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Position Papers


Official Position Papers and Accomplishments

Where FCC or other governmental activities touch upon controversial financial aspects of broadcasting, BCFM has developed and filed official position statements relative to specific hearings or actions. For example:

1. Docket #19153 (RM-1837) Re: matter of public disclosure of FCC form 324, “Annual Financial Reports of Networks and Licensees of Broadcast Stations,” and listing of broadcast expenses in specific programming categories. BCFM filed opposition statement to petition for FCC rule-making as filed by SCLF. A position paper of opposition was submitted August 30, 1971.

2. Docket #19154 Re: “Formation of Policies Relating to the Broadcast Renewal Applicant, Stemming from the Comparative Hearing Process.” BCFM submitted comments February 14, 1972, regarding the financial threat involved in license renewal procedures.

3. After a ten-year continuing effort by BCFM, the Internal Revenue Service modified its ruling covering film amortization (Rev. Ruling 62-20). The new ruling (74-358) provides that limited run contracts may be depreciated under “any acceptable method” under Section 167, including the “INCOME FORECAST METHOD.” (September 1974).

4. In March 1973 and again in October 1974, BCFM filed official comments in opposition to FCC-proposed increases in Broadcast License Fees.

5. In November 1974 BCFM and its subsidiary BCCA recommended in an official Resolution and Position Paper that the broadcasting industry (and other media) adopt a new liability clause which better protects the media as well as the advertiser - while still continuing to maintain the traditionally-accepted advertising agency’s sole liability position, provided the agency does not become seriously delinquent in its payments. In December 1975 BCFM and BCCA published a compendium, “A New and Needed Position on Liability,” which was disseminated to all radio and television stations, as well as other parties of interest, recommending that the broadcast industry adopt this new clause.

6. In September 1975 BCFM, after a joint study with the National Association of Broadcasters, submitted a joint Position Paper to the Financial Accounting Standards Board that requested a modification of Accounting Principle Board Opinion No. 17, which presently requires mandatory amortization of intangible assets (such as broadcasting license and network affiliation contracts).

7. In October 1975 BCFM filed official comments with the American Institute of Certified Public Accountants in response to the Exposure Draft prepared by AICPA’s Accounting Standards Task Force on Entertainment Companies.

8. In November 1975 BCFM filed comments with the FCC opposing “Roadside Radio” - the proposed assignment of frequencies 530, 1606 and 1620 kHz to local governmental bodies for the transmission of certain kinds of information to the traveling public.

9. In May 1976 BCFM’s joint efforts with NAB were successful in defeating a proposed House bill that would have imposed an unfair and potentially disastrous 1% royalty on gross broadcast revenues, to be paid record performers.

10. In December 1976 BCFM filed objections to Docket #19667 regarding a rule-making proposal on what programming records radio stations should keep and make available for public inspection.

11. In December 1976 BCFM filed informal comments regarding a rule-making proposal to amend the Commission rules to make certain data on FCC Form 324, Broadcast Annual Financial Report, routinely available for public inspection.

12. In March 1978 BCFM filed comments regarding a Petition for Rule-Making to Amend FCC Reporting Form (Personnel) 395 (Docket #21474) in which it proffered improvements in the present system of reporting human resource category information. BCFM suggested more sharply defined categories with appropriate examples. BCFM also opposed proposed requirements of organizational charts, employee salary disclosure and the preparation and retaining for public inspection written justification for terminating women or minority employees.

13. In September 1978 BCFM filed further comments in the above-mentioned Docket on FCC Form 395 wherein the Commission sought comments to its proposal to amend its Equal Employment Opportunity Rules that would include the handicapped and also ascertain what physical modifications to a licensee’s facilities should be made (if any) to accommodate the hiring of the handicapped. BCFM’s objections were based on its belief that the FCC lacked jurisdiction, no workable definition of the word “handicapped” is known to exist, that such reporting constituted an invasion of privacy, and that modification of station facilities was an expense that could seriously jeopardize many broadcasters’ financial viability.

14. In October 1978 BCFM filed comments (BC Docket #78-237) objecting to the proposed rule-making that would amend the Primer on Ascertainment of Community Problems by Broadcast Renewal Applicants in Regard to the Community Leader Survey.

Comments also were filed to GEN Docket #78-205 that objected to the FCC’s Notice of Inquiry (July 10, 1978) in which the Commission would propose to reimburse from the FCC’s budget certain expenses incurred by citizen and group participants in Commission proceedings. BCFM also filed comments on the FCC’s proposed rule-making in the matter of FCC Fee Refunds and Future Fees.

