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NAB Optimistic Big 4 Will Return

Aug 8, 2005  •  Post A Comment

ABC’s surprise announcement last week that it rejoined the National Association of Broadcasters could be the leading edge of a mass network return to the association, with CBS deemed the most likely candidate to follow ABC’s lead.

Fox also may be open to rejoining the organization, but NBC is considered a long shot for now, industry sources said.

The return of ABC was good news for the NAB and the broadcasting industry, because it signals the end of a longtime network boycott that undermined NAB’s prestige and effectiveness as a lobbying organization.

Under last week’s deal, ABC’s 10 owned TV stations and 70 radio stations rejoined NAB, along with the ABC TV Network. In addition, Preston Padden, executive VP of worldwide government relations for The Walt Disney Co., will immediately assume a seat on the NAB board.

All of the Big 4 TV networks pulled the plug on their NAB memberships over the past several years, largely because NAB’s affiliate-dominated board forced the association to fight a network effort to dramatically relax national TV station ownership limits.

But in the wake of the network exodus, the national cap on TV station ownership was permanently set at 39 percent of TV homes, ending a key source of friction between networks and their affiliates.

Of the remaining networks, Viacom’s CBS was putting out the most encouraging signals for NAB.

CBS Executive VP Marty Franks told affiliates after ABC’s announcement that the network is open to rejoining NAB, depending on the direction the association takes and who is chosen to succeed NAB President and CEO Eddie Fritts, sources said.

NAB’s board is expected to name Mr. Fritts’ successor as soon as October, sources said. Interestingly, Mr. Franks has been mentioned as a candidate to succeed Mr. Fritts, along with Mitch Rose, VP of government relations for The Walt Disney Co. (TelevisionWeek, April 18). The NAB executive committee is planning its second round of interviews Aug. 18, a source said.

At least some speculated that Fox might also be amenable to rejoining, because NAB lobbied vigorously against an effort by EchoStar to acquire DirecTV, clearing the way for Fox parent News Corp. to buy the satellite provider. Said a Fox source, however, “There are no current plans or discussions under way.”

NBC, which declined comment last week, is perceived to be a particularly tough sale for NAB because the Peacock Network appears to be staking future growth on cable TV investments.

NAB spokesman Dennis Wharton appeared hopeful that ABC’s move would be a trendsetter. “Wounds take time to heal. We’re cautiously optimistic that over time the other networks will see the value in being under the NAB umbrella,” he said.

Receiving particular credit for initiating the ABC talks was Russ Withers, an NAB radio board member who owns Withers Broadcasting.

Aside from adding to NAB’s prestige, ABC’s return to the fold is expected to add more than $500,000 in annual dues to the association’s coffers, sources said.

Sources also said ABC’s Mr. Padden wanted to rejoin the organization before Mr. Fritts’ successor is named as a tribute to Mr. Fritts, who alienated some affiliate members on his board by championing compromises that were intended to keep the networks as NAB members.

As a critical part of the negotiations with ABC, a source said, Mr. Padden wanted assurances that NAB wouldn’t use the network’s dues to lobby against ABC’s interests-a key concern spurring ABC to leave NAB in the first place.

But the best Mr. Padden could get from NAB was an assurance that the association would try to consider the conflicting interests of its members when staking out lobbying positions. With a seat on the NAB board, however, Mr. Padden has an insider’s opportunity to influence policy, or at least anticipate what issues may be coming down the pike at the organization for defensive purposes.

With the conflicting business interests of NAB’s members, “It is not surprising that members may disagree about the best course of action on important topics, nor is it surprising that the association occasionally takes positions that are at odds with the sincere interests of some of its members,” Mr. Fritts and NAB Joint Board Chairman Bruce Reece wrote in an Aug. 3 letter to Mr. Padden. “Thus, while we cannot promise you or any other member that you will see eye to eye with NAB 100 percent of the time, we now have systems and procedures in place to give you and all other members the opportunity to be heard.”

In the letter, Mr. Fritts and Mr. Reece wrote that the board is meeting more frequently to assess potential problems, and the executive committee is trying to connect more frequently with the board. In addition, the letter says NAB has adopted “new dispute resolution mechanisms.”

Mr. Padden said in a statement last week that “with policy differences now behind us, ABC and NAB are once again in a position to work together toward our important common goals.” Of all the Big 4 TV networks, it is ABC that has recently turned into a bit of a maverick.

ABC, for instance, declined to join the other three networks earlier this year in forming TV Watch, an organization established to fight escalating efforts by the federal government to crack down on off-color programming.

Breaking ranks with others in the industry, ABC parent Disney has also argued that the industry would be better off if lawmakers extended broadcast indecency regulation to cable’s enhanced basic tier than if cable were forced to provide a family-friendly tier of programming or to offer their programming a la carte.

“This is great news for NAB, ABC and the entire broadcast industry,” said Mr. Fritts of ABC’s decision to rejoin NAB.

Added Mr. Reese: “We are proud to welcome ABC back into the NAB family. ABC stations have a well-deserved reputation for delivering high-quality news and public service, two of the hallmarks of local broadcasting.”