Section I. Introduction & Summary When Being No.1 is Not Enough

Page 23

 

59 The average household income of Blacks and Hispanics is less than Whites and Asians (see

Chart B).

 

60 Scarborough Reports is a division of The Arbitron Company. 

 

61 Data for this example was supplied by Judith Ellis, Senior Vice President of Emmis Radio and

General Manager of WRKS-FM. Scarborough Qualitap Target Profiles in support of the position

taken by Emmis Radio are on file with CFR.

II. Radio

A. The Media Buying Process

The purchase of commercial time on radio involves several steps that begin with developing

marketing and media objectives. In the course of establishing these objectives, advertisers identify

consumers who are to be targeted in the advertising campaign (see, Overview of Media Planning,

Diagram A, Appendix A). The consumer target may be identified in terms of demographic variables

(e.g. males, ages 25 to 54, with household incomes of $50,000). Focusing the advertising campaign on

a targeted segment of the market enables advertisers to make efficient use of their resources. Money

is concentrated on buying advertising time on media patronized by people likely to consume the

companies’ products. 

In 1997, for example, the New York Volvo dealers association adopted the following

demographic profile for a media buy campaign:

Education level: college graduate plus; 

Household income - $75,000; 

Age - 25 to 54.

 

Without stipulating race, the income and educational variables of this profile automatically

disqualify radio stations that program to Black and Hispanic consumers.59 In an attempt to win the

account, Emmis Broadcasting, which programs to the Black community on WRKS-FM, conducted

further research.

Emmis found that there is very little relationship between the profile adopted by Volvo and the

profile of the vast majority of Volvo owners. Scarborough60 qualitative data61 indicated that 80 percent

of Volvo owners in New York City do not fit the profile of the Volvo dealer. Nearly 29% of New York

Volvo owners were found not to be age 25 to 54; over 60% had household incomes less than $75,000;

and nearly 65% did not graduate from college. The station provided evidence that the amount of

money paid for a new car by people who listen to black/urban radio is similar to the amount paid by

general market station listeners. Research showed that 12.5% of urban and general market listeners pay
Section II. Radio When Being No. 1 is Not Enough

Page 24

 

62 Scarborough Qualitap Reports on file with CFR.

 

63 Interview with Judith Ellis, Emmis Broadcasting, pages 14 - 15. (emphasis added).

 

64 Telephone interview with Judith Ellis, Emmis Broadcasting, August 10, 1998. 

 

65 Scarborough Qualitap Report, New York, March 1997- February 1998 on file with CFR.

$20,000 to $30,000 for new cars; while 6.1% of the urban radio listeners and 7.6% of general market

listeners pay $25,000 to $30,000 for new cars.62

Emmis presented data to the advertiser’s buying service that they believed showed that urban

listeners fit the demographic profile of Volvo consumers. The research findings were not contested,

yet they did not persuade the advertiser’s buying service. After prolonged discussions, the dealer's

association decided not to buy WRKS on grounds independent from the market research. The station

manager reported:

We went to the buying service. They gave us a lot of time. We got to see people right up the line; the

account people. They couldn’t say no. It was right there in black & white; we were showing them.

And then it got down to—what we were told by the buying service—was the head of the dealership who

said, “I just don’t want to. We just don’t want it on that radio station.”

...I don’t believe that the criteria ever really mattered to begin with. I think to a great degree the criteria

exist so that they can eliminate whoever they want to eliminate, i.e. the Black stations. And they buy

whoever they want.

63

As an example of “no Urban dictates,” Ms. Ellis also reported that the luxury car manufacturer

BMW refused to buy advertising time on urban radio stations in New York, including WRKS-FM and

WBLS-FM. 64 The company chose not to advertise on these stations despite qualitative research that

showing that Black adults, aged 25 to 54, account for 46 percent of the people who own or lease BMWs

in New York.65

While it is normal business practice for advertisers to identify a target market, factors other than

market research frequently influence the selection of radio stations that will be part of the media mix.

This study has identified seven reasons related to ethnic identity and economic status that may account,

at least in part, for “no Urban/Spanish dicates” and “minority discounts:

< racial/ethnic minority consumers are incorrectly stereotyped as inappropriate 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;
Section II. Radio When Being No. 1 is Not Enough

Page 25

 

66 A list of the individuals interviewed is provided in Appendix C.

 

67 The questionnaire was completed by 64 of 284 (or 22.5%) of the minority-owned radio

stations. The survey instrument and the consolidated results are provided in Appendix J.

 

68

 Data collected by this study indicate that “dictates” are frequently imposed upon stations

that air programming targeted to either Blacks or Hispanics. Interviews with the following media

executives provided evidence of dictates imposed upon Spanish-formatted stations: Tom Castro,

Chairman & President of El Dorado Communications; Luis Alvarez, Local Sales Manager, WSKQ,

Spanish Broadcasting Systems; Carey Davis, General Manager, WSKQ, Spanish Broadcasting

Systems; Roman Pineda, President of Caballero Media; and David Lykes, President of Heftel

Broadcasting. The U.S. Department of Commerce has identified only four Native-American radio

licensees. Only one, KTNN-AM, responded to the survey questionnaire circulated by this study

stating that it had not encountered a “dictate,” but that “some advertisers in minority [Navajo

nation] border towns have been telling us they aren’t interested in Navajo business,” Survey of

Tazbah McCullah, General Manager, KTNN-AM.

< unfounded fears that minority consumers pilfer;

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

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

on minority-formatted stations; and

< the belief that minorities can be reached through the general media.

It is noteworthy that in the interviews conducted for this survey, lack of responsiveness to ads

on urban and Spanish stations was not raised as a reason for not placing ads there. The factors listed

above were predominant in the experience of the broadcast and advertising professionals interviewed.

Further research should investigate response rates to ads in minority and general format stations, and

their impact on “no Urban/Spanish dictates,” “minority discounts,” and ad placements. 

In the following section, explanations for imposing “dictates” and “discounts” are further

explored.

B. “No Urban/Spanish Dictates” and “Minority Discounts”— What Are They & Why are

They?

In order to gain a better understanding of industry practices, CRF conducted twenty-one indepth interviews66 and surveyed General Managers at minority-owned broadcast stations with a written

questionnaire.67 The next two subsections present findings based upon these research efforts.

1. No Urban/Spanish Dictates Examined

The term “no Urban/Spanish dictates” is industry jargon for the practice of prohibiting the

placement of ads on stations that have an urban or Spanish68 format. In this study the terms “dictates”

and “no Urban/Spanish dictate” are used interchangeably. “Minority discounts” refers to the practice
Section II. Radio When Being No. 1 is Not Enough

Page 26

 

69 John Kirkpatrick, Making Waves: Concern over Distribution of Ad Dollars Stirs Up Radio Industry,

(“Making Waves”), The Dallas Morning News, June 28, 1998, 1H; 1998 WL 13084258.

 

70

 Id.

 

71

 Id.

 

72 Kendall Wilson, Many Outraged by Agency’s Snub of Minority Radio,, The Philadelphia Tribune,

May 19, 1988 1A; 1998 WL 11493873.

 

73 Interview with Judith Ellis, Emmis Broadcasting, page 13. 

of buying time on a minority-formatted station at a rate that would be less than what is paid to a general

market-formatted station with comparable audience size. 

Occasionally an advertising agency will expressly indicate that its client has a “dictate” or policy

not to buy advertisements on urban or other minority-formatted stations. Sherman Kizart, Director

of Urban Marketing at Interep in Chicago which represents radio stations soliciting ads from national

advertisers and their ad agencies, recounted that he “routinely” runs into these exclusionary practices.69

The Dallas Morning News quoted Kizart regarding the distribution of ad dollars in the radio industry:

When mapping out marketing plans, major advertisers and ad agencies sometimes specify what are called

“no-Urban” dictates, Mr. Kizart says. That means no black-oriented stations are to be included when

ads are purchased.

‘I just got off the phone with an advertising agency where I had to deal with it, where there was a noUrban dictate for a specific car brand’ that is beginning a national radio campaign, Mr. Kizart says.

He wouldn’t name the agency or the automobile company.70

Kizart observed that “there is often ‘no rhyme or reason’ for the exclusion of black-oriented

stations in marketing plans.”71

Kernie Anderson, General Manager at WBLS-FM in New York, an African-American owned

station offering urban-formatted programming, reported that “the reality is that there are still a

significant number of accounts that regularly tell our salespeople ‘no urban dictates,’ which translates

into saying that clients refuse to buy time on minority-oriented stations.”72

Judith Ellis, Senior Vice President of Emmis Broadcasting, a majority broadcasters with an

urban formatted station in New York, echoed the sentiments of Mr. Anderson, “There is one ad

agency that told our account executive that Black people do not buy linens when there was a Wamsutta

linens buy. I could go on and on about this.”73
Section II. Radio When Being No. 1 is Not Enough

Page 27

 

74 Telephone interview with Cheryl Womack, Local Sales Manager, KJLH-FM, November 13,

1998.

 

75

 Id.

 

76

 Id.

 

77 “The Tom Joyner Morning Show” is the most highly rated urban-formatted morning show in

the country. See, Ratings Racism: When No. 1 is Not, (“Ratings Racism”) MediaWeek, June 22, 1998,

1998 WL 10320344.

 

78

 Id.

 

79

 See Katz memo, page 12, (on file with CFR).

 

80

 See also, Letter from Stu Olds, May 26, 1998, apologizing for the language and tone of the

Katz memo and referring to the discussion of it on the “Tom Joyner Morning Show,” (on file with

CFR).