15. In May 1979 BCFM (in support of NAB) filed comments urging the FCC to adopt guidelines and procedures to assure compliance by Petitioners-to-Deny with Section 309(D) (1) of the Communications Act. The purpose of these guidelines would be to prevent frivolous or otherwise improper Petitions-to-Deny that have been causing undue delay or burdens on both the licensees and the FCC in the administrative process.

16. In December 1979 BCFM submitted comments to the Financial Accounting Standards Board wherein the FASB was asked whether APB Opinion No. 21, Interest on Receivables and Payables, applies to receivables and payables arising from television film license agreements. This Interpretation would state that Opinion 21 applies to such receivables and payables.

BCFM proffered four reasons substantiating its opinion that this proposed imputing of interest should not be applied to receivables and payables arising from television film license agreements.

17. In February 1980 BCFM filed comments with the House of Representatives Subcommittee on Communication of the Committee on Interstate and Foreign Commerce strongly opposing House Bill H.R. 5430. This proposed bill would amend the Communications Act of 1934 to require the FCC to collect financial information from commercial broadcast station licensees and to make such information available for public inspection.

18. In April 1980 BCFM filed comments opposing the FCC’s Notice of Proposed Rule-Making (FCC 79-852) wherein the Commission would reimburse expenses of certain “public interest” parties in Commission proceedings. BCFM argued that such reimbursements were “illegal, unnecessary and untenable procedurally and not cost-justifiable.”

19. In October 1980 BCFM filed very lengthy comments with the FCC in the matter of the Amendment of Form 324 - the Annual Financial Report of Broadcast Stations (BC Docket No. 80-190 Proposed Rule-Making 3630). In its comments, BCFM reiterated its (and NAB’s) previous position that neither the public interest nor any material regulatory purpose is served by requiring an entire industry to collate and file financial data. The burden of preparation far exceeds the few minor benefits derived from the availability of this information. If in the event the FCC persists in the collection of annual financial data, BCFM submitted for FCC-adoption a proposed revised Form 324 that would provide all the essential and material needs of the Commission but would, at the same time, minimize the burden on individual stations.

20. In November 1980 BCFM filed comments in the FCC’s Proposed Notice of Rule-Making (Docket No. 21474, RM-1968, 2810, 2978) in the Matter of the Amendment of Broadcast Equal Employment Opportunity Rules and FCC Personnel Reporting Form 395.

21. In January 1981 BCFM filed further comments in a reply brief that recommended the FCC reassess its EEO role and procedures, abandon its proposed rule-making which intrudes too far into the area of management judgment in the private sector and creates a paper production program when the FCC has not developed a methodology to assess the result.

22. In March 1981 BCFM filed comments vigorously objecting to the Internal Revenue Service’s proposed regulations on “grass roots” lobbying. BCFM objected not only because the proposed rules would require onerous and expensive record-keeping and reporting, but also because it “placed the IRS in a role as a ‘super censor’.” BCFM’s interpretation of the proposed rules sees the IRS classifying newspapers, radio and television editorials as communications that constitute an attempt to influence the public with respect to legislation (i.e., “grass roots” lobbying). Such rules - if enacted - would have a chilling effect on all media over and above the serious First Amendment rights implication.”

23. In September 1981 BCFM joined many television stations and groups in filing further comments on APB Opinion No. 21 with the Financial Accounting Standards Board. BCFM (and others) responded to the FASB Exposure Draft 1063-075 (6/12/81). In brief, BCFM’s position is that television program/product license agreements should not be treated as assets but rather as any rental or lease agreement. Furthermore, the imputing of interest on program/product agreements should be eliminated because imputing interest is very confusing, of very minimal value, a waste of accounting and administrative time and is certainly not a generally accepted accounting principle.

24. In May 1982 BCFM/BCCA published a Status Report on Advertiser and Agency Liability that was an update on their Liability Clause originally recommended to the Broadcasting Industry in December 1975.

25. During 1982, BCFM spearheaded (with the assistance and cooperation of NAB, NRBA and RAB) the Broadcasting Industry Revenue Reporting Committee’s efforts to develop a replacement procedure for the collecting and dissemination of revenue data. This action was necessitated by the FCC’s decision in March to immediately discontinue the mandatory reporting of financial data on FCC Form 324. The BIRRC (comprised of and funded by BCFM, NAB, NRBA and RAB) retained Deloitte, Haskins & Sells to function as the third party collector of industry revenue data. Regrettably, the response data were insufficient to provide a meaningful summary.

