Media experts tracking NBC’s efforts to merge with another media conglomerate seem in agreement on this much: The negotiations will ultimately culminate in some sort of merger – or, on the other hand, they may not.
Not surprisingly, the key bone of contention, in an industry dominated by control freaks, is who is going to control NBC. Ted Turner and GE reps marched close to the finish line last week until the ugly issue of control reared up again.
Indeed Turner himself said both sides liked the deal they had struck except for one thing – “We couldn’t agree on who was going to run it,” he said.
NBC president Robert Wright was not so definitive in his analysis of the bust-up. He told the Wall Street Journal that the deal could still be done but declined to explain how the control issue would be resolved. Wright then spent the rest of the week dodging press calls.
One scenario floated would have the two combine news operations. But it seems unlikely that Ted Turner would give up control of CNN, the jewel in his crown.
NBC, meanwhile, says it is planning its own cable news network. Turner execs privately said they are not concerned about competition.
If NBC does launch a news channel, carriage won’t be easy. NBC has approached cable operators in the past about starting a news channel, but operators have resisted because NBC wanted a high subscriber fee. Tele-Communications Inc. president John Malone said he’d want NBC to prove it’s committed to a fresh news service and not a rehash of its broadcast effort before he would consider carrying it on TCI systems.
NBC has also had merger talks with Time Warner, but those talks faded a few months ago.
With Republicans taking control of both the House and Senate and looking to relax many industry regulations, Turner execs are confident that the 5% limit on cable operator stakes in broadcast networks will be relaxed, if not completely lifted.
At this point Time Warner could face even more significant regulatory hurdles than Turner in trying to merge with a network. Not only is Time Warner the nation’s second-largest cable operator, Warner Bros. has just launched the WB Network and FCC regulations prohibit a company from owning more than one broadcast network. NBC has lobbied the FCC to relax the dual network rule so it could start new networks itself.
While talks with NBC may be wavering, Turner could go after CBS, which, despite constant denials from Eye web chairman Laurence Tisch, is said to be for sale.
Turner Entertainment president Scott Sassa added that if Turner goes after any network, he will want – you guessed it – to control it, not just be a minority investor.