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New black radio network.

The nation's two largest black-owned radio network companies, NBN Broadcasting Inc. (ranked No. 74 on the 1991 BE INDUSTRIAL/SERVICE 100s with sales of $12.5 million) and the Sheridan Broadcasting Network Inc., recently merged to form the American Urban Radio Networks. Observers say the new company could be the nation's largest media vehicle targeted to black consumers.

The agreement between Sheridan Chairman Ronald R. Davenport and NBN Chairman Sydney L. Small was reached last October after economic difficulties stemming from the recession forced both radio network companies to downsize and make cutbacks.

Davenport and Small, who will co-chair the new company, say the merger was a "moneyless" transaction, which has the two old companies joining forces to share in the profits of offering programming from five radio networks. Davenport says the American Urban Radio Networks could garner as much as $40 million within the urban radio market.

In addition to the parent companies (Sheridan and NBN), the new radio giant includes three other networks: STRZ Entertainment Network, SBN Sports Network and SPM Radio Network. The five networks serve approximately 300 radio stations nationwide, which Sheridan's Davenport says could reach approximately 90% of all African-Americans.

"The consolidation means that both companies will survive and be better prepared for the tough advertising market facing black and urban-oriented radio," says Ken Smikle, president of the Chicago-based African-American Marketing and Media Association.

Smikle says that both networks had difficulty attracting national advertising because most radio stations receive the bulk of their advertising revenue from local advertisements.

"As a single network," Smikle observes, "...the company will attract many advertisers because a large number of national radio affiliates can be found under one umbrella. The new network will have a greater net worth."

Small says the move creates a larger company that can command a larger share of the market and thus stand a better chance of becoming a major player in the industry. "Preliminary talks with advertisers," he explains, "indicate that this new partnership will improve the radio network's revenue."

Small also noted that shared resources will help improve the quality of network broadcasts. "We see the general [white-American] market doing this all the time... Take Time Warner Inc. for example."

Davenport agrees: "Clearly, we are stronger together than we are separately."
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Title Annotation:American Urban Radio Networks
Author:Warren, Renee E.
Publication:Black Enterprise
Date:Mar 1, 1992
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