NAB Holds Fast on Keeping Minority Investors Off of Ownership Reports

WASHINGTON – The broadcast lobby stuck to its guns on how station ownership should be reported to regulators in comments filed with the Federal Communications Commission. The National Association of Broadcasters held that investors with no voting rights should not be included in ownership reports. Such non-attributable owners are not now counted, but the Federal Communications Commission has proposed including them as a way to further analyze the level of TV station ownership by ethnic minorities and women. The NAB contends that doing so would “fail to yield useful information about minority and female ownership, while at the same time imposing burdens on and deterring investment in broadcasting.”

The NAB and the FCC have been down this road before. The issue goes to FCC Form 323, used by the commission to collect station ownership data every six months. The commission adopted non-attributable ownership reporting 2009, and then partially granted an NAB petition to eliminate it. The result was an exemption for shareholders who hold an interest in a company where one shareholder controls more than 50 percent of outstanding voting stock.

The proposal again gained momentum after a report released last November indicated women controlled less than 7 percent of the nation’s 1,328 full-power TV stations, while Hispanics and Latinos owned less than 3 percent, and other ethnic minorities collectively controlled 2.2 percent—gender-ethnic overlap excluded. The report raised concern on Capitol Hill, deep-sixing what was reported to be a planned vote by the commission in December to relax the newspaper-broadcast cross-ownership rule.

The NAB claims that a non-attributable ownership reporting requirement on Form 323 would be costly and cumbersome.

“To complete the reports properly, a licensee must survey all of the attributable interest holders on their ownership of other communications outlets, identify familial relationships among those with attributable interests, and confirm that any new media interests held by investors comply with relevant ownership rules,” the NAB filing states. “For each attributable interest holder, the positional interest, ownership share—i.e., class and percentage of assets, including equity and debt, voting rights or other rights to control—name, address, citizenship, ethnicity, race, and gender must be verified and updated. Although the Commission estimates that ownership reports take only 2.5 - 4.5 hours to complete, it can in fact take many more hours just to perform the due diligence necessary to make the requisite certifications on the forms and to fully describe the ownership structure.”

If ownership entities are not “natural persons,” the filing continues, a separate report must be completed.

“Investors may well select investment vehicles that do not involve extensive reporting obligations over other vehicles with such additional obligations,” the NAB said.