Fair Trade? Why Armstrong Williams Doesn't Represent Broadcast Diversity

On Monday, Fox News contributor Juan Williams penned a Wall Street Journal Op-Ed decrying the Federal Communications Commission’s plan to examine television-station sharing arrangements. This morning, Rep. Greg Walden touted the merits of the piece at a hearing on legislation that would prevent the FCC from acting on this issue.

Broadcasters like the Sinclair Broadcast Group have been using these arrangements to control multiple TV stations in the same market. The new rule would tighten one of the ownership loopholes broadcasters have exploited to grow their empires.

The agency will also seek further comments on shared services agreements (SSAs) and other management arrangements. The announcement came after the Department of Justice warned the FCC of the agreements’ anticompetitive effects and urged action.

The Op-Ed called the FCC’s move an attempt to target and derail the ownership plans of Armstrong Williams, an African American who owns stations that operate via JSAs and SSAs with the Sinclair Broadcast Group, the nation’s largest broadcaster. According to the author — who happens to be a friend of Armstrong Williams — the new rules are a calculated blow to would-be black owners and their communities.

This characterization of the proposed policy highlights both Juan Williams’ misunderstanding of the broadcast market — and his misunderstanding of how racism operates. However, as a black woman I can’t let this rhetoric go unchecked.

Armstrong Williams’ ownership comes at a price. Allowing him to hold certain broadcast licenses while Sinclair remains the effective owner and operator of his stations endorses a policy that hurts communities of color.

The joint sales agreements (JSAs) and SSAs between Sinclair and Armstrong Williams’ company, Howard Stirk Holdings, are illustrative of many similar agreements across the country.

Under these arrangements, Sinclair provides Howard Stirk with all technical, promotional, marketing, back-office, payroll, sales and related services. Sinclair also has the right to provide Howard Stirk stations with up to 25 hours of programming.

Twenty-five hours happens to equal 14.88 percent of the 168-hour week, and FCC rules already require ownership attribution in instances where a broadcaster programs more than 15 percent of another station’s content. Still, 25 hours can easily represent all of a station’s weekly local news content, meaning we could see simulcasts of the news on two stations in the same market.

Even more notably, Sinclair will retain most, if not all, of the Howard Stirk stations’ profits after Howard Stirk pays all of the station costs for which it is responsible and hands over Sinclair’s service fees and performance bonuses. Oh, and Sinclair loaned Howard Stirk the money to purchase its stations and would have the exclusive right to buy those stations back if the FCC changes its rules allowing common ownership in a market. The outcome is exactly as it would be if Sinclair owned these stations outright.

Sinclair has spearheaded a covert-consolidation campaign that has consumed the U.S. broadcast industry over the last year. In 2013, $11 billion and 286 stations changed hands in the biggest year for broadcast deals since 1999. The majority of these deals involve sharing arrangements like the ones between Armstrong Williams and Sinclair.

This wave of consolidation has left in its wake shuttered newsrooms and jobless Americans in communities around the country. Broadcast is critical to the economic viability of communities. Newsrooms provide jobs for everyone from journalists and camera operators to human resources and maintenance staff.

Cuts to newsrooms also mean fewer managerial positions and less diversity among those who decide what to cover and who to hire. National Association of Black Journalists President Bob Butler made this point in his blog supporting the FCC’s announcement.

Consolidation has also spelled trouble for black broadcast owners. In December 2012, there were five black broadcasters in the U.S. That number is down from 18 in 2006. Now Armstrong Williams’ nominal ownership is all we have left.*

Broadcast diversity is crucial to the fabric of the media. Broadcast enables people to get the information they want and need — the information that’s critical to their health, security and stability. Broadcast allows people to make informed decisions and participate in our democracy. It should reflect the unique range of backgrounds, viewpoints and concerns in a given community. Having broadcast owners who can relate to and engage with a community makes that reality all the more possible.

In a meeting last week, Armstrong Williams told FCC Commissioner Mignon Clyburn and her chief of staff that JSAs and SSAs were the only means of boosting minority ownership.

That’s just false. If Sinclair or any other broadcaster has any interest in helping people of color get started in the news business, it’s free to help them buy and operate stations in any number of markets where the outcome would not be an end run around the ownership rules. But they’re not doing that.

Free Press’ research has shown that as markets become more concentrated, minority ownership plummets. When stations consolidate and markets become more concentrated, barriers to entry become even higher. Also, existing singleton and small-group owners are less able to compete for advertising and programming contracts. These effects create immense pressure on smaller owners to exit the market.

And this cycle disproportionately impacts minority owners. Thanks to a lack of wealth, they’re far more likely to own just a single station in comparison to their white male and corporate counterparts.

Even Sinclair CEO David Smith admits that consolidation does not bode well for smaller owners.

“I think we clearly have an advantage in … any market that we’re in,” he said in a call last year to investors. “… And my sense is that over the long term it’s going to be somewhat difficult for small broadcasters to keep up given the competitive landscape out there ... and I think that’s the precise point.”

For years, the FCC has rubber-stamped deals that have allowed companies like Sinclair to control two or more stations in the same market. FCC apathy has led to mass consolidation, and both minority ownership and minority communities have suffered. Let me be clearer: The FCC’s policy over the last two decades has discouraged minority ownership and deprived minority communities of their information needs.

Now Juan Williams is suggesting that the FCC’s attempt to correct course and recognize sharing arrangements as the blatant rule evasions and competition killers they are is racist because it thwarts the plans of a lone African American who, along with his corporate benefactor Sinclair, profits from the existing policy at the expense of our community.

This is dishonest and dangerous. Racism is not about Armstrong Williams or any one individual. It’s about the systematic effort to silence a group and derail its progress. It’s about policy (like the one the FCC is trying to fix) that promotes racial inequality and injustice.

Already in the past year, the FCC has taken strides to empower communities of color. Last August, the Commission voted to reduce exorbitant prison phone rates that kept families out of touch and acted as a hurdle to successful reentry. It recognized a policy that inhibited the advancement of people of color. (Would we have allowed predatory phone rates to endure if a prison-phone company had been black-owned? Of course not.)

No one man is greater than the movement. And no one man’s wealth should come before that of our community. The FCC should not back down from its proposal to curb the reckless disregard for its rules and market concentration. Nor should it allow Sinclair or any other broadcaster to exploit the agency’s diversity objective for profit.

If doing the right thing for communities of color means Armstrong Williams misses out on a payday, so be it.

* The owner of WJYS in Chicago did not identify as African American in the 2011 FCC ownership filings we based our research on. However, in previous filings the station’s co-owners did self-identify as African American. In its most recent filing, WJYS’ owners selected every race.

Original photo by Flickr user James F. Clay

People + Policy

= Positive Change for the Public Good

people + policy = Positive Change for the Public Good