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Marshall Broadcasting Group purchases three community-oriented TV stations

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Cover Design by Andrew Nunez (77495)
Cover Design by Andrew Nunez

It’s been nearly 70 years since American families were introduced to television. According to experts from Stanford University, television must take on an active role in the promotion of economic development and equality for minorities. Through the creation of Black-owned television stations and networks, viewers are more likely to see positive images of themselves.

In 2014, there are very few Black-owned digital television stations (however there are Black-owned cable networks). Pluria Marshall Jr. and the Marshall Broadcasting Group (MBG) hope to change that dynamic with the purchase of FOX-affiliated stations KLJB-TV in Davenport, Iowa; KMSS-TV in Shreveport, La., and KPEJ-TV in Odessa, Texas.

Marshall is publisher of the local Wave Newspaper Group and was practically reared within a media environment—his father is Pluria Marshall Sr., a co-founder of the National Association of Black Journalists, and in the 1970s formally challenged the dearth of federal broadcast licenses given to minorities when serving as chairman of the National Black Media Coalition.

Here’s what the sticking point may be in terms of Marshall’s purchase: Nexstar Broadcasting Group Inc. plans to sell three of its stations to Marshall. The deal would require a waiver from the Federal Communications Commission (FCC) which voted in March to bar so-called “shared service agreements” where one station provides services (i.e. advertising) for another. However, when the FCC passed the ban on such arrangements, it added language designed to encourage waivers for joint sales agreements that have long encouraged diversity in media ownership.

Marshall (77494)

According to published reports, American Cable Association President and CEO Matthew M. Polka said in a statement, “FCC Chairman (Tom) Wheeler deserves high praise for addressing the broken retransmission consent market and moving to correct one of its most serious flaws—the collusion practiced by dozens of TV station owners, who are supposed to be competing with one another.”

Bloomberg News reported Sinclair Broadcasting, along with several other station groups including Nexstar and LIN Media, were forced to give up some stations once the proposal passed.

Nexstar said it would guarantee the loans necessary for Marshall to meet the $58.5 million price tag.

Marshall is confident that the deal will go through and that more people in the south, southwest and midwest will soon enjoy a more diverse television experience.

“We are confident on our end that they (FCC) won’t say no,” Marshall said regarding the new rules. “Nexstar is working with us because I’m an ‘operator.’ I’ll employ a ‘hands-on’ ethic that will offer a better chance of success than merely someone who is operating these stations from a distance.”

Marshall said his group has answered “all questions” regarding the financial viability of MBG and, as is usually the case, he said, “…they (FCC) will likely have a few more questions, as is the tradition of any federal body.”

Nexstar seems excited about the deal. In a statement issued this month, CEO Perry A. Sook said, “We believe the proposed transaction presents an ideal framework for introducing and incubating a new, minority-controlled entrant to broadcasting, and for bringing additional news, information and specialized programming to MBG’s markets at the earliest possible opportunity.”

The chance of the loan guarantees falling through are, according to Marshall, non existent. “We’re moving forward,” Marshall said, adding that any doubts about the guarantee of the loans can be “put to rest.”

Marshall said viewers of the new MBG stations can expect a large degree of local programming. “Obviously, Iowa and Texas will be different than Louisiana and that speaks to our efforts to tailor each station to the demands of the local audience,” Marshall explained. “If there is something missing that we should be aware of, I’ll fill the void. I’m going to be in each town at least once a month; I obviously will have a lot of traveling to do, but that is how I plan on running those stations. I’m a hands-on manager. That’s the only way that I’ve learned to offer the best, most effective product.”

It could be a sweet deal for MBG as well. Under terms of the proposed agreement between Nexstar and MBG, the latter group will be entitled to a maximum of 70 percent of the revenue from advertising sold by Nexstar on the stations, and the agreement will not provide for any bonus payments to Nexstar in terms of reaching revenue goals. The transaction structure reportedly provides MBG with an incentive to seek the best programming and thus maximize station advertising revenue.

