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Over Our Dead Bodies

Nets blast proposal for 25% prime time set-aside for indies 1/05/2003 07:00:00 PM Eastern

Network executives are deriding an effort by independent producers, artist unions and at least one ad agency to revive "fin-syn" rules, calling it an unreasonable attempt to further fragment the TV business.

"With literally hundreds upon hundreds of outlets and opportunities for programmers, it would be more irrational than ever to restrict TV broadcasters," said CBS spokesman Dana McClintock of the attempt to reinstate a version of the rules, which once severely limited the nets' ownership of their prime time shows.

"It's strange that this bad idea surfaces at the same time we get the news that basic cable's ratings exceed those of broadcast television networks," said Preston Padden, ABC's Washington policy chief. "Our share of the overall television programming marketplace is so small it could not possibly support a regulatory structure like fin-syn."

Padden noted that the big nets, then only three, controlled "90-some percent" of all TV viewing, including prime time, when fin-syn was imposed in 1970. Today, the three, plus Fox, account for less than half of prime time viewing, while cable and second-tier broadcast networks have become major players. "The market today doesn't bear a remote resemblance to what existed then," Padded said.

To remain profitable in today's splintered TV market, the networks insist they must have unfettered ability to produce their own shows and to profit from the off-net syndication of shows they made popular in first run.

The fin-syn restrictions are "anachronistic and don't serve the public interest," said Andrew Butcher, spokesman for News Corp., Fox's parent.

The Coalition for Program Diversity, which includes independent program producers, TV directors and actors, disagrees, and last week urged the FCC to put a hold on the big networks' lineup of in-house programming.

The creative community's self-interested bid is no surprise. The big question is whether their proposal to cap the networks' share of self-produced shows at 75% of prime time programming will gain any traction in Washington.

The idea is likely to find sympathetic FCC ears in Democratic Commissioners Michael Copps and Jonathan Adelstein, and the independence of Republican Kevin Martin may give the idea more traction than would have been predicted when the media-ownership review was launched in September.

Adelstein, sworn in as an FCC commissioner last month, will provide his first take on media consolidation Monday to the Future of Music Coalition, a group of artists and others opposing relaxation of media-ownership rules. During the confirmation process, Adelstein stayed mum on his views, but the former aide to Sen. Tom Daschle (D-S.D.) is expected to mirror his former boss's worries about the merger wave of the past six years.

Dysfunctional Marketplace

The coalition asked the FCC to limit the amount of in-house programs during prime time. "The narrow prime time television programming marketplace has become dysfunctional as diverse sources of independently produced, non-network programming have been eliminated or seriously compromised by the unregulated major networks," the coalition said in a filing at the FCC.

The coalition is one more voice in a chorus of consumer advocates, artists and some prominent lawmakers worried about all or part of the FCC's media-ownership review.

A virtual mountain of electronic documents was filed last week with the FCC, which is undertaking a sweeping review of all its media-ownership restrictions.

The broadcast industry is not united on media-ownership restrictions, however.

Keep the cap

While the nets want to boost their station holdings by eliminating the 35% cap on one company's TV household reach, their affiliates last week blamed fin-syn's repeal for the growing power of the nets to dictate stations' programming policies. The Network Affiliated Stations Alliance, however, is calling for the FCC to retain the 35% cap rather than reinstate fin-syn. The National Association of Broadcasters also wants the FCC to retain the ownership cap but continued its "no opinion" stance on the impact of fin-syn.

The coalition's aim is to reverse a trend that they say has forced producers of syndicated shows to either go out of business or sign back-end agreements giving networks generous royalties when the shows air in off-net syndication.

Members of the coalition include Carsey-Werner-Mandabach, Sony Pictures Television, ad agency MediaCom and artist unions AFTRA, the Screen Actors Guild and the Directors Guild of America.

Although reserving 25% of prime time for independents would do little more than freeze the status quo, supporters of the idea say ending the decline in independents' business would assure investors that new shows are worth backing.

Since the 1993 repeal of the financial interest and syndication rules (fin-syn) restricting nets' ownership of their prime time programs, non-network producers' share of prime time lineups dropped from 68% to 24%. In terms of weekly hours, independent producers' now average 17 hours of prime time programming on the Big Four nets, down from 47.5 hours a decade ago.

CBS is most reliant on its own shows, controlling 90% of its prime time lineup. Next is Fox with nearly 85%. ABC and NBC are at 76% and 55%, respectively.

The coalition says fin-syn's repeal led to deterioration of programming quality as the networks began to produce in-house shows as cheaply as possible. The focus on cost-cutting has led to the flurry of prime reality and game shows and a reduction in the number of more costly comedies and dramas, they say, and has led to a decrease in opportunities for actors, writers and directors. "Network programming is the cheapest, most mainline programming that network officials can simultaneously repurpose as many times as possible on various network-owned broadcast and cable platforms," the coalition wrote.

'Bland' programming

Aside from carving out room for non-network programming, the coalition also is asking the FCC to hold the current 35% cap on one company's TV household reach and retain the "dual network" rule barring the Big Four nets from owning each other.

The coalition derided networks' claim that programming costs are increasing, contending that nets have decreased their programming expenditures as a percentage of revenues from 30.3% eight years ago to 26.3%.

The networks' "fixation" on profits also is hurting advertisers' and American consumers, the coalition said. The resulting "blandness" of programming not only reduces audience size but increases per-viewer ad costs that must then be recouped through high retail prices, the coalition said. "This cost increase is ultimately borne by the American public in higher prices paid for goods and services."

Limiting nets' share of self-generated product will ensure viewers have access to some measure of programming diversity, the coalition argues. The coalition's request will be filed as part of comments in the FCC's sweeping review of media-ownership rules.

The FCC repealed its fin-syn rules after a federal appeals court in Chicago ruled against them in 1992. Ironically, the coalition argues that the court's order provides regulators sufficient reason to resurrect the restrictions. The court said at the time that the FCC could "carve out a portion" of programming time for "diverse programming sources." Also, they say, the networks' increasing domination of prime time production now gives the FCC plenty of empirical data demonstrating the need for fin-syn rules that was lacking when the court ruled more than a decade ago.

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