Armstrong Williams, the conservative commentator and long-time business manager for GOP presidential candidate Dr. Ben Carson, is now also the leading African-American owner of television stations in America.
Earlier this month, the FCC approved the acquisition of two television stations by Howard Stirk Holdings (II), a company that is entirely owned by Williams.
His purchase of KVMY, the MyNet affiliate in Las Vegas, Nevada, from a subsidiary of Sinclair Broadcasting, for $150,000 and WLYH, the CW affiliate in Harrisburg, Pennsylvania, from Nexstar for $450,000 brought his total holdings to seven television stations.
“Armstrong [Williams] is the leading owner [of television stations],” James Winston, President of the National Association of Black Owned Broadcasters tells Breitbart News. In fact, as the Washington Post reported in August, African-Americans owned only ten television stations in the country. At the time, Williams accounted for five of those. Now, he owns seven of the twelve total owned by African-Americans.
Williams’ big break in broadcast ownership came in 2013, when his good friend David Smith, CEO and one of four Smith family members who together own a controlling interest in publicly traded Sinclair Broadcasting, which “owns and operates, programs or provides sales services to 164 television stations in 79 markets,” helped him purchase the license assets of two Barrington Broadcasting owned stations for an estimated $6 million as part of a larger $370 million transaction in which Sinclair purchased eighteen television stations from Barrington.
In a controversial, but legal, arrangement known as a “sidecar deal,” Sinclair, which already owned a Fox affiliate in the Flint market, arranged for Barrington to sell the license assets of WEYI, an NBC in affiliate in Flint, to Williams. But Williams doesn’t operate WEYI, Sinclair does, through a Local Marketing Agreement [LMA] it signed with him. Williams does, however, control the programming of the station.
In a similar “sidecar deal” completed as part of the same transaction, Sinclair also arranged for Barrington to sell the license assets of WWMB, its CW affiliate in Myrtle Beach, South Carolina, to Williams. As in Flint, Sinclair owns another station in Myrtle Beach, ABC affiliate WPDE.
“The license and programming assets for [WEYI TV and WWMB TV] are currently owned by [a] third [party]. We provide certain non-programming related sales, operational and administrative services to [this station] pursuant to service agreements, such as joint sales and shared services agreements,” page 3 of the Sinclair Broadcasting Group 2014 Annual Report says.
“We typically own the majority of the non-license assets of the stations and in some cases where the licensee acquired the license assets concurrent with our acquisition of the nonlicense assets of the station, we have provided guarantees to the bank for the licensee’s acquisition financing,” Sinclair Broadcasting says of such arrangements on page 39 of that 2014 Annual Report.
The African-American businessman with the next largest ownership interest is Pluria Marshall, Jr., sole owner of the recently formed Marshall Broadcasting Group, which purchased three Fox affiliated television stations from Nexstar in 2014 for $58 million.
In that deal, Nexstar guaranteed the Marshall Group’s financing and signed a shared services agreement that provides 70% of ad revenues to Marshall’s company.
Critics of such “sidecar deals” call it a way to skirt FCC prohibitions against monopoly control of television broadcast markets.
That criticism doesn’t phase Williams. Unlike other sidecar deals, the one he negotiated with Sinclair that got him into broadcast ownership keeps him in control, he says.
“[A]ll sidecar deals are not created equal,” he told C-SPAN in 2014. In his deal with Sinclair at WEYI and WWMB, “he has total control over programming and gets 85% of the station’s revenues.”
For the 56-year-old Marion, South Carolina native and former aide to the late Senator Strom Thurmond (R-SC), the arch-segregationist Democrat and Dixiecrat candidate for President in 1948 who switched parties in the 1960s, the news of his rise to media magnate comes after more than three decades of building a network of personal and professional contacts rivaled by few in the hyper-connected world of the Washington, D.C. Beltway.
