Cumulus Media's Lewis Dickey realizes his company did itself no favors in Washington when it banished the Dixie Chicks from country playlists. "If we had to do it over again, we would do things differently to avoid this," he admitted after incensed lawmakers called the incident a big warning about the potential dangers of consolidation.
"You have given me reason to have tremendous pause about consolidation," said Sen. Barbara Boxer (D-Calif.), likening the company's behavior to Communist and Nazi tactics in controlling opinions their citizens hear. "You've hurt yourself in terms of what you want."
The liberal Democrat was joined by several lawmakers at a Senate Commerce Committee hearing last week on the impact of new FCC radio-ownership rules.
"It's a strong argument about what concentration has the power to do," said committee Chairman John McCain (R-Ariz.), who has sponsored a measure that would force Cumulus and other big groups to sell some small-market stations. Decisions to ban the Chicks would have been less alarming, he said, if made on a station-by-station basis by local program directors.
Dickey seemed taken aback by criticism of the corporatewide decision in March to ban the group from Cumulus's country stations for 30 days after singer Natalie Maines told a London audience she was ashamed to hail from the same state as President Bush. (He noted that Cumulus Top-40 stations continued to keep the group in rotation.)
Failing to convince most lawmakers that Cumulus headquarters was simply reacting to the groundswell of listener demands, Dickey asked the lawmakers for some understanding. The "hue and cry" was unprecedented, he said. "We were caught off-guard. As much as anything, [stations'] were looking for guidance. Their gut told them what they should do, but they looked to corporate for guidance."
Not all lawmakers were convinced that Cumulus had done anything wrong. "Entertainers are realizing their political involvement has a consequence in terms of their business," said Sen. Gordon Smith (R-Ore.), noting that Dr. Laura Schlesinger's syndicated TV show failed because of the uproar over derogatory comments she made about homosexuals.
But Dixie Chicks manager Simon Renshaw said the impact went well beyond bumping the group from the airwaves. He accused Cumulus of acquiescing to CD-destroying rallies sponsored by company DJs and fostering an atmosphere that led to death threats against group members. "There was an organized campaign to vilify the group."
The focus on Cumulus's actions cost the industry, too. Few lawmakers followed up calls by Dickey and First Media Radio's Alex Kolobielski to retain the FCC's complicated market-measurement systems based on overlapping signal contours. A new method based on Arbitron market measurements would only help Clear Channel, one of the companies the rule was meant to hem in. Going to the Arbitron method is meant to eliminate an anomaly that allows one company to own more stations in some small markets than would seemingly be permitted. The tightening effect of the Arbitron switch, however, was diminished somewhat by the FCC's decision to add noncommercial stations to the market count.
Under FCC ownership limits, owners may control up to eight stations in markets with 45 or more stations. Permitted holdings decline on a sliding scale as market size drops.
Dickey said FCC plans to grandfather existing clusters that don't comply with the new measures help primarily Clear Channel, while competitors will be prevented from establishing clusters to compete with the country's largest radio group.
Small groups like First Media, which owns 13 stations, will be doubly hurt, Kolobielski said: "The loss of a single station or inability to transfer intact a single cluster could have devastating effects." He called on the FCC to continue an interim policy that relies on the contour-overlap method in non-Arbitron markets while excluding the contours of powerful distant stations that artificially boost the number of stations in a market.