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Congress should reinstate tax certificate program to foster media ownership diversity

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In just a few short weeks, as a result of millions of Americans protesting the killings of Breonna Taylor, George Floyd, Ahmaud Arbery and Rayshard Brooks, America has undergone a seismic shift in how we identify and address racial injustice. At considerable risk to their own safety – made even more difficult by the COVID-19 pandemic — broadcast journalists have helped expose police abuses, held public officials accountable and shined a light on the scourge of racism that remains prevalent in too much of society.

I’m proud of those local radio and TV reporters and network evening news journalists who are chronicling the first draft of history. They are bringing into living rooms the sights and sounds of a Black Lives Matter movement that I believe will lead to a more equitable America. But I also believe that this historic moment provides an opportunity for public policymakers and prominent media executives to address another systemic challenge: the woefully low percentage of communications outlets that are owned by people of color.

As president and CEO of the National Association of Broadcasters, I would be the first to admit that the number of media properties owned by people of color is unacceptable. This is not for lack of trying on NAB’s part; for almost 20 years, NAB has underwritten successful broadcast sales management programs and partnered with historically Black universities and colleges to help college graduates earn entry-level sales jobs at broadcast stations. NAB has also hosted a symposium for community bankers, independent lenders and other investors designed to educate the lenders about the broadcast TV and radio business and connect them with their local broadcasters.

Since 2000, the NAB Leadership Foundation’s cornerstone initiative has been the Broadcast Leadership Training, an MBA-style program that trains senior-level broadcast executives – especially women and people of color – on the fundamentals of owning and operating a broadcast station. Scores of graduates have been promoted to more prominent positions after completing this program; more than 50 have gone on to become owners of broadcast stations.

Yet despite the best efforts of NAB and the many broadcast companies that have helped fund these programs, the number of minority-owned broadcast stations remains disappointingly low. The reason can be summed up in three words: access to capital.

Securing capital investments can be a challenge for smaller broadcasters – and even more so for minority-led broadcast stations. Many lenders are reluctant to make the loans independent broadcasters need to acquire stations and finance their operation. Fortunately, there is a tried and true solution in Congress to help aspiring minority broadcasters break into the media landscape.

First implemented by the Federal Communications Commission in 1978, the Diversity Tax Certificate Program provided a tax incentive to companies that sold their majority interest in a broadcast station to minorities. The program was immediately and highly successfully able to break down barriers for minority and female station owners, propelling growth in minority ownership of broadcast stations by more than 550 percent between 1978 and 1995.

Despite the program’s success, unfortunately Congress repealed the Diversity Tax Certificate Program in 1995. Since then, minority broadcast ownership has taken a drastic step back.

NAB has advocated on Capitol Hill for many years championing for the reestablishment of the tax certificate program, and many lawmakers have voiced their support to bring back the initiative. During my time in the Senate, I was proud to be a part of this cause and worked with former Sen. John McCain (R-Ariz.) on efforts to reinstate a tax certificate initiative to help the underrepresented realize their dreams of station ownership.

Last year, Rep. G.K. Butterfield (D-N.C.) and Sen. Gary Peters (D-Mich.) introduced the Expanding Broadcast Ownership Opportunities Act to bring back the tax certificate program and encourage investment in broadcast station ownership for women and people of color. NAB strongly supports congressional passage of this legislation, and we are thankful to be joined in this effort by the Multicultural Media, Telecom and Internet Council and the National Association of Black Owned Broadcasters.

A local media landscape that reflects our communities on the air, in the control booth and in the boardroom has long been a priority for America’s radio and television broadcasters. Yet, we cannot accomplish this goal alone. Congressional passage of the Expanding Broadcast Ownership Opportunities Act would serve as a critical step in creating a more diverse broadcasting industry.

Gordon H. Smith is president and CEO of the National Association of Broadcasters. He is a former two-term Republican U.S. senator from Oregon.

Tags G.K. Butterfield Gary Peters John McCain

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