1

 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat 56 (1996), 47 U.S.C. 

§ 257(a).

 

2

 Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Small Business

(Market Entry Barriers Notice of Inquiry), 11 FCC Rcd 6280 (1996).

 

3

 Forum on Small Business Market Entry Barriers, (“Market Entry Barriers Forum”), Federal

Communications Commission, September 24, 1996. See FCC Public Notice 64975, released

September 5, 1996, announcing the forum’s panels.

 

4

 Urban is a radio music format targeted to predominantly Black audiences. 

 

5

 Testimony of James Winston, (NABOB) and Vince Cullers (Vince Cullers Advertising

Agency), note 3, supra.

 

6

 Interview with Carey Davis, General Manager, WSKQ-FM and WPAT-FM, (Spanish

Broadcasting System), page 8 (references to interviews refer to transcribed interviews available in

volume III of the study and on file with the FCC Library and the FCC’s Office of Communications

Business Opportunities, unless noted as telephone interviews). 

 

7

 Market Entry Barriers Forum, note 3, supra.

I. Introduction & Summary

A. The Impetus for this Study

This study stems from a Congressional mandate given to the Federal Communications

Commission (“The Commission” or the “FCC”) to initiate “a proceeding for the purpose of identifying

and eliminating...market entry barriers for entrepreneurs and other small businesses in the provision

and ownership of telecommunication services....”1 Pursuant to that mandate, the Commission issued

a Notice of Inquiry seeking comments on the nature of market entry barriers faced by small

businesses.2 The Commission also held a public forum in 1996 to identify barriers to competition and

to formulate strategies to overcome them.3 

At the hearing, witnesses testified before the Commission regarding practices within the

advertising industry that were alleged to inhibit the ability of minority broadcasters to generate

advertising revenues. James Winston, Executive Director of the National Association of Black-Owned

Broadcasters (“NABOB”), testified that advertisers and ad agencies often issued instructions to media

buyers not to purchase advertisements on urban-formatted4 radio stations.5 Commonly referred to as

“no Urban dictates,” the practice is also frequently used in connection with programming targeted to

the Hispanic audience.6 Mr. Winston’s testimony was supported by the comments of Jeffrey Cullers,

President of Vince Cullers Advertising Agency.7

Broadcasters serving the minority community reported many examples of these practices over

a long period. They stated that “no Urban dictates” are often founded upon stereotypical perceptions

about minority consumers. According to NABOB, minority station salespeople soliciting an

advertisement from the Beef Council were told that the Council was not going to buy advertising time
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 2 

 

8

 NABOB, Spring Conference, 1996.

 

9 NABOB, Spring Conference, 1997.

 

10 This report uses the terms “African-Americans” and “Blacks” interchangeably to refer to

persons of African descent living in the United States.

 

11

 NABOB, Spring Conferences, notes 8 and 9, supra.

 

12 Minority broadcasters responding to the survey for this study estimated “minority discounts”

averaged 59% (see page ?). 

 

13

 Report on Minority Ownership in Broadcasting, Federal Communications Commission, 1978, at 25.

 

14 NonDiscrimination in Advertising Act of 1991, H.R. 285, 102nd Cong., 1st Sess. (1991), (see

Appendix B). 

on urban formatted stations because “Black people don’t eat beef.”8 NABOB also reported that a

major mayonnaise manufacturer refused to buy commercial time based upon the perception that “Black

people don’t eat mayonnaise.”9 In both cases, NABOB members reported that the advertisers were

unmoved by market research that indicated that African-Americans10 represented a substantial number

of the consumers of the companies’ products.11

In many instances, advertisers were also reported to pay less money for commercial time on

stations that target programming to minority listeners. Minority broadcasters claim that this practice,

known as “minority discounts,” accounts for a substantial loss of revenues from the sale of

advertisements.12

The FCC’s market entry barrier forum was proceeded by a conference nearly 20 years earlier

during which similar information was brought to the Commission’s attention. Panelists at the

Commission’s 1978 Minority Ownership Broadcasting Conference noted that: 

A preconceived notion, on the part of some advertisers, is that minority consumers are unimportant and do not

represent a particularly lucrative market. Consequently, advertisers are less inclined to purchase time on

minority-owned stations.13

The concerns of broadcasters have also been registered with members of Congress. In 1991,

Representative Cardiss Collins, (D-Ill), introduced a bill14 intended to prohibit the purchase or

placement of advertisements in a manner that discriminates against broadcast, telecommunications or

print entrepreneurs by reason of the entrepreneur’s racial/ethnic status or the racial/ethnic status of

the consumers targeted by the communications format. In introducing the bill, Representative Collins

said:

According to the National Association of Black-Owned Broadcasters, black-owned radio and television

stations, print media, and black-owned advertising agencies are subjected to systematic discrimination.
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 3 

 

15 137 Cong. Rec. E32-02 (1991). 

 

16 FCC, Office of Public Affairs, EEO Minority Enterprise Division, Minority Ownership of

Broadcast Facilities: A Report (1979) at 19. 

 

17

 See Akosua Barthwell Evans, Are Minority Preferences Necessary? Another Look at the Radio

Broadcasting Industry, 8 Yale Law and Policy Review 380 (1990) (“Radio Broadcasting”) at 400, (“A ripple

effect of the difficulties in obtaining financing and high quality stations is that African-American

broadcast facilities are often highly leveraged and have a greater dependency on advertising

revenues to pay debt service.”).

 

18 Radio Marketing Guide & Fact Book, (“Radio Marketing Guide”) www.rab.com/station

/mgfb98/fact5.html accessed December 2, 1998.

 

19 This report uses the term “Hispanics” to refer to persons of Hispanic origin or descent living

in the United States.

 

20 Radio Marketing Guide, note 18, supra.

 

21 TVB, Resource Center, Trends in Television, www.tvb.org/researchreports/trend tv/

timespent.html, accessed December 21, 1998.

 

22 Nielson Media Research, Television Audience 1997, at 24.

Ad agencies and their clients are refusing to advertise in media owned by blacks and other minorities.

This means that in many cases Black media are being bypassed for advertising placement, even though

they possess higher numbers in groups being targeted by the ad agency. Black-owned advertising agencies

are also being singled out because they are presumed to have expertise in appealing to black audiences.15

Though the bill was not passed, it drew attention to the impact of advertising practices on broadcasters

and the community that they serve. 

