The Underwriting Game June Fox J.C. Patrick With Answers by John Crigler Attorney with the law firm of Garvey Schubert Barer Created by: J.C. Patrick, Station Development Manager Copyright © 2010 All Rights Reserved. These materials may not be reproduced in whole or in part without prior written permission. What is a sponsorship credit? It’s the legal requirement by the FCC to identify a program funder What you CAN say in a credit: Name of funder Location and direction information Phone number, web address Slogans that identify but do not promote Value-neutral descriptions of services or products Brand/trade names, product/service listings (no more than 3 per credit) What you CANNOT say: Qualitative or promotional language Calls to action Price references – including types of credit cards accepted or interest rates offered Inducements to buy, sell, rent, lease No secondary sponsorships No awards or prizes How long should a credit be? No FCC rule about this Standard is :10 - :20 1992 – FCC warning - longer credits are more likely to be promotional 2001 – FCC noted that credits over :30 appear “excessive” Our programming is supported by our contributing listeners and by………….. Albright, Carson and Jones, formerly Albright and Sons. We’ve changed our name, but our expertise in construction and real estate law remains the same. Our attorneys provide practical legal solutions -- understanding your business is our business. More information at alcarjo.com. John says… The Albright boys are entitled to no professional courtesy. Their claim of “expertise” has to go, as does the guarantee to provide “practical legal solutions,” and their promise to understand their clients’ business. Our programming is supported by our contributing listeners and by………….. Dave Carson State Farm Insurance Agency, with our annual back-to-school drawing for a new laptop computer. Entry forms can be found in our office at 495 Canal Street before August 10. Dave Carson and State Farm Insurance have been serving New Orleans for over 40 years. John says… It’s unclear whether the back-to-school drawing is an illegal lottery open only to Dave Carson customers, but it seems clear that it is an “inducement” to patronize the agency since the only way to enter is to pick up entry forms at the Carson office. Our programming is supported by our contributing listeners and by………….. Home Depot, donating 5% of every purchase to Habitat for Humanity, for those whose lives were affected by Hurricane Ike. Home Depot offers a complete line of hurricane preparedness supplies. To download the 2010 hurricane checklist or to find out how you can contribute to the Habitat fund, go to homedepot.com. John says… The road to underwriting hell may be paved with the philanthropic as well as the commercial intentions of underwriters. Home Depot’s intentions are mixed. On one hand, it wants to benefit Habitat for Humanity and hurricane victims. On the other, it wants to peddle “preparedness supplies.” The FCC would regard donations that are linked to purchases as an inducement to buy. Our programming is supported by our contributing listeners and by……………. Whole Foods, 5600 Magazine, presenting a seasonal tasting, Wednesday, November 9th from 6-8pm. Holiday fare, including hormone-free turkey, will be served. Holiday and seasonal items are available for pre-order. For more information, 504-8999119, or Whole-Foods-Market DOT COM John says… Free hormone-free turkey may not sound particularly appetizing, but the purpose of this announcement seems to be to whip up advance orders for Thanksgiving. An argument can be made that “tastings” are now an essential part of what grocery stores offer, and this announcement could be toned down to make it a description of a regular service, rather than a hormone-stuffed inducement to buy. Our programming is supported by our contributing listeners and by………….. The Commander’s Palace. The staff and management of Commander’s Palace wish our customers and the Bayou City a safe and joyful holiday season. Commander’s Palace will be serving a holiday buffet until 6pm on Christmas Eve. For reservations, (504) 899-8221. John says… Would the FCC fine you for wishing listeners Merry Christmas? Nah, probably not. The ambiguity is that seasonal greetings aren’t a description of the underwriter’s business. The FCC has, in fact, entertained complaints about such announcements, although it has dismissed those complaints when the greetings are innocuous. Our programming is supported by our contributing listeners and by………….. Ann’s Coffee Klatch, featuring Caribbean Blend, a dark roasted Jamaican brew flavored with spices; Maui Moonbeams, a blend of three organic shade-grown coffees; and Carmen Miranda, a coffee created with summer fruits. A Garden District landmark for 20 years, Ann’s offers complimentary wi-fi connections. John says… This announcement goes down smooth until the last sentence. The details about different coffees can be defended, as well as the description of the business as a “landmark,” but the free wireless connections are over the top. Our programming is supported by our contributing listeners and by………….. Riverwalk Marketplace, newly re-opened for business…shopping, dining, entertainment and fun, on the banks of the Mississippi River. Employment opportunities can be found at newriverwalk.com John says… It’s debatable whether anyone except a comedian is in the business of “fun,” and a more descriptive term would be advisable, but the bigger problem with this spot is the job listing. FCC staff have informally opined that recruitment announcements are “inconsistent with the identification