Fourteen minority broadcasters sent a letter to Treasury Secretary Timothy Geithner Monday asking for financial assistance.
In the current economic situation, "minority-owned broadcasters are close to becoming an extinct species," they said in the letter. They also noted that the percentage of broadcasting companies owned by minorities is in the low single digits.
The broadcasters called on the Treasury to institute a program similar to the recent Auto Supplier Support Program, which would increase the flow of credit to broadcast companies. They also asked Geithner to consider issuing government-backed loans.
The letter comes on the heels of a similar one from House leadership in June, including James Clyburn (D-SC), Barney Frank (D-MA), Charlie Rangel (D-NY) and Ed Towns (D-NY).
Read the letter below:
The Honorable Timothy Geithner
Secretary of the Treasury
1500 Pennsylvania Ave., NW
Washington, DC 20220
Dear Mr. Secretary:
The recession and current credit crisis are having disastrous impacts in all economic sectors, but minority-owned broadcasters are close to becoming an extinct species. Even in better economic times, minority broadcasters have historically had difficulties accessing the capital markets to make the meager gains achieved over a decade after the tidal wave of media consolidation. We write today to support and highlight a letter sent to you by House Majority Whip Jim Clyburn and a group of key House Committee Chairmen, including Reps. Barney Frank, Charlie Rangel, Ed Towns, Bennie Thompson, Carolyn Maloney, and Maxine Waters among others. The letter urged you to act to ensure minority-owned broadcasters are afforded similar consideration for federal assistance and investment given to the financial services and the domestic auto industry.
Unlike the auto business, the broadcasting has been healthy for many years and, upon a recovery, could shortly be restored to a path of growth with some temporary assistance. Given the global credit crisis, plummeting ad revenues, no-minority dictates by advertisers, and changes in Arbitron audience measurement, which have further deflated ad pricing, the short-term financial outlook for our broadcasting companies is not good. Many of us are now, or will soon be, weathering significant defaults of our credit facilities. Ironically, the loss of automobile advertising revenues, a substantial source of revenue for broadcast stations, is also weighing heavily on our businesses.
It is particularly concerning that the percentage of minority ownership in the broadcast industry is currently in the low single digits. What will happen to the communities we serve if this once in a lifetime financial crisis completely severs our access to capital and we lose our stations? The federal government for decades has advocated the importance of minority voices in the broadcast industry as a precursor to a vibrant democracy and a more inclusive society. Financial foreclosure will roll back decades of work by the federal government to encourage more minority voices in the broadcasting industry.
We are urging you to heed the recommendations from those key House leaders calling for:
The enactment of an investment facility similar to the Auto Supplier Support Program to help restore credit flows to the broadcast sector; and
Consideration be given to temporary bridge financing or government-backed loans (with warrants) until the economy improves.
We understand many businesses are seeking federal assistance. We don't diminish the worthiness of those sectors. However, the primary source of news and entertainment for millions of minority communities in the U.S. comes primarily from minority-owned broadcasters. It would be unconscionable to have financial institutions that have accepted billions of federal government assistance to foreclose on these vital American voices. If the Treasury does not want to enact a direct assistance program, at least it should seriously demand that banking institutions receiving federal funds extend credit and be flexible in restructuring credit facilities to insure that healthy, commercially-viable minority broadcasters can weather this unprecedented, but temporary, financial storm.
We look forward to working with you, your staff, members of Congress, and our colleagues in the broadcasting industry to find ways to move forward during these difficult economic times. Thank you for your time.