 

81

 Ratings Racism, MediaWeek, June 22, 1998.

 

82

 Id.

Cheryl Womack, Local Sales Manager for KJLH-FM in Los Angeles, a minority-owned, urban

formatted station, heard an airline’s ads on other radio stations in the Los Angeles market.74 She

approached the airline’s advertising agency about buying ad time on KJLH. The ad agency told her the

client was “not buying urban stations.” 75 Later, KJLH secured an ad for that airline through a national

buying service, which seeks bulk national ad placements for clients. Ms. Womack did not know whether

the ad placement resulted from a change in strategy by the client, or the difference in advertising

agencies. She suspected that the ad agency’s perspectives had a great influence on the original refusal

to consider their urban station.76

Katz Media, a firm that represents broadcasters selling air time to advertisers, was lambasted

on ABC Radio’s “Tom Joyner Morning Show”77 for a memo the firm authored coaching sales people

on ways to pitch time on general market stations against minority-formatted stations.78 The memo said

that urban stations fared poorly in delivering “prospects, not suspects.”79 Stu Olds, President of Katz

Media, appeared on the May 15 show to discuss the memo.80

MediaWeek reported that a week later, Olds met privately with Joyner and co-host Tavis Smiley

to discuss what Katz should do in the wake of the memo. Olds promised to hire more minorities at

Katz. He also pledged to “personally call on 20 companies both parties agreed had a ‘no urban

dictate’—meaning they have a policy against advertising on black stations— and pitch his black station

clients to them himself.”81 Though Olds and Joyner would not specify which companies were

identified,82 their agreement confirms that media executives such as Olds recognize that “no Urban

dictates” are a current marketplace reality. 
Section II. Radio When Being No. 1 is Not Enough

Page 28

 

83

 Report on Minority Ownership in Broadcasting, Federal Communications Commission, 1978, at 26. 

W. Cody Anderson, General Manager of WHAT-AM, reported: “In my earlier years in radio,

agencies used to say ‘no ethnic’ advertising. Because of laws, they were prevented from doing that,

but they continued to practice it. They just didn’t say it.” Kendall Wilson, Many Outraged by Agency’s

Snub of Minority Radio, The Philadelphia Tribune, May 19, 1998 1A, 1998 WL 11493873.

 

84 The National Telecommunications and Information Administration found that in 1996, AM

stations represented 50% of non-minority owned stations, but 69% of African-American owned

and 80% of Hispanic-owned stations. Non-minority owners also had higher average signal power

than minority owners. NTIA Minority Broadcast Ownership Report, 1996, pages 4-7. Anecdotal

evidence collected indicates that FM stations with high signal power are subjected to “no

Urban/Spanish dictates,” see page 26 and to minority discounts, see page 34 Technical

characteristics of the station are unlikely to be the selective factor for imposing dictates, particularly

since they are applied across the format. Further research should examine the impact of a station’s

technical characteristics on advertising performance and the imposition of dictates or discounts. 

 

85 Survey response of Andrew Langston, CEO, and Owner of WDKX-FM. 

 

86 Survey response of Preston Brown, General Manager of WCLM - FM. 

 

87 Survey of Manuel Davila Jr., Owner, and General Manager of KBSO-FM, KCCT-AM, and

KFLZ-FM. 

Dictates against advertising on minority targeted radio have deep roots. The FCC released a

report in 1978 on its minority broadcast ownership conference. The report discussed advertising

practices as a barrier to minority ownership:

It appears, however, that black stations are often told that time will not be bought in advance of the

“buy,” notwithstanding their numbers. [Advertising] (a)gencies claim that their clients impose a “no

ethnic” restriction on the advertising medium used due to the nature of the product. Yet, a double

standard may exist even at this level, for white-owned stations with formats aimed at the Black

community may not be barred from securing these ads.83

These dictates appear to be based on the station’s minority format, rather than individual assessments

of the station’s ratings, audience or technical characteristics.84

Minority broadcasters surveyed for this study reported that they also encounter “dictates”

disguised in a variety of ways. When asked if they had encountered discriminatory advertising practices

that go by a name different from “no Urban/Spanish dictates,” the survey respondents provided the

following examples: “We’re out of budget;” “We used the medium, but it didn’t work;” “We are not buying radio;”

“We can’t get financing for [minority customers];”85 “There is no money for your market;”86 “We are not looking for

that kind of audience.”87 While these may constitute legitimate reasons for not advertising on a station,

the broadcasters responding to the survey indicated that the reasons provided were often a ruse. 
Section II. Radio When Being No. 1 is Not Enough

Page 29

 

88 Survey response of Migdalia Colon, Vice President of WCUM-AM. 

 

89 Id.

 

90

 Stewart Yaguda, President of Radio 2000, a division of The Interep Store.

 

91

 Id. 

 

92

 Id.

 

93

 Making Waves, The Dallas Morning News, June 28, 1998.

Migdalia Colon, Vice President of the Spanish-formatted station WCUM-AM said she was once

told, “We are not doing ethnic stations.”88 On another occasion she was told that her market was not

included in a promotion, “but then we would hear their product on all the Anglo Stations in our market.”

89

Of those minority broadcasters responding to the survey, ninety-one percent indicated that they

had encountered a "no Urban/Spanish dictate" at least once fromthe advertising agencies or advertisers

from which they solicit business. An average of 26 “dictates” were reported to be encountered annually.

Urban stations that are clients of The Interep Store regularly report to the company incidents

that they believe constitute “no Urban dictates.”90 Interep routinely investigates such reports and

contacts advertisers in order to verify them.91 If Interep encounters reluctance or a refusal on the part

of an advertiser to place ads on urban-formatted stations, the national rep firm will attempt to “turn

around” the “dictate” with market research that justifies such a buy. In rare instances, according to

Interep executive Stewart Yaguda,92 do advertisers maintain a dictate after being presented with such

research. Interep’s Sherman Kizart reported to The Dallas Morning News:

‘The excuse I hear is that the clients are looking for ‘upscale,’ and implying that African-Americans aren’t

upscale...My job is to turn around these no-urban dictates. There are a lot of negative perceptions that

unfortunately exist about the black consumer market and their viability’... including ‘lack of money, lack of

education, lack of professional jobs.’ 

The only way to change that... is ‘by giving people the right information’ - a tactic that often works, he says. 93

Contrary to this view, the minority broadcasters responding to CRF’s survey indicated that

in most instances there is either no response or a continued refusal to buy after market research is

presented to advertisers or ad agencies (see page 38).

The study was not able to investigate advertisers’ reasons for “no Urban/Spanish dictates”

because of funding limitations. The anecdotal evidence collected suggests minority broadcasters and

professionals working in the format believe they may be based, at least in part, on stereotypes based
Section II. Radio When Being No. 1 is Not Enough

Page 30

 

94

 See, Section II-B-3.

 

95

 See, Title II of the Civil Rights Act of 1964, 42 U.S.C. § 2000a; Fair Housing Act, 42 U.S.C. §§

3604 et seq. Title II prohibits discrimination on the basis of race, color, religion, or national origin in

the provision of public accommodations such as hotels, restaurants, and places of entertainment. 

The Fair Housing Act prohibits, among other practices, discrimination in the sale or rental of

housing, on the basis of race, color, religion, sex, familial status, handicap, or national origin. 

Moreover, judicial cases interpreting the Fair Housing Act's prohibitions have recognized that

discriminatory intent need only be one motivating factor for the conduct. See, Village of Arlington

Heights v. Metropolitan Housing Dev. Corp., 429 U.S. 252 (1977); United States v. City of Parma, 661 F.2d

562, 575 (6th Cir. 1981), cert. denied, 456 U.S. 926 (1982) ("There is no requirement that such intent

be the sole basis of official action"). See also, United States v. Scott, 788 F. Supp. 1555, 1562 (D. Kan.

1992) (“[w]hether motivated by animus, paternalism, or economic considerations, intentional . . .

discrimination is prohibited by the [Fair Housing] Act.").

 

96 See also, Ragin v. Harry Macklowe Real Estate Co., 6 F.3d 898 (2d Cir. 1993). Congress decided

that the prohibition on discriminatory advertisements was so important that small housing

providers who are otherwise exempt from the Fair Housing Act's prohibitions, (the so-called "Mrs.

Murphy exemption"), are still subject to the provision prohibiting discriminatory advertisements

(see, 42 U.S.C. § 3603(b)).

on the race or ethnicity of the station’s audience.94 Dictates could also be a short-hand way of excluding

unlikely customers, based on perceptions of their purchasing power, consumption patterns or other

factors.

Blanket dictates based on a station’s format preclude a broadcaster from competing for the

advertisement of the goods or service. While it may save resources for an advertiser or its ad agency

to exclude an entire class of stations from consideration so they can focus on others, this practice has

profound implications. Rather than evaluating a station based on its individual merits— its rating, its

particular audience characteristics, the price of ads—the station is excluded based on its minority

format. 

To the extent that dictates are based on the race, ethnicity or national origin of the

broadcaster's audience, one could argue that such practices amount to an attempt to avoid having

minorities as customers. In certain areas, such as housing and public accommodations, Congress has

enacted legislation stating that businesses cannot limit their customers based upon race, color, or

national origin.95 Indeed, in the housing area Congress has recognized that advertisements which

convey a message that certain groups are not welcome are detrimental to our society and contrary to

public policy. Thus, the Fair Housing Act explicitly prohibits the publication of any "advertisement,

with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination

based on race, color, religion, sex, handicap, familial status, or national origin . . ." 42 U.S.C. § 3604(c).96

While there are no similar statutes prohibiting advertisers from selecting stations on the basis of race,

the public policy concerns here are similar to those motivating various anti-discrimination statutes.

