Fin-Syn Fever Rising

Universal Television, owned by No. 2 media conglomerate Vivendi Universal, has joined the ranks of mostly independent producers in urging the feds to investigate whether the increasing dominance of network-produced prime time shows harms the industry.

In the past three weeks, Universal execs, including group president David Goldhill, have met with leaders of the House and Senate Commerce Committees and senior FCC staff to complain about the increasing difficulty that non-network producers experience selling prime time shows. Their complaints suggest that even 800-pound gorillas—Vivendi's revenue tops $30 billion and its TV holdings also include USA Network and Sci Fi Channel—are having trouble breaking the networks' grip on prime time.

Universal's complaints follow a petition filed by independents Sony Pictures Television and Carsey-Werner-Mandabach last month. The two producers are part of a coalition that also includes writers, actors and directors unions and ad agency MediaCom. Also seeking to rein in the nets is the Caucus for Television Producers, Writers and Directors.

So far, Universal isn't backing the other groups' call to revive limits on networks' in-house share of prime time but are simply urging policymakers to recognize that a problem exists. "We're asking officials to look at how the television market has changed for independents, but we're not pushing a solution," said a Universal executive. "Although we're part of much bigger company, we're still finding it difficult to crack into prime time."

In a Feb. 5 FCC filing, Universal asserted that the rising share of network-owned or affiliated programming has diminished the "diversity and quality of broadcast network television" since the 1993 repeal of financial-interest and syndication (fin-syn) rules limiting network ownership in prime time shows. In January, the Sony-led Coalition for Program Diversity asserted that non-networks' share of prime time lineups had dropped from 68% to 24% since 1993. In terms of weekly hours, independents now average 17 hours weekly, down from 47.5 hours.

The networks deride that calculation and say they account for only 35% of prime time if news, sports and shows co-produced with non-network shops are excluded.

Universal might have an uphill battle proving that fin-syn repeal created an irreversible decline in non-net production. After all, the company announced this spring that fall 2002 was a "banner year," with nine of its series picked up for fall network schedules in last year's upfront. According to a May 16 press release, the total was the "largest volume of series since the 1994-95 television season." New network picks this year include American Dreams and midseason replacements Dragnet and Mister Sterling.

As for complaints about the declining quality on network TV, Universal has created a multi-series franchise out of critically acclaimed Law & Order, which airs on NBC. Many critics also would argue that Universal's syndicated Jerry Springer, Maury and Blind Date have contributed as much to the decline of TV as any shows on the air.

So far, the effort to revive fin-syn hasn't caught on at the FCC.

Sony's coalition asked the FCC to impose the 25% set-aside as part of a sweeping revision of ownership rules now being drafted by agency staff. A fin-syn revival was not among the proposed changes, but the plan could legally be included because the FCC did make an open-ended request for alternatives to today's numerical ownership caps that would encourage programming diversity.

Still, FCC officials caution that, while fin-syn supporters have shown that non-network share of prime time has dropped, they haven't proved that, from a viewer's point of view, program quality and diversity have diminished.

Democrat FCC Commissioner Michael Copps, whose early support would be critical to moving the idea onto the commission radar screen, told an industry gathering last week that the idea isn't being actively considered. Republican colleague Kevin Martin, the likely choice to be a Republican swing vote, hasn't discussed his views with his staff.

Still, the networks aren't taking the challenge lightly.

After word circulated that Universal's team met with the staffs of Sens. John McCain (R-Ariz.) and Ernest Hollings (D-S.C.) and Reps. Billy Tauzin (R-La.) and John Dingell (D-Mich.), the nets demanded a chance to rebut the idea in person, and meetings are being scheduled.

"Fin-syn was applicable when television consisted almost entirely of three networks," said Disney/ABC lobbyist Preston Padden. "The courts threw it out when there were four broadcast networks and 100 cable networks. It plainly makes no sense in a world with seven broadcast networks and 300 cable networks."

Said a CBS spokesman, "Beyond the dubious legality of the proposal, lifting the rule enabled networks to see the benefits of a successful run on their air, while continuing to provide opportunities to independent producers. A regressive new rule limiting ownership would load all the risk back on the networks and undermine the entire financial structure of the television business, making it highly destructive even to those who have made this proposal."