After graduating from South Carolina State University in 1981, Williams worked as an aide to Thurmond then worked for four years as the assistant to now-Supreme Court Justice Clarence Thomas at the Equal Employment Opportunity Commission. A fixture of the behind-the-scenes Republican and GOP community in Washington, D.C., Williams branched out to partner with Oprah Winfrey’s long-time boyfriend Stedman Graham to form the Graham Williams Group, an international marketing and public relations agency in 1991.
Since the 1990s, Williams has hosted several radio programs—he currently hosts his own weeknight radio show on Sirius XM’s Urban View network, Channel 126 from 6:00 pm to 8:00 pm—as well as numerous television programs over the years. He also owns a television production company.
But it has been his long standing relationship with Sinclair Broadcasting that gave him the help he needed to enter the world of television station broadcasting when he bought WEYI in Flint, Michigan and WWMB in Myrtle Beach, South Carolina for an estimated $6 million.
JP Morgan, along with others, provided Williams’ Howard Stirk Holdings with a $6.6 million loan to complete the transaction, but only because Sinclair Broadcasting guaranteed it, sources familiar with the deal tell Breitbart News.
Williams kicked in a million dollars of equity himself, sources say.
When the FCC voted in 2014 to make “joint sales agreements attributable as ownership interests,” thereby threatening to put his arrangement with Sinclair Broadcasting at WEYI in Flint in jeopardy just months after the agency had granted final approval of the deal, Williams applied for a waiver.
Other broadcasters who rely upon such “sidecar” deals also objected to the FCC’s new rules.
In fact, several argue that the new FCC rules have significantly hurt the ability of minority entrepreneurs, who lack access to capital, to purchase and operate broadcast properties, television stations in particular.
The hard fact is, without such arrangements, African-American businessmen would not own twelve television stations as they currently do. Instead, they would own two.
The FCC has not relented, however, and has given the Television industry, including Williams, until December 31, 2016 to terminate all joint sales agreements and shared service agreements. This will impact Williams’ Flint station only.
Williams and other broadcasters have pushed back. With Williams as the lead petitioner, along with the National Association of Broadcasters and Nexstar, the U.S. Court of Appeals for the District of Columbia is scheduled to hear this December their case to throw out the new FCC regulations.
If Williams fails to prevail in court, he assures Breitbart News that he has a fallback plan that will preserve his broadcast ownership interests.
“There is no way with my owning two or three television stations could I survive this without these joint agreements,” Williams told C-SPAN back in 2014.
“Let’s just to say we were to unwind [the sharing agreements] with my stations that exist now, in four months I would go belly up. And not just me. I’m speaking for all small town broadcasters that are in the same predicament I’m in,” he added.
The trade publication Broadcasting and Cable also reported that “he later said if he did not get the waiver and had to unwind the JSAs he would find a way to reinvent himself that included owning the TV stations.”
For Williams, the relationship with Sinclair was key:
Williams says Sinclair’s big pockets were a blessing without which he could not have gotten access to the capital—through J.P. Morgan—to buy the stations, which he did as part of a spin-off deal of stations by Sinclair when it bought the Barrington group.
Williams said that when he tried to buy the stations independently, J.P. Morgan said “no way” unless they got “one of the big buys” to guarantee the loan.
Williams described to C-SPAN the problems that arise from running a television station without the help of a larger entity:
Standalone cannot exist. That’s why the Roberts Brothers in St. Louis had to go into bankruptcy, and why Granite couldn’t make it. And it’s not just minorities. It’s people across the board. This is a game for the Sinclair’s, Belo’s, and Gannett. They are the big boys and if you are not one of those, it is just very difficult as a standalone to compete for advertising dollars. Advertisers like to buy conglomerates. . .
It is important that we have someone with a proven track record in broadcasting and programming to be there for us and to fight for us.
