November 28, 2015

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First Mediaworks

Eddie Fritts: The Exit Interview (09/19/05)

By Reed Bunzel, Editor-in-Chief

Flash back to 1982: President Reagan was in his first term in office. Dallas was the number one non-news network television show, and the top song of the year was Survivor's Eye of the Tiger. The top-grossing film was E.T., and Ghandi won the Oscar for Best Picture. MTV had just been born, Howard Stern had just moved his morning show to WNBC in New York, and Clear Channel - believe it or not - owned a total of seven radio stations.

That same year, Edward O. Fritts, a small-market broadcaster with a clear love of the radio business, was selected president and chief executive officer of the National Association of Broadcasters following a contentious search process. The owner of a group of stations in Mississippi, Arkansas, and Louisiana, Fritts grew up in the radio business and landed his first broadcasting job at a Tennessee station that his father managed. In his early 20s, he bought his first station, adding additional AMs and FMs as resources warranted. Over the next 15 years, the group grew and prospered, and Fritts took a broader interest in both the radio industry and the communities in which he did business.

An avid believer in the strength of localism and public service, he accepted the NAB job with the conviction that the industry best would be served by rebuilding the association through grass-roots relationships with members of Congress. “We began enhancing our grass-roots operation immediately,” he recalls. “Over the years, we spent a lot of time, energy, and effort educating members of Congress and getting broadcasters to meet one on one with their members of Congress.” Part of this education process, Fritts maintains, is making sure that the broadcasting industry's community service contributions not be overlooked. “The broadcasting industry - and radio is the larger part of this - last year alone was in excess of $9 billion in community service programming, PSAs, public-interest activities,” he says. “I am so proud to be part of an industry that contributes so much to their local communities.

To this end, Fritts has enhanced many stations' community efforts by serving on the boards of The Ad Council, the National Commission Against Drunk Driving, and numerous other organizations. Additionally, he is on the U.S. Chamber of Commerce Committee of 100 and has served on the Individual Investors advisory committee of the New York Stock Exchange.

An Ole Miss Alumni Hall of Fame inductee, Fritts was on the board of the University of Mississippi Foundation and is on the school's business advisory board. He has received the Highest Effort Award from the national Sigma Alpha Epsilon fraternity and was the first recipient of the Ole Miss Silver Mike award for significant contributions to broadcast journalism. The Media Institute, based in the nation's capital, awarded Fritts its prestigious American Horizon Award for leadership, and the Broadcasters' Foundation awarded him its 2000 Golden Mike Award.

Proud and humble, Fritts credits his wife Martha Dale with supporting his business endeavors through the years. The parents of three children and grandparents of five, they are involved in civic, educational, and charitable organizations in the Washington area.

As Fritts prepares to hand over the NAB gavel to his successor - expected to be named later this year - Radio Ink invited him to sit down for an “exit interview” and share his thoughts on broadcasting, Washington, DC, and the political process that he has come to know and love.

INK: Those old enough to remember the The Mary Tyler Moore Show will recall that Ted Baxter got his start at a 5,000-watt radio station in Fresno, California. How did it all begin for Eddie Fritts?
I grew up and attended high school in Union City, Tennessee. My father was the general manager of WENK, the only radio station in town, and in the summertime I was a lifeguard by day and a disk jockey by night. For me, “disk jockey” mostly involved riding the board during Cardinals baseball games, and if the game was over early enough I got to play a few records before the 11 o'clock sign-off. I went to college at Old Miss, and when I came back I worked for my father full time. If Dad had not been the station manager, I would have been fired many times over.

Were you still on the air, or had you migrated, as many radio people do, to the more lucrative area of sales?
When I returned from school, I got married and started working at the station, selling advertising primarily for sports broadcasts. I sold high school and small college football and basketball games. If I sold the advertising on the sports broadcasts, I could get paid an extra fee for talent as the announcer for those games.

When did you buy your first radio station?
After about a year and a half, my dad felt I could sell pretty well and I had a good track record, so he suggested that I go out on my own. We found a station in Indianola, Mississippi, for which we were able to scrape together a small downpayment. The station was down-and-out, and the owners were willing to take mostly paper, so on April 1, 1963, I became a station owner. On April 2, we took in $29.22. I had a pregnant wife and one automobile, and we lived in a rented house. I worked very hard to build the station up and make it a vital part of the community. I later added an FM. When we decided we could replicate the model in other communities, we bought stations in Arkansas and Louisiana, and additional properties in Mississippi. By the late '70s, we had a nice little enterprise. Radio as I knew it was local and relevant; we did remote broadcasts out of a motor home. The vice mayor of Indianola was my news director, and we did a lot of fun things with promotions. I even owned and piloted my own airplane and hot air balloon. I enjoyed it all very much.