Specifically, these policies would suggest that stations should be evaluated on the basis of their
Section II. Radio When Being No. 1 is Not Enough

Page 31

 

97 Interview with Sherman Kizart, Director of Urban Marketing, The Interep Store, October 1,

1998.

individual merit—ratings, particular audience characteristics, prices —rather than being excluded on

the basis of the race of their listeners. “No Urban/Spanish dictates” appear to prevent broadcasters

serving the minority community from obtaining ads in the same way that exclusionary policies by hotels

or real estate agents prevent minorities from obtaining services. This has implications for competition,

fundamental fairness and service to the public.

2. Minority Discounts Examined

“Minority discounts” are based upon discrepancies in the rates paid to comparable minorityformatted and general market-formatted stations. The difference may be based upon the amount of

“cost per point” paid to such stations. The general market cost per point is the rate that advertisers

pay to reach one percent of the entire population in an Arbitron metro market (see Glossary and

Overview of Media Planning in Appendix A). When a minority discount is used, a minority-formatted

station is compensated at a lower rate than the general market cost per point, even though it may have

more or the same number of listeners than a general market station.

For example, a well-known bedding and mattress retailer reportedly offered to buy time on on

WRKS-FM and WQCD-FM in New York. Both stations are owned by Emmis Radio. The urbanformatted station, WRKS, was offered a general market cost per point of $330 while the general market

station, WQCD, was offered a general market cost per point of $365. The urban station had a larger

market share than general market station. Moreover, data on consumer buying habits indicated that

urban listeners were more inclined to purchase bedding products (see, page 86 regarding telephone

interview with Judith Ellis). 

Advertisers interested in targeting their products to minority consumers often pay minorityformatted stations on the basis of the Hispanic cost per point or the Black cost per point. These rates

are based upon the cost of reaching one percent of the Hispanic population within the metro market

(i.e. the Hispanic cost per point) or the cost of reaching one percent of the Black population within the

metro market (i.e. the Black cost per point). A comparison of the Black cost per point and the general

market cost per point indicates that in some markets the Black cost per point is higher, reflecting the

more targeted nature of the audience. (see, Table 5). However, advertisements purchased on the basis

of the Black cost per point are estimated to comprise only a small fraction of the buys on urban radio

stations97 (see, Section II-C-2-d). 

Minority discounts also occur when advertisers insist on paying less than the minority-formatted

station’s rating or audience demographics would indicate. For example, according to a Spanish

Broadcasting System sales executive:

[Media buyers] don’t ask for your rate card....They tell you what the Hispanic cost per point is. When

comparing certain Hispanic costs per points to [what] the general market cost per point are, the cost per point

that they are quoting you is much lower....[J]ust this morning a sales person was in here talking to me about a
Section II. Radio When Being No. 1 is Not Enough

Page 32

 

98 Interview with Luis Alvarez, Local Sales Manager, WSKQ and WPAT pages 5 - 6. 

 

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

Broadcasting System), page 8.

 

100 1998 BIA MasterAccess database.

 

101 1988 BIA MasterAccess database.

 

102 Kearnie Anderson, WBLS General Manager, telephone interview, November 12, 1998.

$45 cost per point which is ridiculously low. But it’s not the first time I’ve heard that... A general market cost

per point is around $280, which translates basically to they are trying to have us come in at a $45 cost per point

when the average [Hispanic] cost per point is $75.98 

Minority broadcasters interviewed for this study reported that “minority discounts” account

for a substantial amount of lost advertising revenues. Carey Davis, General Manager of two Spanish

formatted stations in New York, estimates that “minority discounts” account for 25% of the lower

amount of revenues earned by his stations.99 Spanish-formatted WSKQ-FM, which Davis manages, was

ranked number two in the New York market in 1997. Its 6.1 local commercial share (audience size),

represented a much larger audience than the two general market stations, WCBS-FM and WXRK-FM,

with local commercial shares of 4.6 and 5.5, respectively. Despite their smaller listening audience, the

two general market stations earned $34.8 million and $37.3 million, compared to $21.5 million for

WSKQ.100 The power ratios reflected these differences: 0.72 for WSKQ, 1.14 for WCBS, and 1.61 for

WXRK.101

Minority broadcasters responding to CRF’s survey estimated that 61% of their sales transactions

were reduced by “discounts.” The amount of the “minority discount” was estimated to average 59%.

Kearnie Anderson, General Manager of minority-owned, urban-formatted WBLS-FM in New

York City, said that minority-owned stations have to work harder for the dollars they earn. He said his

station does more promotions of events in its local market than its competitors do. He believes they

have to offer the advertiser more “value-added” benefits through promotions, such as events outside

of air time, to get a sales dollar.102

3. Rationales for “Dictates” and “Discounts” 

Advertiser avoidance of media outlets based on the ethnic identity of the audience would appear

to contradict the natural inclination to increase customer patronage and sales. However, product image

control, lack of knowledge, and stereotypical views about minority consumer habits may be a few

factors that explain the reason for “dictates” and “minority discounts.” 
Section II. Radio When Being No. 1 is Not Enough

Page 33

Question: To what extent are “no Urban

dictates” based upon the reasons listed

below?

Average Response

on a scale of 1 to 10 

(1 denotes the

highest level of

importance)

Faulty evidence that there is no ethnic market

demand for the goods/services in question

3

The desire not to have ethnic minorities

patronize the goods/services

5

Legitimate reasons based upon evidence that

the ethnic minority market does not purchase

the goods and services

6

As part of the survey analysis, minority broadcasters were asked to rate several explanations for

“dictates.” Most broadcasters responding indicated that they believed “dictates“ were based upon

“faulty evidence that there is no ethnic market demand for the goods or services.” The “desire to avoid

minority patronage” and “legitimate rationale based upon market research” were rated five and six,

respectively, on a scale of one to ten, with one being the highest level of importance and 10 being the

lowest. In the following table the responses in column two represent the average rating provided by

the survey respondents.

 

In th e

interviews conducted by CRF, explanations for “minority discounts” and “dictates” included

perceptions of insufficient income, image control, fear of pilferage, unfamiliarity with the market, and

stereotypical views about minority buying habits. Byron Lewis, Chairman and CEO of UniWorld

Group, America’s largest independently-owned ethnic advertising agency, characterized advertisers as

having the following misperceptions about the African-American market: 

Lewis: [H]istorically, the advertisers have assumed that based upon census data, African-Americans earn less

money, have less median income than their mainstream customers. So, therefore, they believe that certain

types of purchases — particularly upscale — they really do not consider African-Americans as customer

targets for many product categories. So, for example, very few insurance companies advertise to Blacks.

Banks, financial services, luxury items like credit cards, tourism destinations—the whole area of product

advertising feel that Black people are not, because of income and professional background and education,

suitable targets to advertise to. That is a general attitude toward the African-American consumer

market. 

Ofori: Do you believe that’s an accurate perception? 
Section II. Radio When Being No. 1 is Not Enough

Page 34

 

103 Interview with Byron Lewis, Chairman and CEO of The UniWorld Group, page 4.

 

104

 See page 38, infra.

Question: If an advertiser or advertising agency is

presented with research that contradicts their “no

Urban dictates” policy which of the following best

describes the response?

Average Response

on a scale of 1 to 10 

(1 denotes the highest level

of importance)

No response 3

The research is acknowledged, but the agency or

advertiser still refuses to grant the account. 

3

The research is acknowledged, but there is a lapse

of a long period before the account is granted.

4

A rescission of the policy and an account is acquired

within a short period of time

7

Lewis: No, I don’t believe its an accurate perception. But it’s an historic perception.103

The view that minority household income is strongly associated with reluctance on the part of

advertisers to target advertising to Blacks and Hispanics is consistent with the quantitative findings

presented in Section II-C. A comparison of general market and minority-formatted stations indicates

strong linkages between low household income, high levels of minority listenership, and minority

targeted programming. (See, Charts H-I, page 69). 

 

As explained earlier, the media buying process seeks to use advertising dollars in the most

efficient manner possible. Based upon market research, the audience demographic most likely to buy

the product or service is identified and targeted for a media ad campaign. Or, the marketing objective

may be to expand the company’s consumer base, in which case the advertiser will target ads to

consumers who haven’t purchased its products in the past. However, even where market research

identifies minoritied as heavy or moderate consumers and the advertiser’s marketing objective is not

focused upon expanding the consumer base, survey respondents reported that advertisers were often

reluctant to include minority-formatted stations in their advertising 

campaigns.104

Consistent with the example of the New York Volvo dealers association, media buyers with a

"no Urban/Spanish dictate" were reported to have either “no response” or a “negative response” to

market research that demonstrates minority patronage of the brand. Rated closely behind these choices

was the response that there is a “long lapse of time between when the research is acknowledged and

when the account is granted.” The table below summarizes the experiences of minority broadcasters

responding to the survey when they presented market research to media buyers in an effort to

overc ome

a “no U r b

an/ S pani

s h dicta

te.”

