitting there now for years that they should resolve. But the truth is it is very tough to have a rulemaking, a policy, an order without violating the APA or the organic Telecommunications Act.

Hoffman: Or the Constitution itself.

Powell:  Or the Constitution. Making real progress is knowing what your limitations are, and what I realized was that the most powerful asset I had both as a chairman and, frankly, as an African American chairman who cared, was to use my bully pulpit and my ability through relationships, connections and influence, to make that conversation alive. I can start a committee [he did, a diversity committee]. I can introduce him [points to Liggins] to an important media mogul. And I think that leads us in much more effective and productive ways. I could have started a lot of proceedings and I think I would have been yet another guy who started a lot of proceedings and years later you wonder why nothing has changed.

Liggins: Three of the biggest transformative business events that helped us grow Radio One and TV One to what they are today were, one, chairman Bill Kennard  [the first African American FCC chair], who didn’t have any policy levers. But radio was consolidating and Lowry Mays  and Mel Karmazin were buying up the industry, and Lowry  Mays and Clear Channel were buying a lot of AM and FM radios and they had a lot of overlap and they had a hundred and something stations that had to be sold. He [Kennard] told them: ”Minority ownership is very important to me. You should sell stations to minorities.” And they did. And a lot of people bought a lot of radio stations and we doubled the size of our company in terms of cash flow. That was transformative for our radio group.

A second one was when we launched TV one and Comcast gave us a distribution deal and became our partner. It would not have happened without that and that was on the heels of their AT&T Broadband merger.

And then, cable networks lose a lot of money—we lost $30 million a year for four years before we turned a profit. But you have to get enough scale to get over the hump, which is about 30 million subs.

Chairman Powell introduced my mother, Radio One founder Cathy Hughes, to Rupert Murdoch at some meeting on the Eighth Floor [the commissioner’s floor at FCC headquarters] and said [we] were starting  a cable network targeted to African-Americans and you should meet with them.”

I got the meeting and the next thing you know we had full distribution on DirecTV. And that was the instant distribution piece that made TV One profitable.  It got us over that hump. All because people in power said it was important to them.

Hoffman: I completely agree. Those moments were brought about as a result of seminal events where the commission or the government had a key role. So, you have to have the recognition on the part of government that: “Here’s a seminal moment. I’ve got an opportunity to do something if you’ve got a commitment. So, here’s a transaction before me.” I agree, rulemaking alone, policy prescriptions,  aint gonna happen, but there’s an opportunity to impact far beyond that. And those seminal moments, I think in this media environment, are coming up more regularly than they have in the past.

But doesn’t that translate to diversity by deal condition?

Powell:  There is something we should be careful about here because if it’s read wrong this could sound inappropriate.  We’re not talking about government officials saying “you’d better sell to a minority or else” or “I am going to hold over your merger, or else.”

But, let's just face it, you have to raise the dial. You have to make people conscious of the options. I have never, as a government official, told Rupert Murdoch or anyone else they had to do anything. But what I told them is: "Diversity is a really important value in this country and there are really talented entrepreneurs out there trying to get a break, and I just would encourage you when you get a chance, let me introduce you to one 'cause I happen to know one. You are going to sell them anyway, why don't we make sure you put in your pool an opportunity?" And if they hear that from the chairman of the FCC I don't think they are taking a directive. But they are saying, 'Look, it's important to him.'That is what leadership is, right?

The world works on relationships and connections and opportunity. You make your own luck. The problem for our communities is they have historically been kept out of those interlocking relationships.

And, by the way, it works just this way with the sole-white community. I guarantee you Rupert’s son gets introduced to so-and-so because that’s the way the world really works.  And what you can do when you are in a position of leadership is help accelerate network connections that are otherwise very difficult for a community that hasn’t been born into them and raised among them and had an opportunity to grow them.

And I think that whether you are a government official or the head of a trade association or the head of a company, you can take on a personal responsibility. I have never taken a job where when I sat down to think about my vision where there wasn’t a bullet on that piece of paper that said: “What are you going to do on the diversity front as part of your leadership?” And I’ve done that in every job I’ve ever had.