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July 23, 2009


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Larry Jennings

For the record, I'm opposed to any type of government bailout for radio. Period. But I notice that the discourse on minority owned radio seems focused on race or color. Actually, minority-owned encompasses women, African-American and Latino. I'm not sure, but I belive there are some other classes included in that definition.

Alex. M. G. Burton

What is so bad about some radio ststions failing in these tough economic times? If they don't know how to attract listeners and serve their community then of what good are they? Let them fail, minority or other wise. Those left can take up the slack and perhaps offer some listeners choises.
That's whey tough timer come along. To weed out the incompent and those who have not paid attention to business.

Tom Darrah (aka Daren)

The only words scarier than "corporate radio" would be "government radio."

JD Stearns

Eric makes some very good points and they could be related to what is happening in the small business contracting arena with respect to Department of Defense Contracts. If federal money is used to bail out radio stations, it shouldn't matter the race of the owners. The determination for bailout should be objective, if bailout money is offered at all.

Bottom line, the federal government is SUPPOSED to be color blind.

A summary of the case is below:

FedCir: Disadvantaged minority set-asides for DOD contracts unconstitutional

(Rothe Dev Corp v Dep't of Defense, November 4, 2008). A federal law that sets a goal of awarding five percent per fiscal year of defense contracting dollars to companies owned by "socially and economically disadvantaged individuals" has been found unconstitutional by the Federal Circuit Court of Appeals. The law incorporates the Small Business Act's rebuttal presumption that African-Americans, Asians, Hispanics and Native-Americans are socially disadvantaged individuals, but implementing regulations require all owners to demonstrate the economic disadvantage element. The plaintiff corporation, owned by a Caucasian woman, claimed the law was unconstitutional on its face and as applied by the Department of Defense (DoD) when it awarded a contract to an Asian-American-owned business despite the fact that the plaintiff was the lowest bidder. In 1995, the US Supreme Court held in Adarand Constructors Inc v Pena that all race-conscious government programs must be evaluated pursuant to strict scrutiny standards to determine whether they violate the Constitution's equal protection guarantees. Under strict scrutiny analysis, such programs must be narrowly tailored to further a compelling government interest. In the present case, the Federal Circuit found that Congress did not have "a strong basis in evidence" upon which to conclude that the DoD was a passive participant in racial discrimination in relevant markets nationwide. Thus, Congress did not have a compelling state interest to justify the race-conscious remedial measures contained in the law when it was reenacted in 2006.

This is from the blog of Mitchell H. Rubinstein, Adjunct Professor, St. John's

Bob Fox

Maybe every failed business should get a bail out - restaurants, dry cleaners, you name it. This ia all nonsense. If one doesn't know how to run a business, then the business will fail. Unfortunately, with consolidation it seems those in charge of companies owning radio stations took on tremendous debt that is impossible to pay down. Further, it seems some of those CEO's had never operated a radio station. The results are well known. Very, very sad. By rhe way HD is not going to save the industry. I believe it is the "Edsel" of the radio industry.

Dick Baggs

What's that old saying - "What goes around, comes around?" Radio is getting exactly what it deserves at this point in time. And it will be a relief to finally witness the end of the Great Corporate Experiment and the return of individual ownership. This is what happens when you turn an entire industry over to a bunch of idiot bean counters and slimy corporate terrorists. Enjoy sleeping in the bed you've made for yourselves, douche bags.

Eric Rhoads

Sean Kelly's point is spot on. Imagine a world of restrictions, which make us less marketable while streamers rejoice and take even more audience.

In the AM days the FM guys took advantage of the the standards the AM people could not overcome. This could drive more online success.

Of course those of us in radio must not assume we will need those towers in the future. We certainly do now and for a few years (while having companion online offerings). But in the future those towers make be like the printing presses the papers no longer need.