The FCC has long recognized that advertisers play a vital role in a station’s financial success or

failure.16 Advertising dollars are critical to a commercial station’s ability to make a profit to pay its

employees, retire debt from the station purchase,17 earn money to acquire other stations, and offer

quality programming to its audience. Thus, advertising practices have a profound effect on a station’s

ability to serve their community of license. 

Radio and television play a critical role in American society as a means of communicating news,

information, and entertainment. In 1997, the average adult listened to the radio 22.5 hours a week.18

Hispanics19 listened to the radio 24.45 hours weekly, while African-Americans listened 25.5 hours

weekly.20 The television was on 7.12 hours a day in the average American household in 1997.21

Consequently, American television households viewed on average 50.24 hours of television a week in

1997, compared to 56.17 hours for Hispanic and 69.49 hours for African-American households.22
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 4 

 

23

 The Average Adult, The Pantagraph, Bloomington, Illinois, August 24, 1997, 1997 West Law

(“WL”) 2484757.

 

24 TVB, Resource Center, Trends in Advertising Volume, www.tvb.org/researchreports/

trends_advolume/1995_1997.html, accessed December 3, 1998. By comparison, $41.6 billion was

spent on newspaper advertising in 1997, and $9.8 billion on magazine advertising. Id.

 

25 This study was funded by a $20,000 contract awarded to the Civil Rights Forum by the Federal

Communications Commission, Office of Communications Business Opportunities.

 

26

 Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Small Business (“Market

Entry Barriers Report”), 12 FCC Rcd 16802, para. 222 (1997). The Report referenced strict scrutiny

standards for affirmative action policies established by the federal government. See, Adarand

Constructors, Inc. v. Peña, 515 U.S. 200, 115 S. Ct. 2097 (1995); See also, Memorandum to General Counsels,

Office of Legal Counsel, U.S. Department of Justice, June 28, 1995.

 

27

 WHUR and WKYS are both “urban” format stations, meaning they target the AfricanAmerican community with “urban-style” programming. WPGC classifies itself as “Contemporary

Hit Records (“CHR/Top 40"), although its programming is similar to its urban competitors and

79% of its audience consists of minority listeners. See, The Media Audit database (Spring 1997),

prepared by International Demographics, Inc., Ben Carter, Regional Manager of the Interep

Sixty minutes of the average American adult’s day were spent reading, watching or listening to

advertising.23 The billions of dollars spent on radio and television advertising reflect its impact on the

economy and society. In 1997, $13.4 billion was spent on radio advertising and $44.5 billion on

television advertising.24

In light of the important role of broadcasting in American life, and the impact of advertising

practices on broadcasters’ ability to compete and serve the public, the FCC, in August 1997,

commissioned the Civil Rights Forum on Communications Policy ( “CRF”) to conduct this study. The

funding25 allocated to this study only permitted a preliminary investigation of whether small, female and

minority-owned broadcasters have greater difficulty in obtaining commercial advertising. The study

seeks to establish a basis for a comprehensive analysis of this question in the future. 

This study will aid the Commission in its efforts to evaluate policies to promote competition

and overcome market barriers facing small, female and minority communications firms. It will serve

as a foundational step for the FCC to “identify the specific obstacles that women and minorities face

and to determine whether they are of the nature that will satisfy heightened judicial scrutiny.”26 

A comparison of the top-rated radio stations in the eighth largest market, Washington, D.C.,

illustrates the importance of this study. Minorities comprise a large percentage of the listening audience

for the three highest-rated stations—WPGC-FM, WHUR-FM and WKYS-FM. These three stations

are roughly comparable in terms of audience size, program format,27 and audience demographics (see
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 5 

Media Store, commented that some urban formatted stations designate their format as CHR or

Adult Contemporary (AC) in order to avoid “no urban dictates” and “minority discounts.”

Telephone interview with Ben Carter, August 5, 1998.

 

28 The column labels of Table 1 indicate station owner, call sign, local commercial share (“LCS,”

a measure of audience size), power ratios (a measure of a station’s ability to convert listener share

into share of market revenues), 1997 station revenues, program format, percent of minority

listeners, percent of listeners with household income of $75,000 or greater, percent of listeners with

a college degree, percent of listeners age 25 to 54, and percent of listeners with professional or

technical employment (see, Glossary, Appendix K for definitions). Minority-owned stations are

highlighted in dark shading. Data in the first six columns was provided by the July 1998 edition of

the BIA MasterAccess, BIA Research, Inc. Audience demographic data was obtained from Fall

1997 edition of The Media Audit (Fall 1997), International Demographics, Inc. 

 

29 Stations with power ratios less than 1.00 are “underselling” their audience— the station’s

market revenue share is less than its market listener share. Conversely, those with power ratios

over 1.00 are “overselling” their audience— the station’s market revenue share is greater than its

market listener share. See BIA Research, Interpreting BIA’s Numbers in MEDIA Access Pro, undated

memo, (“The estimated revenue share for the station is determined by dividing the station revenues

by the market revenues times 100. Then this calculated revenue share figure is divided by the local

commercial share. A power ratio greater than 1 indicates the station is overselling its audience

share; while a ratio less than 1 indicates a station is underselling its audience share.”). (See, Glossary,

Appendix K, (the 1998 edition of the BIA MasterAccess database was renamed MediaAccess Pro)). 

Table 1).28 The demographics of WHUR, in fact, reflect a more economically affluent audience than

the listeners of the number one rated station, WPGC. However, WPGC generated revenues in 1997

that were greater than the combined revenues of WHUR and WKYS. 

Second, WPGC was far superior in terms of earning more ad revenues per listener. The power

ratio is a measure of a station’s ability to convert market share of listeners into market share of

revenues.29 The power ratio of WPGC was 1.26 compared to 0.78 for WHUR and 0.59 for WKYS.

In comparison, the average power ratio was 1.06 for 3,502 stations reporting power ratio data for 1997

in the July 1998 edition of the BIA MasterAccess database.
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 6 

 

30 WHUR is a commercial station owned by Howard University, a historically Black college;

WKYS is owned by minority-owned Radio One. 

 

31 CBS owns 166 radio stations nationwide compared to 1 for Howard University and 13 for

Radio One (BIA MasterAccess, July 1998 edition). 

Owner Calls LCS Power

Ratio

1997 

Station

Revenues

(1,000s)

Format

% 

Minority

Listeners

% 

75,000

plus HHI

% 

College 

Grad.

%

Age

25-54

%

Prof./

Tech,

CBS WPGC FM 7.4 1.26 $22,000 CHR/Top 40 79.3% 26.0% 15.1% 63% 13.4%

Howard

Univ.

