THOMPSON URGES COMPANIES TO ADDRESS DISCRIMINATION AGAINST BROADCASTERS THAT SERVE MINORITY AUDIENCES.

 

Citing reports about discrimination in the industry, New York City Comptroller William C. Thompson, Jr. has written to 46 companies urging them to take immediate steps to ensure that their respective contracted advertising companies and agencies do not discriminate against minority broadcasters and minority employees.

 

“As the investment adviser to the New York City pension funds, it is my fiduciary responsibility to protect our funds’ investments and safeguard the retirement benefits of our members,” Thompson wrote. “Consistent with this responsibility, I am committed to the eradication of discriminatory practices at advertising companies and their agencies that provide advertising services to companies in which our funds invest.”

 

He added, “In addition to the harmful economic and social impacts on minority broadcasters, the communities they serve, and racial and ethnic minorities generally, these discriminatory practices pose significant legal liability and reputational risks to offending companies, with potential negative impacts on the investments of their shareholders over the long-term.”

 

In the letters – available at www.comptroller.nyc –Thompson urged company heads and their respective Boards of Directors to actively address this serious problem.

 

Collectively, the New York City Pension Funds hold more than 200 million shares of common stock valued at more than $ 5 billion in the companies.

 

Thompson sent letters to the following companies: Bank of America Corporation of Charlotte, NC; Bank of New York Mellon of New York, NY; Best Buy Company of Richfield, MN; Black & Decker Corporation of Towson, MD; Boeing Company of Chicago, IL; Cablevision Systems of Bethpage, NY; Campbell Soup Company of Camden, NJ; Clorox Corporation of Oakland, CA; Coca-Cola Company of Atlanta, GA; The Dow Chemical Company of Midland, MI; Exxon Mobil Corporation of Irving, TX; Federal Express Corporation of Memphis, TN; General Electric Company of Fairfield, CT; General Mills, Inc. of Minneapolis, MN; Gerber Scientific, Inc. of South Windsor, CT; GlaxoSmithKline of Brentford, Middlesex; Goodyear Tire & Rubber Company of Akron, Ohio; H & R Block, Inc. of Kansas City, MO; Hartford Financial Services of Hartford, CT; Hewlett-Packard Company of Palo Alto, CA; Hormel Foods Corporation of Austin, MN; JCPenney Company, Inc. of Plano, TX; Johnson & Johnson Company of New Brunswick, NJ; Kohl’s Corporation of Menomonee Falls, WI; Kraft Foods, Inc. of Northfield, IL; L’Oreal International of France; McDonald’s Corporation of Oak Brook, IL; Merck & Company of Whitehouse Station, NJ; MetLife, Inc. of New York, NY; Microsoft Corporation of Redmond, WA; Molson Coors Brewing Company of Denver, CO; Moneygram International, Inc. of St. Louis Park, MN; Motorola, Inc. of Schaumburg, IL; Nike, Inc. of Beaverton, OR; Pepsico, Inc. of Purchase, NY; Pfizer, Inc. of New York, NY; Proctor & Gamble Company of Cincinnati, OH; Sprint Nextel Corporation of Reston, VA; Target Corporation of Minneapolis, MN; Time Warner, Inc. of New York, NY; Verizon Communications, Inc. of New York, NY; Visa, Inc. of San Francisco, CA; Wal-Mart Stores, Inc. of Bentonville, AR; Wells Fargo & Company of San Francisco, CA; Wendy's/Arby's Group of Atlanta, GA; and Yum! Brands, Inc. of Louisville, KY

 

“These companies should adopt, and vigorously pursuing compliance with, effective policies for ensuring that advertising companies and their agencies do not discriminate against minority broadcasters and minority employees,” Thompson said.

 

In May, Comptroller Thompson wrote similar letters to leading advertising agencies with operations in New York City, requesting the opportunity to sit down with his office to discuss practices that either exclude radio stations serving minority audiences from ad placements or involve lower pay to those stations. The letters were sent to: Interpublic Group; Publicis Groupe; Omnicom Group, Inc; WPP Group plc; and Havas Media.

 

Studies commissioned by the Federal Communications Commission (FCC) and non-governmental organizations have found that advertising companies and their agencies continue to exclude radio stations serving minority audiences from ad placements, and pay them less than other stations when they are included.

 

Among other findings, the study identified two primary types of discrimination: (1) “no Urban” and “no Spanish” dictates – the practice of advertisers and/or ad agencies of prohibiting the placement of ads on stations that have an urban or Spanish format; and (2) “minority discounts” – the practice of buying time on minority-formatted stations but paying less than the rates paid to general market stations with comparable audience sizes.

 

Further, the dictates and lower rates paid to these stations when buys were made significantly reduced the station’s revenues; and advertisers, or their agencies, refused to buy time on African-American and Latino stations, even if such stations or their sales representatives demonstrated that the stations’ viewers or listeners met the target criteria sought by advertisers.

 

The findings engendered the March 2008 issuance of a joint letter by leaders of the National Association of Broadcasters, the Radio Advertising Bureau and the Television Bureau of Advertising to more than 4,000 advertising agencies opposing these discriminatory policies. The broadcast leaders emphasized that there is significant anecdotal evidence of these harmful discriminatory policies.

 

“I strongly support the efforts of these broadcast leaders to eradicate discrimination against broadcasters based on racial, gender, or ethnic stereotyping,” Thompson said. “These widespread discriminatory practices of advertisers and their agencies are despicable and inflict serious social and economic harm on minority broadcasters and the communities they serve.”

 

The Minority Media and Telecommunications Council (MMTC) estimates that the elimination of the “no Urban” and “no Hispanic” dictates could produce up to a 10% increase overall in ad revenues for stations oriented to African-American and Latino audiences.

 

Thompson also expressed concerns that discrimination in the advertising industry extends beyond minority broadcasters. A new study, “Research Perspectives on Race and Employment in the Advertising Industry,” found that racial discrimination is 38% worse in the advertising industry than in the overall United States labor market. The study, conducted by Bendick and Egan Economic Consultants, Inc., found the “discrimination divide” between ad and other industries is more than twice as bad as it was 30 years ago.

 

“Over the past decades, other credible studies have found compelling evidence of discrimination against minorities in the advertising industry,” Thompson said. “Despite the well-intended recommendations made to the industry by the FCC, the New York City Commission on Human Rights, and non-government organizations to eradicate this very harmful discrimination, sadly, the industry has failed miserably to effectively address this problem. Consequently, discrimination against minorities in the advertising industry remains deeply entrenched.”