Inner City Media Bankruptcy -- Black Radio in the Crosshairs

Inner City Media Bankruptcy -- Black Radio in the Crosshairs

Story tools

Comments

A A AResize

Print

Share and Email

 

“[T]he market shapes programming to a tremendous extent. Members of minority groups who own licenses might be thought, like other owners, to seek to broadcast programs that will attract and retain audiences, rather than programs that reflect the owner’s tastes and preferences.” - From Justice Sandra Day O’Connor’s Dissenting Opinion in Metro Broadcasting Inc. v. FCC, 497 U.S. 547 (1990)

“Don’t take away the music. It’s the only thing I’ve got. It’s my piece of the rock.” - From the lyrics of Don’t Take Away the Music by Tavares.

When the walls started shaking at the Joint Center’s offices during Tuesday’s earthquake, I was faced with one question: leave the building or stay inside? Similarly, the seismic transformation of the broadcasting industry brought on by mobile devices, personal computers, and digital video recorders has presented new problems for broadcasters. But Black-owned radio stations targeting African-American audiences are faced with their own fight or flight question: Can they stay profitable by offering black-only programming? What is the tipping point at which diversifying their programming will begin to alienate their listener base?

Earlier this week, Inner City Media Corporation’s creditors filed an involuntary Chapter 11 bankruptcy petition against it. Inner City Media Corporation is the holding company of Inner City Broadcasting, one of the nation’s leading black-owned broadcasters and owner of WBLS-FM/WLIB-AM in New York City. Inner City’s creditors claim that it owes some $254 million.

Inner City Broadcasting is rooted in the civil rights movement. The late Percy Sutton, former attorney to Malcolm X and a former Manhattan Borough President; and Clarence Jones, former publisher of The New York Amsterdam News, one of the oldest black-owned newspapers in the United States, founded the company in 1970. WBLS has been home to legendary black radio personalities like Hal Jackson, Frankie Crocker, Wendy Williams and DJ Red Alert. WLIB has changed formats many times over the years, but it too has featured notable personalities including Betty Shabazz, Malcolm X’s widow; and Rev. Al Sharpton. Inner City owns 15 other stations in San Francisco, CA, Columbia, SC, and Jackson, MS.

Inner City’s failure to repay its debt could be attributed to any number of causes, such as poor financial management. But saying that poor financial management is the sole culprit, and leaving it there, does little to address the issue of why Inner City’s stations have failed to generate enough revenue to pay the bills.

Let’s take WBLS as an example.

WBLS’ Glass Ceiling

WBLS has hit a glass ceiling. Barring a complete revamping of its format to include more mainstream content, it appears that WBLS has attained the highest ranking possible with an urban adult contemporary (Urban AC) format in New York. According to Arbitron, the Urban AC format is the most popular format among African-Americans. It features music by artists such as Maze Featuring Frankie Beverly, Earth, Wind & Fire Marvin Gaye, R. Kelly, Alicia Keys, Eric Benet, Ne-Yo and Usher. The “average quarter hour” (AQH) rating of a radio station is the average percentage of a population being measured listening to a radio station for at least five minutes during a 15-minute period. With a 3.6% AQH overall rating, WBLS is the number one station in New York targeting a predominantly black audience. It also ranks #8 among all radio stations in the New York metro area. WLIB, WBLS’ sister station, ranks 34th, with a .4 AQH rating.

WBLS’ closest competitor, Emmis Communications’ WRKS-FM (98.7 Kiss FM)—the only other Urban AC station in the market—is ranked at a distant #16 overall. But Kiss is half of Emmis’ combo which includes WQHT-FM (Hot 97), an urban station that skews toward the 18-34 demographic with hip-hop and r&b artists. Hot 97 posted a 3.3% AQH rating in July, placing it at #12 in the overall rankings. But with the ratings of Kiss and Hot 97 combined, Emmis is actually pulling a 6.2% AQH overall rating, compared to a 4.0 combined rating for Inner City’s WBLS/WLIB combo.

Further, Inner City has been hauled into bankruptcy, while its publically traded counterpart is carrying a similar long-term debt load without repercussions. The $254 million that Inner City owes to Yucaipa Cos. and others does not appear to be that unusual. Not taking into account other liabilities, Inner City’s debt-per-station based on the $254 million alone is $14.9 million. At the end of 2Q’11, Emmis held long term debt obligations of $327.2 million. Spread across Emmis’ 22-station portfolio, its debt-per-station is $14.8 million, just $100,000 shy of the amount of Inner City’s obligation.

Should WBLS Change Formats to Increase Inner City’s Revenue?

