NBC Universal was not happy with Paxson's announcement Tuesday that it was morphing its network into something completely different and would be moving its Pax TV programming to the as-yet little-watched digital space. NBC is a one-third owner in the network
"NBC Universal was not informed in advance of today's programming announcement issued by Paxson," said the company in a statement. "While we have no direct input regarding Paxson programming, we continue to disagree with the direction Paxson management is taking the company.
"Our concern is that Paxson's strategy will erode our financial investment and, in our opinion, is not in the best interest of any Paxson stakeholder."
"We are doing what is best for our company," Paxson President Dean Goodman told B&C before NBC issued its statement. Goodman says the move was to make its operating structure more efficient and its programing more flexible.
Paxson Communications is changing its name to "i"--an "independent broadcast platform for producers and syndicators," starting July 1.
During a transition phase, both the old Pax TV logo and the new "i" brands will appear onscreen, after which the Pax TV brand will continue on one of the digital multicast channels of Paxsons owned stations (it is multicasting on 45 of its 60 stations).
Goodman says the new independent channel will be "a mix of original series, movies, specials, sports and news that appeals to a variety of interests. Supported by our broad distribution platform, we want to evolve our primary network as a strongly branded television destination for all viewers and for producers and syndicators seeking a national venue for their programs."
Goodman told B&C that the model for i would include both programming that Pax owns and time it would sell to syndicators and other producers.
For example, a small syndicator could buy its way onto a 60-station national launch pad for a show, then sell all the time it in.
Goodman would not say what the ratio of programming it paid for to programming time it sold would be, nor, citing ongoing litigation with NBC, how the move jibed with that network's charge that migrating to a paid programming model violated its contract.
NBC clearly saw the move as an infomercial network wolf in new independent network clothing.
The remake may be what is best for Paxson, but for the family-friendly Pax TV, it means a move to digital, where there are currently few TV sets to receive it, though it will get some cable carriage as well. Its fate likely depends on the government requiring cable to carry broadcasters' multicast channels. "That will be crucial to the entire industry," said Goodman, not just to Pax TV.
Goodman wouldn't give a timetable for the transition from Pax TV to "i" (the actual channel logo will not have quotation marks around it), but said it would be within a year.
Some change in the network structure had been expected, and advertised.
Paxson Chairman Bud Paxson last month said the net was not reducing its entertainment fare in favor of paid programming, calling reports that the company was dropping or even reducing its entertainment programming "totally incorrect."
But, Paxson also said that "as we approach the new fall season, the entertainment programs on our schedule may change to allow the company to give its shareholder a better return on their investment."
Just how the new Pax/"i" model does that isn't clear, though the new independent channel could conceivably be a home for paid entertainment programming rather than infomercial. Big nets also sell their time to outsiders, for kids blocks, say, or NBC's coverage of the Lacrosse Championship, which the league paid it to air.
Paxson's programming defense last month followed the filing of an arbitration claim by NBC two weeks before.
NBC was also under the impression Paxson was cutting back on entertainment fare and loading up on paid programming and said such a move breached a contractual agreement.
Paxson responded with a petition to the FCC to block NBC from influencing its programming, claiming the Peacock was trying to take "illegal control" of the the 57-station TV group.
Paxson also told the SEC: "We are not currently investing substantial additional amounts in new entertainment programming and are evaluating other programming strategies and opportunities that might be available to us that could improve our cash flow."
In February Paxson axed 50 staffers, many in the programming department.