Preparing for the 2020 Elections – Our Updated Political Broadcasting Guide

David Oxenford - Color

David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP

2020 will no doubt be a very active year for political advertising. To help broadcasters sort out the confusing rules they need to follow in connection with such advertising, we have updated our Political Broadcasting Guide for Broadcasters (note that the URL for the updated version has not changed from prior versions, so your bookmarks should continue to work). The revised guide is much the same as the one that we published two years ago, formatted as Questions and Answers to cover many of the issues that come up for broadcasters in a political season. This guide is only that – a guide to the issues and not a definitive answer to any of the very fact-dependent legal issues that arise in election season. But we hope that this guide at least provides a starting point for the analysis of issues, so that station employees have a background to discuss these matters with ad buyers and their own attorneys.

In looking at the Guide that we prepared two years ago, really not much has changed. The online public inspection file has now become a reality for all broadcasters, so that adds a new layer of transparency (and scrutiny) to broadcasters’ political advertising decisions. There also has been some discussion of the disclosures necessary for issue advertising – though because this guidance is still somewhat up in the air (see our posts here and here), our Guide highlights the questions and our understanding of where the FCC appears to be heading on this topic. We have also made some clarifications and updates on other issues based on issues we have seen arise in the last year.

Again, this Guide is just a starting place for analyzing political broadcasting issues, but we hope that many broadcasters find it to be helpful in giving them some of the tools that are needed to analyze the complex questions that come up during this election year. But resolving these issues is very dependent on the facts of any particular situation, so stay in close touch with your attorneys and advisers experienced in these issues to make sure that you get the law right. In the upcoming months, I will be doing a number of seminars on these rules for various broadcast associations – watch for announcements on those in the coming months. Last week, I spoke at the Iowa Broadcasters Association annual convention, where broadcasters are already gearing up for their Presidential caucuses early in 2020. With the Democratic debates starting this week, it looks like we are about to enter this crazy season. We trust that our Guide will assist broadcasters in spotting issues in this very active political year.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your MAB membership.




Paul Jacobs Honored at Conclave

Edit 6/24/19:  Read “What Does It Take To Win A Rockwell Award?” and Paul’s full acceptance speech here.

Paul Jacobs

Jacobs Media Strategies’ Paul Jacobs was honored Thursday  with the Conclave’s  Rockwell Award, an annual Lifetime Achievement Award that recognizes individuals of unquestioned accomplishment who have made a lasting impact on radio.

“Receiving this award is truly rewarding and a high mark in my career in radio,” Jacobs said. “I have been a big fan of the work of the leaders of the Conclave had done for our industry for decades, and to be acknowledged by them is truly an honor.”

The annual Conclave event in Minneapolis began on Wednesday and continues through today (6/21).




FCC Sends Out Second Set Of EEO Audit Letters For 2019

The FCC has sent out its second set of Equal Employment Opportunity audit letters of 2019 to randomly selected radio and television stations.

The letter was sent June 13 to the second batch of stations picked to report, and responses will be due to be posted to station online public inspection files by July 29.  About 5% of all stations are selected for EEO audits each year.  A quick look by the MAB shows one Michigan station on this latest list.

Read the release here.




Michigan Radio, WJRT-TV and WDIV-TV Win National Murrow Awards


Three Michigan broadcasters have been honored with a National Edward R. Murrow Award from the Radio Television Digital News Association (RTDNA).  The awards were announced on Tuesday.

Michigan Radio’s Mornings in Michigan series received a Murrow Award.  The series installment entitled, “The Early Birder Gets the Warblers, Chickadees, and Orioles,” was given the honor for Excellence in Sound in the Large Market Radio category. Winners in the Excellence in Sound category demonstrate creative use of sound to tell a story.

The feature was written and produced by Rebecca Williams and edited by Doug Tribou, with help from Lauren Talley. In the piece, which originally aired in May, 2018, Williams followed a group of birders on an early morning hike to see migrating birds arriving in Michigan. The story captured the sounds of warblers, buntings, orioles and sparrows, and the excited birders as they spotted their favorite species. You can listen to the story here. Companion images to the feature were provided by Michigan Radio’s Emma Winowicki.

Gray Television’s WJRT-TV (Flint) received a national Murrow Award for the third installment of the station’s annual Born Into Crisis series.

The February 2018 story, which looks at children born during the water crisis and how they are developing compared to their peers, won the national Edward R. Murrow Award in the Hard News category this year.

