Loan Terms and Rules Stifle Media Ownership for Women, Minorities
Any new entrant into media ownership faces difficulties, but women and minorities continue to tackle increased barriers to owning stations and other assets, speakers said Friday at an event organized by the Alliance for Women in Media. Access to capital and a hostile regulatory environment are some of the biggest challenges, they said. Bringing back tax credits, and allowing them to be used when companies sell any telecom asset to minorities, is a good idea, speakers said. Access to capital for media ownership has been a huge issue for women, said Christine McLaughlin, a telecom lawyer at Venable. Some financiers are hesitant to take a risk on women, she said. About 11 percent of equity financing goes to females, she said. “That’s a huge hurdle to overcome.”
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Unfavorable terms and conditions in financing and the inability to participate in the regulatory process also create hurdles for women and minorities, said communications lawyer Jenell Trigg of Lerman Senter. FCC policy and procedures need a major adjustment, she said. “There needs to be a better rulemaking process.” The FCC “needs to put out distinct rules … in advance with an opportunity for women, minorities and small business to comment,” she said. More lead time for these groups is needed because they “don’t have a whole legal staff to walk the halls of the eighth floor,” she said.
Former Commissioner Deborah Tate is hoping for a concerted effort to move some women and minority-related issues through at the agency, she said. “I know that both Commissioner [Robert] McDowell and Commissioner [Meredith] Baker have committed to not necessarily supporting all of them, but at least getting them out there so the commission can actually review them and take a vote on them,” she said. Like Baker and McDowell now, Tate was a Republican commissioner.
Tax certificates have been a bright spot for some minority media owners, some panelists said. The tax certificate is a way to defer capital gains for an entity that’s selling a property and “they will get a financial benefit,” Trigg said. Tax certificates “were what made it possible for us to buy our first radio stations in 1971,” said Vice President Keisha Sutton-James of ICBC Broadcast Holdings. “Access to capital is the primary barrier,” and tax certificates helped ICBC break through that barrier, she said. The commission should “work with Congress and with all of the broadcasting sector to get the tax certificate reinstated,” Tate said. “There’s been a lot of movement in terms of support on both the Republican side and the Democrat side, so it seems like the perfect time to try to move forward on the tax certificate."
The tax credit should benefit owners across all media platforms, some industry professionals said. It should expand to any media company, Trigg said. “The minority tax certificate and tax credit really didn’t benefit us because we were a cable operator,” said Brigitte Daniel, executive vice president at cable operator Wilco Electronics Systems. It would be great to expand that definition “because there are so many different types of ownership opportunities that could be out there,” she said. NTIA’s BTOP broadband funding program could have had a bigger impact for minorities, she added. “If you're giving grant money to provide broadband which could then help operate stations online, that’s a way for people to own media,” she said. “I feel like that BTOP plan really missed the mark on creating minority ownership.”
Last year’s Local Community Radio Act could diversify media ownership, but it’s only a piece of the puzzle, some broadcast attorneys said. “It really is a nice supplement to opportunities in commercial media, but it’s not going to be a replacement,” McLaughlin said. “It’s wonderful for putting viewpoints out there that otherwise wouldn’t have a commercial viability, but it’s not going to replace any of the other things that we're doing.” Trigg said that “it’s still going to be difficult to build a station when you're noncommercial and it’s difficult to get financing.” It’s important to remember that even though the act will add low-power FM stations, she said, “it is no substitute under any circumstance for women not to own full-power stations.”