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Editor's letter.

The general impression is that, if the FCC rescinds the Fin-Syn rules, the networks will win and, if the rules are retained, the studios will win.

The way I see it, the networks will lose more if the Fin-Syn rules were to be completely eliminated.

As soon as the Fin-Syn rules are removed, the studios will certainly buy the networks out.

Someone should explain to me how this could benefit the independents (as indicated in an editorial by The New York Times). Under the proposed revised rules, the networks could have a financial interest in overseas production. What could be better for bringing foreign programs into the U.S.? Plus, the networks could produce as much as they want and sell it to the U.S. and the international marketplace.

To me, the game plan is the following: The networks want the Fin-Syn rules removed so that they can be sold to the studios at a premium. The studios want to keep the Fin-Syn in place so that they can negotiate better prices or delay the deals after a more favorable economic environment. Also, Pac Tel's cable deal could offer a precedent, since telcos, at present, cannot own cable systems: A studio could finance a third party to buy a network with the proviso that it will eventually be sold to the studio at a set price, when the Fin-syn is rescinded.

Today, the only Hollywood studios that could buy a network are Walt Disney and Paramount.

Warner's large debt, Columbia and MCA's foreign ownership and Fox's current set up, limit the possibilities. It is possible that Disney will buy CBS and Paramount will buy ABC "back" (United Paramount Theatres merged with ABC in 1951, after UPT separated from Paramount Pictures).

What is unlikely is a network buying a studio.

Studios have proved to be able TV channel programmers (USA Network, Disney Channel, HBO, etc.), the broadcast networks have yet to develop successful production units.

It could be argued that the last network to remain out of a studio's embrace could suffer the most terms of its saleability. A solution could be to have a foreign studio entity buy the network "service" and spin-off the networks owned and operated TV stations to an independent company, in which a foreign-owned studio can own up to 20 percent. It is also possible that GE's NBC could be sold to a group of minor studios (in the USA Network fashion, which is owned by Paramount and MCA). GE Credit could even finance such a transaction.
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Title Annotation:Syndication and Financial Interest Rules are a no-win proposition for the networks
Author:Serafini, Dom
Publication:Video Age International
Article Type:editorial
Date:Apr 1, 1991
Words:422
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