Making Good on the Promise of Impartial Minority Ownership of Television Channels

Increasing minority ownership of television broadcast channels has been an often-stated, but elusive goal. While there is widespread contract on the need for progress, there has been hardly any by way of new ideas to solve the particular twin problems of access and opportunity. For several years, the only path available to minority entrepreneurs required troubling financial dependency and constrained programming choices. With the Media Bureau’s approval of several transactions today, however , we all see the emergence of new ownership models that will not only bring more impartial voices to the station ownership ranks in a manner that promotes diversity, competition, and localism.

Each latest success detailed below is grounded in steps the Commission got this year to rein in misuse of the “sidecar” business model. This permitted television station owners to structure broadcast transactions in ways that freely circumvented our local TV possession rule, which generally forbids possession of more than one station in a nearby market. The effect was to deny opportunities for minority ownership and management.

In aligning our treatment of Joint Sales Contracts (JSAs) for TV stations — which permitted the larger, financially superior station in a market to sell advertising for a weaker station — with that of radio stations, we sought to lessen any influence on programming in the smaller station that might naturally attach to such arrangements. Moreover, allowing major broadcasters to tie up stations because sidecars made it harder for truly impartial would-be broadcasters to compete to purchase available stations.

Additionally , the Media Bureau issued processing guidelines advising broadcasters that the Bureau will look closely at proposed transactions in which stations share services while maintaining extensive financial entanglements, such as options to buy or loan ensures. Such a combination of arrangements raises queries whether the independent ownership that our guidelines require truly exists. By enforcing our local TV rule, we all sought to achieve its purposes of protecting competition and diversity in nearby TV markets.

As a whole, the Bureau approved transactions that will result in ten new minority- and women-owned stations:

  • KPEJ-TV, Odessa, Texas, and KMSS-TV, Shreveport, Louisiana . Marshall Broadcasting Group, Incorporation., owned by Pluria Marshall, Junior., will obtain each of these stations through Nexstar Broadcasting, Inc. Mr. Marshall, an African-American media executive with extensive experience running television and radio stations, began his career on WLBT-TV in Jackson, Mississippi, later on becoming Vice President and General Manager at WLBM-TV in Meridian, Mississippi. During his five-year tenure at WLBM-TV, Mr. Marshall tried to become a broadcast station owner four separate times, with each transaction falling through due to his incapability to obtain financing. Nexstar will provide financial assistance for no more than five years after closing, with no express or even implicit financial support after that time. Use of JSAs is limited to fifteen percent of sales, the attribution floor established in the Commission’s JSA order. Marshall will acquire its very own programming independently of Nexstar, aside from the 15 percent of development for which Nexstar will be allowed to manage advertising sales. This incubation agreement addresses the difficulty that Mr. Marshall previously encountered in obtaining financing for a station purchase and facilitates the entry of a new impartial voice in these local markets.
  • WEVV-TV, Evansville, Indiana . DuJuan McCoy, CEO of Bayou City Broadcasting Evansville, Inc. can be part-owner of WEVV-TV and will run the day-to-day operations; a private investment decision group will provide the money for the purchase. His experience includes over a 10 years of growing small, medium, and large stations. Mr. McCoy, a good African-American, indicated that he has the obligation to “lay down groundwork just for future minorities so that there’s some form of track record of success with minorities running television stations. ”[1]
  • WMMP(TV), Charleston, South Carolina, WCFT(TV), Tuscaloosa, Alabama, and WJSU-TV, Anniston, Alabama . The Bureau is also approving the sale of channels from Sinclair Broadcasting to Howard Stirk Holdings, LCC, which is possessed and controlled by Armstrong Williams. Sinclair will sell these channels rather than turn them in for termination as it had previously announced. Mr. Williams, a well-recognized African-American political commentator with years of experience within the broadcast industry, has said that he can obtain programming by, among other things, making original local public affairs programs aired during prime time.
  • KJCT(TV), Grand Junction, CO, KXJB(TV), Valley City, ND, KAQY(TV), Columbia, LA, and KNHL(TV), Hastings, NE . Gray Television, Incorporation., retained MMTC Media and Phone system Brokers, the brokerage arm from the Minority Media and Telecommunications Council, to identify and facilitate the transfer of these full-power television stations following a termination of their services agreements with Gray. The sales will provide Ravi Kapur and Sherry Nelson the first opportunity to purchase a full-power television place. Jeff Chang will purchase their second full-power television station.

What we have done in a really short time is foster clear-eyed market-based solutions to the longstanding challenge of low minority broadcast ownership. The examples above indicate real and replicable progress of which the broadcast industry should take note. We anticipate the continued expansion of minority ownership of broadcast stations and invite the participation of all stakeholders in working toward this goal.

[1] Adam Buckman, DuJuan Could be the Real McCoy Station Owner, TVNewsCheck: The Business of Transmitting, Oct. 1, 2014.

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