Broadcasting and Cable reported that Williams also made clear that without Sinclair’s financial backing, the numbers just would not work:
He suggested that without the backing of Sinclair sharing agreements, he could not afford the local programming, or news or to do things like replace a $400,000 generator destroyed by an ice storm, in addition to having to meet a $138,000 a month debt payment on his loans. “Without Sinclair I could not afford these figures,” he said.
He suggested he was not alone, and that other smaller operators needed similar big pockets to be able to both operate their stations and invest in improving them.
Williams’ five subsequent acquisitions have been much smaller than the blockbuster deal he used to burst onto the scene of broadcast ownership.
In December 2014, Williams put together three small deals, each property purchased from Sinclair Broadcasting for a mere $50,000, or $150,000 in total. The three stations—WGWG in Charleston, South Carolina, WSES in Tuscaloosa, Alabama, and WGWW in Anniston, Alabama—are all affiliated with the new Heroes & Icons Network, formed in 2014 by Chicago based Weigel Broadcasting. The network’s programming consists primarily of “classic” television series from the 1950s to the 1990s.
Williams’ strategy is to build a larger network—as many as ten stations are in his sights—that will become profitable based on a combination of local and national sales efforts that take notice of some unique elements of his stations as well.
Each station he owns serves a particular demographic group that advertisers want to reach, Williams says. The unique strategy is Williams’ focus on localism in both regular programming and special programming.
In particular, he’s focused on town hall meetings that address specific socially and politically charged topics.
In 2014, he held a town hall meeting for WWMB in South Carolina that focused on whether or not his alma mater, South Carolina State University, should be shut down. Not surprisingly, the outcome of the town hall resulted in political actions that kept the school open.
“South Carolina State University where I graduated from was under budget pressure. My town hall broadcast invited key legislators to have a dialogue for people to understand the significance of the school. Sinclair simulcast the town hall in Charleston and Columbia. Within two weeks after the town hall aired legislators rethought, and re-authorized funding for the university,” Williams tells Breitbart News.
Each town hall has the potential of being simulcast across the entire Sinclair Broadcasting network of 164 stations during prime time.
Town halls are not limited to markets where Williams owns stations. In fact, he travels to other Sinclair Broadcasting owned properties to conduct town halls of local and national interest in those markets.
In November, for instance, he will travel to Sinclair’s Nashville station, Fox affiliate WZTV, to conduct a town hall on the Islamization of public education, a hot topic in Tennessee that Breitbart News has covered extensively.
Savvy to the ways of power in Washington, Williams has put together an All-Star politically bipartisan team to help him achieve his business objectives.
Adonis Hoffman, former chief of staff to Democratic FCC Commissioner Mignon Clyburn, daughter of powerful Democratic South Carolina Rep. James Clyburn, is a key player on that team.
“The important thing to focus on here is you have an FCC chaired by Tom Wheeler [who] came in with an agenda to increase minority ownership of broadcast property,” Hoffman notes.
“The FCC was very focused on having minority owners who could, for the most part, pay the freight,” he adds. Williams, he says, “was able to put together a financial system to acquire the properties in a way the FCC could not say no to.”
“Even though it was a painful process, Armstrong Williams was able to get through the FCC process. That doesn’t get told,” Hoffman tells Breitbart News.
Colby May, communications counsel for Williams’ Howard Stirk Holdings, is another key member of the team. He’s been practicing communications law since 1980, and he knows his way around the FCC legal block. As senior counsel and director of the Washington office of the conservative American Center for Law and Justice, he also knows his way around the political block.
“What Armstrong has done that no one has been able to do, not even the Roberts brothers, who went bankrupt, is this: The market requires a certain momentum and aggregate number to succeed,” May tells Breitbart News.
“The days that you can create a local sales office and pick up enough national ad avails to make it are over. Armstrong has realized he has to reach critical market size of ownership and he’s just about there,” May adds.
“Armstrong has begun to work with other independent content providers to put in local content. The FCC has been screaming for larger national reach. He recognizes you have to be able to have larger reach than a single station. Hopefully now, the regulators recognize that,” May says.