Radio stations change formats all the time. If a particular format is not working, most station owners are generally not averse to abruptly switching formats. For example, the radio station at 101.9 FM in the New York Metro area, also owned by Emmis, has changed formats four times over the past seven years. In 2004, the station switched from Smooth Jazz (Kenny G, Sade, Yellowjackets, Anita Baker) to an electronic/ambient music format (Massive Attack, Thievery Corporation). It switched back to Smooth Jazz in 2005 and, in 2008, flipped to Rock (Kings of Leon, Pearl Jam, Black Crowes, Blink 182). Finally, on August 12th of this year, the station changed formats yet again, switching to an all-News format.

Inner City is no stranger to programming formats targeting non-African-American audiences. Among Inner City’s 15 other stations, only 6 target African-Americans specifically. Inner City’s station portfolio also includes progressive talk, rock, classic rock (Allman Brothers, Rolling Stones, The Beatles, the Yardbirds), oldies (Elvis Presley, The Beach Boys, The Supremes, The Four Seasons, and Sam Cooke), Chinese-language, Vietnamese-language, and two sports talk, ESPN Radio affiliates.

But what is often a business-as-usual decision to change formats carries an additional layer of complexity for black-oriented stations. As in the case of WBLS, radio stations targeting a predominantly African-American audience are often intimately tied to the very heritage of the communities they serve. In our communities, having the ability to listen to black music, on radio stations owned by people who look like us, with credible air personalities we can relate to, is often about much more than entertainment. In an era of high unemployment, mortgage foreclosures, disproportionate incarceration rates, and widening achievement gaps in education, listening to black-oriented radio has a cathartic effect.

WBLS could change formats, but why should it? Arbitron reports a .5 percent increase in the number of African-Americans who listen to Adult Contemporary radio stations (Eric Clapton, Whitney Houston, Chicago, and Christopher Cross) since Fall of 2009. It also reports an increase in the number of Blacks who listen to Pop Contemporary Hits (Ke$ha, Lady Gaga, Bruno Mars, Pink, Black Eyed Peas). But this is far from a death-knell for black radio. Radio stations targeting mainstream audiences have diversified their playlists, but black-oriented radio stations have not.

Those African-Americans that listen to both black-oriented stations and mainstream stations are signaling a desire for more diverse content. Their behavior indicates an impulse to seek out contexts that communicate—as Pepper Miller of the Hunter-Miller group describes it—“a universal situation … living parallel to mainstream” rather than isolated in a silo with no mass appeal relevance. This does not require black-oriented stations to change formats completely. But what it does require is learning a lot more about black listeners who are less loyal to Urban AC formats, and addressing some of their programming needs. If Inner City doesn’t do it, someone else will, and it is starting to look more and more like that may very well be the scenario.

 

Comments

 
Anonymous

Posted Sep 1 2011

You are missing the point here. Inner City media defaulted on its debt which is why it was forced into bankruptcy. Debt burden alone wouldn't do much harm for the company but not being able to cope with it and unwilling to negotiate can.

Anonymous

Posted Sep 1 2011

Thanks, Anonymous. There are many points to be gleaned from this. I don't think there is any one, overarching point to be missed. Some have said the bankruptcy petition was actually triggered by Inner City's failure to accept the terms of a settlement.

Anonymous

Posted Sep 1 2011

Thanks, Anonymous. There are many points to be gleaned from this. I don't think there is any one, overarching point to be missed. Some have said the bankruptcy petition was actually triggered by Inner City's failure to accept the terms of a settlement.

Anonymous

Posted Sep 3 2011

I believe the genesis of what I C B C is experiencing began with a seemingly harmless lawsuit by a young woman named Nicole Spence. Settling the lawsuit out of court certainly didn't cost the company $254 million but it certainly resulted in their inability to retain top talent on its payroll. Various on-air personalities, technical staff and back-office employees lost their jobs-either as a direct result of the settlement or merely as casualties of a convenient excuse. You cannot lose many of your best and brightest and not suffer the effects.

Anonymous

Posted Sep 5 2011

inner city has been a mismanaged company for many a decade now, even the late frankie crocker was quoted in the ny daily news back in 1997 when the ny daily did a story on inner city broadcasting and question back then in 1997 why a once proud and innovative operation and become a bottle of the barrel nyc radio ratings dweller. "they to bring people to program that station who have no feel new york."from the period of 1993 to 1996 wbls alone hand undergone leadership under 5 program directors.

It's true that inner city was stuck with debt that they had stop making payments on for a number of years, debt can't go unpaid, and when it does you likely will be headed for a court appointed receivership, something that once nyc radio power house 1600 wwrl has been in for close to 2 years now, the problem with us and companies like inner city broadcasting, access1 communications owner of wwrl, superadio syndicator, 49% ownership in aurn, they don't challenge the un eqaulness in the business of broadcasting in general.