 
Section II. Radio When Being No. 1 is Not Enough

Page 35

 

105 To the extent that “no Urban/Spanish dictates” may be based on concerns that White

customers will not buy the product or service, or patronize the business or location if it is

associated with minorities, case law in the housing and employment area has stated that concerns

about the preferences of customers do not justify excluding others based on race, ethnicity or

gender. See, for example, Diaz v. Pan Am World Airways, 442 F.2d 385, 389 (5th Cir.1971), cert denied,

404 U.S. 950 (1971) (holding that customer preference for female flight attendants does not permit

airlines to refuse to hire males). See also, United States v. Starrett City Assoc., 840 F.2d 1096 (2d Cir.)

cert. denied, 488 U.S. 946 (1988) (fear of "white flight" did not justify policies limiting number of

minority tenants).

 

106 Interview with Byron Lewis, The UniWorld Group, page 6. 

 

107

 Id.

The reluctance to rescind a “dictate” despite market research that favors minority consumers

is often due to concerns about product image and positioning. According to Byron Lewis:

In many cases, people have statistics. For example, there are categories of advertising where Blacks are

the dominant customer. For example, you take liquor, the cognac category. Blacks represent 60 - 70%

of the expensive cognacs, but almost never are directly targeted. Or, if you look at a lot of tourism

advertising—tourism advertising for destinations like the Caribbean or other upscale places, almost

never portray Blacks as a target because they feel that, in some way, it might create the impression that

they’re-attempting to encourage Blacks to come to these destinations. And that this will turn off the

White traveler.105 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.106

Some luxury car manufacturers expressed concerned about ethnic stigmas:

Domestic, I’d use the case of Cadillac. And [internationally,] Mercedes Benz, BMW because we can

show there probably is a better market among upscale and upwardly mobile African-Americans with

foreign cars. But the issue is, the projection in the media is always upscale, young professional and

professional, White audiences. This is the general approach. Not that there aren’t exceptions. But that

has been historically the case.

107

Ken Smickle, President and Publisher of Target Market News, also addressed the issue of image:
Section II. Radio When Being No. 1 is Not Enough

Page 36

 

108

 Interview with Ken Smickle, President and Publisher of Target Market News, page 15. 

 

109

 Id., at 15. 

 

110

 Marketing Fragrance to Minorities is Lucrative But Not Specialized, Minority Markets Alert, EPM

Communications, Inc., October 1998 (see, Appendix E). 

It’s all image. So, Rolls Royce or even a Japanese luxury car maker have reams and reams of research

that would tell them what the American car buyer with a lot of money to spend on a car thinks about

themselves, their own self image, etc. And Black folks don’t factor into the equation at all. “So, what

on Earth would this person think if they ever saw an ad with a Black person driving our car?” That

would diminish the value of the car because they’re not seeing themselves behind the wheel.108

Concerns about product image are reported to extend beyond luxury items to the need to

assuage White perceptions about the intended market for ordinary products and services: 

We’re talking about an image business where everything is image; your positioning, who you are, the

difference between your product benefits, in what it offers versus what your competitor offers. It’s all a

matter of perception. And that perception comes from tightly controlled images about that product, about

the company behind that product. And, race again plays a big factor in the thinking of how the product

will be perceived. JCPenney had a huge success a few years ago in establishing these Afrocentric

boutiques on its selling floor at a number of its stores. These boutiques would carry things like Black

greeting cards, like books, Kente clothes or items made from Kente cloths, African art and artifacts.

And these shops were set up just prior to the Christmas selling season. When the Christmas season was

over, every single one of those boutiques had sold out of everything they had in an unqualified success.

They never repeated the program. The reason they didn’t repeat the program, it’s widely felt, is because

they couldn’t control the industry buzz, talk, news stories and perceptions that surrounded the entire

thing. They had a picture in Time Magazine, a full page color picture of a woman in an African dress

and the caption said “Dress came from JCPenney.” And I could just hear the Penney executives now.

“Every White person in America is going to think we just became a Black store.” And that’s the

problem.109

EPM Communications, Inc. recently published an article that discussed reticence on the

part of fragrance companies to target-market their products to minorities:

While major fragrance companies obviously want the business of minority consumers, they don’t want

to be perceived as making ethnically targeted scents, despite the fact that market research suggests that

regional an cultural preferences exist.110
Section II. Radio When Being No. 1 is Not Enough

Page 37

 

111 Interview with Roman Pineda, President of Caballero Spanish Media, a division of Interep

Media Store, page 3.

 

112 Interview with Byron Lewis, The UniWorld Group, page 6; See also, Interview with Judith

Ellis, Emmis Broadcasting, concerning misleading sales presentations, page 23.

 

113 Interview with Luis Alvarez, WSKQ and WPAT, referring to incident that occurred in 1981,

page 2.

 

114 Id. at 11.

 

115 July 1998 edition of BIA MasterAccess.

 

116 Mira Schwirtz, Ratings Racism: When No1. Is Not, MediaWeek, June 22, 1998.

In addition to product image control, media executives cited lack of familiarity with the Black

and Hispanic market111 and a reluctance to obtain reliable data,112 as factors contributing to stereotypical

views about the minority consumer. Recalling his early experiences as a radio salesperson, Luis Alvarez

of WSKQ said: 

I recall being in front of a buyer and we were discussing at the time Ivory Soap and the buyer was telling

me they were not going to buy the station. And the question was,“Why not?” And they said, “Well,

we have studies that show that Hispanics don’t bathe as frequently as non-Hispanics.” And as you

could see there were no studies that I’ve knew of, whether it be at the time Yankelovich, Skelly &

White or Scarborough or Simmons that referred to that.113

On another occasion, Mr. Alvarez recalls: 

[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.” And I looked at him and I said, “Well, that’s funny because my wife drives a Lincoln

Towncar. And I’ve got a Mark VII.” And he says, “And?” And I said, “And my name isn’t

Luigi Baccagalupi. It’s Luis Alvarez.” And this guy turned all colors. All colors. We wound up

walking out of there with a buy, by the way. I think out of embarrassment.114 

Mr. Alvarez was confronted with these stereotypes despite the fact that in 1997 WSKQ-FM

was the No. 2 station in New York in terms of number of listeners. During 1997 WSKQ had a power

ratio of 0.72.115 In 1998, WSKQ was ranked number one.116

. 

A similar pattern occurred in Los Angeles. Spanish format KLVE-FM was the market leader

by a wide margin, with a local commercial share of 7.2, compared to 5.4 for its nearest competitor in
Section II. Radio When Being No. 1 is Not Enough

Page 38

 

117 BIA Analysis of Hispanic and Urban Formats in the Top 50 Markets, BIA Research Inc. (see,

Appendix L); see also July 1998 edition of BIA MasterAccess.

 

118

 See, Interview with Roman Pineda, Caballero Spanish Media, page 6.

 

119 Interview with David Lykes, Chief Operating Officer of Heftel Broadcasting, page 5.

 

120 Interview with Luis Alvarez, WSKQ and WPAT, page 2.

 

121 Interview with Tom Castro, Chairman and President of El Dorado Communications, page

12.

 

122 Interview with Pierre Troupe, Account Executive, Jacor Communications of St. Louis, page

5.

terms of local commercial share. Yet, KLVE’s power ratio was 0.62 in 1997, and it ranked 8th in

revenues.117

Another barrier confronting Spanish radio is language. To effectively target Hispanic

consumers, the copy may need to be written and delivered in Spanish, and the creative approach must

appeal to this audience.118 These extra requirements constitute additional obstacles for Spanish radio:119

It's not just being minority that's a disadvantage when you're trying to sell to some of the "Anglo" nonHispanics. But also, that you're a minority in a different 

language.120

Lack of workforce diversity at ad agencies contributes not only to a resistance to

accommodating the minority market, but to misperceptions about the minority consumer market in

general.

121 Pierre Troupe, an Account Executive with a Jacor Communications radio station in St.

Louis said:

[Part of the problem is ] the fact that the agencies, or a good deal of the agencies here in the St. Louis

market, are lily White in terms of front door to back wall, or agencies that only have a couple of Black

people involved in them. So the whole idea of understanding what Black people are all about is

difficult....[For example] if you’re talking to a White buyer, they try to equate it to situations in their

own particular culture by which young Blacks have less money and their parents do less well. When in

actuality, in reality, in the Black community, wealth is held at a younger age than is held in the White

population....[T]here’s the underlying aspect of the stigma of young Blacks being not into serious things

even to the point of being gang members and that sort of thing.

122

Lack of diverse personnel in advertising agencies and companies which place ads may affect

relationships with minority salespeople, minority broadcasters, and perceptions of minority consumers.

Minority broadcasters tend to employ more minorities than non-minority-owned broadcasters, so they
Section II. Radio When Being No. 1 is Not Enough

Page 39

 

123

 See, NTIA Minority Ownership report, 1997. The Supreme Court noted in Metro Broadcasting

that, “In 1981, 13 of the 15 Spanish-language radio stations in the United States owned by

Hispanics also had a majority of Hispanics in management positions, while only a third of Angloowned Spanish-language stations had a majority of Hispanic managers, and 42 percent of the

Anglo-owned, Spanish language stations had no Hispanic managers at all.” 497 U.S. at 582 n. 34. 

Paul Milton Gold found in 1983 that 82% of Black-owned stations had African-American general

managers, as compared to 27% of white-owned stations. Nearly 74% of the Black-owned stations

had more than 75% African-American employees, compared to fewer than 38% of the whiteowned, Black-formatted stations. Public Interest Programming Service to Minority Communities by MinorityOriented Commercial Radio Stations, 1983, National Association of Broadcasters’ Library, unpublished

paper. Further research is recommended on the relationship between the race/ethnicity of the

sales staff of minority-format stations, advertisers, ad agencies, representative firms, and a station’s

advertising performance.

