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The Man in the Middle

Eddie Fritts is at odds with the network affiliates he represents 7/27/2003 08:00:00 PM Eastern

I'm curious to see what happens to Eddie Fritts this week. Today, the president of the National Association of Broadcasters is to preside over a special meeting of his board of directors in Washington. The stated purpose is to figure out what the NAB should do next on media-ownership reform, an issue that has riven broadcasters and the association itself. Unofficially, the purpose is to get Fritts and the TV board on the same page.

Right now, Fritts has a problem. He is where no trade association executive ought to be: out of sync with his TV board, a large number of the folks who pay his salary.

The basic rub is that Fritts is not as gung ho about preserving the 35% audience-reach cap on TV-station ownership as the affiliate station group heads who dominate the TV board, most notably Hearst-Argyle's David Barrett, Cox's Andy Fisher and Post-Newsweek's Alan Frank.

For the affiliates, no regulatory issue is more important than that 35% cap, which has come to symbolize the deep enmity between the affiliates and the networks. Without the 35% cap, the affiliates fear they will continue to lose market power and leverage in dealing with the networks. It's a legitimate fear.

On the other hand, the networks want to raise the cap so they can own more stations, where they make all of their money. Owning stations is also the best way to ensure that all network programming is cleared without complaint and without having to pay compensation to stations.

A few years ago, over the vehement objections of the networks, the affiliates made preservation of the 35% cap NAB policy. One by one, the networks quit.

Here's where it gets sticky for Fritts. The affiliates appear content to have the NAB all to themselves. Fritts believes in unity. He wants an association that represents all broadcasters—network affiliates as well as the networks and O&Os. This is a matter of pride. He doesn't want to be remembered as the NAB president who lost the networks. It's also a practical matter: The NAB is stronger with the networks on board. And arguing for the 35% cap is inconsistent with NAB's call for deregulation almost everywhere else. Believe it or not, consistency does matter in Washington.

On June 2, the FCC raised the cap to 45%—a blow to the affiliates. Some grumbled that had the NAB believed in 35% more and sold it harder, the FCC might not have raised it.

The affiliates believe the NAB should now be working for "clean" legislation that would reinstate the 35% cap. By "clean," they mean legislation without other regulations they don't want but many lawmakers do. There has been talk about coupling the 35% provision to tightening up other just-relaxed restrictions or to reduced license-renewal periods, tougher indecency enforcement, free time for political candidates, and other troubling fare.

Because of those potential add-ons, Fritts thinks pushing for 35% legislation is too risky. Fritts would like to believe such "clean" legislation might pass the House (as it did last week) and Senate. But he is pragmatic enough to fear that somewhere along the line, perhaps in the wee hours of a cold October night during a conference to reconcile House and Senate bills, the bad stuff could be added.

So, two weeks ago, Fritts got himself into hot water when he announced the NAB would oppose all legislation and sent word to NAB's friends on Capitol Hill. The affiliates were not happy. They felt Fritts had abandoned the clean 35% effort way too early, and they let him know it. With their own team of lobbyists and Washington reps, the affiliates continued to work for the clean 35% bill in the House and, to the surprise of many, got it. (When newspapers reported last week that broadcasters suffered a stunning loss on Capitol Hill, they missed more than half the story. For many stations, it was a big victory.)

The latest word from the Senate is that it will produce a companion bill. For the first time, Washington insiders are saying that a clean 35% law is possible, despite President Bush's veto threat.

I agree with Fritts that the NAB should walk way from the 35% bill. Fritts's warning is real. And to win passage, affiliates have to go into debt to lawmakers hostile to their business. They will one day collect on that debt.

Then again, I don't work for the Barrett-Fisher-Frank triumvirate. Fritts does.

Jessell may be reached at hjessell@reedbusiness.com

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