WASHINGTON — A group of leading broadcasters announced Tuesday the creation of an investment fund that it says will make $1 billion available to minorities and women who need capital to enter the broadcasting and Internet industries.
While CBS CEO Mel Karmazin and Clear Channel chairman Lowry Mays say the fund will dispense $1 billion, it has only raised $175 million from broadcasters so far. Karmazin and Mays said they will continue to solicit broadcasters to play a role in the investment fund before going to institutional investors such as pension funds.
The fund is being administered by Chase Manhattan Bank, which is expected to increase the buying power of the fund by providing loans to companies that become investments.
Among the participating broadcasting companies are CBS, Clear Channel, NBC, ABC and Fox. Also investing in the fund are A.H. Belo, Bonneville, Tribune and Viacom.
Some have criticized the motivation of broadcasters. The National Assn. of Broadcasters debuted the fund at a time when it is seeking regulatory relief from the Federal Communications Commission.
FCC chairman Bill Kennard has been critical of the effect that the wave of media consolidations is having on minority broadcasters. The steep prices that broadcast properties now command make it difficult for new entrants to gain a toehold in the industry.
Broadcasters emphatically denied they are trying to get into Kennard’s good graces by creating the fund.
“There is no quid pro quo here,” Mays said.
“It is possible (that we are doing this) because it is the right thing to do,” Karmazin added at a press conference.
Despite their insistence that their motives are entirely altruistic, Karmazin, Mays and a dozen other broadcasters boarded a bus immediately after the press conference for a meeting with Kennard and commissioner Michael Powell to talk to them about the fund.