26. In December 1982 BCFM filed comments in an FCC rule-making proceeding requesting that the Commission delete the requirement that commercial broadcast licensees maintain a Public File containing letters received from the public. BCFM surveyed 10% of its membership and submitted its findings that 74.5% of respondents reported that no requests to see the Public File had been received during the previous year and concluded that the rule was an unnecessary burden on the broadcaster and that no legitimate public interest would be served by continuing this requirement.

27. In 1984, BCFM and the NAB were involved in a series of dialogues with both the Treasury Department and the Internal Revenue Service in the matter of reporting requirements on barter exchanges as a result of the Tax Equity and Fiscal Responsibility Act of 1982. Typical barter exchanges of property or services for other property or services (“trades”) where no third party is involved are transactions that would not be subject to reporting (on IRS Form 1099-B). The IRS informed BCFM and NAB in a general information letter; however, BCFM tax advisors advised that such a document provides no legal precedent and may not be relied upon by our members. Consequently, BCFM and the NAB submitted a Draft Revenue Ruling on Barter Exchanges for Broadcasters that would clarify this matter.

28. In February 1986 BCFM filed comments in the matter of the FCC’s “Notice of Proposed Rule-Making” which addressed concerns raised by the Office of Management & Budget (OMB) in its opposition to the use of the Commission’s five-point and ten-point Model EEO Program reports for routine data collection. BCFM’s comments (MM Docket #85-350) included a recommendation for the adoption of a combination of approaches supported by the OMB and the Civil Rights Division of the Department of Justice, which would not overemphasize statistics and still be consistent with the Paperwork Reduction Act and The Commission’s regulatory responsibilities.

In addition to the elimination of the five- and ten-point EEO Program report, BCFM also proposed the following: incorporate into the FCC’s rules the EEO guidelines and policies presently contained in the EEO Program report forms; replace Form 396 with a new form entitled Broadcast EEO Program Report; limit additional data collection to situations where a licensee appears to be engaging in discriminatory employment practices; supply licensees with labor force information for the MSA or county in which the station is located; revise the Annual Employment Report (FCC Form 395) by combining data for full-time and part-time employees to conform to the EEO-1 form used by the EEOC; eliminate the requirements that stations file annual reports from headquarters or other regional and national offices of broadcast licensees; and increase from five to six full-time employees the required threshold for subjecting licensees to EEO reporting requirements.

BCFM submitted that the recommended changes will achieve the FCC’s goal of formulating EEO procedures and reporting requirements which “will be less burdensome for broadcasters and at the same time will provide the Commission with sufficient information to evaluate broadcasters’ EEO efforts.”

29. During 1986, BCFM re-addressed the matter of revenue reporting in the broadcasting industry. In cooperation with Arthur Young & Company, Los Angeles, BCFM compiled and published 1980 through 1984 data for the following television markets - New York, Los Angeles, Chicago, Philadelphia, San Francisco, Washington, DC, Boston, Dallas, Houston, as well as TV network revenues of ABC, CBS and NBC for the same years.

30. During 1987, BCFM filed comments in response to an FCC Further Notice of Proposed Rule-Making (86-498) regarding the Commission’s Rules Concerning Equal Employment Opportunity in Broadcasting (MM Docket No. 85-350.) BCFM, in its comments, supported the Commission’s proposed two new information-collection systems (FCC Form 395-B - Annual Employment Report and FCC Form 396 - Broadcast EEO Program Report) and recommended that the FCC adopt a blend of approaches advocated by the Office of Management & Budget and the Civil Rights Division of the Department of Justice. Such approaches (which BCFM supports) include an OMB alternative Form 396 and the FCC’s proposal to exempt broadcast stations with less than six full-time employees from any EEO reporting requirements.

31. BCFM, at the request of the National Association of Broadcasters and after much deliberation, agreed to team up with NAB in the collection of financial data: BCFM and NAB concurred that a joint effort would be in the best interests of their respective memberships, as well as the entire industry, in the collection and publication of industry revenue and expense data, as well as wage & benefit information. The increased quantum of joint survey responses as compared to separate BCFM and NAB surveys confirms that this was a wise decision.

32. During 1988, BCFM supported a pleading by NAB that the FCC (1) clarify the procedures broadcasters are expected to follow in compiling data for the section on recruitment in Form 396 and (2) suspend or modify the use of this section for at least a year to allow broadcasters time to comply with the new reporting requirements.

33. During fiscal year 1988/89, BCFM’s subsidiary, Broadcast Cable Credit Association, embarked on an effort to encourage the Broadcasting industry to discontinue the onerous and time-consuming practice of the notarization of broadcast advertising invoices. BCCA and BCFM are confident that, eventually, the majority of broadcasters, agencies and advertisers will agree that notarization is archaic and unnecessary.