Williams and his team believe ten stations will be their critical mass around the country. They say it will allow Howard Stirk Holdings to have the number of outlets and the variety of services to be able to do not only the local sales but also the national sales you’ve got to be able to do to survive.
“The point about critical mass is important, particularly when you talk about an ethnic broadcaster,” Hoffman notes. “They [advertisers] look for the easiest, most proven, way to reach that mark. Howard Stirk Holdings becomes a very reliable ad buy, an easy no brainer buy for a media buyer,” he adds.
“We are in markets highly populated by what would be considered as minorities,” Williams tells Breitbart News. Advertisers, he says, are looking at a national level how to reach those groups.
Williams’ localism strategy and his coverage of hot political topics in partnership with local groups solidifies the company’s brand within the community, he says, adding that viewer loyalty then translates into advertising dollars.
One way to do that is through local partnerships.
“We go into markets and find a university to partner with. In South Carolina we set up a $50,000 Howard Stirk Holdings Media Foundation with Coastal Carolina University,” he notes.
“We have about a 38% minority listenership [in that market.] They connect with our brand and news,” Williams says. The scholarship program, he says, just adds to that connection.
“This whole focus on localism is one of the pillars of the Communications Act. When regulators are looking to approve, they look at [three] public interest elements: 1-Local 2-Diverse 3-New services to consumers,” Hoffman says.
“It’s important you have different perspectives in the media. I’ve already said the media does not really focus on [issues that are important locally]… and when they do, they focus on it in sound bites. What we have done is we’ve created these long form town hall meetings,” Williams notes.
“We like to get engage people and not get people who should be adversaries, talk about things they agree about. Positive, investigative, thorough. When people decide for themselves, they are engaged. Howard Stirk Holdings is the only one taking this approach,” Williams adds, noting that the town halls are often broadcast in the lucrative weeknight 7:00 pm to 8:00 pm prime time slots.
“We do them [local town halls] almost every two weeks,” Williams says.
Williams tells Breitbart News the town hall format allows him to explore more issues that are getting ignored by other media outlets, both at the national and local level.
“It’s really deep. The kind of guests that you have, you’ve got to have a long format. You’ve got to have the capability to [provide this information]. When you are a broadcast owner, this is what you want to do to be innovative and community oriented.”
Town halls are cross promoted—in news clips at 6:00 pm and 10:00 pm, and on the station’s website, Williams says, making the entire package attractive to advertisers and viewers alike.
Williams believes having the financial staying power to remain in the game long enough to build up to the critical mass to attract national advertising sales is key.
“There is no such thing as freedom of speech unless you own the media,” Williams says. It’s clear Williams intends to be a television station owner who uses that power to promote freedom of speech, with his own voice in the mix.
“I am unique as a broadcast owner. I am the sole owner,” Williams tells Breitbart News.
“The last five stations, I’ve had to pay out of my pocket. This is why David Smith at Sinclair Broadcasting gave me the opportunity. My background is TV. He knew we would bring our own innovation to the marketplace. So unique, so revolutionary, it monetizes itself. The more you have to offer to a sponsor, the more valuable you are,” he adds.
For Williams, it all comes down to access to capital, not race, nationality, or gender.
“This is like owning a sports franchise. This is a rich man’s game. The burden [on the under capitalized small business man] is too much. They want someone who’s poor and struggling? They can’t survive in this world,” Williams tells Breitbart News.
“It really doesn’t matter what race or nationality the owner of the facility is. In the end you have to succeed in the marketplace,” William’s attorney, May, notes.
“When you look at the [FCC] review process that goes on, we see increasingly the federal regulators are getting down into the minutiae of ownership. How are you going to make your numbers? That [scrutiny] probably doubles when you go to the notion of smaller broadcasters,” Williams’ media advisor Hoffman says.
