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Jul 23, 2003  •  Post A Comment

News Corp. Demands Retraction From McAuliffe

A day after Democratic National Committee Chairman Terry McAuliffe accused Fox of “a blatant, partisan attempt to aid the Bush White House” by becoming “the only network in Wisconsin” to refuse to run an anti-Bush ad on its station in Madison, Fox parent News Corp. demanded a retraction of Mr. McAuliffe’s charges. Sinclair Broadcast Group owns the station, WMSN-TV, and Fox had nothing to do with the rejection of the ad, News Corp. said.

Mr. McAuliffe’s statement, posted on the DNC Web site, also appears to confuse Fox with Fox News Channel and attributes the latter’s slogan to the former, which is a distinct corporate entity from Fox News.

“Either Mr. McAuliffe does not understand the basic relationship between networks and their affiliates or he made a deliberately misleading and inflammatory statement,” said the News Corp. statement. “In either case, Mr. McAuliffe should immediately retract his incorrect accusations against Fox.”

“Unfortunately, it is erroneous statements like these made by groups such as the DNC that have led to a gross misunderstanding of the facts surrounding the media ownership debate in Washington,” concluded the News Corp. statement.

The ad, which is airing on other stations in the area, focuses on the most disputed 16 words of President Bush’s case for going to war against Iraq. It shows the president saying, “Saddam Hussein recently sought significant quantities of uranium from Africa.”

Sinclair VP and general counsel Barry Faber rejected the ad as “misleading” because it omitted the first six words of that sentence: “The British government has learned that …” Mr. Sinclair said WMSN-TV had said it would run the ad-and continues to be willing to run the ad-if those words were included in the 30-second spot.”

“In the world of 30-second ads, that is nonsense, utterly nonsense. We entirely reject the notion that this is misleading,” said DNC spokesman Tony Welch, who was surprised to be told that WMSN-TV is not owned by Fox.

TVB Study Says Television Still Dominant In U.S. Homes: Television continues to dominate the media usage habits of Americans, outscoring the Internet, magazines, newspapers and radio, according to a Nielsen Media Research survey commissioned by the Television Advertising Bureau. The not-for-profit TVB (www.tvb.org) is the trade association of local television broadcasters. The survey of 1,017 adults was conducted in January. The findings include:

Television reaches more adults each day than any other medium (90 percent of those surveyed reported watching television in the previous 24 hours, as opposed to 72.8 percent who listened to radio, 65.2 percent who read a newspaper, 51.1 percent who used the Internet or 48.0 percent who read a magazine).

Adults spend significantly more time with television than with other media (258.4 minutes in the previous 24 hours as opposed to 120.7 minutes for radio, 65.8 minutes for the Internet, 32.4 minutes for newspaper and 18.3 minutes for magazines).

Americans say television is the medium where there are most likely to learn about products or brands (57.2 percent cited television, 17.0 percent for magazines, 12.6 percent for newspapers, 9.8 percent for the Internet and 3.4 percent for radio).

Broadcast television is cited by more adults than any other medium as their primary news source (broadcast TV was named by 43.6 percent, cable TV by 28.0 percent, newspapers by 12.1 percent, radio by 9.2 percent, public TV by 3.9 percent and the Internet by 3.2 percent). Asked to name their first source for local weather, traffic or sports, 48.1 percent named broadcast TV, 17.3 percent cited cable TV, 14.2 percent said radio, 9.4 percent cited the Internet, 7.7 percent named newspaper and 3.4 percent cited public TV. Asked which was their most influential news source, 46.6 percent of adults named broadcast TV (as opposed to 36.9 percent for cable TV, 6.4 percent for newspapers, 4.4 percent for public TV, 3.7 percent for radio and 1.9 percent for the Internet.

Asked to cite which medium was the most involved in their community, 50.4 percent named broadcast TV (as opposed to 22.4 percent for newspapers, 14.1 percent for radio, 6.3 percent for cable TV, 5.3 percent for public TV and 1.5 percent for the Internet).

Powell Defends FCC’s Deregulation Decision: With the threat of a major legislative rebuke from Congress looming, Federal Communications Commission Chairman Michael Powell today issued a statement defending the controversial June 2 decision by FCC’s Republican majority to relax the agency’s media ownership restrictions.

A growing chorus of critics has been alleging that the decision runs afoul of public interest by paving the way for a handful of media conglomerates to dominate the nation’s media. But in his first formal statement on the subject since the FCC’s vote, Mr. Powell said he believes that the agency’s Republicans have created rules that reflect the realities of today’s media marketplace and benefit the public.

“We are confident in our decision,” Mr. Powell said. He issued his statement shortly before the House of Representatives voted 440-21 this afternoon to approve an appropriations bill that would overturn a significant part of the FCC’s decision by rolling back the cap on national media ownership to 35 percent.

In the wake of the vote, the Network Affiliated Stations Alliance, which has been leading the lobbying charge for the cap rollback, said the House vote would “preserve localism and competition” by suspending the FCC’s decision to raise the cap to permit broadcasters to buy stations reaching 45 percent of the nation’s TV homes.

“We also are encouraged that the House defeated an amendment on newspaper cross-ownership and duopoly that would have been a setback to localism,” said Alan Frank, NASA chairman and president of Post-Newsweek Stations. “We look forward to keeping the 35 percent cap legislation clean and focused on preserving localism.”

