Viacom makes NAB break over station cap

Apr 9, 2001  •  Post A Comment

In a blow to the prestige of the National Association of Broadcasters, Viacom’s CBS Television and Infinity Broadcasting last week pulled their 35 TV stations and more than 180 radio stations out of the trade group.
CBS’s major beef, according to sources, was the NAB TV board’s refusal to reconsider its staunch opposition to a network campaign to ax a federal rule barring broadcasters from reaching more than 35 percent of the nation’s TV households.
“It has now become clear that we cannot remain within an organization that is actively working against [CBS’s] objectives,” said the network, in a statement.
“Deregulation cannot in good conscience be approached piecemeal, selecting for elimination those that directly help one’s company while supporting those that hamstring a competitor,” added Leslie Moonves, CBS TV president and CEO, and Farid Suleman, Infinity president and CEO, in a joint letter to the NAB. “We must reject an agenda that is inconsistent and misguided and which fails to address the very real competitive and technological challenges to our industry’s future.”
The fight over the cap has divided affiliates and their networks for the past several years, with the networks contending they need to beef up their station portfolios to compete with the cable giants.
But affiliates fear that easing the cap will give networks too much additional power over them.
The battle has been particularly visible at the NAB because the association’s affiliate-dominated TV board has forced the organization to lobby for the cap-and NBC and Fox Broadcasting Co. have already bailed out of the association, chiefly over the cap conflict.
In a brief statement, NAB said it was “regrettable” that CBS had followed the other major network members out the door.
Preston Padden, executive vice president, government relations, The Walt Disney Co., said ABC had decided to remain on board-even though it is now the association’s only major network member.
“ABC will remain a member of NAB and work from inside the organization with the twin goals of restoring broadcast industry unity and embracing consistent and principled deregulation of broadcast ownership rules,” Mr. Padden said.
Alan Frank, president of Post-Newsweek Stations and an NAB TV board member, said several station representatives tried to persuade CBS to stay.
“But they are electing to make the cap a litmus test, and that’s their choice,” Mr. Frank said. “We believe that for the good of the American broadcast system and what it stands for-localism and diversity-the cap is very important.”
In a last-ditch effort to keep CBS on board, Eddie Fritts, NAB president and CEO, had proposed to convene a special board meeting of the association’s radio and TV boards to consider taking a blanket policy of neutrality on all the battles that divide the networks and their affiliates.
But network sources said NAB TV board members derailed the initiative, fearing they might lose a vote that included NAB radio board members.
Ben Tucker, NAB TV board chairman and president of Fisher Broadcasting, said the cap issue had been voted on repeatedly and ratified by the radio board several times previously. “There was no need to bring it up again,” Mr. Tucker said.
No matter how important the cap battle, some broadcasters were making clear that they believe it would be far better for the industry to work together.
Jeff Smulyan, chairman and CEO of Emmis Communications, said unity may be critical to ensure the industry’s survival.
“Broadcasters have to work together to try to figure out a way to save free TV,” Mr. Smulyan said.
Bill O’Shaughnessy, chairman of Whitney Broadcasting, said it would behoove the NAB to focus on its central mission: protecting the industry from government incursions.
“When you have to draw the wagons in a circle, the circle is smaller and provides a less effective haven if the big wagons are not available,” he said.