MBG wants to feature an aggregate of 24.5 hours of additional local news and sports programming, “…and more will be developed,” Marshall said.

MBG will also develop minority-oriented public affairs programming (required for an FCC license) specifically tailored for the local audience. These shows will be syndicated to other television stations nationwide. What’s more, Nexstar will add another 13.5 hours of local news and public affairs programming in Shreveport, Odessa-Midland and in Quad Cities (Iowa). “We’re dedicated to full coverage of local news and events important to each community of viewers,” Marshall said.

Mergers may be more prominent today in television station ownership than in any other industry. But media consolidation has made it increasingly difficult for people of color to own broadcast stations because of so-called “entry barriers” (money). Consolidation has made it more difficult for small owners to compete, and the few minority-owned broadcast licensees are mostly small owners who control just a handful of stations or a single broadcast outlet. The share of Black-owned television stations has been in steady decline from 2009-2014, while the FCC reported in 2012 that White-owned stations increased from 754 to 935 (69.4 percent) during the same period.

The poor state of affairs regarding Black-owned TV stations may have begun in the late 1990s when Congress and the FCC allowed massive consolidation in the broadcasting industry. This policy shift reportedly crowded out existing owners of color and ensured that it would be nearly impossible for new owners to access the public airwaves. The recent FCC ruling barring shared service agreements has only hastened the decline in opportunities for broadcasting diversity.

In 2006, there were a scant 18 Black owned-and-operated full-power (operating on channels 2-69 and not licensed as a Class A, low power TV, TV translator or TV booster) commercial television stations. That represented only 1.3 percent of all such stations then, and it had gotten much worse by 2012 when the number was whittled down to five.

By December 2013, Roberts Broadcasting, a Black-owned media company, had sold its three remaining full-power TV stations to ION Media Networks for about $8 million. Roberts was once considered a great success story in an industry known for a lack of diversity throughout individual stations from coast to coast. Roberts declared bankruptcy in 2012 and its decline stemmed primarily from Viacom’s decision to shutter the UPN network which Roberts was attached to because of its early focus on programming featuring ordinary portrayals of African Americans.

The operation of shared service agreements have traditionally allowed persons access to capital that otherwise would not be available to them. Howard Stirk Holdings (owned by Armstrong Williams) holds licenses for two broadcast TV stations (WEYI-TV in Saginaw, Mich., and WWMB-TV in Florence, S.C.),  Other full-powered Black-owned commercial television stations are WLOO-TV in Jackson, Miss., owned by Tougaloo College; and WJYS-TV in Hammond, Ind. According to Marcella Gadson of the Minority Media & Telecommunications Council, “At one point, there were more than 20 fully owned and operated African American stations, but FCC policies regarding ownership structure and the loss of the minority tax certificate policy killed minority ownership.” Howard Stirk Holdings released a statement just after the new FCC regulations were announced, stating that if there were not for shared service agreements, they would not have been able to own a television station. “Single buyers  of a TV station, especially in small- and medium-size markets, simply cannot get financing without JSAs (Joint Service Agreements) and similar types of shared services agreements. JSAs and shared services provide the only means over such obstacles, and thus are a critical avenue for addressing the FCC’s goals of serving the public interest in fostering competition, diversity, local programming and minority ownership.”

MBG is essentially starting anew the tradition of Black-owned television stations. In a nation where African Americans spend some $45 billion annually on cable-TV service, Blacks reportedly watch about 77.4 hours of television each week, and watch 40 percent more television than any other ethnic group.

Marshall said he will first go on a “listening tour” of the three markets to develop different programming that is timely, informative, entertaining and, importantly, family oriented. “We want people to watch these shows,” said Marshall, who is also CEO of Equal Access Media Inc. as well as heading the Los Angeles Independent Publications Group. MBG owns the Houston Informer and the Texas Freeman. “These are their stations. It’s their community. What we want our viewers to do is enjoy a selection of quality programming that will uniquely fit their needs. If we accomplish that, all of the hard work put into these acquisitions will have been well worth it.”

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