Eric Rhoads

For the purpose of clarification:
1) Localism, Local News, etc. are great elements of great radio. But when the gov't legislates this it changes the free market and the ability to innovate.
2) Ascertainment was a good idea in theory...listen to the local community. BUT, it was all a ruse. Stations would ascertain, show how they were addressing it, then throw a show on Sunday morning when no one listened. Primarily because IF they did what they learned it usually meant no audience.
3) Limbaughesque? Come on! I don't think you have to be or think like a right wing conservative to understand that the less government intervention in content, the more freedom we maintain. Even places like the UK do not have complete free speech and the people never can get the full picture... no matter which party or idealism they support. It cuts both ways in to Liberal and Conservative. We need to protect this at all cost therefore we must avoid strings. This isn't a car company who was out of touch with its customers. Though the loss of GM would have a big economic impact it won't kill free speech.

Larry Jennings

I agree with Eric on the bail-out issue. It's a crazy idea and one that ultimately makes a few people rich while the industry remains the same. Radio and GM have much in common. Neither was willing to make the changes necessary to evolve until market conditions (and the government) forced a change. Eric is driving on the bridge to nowhere with all that Limbaughesque talk about government take-overs of radio. By the way, what's wrong with localism, hourly news and ascertainment? I thought these were public airwaves. What was I thinking?

Sean Kelly

Eric left out a sentence:

Do we want to risk the return of pre-consolidation limits on station ownership, or return to the FCC of the 1970s, when the commission required hourly news, stronger localism, public ascertainment, and government approval of format changes?


Lets face it. The realities of this business have changed forever. There isn't enough government bailout money to get the genie back in the bottle.

We can either adjust and adapt or go the way of newspapers.

Valerie Langford

Thanks Eric - we all know that old saying that "You never get something for nothing" and that is the status quo for any bailout monies. Beware!

Charlie Ferguson

Radio stations taking bailout money virtually assures programming in the government's interest - not the public's. You'll see me in the unemployment line long before you'll see me standing with my hand out in the government bailout line. "Abandon Hope All Ye Who Enter Here" - Dante

Bob Bellin

The senior lenders (Goldman, et. all) who are lining up to take over their radio assets probably won't assume the programming reigns. In fact, most will likely leave the management in place. They will just control the asset and little will change, as there isn't much of a market for radio stations right now.

A bailout - even for minorities, seems far fetched. True, it would probably come with strings attached, but I don't see much public appetite for further bailouts...and the 2010 election is just around the corner.

Eric Rhoads

Skip brings up some very important points, of which I was not aware. There is no doubt better hands to operate are those of broadcasters.

Thanks for the vote of confidence Skip. Absolutely this is NOT an issue about Minority stations.

My ONLY, repeat ONLY concern is that the strings for receiving money do NOT control our industry or what we can put on the air.

Skip Finley

Or, another way of looking at it; suppose Goldman, GE, Bank of America, Wells Fargo(et al)and/or groups of anonymous hedge funds were the licensees of the public interest, need and convenience? How's that feel to you? Goldman, for example, controls so many stations in the Cape Cod market that it must find a way to divest several Nassau Broadcasting stations that it took 85% control of due to the attribution rules. Do you believe Goldman will do a better job programming in the public interest than Riviera Broadcasting--where Goldman took 100% control? Or Border Media? Or that Lazard will better operate the highly respected and localized Mapleton stations? Oh, did I mention that none of these were minority owned? I can vouch for Eric Rhoads sensitivities on the issue--but absolutely no one elses. So I don't abide by negative comments at any time after minorities have developed a very sophisticated legislative solution to an evident problem that the rest of the industry seems to have overlooked, for whatever reasons.

Steve Gaines

I can't think of anything worse for this industry than to think that a bailout is a good idea. The biggest issue of them all is, as you point out, that it would change NOTHING about the way the business is being run. (And run quite poorly for the most part, I might add.) It would be nothing but "bottom line" money for the top shelf.

When will the industry start to think about the importance of reinventing the way radio is done? When will the industry wake up to using Social Media to truly build REAL one-to-one connections and community portals?

Nah, let's just do the same ole same ole and whine. And maybe hold out a hand for some government cheese.

Glad you posted this Eric. I know you carry weight in the industry. I dearly hope some are listening.

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