BCFM concurrently is working with the American Association of Advertising Agencies, the Association of National Advertisers, the Television Bureau of Advertising, as well as Westinghouse Broadcasting, CBS, NBC, Foote, Cone and Belding, and Donovan Data Systems and Columbine/JDS testing the methodology and feasibility of electronic invoicing.

34. In late 1988, BCFM’s Television Programming Committee surveyed all commercial television stations in the matter of Program Practices. The 69-question survey sought information on TV station practices on accounting and amortization, treatment for barter programs, cost analysis prior to program purchases, imputed interest, as well as several specific financial management policies. The responses were published in the March/April 1989 issue of the Broadcast Cable Financial Journal and were discussed at panels conducted at the BCFM Conference and the National Association of Television Program Executives Convention.

35. In July 1989 a new committee called the Futures Committee was established. Its function is to serve as a facilitator to redefine and redirect BCFM for the coming decade and beyond. Specifically, it is (1) to determine marketing directions, (2) examine the dues structure, (3) determine the services required for our members, and (4) develop a mission/vision statement.

As authorized by a proxy ballot of the entire membership, Broadcast Financial Management Association’s name was officially changed to Broadcast Cable Financial Management Association. BCFM’s subsidiary, Broadcast Credit Association, also changed its name to Broadcast Cable Credit Association.

In a corporate restructuring, the position of Chairman of the Board was eliminated, with the President of the Association (CEO) becoming the chief presiding officer of the Board of Directors. Thus, the Executive Committee consisted of the President, Vice-President (President-Elect), Secretary, Treasurer and Executive Director (Chief Staff Officer).

36. On November 16, 1990, the Broadcast Cable Financial Management Association Foundation was chartered as a 501 (c)(3) Charitable and Educational Foundation. Its objective is to encourage the professional development and training of deserving students, especially, financial managers in the field of broadcast/cable communication through the awarding of annual scholarship grants to meritorious college programs and to develop intern programs with local stations and cable systems. An initial grant of $50,000 was provided by former BCFM President, John C. Herklotz.

37. In October 1991 BCFM filed comments with the Committee on Ways & Means of the House of Representatives in regard to H.R. 3035 - a proposed bill that endeavors to bring some certainty and simplicity to the tax law regarding the amortization of intangible assets. While BCFM is generally supportive of H.R. 3035, it believes that certain changes in the bill’s provisions were warranted - specifically - (1) “Governmental licenses should be included in the 14-year amortization period” (2) “Cost attributable to contract-based assets such as program licenses and sports broadcast rights agreements should be excluded from 14-year amortization.”

38. In July 1994 a corporate restructuring took place. The position of the Executive Director was eliminated and named the President. The Executive Committee’s President position became Chairman of the Board and Vice-President changed to Vice-Chairman.

39. In August 1994 BCFM filed comments with the Internal Revenue Service in regard to (“IRS”) Section 197 concerning the amortization of goodwill and certain other intangibles. Significant items BCFM commented on were the following.

*The treatment of acquired programming assets and non-compete agreements as Section 197 assets.

*The treatment of the disposition of intangibles under Section 197(f)(1).

It is BCFM’s opinion that the decision to include programming assets acquired in a trade or business as Section 197 assets is extremely unfair to the broadcasting industry.

With regards to covenants not to compete, BCFM believes that they should be excluded from Section 197 as it is unfair given their fixed and determinable life and that they are often supported by independent appraisals verifying their value.

Additionally, with regards to acquired intangibles, Section 197(f)(1) which contains a stringent rule for measuring when a disposition will be deemed to have occurred, BCFM disagrees with the ruling that these intangibles will not be treated as disposed of before the disposition of the “entire interest acquired.”

40. In July 1998, BCFM filed comments with the Internal Revenue Service and Treasury with respect to (IRS) Section 167(g), the income forecast method of depreciation. The comments requested guidance on acceptable methods of amortization available to broadcasters possessing licensed programming assets, and ensure that these assets will not be subject to the look-back provisions of Section 167(g). Absent this guidance, the members feel that the inclusion of licensed programming assets within the scope of assets subject to Section 167(g) will have an unwarranted adverse effect upon broadcasting networks, television stations, and cable programming companies utilizing licensed programming assets. READ

41.In October 2003, BCFM published a paper providing guidelines for accounting for the landmark BMI-RMLC music license agreement.  While this agreement helped the radio industry achieve the goal of uncoupling music rights payments from revenues, it opened the door to questions about accurate station accruals for these payments.  BCFM recommended that stations accrue the expense using the Benchmark Fee established in the agreement.  READ

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