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Quality Popular Television Cult TV, the Industry and Fans

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Edited by Mark Jancovich and James Lyons

• Publishing Contents

Acknowledgments \-j 1 Notes on Contributors IX

1. Introduction Mark [ancoincb and James LyollS

Part One: Industries, Networks and Programming

2. Vertical Vision: Deregulation, Industrial Economy and Prime-time Design Jennifer Holt 11

3. 'Must See TV': Programming Identity on NBC Thursdays Nancy San Martin 32

4. The Changing Face of American Television Programmes on British Screens Paul Rixon -lk

Part Two: 'Content is King'; Formats, Shows and Events

5. Long-format TV: Globalisation and Network Branding in a Multi-Channel Era John McMurria h5 First published in 2003 hy the British film Institute 6. 'Must See' Queer TV: History and Serial Form in Ellen 21 Stephen Street, London WIT lLN Anna McCartby ss 7. 'You're not going to see that on TV': SIal' Trek: The Next Generation in The British film Institute promotes greater understanding of, Film and Television and aCCt:SS to, film Jnd moving image culture in the UK. Roberta E. Pearsall and IvIdire Messenger-Davies Hi)

Copyright © Mark Jancovich and James Lyons 8. Brave New Buffy. Rethinking 'TV Violence' Lisa Parks 111'

Cover design: Mark Swan Part Three: Commodity Audiences: Cults, Fans and Dedicated Audiences Set by Alden J)ookset, Northampton 9. Martial Law and the Changing Face of Martial Arts on US Television Printed hy Bell and Baill, Glasgow, Scotland Andrew iY/illz~' 137

British Library Cataloguing-in-Publication Data 10. Superman on the Set: The Market, Nostalgia and Television Audiences

~.,!,;,~ Jan Gordon 1

A catalogue record for this hook is available from the British Library 11. \1GTeh Wars: Resistance, Online Fandom and Studio Censorship JSBN 0-85170-941- '-) (pbk i Sara Gicenllian [ones 163 JSBN 0-8)170-9·.jO o (l.bk ) Introduction

Mark Jancovich and James Lyons

In the mid-1990s, in a bar in Staffordshire, England, Peter Kramer made a heretical claim: American fictional television is now better than the movies! He therefore chal­ lenged anyone to name a detective film of the past fifteen years that was as good as an

average episode of NYPD Blue or Homicide: Lije 011 the Streets; a horror film thai was as good as an average episode of 'foe X Files or BullY tbc \,lampir/' Slayer; or a romantic comedy that was as good as anyone of a score of television sitcoms. Many shows were now so compelling, he claimed, that 'a life is something you get when there is nothing on television'. For Kramer, this situation could be linked to the demise of the 'classical' Hollywood studio system, and the emergence of a flexible mode of Hollywood film production (see Kramer, 1996, 1998,2001; see also Neale and Smith, 1998). He suggested that while films are now usually made as one-off events, the regularised production of program­ ming on television generated a wealth of rich, intertextual references not unlike the films of 'classical' Hollywood, and made the viewing of these shows essential and compulsive. For example, each minor event on Buffy the Vampire Slayer is contextualised with hours of prior narrative or 'backstory' that invests each moment, and the characters' responses within it, with a weight of nuance and significance. Kramer is not alone in this celebration of contemporary television. Indeed, over the past twenty years television programmes, and the academic analysis of them, have under­ gone a discernible transformation. David Marc, for example, refers to the 'literate peak' of the sitcom genre, which he identifies with a series of shows from the 1970s such as All in the Famtly and M"A ':T'B. While he concedes that these shows 'did not bring about the sitcom millennium' (Marc, 1989, p. 200), their influence has nevertheless been crucial, and none more so than The Mary 'lvlcrMoore Show. The Mary Tyler Moore ShOlL" launched the production company MTM, which not only produced some of the most revered shows in Television Studies, shows such as LOll Crans, 5t Elscicbctv and Hill Xtrrct Blues, but also created the template for many later shows (see Feuer, Kerr and Vahimagi, 1984). For example, IvITM established the career of Steven Bochco, who would later produce NYPD Blue - itself a template for numerous other shows. Furthermore, genre redefining sitcoms such as Taxi and Cheers had 'production teams [that] were rife with ---- NLl']'vLveterans' (Marc, 1989, p. 201). ~------_------l .\', ~ ~ ,