And it appears they just go along with it instead, and then they in turn go out of business or wind taken over like inner city broadcasting, it appears that this generation in black america falls into the guise of thinking they are in an era that is post racial and all challenges have been fought and won, when you see media institutions that are your own disappear without an outcry instead just reduced to an apple and oranges debate to no where, then you know it is unlikely it will be this generation in black america that will continue to fight the battle of uneqaulness.

To a poster on here that thinks there is always 2 sides to a story, inner city broadcasting bought itself down from within with in house nepotism instead of doing business and challenging an uneqaul system that they play in instead, that system played them into takeover end of story. There is a reason you will not hear nyc radio talk outlets talk about the inner city broadcasting situation, and they is because this has been coming for them for the last 6 years.

Anonymous

Posted Sep 12 2011

the author fails to ask the most basic of questions....where is the $192 million that ICBC borrowed??? The South Carolina stations that they bought at the height of the market didn't cost anywhere near that.. Most of their stations carry a high level of syndicated programs, so they're not paying it to employees. HINT: The Sutton's have used the stations for decades as their own personal piggy bank and they have looted the coffers. How many relatives have been on the payroll for decades with no-show jobs? The tragedy is that long time shareholders who invested because they believed in Black radio, walk away with pennies while Sutton still gets paid.

Anonymous

Posted May 2 2012

Good discussion with valid points made by most all posters. But now it is 2012 and the bottom line is that this really is some tragic $#%&! Another media giant (sorry, don't have that name in hand as I write this very moment...) bought up ICBCs holdings as part of the Chapter 11 settlement, and 1st thing they did at KBLX in SF Bay Area is fire the two enormously popular black male djs, one of whom arguably had the most popular a.m. show in the region...this in favor of plunking a canned Steve Harvey format in that slot. while meanwhile retaining the latino male and ethnically-varied female air talent (note: the 2 black/bi-racial of the remaining females are in marginalized positions like traffic/news reporting...). This is a great loss to the Oakland/Bay Area community, one that will further disintegrate the sense of cuture and community...this effectively eliminates the (live) presence of black men on the radio in Nor. Cal except for a couple of part-time spots on PBS/Pacifica stations.

And, worthy of note: while KBLX did feature a program of black R&B so could be considered a black focused station, in larger truth its loyal listenership is highy diverse and not segmented to only the black community...but then, that is how the Bay Area rolls, moreso than maybe other places. .

Anonymous

Posted May 2 2012

Good discussion with valid points made by most all posters. But now it is 2012 and the bottom line is that this really is some tragic $#%&! Another media giant (sorry, don't have that name in hand as I write this very moment...) bought up ICBCs holdings as part of the Chapter 11 settlement, and 1st thing they did at KBLX in SF Bay Area is fire the two enormously popular black male djs, one of whom arguably had the most popular a.m. show in the region...this in favor of plunking a canned Steve Harvey format in that slot. while meanwhile retaining the latino male and ethnically-varied female air talent (note: the 2 black/bi-racial of the remaining females are in marginalized positions like traffic/news reporting...). This is a great loss to the Oakland/Bay Area community, one that will further disintegrate the sense of cuture and community...this effectively eliminates the (live) presence of black men on the radio in Nor. Cal except for a couple of part-time spots on PBS/Pacifica stations.

And, worthy of note: while KBLX did feature a program of black R&B so could be considered a black focused station, in larger truth its loyal listenership is highy diverse and not segmented to only the black community...but then, that is how the Bay Area rolls, moreso than maybe other places. .

Anonymous

Posted May 10 2012

To the poster who forgot the name of the company who now owns the icb stations except the kblx station in the bay area, that station had to be sold off to entercom, another icb station in south carolina is in a trust now, ymf media is the company you are refering to, that newly formed company is actually companies combined into one, Ron Burkle Yucapia, Magic Johnson enterprises and Forest Capital. Those companies make up ymf media they are also the ones that double crossed the national black caucus, when inner city was in debt to goldman sachs the national black caucus wanted to block tarp money that would go to big business like goldman sachs if goldman sachs did not let up on inner city broadcasting, goldman sachs decided to do so, here is where magic johnson appears and let's it be known he could help icb and had partners that would make the debt payment and icb would pay it back once they were able to, but instead after making the debt payment they then emptied icb's bank accounts and forced then into chapter 11 therefore becoming the new owner's of all but about 4 former icb stations, that had a total of 18. The Sutton family will stay on in payed position titles and that's the really the whole story.

Disclaimer: Comments do not necessarily reflect the views of New America Media. NAM reserves the right to edit or delete comments. Once published, comments are visible to search engines and will remain in their archives. If you do not want your identity connected to comments on this site, please refrain from commenting or use a handle or alias instead of your real name.