Minority ownership in Broadcasting

As of 1995, the latest year for which published data are available, there were 1,221 television stations licensed in the United States. A total of 37, or just three percent, were at least 51 percent minority-owned. Minority ownership of AM radio stations was 175 of a total of 4,906, and 118 of 5,285 FM stations. Taken as a whole, minority ownership accounted for 330 of 11,412 broadcast licenses--2.89 percent (Adelson, 1997, p. D9). These numbers are declining, and they are expected to continue to do so.

According to Adelson, the Telecommunications act of 1996 "set off a torrent of mergers in the radio industry by relaxing the limits on radio ownership to as many as eight stations in a single market" (1997, p. D9). Radio giants have quickly emerged, as demonstrated in the combination of the CBS Radio network and Infinity Broadcasting by Westinghouse. And ten percent of all minority-owned radio stations in America

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ou're not able to buy, you ought to be selling," Howard A. Lipson, a senior managing director of Blackstone Capital Partners (which had invested $30 million in U.S. Radio in 1994), noted that prices for broadcast stations had risen to 15 times cash flow, far above the roughly 8 times cash flow that characterized most of U.S. Radio's acquisitions (Adelson, 1997, p. D9). And, as is prevalent in many minority communities, access to capital is either limited or expensive. Hispanic broadcaster Thomas H. Castro, whose El Dorado Communications owns seven stations, including the largest Hispanic station in Texas--KQQK-FM in Houston, admits that he couldn't start his company today, just six years later (Adelson, 1997, p. D9). Castro has found it difficult to outbid larger, public companies which have the ability to obtain financing a much lower interest rates. And W. Don Cornwell, formerly an investment banker with Goldman, Sachs & Co., who left the security of Wall Street in 1988 for a TV station on Main Street, makes no bones about the value of the tax credits. His company, Granite Broadcasting Corporation, owned seven TV stations by the end of 1994; its stock valued doubled that year as cash flow "swelled 71 percent to $25 mi
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