post-war period (Schatz, 1993) rather than the regularised product that the studio Another key moment was the launch of David Lynch's TWill Peaks, a show that promised to 'change TV (advert republished in Collins. J992) and usher in the era of system produced in the 1930s and 40s. As a result, it is possihle to argue for an alternative history of 'must see' television and post-modern television (ibid.). In retrospect, 'hoi): Peaks could be said to have trans­ one that is necessarily much less celebratory. As network audiences declined in the bee formed television, but not quite in the ways that were initially predicted. On the one of competition from the proliferation of cable and satellite channels in the J980s, the hand, it created a transatlantic cycle of programmes about idiosyncratic communities networks became less concerned with attracting mass audiences and increasingly that continues today and ranges from the sublime (Northern Exposure, Piclect Fences, concerned with retaining the most valuable audiences; affluent viewers that advertisers Fcrie , Indit1Jhi) to the ridiculous (l3

Bibliography Bourdieu, Pierre, Di\"tillctiofl A Socia! Critique ojtb: Judgeme/lt of Tasle (London: Routledge, Industries, Networks and Programming 1984), Brunsdon. Charlotte, Serei'll Tastes. Soap Operasto Satellite Dishes (London: Routledge, 1997). Collins, Jim, 'Postmodcrnism and Television', in Robert C. Allen (ed.), Cbarmels 0/Discourse Rml:\'c!!Ihlcd (London: Routledge, 1992), pp. 327-53. Feuer, Jane, Kerr, P"u] .md Vahirnagi, Tise, !vltAf 'Q/I,zlity /(1cvi,ion' (London: BFI, 1984). GamhalTl, Nicholas, C and Comnaaacation: Global Culture and the Economics of III/or1l1,7Iiul/ (London: Sage, 1990). Jancovich, Mark, '11. Real Shocker: Authenticity. Genre and the Struggle for Cultural Distinctions'. Continra.m, vol. 14, no. 1 (April 2000), pp. 23-·.35. Jenkins, Henry, '}ex//I';[ Poacbcrs: Tc!el'iw'oJl, Fans dlld Participatory Culture (New York: Routledge, (992). Kramer, Peter, 'The Lure of the Big Picture: Film, Television and Hollywood', in John Hill and Martin Mcl.oonc (cds}, BI:~ Picture, Small Screen Tbe Relations bcucccn Film and 'Ieleuision (Luton: John Lihbey, 1996), pp. 9-46. Kramer, Peter, 'Post-classical Hollywood', injohn HiJlnnd Pamela Church Gibson (eds), The O,/ord Gi,ide to Film Srurlic: (Oxford: Oxford University Press, 1998), pp. 289-309. Kramer, Peter, '''It's aimed at kids - the kid in everybody": George Lucas, Star W~m and Ch ildrcri's Entertainment', in Scope: Jln Online Journal 0/Film Studies (December 2001),

Marc, David, Comic Visioll: Tclcoision Comedy 1111,1American Cultun: (Boston: Unwin Hyman, 1989L Morley, David and Robins, Kevin, Spell'C\ ofIdcntitv. Global AIedia, lilectronic Landscapes and Cldtill'tilHound"ri,'s (London: Routledge, 1(95). Mulgan, Geoff !,d.), The QUI"stiol1 of Quality (London: BFT, 19(0). Ncal«, Steve and Smith, Murray (cds l, Contcinporarv Hollywood Cinema (London: Routledge, 1998). Schatz, Thomas, 'The New Hollywood', in Jim Collins, Hilary Radner and Ava Preacher Collins (cds), Film Theory Goes to tbc Mol'ii's (London: Routledge, 1993), pp. 8-36. Webst"r, Duncan, Lool:« Yonder.' The Il71agilhl!Y America 0/Populist Culture (London: Comedia, 1988). WiliiC1!11S, Raymond, Lclcrision: Tixhilology and Cultur«! Form (London: Fontana, 1974). 2

