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Disney, Viacom Taking No Chances on Fin-Syn

3/16/2003 07:00:00 PM Eastern

You can't be too careful. At least, not if you're broadcast network chiefs Leslie Moonves and Alex Wallau. The heads of CBS and ABC, respectively, were in Washington last week making high-profile bids to persuade FCC commissioners not to revive limits on the nets' share of in-house prime time shows.

Their strongly worded appeals to regulators were strangely incongruous given network staffers' behind-the-scenes comments insisting that there is no chance the FCC will bring back even a watered-down version of financial-interest and syndication rules struck down by federal judges in 1993.

The network chiefs are fighting a streamlined and less strict version of fin-syn urged by a coalition of studios, artist guilds and ad agencies that would require the major broadcast networks to set aside 25% of their prime time lineup for shows created by outside producers. The coalition has petitioned the FCC to impose the carve-out as part of sweeping changes to ownership rules.

FCC Chairman Michael Powell discounted chances for the proposal two weeks ago, telling reporters the FCC would need orders from Congress. The networks insist that resurrecting restrictions on their ability to own the programs they air would violate court orders and be bad business. "There is no legal, or competitive, basis for re-imposing the financial-interest and syndication rules," Wallau said on March 12, following meetings with Powell and the other FCC commissioners. Moonves made the rounds to FCC offices separately that day.

Why such high-profile fetes for an idea that has no legs?

"I don't want to wake up one day and find this bad idea had gotten traction because we ignored it," said Preston Padden, ABC executive vice president of worldwide government relations.

Moonves was sending the FCC mixed signals about his concerns in meetings with commissioners and agency staff. Though focusing on the threat of programming restrictions with some offices, he indicated to others that his real worry was an apparent stalemate over a proposal to lift the 35% cap on one company's TV-household reach.

Lifting the cap is the top priority of CBS, Fox and NBC. Prospects for a higher cap were thrown into doubt when the Media Bureau announced that it will give no formal recommendation on which way to go and instead will let the five commissioners sort it out. A higher cap is opposed by the National Association of Broadcasters and top station groups that own network affiliates.

Supporters of the programming carve-out say network bravado is whistling in the dark. Powell did not rule out their idea and promised to keep an open mind.

To make their case, coalition members Jon Mandel, chairman of ad firm MediaCom, and officials from independent studio Carsey-Werner-Mandabach are scheduled to visit the FCC April 3. They argue that networks have forced producers to give up ownership stakes in shows because fewer spots are open to outside programs. According to their data, share of prime time shows owned or produced by four top broadcast nets has climbed from 32% to 76% since 1992.

While conceding the plan is a long shot, they believe that enough commissioners are worried about networks' power to dictate prime time choices that a three-vote majority could arise once horse-trading over the media-ownership changes begins later this spring.

So far, the nets appear to be winning. Several commissioners question whether there is authority to create a new rule in a proceeding devised to change or eliminate existing media-ownership rules. They also worry whether a rule tossed out with a harsh critique by judges can be revived.

Finally, although supporters of limits have demonstrated that opportunities for independent producers have diminished since 1993, they have not yet convinced FCC officials that American viewers have suffered reduced programming choices.

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