What's the greatest lesson you learned from operating your own broadcasting company?
The bedrock principle for me is that localism sells. A station's localism is particularly relevant in towns that have a weekly or daily newspaper without a wide subscription base. Local people want to know what's happening in their communities. They're tied to the local sports teams, high school football and basketball, even Little League baseball. While those don't sound like they are of great magnitude, they certainly were - and are - important to those local communities. If Grandmamma couldn't go to the football game to watch her grandson play, she could listen to it on the radio and feel as if she were there.

Let's fast-forward a few years. When did you become involved with the NAB?
I had become very involved with the Mississippi State Broadcasters. In 1977, we went to Washington to meet with our members of Congress as part of NAB's state leadership conference, where all the state broadcasting associations gather. At the time, the Mississippi delegation included Sen. John Stennis, who was chairman of the Armed Services Committee; Sen. James Eastland, who chaired the Judiciary Committee; and Sonny Montgomery from Meridian, who chaired several House committees dealing with the military. At breakfast with them one morning, I realized they had no idea that broadcasters had to deal with so much FCC red tape. It struck me that we had a lot of educating to do as an industry. I decided to run for the NAB board of directors for a “small market at large” seat. At that time, the NAB had four directors from nationwide seats, and I ran for one of those seats. I'm not sure about this, but I was told I won that election by one vote.

How did you parlay that board seat into becoming the president/CEO of the association?
When Vince Wasliewski retired as president of NAB in 1982, the presidential search committee believed it was important to find someone who could represent broadcast interests in Washington. The thought was that we could hire all the lobbyists and lawyers we would need. The race was between Donald Thurston from Berkshire Broadcasting, and me. We were both small-market broadcasters and former chairmen of the NAB board. I campaigned very hard for the position and won. Martha Dale originally had no intention of moving to Washington. A group of board members insisted we spend a week in Washington, talk to people, look at the area, and decide if we wanted to move our family here. At the time, we had a second-grader, an eighth-grader, and a college sophomore, so this was a big issue. The rest is history.

At the time, did you think you would hold this job for 23 years?
There was so much controversy when I took the job, I wasn't sure I would last 23 days. I did not think I would be here this long, but I did think that if I worked as hard at this job as I had at my radio stations, I could be successful.

What do you see as the greatest change in the radio business since you bought your first station more than 40 years ago?
We've had an explosion of new radio stations all across the country. When I was working in Indianola, I had 17 stations at my front door as loud as my station was, and I thought that was a fair amount of competition. Today, there are probably 45 stations in that area, even though it's fairly rural. Few people realize that before deregulation, 60 percent of the radio stations were losing money, largely because when Charles Ferris was FCC chairman, he started the “80-90” proceeding, which dropped in stations around the country without any economic consideration. We went from being a very good business to a very poor business, then the Telecom Act brought us back to being a very good business.

Has deregulation and the resulting consolidation been healthy or detrimental to the radio industry?
It has allowed a greater diversity of format. It has allowed more stations to serve their communities better. Whether stations have automated music or not is not the issue; it's what they do in terms of local broadcasting. As we look at where we are today and where we're going tomorrow, we must hook our wagon to localism. There's plenty of competition from the Internet, from satellite radio, and from within our own industry. Radio is probably the most competitive medium today. Every market has an abundance of radio stations, each trying to find the right format. I learned early that a station that is not successful, with some degree of profit, will not to be able to provide exemplary community service and public-interest broadcasting.

Back when you owned eight stations, could you have envisioned a day when one company could own 1,200?
I don't think I envisioned that even when the '96 Telecom Act was passed. We recognized that if stations could cluster up, they would have a better opportunity. When we took the national caps off, obviously a number of companies grew fairly large. Wall Street had never paid much attention to radio, but because of consolidation Wall Street and the banking community began to think of radio as a good business. It has a good business model, which was an industry secret for many years.