“They wanted to typecast [Armstrong] as a conservative commentator. They were not familiar with his business acumen. He has been successful in putting together a network of resources and relationships to be successful .There was a little bit of surprise [among the FCC regulators] as to how hands on he is,” Hoffman says.
“The light bulb finally went on [with the regulators] that Armstrong is a hands on guy,” Hoffman says.
While Williams appears to have crossed a threshold when it comes to FCC perceptions of his long term viability, his career has not been without controversy.
The Department of Education scandal in 2004 in which he was paid $240,000 by the George W. Bush administration to promote its No Child Left Behind program, but did not disclose the payment relationship, left a mark.
“Sometimes you use bad judgment,” Williams told TV News Check several years later.
“I suffered for it, but I paid the price. I’ve moved on and I’ve learned from it, and I’m a better CEO and entrepreneur as a result.”
While Williams was skewered by the press at the time, and apologized for his failure to disclose the financial arrangements, it is worth noting that the mainstream media yawned with disinterest when Obamacare architect Jonathan Gruber did virtually the same thing in 2010.
Gruber wrote a pro-Obamacare op-ed for the Washington Post that year without disclosing that he had a $400,000 contract with the Department of Health and Human Services to put together an economic model that “gamed” the possible scenarios the Congressional Budget Office’s scoring model would develop.
Earlier this month, Williams stepped smack dab into the middle of another controversy that has the potential of impacting the Presidential campaign of his close friend, Dr. Ben Carson.
In a column for the Washington Times, Williams argued that federal and local governments in high crime cities such as Los Angeles, Chicago, and Baltimore, should consider resurrecting a program of paying Fruit-of-Islam, the paramilitary organization that is part of the Nation of Islam, whose commander-in-chief is Louis Farrakhan, to provide security in certain communities.
The timing of the proposal is awkward, coming on the heels of Dr. Carson’s decidedly anti-Islamist terrorist statements on the campaign trail.
Some conservatives have called for Dr. Carson to disavow his relationship with Williams as a result. As M. Catharine Evans wrote at American Thinker last week:
Morton Klein of the Zionist Organization of America is calling on presidential candidate Ben Carson to sever ties with his longtime confidante, business manager and top outside campaign adviser, Armstrong Williams….
Williams and Carson have been like ‘brothers,’ for 22 years. When asked about their relationship in August, Dr. Carson stated, “it’s a package deal, no question about it.”…
Did Williams op-ed suggesting Louis Farrakhan’s group Nation of Islam be called in to save Chicago’s inner city at taxpayer expense, pass muster with Carson? Last August, a man Williams refers to as “controversial,” called for “10,000 fearless men to rise up and kill those who kill us, stalk them and kill them,” and later, in another speech, added, “white people deserve to die.”
Williams is no stranger to scandal and controversy but advocating for a government agency to fund a group, led by an anti-Semitic, America-hating Muslim leader who incites his followers to kill Jews and white people, is mind-boggling.
For his part, Williams remains unapologetic.
“I condemn the anti-semitism of Louis Farrakhahn. Desperate times require desperate measures,” he tells Breitbart News.
“As a broadcaster, columnist, radio and television host, and magazine publisher for over twenty years, I hold journalistic integrity above all else. I do not tailor my own opinions or the editorial content of any of the publications or media platforms we own to align with the views of any political campaign or candidate,” Williams adds.
“My personal and professional relationship with Dr. Carson is fully consistent with my integrity as an independent broadcaster. He does not expect to agree with all of the views that might be expressed by me or on my various media platforms. Nothing I say in my capacity as an independent journalist should be construed as having the explicit or tacit endorsement of Dr. Carson,” Williams concludes.
When it comes to critics, Williams gives as good as he gets.
Given his wide range of business and political contacts, and his ability to deliver unique content, the likelihood that Williams will continue to grow his nascent television broadcasting empire over the next several years remains high, regardless of the various pitfalls encountered in the ever changing regulatory and legal environment.