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Mouse Scurries From NAB

Disney/ABC exits, citing net-bashing and false claims 6/22/2003 08:00:00 PM Eastern

Halfway through the second day of the National Association of Broadcasters' board meeting in Washington two weeks ago, ABC's veteran lobbyist Preston Padden had heard enough. Fed up with what he says was incessant criticism of the major networks from a handful of fellow board members, Padden bolted the meeting.

A couple of days later, he penned an angry letter to NAB President Eddie Fritts, calling NAB a weapon in the "jihad" of large affiliate groups against the networks. Padden abruptly dropped ABC's membership, erasing the last of the major nets from the organization's roster.

"For two years, we have endured (and helped to pay for) a non-stop stream of network-bashing letters, lobbying and legal filings," Padden wrote to Fritts. "We have tolerated our own trade association's patently false claims that our stations lagged behind affiliate stations in terms of local public service."

The last to go

CBS, Fox and NBC left NAB long ago because of the intramural dispute over the 35% cap on one company's national TV-household reach. The networks want to jettison the cap. Network affiliates, though, want to keep it in place, arguing that networks will have greater leverage to demand unfair affiliation terms if permitted to increase their O&O stables. Because of the affiliates, who dominate the NAB board, the association has fought to preserve the cap.

Also, under the auspices of a separate group, the Network Affiliated Stations Alliance, the affiliates have peppered the FCC and Congress with complaints about network hardball tactics in affiliation negotiations.

ABC had stayed in the association in part because its 10-station group was not close to the 35% cap, in part because it hoped NAB could put the station-cap controversy behind it after the FCC's June 2 vote to loosen the media-ownership rules. That vote included raising the cap from 35% to 45%.

ABC saw that hope fade when the NAB Television Board two weeks ago voted to support congressional efforts to restore the cap at 35%.

Padden said the affiliates, especially the big groups holding more than 30 stations in addition to newspaper or cable holdings, had exceeded "even Washington's liberal allowance for cynicism" in claiming that ABC's 10-station group was less able to serve local communities than they were.

In a meeting with reporters last week, Padden refused to name the "affiliate firebrands" he blamed for pushing NAB against the nets.

But sources attending the board meeting said Padden was angered by comments by Hearst-Argyle Chief Executive David Barrett and Cox Broadcasting President Andrew Fisher.

Neither Barrett nor Fisher could be reached for comment last week.

Disney's withdrawal caught Padden's board colleagues off-guard. At the opening of the board meetings, he assured them that he would be "dragged" out of the NAB before he gave up membership.

"His actions are confusing to more members that just me," said Michael Fiorile, chief executive of Dispatch Broadcast Group and chairman of NAB's TV Board. He insists that Padden misrepresented both NAB's plan for continued lobbying on the 35% cap and the board members' overall statements regarding the networks.

"I don't hear any constant hammering against them," he said.

Concession to ABC

By leaving the meeting early, Fiorile and other board members said, Padden missed NAB's final decision, made by the joint board, not to be out front in lobbying for cap-rollback legislation and not to support any legislation that went beyond restoration of the 35% cap. Some members saw the condition as important concessions to Padden.

"There will be no stepped-up effort to reverse the FCC's decision," Fiorile said.

Another board member and key NASA figure, Post-Newsweek President Alan Frank, says Padden is engaging in revisionist history by charging that the affiliates, or even NASA, accused the O&Os of being disinterested in local community-programming needs.

"That's crap," Frank said. "NASA went out of our way to not attack network stations. ... We never led the charge. If a net filed something against performance of network affiliates, we responded."

The genesis of Padden's complaint is an October 2002 FCC study, conducted to gain information that would help craft new ownership rules, that found network O&Os offer more and higher-quality news. NAB and NASA later produced their own studies attacking that thesis and showing that affiliates' station managers have more power to respond to local tastes and needs than the nets do. The nets dueled with NAB/NASA over these issues in repeated filings to the FCC right up to the commission's June 2 vote on new ownership rules.

Paper duel

In Frank's view, Padden showed up at the board meeting looking for a fight, knowing that the board would uphold its longstanding position on retaining the 35% cap. Padden brought an easel and poster. Printed on it: "The 11th Commandment: Thou shalt not use the NAB to screw thy fellow broadcaster."

Padden said he tried for a day and a half to persuade the TV board to adopt a resolution of some sort that would bar the NAB from working against individual members as it as done in the ownership proceeding. He said he became frustrated after his efforts gained no traction and the TV board voted to continue working for the 35% cap. "I begged these people."

NAB officials said Disney's total fees for its network, 10-station TV group and 68-station radio group totaled $500,000 of NAB's $48 million annual budget. When it comes to lobbying, the organization can still rely on the thousands of station owners and managers from every congressional district in the country.

In the meantime, Padden said he will attempt to persuade the other networks to join ABC in launching their own association. He is toying with the name America's Greatest Local Broadcasters.

"Seriously," he said, stonefaced, when reporters chuckled, but then he conceded that the name needs work.

Few predict the networks will remain forever estranged from NAB. Padden predicted that ABC's exit will have a "cathartic effect" that will end the network bashing. Fiorile said the dispute is "about to be behind us," adding, "We would welcome them back with open arms."

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