Yet some of these companies have been experiencing economic difficulties of late. Is consolidation at all complicit in this?
We must ask ourselves: Is one company owning 1,200 stations out of 13,000 really a bad thing? I don't think you could say it is. It is competitive, and it draws a lot of fire from the industry because, in Clear Channel's case, they're competitive with virtually every company in business today. In some cases, they're more competitive than their competition would like. In the final analysis, consolidation has brought diversity of formats, it's brought innovative ideas to radio, and it's created enthusiasm for radio in the investment banking community. Essentially, we have a corporate flavor while retaining a local presence. That's not always easy to do, and some days we do it better than others. But we are learning as an industry.

When you came in as president, what were your immediate objectives?
We worked very hard to build the NAB's reputation. Remember back in the early '80s, when Sen. Bob Packwood (R-OR) remarked at an NAB convention that the NAB couldn't lobby its way out of a paper bag? Think about it: It was unheard of that the chairman of the Commerce Committee would make such a statement about an industry association. I accepted the challenge, and instilled in our staff that we needed to prove that perception wrong. Frankly, it took a while to do that, but fortunately we were able to notch some wins.

How do you determine how much effort and how many resources to put behind a specific issue?
A trade association - particularly one that operates in a heavily regulated industry - by nature has to be defensive, but proactive. We've tried to strike that balance. At any time, you may have 150 issues on the table. You must prioritize, and get down to three or four that you realistically have a chance to win. The first thing I learned when I took this job is you have to keep your head down, because they're using live ammunition.

Did you expect that when you took this job?
Before I got this job, I had made a few calls on Congress over the years on behalf of the Mississippi delegation. That was nothing compared to what we do as an organization. There is an enormous difference between working within the inner clutches and dealing with Congress from the outside. It became abundantly clear that if we didn't have a grass-roots organization where we could talk to the members back home, we would get left in the wake. We began enhancing our grass-roots operation immediately, and we spent a lot of time, energy, and effort educating members of Congress and getting broadcasters to meet one on one with their members of Congress. When we looked at the make-up of Congress, we realized there were 17 states without a top 50 broadcasting market. That told me there were 34 senatorial votes that were rural in nature, and those people were interested in serving hometown America. We were able to develop a game plan to balance working with the rural and urban members of Congress.

Capitol Hill is a highly charged partisan arena. Is there a secret to dealing with both sides of the political aisle?
NAB has always been bi-partisan. You have to work together with republicans, democrats, and the White House. Neither the House nor the Senate has a large enough majority to dictate a partisan victory, nor to orchestrate a partisan defeat. Martha Dale and I have had fund raisers at our home for republicans and democrats. I'm a republican, but I've been fortunate to have a lot of democratic friends, and I've worked well with democrats through the years.

How important is the art of compromise?
That's been a constructive part of our relationship. The first thing you learn is that you never get 100 percent of what you want. You have to learn when to hold 'em and when to fold 'em. Most members of Congress don't want to get put between two powerful industries that have opposing views on an issue, and they would rather not have to make the hard decisions because it's not in their nature to offend anyone's constituency. The art of compromise - understanding when to take the deal and when not to - has been very important in our success.

How challenging is it to deal with both the legislative and regulatory sides of the government?
In its simplest form, at the FCC you only need 3 votes. In Congress, you need 218 in the House and 51 in the Senate. In its more complex manner, we believe that what affects broadcasting on Capitol Hill will also affect it at the FCC, and vice versa. Our legal and regulatory affairs division works exclusively on FCC, while our congressional relations team works exclusively with Congress. I bridge the gap between both. The rest of the staff understands that we have to support both teams, so there's constant dialogue internally, as well as between us and Congress and the FCC.

NAB goes to Capitol Hill with an issue because broadcasters want or need something. How do you convince Congress they want it as well?
When I was selling radio in Indianola, I was working up an ad proposal with a store owner one day. He said, “Look, I don't want any advertising. I don't advertise, so you can get the hell out of here.” I learned that any sale begins with “no.” He later became one of my best customers, because I took some creative things back to him. It's not that different working with members of Congress. If you put together a legitimate proposal that makes sense to them and is important to their constituents, you have a good opportunity to make a sale.

Is it more important to make that sale, or to let Congress take credit for the purchase?
Let's be honest: When members of Congress help pass a piece of legislation, they want to receive appropriate credit for it, and they should. We've always tried to ensure that members of Congress who help us will receive that credit, because they're helping their hometown communities. We've had successful times, often under adversarial conditions, primarily because the work we do in local broadcasting and local communities benefits our respective communities. Most members recognize that, as does the FCC. The members of Congress who have supported us through the years recognize that as well. They don't support the NAB because they like NAB institutionally, or because they like Eddie Fritts personally. They do it because they think they're doing the right thing. When we ask for a commitment, we must be willing to back it up with the goods - the actual broadcasting of local information in hometown America.

