The National Association of Black Owned Broadcasters said that equity backer participation in certain large broadcast groups was granted contingent on divestitures in markets where local ownership or cross-ownership caps are implicated. But it wants to see properties spinning, not boardroom votes.
NABOB notes that Providence Equity Partners, to get a chunk of Univision, had to "…either divest its interest in Freedom or Univision divest the broadcast station licenses that implicate the newspaper/cross-ownership rule in Los Angeles, Phoenix, Fresno-Visalia, Harlingen-Weslaco-Brownsville-McAllen and Odessa-Midland markets…" Likewise, Thomas H. Lee Partners, in order to get a piece of Univision, had to "..divest its interest in Cumulus Media LLC or Univision divest the broadcast station licenses that implicate the radio/television cross-ownership rule and the radio local ownership rule."
NABOB argues that keeping the stations while ditching the votes doesn’t cut it. The association cites Commissioner Michael Copps’ (D) contention that "…the growing control and influence of private equity firms in the ownership of broadcast licenses has not been adequately reviewed by the Commission." NABOB said, "Increasingly, the largest companies holding Commission licenses are becoming controlled by a very small group of private equity firms." In many markets, it argues, the same private equity companies are behind license companies that should be competing with one another. The Commission, it says, should stand firm on demanding meaningful property divestitures. "The eight hundred pound gorilla does no need to vote to get his way; he just needs to be in the room," concluded NABOB in opposing the proposed restructuring.
RBR/TVBR observation: Many think it is a good thing to free broadcast companies from the tether of the quarterly Wall Street conference call, and it is certainly a good thing to have investment capital flowing into the business. On the other hand, NABOB has a point — how hard will two step-sister clusters compete against one another in a market where they could instead silently agree to divide and conquer clusters and standalones owned by completely unaffiliated groups and local owners? We would love to get your take on this — your thoughful Bouncebacks are welcomed.