WHUR FM 6.8 0.59 $9,500 Urban 93.4% 31.8% 23.7% 75% 21.5%

Radio One WKYS FM 6.5 0.78 $12,000 Urban 85.7% 26.9% 13.7% 65% 12.8%

 Chancellor WMZQ FM 6.1 1.12 $16,000 Country 11.0% 36.6% 22.2% 86% 22.2%

Chancellor WBIG FM 5.2 1.06 $13,000 Oldies 26.3% 37.2% 29.0% 73% 73.7%

ABC WMAL AM 5.2 0.94 $11,500 News/Sports 24.0% 46.4% 31.3% 54% 30.1%

Chancellor WASH FM 5.1 1.21 $14,500 AC 46.3% 37.3% 30.8% 73% 36.0%

Table 1. Washington, D.C. - Top-Rated Stations

In addition to format label, two main factors distinguish the market leader, WPGC, from its

two closest competitors. First, WHUR and WKYS are owned by minority broadcasters,30 while WPGC

is owned by CBS, a publicly-held, non-minority broadcaster. Minority ownership also distinguishes

WHUR and WKYS from the next four competitors, all of which have fewer listeners but earn equal

or greater revenues. The second distinguishing factor is ownership size. The owners of the top revenue

performers in Table 1 are among the top five largest group owners in the country. The 1997 national

revenues for all radio stations owned by CBS, the owner of WPGC, were $1.5 billion, compared to $9.5

million and $56.8 million for Howard University’s station and all Radio One radio stations,

respectively.31

This example is typical of what can be found in several large urban markets where top-rated

minority-formatted and/or minority-owned stations fail to earn advertising revenues that are

Data: BIA MasterAccess; The Media Audit
Section I. Introduction & Summary When Being No.1 is Not Enough 

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32 Based upon local commercial share rankings for 1997, minority-formatted and/or minorityowned broadcasters rank among the top four stations in New York, Washington, D.C., Detroit,

Houston and Los Angeles. In each of these markets many non-minority-formatted stations with

fewer numbers of listeners receive greater amounts of advertising revenues. In New York, for

example, the number one station in terms of listeners is WQHT-FM, an urban formatted station

that has a 1997 average local commercial share of 6.90. Easy listening station WLTW-FM also

has a 6.9 local commercial share. The revenues of WLTW, however, are $37.9 million, compared

to $26.6 million for WQHT. Spanish formatted WSKQ-FM is minority-owned and is the third

ranked station in New York with a local commercial share of 5.2. Yet, its revenues were only

$20.7 million compared to $32.7 million for WCBS-FM, an oldies formatted station that also had

a 5.2 rating. The top revenue performer for New York was a mid-market performer in terms of

local commercial share; WFAN-AM owned by CBS, earned $47 million and averaged 3.1 in terms

of local commercial share. Data derived from the BIA MasterAccess, July 1998 edition.

 

33 Market Entry Barriers Report, 12 FCC Rcd 16802 para. 222.

 

34 Request for Quote (“Advertising RFQ”), Impact of Advertising Practices on Small, Minority

and Women-Owned Broadcasters, FCC Office of Communications Business Opportunities, (97-

10), July 1997.

commensurate with their large audience.32 (See also, Ratings Racism: When No. 1 Is Not, by Mira Schwirtz,

MediaWeek, June 22, 1998). 

This pattern raises several questions: To what extent does ownership size explain discrepancies

in advertising performance? To what extent does minority-format or minority ownership contribute

to the inability of stations to earn revenues that are commensurate with their large audience shares?

And, to what extent does the racial/ethnic or economic status of an audience influence the buying

practices of advertisers and ad agencies?

B. The Research Objective

Following the Commission’s mandate to “identify the specific obstacles that women and

minorities face” in the communications industry,33 the FCC’s Office of Communications Business

Opportunities (OCBO) contracted for this study to “examine whether minority or women-owned

firms, and small firms, which have acquired FCC broadcast licenses, have greater difficulties in

obtaining advertising or are affected by industry practices which may lower their advertising revenue.”34
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 8 

 

35 The Advertising RFQ which solicited bids for this research study mentions “other dictates” in

addition to “no Urban dictates.” Preliminary investigations indicated a need to include “no Spanish

dictates” in the study. For purposes of this study’s analysis, “Spanish” format includes

programming targeted to the Hispanic community, whether provided in the Spanish language or in

a Spanish-English bilingual format.

 

36 Advertising RFQ, page 4. 

The Commission specifically requested an analysis of the impact of “no Urban dictates”35 and “minority

discounts.”36 

The term, “no Urban/Spanish dictates,” means that the advertiser or its agency has issued a

directive that commercials are not to be aired on stations that program primarily to the Black and

Hispanic communities, regardless of data on station ratings, audience demographics or consumption

patterns. “Minority discounts” consist of buying time on a minority-owned or minority-formatted

station at a rate that is substantially less than what the station’s ratings and audience characteristics

suggest should be paid.

This study was intended to be a preliminary investigation. Its objective was to analyze

advertising practices and to identify areas for further research. Specific areas of research concerning

“no Urban/Spanish dictates” and “minority discounts” include:

< range and extent of the practice;

< motivation factors (e.g. income and/or race of the listening audience);

< impact on station revenues; 

< impact on power ratios—a station’s ability to convert its listener share into shares of revenue

in a market; 

< ownership size; and

< access to capital and ability to expand.

C. Methodology

The methodology consisted of survey questionnaires, in-depth interviews and quantitative

analyses. Preliminary efforts were undertaken to refine the research question.

First, CRF determined that it is standard practice in the advertising industry to target ad

campaigns to consumers who are most likely to purchase the products or services of the advertiser (see

Overview of Media Buying, Appendix A). In the case of radio, this means buying commercial time on

stations that have an audience that satisfies the “buy criteria” (i.e. demographic characteristics that
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 9 

 

37 For the purpose of this study, program formats were categorized as minority-format or

general market based upon the categories employed by BIA Research Inc., (see Appendix K). BIA

formats denoted as ethnic, black, Spanish, or urban were categorized as minority-formatted. These

broad classifications also included subcategories (e.g. urban includes rhythm and blues, urban adult

contemporary, and urban rap). All other formats were categorized as general market. 

advertisers believe best describe the people most likely to purchase their products, such as males with

a college degree, ages 25 to 54). The fact that most commercial buys on radio are targeted suggests that

a demographic segment (i.e. males without a college degree, ages 12 to 34) is always excluded from an

ad campaign. 

