• by Erik Sass  @eriksass1, July 13, 2009

A proposed financial bailout for minority-owned broadcasters edged closer to reality Monday. Minority broadcasters sent a letter to Treasury Secretary Timothy Geithner urging support for the emergency measure.

By enlisting the Obama administration for a measure already backed by House Majority Whip Jim Clyburn, the broadcasters are raising the ante for the Democrat-controlled Congress and the administration, both of which have treated minority broadcasters as important political allies.

"Minority-owned broadcasters are close to becoming an extinct species," warned the letter to Geithner, signed by Jim Winston, the president of the National Association of Black-owned Broadcasters, Raul Alarcon, the chairman, president and CEO of Spanish Broadcasting System, Walter Ulloa, CEO of Entravision, and Pierre Sutton, chairman of Inner City Broadcasting, among others.

The bosses blamed the combined threat of the economic downturn, which has hurt advertising, the credit crunch, which makes borrowing more difficult, the historical obstacles faced by minority broadcasters trying to get loans, and measurement by Arbitron's Portable People Meter, resulting in big apparent drops in audience size for many minority-owned radio stations.

Squeezed from all directions, many minority broadcasters, like mainstream competitors, also find themselves saddled with substantial debts after a decade of highly leverage acquisitions. As such, default and bankruptcy loom as very real possibilities for mainstream and minority broadcasters alike.

The bailout proposed by the minority radio bosses would make so-called "bridge financing" available to minority broadcasters in the form of loans from a temporary, federally-funded credit facility or government-backed loans from banks. The broadcasters point out that the government has particular influence over banks that have recently accepted billions of bailout money. The Feds could demand that these banks show greater flexibility in re-negotiating borrowing agreements, thereby helping minority broadcasters avoid default.

Although Democrats in Congress have helped minority radio broadcasters air their grievances about Arbitron's PPM ratings -- an issue Barack Obama addressed in a letter to Arbitron while a presidential candidate -- the bailout proposal faces an uphill battle.

Sensing growing public opposition to government bailouts, some Democrats and many Republicans are likely to oppose any more government rescues for "non-essential" businesses -- i.e., any sector of the economy besides finance.