 

124 Note that the analysis of power ratios in Table 2 of Section II-C-2-c, page 79, indicates that

minority owners are less able to convert their audience ratings into revenues than their majorityowned counterparts of similar size. While minority broadcasters responding to the survey believed

their race or ethnicity was a less significant factor in the imposition of “no Urban dictates” than

format, power ratio data indicate minority owners averaged lower power ratios than their majority

counterparts of similar size.

 Barthwell Evans in her study of minority broadcasters reported two instances in which

advertisers canceled their ads when it was announced that the new owner of the station was a

minority. While these two anecdotes do not provide direct evidence proving that the owner’s race

or ethnicity was a factor in the advertising decisions, the timing of the decision raised concerns in

the minority owners’ minds. See, “Radio Broadcasting,” 8 Yale Law and Policy Review 380, 404.

may be more adversely affected by lack of inter-ethnic/racial understanding when dealing with

advertisers or ad agencies.123

Consistent with the view that race and ethnicity are key factors in the media buying process,

minority broadcasters rated "minority-targeted format" number two on a scale of one to ten as the

most important basis for “no Urban/Spanish” dictates. "Audience income" received an average score

of four followed by "audience age" and "station ownership by a minority," both of which scored an

average of six.124
Section II. Radio When Being No. 1 is Not Enough

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125 A spot sale is an advertisement for a stipulated length of time (e.g. 60 seconds) and duration

(e.g. five times a day for twenty days). 

Question: To what extent do the following factors

influence an advertiser or advertising agency to adopt

a “no Urban dictate” policy?

Average Response

on a scale of 1 to 10 

(1 denotes the highest

level of importance)

Format that targets the minority audience 2

 Audience income 4

 Audience age 6

 Station ownership by an ethnic minority 6

Question: In your estimation which of the following

factors influences advertisers or advertising agencies

to impose “minority discounts?”

Average Response

on a scale of 1 to 10 

(1 denotes the highest

level of importance)

Racial/ethnic composition of audience 3

Evenly, audience income and racial/ethnic composition 4

Ability to reach minority audience via general market

media outlets not targeted to minorities

4

Audience income 5

Respondents to CRF’s survey were also asked to rate factors that influence advertisers to

impose "minority discounts." The "minority composition of the audience" on average was rated three

on a scale of one to ten; “audience income and minority audience composition as even factors" on

average was rated four; the "ability to reach minorities by means of general media" (e.g., general market

radio) also was rated four; and "audience income" was rated five. Significantly, the minority

composition of the audience was rated first and the income of the audience— as a single factor—was

rated last.

The survey questionnaire also asked if "minority discounts" are likely to be imposed on a minoritytargeted station even though the income of its audience is comparable to that of non-minorities in the

market. Seventy percent of the respondents said that the rate for spot sales125 would be discounted in

such instances. Seven percent said they would not, and 23 percent declined to respond based upon

lack information.
Section II. Radio When Being No. 1 is Not Enough

Page 41

 

126 Interview with Tom Castro, El Dorado Communications, page 4.

 

127

 Airline to Latin Americans: Sorry, New York Daily News, August 21, 1997.

The dilemma of whether race or income is the primary factor in influencing media bias was

addressed by Tom Castro, Chairman and President of El Dorado Communications. On average, he

maintains, the Hispanic household is larger than that of the general population. While per capita

income may be low, household consumption is greater in certain product categories. Nonetheless,

negative stereotypes often deter Spanish radio buys. According to Mr. Castro:

If I’m selling groceries, Hispanics are the best possible consumers that there are. And this is not my

data. Its been demonstrated by many people that Hispanics will spend more (as an index against a

norm). Hispanics will overspend on groceries compared to everybody else. So if you use the index of 100

with 100 being the norm, Hispanics might index at 120 or 130% for groceries. Why? Because the

households are larger; because the family structure and lifestyle is such that people don’t go out to eat at

restaurants as much. They eat with each other more. And so, Hispanics are great consumers for

groceries and everything that’s inside of a grocery store which might be 30% of what you hear on a radio

station, 40% of the advertising is either the grocery store itself or all the products you find inside of

grocery stores. So if logic held, you would spend more to reach that Hispanic consumer than you would

spend to reach anybody else. Because you know that once you reach ‘em, they’re going to spend 20 or

30% more than the typical consumer will for those kind of products. Well, instead what you find is

people telling you, “Well, we don’t advertise to Hispanics. Or when we do it’s a token buy.” As

opposed to really seriously going after the consumer. Why is that? Usually, people will be economically

rational. I think it’s a combination of things. On the one hand, you have prejudice, which is hard to

quantify and prove, but is there. And there are just people who say, “Well, I don’t want Hispanics in

my grocery store.” Or you have consumer product people sitting in a place like Cincinnati or Minnesota,

or some other location where there are not a lot of Hispanics. So all they know about Hispanics is

they’ve been to Mexico once or twice and saw a lot of poor people there. They watch TV and most of

the people on TV that are Hispanic are pimps, prostitutes, illegal aliens, drug dealers, somehow on the

opposite side of the law. And so, to them it’s not an attractive market.126

Evidence surfaces from time to time indicating a negative view of minority patrons on the part

of advertisers. American Airlines issued an apology for stereotyping Hispanics in its pilots’ manual. As

reported in the New York Daily News:

In a section titled, “Survival in Latin America,” the manual says that Latin American passengers can

become drunk and unruly, don’t expect planes to leave on time and that there are reports of people

making false bomb threats to delay planes if they are running late.

127
Section II. Radio When Being No. 1 is Not Enough

Page 42

 

128

 Compare, David Hinckley, Macy’s ups black, Hispanic advertising,, New York Daily News,

December 14, 1998, 1998 WL 21937063, (Macy’s department store reported to have increased its

advertising on black and Hispanic media by 50% in response to pressure from minority media

advocates).

 

129 Interview with Luis Alvarez, WSKQ and WPAT (Spanish Broadcasting System), page 2. See

also, Mira Schwirtz, Sharpton Leads Ethnic Media Demonstration Outside Y&R, Mediaweek, June 22,

1998, 1998 WL 10320331.

 

130 Survey of WBGE-FM. See also, interview with Ken Smikle page 10. 

 

131 Interview with Co-Owner of a station that has requested anonymity, pages 4-5.

The national retail chain, Macy’s,128 was alleged to have unfounded fears of pilferage by

minorities. According to Mr. Alvarez:

...I was managing a station where the sales [representative] came back and she was practically in tears

because the agency had told her that the client said that the reason they don’t advertise in the Hispanic

market (it was a Macy’s department store) was because their pilferage will increase.129

Other individuals interviewed for this study noted that advertisers are cautious about minority

consumers due to perceptions linked to stereotypes about thievery. Michael Banks, Station Manager

of the urban formatted station WBGE-FM, said he was told by one potential advertiser:

Your station will bring too many Black people to my place of business.130

Another example was provided by the Co-Owner of an AM/FM in the southern region:

[F]or example, 4 or 5 years ago a store moved [from New York] to Huntsville... on the South end of

town. [Huntsville] is divided racially by North and South. Most of the Blacks live North. And in

this very nice little strip mall, this guy said, “I know I need your audience. Your people spend more

than the average White customer that comes in here. And let me try you.” So we put an OES schedule

on for him — an optimum effective schedule — on the radio station. And Black folks showed up.

And then he said, “I’m going to have to cancel my business.” I said ‘Why?’ He said, “Well, my

pilferage rate is higher.” I said, ‘Can you prove that?’ [He responded] “No, but, I don’t have enough

people, and I have suspicious people coming in here. And I believe they’re shoplifting.”131 

Byron Lewis made the same point:

Sometimes, there’s even the matter [of too many Blacks],... particularly if you get into the franchise

business, and you get a disproportionate amount of Black traffic. There’s some people who own

stores—franchise outlets—who still don’t want to advertise their market, because they’d rather spend

their money on a broad basis, because they just don’t like the traffic. So I think that there’s still a
Section II. Radio When Being No. 1 is Not Enough

Page 43

 

132 Interview with Byron Lewis, The Uniworld Group, page 18.

 

133 The Katz Radio Group has five separate radio representation companies — Christal Radio,

Eastman Radio, Katz Radio, Katz Hispanic Media and Sentry Radio. Collectively, these companies

represent more than 2,000 radio stations in 270 markets. The memo was alleged to be by used by

Katz sales staff on behalf of radio stations owned by Walt Disney/CapCities/ABC. Interview with

Judith Ellis, Emmis Broadcasting, page 22.

 

134 The full text of the memo (“Katz memo”) and Katz statement of apology are on file with

CFR.

 

135 Katz memo, page 1 (emphasis added).

 

136

 Id., at 12 (emphasis added).

 

137

 See, Advertisers Show Bias by Tuning Out Black Radio, Clarence Page, The Cincinnati Post, July 2,

1998 19A, 1998 WL 13550328.

subjective attitude or racial attitude that gets in the way of sound business practice which is one of the

things that you encounter when you work the minority side of the marketing fence.132

More recently, the national rep firm, Katz, issued an apology for language contained in a memo

alledgedly used to train its salesforce.133 The memo contained several references to Blacks and

Hispanics as “suspects” rather than “prospects.’134 Under the heading, “Keys to Success,” the memo

said: 

Get buyers to understand that WABC is one of the most upscale select stations in New York. We

must get the buying community to understand and appreciate the unique qualitative, personality and

foreground profile of WABC. Advertisers should want prospects not suspects.