Given that targeted advertising is a standard business practice, CRF recognized that a causal link

between poor advertising performance and “no Urban/Spanish dictates” and “minority discounts”

could not be established, unless “dictates” and “discounts” could be distinguished from justifiable

business practices. In order to do this, it would be necessary to assemble a data set that contained data

on station advertising performance, as well as audience demographics. The attempt to do this,

however, resulted in a relatively small data set of 1,533 stations mostly located in the top 100 markets.

CRF determined that the task of assembling a data set for a representative number of markets and

stations containing both station performance and demographic data was beyond the scope of this

project. Subsequent research with appropriate funding is recommended to undertake a full statistical

analysis of the problem.

The quantitative analysis, more fully explained below, did compare the advertising performance

of stations controlling for program format, ownership size, and minority ownership. These findings,

therefore, should be regarded as prima facie. They will be verified or invalidated by subsequent research.

They are presented here as preliminary findings and to inform future research efforts.

At the outset, interviews were conducted to refine the research question. In the television arena,

interviewees suggested that bias related to race and ethnicity was primarily based on the race or

ethnicity of minority salespeople, and had less to do with the viewing audience. This view is consistent

with the fact that television, unlike radio, is viewed by a broad segment of audience demographics

throughout the broadcast day. The exception to this practice is foreign language television. The

investigation of the television medium, therefore, concentrated upon discrimination related to the

ethnic/racial composition of the salesforce of minority-owned television stations, as well as minority

ownership.

In the radio arena, the preliminary interviews suggested that many stations are hindered in their

ability to earn ad revenues due to advertising practices that disfavor programming targeted to minority

listeners.37 The main focus of the study with regard to radio, therefore, was directed toward

determining the extent to which, if any, “no Urban/Spanish dictates” and “minority discounts” are

practiced in the advertising industry and quantifying the relationship between such practices and the

advertising performance of minority-formatted stations. 
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 10 

 

38

 Minority Commercial Broadcast Ownership in the United States (“NTIA Minority Ownership

Report”), National Telecommunications and Information Administration, U.S. Department of

Commerce, August 1997.

 

39 The power ratio measures a station’s ability to convert its share of listeners into share of

market revenue. See, Glossary, Appendix K and note 29, supra.

 

40 Average station revenues reflect average gross revenues, as opposed to net. (see Glossary,

Appendix K). 

 

41 A power ratio greater than zero indicates the station reported revenue and listener data.

The qualitative methodology included in-depth interviews of 21 radio industry executives. The

interviews focused on “minority discounts” and “no Urban/Spanish dictates.” A full transcription of

the interviews is on file with the Federal Communications Commission Office of Communications

Business Opportunities and in the FCC Library. It is also available as volume III of this study.

In addition, a survey questionnaire was submitted to the General Managers of all 284 minorityowned radio stations that are listed in the 1997 minority ownership report published by the U.S.

Department of Commerce.38 Sixty-four completed questionnaires were returned, representing a

response rate of 22.5 percent. Survey questionnaires were also distributed to all 30 television licensees

identified as owned by minorities by the U.S. Department of Commerce. Eleven completed

questionnaires were returned representing a response rate of 36.6 percent. The survey instruments and

their consolidated results are presented in Appendix J. 

The survey response rates and survey design did not produce results that can be generalized to

the universe of minority broadcasters. Accordingly, the survey analysis represents the views of only

those broadcasters who responded to the survey. Further research should be conducted with sufficient

resources to provide results that can be generalized to all minority broadcasters. Subsequent research

should also survey the experience of non-minority owners that air programming targeted to minorities.

Two separate quantitative analyses were undertaken to examine nationwide data on the radio

industry. The independent variables for the first analysis were program format, the ethnic/racial

classification of the station owner, and number of stations owned nationwide. Two dependent variables

served as proxies for advertising performance: power ratios39 and station revenue.40 These two variables

were compared on the basis of the independent variables. The results of the analysis are discussed in

Section III-C-2 and Section III-C-3.

Data for the first analysis was obtained from the August 1997 edition of the BIA MasterAccess

radio database prepared by BIA Research Inc. (see, Glossary in Appendix K for description of BIA’s

methodology for estimating station revenues). The BIA database was queried to produce a list of all

stations in 1996 with advertising performance data by using the selection criteria: “stations with a power

ratio greater than zero.”41 This produced a data set of 3,745 stations representing approximately onethird of the nation’s commercial radio stations in 1996. The data set included 155 stations that were
Section I. Introduction & Summary When Being No.1 is Not Enough 

Page 11 

 

42 The August 1997 edition of the NTIA Minority Ownership Report was used to flag stations in

the BIA MasterAccess database as minority-owned. The NTIA list was modified to conform with

sales transactions that had occurred through August 1997. 

identified as minority-owned42 and 413 stations with programming directed to minority listeners.

Stations included in this data set ranged from Arbitron market number 1 through market 246.

Appendix D contains a frequency distribution table that indicates the number of stations in each

Arbitron market.

A second analysis sought to determine whether the audience demographics associated with

minority-formatted programming could be readily distinguished from the demographics of general

market programming. This analysis was undertaken because it was previously determined that media

buyers take audience demographics into consideration when deciding where to place advertisements

(see Appendix A). For this analysis CRF compared minority-format stations with general market stations

on the basis of average household income and percentage of ethnic/racial listeners. The results of the

analysis are presented in Section II-C-1.

Data for the second analysis was obtained by combining the August 1997 edition of the BIA

MasterAccess database prepared by BIA Research Inc. and the Spring 1997 edition of The Media

Audit prepared by International Demographics, Inc. Pairing data from The Media Audit with data

from BIA resulted in a combined data set of 1,533 stations. This data set consists of stations located

mostly in the top 100 Arbitron markets and includes 98 minority-owned stations and 212 minorityformatted stations. See Appendix D for a market frequency distribution table for this data set.

Data comparisons for both analyses were performed using SPSS software version 7.5. 

As noted earlier, the funding available for this study was insufficient to undertake a

comprehensive statistical analysis that simultaneously controls for all variables that may affect

advertising performance. Hence, the quantitative findings of this study should be regarded as

preliminary. They are presented here to inform future research that should control for additional

variables such as audience income. Therefore, the results contained in this study do not constitute

conclusions about the causal relationship between the independent and dependent variables. Further

statistical inquiry is necessary to explore and verify these findings.