Anchor Angie Hendershot reported the story while Photographer Timothy Robertson captured the video that accompanies it.

Graham Media Group’s WDIV-TV (Detroit) received a national Murrow Award for Criss-Cross Crash, coverage of figure-eight racing with school buses and boats at the Flat Rock Speedway — “Criss-Cross Crash” — won the “Excellence in Sound” award for large market television.

Criss-Cross Crash was produced by WDIV photojournalists Alex Atwell and Hans Ihlenfeldt.  You may see the story here.

The Radio Television Digital News Association has been honoring outstanding achievements in electronic journalism with the Edward R. Murrow Awards since 1971.  Award recipients demonstrate the spirit of excellence that Murrow set as a standard for the profession of electronic journalism.

“These winning pieces from news organizations large and small have educated, uplifted, inspired, uncovered and enlightened,” said Dan Shelley, RTDNA Executive Director. “We’re proud to recognize the most outstanding ways journalists are keeping the public informed, holding the powerful accountable and enhancing the quality of life in their communities.”




NASBA Success Stories Continue

As many readers know, the MAB is a member of the National Alliance of State Broadcast Associations (NASBA), which represents broadcast associations in Washington, filing joint comments in FCC proceedings.

In 2017, when FCC Chairman Ajit Pai launched the Media Modernization proceeding, he asked broadcasters to submit comments proposing changes to the FCC’s broadcast rules to improve those rules while eliminating unnecessary burdens. NASBA responded with comments proposing a broad number of changes, most of which have either been adopted by the FCC or are the subject of ongoing rulemakings considering such changes.

On June 18, Chairman Pai released, in a blog post, a list of matters to be voted on at the FCC’s July meeting. In it, he wrote:

“The Commission’s July meeting will also feature three media-related items. The headliner out of this trio will be an update to the FCC’s children’s television programming rules. In recent decades, we’ve seen a monumental shift in the way young viewers access video programming. I’ve seen it myself in comparing my own television viewing habits as a child to those of my kids today. So this update of our rules is long overdue.”

The children’s television item is another aspect of the Commission’s Modernization of Media Regulations Initiative (MMRI), which is focused on updating the rules to match the realities of the media marketplace. And it’s not the only MMRI item on our July agenda.

The Commission will also vote on two items that will replace wasteful and costly paper notifications with electronic notifications. The first is an order updating the triennial must-carry/retransmission consent election process for broadcasters and covered video providers, such as cable operators and satellite TV providers. Under these new rules, commercial broadcasters would no longer be required to send their elections via certified mail to each provider, but instead would upload their elections into their public files every three years and notify video providers by e-mail of any change.

NASBA’s comments in the Media Modernization proceeding urged the Commission to streamline its Children’s TV requirements, so we are pleased to see the FCC move forward on that (final details are still being debated), but of particular interest to broadcasters is Chairman Pai’s paragraph regarding Retransmission Consent Elections. Based on the description above, it sounds like the FCC is pretty much adopting NASBA’s exact proposal. Depending on the size of the broadcaster, the cost of complying with the old rule could be in the tens of thousands or even hundreds of thousands of dollars each election cycle, with incredibly high stakes (being dropped from a cable system or forfeiting retrans payments for the next three years) for making an error. If adopted, as appears likely, this will be a big win for NASBA and state broadcast association TV members.




Interlochen Public Radio Takes Home National Award for ‘Short Documentary’

via Daniel Wanschura, Interlochen Public Radio

Morgan Skinner

For the second year in a row, Interlochen Public Radio has won a national award for its “Irredeemable” series.

In Washington D.C. on Saturday, Public Radio News Directors Incorporated awarded first place in the “Short Documentary” category to the episode titled, “Irredeemable, episode 6: Coming clean.”

PRNDI is an association that represents news directors, broadcast editors and newsroom managers. It has been awarding local reporting since 1988.

“Irredeemable” is the work of IPR’s Morgan Springer, who in 2017 began telling the stories of individuals convicted of murder as juveniles and sentenced to life in prison. This is her fifth PRNDI award since working for IPR.




For Radio, the Key to Podcasting Revenue May Not Be in Ads

Seth Resler

By: Seth Resler,
Jacobs Media Strategies

Earlier this month, the IAB (Internet Advertising Bureau) and PwC (Pricewaterhouse Coopers) released their third annual Podcast Ad Revenue study. Once again, there was lots of good news for podcasters. Many will focus on the 53% increase in year-over-year podcast advertising revenue — from $314 million in 2017 to $479 million in 2018. The growth is certainly impressive.