What are some of the greatest challenges - or opportunities - facing the radio industry today?
You can sum it up in three words: digital, digital, digital. Not to be flippant, but it's a great challenge and a great opportunity for broadcasters. We have some difficult times to work our way through, and we're making good progress. I feel really good about where we are going. There's great promise ahead for radio, and technology will allow us to provide services that we never thought would be available in a one-channel universe. We can look ahead with confidence, hope, and inspiration that HD Radio will help move us forward. I know there are naysayers, but I believe they will soon be converts who are pleased that the industry has embraced digital technology.

How closely will the radio industry of today resemble the industry 5 or 10 years from now?
Radio will still have traditional stations, but we'll also have an abundance of additional opportunities. These will come in the form of Internet streaming, using additional HD Radio channels, channeling people to websites, or broadcasting ballgames on the Internet. Some stations have not yet embraced everything HD can do, but there are great opportunities. I'm excited that we have embraced web-based broadcasts and HD Radio, which will provide many additional over-the-air opportunities. We're slicing and dicing our spectrum to provide new avenues of programming, data, or streaming. It's a far more competitive world, and we're limited only by our imaginations.

What plans do you have personally once a new president is installed at the NAB?
We're going to live here in Washington. We have children who live here, and we have a second home in Mississippi so we can visit our children and grandchildren there. After a new president arrives at the NAB, I plan to form a company in Washington to represent clients. I plan to invest in some broadcast stations, and I'd like to serve on a board or two. I've assured Martha Dale that she need not worry that I will be spending more time with the family. She's said, “In 43 years of marriage, you've been gone almost every working day anyway, so why would you want to change?” I say that in a loving in spirit. I don't think she would feel comfortable if I spent my days at home. Now, we enjoy travel together; we have a great family, and we enjoy our weekend time with them.

In retrospect, did you underestimate anything when you came to Washington?
I may have underestimated how hard you have to work in this job. It is time-consuming, demanding, and very difficult. It may seem glamorous, and in fact it is - but there's also an enormous amount of hard work. The most gratifying part is that I've been fortunate to attract a top-flight staff, and I've been smart enough to stay out of their way. I operate on the basis that if they are successful in their individual areas, the institution will be successful. If the institution is successful, enough credit will rub off on me to be more than satisfactory.

On that same note, what is the most important thing you learned in the past 23 years?
I learned that in this town your word is your bond. Don't over-promise, because you'll be expected to live up to it. I know prominent members of Congress who won't meet with some trade association types because they feel those people have not been straight with them. There's no room in this town for a short-change artist.

What would you tell your successor at NAB?
I'm confident that a new person will come in with fresh ideas and be able to move forward successfully. I will say, however, that it would be more difficult for a hard-core partisan to be successful than it would be for someone with a bi-partisan background. I urge my successor to remember there are no final victories and no final defeats. This is a unique industry in a unique city. Congress and government make a unique work environment. What you lose today you have a chance to win tomorrow. Conversely, your wins could be short-lived if you don't live up to your reputation or your promises.

What would you tell the search committee to look for in a new president?
It took me a long time to ramp up, so if I were making the hire today, I would say that you don't need that ramp-up time. Plenty of good people are trade association professionals. I don't know what the search committee is thinking; they may hire a broadcaster, a trade association person, or a political type. Any one of the three could do the job. But if you don't have an inside track - if you don't have a godfather or a rabbi here in Washington to help when you're in a tight spot - you can lose some big issues. I've been fortunate to create many friends in Congress; they have provided wise counsel for me through the years, and I've respected their thoughts and ideas.

What do you personally take from your 23-year term as NAB president?
Martha Dale and I have thoroughly enjoyed representing and working with this industry. Traveling throughout the country, I learned that we have great broadcasters in every state. They all care about their communities, and they do one heck of a good job. I can think of nothing else that reaches the same level of commitment or public-interest involvement as local broadcasting. It's been an honor and privilege to work with and serve this industry, and I wish for its continued success. I'm confident that the NAB will be as successful in the future, and I'm satisfied that we have done the best we could with the organization. I'm grateful to have a consulting contract with the NAB team into 2008. I've had a lot of wonderful experiences that couldn't be replicated in virtually any other industry.

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