FCC’s Copps Calls Broadcast License Renewals ‘Farce’: Federal Communications Commissioner Michael Copps announced plans today to take his agency road show nationwide to determine whether incumbent radio and TV licensees are doing enough to serve the public interest to warrant renewal of their broadcast licenses.

At hearings today before the Senate Commerce Committee, Mr. Copps, one of two Democrats on the five-member FCC, said the agency’s current renewal procedures are so lax that they essentially amount to automatic renewal for incumbent broadcasters. “It’s a farce,” Mr. Copps said. To add heft to the process, he said he plans to organize field hearings in communities around the country as license renewals for stations start coming due this fall.

“How can we know if licensees are serving their local communities without hearing from the local community?” Mr. Copps said. “I intend to go to local communities to listen and to learn.”

Also at the hearings, Sen. John McCain, R-Ariz., the committee’s chairman, said he is considering sponsoring legislation that would reduce broadcast license terms from eight years to three and shift more of the burden to licensees to demonstrate why a license renewal is warranted.

Sen. McCain also said he plans to introduce legislation next week that would require broadcasters to provide some coverage of political candidates and issues. Versions of the bill he has introduced previously also would have required broadcasters to pay spectrum fees to help underwrite political ads. “The purpose of the legislation is to increase the flow of political information in broadcast media and to reduce the cost to candidates of reaching voters,” Sen. McCain said. Mr. Copps used a similar series of agency field hearings to publicize the efforts of his GOP agency colleagues to relax the agency’s media ownership restrictions.

Also at the hearings, the Lear Center for Local News Archive and the Alliance for Better Campaigns released studies that said six out of 10 top-rated news broadcasts contained no campaign coverage whatsoever in the seven weeks leading up to last year’s elections and that stations
jacked up the prices of candidate ads by more than 50 percent in the two months before the vote. Dennis Wharton, a spokesman for the National Association of Broadcasters, said the Lear study is misleading because it failed to consider debate time offered by broadcasters and because it failed to examine early afternoon newscasts, Sunday morning talk shows and programs such as ABC’s “Nightline.”

“To my knowledge, there has not been one finding by the FCC that stations overcharge candidates,” Mr. Wharton added.

AOL Time Warner Q2 Profits Tripled: AOL Time Warner on Wednesday said its second-quarter profit almost tripled from a year ago, thanks in part to one-time gains associated with its settlement of a lawsuit with Microsoft and the sale of its 50 percent interest in cable channel Comedy Central. However, the company hinted that the federal probe into the accounting practices at its America Online unit might lead to further earnings restatements.

The media giant, which has been rocked by accounting scandals, mounting debt and a reversal of fortune at its once-hot online unit, reported a profit of nearly $1.1 billion, or 23 cents a share, versus a year-earlier profit of $396 million, or 9 cents a share. Revenue during the period rose 6 percent to $10.8 billion.

“We are firmly on track to meet all the key business objectives for the full year,” Chairman and CEO Richard Parsons said during an earnings call.

Mr. Parsons noted the company was able to reduce its debt by $2 billion to $24.2 billion at the end of the second quarter. And he said the company was on target to continue to generate robust levels of free cash flow this year.

While the online business continued to decline, other divisions, including television and cable, delivered strong growth in the quarter, with revenue at the cable and networks units rising 9 percent to $1.9 billion and 10 percent to nearly $2.2 billion, respectively.

The potential for more earnings restatements developed after the Securities and Exchange Commission, which is investigating how the online unit booked advertising revenue, determined that a $400 million payment made to AOL by German media company Bertelsmann was improperly booked as advertising revenue instead of as a reduction in the purchase price for Bertelsmann’s stake in AOL Europe.

AOL, whose auditors maintain the payment was correctly accounted for as ad revenue, said it won’t proceed with a highly anticipated initial public offering of its cable unit until the matter is resolved. Not that there’s any rush: Mr. Parsons stressed that AOL will be able to meet its balance sheet objectives with or without a cable stock offering.

“Nevertheless, we like the cable business, and going forward, as we think about 2004, 2005 and 2006, we would like to have a bigger footprint,” he said, adding that it might be wise to spin out the cable unit in order to take advantage of any cable industry consolidation.

Cablevision Intros Spanish Tier In NYC Area: Cablevision introduced Wednesday a Spanish-language programming tier in New York that includes on-demand service in Spanish. iO en Espa — ol consists of 30 Spanish-language networks in addition to the Spanish-language networks the operator currently carries: Galavision, Telemundo, Univision and TeleFutura.

The new digital service will feature networks such as CNN Espa — ol, Discovery en Espa — ol, Cartoon Network en Espa — ol, Toon Disney Espa — ol, Fox Sports World Espa — ol and MTV Espa — ol. In addition, the VOD service “World Picks: Latino” contains 20 hours of Spanish-language content from around the world, refreshed regularly. The digital package is available in Brooklyn and the Bronx, N.Y., and Newark and Hudson County, N.J., and costs $14.95 per month.

NFL and IBM In Digital-Media Deal: The National Football League has forged a three-year partnership with IBM to create a next-generation technology platform and develop a digital media strategy for statistics, Web applications, streaming video, e-commerce and on-demand access.

As the technology partner, IBM’s role is to assist the league in designing a digital-asset-management solution for the NFL’s more than 80 years of video, audio and photographic assets. The goal of the partnership is to allow NFL Films, the teams and broadcasters to better manage and distribute content securely. Under the agreement, IBM will also be a charter advertiser for the NFL network, the league’s new programming service debuting Nov.4.