An initiative to raise $1 billion, spearheaded by television and radio industry giants to promote diversity in their ranks, was recently announced. But while the effort-dubbed the National Broadcasting Fund — has been applauded by many, the lack of participation by key African American groups has raised a few concerns.
Top members of the television and radio industry gathered in Washington, D.C., to introduce the National Broadcasting Fund, which aims to stimulate greater minority and female representation in station ownership. CBS President and CEO Mel Karmazin and Lowry Mays, chairman and CEO of Clear Channel Communications, co-chairs of the fund, have aligned the major television networks-CBS, NBC, ABC and Fox-with Viacom, Tribune Broadcasting and Infinity Broadcasting, among others, to create the fund. be 100s communications firms Granite Broadcasting and Radio One (No. 8 and No. 40, respectively, on the be industrial/service 100 list) have also invested in the fund.
The fund has already received commitments of $175 million from its investing partners, says Reg Hollinger, managing director of Chase Manhattan Corp.’s Global Media and Telecommunications Group. Chase Capital Partners (CCP), the private equity unit of Chase Manhattan, will manage the fund. Hollinger was recently named managing partner and will oversee it.
The National Broadcasting Fund has no formal application process, but its executives are looking for entrepreneurs with strong business plans and demonstrated management ability. Chase is already reviewing submitted business plans with the intention of meeting with entrepreneurs and making actual investments in their companies in early 2000, says Hollinger.
“We’ve had a terrific response since it was announced,” says Hollinger. “The fund wants to consider all sorts of companies. We don’t want to exclude start-ups, midlife or mature firms. The single most important criterion is the business plan, not the size or maturity of the [applying] company.”
Federal Communications Commission (FCC) Chairman William E. Kennard heralded the National Broadcasting Fund as a major opportunity to increase minority ownership in broadcasting, praising the broadcasters for helping make the communications industry more accessible. “The fund will give women and minorities access to badly needed capital,” says Kennard, who has made promoting diversity in the media a personal crusade since he became the FCC’s first African American chairman in November 1997.
But while the fund targets minorities and women, at its very inception it has excluded the participation of groups like the National Association of Black Owned Broadcasters (NABOB) and the Black Broadcasters Alliance. Officials from NABOB, which represents 175 minority-owned TV and radio stations nationwide, say the group is “cautiously optimistic” about the National Broadcasting Fund.
“We’ve been kept informed of [the fund’s] organizational efforts, but not really involved,” says James Winston, executive director of NABOB. “We’re pleased that the fund has been created, but I doubt that we’ll be joining with them.” Winston says one of his primary concerns is Chase’s management of the fund. NABOB questions Chase’s history with small partnerships, says Winston.
“Chase doesn’t have a lot of experience doing small transactions. It’s not their general investment profile,” says Winston. “We’re hoping that we can