Disney Out of Cap Fight

Aug 11, 2003  •  Post A Comment

In a blow to the broadcast network effort to preserve the Federal Communications Commission’s 45 percent cap on national TV ownership-or at least to the appearance of network unanimity on the issue-representatives of The Walt Disney Co. have thrown in the lobbying towel, sources said last week.
“Disney lobbyists have indicated that the company is no longer playing hard on this issue,” said one well-placed congressional source.
In a show of unity, ABC parent Disney and the other major networks-Fox, CBS and NBC-had been urging lawmakers to kill legislation that would roll back the cap to 35 percent. But sources said Disney reconsidered its involvement after the network effort suffered a series of legislative reversals in Congress, capped by last month’s 400-21 vote by the House of Representatives to approve an appropriations bill with a rider that would roll the cap back to 35 percent.
Disney has always had less reason than the other networks to fight for the cap increase because its ABC owns only 10 TV stations, reaching 24 percent of the nation’s TV households, leaving it plenty of room to grow before reaching a 35 percent limit.
NBC, however, already owns stations reaching 34 percent of homes, while Fox is at 37.8 percent and Viacom is at 39 percent, more than a rolled-back cap would allow.
A source close to the issue said some ABC representatives also perceived that a 35 percent cap could be in their best financial interest, at least in the short term, because it frees them to buy stations without having to worry about competition from Fox, CBS or NBC. As a result, ABC officials decided they were burning political capital unnecessarily, according to a congressional source.
Affiliate sources said ABC representatives made clear in the past the cap was not a big issue for the company. An ABC spokesman declined comment.
Also last week, the Network Affiliated Stations Alliance asked the Court of Appeals in Washington to overturn the FCC’s June 2 decision to raise the cap on national TV ownership from 35 percent to 45 percent of the nation’s TV homes. In a filing with the court, NASA alleged that the decision was “arbitrary, capricious and otherwise not in accordance with law.”
In a separate filing with the court, the National Association of Broadcasters also appealed aspects of the FCC media ownership rulings dealing with radio ownership and a provision that many broadcasters believe fails to provide sufficient duopoly relief.
On a related front, the FCC announced that its new media ownership rules will go into effect Sept. 4, 30 days after they were published in the Federal Register. There’s still a freeze on filing merger applications, pending Office of Management and Budget approval of the new forms for the deals. But that approval is expected within the next couple of weeks.
An FCC source said the agency is free to begin processing the applications as of Sept. 4, even though leading lawmakers are threatening to overturn critical parts of the FCC’s deregulation. One industry source said Congress will have at least two months to intervene before the first deals can be done, because it takes the FCC at least that long to process a routine application.