Entravision delivers quality content, and it would be wonderful to see their business expand. The question is why Mr. Davenport is even needed in this situation. Is it simply to “qualify” as a minority owner? What is more important? The ownership, or the content delivered to consumers?
Davenport argues that the seizure of 20% of the spectrum would only impact 2% of the subscribers of Sirius or XM. He supports this by stating that subscribers only “listen to” a finite set of channels on SDARS. That argument falls flat because one of the compelling aspects of SDARS subscribers is the ability to have a wide variety of content. Stripping 60 channels out of the SDARS line-up is not a 2% impact. See what happens with SDARS subscribers if 60 channels suddenly fell from the line-up. Do you think customers would complain? You bet they would.
Further, the primary products of Entravision are three channels. They broadcast through a centralized production facility and their leading products are music formats:
- Super Estrella, a music-driven, pop and alternative Spanish rock format
- Radio Tricolor, a personality-driven, Mexican country-style format
- Jose, a mix of Spanish-language Adult Contemporary hits from the 1970’s to the present.
This would use 3, and maybe as much as 6 out of the proposed 60 channels. What has Davenport promised for the rest? To quote from his own filings, “Family friendly commercial supported programming that meets FCC decency standards”. News flash… when Howard Stern was on the terrestrial air waves, his programming was “family friendly programming that met FCC decency standards”.
For Georgetown Partners, bringing out Entravision could well be an attempt to state that the 20% would be African American as well as Hispanic based. I do not buy it. Not for a second. If Davenport ever wanted to make money on a national basis, he will need mainstream programming. Whether rap, country, rock, or talk, the breadwinner type programming needs to be a part of the mix. In my opinion, Georgetown Partners is simply hiding this bit of information.
What value would having KISS FM on in every market carry for a terrestrial radio giant? Think about the most popular formats being available on terrestrial, HD, as well as satellite all under the control of a Clear Channel or a CBS? Program the show and broadcast it in every medium. Don’t forget Internet radio. All of the big boys also broadcast globally on the net.
Chester Davenport is a smart man. He was smart enough to ask for and receive meetings. He was smart enough to bring in consultants with relationships to Martin. He is smart enough to play the minority ownership card in such a way that limited other minority competition. He was smart enough to keep his plans veiled. He was smart enough to not answer the questions raised by Sirius Buzz, and he was smart enough to avoid daily calls from this writer for weeks on end. Did we see something that Davenport did not want us to see?
Davenport will not get what he wants. What he is seeking is a merger deal breaker. While his efforts have been less than transparent, a bit of reading between the lines will get anyone to the motives behind the Georgetown Partners proposal.
I am not against minority programming or ownership. From a consumer perspective, all I care about is what programming is delivered, and whether programming exists on the service that meet my taste. From an investor perspective, the same is true. I do not care whether SIRI, XM, or EVC are invested in by any race. It simply does not matter. What I am against is a spectrum grab under the flag of “minority” when we have not been ensured that such ownership would center their business around that concept.
Simply stated, the Georgetown Partners latest proposal raises more questions than ever before, and perhaps sheds a bit of light on what exactly is being put on the table.