Vertical Vision: Deregulation, Industrial Economy and Prime-time Design

Jennifer Holt

Introduction; what's on TV... and why? 'X'ith increasing mergers, acquisitions and takeovers, the American broadcast industry has become a complicated and tangled web of 'webs'. Since the mid-1980s, the playing .icld has been dramatically reconstructed - twice. Rivals in all facets of the business now rind themselves under one vertically integrated corporate umbrella or another, rendered r-oth competitors and collective assets by virtue of their parent companies' vast size. In light of this transformation, Peter Bart of Variety has noted that to survive in the present media marketplace, a major player must 'mobilize a vast array of global brands to command both content and distribution. Indeed, such an enterprise must be more than a company - it must be a virtual nation-state' (Bart, 1996, p. 10). The companies that control the airwaves today are precisely that: a high-powered cabal of entertainment empires, dominating film, television, publishing, cable systems, home video, music, merchandising and theme parks - all at the same time. Consequently, to maintain their sovereignty, the CEOs of these conglomerates are constantly redehn­ ing the art of vertical integration in a new and paradoxical market - one that is simultaneously driven by segmentation and unified vision, broad range and specific demographics, localism and global scope, expansion and consolidation. Just a glimpse at their broadcast properties alone shows the principal TV players in the year 2000 I,AOL Time Warner, Disney, and .) owning five of the six broadcast networks, eighty affiliates in major US cities, extensive distribution systems and the majority of programming being produced for air on these channels (see Compaine and Gomery, 2000). The catalyst for this present industrial design has been the striking turn in the politi­ cal philosophy behind broadcast regulation over the last twenty years. A frantic cycle of crisis and expansion that began in the 1980s coupled with a presidential administration devoted to deregulating the marketplace set the industry on its course. By the mid-1990s, with a new structural groundwork in place, the broadcast networks entered another phase of frenzied merger and acquisitions activity characterised by an unprecedented commitment to vertical integration and 'synergy'. In 1995 alone, Disney announced a $19 billion deal to buy ABC, Westinghouse acquired CBS in a $5.4 billion merger ~' and two new networks were born, conceived hy srudio-based conglomerates in the throes i'~gulatory debate, equated the public interest 'with the profit interest and to some e:,rc>l~\. of deregulation (Viacoms UPN and AOL Time Warner's \'V'B). e'en redefined the mandate of the FCC. Deregulation was officially sanctioned and" This new state of affairs also requires a new manual for conducting business; as own­ .: result, the concept of the broadcaster as public trustee swiftly deteriorated and the ership has changed, so have the rules of the game and in turn, so have programming airwaves became another commodity on the open market. options. Boundaries between production, distribution and exhibition have collapsed to \'{lhile they had historically been safeguarded hy their relationship with the FCC, rh,~ the point ttwt the old edicts no longer apply. As a result, the industry is adapting to a networks were now being exposed to the vagaries or the changing marketplace. \\7ith the new vision of television buil t largely on faith in a modern version of synergy that requires TOle of the commission changing, broadcasters could no longer rely on the FCC for a the vast media resources of entertainment conglomerates to feed off themselves, ren­ certain measure of security and protection and, as a result, were left quite vulnerable in dering industrial organisation a prominent factor in determining what's on TV This an increasingly unstable industry. The aggressive competition signalled by a cb,m&ii\2 concept of 'must sec' TV in the literal sense raises powerful questions regarding the marketplace substantially reduced the networks' profits and threatened their livelihood corporate structure of the American television industry and its effect on the television \\:hat ensued was a complicated battle over the business of home entertainment in the schedule. Primarily, how does the current industrial economy of tightly diversified, 1980s that fundamentally reshaped the structural foundation of the broadcast indusu. vertically integrated entertainment conglomerates impact programmmg decisions? Furthermore, how has regulation dictated the course of the relationships between 'It really all comes down to government regulations'. John Malone, networks, independent producers, Hollywood studios and their parent companies? President and CEO, TCI Ultimately, 1 will argue that the concept of 'must see' can also be interpreted as a man­ The FCC under Fowler moved to dismantle numerous fundamental regulations 111 date ofindustrial economy and government regulation as opposed to solely a marketing broadcasting, Ho-wever, the complications of new technology, cable, a rapidly evolvinc design or textual paradigm. corporate geography and the industry's renewed global emphasis had made maintaining a free, unregulated and profitable market very tricky. One of the FCC's most contcntiou-. 'Television is just another appliance. It's a toaster with pictures.' Mark campaigns was waged to raise the limits on ownership of broadcast properties from seven Fowler, FCC Chairman 1981-6 to twelve stations, which took effect in 1985. This was allowed with the provision thal With President Reagan's appointment of Mark Fowler as chairman of the Federal Com­ the twelve stations together reached no more than 25 per cent of the nation's homes. munications Commission (FCC) in 1981, the deregulatory swing that began during the The newly established '12-12-12' law additionally contributed to the substantial increase late 1970s under such chairmen as Charles Ferris was institutionalised. Reagan and in advertising ratings and station prices, as these perceived values skyrocketed a)o J11i Fowler shared the common vision of an unfettered marketplace. Suddenly 'there was a with demand. sense that you could do whatever the hell you wanted' in the broadcast industry, accord­ The repeal of the 'anti-trafficking' provision was another move by the FCC tlnt ing to then CBS News president, William Leonard (Hertsgaard, 1988, p. 180). It was alerted potential players to sit up and take notice. Owners had been required to retain during this period that the agency began to be described as the industry lap dog instead stations for three years before selling them, but the reversal of this law in t982 elimi­ of the watchdog it was intended to be. Fowler became known as the darling of the nated that requirement altogether. This ruling subsequently encouraged the practice d broadcast industry with his mantra of 'Let the market prevail I , and he aggressively 'flipping' stations for a profit and further inflated station values. After the FCC also pursued a pro-network agenda throughout his term of office. decreased the processing time for broadcast licences and increased ownership limits, the The eradication of structural and content regulations proceeded rapidly with Reagan's industry was primed for corporate raiders. Station prices kept creeping higher, even a, appointment of chairman Fowler, and the move towards a free broadcast market was the broadcast playing field widened. This standard presented an invitation to w..JI­ underway. \X!ith it, came the FCC's emphasis on competition and profit as opposcd to bankrolled speculators and outside investors to buy up station properties to fortify their scheduling mandates or programming requirements. By the end of Fowler's first four empire, similar in nature to the corporate takeovers in Hollywood during the late 1960, years as chairman, the FCC had reviewed, changed or deleted 89 percent of the agency's Essentially, the FCC's machinations introduced a crippling measure of instabilir, to approximately 900 mass media rules (BroadC{lStil1g, 18 February 1985, p. 11. an industry that was already extremely vulnerable. Dy this time, the networks wert- t'-"c­ Most notable about Fowler's tenure was the way that he challenged the basic and ing a financial crisis (largely attributed to spiralling costs, poor management and grOWJl1,,:: foundational assumptions of the regulatory agency he chaired: whether or not [he FCC competition from cable and home entertainment), stock prices were depressed 8nd should police the airwaves and industry conduct in the name of the 'public interest'. ratings were sliding. Thus, the combination of relaxed rules and abandoned regulation' Commissioner Dennis Patrick summed it up best when he said that the FCC's thresh­ provided the crowning impetus for what was termed by the industry trades as 'merge: old question had become whether it should regulate at all, not what sort of regulation mania' during the mid-1980s, as the FCC basically invited and encouraged more might be appropriate (ibid.). \\7ith this shift, Fowler changed the terms of the entire exchange and concentration of ownership. ~'"' :..J..,'

