Underwriting Fundamentals

							Underwriting Fundamentals
Underwriting
 Used to thank companies and individuals
  for “in-kind support” of a non-
  commercial broadcast entity.
 Examples of non-commercials include:
    • National Public Radio (NPR)
    • Public Broadcast Stations (PBS)
    • Corporation for Public Broadcasting
Underwriting
   Companies donate money to support a
    noncommercial station or network
   The station then thanks them for their donation.
   This “thank you” is called an underwriting
    credit.
   Not referred to as “advertising.”
   More of an incentive to donate or support non-
    commercial station.
    Underwriting
   1984. FCC relaxed rules
   Now may use
     • Logograms or established slogans.
         • OK if descriptive only.
         • If contains sales information (“The Best a Man Can Get.”) must
            have been using for at least 2 months.
    •   Location Information
    •   Value neutral descriptions of a product line
    •   Brand names and trade names
    •   FCC rules do not apply to non-profit organizations or, by
        extension, PSAs.
            Underwriting

   Specifications for On-Air Credits
    • Credits are 10 seconds long.
    • Almost always voiced by an announcer.
    • Contain no produced music bed.
    • Contain no sound effects.
Underwriting
 • Credits may include:
    • the organization or company name;
    • the name of a subsidiary, operating division or
      parent company;
    • any additional language which further clarifies
      the identity of the underwriter.
Underwriting
•   This language may contain:
     • A neutral description of products or services;
     • A recognized corporate slogan that identifies the company or
       products;
     • A statement of business locations;
     • A World Wide Web address;
     • A toll-free phone number;
     • The organization's mission;
     • A mention of the particular programming being supported (ex: "for
       coverage of Eastern Europe...");
     • The duration of the business or service (ex: "providing services to
       businesses for over 50 years...")
Example of Acceptable Underwriting Spot

   Programming is brought to you by New
    York Long Term Care Brokers. Long-
    term care insurance and retirement
    planning. Our policy is taking care of
    you. New York Long Term Care
    Brokers.
Example of Acceptable Underwriting Spot



   Programming support of financial news
    on NPR is provided by Rosner Soap of
    Sugar Loaf, New York. Creating
    traditional soap since 1745.
Underwriting Language MAY NOT contain:

  • Reference to price
     • Can’t give the price of an item or items or category
       of items.
     • Can’t discuss promotional pricing.
     • Cannot give a “ballpark” figure
     • Cannot use comparative terms – “less than other
       stores prices,” “reduced,” “special.”
     • Cannot list interest rates.
Underwriting Language MAY NOT contain:

   • Reference to Price:
      • Cannot imply a discount or imply comparative
        pricing.
      • Can’t use the term “free”
      • This is true in English or in another language.
      • Can’t say that you accept credit cards.
      • Can’t say that you accept “campus cash.”
Underwriting Language MAY NOT contain:

   Comparative inducement to buy:
    •   Cannot compare your product, service or company to the
        competition
    •   Includes implied comparison:
          • Seafood buffet this Friday. (OK to say Seafood buffet every
            Friday.)
          • “The cars with the best fuel economy.”
          • “We specialize in foreign auto repair.”
          • “With a specially trained sales staff…”
          • “….specializes in….”
Underwriting Language MAY NOT contain:

   Value Statements:
    •   Amazing!
    •   Great!
    •   The best!
    •   Fine;
    •   Award-winning (or name awards won);
    •   Or the name of any product, if that means that this product is
        certifiably better than the competition – (USDA prime, board-
        certified, Fender, Angus Beef).
Underwriting Language MAY NOT contain:

   Call to action:
    • Visit our showroom….
    • Call today….
    • Don’t miss out on this special offer….
    • Check us out….
    • Come see our new line of Buicks….
   What if you violate one of these rules:
    • FCC cannot seek you out.
    • Must receive complaint.
    • Who would complain?
    • Levels of fines
       • From warning in a file
       • To $20,000 fine per occurrence.
Legal or Illegal?
   Jones Toyota. Are you tired of big gas
    bills? The 2006 gas/electric Toyota
    Prius offers amazing fuel efficiency.
    Stop by for a test drive today at Jones
    Toyota, 955 South Main Street.
Problems?

