WASHINGTON — Sure, Viacom topper Mel Karmazin may have been half jesting when suggesting that Washington cut the broadcasting biz a regulatory break and allow further consolidation in light of the Sept. 11 terrorist attacks, but his words could prove to be prophecy.
The theory? That the TV biz, like many other industries, has lost millions since the attacks. While broadcasting bigwigs wouldn’t dream of being so crass as to ask for a direct bailout, they could informally argue that one way to keep the biz financially viable is to erase from the books key ownership rules and other mandates.
“One could see the stars lining up,” one network exec said.
Congressional aides who track media/entertainment companies say it’s not an outrageous idea. It must, however, be handed delicately and not couched as any sort of direct bailout.
“You have to be very, very careful that you’re not opportunistic,” said Ken Johnson, top aide to Rep. W.J. “Billy” Tauzin (R-La.). “The problem is, media companies will have to take a number and stand in line behind the airline and travel industry, behind rental car companies, restaurants and just about everyone else who has been impaired.”
A Senate staffer echoed the same sentiments, saying that virtually all industries under the jurisdiction of the Federal Communications Commission have suffered, whether it’s wireless, phone or TV. At the same time, that staffer also said it’s “not crazy” to think that opposition to deregulation might soften, in light of the new world order.
Media tracker Jeffrey Chester is so concerned that his org, the Center for Digital Democracy, is launching a letter-writing campaign to oppose any such easing of the rules. The campaign will target the White House, Sen. Ernest Hollings (D-S.C.) and Rep. John Dingell (D-Mich.).
Chester also is providing a link on the center’s Web site to a transcript of Karmazin’s comments, made during a Oct. 2 Goldman Sachs media confab in Gotham.
“The message of the broadcasters to politicians is, ‘We’ve met our public interest mandate; we were already hurting; we’re an important patriotic force; we declared war before you did; we’re playing ball,’ ” Chester said.
Viacom, parent company of CBS, and other broadcasters say Chester’s argument doesn’t hold water, since key ownership rules are already poised for repeal. And pols on Capitol Hill say they haven’t heard one word about any new lobbying campaign on the part of media company reps.
Pat on the back
TV execs haven’t been shy about extolling their response to the Sept. 11 terrorist attacks, which is still costing them dearly.
Broadcasters say they have gone the distance in terms of fulfilling their public trust. The Big Four put on a star-studded telethon that has raised millions in relief money and broadcast commercial-free news for nearly a week, losing more than $200 million in revenues.
“The economic climate for broadcasters had been very difficult over the course of the year and only got worse after Sept. 11. As we look to 2002, it certainly makes sense to re-examine any and all regulations that continue to hinder broadcasters’ ability to grow and survive an increasingly difficult marketplace,” NBC lobbyist Bob Okun said.
There’s also word that the networks and affiliates may be making strides in settling a contentious complaint brought against the nets by the National Assn. of Affiliated Stations (NASA), which represents the more than 600 ABC, CBS and NBC affils.
This would be a key development on Capitol Hill, since pols don’t want to get in the middle of the fight between nets and affils. If there was a settlement, nets and smaller stations groups would be able to better lobby for their respective platforms.
The regulation that nets are fighting tooth-and-nail to get off the books is an ownership cap blocking a broadcaster from reaching more than 35% of the national audience. Since the cap is likely to be overturned by a federal appeals court, smaller station groups may have incentive to go ahead and make some sort of gentlemen’s agreement with the networks.
Even if affils and nets didn’t settle, congressional players could be persuaded in light of the crippling terrorist attacks to back off of any active fight to keep the cap in place.
There’s other fights to be had for broadcasters, chiefly the looming deadline to go all digital.
Broadcasting stations could argue that they’re too financially strapped to make the transition.
Separately, net execs like Karmazin want the FCC ban on owning two nets removed.
There’s also the question of an FCC cross-ownership rule preventing a broadcaster from owning a station and a cable system in the same major market. (This rule also is under judicial review.)
Chester doesn’t see it ending there.
“It’s also about having the Bush administration look the other way when AOL Time Warner or Comcast swallow up AT&T Broadband,” Chester said. “That’s what I see happening.”