D. Summary of Major Findings

Radio. As discussed further below, the quantitative data suggest that minority-formatted radio

stations earned less revenue per listener than stations that aired general market programming. Second,

minority-owned radio stations appear to earn less revenues per listener than majority broadcasters that

owned a comparable number of stations nationwide. These disparities in advertising performance may

be attributed to a variety of factors including: economic efficiencies derived from common ownership;

advertisers’ or ad agencies’ assessments of a radio audience’s income, spending patterns, and

responsiveness to advertising; or ethnic/racial stereotyping that influences the media buying process.
Section I. Introduction & Summary When Being No.1 is Not Enough

Page 12

As a preliminary investigation, this study was able to establish that disparities in advertising

performance exist. It was not able, however, to determine in quantitative terms the degree to which

each of these factors may explain disparities in advertising performance. Further statistical research

should be undertaken to find the answer to this question. 

With regard to the anecdotal data, the results of study survey and interviews suggest that “no

Urban/Spanish dictates” and “minority discounts” are partly the cause of the disparities in the

advertising performance described above. According to the anecdotal data, the following factors

influence the media buying process and to some extent form the basis of “no Urban/Spanish dictates”

and “minority discounts:”

< racial/ethnic minority consumers are incorrectly stereotyped as inappropriate consumers to

receive advertising for certain luxury products or services;

< stations that program to minority listeners are excluded based on average listener income,

regardless of data about consumption patterns;

< the desire to disassociate a company’s image from minority consumers;

< language barriers, in the case of Hispanic radio;

< advertisers’ unfounded fears that minority consumers pilfer;

< media buyers’ and advertisers’ unfamiliarity with the consumer habits of minorities; 

< efforts by broadcasters and their national sales representatives to discourage advertisements on

minority-formatted stations; and

< the belief that minorities can be reached as effectively through the general media as compared

to targeted media.

Despite indications that Hispanics and Blacks are a substantial and growing segment of the

domestic economy (see Section II-B-3 and C), the anecdotal data provided evidence that “no

Urban/Spanish dictates” and “minority discounts” are still practiced in the radio marketplace.

An example of these practices is the reported refusal of luxury automobile manufacturer BMW

to consider placing advertisements on urban formatted stations in the New York metro market.

According to the station manager of one of the urban stations, BMW also disregarded qualitative

research showing that Black adults accounted for 46 percent of the people who owned or leased BMWs

in New York (see page 26; see also, page 25 for an example involving Volvo). In industry jargon this

practice is called “no Urban dictates” or “no Spanish dictates” (i.e. a policy not advertise on stations

due to their urban or Spanish formats). 
Section I. Introduction & Summary When Being No.1 is Not Enough

Page 13

The Black consumer is less valued than the

White consumer and therefore they’re going

to pay less for Black consumers. Judith Ellis,

Sen. V.P., Emmis Broadcasting.

[T]he account supervisor for a major car

manufacturer says to me, “Come on guys. 

You know we’re wasting our time here.” And

I said, “How’s that?” He says, “You know

the Hispanics don’t buy or lease cars.” Luis

Alvarez, Sales Manager, WSKQ, WPAT.

There are certain products, name brands,

who for the longest time did not utilize

Blacks in their advertising even though they

knew that Blacks represented a significant

part of their sale volumes. Byron Lewis,

Chairman, The UniWorld Group

The results of CRF’s survey research

provided an estimate of the magnitude of the

problem concerning “dictates.” Ninety-one

percent of the minority broadcasters responding

to the survey indicated that they had encountered

“dictates“ not to buy commercials on their radio

station (see page 32).

Minority survey respondents reported

that efforts to overcome “dictates” using

audience measurement research yielded meager

results. When asked to describe the response of

advertisers and ad agencies toward research that

demonstrated minority patronage for the

advertised product, survey respondents rated “no

response” and “acknowledgment of the research,

but no rescission of the dictate” as the two most

common responses (see page 38).

Media executives interviewed for the

study reported that advertisers and/or ad

agencies habitually purchase commercial time on

minority-formatted stations at rates that are lower than what is paid to stations that air programming

to the general market. This practice is customarily called “minority discounts.” For example, a wellknown mattress retailer offered to buy time on a New York urban station at a rate lower than what it

offered to pay to a jazz format station under common ownership with the urban station. The urban

station was offered a discounted rate, despite the fact that its audience size was greater than that of the

jazz station. Moreover, qualitative data ranked the urban station 22 points higher than the jazz station

with respect to listeners’ plans to buy bedding or mattresses (see page 85). 

Minority broadcasters responding to the survey estimated that 61 percent of the advertisements

purchased on their stations were discounted. The amount of the discount was estimated to be 59

percent (see page 35). When asked to estimate the magnitude of sales loss attributable to “no

Urban/Spanish dictates” and “minority discounts,” the minority broadcasters replied that these

practices reduced their revenues by an average of 63%.

The corollary to this claim is that minority broadcasters would perform better, and possibly

exceed the performance of their majority competitors, but for “minority discounts” and “no Urban/

Spanish dictates.” Quantitative data collected by this study suggests that if minority-owned broadcasters

and minority-formatted broadcasters were able to earn revenues at the same rate per listener as general

market broadcasters, higher performance levels might be possible. The data suggest that “minority

discounts” and “no Urban/ Spanish dictates” constitute considerable barriers to competition for

minority-owned and minority-formatted broadcasters.
Section I. Introduction & Summary When Being No.1 is Not Enough

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43

 James H. Duncan’s 1997 report on radio revenue and ratings documented this trend over

time. CRF computed the historical average for the power ratios of minority and general market

formatted stations analyzed by Duncan between 1991 and 1996. During that period, the power

ratio for the stations analyzed by Duncan averaged 0.96 for Hispanic formats and 0.73 for

urban/black formats, with a combined average of 0.85. For general market formats, the average

power ratio between 1991 and 1996 was 1.07. The historical data indicate that during this

decade, Black and Hispanic formats have been less able to convert their share of the listening

audience into revenues than general format stations. This time series analysis is consistent with the

anecdotal evidence in this study. See, James H. Duncan, Share-to-Revenue Conversion

Ratios,(Some call them Power Ratios, We call them Conversion Ratios) and Format

Performance Analysis,” (“Duncan’s Power Ratio Analysis”), Duncan’s American Radio, Inc.,

May 1997, page 5.