135

The memo also said:

When it comes to delivering prospects not suspects, the urban[-formatted stations] deliver the

largest amount of listeners who turn out to be the least likely to purchase. Median age is 23. Very

young and very, very, poor qualitative profile.

136

The phrase “prospects not suspects” has been criticized by minority broadcasters and

community activists, including the Reverend Al Sharpton, as perpetuating the stereotype that minorities

are responsible for thievery.137 

Elsewhere, the memo says: 
Section II. Radio When Being No. 1 is Not Enough

Page 44

 

138 Katz memo, page 4.

 

139 Id.

 

140 Id.

 

141 According to Barry Drake, Chief Operating Officer, Sinclair Communications, the

presentation was prepared by Sinclair’s national sales manager. Telephone interview with Barry

Drake, November 20, 1998.

 

142 Telephone interview with Barry Drake, Sinclair Communications, January 8, 1999,

(presentation is on file with CRF).

 

143 Capitals and emphasis in original.

The indices highlight the importance of effectively reaching New York’s “white” population but the

White population also accounts for almost 3/4's of each category. We have to drill this home that while

the Black and Hispanic segments of the New York population are significant, they comprise very small

portions of the upscale, educated and affluent [aged] 25- 54.138

The memo also stressed that advertisers “can easily overbuy Black.”139 The memo argued that

advertisements on urban stations reach less economically affluent young African-Americans, and that

you can reach “upscale Blacks” through “non-ethnic stations.”140

Other anecdotal evidence obtained by CRF expressed sentiments similar to that of the Katz

memo. A sales presentation prepared by Sinclair Communications141 was used in the New Orleans

market to discourage advertisers from buying more than one, or “overbuying”, urban radio stations.

CRF requested permission to reproduce the full presentation for the purpose of dissemination with this

study, however, permission was denied by Sinclair Communications.142 

The Sinclair presentation sets forth various demographic data, including age and income, in an

effort to show that Sinclair’s audience would provide a more profitable market. However, Sinclair

explicitly relies upon racial data noting: 

“***BEWARE***

BY ALL MEANS, BUY ONE URBAN STATION FOR COVERAGE OF THE BLACK

POPULATION....BUT DON’T SACRIFICE THE “ANGLO” POPULATION BY

OVERBUYING URBAN! 1 URBAN STATION WILL GIVE YOU THE BLACK

“REACH” YOUR NEED!”143
Section II. Radio When Being No. 1 is Not Enough

Page 45

 

144 Sinclair sold KMEZ-FM in 1998. 

 

145 Telephone interview with Ernest Wilson, Regional Market Manager, Clear Channel New

Orleans, December 9, 1998.

 

146 Ranked according to average 1996 local commercial shares, WQUE ranked first, WYLD

ranked forth, and KMEZ (Sinclair’s station) ranked ninth in the New Orleans metro market. See,

BIA MasterAccess, August 1997 edition.

 

147 Telephone interview with Ernest Wilson, note 145, supra.

The New Orleans metro market consists of several parishes (i.e. political subdivisions) and three

urban radio stations— KMEZ-FM (owned by Sinclair),144 and WQUE and WYLD (owned by Clear

Channel Communications). The Sinclair presentation describes the “upscale population” in the New

Orleans metro market as residing in five “non-ethnic” parishes. The presentation describes the listeners

of its competitor’s urban stations as residing mostly in the “Black” Orleans Parish: “The majority of

WYLD’s and WQUE’s Adult 24-54 listeners are located within the Orleans Parish, which is a

predominantly Black area with a low-income, downscale socioeconomic profile.”

According to Sinclair, the presentation was intended to show that the Sinclair urban station,

KMEZ, reached the economically affluent “money demo”—Black listeners aged 25 to 54. In contrast,

WQUE was characterized as reaching mostly 12 to 34 year olds —“They have no money!” According

to Sinclair, buying advertisements on more than one urban station in the New Orleans market would

amount to duplicated reach among Black listeners. Buying advertisements on one urban station, (i.e.

KMEZ), according to Sinclair, delivers the necessary reach with “NO ANGLO WASTE” (capitals in

original).

According to the Regional Marketing Manager of WQUE and WYLD, advertisers usually

purchase advertisements on the top five stations in a market when making national buys despite the fact

that this may result in duplicated audience reach.

145 WQUE and WYLD are among the top five stations in the

New Orleans market.146 In his view, “racism can only explain why it is negative to buy more than one

urban station, but positive to buy more than one general market station.”147 Mr. Wilson also said that

it was “disingenuous” to promote KMEZ based upon a higher percentage of “upscale” age 25 - 54

listeners, because the audience of WQUE and WYLD is “four times the size of KMEZ.”

The Sinclair presentation omits the fact that the Clear Channel urban formatted stations,

WQUE-FM and WYLD-FM had average 1996 local commercial shares of 14.7 and 8.4, respectively.

KMEZ’s 1996 average local commercial share was 4.9.

In 1996, Sinclair Communications owned 26 radio stations nationally, including three general

market and one urban formatted station (KMEZ) in the New Orleans market. One can thus surmise

that urging advertisers not to “overbuy” urban stations (i.e. buying only KMEZ) would benefit Sinclair’s

general market stations.
Section II. Radio When Being No. 1 is Not Enough

Page 46

 

148 Telephone interview with Barry Drake, November 20, 1998.

 

149 BIA MasterAccess database, August 1997 edition.

 

150 Katz memo, supra note 134, at 4.

 

151 BIA MasterAccess database, 1998.

 

152 Id.

 

153

 As noted above, under certain anti-discrimination statutes, it is sufficient to demonstrate

that race is one factor leading to the challenged practice. Specifically, judicial cases interpreting

the Fair Housing Act's prohibitions have recognized that discriminatory intent need only be one

motivating factor for the conduct. See, Village of Arlington Heights v. Metropolitan Housing

Dev. Corp., 429 U.S. 252 (1977); United States v. City of Parma, 661 F.2d 562, 575 (6th Cir.

1981), cert. denied, 456 U.S. 926 (1982) ("There is no requirement that such intent be the sole

basis of official action"). Rather, "[w]hether motivated by animus, paternalism, or economic

According to Sinclair’s Chief Operating Officer, the presentation was given to Allied Radio

Partners, a subsidiary of The Interep Store, to encourage national advertisers to place advertisements

on KMEZ.148 Ironically, Sinclair’s competitors, WQUE and WYLD, are represented by another

Interep subsidiary, Clear Channel Radio Sales.149

Cautioning advertisers not to “sacrifice the ‘Anglo’ population by overbuying urban” echoes

sentiments expressed in the Katz memo urging sales people to tell advertisers that the “white”

population is of paramount importance:

If an advertiser is buying 100 grps [gross rating points - a measure of the station’s audience reach] and

is targeting professional/managers, they only need to buy [less] GRPS of Black exposure and [even less]

GRPS of Hispanic exposure. Anything more would be overkill and would meant [sic] that effective

frequency and schedules would not be placed against the more important “White” segment of the

population. 

150

ABC radio and its representatives had an incentive to direct business away from urban, Spanish and

other minority formats to general market ad placements, because of the types of formats ABC stations

used. Of the 28 stations ABC radio owned in 1997, only one could be classified as minority format;

KMKY-AM in San Francisco, a rhythm and blues/oldies station which ABC bought in 1997. 151 Its

other 27 stations programed to the general market specializing in formats including Children’s, talk,

and album-oriented rock.152

Both the Katz memo and the Sinclair presentation emphasized the “value” of the “White”

population over Blacks and Hispanics. Though age and income were cited as reasons for directing ads

away from minority-formatted broadcasters, the race and ethnicity of the audience also appeared to be

a factor in the recommendation.153
Section II. Radio When Being No. 1 is Not Enough

Page 47

considerations, intentional . . . discrimination is prohibited by the Act." United States v. Scott,

788 F. Supp. 1555, 1562 (D. Kan. 1992).

 

154 Legal research should be conducted to analyze the extent to which these practices may violate

public policy in the Communications Act of 1934, as amended, 47 U.S.C. §§151 et seq. For example:

(1) Title I, Sec. 1 states that the Act’s purpose is to regulate interstate commerce to ensure radio

communications service is available “to all the people of the United States, without discrimination

on the basis of race, color, religion, national origin, or sex...” To the extent that competitors are

steering business away from a broadcaster based on the race or ethnicity of the station’s audience, it

may limit the availability of radio to minority communities because it undermines the financial

viability of serving those communities. Arguably, this may constitute discrimination under the

Communications Act, particularly if the caution not to buy time on minority-formatted stations is

based on the audience’s race, color or national origin; (2) Section 257 of the Act emphasized that

the FCC shall carry out the national policy “favoring diversity of media voices, vigorous economic

competition...and promotion of the public interest, convenience, and necessity.” 47 U.S.C. 257 (b). 

Discouraging ad business on stations which serve the minority community decreases the incentives

to provide such service, thereby potentially affecting diversity of media voices. It also appears to

affect minority-formatted stations’ ability to earn revenues, and their ability to raise capital. (See

page 56 comments of Tom Castro asserting that advertising practices steer ads away from minority

oriented stations, and harm minority broadcasters’ ability to serve the public interest, compete, and

raise capital to buy additional stations). The FCC is empowered to use other sections of the

Communications Act of 1934, as amended, to remedy market entry barriers for small businesses

and entrepreneurs identified through a Section 257 analysis. 47 U.S.C. 257(a); and (3) Sections

307(c)(1) and 310(k)(1)(A) of the Act require that the FCC take into account whether the licensee is

operating in the public interest as a consideration in license renewal.