 • Amazing
 • Stop by…
 • Fuel-efficient
 • Grey area – how much can you say about
  the hybrid?
Legal or Illegal?
 Tim’s Dancefloor. Where every night is
 Ladies Night. Live music every Friday
 and Saturday with a $5.00 cover
 charge. This month’s performers are
 on the web at tims.com.
Problems?
 • “Ladies Night” is promotional pricing.
   Implies a price discount.
 • Can’t list prices.
 • Live music is O.K. as long as they are not
   the only ones with live music on Fridays.
 • OK to direct to web site for more
   information.
Legal or Illegal?
   Bonanza Buffet. Make that “Freshman
    15” count this weekend with an all-you-
    can-eat buffet from 6 – 10 pm.
    Bonanza Buffet. In the Thomas Road
    Mall.
 Promotional Pricing
 Can’t use phrases like “all-you- can-
  eat.”
 Events like “Freshman Fridays” are
  questionable
Legal or Illegal?
   Body Canvas with the only two certified
    tattoo artists in the city. No design is
    too complicated. If you can imagine it,
    we can draw it. Open daily from 10
    a.m. to 10 p.m.
Problems?
   Comparative Pricing
    • “Only two board-certified”
    • Grey area:
      • “No design too complicated”
      • “If you can imagine it…”
      • Do these imply that other tattoo parlor cannot
        do this?
Legal or Illegal?
   Don’t miss Prestige Cinemas Holiday
    Film Bonanza. Come see some of the
    greatest Christmas films ever made,
    including Academy Award winner
    “Miracle on 34th, plus family classics
    such as It’s a Wonderful Life, A
    Christmas Story and Holiday Inn.
Problems?
 Don’t miss….
 Come see….
 Holiday Film Bonanza
    • “Holiday Film Celebration” – iffy
    • “Holiday Film Festival” -- OK
 Greatest
 Classic
 Academy Award winner
   Today’s programming is sponsored by
    Prestige Cinemas’ Holiday Film
    Festival. Offering 5 holiday films
    throughout December. Films include:
    Miracle on 34th Street, It’s a Wonderful
    Life, A Christmas Story and Holiday
    Inn. For more information call 330-
    555-1212.
Legal or Illegal?
   Enchanted Woods Apartments. With a
    wide range of amenities including free
    cable, high-speed internet access,
    dishwashers, self-cleaning ovens and
    ceramic tile. For more information,
    dial 313-788-0984.
Problems?
 Free cable
 High-speed internet?
    • Is this value neutral?
    • It is a label, but the language is value-
      added.
    • Internet access would be OK
    • Best bet – “broadband”
   Can’t say “dial”.
Legal or Illegal?
   Federal Express. Now accepting
    applications for delivery personnel.
    Applicants must possess a valid driver’s
    license, be able to pass a substance
    abuse test and be able to lift heavy
    loads. More information online at
    fedex dot com.
Problems?
   Can’t recruit.
   May only use underwriting to promote your
    business.
   It is not the job of Federal Express to recruit
    employees.
   If your sponsor were Callas Personnel
    Services, they could promote the jobs for
    which they were hiring, but Kauffman’s
    could not.
Legal or Illegal?
   First Church is the only way to eternal
    salvation and those who follow His
    teachings will be blessed. First Church
    is holding a seminar on same sex
    marriage this Friday at 7:30 explaining
    why God intends marriage to be
    between one man and one woman.
    More information available at 399-555-
    1111.
Problems?
   In terms of the FCC – it is fine.
   Assuming First Church is non-profit, none of the rules would
    apply.
   Also, language is appropriate based on FCC rules even if not a
    non-profit.
   However, would create an inconsistent sound.
Problems?
   May accept account but require them to adhere to the rules
    that commercial organizations face.
   A station may refuse to accept religious underwriting as
    matter of policy.
   Or they may accept it, but under the condition that spot does
    not include proselytizing .
   If they accept underwriting from one religious entity, they
    must accept from all.
Legal or Illegal?
   Anheuser Busch, makers of Bacardi
    Silver Watermelon, the newest member
    of the Bacardi family. Drink
    Responsibly. Read more about alcohol
    and substance abuse at college talk dot
    com.
Problems?
 Alcohol is OK
 “New” is OK – as long as adhere to the
  FTC regulations.