The Hollywood production community is bracing for the worst as the Federal Communications Commission yesterday put some finishing touches on new financial interest and syndication rules that will be unveiled tomorrow.
Though details of the new rules are still being hammered out, an FCC source said the final regulations are likely to allow the Big Three to take an equity interest in all network prime time programs.
That would represent an increase from the 40% of prime time shows the webs currently are allowed to invest in.
An FCC source said the new regs are likely to retain restrictions on network entry into domestic syndication, including the firstrun market. The regs will also exempt Fox Broadcasting Co. from the “network” designation, according to the source.
Commissioner Andrew Barrett is said to be pushing to eliminate all syndication restrictions on the networks within a few years, a position likely to yield a strong dissent from commissioner Ervin Duggan.
The concessions to the networks would represent a blow to Hollywood’s production community, which has long argued against allowing webs unfettered entry into program ownership.
Without protection from the FCC, Hollywood lawyers claim, the networks will demand backend profits from a new show’s producers without paying a competitive price for the program.
“If there are no financial interest restrictions, networks will pay producers the minimum amount necessary to keep them in the business,” one Hollywood lawyer said yesterday. “The result will be fewer producers and less program diversity.”
The FCC is under order from Chicago’s U.S. 7th Circuit Court of Appeals to come up with new rules. The court last November tossed out as “unreasoned and unreasonable” fin-syn rules adopted by the FCC in April 1991 that eased network entry into the program production and syndication market.