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Committed to the cause

Twenty-six years ago, when Inner City Broadcasting needed $1.1 million to buy its second radio station, WBLS(FM ) New York, the African-American-owned company was turned down by 36 banks.

Nearly three decades later, "I don't think things have changed a hell of a lot," says Inner City Chairman Pierre "Pepe" Sutton, who helped found the company in 1970 with his father, Percy E. Sutton, and a group of notable black investors.

It was just last month that Inner City won its biggest cash infusion to date: $200 million-plus that will be used to pay down costly short-term debt dating from the April acquisition of nine radio stations from Clear Channel Communications. "It's a huge change," Sutton says of the loans. "We go from what was a family business into a business that's lean and mean."

Growth in the short term will be made possible by more than $150 million from the Bank of Montreal and more than $50 million from First Union Bank and Quetzal/Chase Capital Partners, a minority-media investment fund that has been criticized for previously investing in only one broadcast company.

With its first "very strong balance sheet ... in some years," Inner City is now poised to expand its current lineup of 17 stations. To better concentrate on radio, the New York-based company last month also spun off its other, lesser-performing interests-including Urban CableWorks of Philadelphia, Showtime at the Apollo
producer Inner City TV and Internet ventures-into a separate entity. This could set up Inner City to eventually go public.

With experiences like the one with the banks in 1974-and as the grandson of a slave-Sutton pulls no punches when it comes to placing blame. It was "racism that compelled the bank to tell us we should be happy with what we have and not expand," he says.

Sutton has served as chairman of the National Association of Black-Owned Broadcasters Inc. (NABOB) since its inception in 1976. He has new plans for that group, too. Since radio consolidation has made it even more difficult for minorities to buy stations, NABOB needs to include members of other disenfranchised minorities. That would "create the kind of strength that's irresistible," Sutton says.

Sutton indeed is "committed to minority ownership and to the African-American community," says James L. Winston, executive director and general counsel of NABOB. In fact, "his commitment is more to service than to making money."

Sutton and his father bought then jazz- and R & B-formatted WLIB(AM), in 1972. They developed the then daytime-only station into the African-American "soul" of New York. Now a news/talker, WLIB has fallen in the Arbitron ratings, dropping to No. 27 last fall. However, R & B-formatted WBLS has taken up the slack, ranking No. 11 overall last fall and No. 5 in the coveted 18- to 34-year-old demographic since spring 1999.

Sutton's commitment to African-American radio is what led Charles M. Warfield Jr. to return to the company as president last July. After about 21/2 years as senior vice president, urban regional operations, AMFM (now Clear Channel), "I really had an interest in working with a black broadcaster" again, he says, and Sutton has "a great commitment to black ownership."

Sutton's commitment comes from the examples set by his family, particularly his father, a former Manhattan Borough president and mayoral candidate. "My grandfather was born a slave," and father Percy was the youngest of 15 children, all of whom went to college, says Pepe Sutton.

The younger Sutton "continues a great legacy," notes the Rev. Jesse Jackson, chairman of the Rainbow/Push Coalition.

His strong family taught Sutton that "you have to be better than many of the people that surround you or you will be deemed less then they are when you're a member of a minority population," he says. And "you don't ever give up. ... You have failed when you've given up."