NBC - Today show host Tom Brokaw heads up one of 32 firms that have received the first loans or loan guarantees from the Small Business Administration for the purchase of broad-casting properties.
Although the Federal Communications Commission hoped many of the first loans under this new program would go to minority businessmen, only 7 of the 32 firms involved were owned by minorities.
The SBA explained that although its program was desigened to help potential minority businessmen, it still must be open to all applicants, with none receiving any preferential treatment.
Brokaw's Tom Tom Communications (his partner is Tom Kearns) was awarded a loan guarantee of $345,000 after Brokaw agreed to take a second mortgage on his Washington home for collateral. The guarantee was for Tom Tom's purchase of KTOQ-AM, a radio station in Rapid City, S.D.
THe 32 firms involved in the broad-casting program are the first to receive financial backing from the government. The action came after the FCC convinced the SBA to reverse its long-standing policy of not loaning or guaranteeing money for broadcasting outlets.
FCC Commissioner Tyrone Brown said yesterday he hoped the publicity surrounding the Brohaw loan guarantee "will not slow the impetus for SBA support of minority ownership which members of the FCC have urged for some time.
"The Brokaw transaction, for all I know; was perfectly appropriate," Brown said. "But it certainly does not fail into the category of assistance to entrepreneurs from disadvantaged and minority groups which was announced with much fanfare in January" [when the SBA program was first announced.]
The The FCC had hoped that the SBA program would spur minority investment broadcasting, despite the SBA's inability to earmark the funds to minorities.
Brokaw said the local bank in his home town of Yankton, S.D., said it would lend him only $250,000 beause that its its loan celling. But the bank suggested that if the SBA would enter into a guarantea arrangement, the bank could get around its limit.
SBA's Combs said "we had to consider his (Brokaw's) application like all of the others. It was more a reflection of the marketplace that there were more nonminorities than minorities."