 

44 Small majority owned broadcasters airing minority-formatted programming were defined as

those owning 17 or fewer stations nationally in 1997, mirroring the range of minority ownership in

that format. The average number of stations owned nationally by minority broadcasters airing

minority-formatted programming was 4.4. The average number of stations owned nationally by

small majority broadcasters airing minority-formatted programming was 4.9. See Table 2, page 79;

see also, NTIA Minority Ownership Report, 1997 and the August 1997 edition of the BIA

MasterAccess.

CRF employed two measures of advertising performance: station revenues and power ratios.

Station revenues in this study are based upon annual gross revenues. Power ratios indicate whether a

broadcaster is “overselling” or “underselling” its audience share. Hence, a station with a 1.20 power

ratio is earning more revenue per listener than a station with a 0.80 power ratio (see Glossary, Appendix

K). 

The analysis of nationwide data indicates that stations with minority formats averaged power

ratios of 0.91, compared to 1.16 for stations with general market programming (see Table 2, page 79).

This analysis is consistent with other trend analysis that shows that minority-formatted stations have

been less able to convert their listener shares into advertising revenue, even when they have large

audiences.43

Disparities in advertising performance as measured by power ratios were also observed in terms

of the racial/ethnic ownership of the broadcaster. Majority owners that aired minority targeted

programming averaged power ratios of 0.95, compared to 0.82 for minority owners. The average

power ratio was 1.16 for majority owners in general market format, compared to 0.85 for minority

owners in general format.

These disparities persist when comparing minority broadcasters to majority broadcasters of

comparable size. Small44 majority-owned broadcasters that target programming to minority listeners

averaged power ratios of 0.99, compared to 0.82 for minority broadcasters in that format. In the
Section I. Introduction & Summary When Being No.1 is Not Enough

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45 Small majority owned broadcasters in general market format were defined as those owning 26

or fewer stations in 1997, mirroring the range of minority owners in that format. The average

number of stations owned nationally by minority broadcasters and majority broadcasters airing

general market programming was 7.4. See Table 2; see also, NTIA Minority Ownership Report, 1997

and BIA MasterAccess database, 1997.

 

46 The basis of the revenue comparison of broadcasters of comparable size was the same as that

for the power ratio comparison. See, notes 45-46, supra.

 

47 Revenue comparisons in this study did not control for the market rank of stations. As noted

in Section II-C-2-c, minority broadcasters are more concentrated than majority broadcasters in

large urban markets where station revenues are higher. Such variations in market rank affect

revenue comparisons (see Chart L). 

general market format category, small 45 majority owners averaged power ratios of 1.16, compared to

0.85 for minority owners. 

In terms of station revenues, general market stations averaged revenues that were 12% greater

than minority-formatted stations. Majority broadcasters, overall, outperformed minority broadcasters

within both format categories. Station revenues for majority broadcasters that aired general market

programming were on average 79% greater than those of minority competitors within the same

format. Majority broadcasters that aired minority-formatted programming averaged revenues that were

20% higher than those of minority broadcasters in the same format category.

A comparison of broadcasters of comparable size46 indicates that general market majorityowned broadcasters averaged revenues that were 14% greater than minority-owned stations within the

same format category. Significantly, the revenue comparison indicated that minority broadcasters that

target minority listeners outperformed small majority broadcasters in both format categories. Station

revenues for minority-formatted, minority-owned broadcasters were 65% greater than small majority

competitors with minority targeted programming, and 22% greater than small majority competitors in

the general market category.47 This finding indicates that minority-owned broadcasters are strong

marketplace competitors. Their advertising performance would likely be even better, allowing them

to provide more service to their listeners and to grow at a competitive rate, were it not for the

advertising practices analyzed in this study.

On the basis of station revenues and power ratios, general format stations outperformed

stations that targeted programming to the minority audience. Majority broadcasters as a whole that

aired general market programming performed better than minority and small majority broadcasters that

aired minority formats. These findings based upon nationwide data are consistent with anecdotal

evidence that suggest that advertisers and/or ad agencies place less value on the minority consumer.

The anecdotal evidence and quantitative findings, taken together, suggest that in the absence of

“minority discounts” and “no Urban/ Spanish dictates,” minority-owned and minority-formatted

stations would earn more revenue per listener than they do currently.
Section I. Introduction & Summary When Being No.1 is Not Enough

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48

 See, In the Matter of Policies and Rules Regarding Minority and Female Ownership of Mass Media Facilities,

FCC 98-281, MM Dockets 98-43 & 94-149, released November 25, 1998, 1998 WL 814552 (stations

must report race and gender of owner on FCC broadcast ownership reports).

Research beyond the scope of this preliminary investigation is required to determine the

relative effect of various independent variables (ownership size, audience income, audience ethnicity,

minority ownership, program format, etc., see Section II-D) upon advertising performance. As

preliminary research, the findings presented by this report may be confirmed or disproved by

subsequent research. These findings are presented as prima facie evidence of practices in the advertising

industry that discriminate against minority listeners and indirectly against the stations that serve them.

They are also intended to highlight areas for further inquiry.

Women-Owned Radio Stations. Until October 1998, the FCC did not require broadcasters

to report the gender or race of station owners.48 In an effort to identify women owners to be examined

for this study, CRF contacted American Women in Radio Television and Film, the National

Telecommunications and Information Administration (“NTIA”), and the Federal Communications

Commission. NTIA publishes an annual list of minority broadcasters, but does not identify the owners’

gender. While that list is an indispensable tool for examining minority ownership, one may only

estimate gender by examining first names. Apart from this source, CRF was able to identify only six

radio stations owned by two non-minority females. Limits on the funding allocated to this study

prevented a more exhaustive effort to identify all female radio and television owners. Considering the

distinct possibility that there may be more women owners, particularly of large station groups, CRF

concluded that there was inadequate data at this time upon which to base an analysis.

It is recommended that subsequent research first undertake to identify the nation’s female

broadcasters. A study should be conducted to assess the impact of advertising practices upon female

broadcasters from the standpoint of programming formats that target women viewers/listeners, the

presence of women in the station’s sales force, the station’s status as female-owned, and the ability of

female entrepreneurs to raise capital.

 

Minority-Owned Television. Television programming is not targeted through the course of

the broadcast day to a narrow audience demographic in the same way as radio. This makes it less likely

that the revenue earning ability of minority television stations can be linked to ad agency or advertiser

bias against an audience, though it may vary by show. The only instance in which such bias was

identified was in the context of Spanish-language television. One station reported negative advertiser

support due to the station’s Spanish-language format and the Hispanic composition of the audience

(see Section III).