only purpose of underwriting acknowledgements.” Our programming is supported by our contributing listeners and by………….. Preservation Hall, the landmark for jazz in New Orleans. Special host for this Friday’s Open Mic night is KZZZ announcer Paul Brown. Doors open at 8pm, the show begins at 9. Tickets available at Barnes & Noble, Ticketmaster, and Tower Records. For more information, 504-522-2841. John says… In order to comply with sponsorship identification requirements, an underwriting announcement must identify the underwriter, but may it identify anyone else? There are no FCC rulings on this point, but a staff memo frowns on announcements that refer to any for-profit that did not pay for the announcement. The safe course is to delete the references to Barnes & Noble, Ticketmaster and Tower Records. Our programming is supported by our contributing listeners and by………….. Riverpoint Church, welcoming visitors of all faiths. Riverpoint teaches a faith based in scripture and discipleship, with the belief that the Bible is the direct word of God. Riverpoint Church, 1710 Azalea Lane. John says… Section 399 of the Communications Act prohibits noncommercial stations from accepting consideration in exchange for expressing a “view” with respect to any issue of public importance or interest. Because there are no cases applying this standard, it is difficult to draw the line between a “view” and a statement of mission or belief. A reasonable rule to thumb is whether the announcement advocates or merely describes the mission. This announcement passes the description test. It does not proselytize. Our programming is supported by our contributing listeners and by………….. Reliant Energy. Beautiful blonde with foul breath and excessive body hair seeks short-term love affair with no strings. Must enjoy long walks, wet kisses, and posses a playful spirit. This kind of excitement is available to temporary foster parents for a homeless pet. More information about volunteering for the Humane Society's foster parent program is available online at www.humane.org. John says… It’s difficult, but not necessarily illegal to write clever underwriting announcements. The real issues with the announcement are not that it is funny, but that a forprofit (Reliant Energy) wishes to air as a paid PSA on behalf of a nonprofit (the Humane Society). If the Humane Society were the underwriter, the announcement would not violate FCC rules. Our programming is supported by our contributing listeners and by………….. Channel 2, KPRC-TV. Tonight at 10, Local 2 features “Freeway Fear” - interviews with victims of freeway road rage. Frank Billingsley keeps you up to date on the “trouble in the tropics”. News updates on click2houston.com. John says… OK. News features are what TV news programs have to offer. Our programming is supported by our contributing listeners and by………….. Christian Brothers Automotive, a brand new underwriter here on KZZZ. Christian Brothers specializes in European and Japanese automobiles. Located at 1444 Grand Parkway. For more information, 281-494-6810. John says… “Brand New” sounds like qualitative or comparative language, but the comparison is to other underwriters not to competing car dealers. “Specializes” can imply expertise (“a patent law specialist,” e.g.) or price (“ blue plate special,” e.g.), but here the term seems only to describe type of services offered. Our programming is supported by our contributing listeners and by………….. the Texas State Lottery, supporting public education in Texas. Total transfers to the state equal more than $13.5 billion to date. To learn more about this program, click on txlottery.org. The new Lotto Texas game begins August 1. John says… FCC rules don’t prevent noncommercial stations from promoting other nonprofits, but IRS rules make the revenue from promotional announcements for anyone except the nonprofit entity itself subject to unrelated business income tax. The IRS isn’t bound by FCC precedent, and there are no published FCC decisions that approve the use of imperative language in underwriting announcements so consider eliminating the call to action (“click on”). Our programming is supported by our contributing listeners and by………….. Louis Shanks Furniture and Interiors, more than just a furniture store. From floral and fine furniture to custom windows and bedding, they have the knowledge and the resources to make your home a reflection of you. Located at Sugar Creek Center. Louis Shanks, making your home your favorite place to be. John says… Shanks may be more than just a furniture store, but this is more than just an underwriting announcement. The claim to have the “knowledge and resources” to make your home your home is qualitative language designed to distinguish Shanks from its competitors. The last line sounds more like a guarantee of satisfaction than a non-promotional logo. Our programming is supported by our contributing listeners and by………….. morticiasmorgue.com, your source for all things Anne Rice and voodoo in New Orleans. Morticia’s Morgue features links to the official Anne Rice homepage, Vampire’s Junction, Vampire’s Coven, NOLA Goth, and New Orleans cemetery and voodoo web links, plus a listing of shops catering to the occult. Morticiasmorgue.com John says… The FCC has yet to consider websites as underwriters, so we don’t know whether links to other sites are considered services, or are considered references to other for-profits who could be mistaken for underwriters. Are you confused? Thanks so much to John Crigler for lending his expertise in absentia. He’d have been even more clever had he been here in person!