Television networks, stepping up their campaign against 20-year-old rules that limit their role in producing and syndicating programs, are waving a politically charged weapon that is used with increasing frequency in the disputes of corporate America: economic nationalism.
In a press conference here on the rules yesterday, NBC President Robert C. Wright pointed out that foreign-owned Hollywood studios will supply one-third of U.S. network prime-time series this season if MCA Inc., owner of Universal Studios, is purchased by a large Japanese electronics company.
Wright said he did not object to the purchase, proposed by Matsushita Electric Industrial Co. But he and other executives at U.S. networks have frequently pointed to the growing foreign holdings in Hollywood and attributed it in part to the rules.
CBS Chairman Laurence A. Tisch, in a letter this week to Federal Communications Commission Chairman Alfred C. Sikes, raised the nationality issue too. "A continuation of U.S. regulations protecting foreign-owned mega-studios from the competition of American-owned networks ... is ludicrous," he wrote.
The networks raise other objections, which most analysts feel will hold more sway with policy makers than foreign ownership. Most important is the argument that studios have grown in market strength and networks have declined since the rules were imposed in 1970 with the stated purpose of reining in network control over program production.
The networks' push comes as the FCC is considering changes in the rules, which essentially bar U.S. networks from owning production studios if the studios are involved in the huge business of syndicating re-runs, as most of them are.
Matsushita's discussion with MCA follows the sale of Columbia Pictures Entertainment to Sony Corp. earlier this year. News Corp. of Australia owns Twentieth Century Fox and the Fox television network, while Pathe Communications, controlled by an Italian financier, is buying MGM/UA Communications Co.
Critics on Capitol Hill and in various think tanks have said that these sales could give foreign interests improper influence over American public opinion.
The networks' opponents, however, discount such arguments, saying nationality of owners is irrelevant, because it is the networks that decide whether a particular show is ever aired. U.S. companies other than networks are free to bid for the studios, they point out. Raising the issue of foreign ownership is "good theatrics," said Jerry Leider, who heads a caucus of producers, writers and directors that opposes changes in the rules. "But I don't really understand the significance of it."
NBC also complains that current U.S. rules hinder networks' ability to compete overseas, by limiting their role in ventures that syndicate foreign-produced programming in the United States. "From a policy perspective, that's 'Alice in Wonderland,' " said Richard Cotton, NBC's general counsel. "It makes no sense."
In raising the nationality issue, the networks are following a familiar trail. Companies fighting unsolicited takeovers from abroad, such as high-tech materials maker Norton Co. and food giant Pillsbury Co., have tried on occasion to create a political issue of nationality to help block the sale.