Other reported instances of lack of advertiser support originated from Home Shopping

Network (HSN) affiliates. Based upon 1997 estimates of minority television ownership, 25 percent of

the Black owners aired commercials 24 hours a day as HSN affiliates. Complaints about advertiser

support originating from minority-owned HSN affiliates are believed to stem from advertiser reluctance

to support this unique format, and not from the racial/ethnic composition of the viewing audience.
Section I. Introduction & Summary When Being No.1 is Not Enough

Page 17

There was no consensus on the part of the survey respondents concerning the effect of

minority sales staff , minority ownership or minority-oriented programming on the ability of the

television stations to earn advertising revenues. Therefore, no conclusions or generalizations can be

made in this area.

Further research is recommended to analyze the impact of advertising practices which take race,

ethnicity or gender into account on television, particularly their impact on which shows are produced

or aired and the advertising performance of programs. Research should also examine the impact, if any,

of advertising practices on the images of minorities and women on television programming. 

E. Policy and Research Recommendations

This study was intended to be a preliminary investigation of practices in the advertising industry

that affect broadcasters. Recommendations for further research and a process for developing policy

initiatives are summarized below. 

1. Further Research Recommendations

As noted earlier, it is a normal business practice in the advertising industry to target advertising

to probable consumers. Hence, it is essential that research undertaken as a follow-up to this study

distinguish between legitimate business practices, and those which may not be justifiable in terms of

nondiscriminatory marketing objectives. 

One such method is to compare the general market cost per point paid to general market and

minority-formatted stations. The cost per point is the price that an advertiser pays to reach 1% of the

audience in a specific metro market (see Glossary, Appendix K). Section II-C-2-d presents evidence

that minority-formatted stations receive general market cost per points that are discounted. In order

to prove a pattern of such practices, however, a researcher must have access to proprietary information.

Advertising agencies and national rep firms generally maintain such records. CRF attempted to, but

could not, obtain such data. It may be necessary for future researchers to avail themselves of the

subpoena powers of the federal government in order to access such information.

On the basis of questions raised by this study concerning the impact of advertising practices

on minority-owned and minority-formatted stations, CRF also recommends the following research

initiative:

< A broader study, funded with sufficient resources, should be undertaken to analyze the impact

of various factors on broadcasters’ performance. Such an analysis will help the FCC identify

whether there are impediments to entry and growth in the broadcast industry that warrant

Commission action, and the reasons for those obstacles. 

< The analysis should examine factors such as: the impact of ownership size on revenue and

power ratios; advertising pricing variances (including cost per point variances) by format; the

racial/ethnic classification of the owner, and owner size; differences in quantity of advertising
Section I. Introduction & Summary When Being No.1 is Not Enough

Page 18

time made available by stations; consumer responsiveness to advertising on minority-targeted

media compared to general market media; the extent to which a broad variety of formats are

subjected to systematic “discounts,” or “dictates” based on the audience served; the relationship

between “dictates” or “discounts” and the range of formats on a broadcaster’s stations; the

extent to which “discounts” are based on audience income levels for various formats; the

quantity of discounts experienced by minority-formatted stations and other formats, and their

pervasiveness; the extent to which discounts may be related to station classifications of power

and reach (i.e. AM or FM, Class A or Class C); the extent and pervasiveness of “no

Urban/Spanish dictates,” and the use of dictates for other formats. 

< Additionally, the analysis should consider the impact of the race/gender of station, ad agency,

advertiser and representative firm personnel; the practices of broadcast owners in competing

against minority-formatted or minority-owned stations based upon misrepresentations and

improper disparagements; the ownership of radio and television stations by women; whether

stations targeting programming at women are subjected to similar practices in the advertising

industry, and the influence of such factors. 

< The analysis should also probe the use of media ratings services in advertising decisions,

particularly unaccredited services. It should examine the effect of audience undercounting by

media ratings services on the advertising performance of minority-owned and minorityformatted broadcasters. It should investigate the impact of advertising practices on viewers and

listeners, i.e. whether they affect the availability of format, diversity of viewpoints on the

airwaves, and broadcasters’ service to the American public. Finally, the analysis should

investigate whether minority or women owners encounter barriers based on race or gender, and

whether any such findings justify remedial measures or incentives to remove barriers to market

entry, growth and competition for small, minority and women-owned radio stations.

2. Policy Initiatives

On the basis of the comprehensive study described above, the Federal Communications

Commission and the Federal Trade Commission should coordinate efforts to address the research

findings. Specifically, the two agencies should:

< Assemble a joint task force to develop standards for acceptable advertising practices. Standards

adopted by the task force should be included in a joint policy statement issued by the Federal
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Page 19

 

49 Section 5(a) of the Federal Trade Commission Act appears to provide the Federal Trade

Commission with authority to exercise jurisdiction over advertisers, ad agencies and other entities

involved with the media buying process to the extent that they engage in practices affecting

commerce that are unfair, false, misleading or misrepresentations of fact. 15 U.S.C. § 45(a)(1)

(“Unfair methods of competition in or affecting commerce...are hereby declared unlawful.”).

 

50 The findings of this study suggest that “no Urban/Spanish dictates”and “minority discounts”

undermine the revenue generating ability of broadcasters and consequently their ability to obtain

financing and to serve the public interest with quality programming. Such practices appear to

constitute barriers to competition and market entry. Section 257 of the Telecommunications Act

of 1996 provides the Commission with the jurisdictional authority to examine and eliminate such

barriers.

 

51

 See also, NonDiscrimination in Advertising Act of 1991, H.R. 285, 102nd Cong., 1st Sess. (1991),

(Appendix B) (bill intended to deny tax deductions for advertising expenditures for persons who

discriminate against minority owned or formatted communication entities in the purchase or

placement of advertisements).

 

52 U.S. Government Accounting Office, Federal Use of Small Disadvantaged Subcontractors is

Minimal (GAO/RCED-89-54), June 1989.

Trade Commission49 and the Federal Communications Commission50 stating their shared and

separate jurisdictions. The policy statement should be open for public comment before being

implemented. The Federal Trade Commission should have primary jurisdiction regarding

instances in which advertisers, ad agencies, or broadcasters are alleged to have violated

regulations governing unfair and deceptive business practices. The Federal Communications

Commission should take the Federal Trade Commission’s findings into account when

determining whether the public interest would be served by renewal of a broadcasters’ license

or other FCC actions including sanctions.

