At the beginning of 2024, I read an article from Rolling Stone.com that I can’t get out of my head. It was titled “Why Is the Radio Full of Christian Rock? Thank This Nonprofit.” It’s a long article, that I encourage you to read, but if you’re short on time, I will summarize its most important content for the commercial radio industry.
What is EMF?
EMF stands for the “Educational Media Foundation,” a name that does not immediately convey that they are a religious broadcaster.
On their website, the foundation states their mission this way:
“Educational Media Foundation (EMF) is a nonprofit, multi-platform media company on a mission to draw people closer to Christ. Founded in 1982 in Santa Rosa, CA, with a singular radio station, EMF today owns and operates the nation’s two largest Christian music radio networks (K-LOVE and Air1) with over 1,000 broadcast signals across all 50 states, streaming audio reaching around the world, and a growing family of media ministries including podcasts, books, films, concerts, and events. EMF employs nearly 500 team members between its offices in Nashville, TN, Rocklin, CA, and field locations around the country.”
Today, I believe, EMF is the largest radio station owner in America, with more radio signals in its control than iHeartRadio, estimating that it reaches a weekly audience numbering over 18-million listeners. It’s those listeners – and their donations – that fund EMF’s operations, much like the listeners support at public radio stations. EMF’s radio stations are licensed as non-commercial educational (NCE) radio stations and the foundation receives the majority of their donations during their twice annual pledge drives; usually held in the spring and fall.
What is iHeartRadio?
iHeartRadio is America’s largest commercial radio broadcaster and owned by iHeartMedia, which was rebranded by CEO Bob Pittman from Clear Channel Radio in 2014.
Full-disclosure, I worked for Clear Channel Communications from 2004-2010, a time when the company operated in a decentralized manner, allowing each of its radio station’s general managers to make their own decisions based on local market conditions and to deliver what was forecast by the radio station’s annual budget. That would change after I left the company to a centralized management model.
At its peak, Clear Channel owned and operated more than twelve hundred American radio stations. Today, the iHeartMedia website says:
“With over 860 live broadcast stations [with 781 employees] in 160 markets across America, there’s an iHeartRadio station where you live. Discover how our stations can deliver your message live and local to your community.”
Wikipedia says ”iHeartRadio’s main radio competitors are Audacy, TuneIn and SiriusXM,” which I found interesting in that TuneIn owns no radio stations, and while SiriusXM is licensed to operate by the Federal Communications Commission (FCC) and does employ land-based transmitter sites in addition to its satellites, it is basically a subscription service.
Its real competitor, like that of the rest of the commercial/public radio industry, is flying under the radar.
EMF versus Commercial/Public Radio
Rolling Stone writes: The big difference between EMF and other commercial broadcasters is that it operates without a local presence and unmanned transmitters.
“Almost every new EMF station operates as a repeater
with no local voices, few local jobs and barely any overhead.”
Rolling Stone says that as of 2022, this “little-known organization had just shy of a billion dollars in net assets (a number that grows steadily year after year), with an annual revenue of nearly a quarter billion. (National Public Radio, by comparison, had net assets of less than $150 million and operated near the break-even mark.)”
The EMF business model has few operating costs – unlike commercial and public broadcasters – where every new radio station they acquire becomes a new source for donations. It’s estimated that about ninety-seven cents of every dollar comes from listener donations.
“Nonprofit EMF has built an unassuming money-making machine.”
-Rolling Stone
The genius of the EMF business model is that it exploits loopholes that the FCC created to help small nonprofits.
“in my own heart, I know God was involved
[in the decision to form a 501(c)(3)]
because being a not-for-profit has paid off for us
many, many times.”
Mike Novak, EMF CEO
The decision to incorporate as a “not-for-profit” entity allows EMF to enjoy many benefits:
- Avoid paying taxes
- Waves FCC applications costs and other fees
- No requirement to maintain a local broadcast studio
- Legally accept tax-deductible donations from their listeners (a revenue stream not available to commercial broadcasters)
- The acquisition of translators* that are made more easily available to entities such as religious broadcasters
- Access to lower FM band frequencies (88.1 – 91.9) that the FCC reserved for use by colleges, community and public-radio organizations and tribes; entities that the FCC envisioned would have limited funds to acquire these frequencies, and commercial broadcasters were banned from bidding on, but didn’t exclude a not-for-profit giant like EMF from buying up.
Sadly, true community broadcasters find this unlevel playing field almost impossible to compete with, when EMF’s billion-dollar foundation can offer iHeart-level prices for neighborhood radio stations. It’s something I personally witnessed happen in my city of Winchester, Virginia when EMF bought 50,000-watt WINC-FM. All local community programming vanished, along with its employees and building.
While the FCC still maintains a policy of not allowing a single radio broadcaster from owning more than five AM or five FM stations in any one city, it left open a loophole for noncommercial broadcasters by never applying its ownership cap to nonprofits. There’s also no ownership cap on the number of translators a nonprofit may own in a single radio market.
Soft Conservatism
While nonprofits can’t legally engage in any political campaign activity, don’t think EMF isn’t using its fortunes to influence its point-of-view; through lobbying and legislation. Those in the Contemporary Christian Music (CCM) industry know that the genre is a punchline for most Americans; it’s something that actually works to EMF’s advantage, by keeping them low profile.
Unfortunately, this unlevel playing field is negatively impacting local commercial and public radio stations to profitably operate, which impacts the communities these stations once served with vital local news, sports, weather and community information.
There are some things in life you can’t have too much of.
DickTaylorBlog 