The industry payment terms of 60, and up to 120 days, have put an enormous strain on minority-owned media businesses, especially the smaller ones.
The stress that delayed payments place on cash flow affects both the ability to continue day-to-day operations, as well as limiting the ability to expand and secure additional funding.
By implementing 30-day payment terms, dentsu will provide a more impactful way to engage, support, and expand minority-owned media partners in the media ecosystem, and truly enable economic empowerment. This new offering will go into effect on October 1st for our US-based clients aligned with the new broadcast calendar.
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Raul Alarcon, Jr., CEO and Chairman, Spanish Broadcasting System said: “dentsu’s newly adopted policy to implement 30-day payment terms is a new chapter in history for minority-owned media owners.
This offering is an unprecedented showing of support and solidarity to minority-owned media, and I feel this is the beginning of a new era of respect, understanding, and cooperation between the advertising community and minority media owners throughout the country.”
Don Jackson, Chairman & CEO, Central City Productions, Inc. Founder & Chairman, Steller TV Network said: “Payment terms of 30-days is a major changemaker for Black-owned media and production companies like Central City Productions and our 51 years in business.
This initiative will certainly make a difference in the launch of our new Stellar TV Network and help lift the burden of our having to carry the total production cost of new shows for 4 to 5 months before we receive income from participating advertisers in our shows.
This major trendsetting initiative by dentsu will also serve as an example, hopefully for other advertising agencies to follow in making a major difference in support of Black-owned media companies. It further addresses a major problem of “access to capital” where banks are reluctant to extend Black-owned media companies’ lines of credit needed to produce new content prior to the airing of the shows, which cannot be invoiced until the programs air. The 30-day payment terms will possibly encourage banks to reconsider and change their lending practices.”
Chesley Maddox-Dorsey, CEO of A Wonder Media (parent company American Urban Radio Networks and Superadio) said: “dentsu’s game-changing announcement demonstrates that our business is valued as well as our financial success in the competitive business.
With this strategic decision, dentsu removes a crucial financial barrier leading the way for their clients to do more business with Minority-owned Media companies based on an authentic connection with the target audience and not solely market capitalization or access to financial markets.”
Jim Winston, President of the National Association of Black Owned Broadcasters, Inc said: We at NABOB are extremely pleased and excited about the dentsu announcement that it will pay Black and other minority owned media companies in 30-days.
In recent years, many ad agencies and advertisers have been paying on 90-day and up to 150-day schedules. Such delayed payments can be a source of major financial strain for NABOB members. We hope that this new dentsu policy will inspire other ad agencies and advertisers to adopt similar policies.
This announcement is just one of many initiatives that dentsu has undertaken to provide leadership in the support of Black and other minority owned media. NABOB is grateful for dentsu’s leadership.
Dr. Ben Chavis, President and CEO, National Newspaper Publi Byron Allen, Founder and Chairman of Allen Media Group said: “I commend dentsu for agreeing to pay Black Owned Media net 30 days. One of the greatest obstacles for African American entrepreneurs is access to capital that is not predatory, and this level of support will help immensely. We are vigorously campaigning for other agencies and clients to do the same.” ************************************* Jacki Kelley, CEO, dentsu Americas said: “From the start of our journey to create equity, we said we will not mistake activity for progress and this initiative shows the conviction of our commitment to achieve meaningful progress. General Motors was our inspiration after they pioneered this concept earlier this spring. Updating our payment terms for minority-owned business partners will enable them to more easily access capital, create more content, offer more programming opportunities and propel the cycle of growth. Lifting the burden of having to carry production costs is a key enabler to create equity in media.” Mark Prince, SVP, Head of Economic Empowerment, dentsu said: “I have witnessed first-hand the struggles many minority-owned media owners face in receiving timely payments and have spent my fair share of time working with agency accounting and investment groups to help resolve delayed invoices and push for faster payments. As we push Economic Empowerment, it was important to quickly develop a strong response from the start that tackles the urgent need to address the basic barriers our partners deal with in this space.” Mike Law, US President, Investment – dentsu said: “Building on our clients’ efforts to further economic inclusion, implementing 30-day payment terms for minority-owned media partners allows us to progress real change in the marketplace. This offering continues our commitment to champion meaningful and impactful progress and truly help our partners grow their businesses and establish long term success. We are excited to continue to work together with our clients and media partners to drive systemic change across every part of the ecosystem.” ************************************* FAQS: Q: Why do this? A: Inspired by General Motors, who was the first to offer updated payment terms earlier this Spring, we believe the industry has the power to remove barriers to equity for minority media owners and that we have a responsibility to be part of the solution. Nearly all minority-owned media partners have voiced that the industry standard payment terms of 60, and up to 120 days, are a challenge to their business operation and cash flow, especially over the last year. Q: What do 30-day payment terms entail? A: Once a correct invoice has been received in the US, our teams will ensure any discrepancies are reconciled and cleared for payment by the 30-day mark. Q: Why 30-days? A: The industry payment terms of 60, and up to 120 days, have put an enormous strain on minority-owned media businesses, especially the smaller ones. The stress impacts that delayed payments place on cash flow, affect both the ability to continue day-to-day operations as well as limiting the ability to expand and/or secure credit. By implementing 30-day payment terms, it allows us to provide a more meaningful way to engage, support, and expand minority-owned partners in the media ecosystem. Q: When does this new offering go into effect? A: We will begin on October 1, 2021. Q: Why October 1st? A: We chose October 1st as its the initial start date to align with the new broadcast year and the start of the new billing quarter. Q: Is there an end date on this offering? A: Not at this time. Q: Is this a global initiative or US only? A: This offering is US only. Q: How do minority-owned media partners qualify to be a part of this offering and provide verification of their minority ownership? A: We will provide a simple web-based form for minority-owned media partners to fill out designating their type of ownership and supplying verification. Q: What type of diverse media partners will be part of this offering? A: We are starting with minority-owned media partners – e.g., Asian-Indian, Asian-Pacific, Black, Hispanic, and Native American with plans to expand to other diverse owned groups. Q: Is this just for media owners only? A: Yes. Q: Why is dentsu doing this now? A: This is a part of our continuous commitment to being champions for meaningful progress. As an industry, we need to provide as many tools as possible to support, grow and expand existing and future minority owned media partners. Eliminating concerns around payment and cash flow is a big step towards reducing inequities within the media ecosystem. Q: Who is leading this offering? A: It is being driven out of dentsu’s new Economic Empowerment practice. Mark Prince, SVP, Head of Economic Empowerment is spearheading it with support from Mike Law, US President, Investment and Doug Rozen, CEO dentsu Media Americas. dentsu Finance, Media Operations, and global executive teams have been providing input. Q: How are we measuring success? A: By fully delivering on it. This offering is aligned with our commitment to champion meaningful partnerships. Q: What else is dentsu doing in the US to concentrate on other DEI initiatives? A: We continue to focus on DEI initiatives as a core pillar to media partnerships. We recently announced a strategic partnership with minority-owned OZY Media, as well as Hero Collective. Earlier this year, in partnership with Urban One and NABOB, we launched a first-of-its-kind audio series, “More Than That with Gia Peppers,” which tapped into diverse voices and was exclusively distributed by Black-owned and operated businesses. Additionally, we developed a DEI digital partner framework called PRISM that assesses investments on a deeper level to ensure they reach audiences that reflect the US population and launched a comprehensive DEI RFI process for clients. We are also the first holding company to remain true to our commitment for transparency, accountability, and open-sourcing support to the industry by releasing our first Diversity, Equity, Inclusion report.
