[Congressional Record Volume 142, Number 85 (Tuesday, June 11, 1996)]
[Senate]
[Pages S6108-S6109]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE RUSH TO GULP U.S. RADIO STATIONS

  Mr. SIMON. Mr. President, some of my colleagues may remember that 
when the new telecommunications law was before the Senate, I offered an 
amendment to limit the expansion of radio station ownership by any one 
corporation or any one individual.
  That amendment was tabled by a vote of 64 to 34.
  The other day I read an article by Prof. Jerry Landay, former 
broadcast journalist, who now teaches at the University of Illinois. 
The article appeared in the Christian Science Monitor under the title. 
``The Rush To Gulp U.S. Radio Stations.''
  I ended up voting against the bill even though I know there were some 
good things in it.
  But diversity in ownership is good for all the media. I don't like 
the concentration of ownership that is taking place in newspapers, but 
that is not a federally regulated entity.
  Radio stations and television stations are federally regulated, and 
we have every right to demand diversity of ownership and not 
monopolistic or oligarchical practices.
  I ask that the Jerry Landay article be printed in the Record.
  The article follows:

           [From the Christian Science Monitor, May 7, 1996]

                   The Rush to Gulp US Radio Stations

                          (By Jerry M. Landay)

       The surface glamour faded long ago from radio. But 
     Americans keep as many as five or six sets in the house and 
     use them regularly. Don Imus, Rush Limbaugh, and Garrison 
     Keillor remind us that television hasn't stripped all the 
     glory from the medium or its revenues--Totaling $11.5 billion 
     in 1995.
       The radio stations that CBS owns--39 of them--grossed a 
     half-billion dollars last year. Like the printing presses in 
     the Federal Mint, commercial radio stations in America churn 
     out cash in prodigious amounts. Returns of 40 to 50 percent 
     yearly are not uncommon.
       Multibillion-dollar mergers and acquisitions in the 
     telephone and television-based

[[Page S6109]]

     industries spawned by the new telecommunications law have 
     stolen our eye from the land rush now under way in Radioland. 
     A vast consolidation of ownership has begun among America's 
     10,000 commercial stations. Just two months after passage of 
     the law erased the limits on the number of radio stations a 
     single owner may acquire, a station-buying blowout is 
     justifying critics' fears that the law is not spurring 
     competition, but monopoly. An industry that once had to base 
     its license renewals on service to a station's community has 
     been let off the hook by Congress and the president.
       Rita Zanella, a media analyst at Gruntal & Co. in New York, 
     predicts that eight or 10 big station groups will eventually 
     control the entire broadcasting industry. ``You control 
     pricing,'' she told the Chicago Tribune. ``You eliminate your 
     competition and have greater control over what you can 
     charge.''
       To cite just a few examples of the radio land rush, Jacor 
     Communications Inc. of Cincinnati spent nearly a billion 
     dollars in February to acquire 26 radio stations and two 
     television stations. Jacor now controls 62 percent of the 
     radio revenues in the Cincinnati, market, nearly half the 
     Denver market, 30 percent of the Tampa market, and a quarter 
     of the radio business in Portland, OR. In a single deal worth 
     $1.2 billion, announced earlier this month, the Sinclair 
     Broadcasting Group of Baltimore acquired 34 radio stations in 
     27 markets, along with a group of television stations, 
     becoming a miniconglomerate in a single bound.
       With the purchase of three stations in March, Citadel 
     Communications Corporation now owns seven of the most 
     powerful AM and FM stations in Albuquerque's 36-station radio 
     market. That includes KKOB, which blankets much of the 
     southwest, and the city's only classical music station, KHFM. 
     Arthur Schreiber, a former manager of KKOB and a veteran of 
     the radio wars, predicts that Albuquerque's classical-music 
     listeners will soon find themselves without choice on the 
     air. ``It's hard for me to believe that Citadel can meet its 
     debt service by continuing to play classical music on a 
     station that cost it $5.6 million,'' says Mr. Schreiber.
       The federal government is essentially licensing the drive 
     to bigness. Station brokers predict that 1996 will be the 
     most lucrative year ever for station trades. I a deregulatory 
     environment, small, aggressive companies such as Jacor and 
     Citadel can become mass-comm players in a single bound, with 
     lenders anxious to supply cheap money.
       But radio isn't just any business. Radio is an essential 
     part of our civic capital. It speaks over publicly licensed 
     frequencies to millions of listeners, at home, at work, and 
     on the road. In the past stations were more than juke boxes. 
     They provided breaking news and weather bulletins, 
     specialized information for farmers, investors, community 
     organizations, local governments, and emergency services. 
     Before the start of deregulation in the 1980s, owners were 
     limited to seven AM and seven FM stations, to ensure diverse 
     voices and dispersed power.
       The new barons of radio are absentee owners who convert 
     their stations from local presences into cash cows for 
     instant milking, their values ballooned for trading to the 
     next buyer. The name of the game is to avoid being the ``last 
     sucker'' stuck with debt if recession hits.
       Radio, once the most trusted news source in America, has 
     increasingly abandoned the role of local service-provider. 
     Newsrooms in many stations have been cut to the bone--one or 
     two readers, Schreiber says, ``ripping and reading'' news and 
     weather supplied to all clients by a single news source, the 
     Associated Press.
       there is teeth-gritting sameness in the music they play, as 
     dial-twisters who have traveled long distances in a car can 
     testify--various shades of rock and country music.
       Before deregulation, the Federal Communications Commission 
     required buyers to hold their stations for at least three 
     years before resale, to ensure local commitment. In the new 
     environment, a wheeler-dealer can theoretically turn his 
     station over as soon as the FCC approves the purchase. Media 
     writer Ken Auletta was told by the head of a station 
     ownership group: ``It's commodity trading to us. We don't 
     know [our] community. We're short-term players.''
       The fundamental question is unavoidable: Is mass 
     communications solely a growth game for entrepreneurs, banks, 
     and Wall Street, or is it also a social partner that 
     justifies its existence by living up to its civic 
     obligations? The late Donald H. McGannon, a respected 
     industry leader of the 1950s and '60s as chairman of the 
     Group W (Westinghouse) Stations, was a businessman with a 
     vision who told his staff: ``If we do the right thing in our 
     cities and towns, the money comes.'' They did--and it did.
       The times have changed. But not the relevance of McGannon's 
     vision. Undoing the damage of the Telecommunications Act of 
     1996 will be difficult, but it will have to happen.

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