By comparison, Kagan reports that the radio industry’s revenue growth was basically flat at 1.1%. Of course, it’s flat at $17.8 billion (with a ‘b’). But in many ways, it’s unfair to compare the two industries. After all, one has been around for more than a century while the other has been around for little over a decade. It’s natural that the mature industry is larger but not growing at a fast pace, while the young industry is smaller but expanding rapidly. That’s the nature of, well, everything.

The question most radio broadcasters — as well as entrepreneurs and venture capitalists — are asking themselves is how they can get in on that growth. Many will assume that the answer is the same for all broadcasters, but I believe the answer is different for different radio companies, depending largely on their size and resources. The temptation, of course, is to go with what we know: create a hit that attracts a large audience and stick ads in the middle of it. But this is much easier when you’re competing against a few dozen other radio stations in your market, most of which have similar staff and budgets sizes to your own. When you’re competing against hundreds of thousands of other podcasts, some of which may be far better resourced or have nationally known hosts, it’s much harder to compete for an audience.

Moreover, it’s not enough to simply produce one hit podcast. Marc Maron and Joe Rogan may generate enough revenue to provide a comfortable living for themselves and a small number of staff members, but when you’re a large company with lots of employees, it takes more; you need to churn out hit after hit after hit to keep the lights on. For radio companies with a large national footprint, this may be feasible. For smaller regional or stand-alone broadcasters, it’s a steep climb.

Compound that with another possible wrinkle: Programmatic advertising. According to the IAB report, the percentage of programmatic ads currently being run in podcasts is tiny — only 1.3%, up from 0.7% in 2017. But as the number of podcasts produced continues to increase, I suspect that a shift towards programmatic advertising will inevitably follow. Sure, there will probably always be premium shows that can be sold individually, but those will be few and far between. Most sizable advertisers will want to place their ads on a large number of podcasts without having to actually listen to all of those podcasts, so programmatic advertising will increase and, as it does, CPMs will drop. This is essentially what happened in the blogging world, and I suspect it will happen with podcasting as well.

All of this is why, when I speak to most radio companies, I’m bearish on podcast advertising revenues, and I strike a cautionary note when talking about it. Yet I am bullish on podcasts as a source of revenue for radio broadcasters overall, largely because I think there’s a fantastic opportunity in a different stream of revenue: branded podcasts.

A branded podcast is a podcast created for a company to engage with its customers. John Deere, Nike, Trader Joe’s, Jack Daniels and eBay are just a few of the companies that have embraced branded podcasts. It’s only a matter of time before local companies start expressing interest in podcasts as part of their marketing strategy as well. These companies won’t have in-house audio experts capable of producing top-notch podcasts…but radio stations do. Many of the skills needed to produce a 60-second ad or host a successful morning show are the same needed to create a compelling podcast.

Radio stations not only have the tools to produce high quality podcasts, but also to promote them with on-air ads, an email database, a social media following, a mobile app with thousands of installs, and a street team. This gives radio stations an advantage that even local audio production houses or marketing agencies don’t have.

The IAB reports that only 10.1% of podcast revenue comes from branded podcasts, but that’s up from 6.5% in 2017 and 1.5% in 2016 — more than a six-fold increase in just two years. It is likely to continue growing from there, which is an opportunity for radio.

The biggest advantage that branded podcasts have over the advertise-in-a-hit model is that with branded podcasts, you don’t start production until after the sale has been made. With advertising, you usually need to produce the podcast first. (A handful may be sold on a trailer or concept alone, but these will be the exceptions.)

Recently, Fred Jacobs and I spoke to the staff of a small radio company about the state of podcasting. During my talk, I laid out the case for focusing on branded podcasts. Later that very same day, they emailed us to report that they closed a deal to produce a podcast for a local client that they pitched after our presentation. Even I was shocked by how quick they managed to close the sale. Yet it reaffirms my belief: I am bullish on branded podcasts for radio.

Jacobs Media Strategies will host a session on branded podcasts as part of our Broadcasters Meet Podcasters track at the Podcast Movement conference in August. If you’d like to learn more about how your radio station can generate revenue from branded podcasts, be there.

For more assistance on digital or social media, contact MAB Member Services at [email protected] or 1-800-968-7622.

Editor’s Note: The views and opinions of this article do not necessarily reflect those of the MAB. Contact the MAB for information on the MAB’s official editorial policy.