Other statutes and public policies may also apply to the extent that characterizations about a

broadcaster or its audience are unfair, false, misleading or misrepresentations of fact. For example,

Section 5(a)(1) of the Federal Trade Commission Act states that “Unfair methods of competition in

or affecting commerce...are hereby declared unlawful.” 15 U.S.C. § 45(a)(1). The Lanham Act

prohibits false or misleading descriptions of fact, or misrepresentations of fact, by any person in

connection with any goods or services, that may cause confusion or deceive regarding the goods or

services of another person. 15 U.S.C. § 1125 (a)(1). 

Both documents were designed to steer ad placements away from stations serving minority

communities, reflecting the authors’ economic interests in general market ad dollars.154 Practices such

as these carried out on a national scale appear to undermine the advertising performance of minorityformatted stations. 

The Katz memo and the Sinclair presentation rely upon audience research data to support their

assertions about the superior “value” of White consumers over Black and Hispanic consumers. Hence,

the reliability of data supplied by audience research services is critical. Statements about audience
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155 A 1966 Congressional oversight committee concluded: “The purchase and use by

broadcasters of rating surveys importantly affect the performance of broadcasters in two respects,

first, in relation to listeners and viewers, and second, in their competitive relations to each other. 

The FCC has vital responsibilities with regard to both these aspects.” House Comm. on Interstate

and Foreign Commerce, Broadcast Ratings, H.R. NO.1212, 89TH CONG., 2D SESS., AT 11 (1966) (see

Appendix G).

 

156 Board members of the Council represent blue-chip radio and television broadcasters, cablecasters, print organizations, advertising agencies and industry trade associations (see Appendix F). 

 

157 Interview with Bob Jordan, President of International Demographics Inc., which prepares

The Media Audit, a rating service, page 6. See also, Appendix I for a fuller analysis of audience

research methods.

 

158

 Id.

characteristics are usually based upon “qualitative” studies of listeners developed by audience research

services—some of which are accredited and some of which are not. 

The broadcast industry, Congress and the FCC have long recognized the importance of

accuracy in audience research services.155 The Media Ratings Council (MRC) is an industry-sponsored

organization that promotes audience research services that are valid, reliable and effective.156 Services

that have disclosed their methodologies to the Media Ratings Council are subjected to its review

process which includes an extensive procedural audit. Fourteen services are currently accredited by

MRC as meeting its standards (see, Appendix F).

Questions have been raised concerning the ascription methodologies employed by some

audience research services.157 Ascription involves using answers from completed surveys to supply

answers for incomplete survey instruments. Ascription has been approved by MRC in certain

instances. However, concern has been raised about the ascription of entire survey instruments— not

just a few missing answers.158

While the accuracy of the data upon which the Katz memo and Sinclair presentation are based

has not been specifically called into question, their comparisons of the “qualitative profile”of general

market and minority-format station listeners underscores the importance of reliable ratings and

qualitative data. In short, assessments of an audience’s qualitative profile may not be accurate, if the

methodology upon which those conclusions were drawn is flawed. 

In summary, a variety of factors may contribute to "dictates" and "minority discounts."

Negative views about the minority consumer and concerns about product image, in certain instances,

appear to outweigh economic justifications for targeting minority consumers. As the next section

demonstrates, some advertisers are adjusting their media buying practices as the minority population

continues to expand. The ability of minority-owned media to take advantage of these new

developments in the marketplace, however, has not been demonstrated.
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159 The 1997 Report on The Buying Power of Black America, Target Market News Inc., pages 13

and 14.

 

160

 Strong Economy Buoys Purchasing Power, Hispanic Business, December 1997, page 58. Estimates

are based upon U.S. Census data regarding per capita income.

 

161 Lewis at page 7. See also Interview with Sherman Kizart, The Interep Radio Store, page 5.

 

162

 Strong Economy Buoys Purchasing Power, Hispanic Business, December 1997, page 60.

 

163 Target Market News, Dollars Spent Advertising to Black Consumers, Target Market New

web site: http:\\www.targetmarketnews.com, accessed September 1998.

 4. Current Marketplace Developments.

Despite the challenges, most media executives interviewed acknowledged that trends are

improving. The fact that the 1996 earned income of African-Americans—estimated to be $367

billion—constituted the fifteenth largest economy in the world,159 has encouraged some advertisers to

reevaluate their marketing strategies. Similarly, Hispanic purchasing power in 1997 was estimated at

$266.5 billion—a 7.7 percent increase over 1996.160 As Byron Lewis puts it, “Now it’s all numbers

driven.” 

[D]espite the fact that African-Americans have a lower median income than say the Hispanic

population, the Asian population and the general market, we have a higher annual purchasing power.

And the purchases that we make reflect our desire to buy products that have imparted prestige and

status associations. So we’re probably 34 - 35 million people in the country. But we have an annual

income over $400 billion which makes us 7th or 8th largest consumer nation in the world. In other

words, we actually have more purchasing power than many other European countries (Spain, places like

that). The truth is, the Black preference for buying things that have the badge of prestige makes us a

valued customer. That you see across all product lines. Now, that phenomena is what the clients begin

to pay attention to.161

Evidence that advertisers are interested in the Black and Hispanic markets can be found in the

increasing amount of advertising expenditures targeted to these market segments. 1997 advertisements

in all media targeted to Hispanics totaled $1.4 billion dollars—up 17% from 1996.162 1997 targeted

advertising to African-Americans totaled over $1 billion.163

While these developments are encouraging, they have not served to close the gap between

marketing expenditures on minority-formatted versus general market radio stations. In several Arbitron

markets the market share of listeners for Black and Spanish stations has increased. Their share of the

advertising revenues, however, lags far behind that of general market stations. One minority radio

station owner commented: 
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164 Telephone Interview with Tom Castro, El Dorado Communications, December 17, 1998.

 

165 Katz memo, page 4 (emphasis added.) 25-54 rating point refers to the ability to reach

audiences between the ages of 25-54.

 

166 Interview with Tom Castro, El Dorado Communications, page 6.

Now, in many markets, large and small, from LA and NY to the Rio Grade Valley and Mobile,

minority targeted radio stations are rating leaders. There is demographic change and Arbitron is slowly

documenting this. But the ad dollars haven’t been reallocated yet. The large, established non-minority

owned stations are getting an unfair share of the revenue. And, they are fighting like hell to hold onto

the revenue allocation that represents the past. Now they’ll say to the ad agencies, “look at my oldies

station, it has a 20% Hispanic audience. You don’t need to buy a minority formatted station.” There

is a show down coming. All we ask is that economic rationality be employed. Green is green, not black,

brown or yellow.164

Consistent with Tom Castro’s claim that general market stations are attempting to discourage

buys on minority-targeted stations, the Katz memo exemplifies a strategy to gain revenues that would

otherwise flow to minority-targeted stations. According to the Katz memo, minorities can be

adequately reached through ABC/Disney and other general market outlets, thus reducing the need to

buy minority-targeted radio.

A 12x schedule on WQCD, WLTW, WTNS, WABC, WPLJ, WKTU, and WCBS-FM delivers

93.6 Black [ages] 25-54 rating points. Don’t even need to use an ethnic station. These

same stations deliver 82.8 Hispanic [ages] 25-54 rating points with a 12x schedule. Get all of the

ethnic ratings you need by not using an ethnic station. Drill this home. Buyers are not aware of this.165

Tom Castro explains that one consequence of such strategies is that highly-skilled minority sales

professionals who were trained at minority-owned stations are hired for higher salaries at general

market stations. More importantly, Castro says that the loss of commercial buys results in lower profits

for minority entrepreneurs which increases the difficulty of leveraging a minority-formatted station to

acquire additional stations in order to enjoy the benefits of competition as a multiple station owner.

With respect to the public interest, Mr. Castro points out that the programming quality of minorityowned stations can decline due to lessened profitability and they become less competitive in the

marketplace. Hence, there is a vicious cycle of events that leads to the decline of minority-formatted

and minority-owned radio.166

The same view was echoed by Roman Pineda, President of the Hispanic division (Caballero

Spanish Media) of the Interep Radio Store. He notes that industry leaders have paid attention to the

fact that Spanish radio is top rated in several markets, reflecting the growing minority population (see

Chart E regarding Hispanic and minority population and projected population trends, page 64). He

believes that the problem lies with smaller advertisers that have not invested in systems for evaluating

their investment in minority-targeted advertising.
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167 Interview with Roman Pineda, Caballero Spanish Media, pages 6-7.

 

168

 See id. at 12. See also interview with Tom Castro, El Dorado Communications, page 17.

 

169

 Interview with Roman Pineda, Caballero Spanish Media, page 10.

 

170 Interview with Judith Ellis, Emmis Broadcasting, page 17.

The reason why you have all of these Fortune 500 Companies advertising in the market is because it’s

already easier for them to track the benefits of advertising to Hispanics. They have the systems in place.