 

< Recommend whether an executive order should be issued that prohibits federal agencies from

contracting with ad agencies or advertising representatives that practice “no Urban/Spanish

dictates,” “minority discounts,” or that otherwise fail to conform to the standard of practices

adopted by the joint task force.51 A 1989 General Accounting Office report on federal use of

small and disadvantaged advertising subcontractors estimated federal advertising expenditures

to total $165 million.52 Such spending capacity should be used to leverage compliance with

standards established by the joint task force.

< Require broadcasters to show cause why they do not use an audience research service that is

accredited by the Media Ratings Council. Broadcasters that use non-accredited research

services should be required to prominently disclose that fact to advertisers, ad agencies and

others that rely upon such data. 

3. Private Sector Initiatives
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53

 See, Associated Press v. United States, 326 U.S. 1, 20 (1943) (“[The First Amendment] rests on the

assumption that the widest possible dissemination of information from diverse and antagonistic

sources is essential to the welfare of the public....”) See also, Metro Broadcasting, Inc., v FCC, 497 U.S.

547, 568 (1990), (overruled on other grounds, Adarand Constructors, 515 U.S. 200). In Metro, the

Court commented,“[T]he diversity of views and information on the airwaves serves important First

Amendment values....The benefits of such diversity are not limited to the members of minority

groups who gain access to the broadcasting industry by virtue of the ownership policies; rather, the

benefits rebound to all members of the viewing and listening audience.” Metro Broadcasting Inc., 497

U.S. 547 at 568.

 

54

 Statement of Policy on Minority Ownership, 68 FCC 2d 979, 981 (1978) (“Adequate representation

of minority viewpoints in programming serves not only the needs and interests of the minority

community but also enriches and educates the non-minority audience.”)

 

55 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat 56 (1996), 47 U.S.C. § 257(a)

&(b). (“[In] identifying and eliminating...market entry barriers....the Commission shall seek to

promote the policies of this Act favoring diversity of media voices, vigorous economic competition,

technological advancement, and promotion of the public interest, convenience, and necessity.”)

In the private sector, CRF recommends:

< The broadcast and advertising industries should develop a code of conduct for advertisers, their

representatives and broadcasters. The code should indicate that decisions about buying ads

should be based on market research supplied by accredited ratings services. It should require

broadcasters and advertising representatives to prominently disclose whether the research upon

which they are relying is accredited by the Media Ratings Council. Such research should take

consumption patterns into account. The code should prohibit the practice of “no

Urban/Spanish dictates” and “minority discounts.” It should require that stations be evaluated

based on their individual merits, including their audience ratings and demographics. The code

should require workforce training regarding laws prohibiting unfair or deceptive disparagement

of a competitor, and training regarding diversity. The code should encourage diversity in hiring.

All employees, regardless of race/ethnicity or gender, should receive training and work

experiences that may lead to promotion. 

4. Serving the Public Interest

The issues discussed in this study ultimately affect the quality of programming made available

to the listening public. To the extent that advertising practices constitute barriers to competition,

broadcasters are less capable of providing a diverse range of viewpoints and a plethora of high quality

programming choices. Congress, the Courts,53 and the FCC54 have repeatedly expressed concern that

a diversity of viewpoints must be reflected in the broadcast media. Indeed, this investigation of barriers

to competition is an outgrowth of Congressional policy “favoring diversity of media voices, [and]

vigorous economic competition.”55
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56 Telephone interview with Tom Castro, Chairman and President of El Dorado

Communications, December 14, 1998.

 

57 As discussed in footnote 210, many minority-owned broadcasters that identify their stations as

general market format have high levels of minority listeners. They may be self-designated as

“gospel” or “religion,” but their audience is predominantly minority.

 

58

 See also, Metro Broadcasting, 497 U.S. 547, 580-581 (“Evidence suggests that an owner’s

minority status influences the selection of topics for news coverage and the presentation of editorial

viewpoint, especially on matters of particular concern to minorities.”) The FCC’s Office of

Communications Business Opportunities is undertaking a study to examine the current linkages

between minority ownership and broadcast content, focusing on news and public affairs

programming.

The public interest consequences of “no Urban/Spanish dictates” and “minority discounts”

are eloquently stated by Tom Castro, Chairman and President of El Dorado Communications:

1) Because of the discounts, sometimes you can’t compete and keep your best people. And that leads

to a brain drain. We do the hard work of training them, and then they go off and work for these larger

companies...; 2) Our profits are less. If our profits are fewer, then when it comes time to buy the station

that comes up for sale in a given city where we’re competing with CBS and Clear Channel and ABC,

they’re going to be able to outbid us for those properties because of the profits that they have built up over

time. And so that means they have yet another scarce frequency that they control, and we are losing the

opportunity to build wealth for ourselves. 3) The quality of our programming, while good, would be

better if we had more profits. If we had more profits we could invest that back into our business. So,

it’s harder to remain competitive and it’s harder to promote your format to the public.... It’s a vicious

circle.56 

The “vicious circle” described by Tom Castro affects all broadcasters that target programming

to minority listeners. However, minority broadcasters appear to be affected in disproportionate

numbers. 

The vast majority of stations owned by minority broadcasters provide programming designed

to serve the needs of minority listeners (see Chart A). Seventy-five percent of all stations owned by

minorities are classified as minority format.57 In contrast, 8% of stations owned by majority group

members are classified as minority format (see Chart A). Majority owners control 267 minorityformatted stations, compared to 116 owned by minorities. However, the greater tendency of minority

owners to serve the minority community58 means that practices such as “no Urban/Spanish dictates”

and “minority discounts” have a disproportionate effect on minority broadcasters.
Section I. Introduction & Summary When Being No.1 is Not Enough

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Chart A

Data: BIA MasterAccess, August 1997 edition.

“No Urban/Spanish dictates” and “minority discounts” effectively reduce the revenues a station

earns per listener. Consequently, such stations have fewer resources with which to serve the needs of

listeners in terms of news, public affairs or entertainment programming.

The findings of this study constitute prima facie evidence that “dictates” and “discounts” impede

market entry, access to capital, competition and diversity of viewpoint. The findings of this study

warrant further research. Based upon the conclusive findings of follow-up research, the Commission

should decide whether to exercise its jurisdiction to eliminate market entry barriers caused by “no

Urban/Spanish dictates” and “minority discounts.” 

Minority Broadcasters Majority Broadcasters