The Congressional Black Caucus and an owner of cable’s Africa Channel have turned up the pressure on Comcast, blasting the cable giant for its business practices and legal strategy in fighting Byron Allen’s racial discrimination lawsuit.
Paula Madison, an owner of The Africa Channel (TAC), issued a lengthy statement criticizing Comcast for what she characterized as the company’s failure to live up to commitments to expand the channel’s distribution. Madison is also a former NBCUniversal executive who headed the company’s diversity and inclusion department at the time that General Electric sold its majority interest in NBCU to Comcast in early 2011.
“Although Comcast has not shut out TAC, Comcast has not been a good business partner. With an unkept — yet repeated — promise by Comcast of 4 million additional subscribers it’s inaccurate to include TAC in any grouping of Black-owned independent networks which would typify the Comcast business relationship as good or in any way proactive,” Madison wrote.
Madison’s statement followed on the heels of commentary from Sean Combs, owner of Revolt TV, that was also extremely critical of Comcast for what Combs characterized as a lack of a support beyond its initial distribution agreement for Revolt TV in 2013.
Madison called for the courts to allow Allen’s lawsuit to proceed. The case has ben dismissed three times by a federal court judge, but last year the Ninth Circuit reversed that on appeal. Comcast appealed the Ninth Circuit’s ruling to the Supreme Court, which held oral arguments on Nov. 13.
Madison, Combs and the Congressional Black Caucus have also slammed Comcast for its legal strategy in fighting the $20 billion racial discrimination lawsuit that Allen filed against Comcast in 2015. Allen asserts that Comcast declined to carry his suite of seven lifestyle channels because of bias. Comcast has vehemently denied that race played any role in its decision that there was not sufficient audience demand for Entertainment Studios’ channels.
During the Supreme Court hearing, the sides battled over the legal procedure for determining the burden of proof in the case and other issues. Comcast’s critics say the company’s push to make Allen’s team prove that race was the sole “but-for” factor — as opposed to a “motivating factor” — in Comcast’s decision to deny carriage would have the effect of weakening civil rights laws by making it harder to prove discrimination cases.
Supreme Court Chief Justice John Roberts and other high court jurists indicated during the Nov. 13 that they did not see the distinction between the but-for and motivating factor tests for the case as particularly significant in the early stage of determining whether the lawsuit should proceed to trial. But Comcast’s legal effort has nonetheless sparked outrage.
“This means defendants could quash a case at the outset by claiming any reason other than race for a contract decision, even if racial discrimination was afoot,” the Congressional Black Caucus said in a statement in response to the hearing. “This also strips plaintiffs of the benefits of discovery when defendants are usually in control of the information that would prove discrimination.”
Meanwhile, Comcast responded to Madison’s statement by noting that its carriage agreement with TAC predated its acquisition of NBCUniversal.
“Comcast is proud of our strong commitment to diversity and inclusion, including an unmatched record of supporting diverse and independent networks, carrying 160 independent networks, 100 of which are targeted to diverse audiences,” Comcast said in a statement. “We are also proud to have launched eight new minority owned cable channels since 2011, bringing these channels into millions of homes. From the start, we provided a long-term commitment to carriage of these channels and were committed to the success of these channels. Seven years after the launch of the channels under the MOU, all of them are still carried to millions of Comcast homes.”
Madison cited her experience in working on the NBCUniversal side during the Comcast merger process. To secure federal approval for the deal, Comcast agreement to a Memorandum of Understanding with the FCC and Justice Department that featured in part commitments to launch 10 independently owned channels on its cable system, including a number of outlets with African American and Latino ownership.
Madison asserts in her statement that Comcast did not make specific subscriber guarantees to the 10 channels — a point that Comcast strongly disputes.
“As the NBCU team leader who worked on and negotiated the MOU with the African American civil rights leaders, separately I had raised with Comcast that without a guaranteed subscriber count giving the Black entrepreneurs significant revenue and profit, the launch of these channels would not help them achieve success in business,” Madison wrote. “Indeed, as an owner of The Africa Channel, I recused myself from any Comcast-TAC discussions but I also knew from experience that without the key components of a guaranteed number of subscribers and revenue, running a profitable cable network would be very problematic. I shared these concerns with Comcast — that the African American networks would be positioned to fail — and Comcast made it clear that it was only committed to launching these networks, and not giving them the necessary distribution and economic support to succeed. Period.”
Comcast also challenged Madison’s claim that it reneged on commitments to TAC.
“We have always met or exceeded our commitments to this channel. We’ve included the network’s content in tentpole on-demand events,” Comcast said.
Here is Madison’s full statement:
The Africa Channel’s (“TAC”) relationship with Comcast has been cordial and at times even jovial but our economic relationship cannot be described as a good one. Yes, Comcast is distributing TAC (in business since 2005 and my family’s investment business is the largest shareholder) to about 4 million subscribers but it has not meaningfully expanded our subscriber base beyond about 2 million Comcast subscribers.
