Hollywood's biggest moguls went head to head with the television networks' top executives in Washington yesterday in a showdown over the right to control the syndication rights of TV programs.
The studio heads urged the Federal Communications Commission to maintain a set of 20-year-old rules that prevent ABC, NBC and CBS from getting a piece of the lucrative business. The networks' representatives argued that the rules are outdated, unfairly protect the major studios and should be repealed or modified.
Neither side appeared to stake out new ground in the long-running battle, but the hearing provided a final public forum before the FCC takes action on the issue next spring. The financial interest and syndication rules have been one of the most intensely lobbied issues before the FCC since 1983, when the agency voted to scrap the rules, only to have that decision blocked by President Reagan.
Under the "fin-syn" rules, NBC can buy the rights to air "The Cosby Show," for example, but it cannot receive profits once its producer sells reruns of the show to other broadcasters. "Cosby" generated more than $800 million in syndication revenue, although most programs never make it into reruns and end up losing money for their producers.
The hearing generated a cross-fire of charges, and some hyperbole, about which side of the business exerts greater control over the entertainment marketplace. The men from Hollywood asserted that the rules encourage independent production of television programming and serve as a check on the networks' power to act as gatekeepers of what appears on the air and to whom programming is resold.
Walt Disney Studios President Richard Frank argued that networks are still a strong presence, despite their claims that their profits are eroding.
"The networks were a 900-pound gorilla and now they're an 850-pound gorilla," Frank said. "The difference is inconsequential for anyone who has stood in the way of a gorilla."
But the networks' representatives countered that their supposed dominance of the airwaves has been considerably diminished by the growth of cable TV networks, independent broadcasters and the videocassette market.
Several broadcasters pointed out that the rules prevent a network from owning a studio or independent producer, while foreign companies, such as Sony Corp. and Matsushita Electric Industrial Co. of Japan, are permitted to make direct investments in Hollywood.
"There is simply no economic or legal basis" for continuing the policy," said Robert Wright, president of NBC, the most vociferous of the three networks favoring repeal.
Laurence Tisch, chief executive of CBS Inc., went further, saying "the future of free broadcasting in America is seriously threatened, not just for the networks but for our affiliates."
FCC commissioner James Quello indicated at the hearing that he was not opposed to network involvement in the programming business as long as safeguards remained in place to prevent them from denying popular network shows to competitors. The three other commissioners and Chairman Alfred Sikes did not publicly express their preference.