They do see a market. And trust me, Proctor and Gamble could care less what language you speak as

long as you buy their diapers. AT&T is aware of the fact that the vast majority of the long distance

consumers in this market in the United States are Hispanics because they can tell: “Oh, here’s a list

of Hispanics’ earnings. This is how much they spend a month on long distance.” It’s a very black &

white equation. You can’t accuse AT&T of discriminating against Hispanics. So when you take a

look at the knowledge and the needs, most of the smaller companies, the smaller entities that don’t have

the resources, don’t have the financial background, are not really marketing savvy, those are the ones that

“may be discriminating against Hispanics” because they haven’t done their homework.167

With respect to the $1.4 billion dollars spent on Hispanic marketing, Mr. Pineda notes that this

figure represents only 1% of the amount of general market advertising expenditures. Hispanics, on

the other hand, represent approximately 10% of the population.168 One reason that more advertisers

have not allocated additional funds to the targeted market is because the same tools (e.g. tracking

systems) used to justify general market expenditures are not available for targeted expenditures.

In the general market, I think there are more tools, more quantitative and more qualitative tools that

enable them to make a decision. And if you’re a brand manager, and you’re paid on profits, and you’re

responsible for developing a plan that’s going to move X amount of cases. Are you going to venture into

an unknown territory where you can’t track sales and you don’t know all of the information? Or are

you going to go to a safe territory like the general market that gives you exact information week-by-week

of your movement that you can look good to your boss? It’s the “Cover Your Ass Syndrome.”169

As the General Manager and Senior Vice President for two general market and one urban

market station located in New York, Judith Ellis of Emmis Broadcasting is in a position to compare

sales by her various stations. The Black-targeted station, WRKS-FM, has the largest listenership of the

three, yet it fails to perform as well in terms of cost per point paid by general market advertisers. When

asked why WRKS cannot obtain the same rates as the other non-ethnic stations, Ms. Ellis responded:

Because it’s black. The Black consumer is less valued than the White consumer and therefore they’re

going to pay less for Black consumers. 170

On the other hand, Ms. Ellis indicated that there are companies that aggressively seek out

minority-targeted outlets. Buys from these advertisers are obtained through ad agencies that handle
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171

 Id., pages 18-19.

minority buys exclusively. In these instances, WKRS gets rates that are comparable to general market

buys. However, she noted that some buyers that handle a broad variety of products will only buy ads

on WKRS for products that are traditionally viewed as Black consumer items:

Ellis: Yes. There are some agencies that are buying just Black media. And there are other agencies that are

general market buys and with those agencies we have a harder time getting the rates we deserve. 

.... 

Ofori: So now, what kind of advertiser are you struggling to get into the door with? Those that do not have

a targeted campaign? What are the examples of those kinds?

Ellis: Continental Airlines, Aruba Tourism, Staples are some that come to mind. Wamsutta, American

Airlines, SAAB.

Ofori: And these are companies that you try to do business with and found it difficult to do it? 

Ellis: Yeah. We’ve given unbelievable presentations to Chock Full O’ Nuts Coffee, Folanari wine, where

we’ve given proposals that are good; that we really had information here. And you just can’t get

anything accomplished. Merrill Lynch. Oh, Cadillac doesn’t buy us. Intel, Dial-A-Mattress. We

have one buying service that’ll only buy us for fried chicken. They will only buy us for fried chicken and

they were mad when I called them racist.

171

An article by Radio Business Report (RBR), entitled NEDs & NUDs are duds, but they’re reality

(June 1, 1998) listed several companies reported by its sources to have “no Urban” or “no Spanish”

dictates. Advertisers reported in the article as “handing down dictates not to advertise on

Urban...radio” include: Armour All, Aruba Tourism, Astoria Bank, Buick, Cadillac, Continental Airlines,

Discovery Channel, Jos. A. Banks Clothier, The Learning Channel, NYX Science Center, Starbucks

Coffee, Trans World Airlines and Volvo. Advertisers reported to have “dictates not to advertise on...

Hispanic radio” include: Baskin-Robins, CompUSA, IKEA, Macy’s, New Jersey State Lottery,

Paramount Studios, Sony Pictures, Starbucks Coffee, and Universal Studios. 

To the extent that such dictates are based on the race, ethnicity or national origin of a station’s

audience, or exclude a station from consideration based in part on those factors, one could argue they

are contrary to public policy and to the public interest mandate of Section 1 of the Communications

Act, as amended, 47 U.S.C. §151. In addition, to the extent that any of these advertisers are covered

by certain anti-discrimination statutes such as Title II of the Civil Rights Act of 1964, 42 U.S.C. §2000a,

or the Fair Housing Act, 42 U.S.C. §§3604 et seq., advertisers who practice minority dictates may be
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172 As noted above, the Fair Housing Act prohibits advertising which indicates a preference on

the basis of race, color, national origin religion, sex, handicap, or familial status. See, 42 U.S.C.

§3604(c). Thus, if a real estate agency were to adopt a “no Urban/Spanish dictate,” this might

violate the Fair Housing Act. Similarly, Title II of the Civil Rights Act of 1964 prohibits

discrimination on the basis of race, color ethnicity or national origin in places of public

accommodation. 42 U.S.C. §2000a. Public accommodations include “any restaurant cafeteria,

lunchroom, lunch counter, soda fountain, or other facility principally engaged in selling food for

consumption on the premises, including, but not limited to, any such facility located on the

premises of any retail establishment.” 42 U.S.C. §2000 (a)(b)(2). One could argue that a Starbucks

coffee house is the 1990's equivalent of the soda fountain. To the extent that Starbucks or similarly

situated businesses may have used “no Urban/Spanish dictates” to exclude stations from

consideration for advertisements based in part on the race, ethnicity or national origin of the

audience, it may be argued that this constitutes an attempt to avoid patronage by minority

customers in violation of Title II. Although Title II does not include a specific provision

prohibiting discrimination in advertising as does the Fair Housing Act, it is possible that evidence of

“dictates” could form part of the evidence showing a violation of Title II. Note, in the wake of the

Katz memo it was reported that Starbucks was engaged in discussions regarding advertising on a

minority-formatted station. See, Radio Waves, Tuned to B.I.A.S, Minority Stations Shunned by Advertisers,

Newsday, September 7, 1998.

 

173 Interview with Byron Lewis , The UniWorld Group, page 11.

engaging in practices which violate these statutes.

172 To the extent businesses receive federal funds,

they are also subject to the nondiscrimination provisions of Title VI of the Civil Rights Act of 1964,

42 U.S.C. §2000(d). Legal research should be conducted on the potential applicability of these statutes

and case law to companies which engage in “no Urban/Spanish dictates.”

Byron Lewis, Chairman of The UniWorld Group, in commenting on the role of his ad agency,

confirmed the point that minority-owned agencies are primarily engaged with promoting the minority

market:

[E]ssentially I’m interested in reaching a station that reaches Black audiences. In some cases it’s a

White-owned station. Like KISS in New York City. And that becomes just a matter of the channel.

You got to use a channel that gets you the numbers against the Black audiences. No I wouldn’t use a

White, suburban station with predominantly White males, because I don’t have an assignment that is

interested in reaching White males. The mainstream agency has the responsibility and the budget to

reach that segment.

173

 

And despite statistics that show increasing consumption by Blacks, buys for such markets are

discounted due to a general negative perception of the market:

The mainstream advertising agencies have a perception that the White customer is more valuable than

the Black or minority customer because of the things we mentioned. The perception is because the White
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174

 Id., pages 15-16.

 

175

 Id., at 15-16.

median income is higher, higher number of people in the professions....In other words, they ask for higher

rates because they’re reaching White customers who the advertiser feels for a variety of reasons is a more

valuable customer. And if there are any Blacks thrown in there that’s a bonus. But that’s not the

issue. Now when the Black station on the other hand comes with its numbers and it tries to get equal

rates, there’s the perception by certain advertisers that the customer is not necessarily in numbers or in

quality equal to the White customer and, therefore, there’s a difference in the rates that the stations can

achieve. Now, all media is subject to negotiation. And I just don’t feel the Black stations have in most

cases the same leverage in order to maintain the rate that they ask.174

Although new developments in the marketplace favor minority-targeted advertising, some

conditions have remained the same. Factors such as product image and misperceptions about the

consumer potential of minorities constitute barriers that prevent minority media from closing the gap

between audience share and advertising revenues. Stereotypes and the desire to target White

consumers also play a role in lower advertising revenues for minority oriented stations. Mr. Lewis said:

Lewis: You don’t advertise to them[minorities]. Let me put it more succinctly. The truth about it is, I’ve been

told that the—let’s just take the Caribbean—Blacks are going to come anyway. We don’t turn anyone

away. But in the Wintertime, the people we want to reach are the upscale, European, Canadian,

American, White travelers. They come in the Wintertime. Now, Blacks come too. But you almost

have no advertising welcoming Blacks during that period. That is a stated reason for not advertising to

Blacks. That’s our core audience. Blacks will come anyway. But underneath it, we don’t want to

create an imbalance. 

Ofori: Are there any other product categories or services that exemplify what you have said ?

Lewis: No one will ever say that to you publicly.175

C. Black and Hispanic Consumer Spending Patterns - Now and the Future

Data on the racial/ethnic distribution of family income tend to reinforce the generally held

perception that Hispanics and Blacks have less disposable income. Chart B contains data on median

family income according to race and ethnic group. The chart shows that, based upon national averages,

Blacks and Hispanics are less economically affluent than Whites and Asians/Pacific Islanders.

Disparities in family income reinforce the perception that Blacks and Hispanics have less disposable

income for goods and products promoted by the electronic media. Such data is often used to justify