Bets are Off for Online Gambling Bills, For Now

Michigan House Republicans and the administration of Governor Gretchen Whitmer are in a stalemate over bills that would allow online casino gambling in the state, according to an article published by Gongwer on Thursday.

The House Ways and Means Committee Chairman, Rep. Brandt Iden (R-Oshtemo), and members of the Whitmer administration met Wednesday with stakeholders on the issue, House Republican spokesperson Gideon D’Assandro said. But governor’s staff broke off the meeting after a few hours.

Whitmer told reporters on Thursday that she hasn’t been a part of the meetings and reiterated her concern that allowing online casino gambling would mean fewer people playing online Lottery games and result in less funding for K-12 schools, which draw most lottery proceeds.

The Department of Treasury has said while $700 of a $1,000 net win from an iLottery game would go to the School Aid Fund, only $4 would go to the School Aid Fund for a $1,000 online casino gambling win.

D’Assandro said other states have not seen Lottery gaming suffer as a result of allowing online casino gambling. New Jersey recently moved to a similar model as Iden’s proposed legislation and saw strong growth in both sets of games, he said.

The House Ways and Means Committee was scheduled to meet on the bills Thursday, but canceled. The online gambling bill is HB 4311.

 




Elections 2020 are Coming … This Panel Has You Covered at #MABsummer

Four of Michigans top political broadcasters will be on hand to offer their insights into the state’s political landscape as the 2020 election cycle looms on the horizon during the MAB’s Advocacy Conference & Annual Business Meeting on August 5-6 at the JW Marriott in Grand Rapids.

The panel will include WOOD-TV Political Reporter Rick Albin, MLive Public Interest Reporter Emily Lawler, WKAR State Capitol Correspondent Tim Skubick and WXYZ-TV Editorial/Pubic Affairs Director Chuck Stokes.

#MABsummer registration is now open. Discounted block hotel room rates expire July 8. Learn more, register for the conference and reserve your room at MABsummer.com




Beasley Media Grows in Detroit with Purchase of WDMK

Beasley Broadcast Group, Inc. announced June 10 that it entered into a definitive agreement to acquire WDMK-FM and three translators in Detroit from Urban One for $13.5 million in cash. Excluding one-time transaction costs, the acquisition of WDMK-FM is expected to be immediately accretive to Beasley’s free cash flow without materially altering the Company’s leverage. Beasley intends to fund the acquisition through borrowings under its credit facility and cash generated from operations.

Beasley currently owns and operates WCSX-FM, WRIF-FM and WMGC-FM in the Motor City.

Beasley’s acquisition of WDMK-FM is complementary to the Company’s three existing radio stations and digital operations in the Detroit market, the thirteenth largest designated marketing area in the country, and reflects the Company’s long-term focus on premium local programming and content.

Commenting on the proposed transaction, Caroline Beasley, Chief Executive Officer, said, “The accretive acquisition of WDMK-FM significantly enhances our revenue and competitive position in Detroit. Detroit is undergoing an exciting renaissance as a result of billions of dollars of new investments in the city’s residential, commercial, entertainment and cultural centers, all of which are driving new residents, businesses, tourists, employment and economic activity.”

“We entered the Detroit market in late 2016 and have consistently improved the operating results of the three stations we acquired, and we believe the proposed transaction is a strategically and financially compelling growth opportunity for our shareholders. The addition of WDMK-FM will mark further progress toward our goal of capturing 30 percent revenue share in each of our markets while delivering valuable synergies and the potential for SOI margin improvement.”

“Consistent with Beasley’s disciplined approach to growing our platform, the acquisition of WDMK-FM is expected to be immediately accretive to free cash flow, excluding one-time transaction costs, and with our strong balance sheet, we will continue to have the financial flexibility to make additional return-focused growth investments, while further reducing leverage and returning capital to shareholders.”

“We look forward to realizing the strategic benefits of the WDMK-FM transaction in 2020 as we continue to advance our initiatives focused on leveraging our premium local programming and brands, while aggressively rolling out our digital offerings and distribution capabilities to reinforce and grow Beasley’s leadership position across all audio platforms in our markets. This approach will enable us to deliver great local content to listeners while creating an even stronger marketing platform for local businesses.”

The transaction, expected to close during the fourth quarter of 2019, is subject to Federal Communications Commission approval and other customary closing conditions. The proposed transaction was brokered by Michael Bergner.

It is reported in the trade press that Urban One plans to continue its LMA with WGPR-FM until the end of 2019.