In 2011 during the Memorandum of Understanding (“MOU”) process, TAC requested that Comcast count it among the three channels it would launch, believing those new channels would be distributed to tens of millions of Comcast subscribers. Because TAC was already carried in approximately 2 million Comcast households, TAC was denied and told we were ineligible. (Indeed, Comcast is the largest distributor of our small, independent cable network.) At that time, Comcast assured the leaders of the NAACP, National Action Network and The National Urban League that Comcast would increase TAC’s subscriber count from 2 million to 6 million, which for a small, independent cable network would have resulted in a palpable economic boost. Eventually, TAC received just half of the promised increase.
Since then, TAC has been in conversations with Comcast regarding the additional cable carriage. We have been told that carrying TAC “on demand” might be a possible solution. Their representative said Comcast is considering networks with zero to very low license fees. And so with virtually no leverage, we offered to reduce our carriage fee or even agree to a flat fee in exchange for wider distribution. We still believe that a loss in carriage revenues would be offset by increased advertising revenue generated by a larger subscriber base, but Comcast consistently has dismissed those requests.
TAC has been an extraordinarily good partner by supporting all of Comcast’s multicultural initiatives such as sponsoring the Odunde Festival, the largest African gathering in Philadelphia — home of Comcast — as well as other Xfinity VOD marketing initiatives targeting the African American community but to no meaningful reciprocity.
Although Comcast has not shut out TAC, Comcast has not been a good business partner. With an unkept — yet repeated — promise by Comcast of 4 million additional subscribers it’s inaccurate to include TAC in any grouping of Black-owned independent networks which would typify the Comcast business relationship as good or in any way proactive.
During the MOU process, I met with Chicago Congressman Bobby Rush as part of the Congressional approval process. We met in his DC office and he asked me to assure him that Comcast would continue the innovative and meaningful progress in diversity and inclusion that as NBCU’s EVP & Chief Diversity Officer, I had led at NBCU. I assured Congressman Rush that I did not know if the Comcast folks would do so and certainly had no way of predicting this. I did say that GE, NBCU’s parent company, was an industry leader regarding Diversity & Inclusion and that NBCU was an industry leader regarding Diversity & Inclusion (“D&I”) and that Comcast was promising Congress that it would work for greater economic success for the African American community as stated by the commitments regarding procurement, banking, employment, etc. I said that I was meeting with him as one of my assigned responsibilities to fulfill what was needed to secure for Comcast the government approval to acquire and own NBCU. I said I was taking Comcast at its word.
Launching these Black entrepreneurs’ new cable networks without meaningful distribution and real economic inclusion, in my opinion, would result in a business model fraught with frustration and near futility. As the NBCU team leader who worked on and negotiated the MOU with the African American civil rights leaders, separately I had raised with Comcast that without a guaranteed subscriber count giving the Black entrepreneurs significant revenue and profit, the launch of these channels would not help them achieve success in business. Indeed, as an owner of The Africa Channel, I recused myself from any Comcast-TAC discussions but I also knew from experience that without the key components of a guaranteed number of subscribers and revenue, running a profitable cable network would be very problematic. I shared these concerns with Comcast — that the African American networks would be positioned to fail — and Comcast made it clear that it was only committed to launching these networks, and not giving them the necessary distribution and economic support to succeed. Period.
None of the Black-owned networks sought cable carriage solely with Comcast. We all sought carriage on Time Warner, Charter, Cox, etc. However, Comcast was seeking to acquire one of the largest content creators in the world, NBCUniversal. And for that reason, Congress legislated that Comcast enter the MOU. Comcast was bound by the agreement to launch the cable networks but was not bound to distribute to a requisite number of households/subscribers so the channels never had a good chance of having a profitable and successful business.
The amount of money Black cable network owners get from their business relationship with Comcast can only be characterized as very small. In fact Comcast spends in excess of $12 billion in licensing cable networks of which Black-owned networks receive a negligible amount.
Because The Africa Channel has been included in Comcast citations which suggested that we are in a good business relationship, I am writing this statement to set the record straight.
I felt compelled to speak up and tell the truth for many reasons, especially after reading the falsehoods spread by Brian Roberts and David Cohen of Comcast. As someone who was a corporate insider and helped to craft the MOU, I can honestly say that after reading Sean Diddy Combs’ official statement about Comcast, he has every reason to feel the way he does. In fact, I considered some weeks ago, filing an amicus brief to Byron Allen’s lawsuit but after communicating with my fellow Vassar College alum Sherrilyn Ifill of Legal Defense Fund, I decided not to do so. I’m convinced there are a number of amicus briefs filed with SCOTUS that I believe make a positive and convincing argument that his case must be allowed to continue.
I also spoke with National Association of Black Journalists (“NABJ”) President Dorothy Tucker expressing my great concern that the Civil Rights Act of 1866 would be gutted by Comcast and U.S. Attorney General Barr and so I encouraged NABJ, of which I am a lifetime member, to speak out and indeed NABJ has done so. After watching Comcast’s actions regarding the statute, I am now convinced that I have to speak up. Again, this is the reason I am writing this statement.
Section 1981(a) of the 1866 law states, “… [C]itizens… of every race… without regard to any previous condition of slavery… shall have the same right… to make and enforce contracts… as is
enjoyed by white citizens…”
I believe Byron Allen’s $20 billion lawsuit must be allowed to proceed to trial so we can hear all of the details and the truth.