PROFILE: Lowell “Bud” Paxson

Dec 10, 2001  •  Post A Comment

Lowell “Bud” Paxson made clear last week he wants to do a deal that merges his 65 independent TV stations and Pax TV network into a larger media concern.
The legal and regulatory actions Paxson Communications took last week against partner NBC to block NBC’s acquisition of Telemundo are a means to an end, allowing Mr. Paxson to create more shareholder value and to step down.
EM: What in the two years since NBC became your investment partner has caused you to change your plan for building shareholder value?
Mr. Paxson: We need to find one or more strategic partners to absorb our company, because the future for an independent like ourselves is uncertain. We’re going to be able to create five networks on our digital television platform, and we don’t have the resources to develop all of those networks. We’d like to have a programming partner to help us with it We’ve got a great platform, and we think somebody will want it. We sure hope NBC turns around and says to us, `Let’s talk.’
EM: There has been speculation that AOL Time Warner, Tribune Co. or Sony would like to align with or acquire you if there is additional deregulation. And then there always is ABC, Fox and USA Networks …
Mr. Paxson: I can’t comment.
EM: So you don’t think you will remain an independent broadcaster for much longer?
Mr. Paxson: I think that’s correct. I’m happy to get the NBC documents corrected and the relationship worked out. Otherwise, they should let me go. If I can find another strategic partner and sell to become a shareholder in someone else’s company, that’s OK.
America is in a consolidation mode, and consolidation is going to hit television broadcasting. The number of broadcast owners is going to decline greatly over the next four or five years. We have a very unique and attractive platform. We’ll have opportunities in the future to hold discussions with other entities, if that’s what the outcome of this arbitration and our filings at the FCC bring us.
EM: Have you had talks with companies who want to buy you?
Mr. Paxson: There are people who would be interested in acquiring us. There have been no offers, and we’re not out soliciting, but we get calls.
EM: Can the marriage with NBC be saved?
Mr. Paxson: I’d like to finish it, but the truth is we can’t finish it under the current agreements. I’m not trying to extricate the company. I just want them [NBC] to live up to the agreement they signed.
EM: What’s the most extreme outcome of all of this?
Mr. Paxson: I guess it would be that we’ll terminate the agreement and back out of the relationship and go out and look for a buyer for the whole company, or at least a strategic partner. Or [the] FCC could tell NBC they can’t acquire Telemundo.
EM: Based on your experience, can broadcasters accomplish what they need to as strategic partners? It looks like it can only happen through outright merger or acquis- ition.
Mr. Paxson: I would agree with that. In order to comply with the FCC rules, you create these agreements which must provide flexibility to the licensee. I think there are problems with a partnership. It all depends upon the cultures. The culture at NBC and General Electric is different than our entrepreneurial culture.