The result was a brisk increase in station sales, the takeover of all three broadcast net­ Consent decrees between the Justice Department and the three networks, signed works by new owners and the beginning of a fourth during Reagan's second term. Capital ·..erween 1976 and 1980, enforced and further solidified Fin Syn and also strictly limited Cities bought ABC for $3.5 billion in 1985 and one month later, Rupert Murdoch pur­ tile hours of 'in-house' prime-time programming the networks could produce. All of chased Metromcdia's stations to launch the Fox Network. Loew's Corporation chairman these restrictions prohibited the vertical integration of production, sale and distribution Laurence Tisch became the controlling shareholder at CBS in 1986 and that same year, programming, preventing the networks from creating a schedule that privileged their

General Electric also acquired RCA (the parent company of NBC). Without the increase "':\'0 products. Itwas further argued that separating the networks from syndication would in station ownership limits and relaxed rules, such properties would have been less attrac­ -trengthen independent stations, removing the networks' ability to stock-pile popular tive, less accessible, and these transactions would have been quite unlikely. rerun material (second-run, off-network series) or funnel hits directly to their owned and These changes in ownership were just the beginning ... the real transformation would operated affiliate stations. come when the FCC attended to the key piece of regulation that lingered: the Financial In reality, however, the rules did not significantly tip the scales in favour of the inde­ Interest and Syndication Laws ('Fin Svn'). Fowler's determination to eliminate these :>cndent sector. Some producers and affiliate stations did receive a boost, as the fortunes rules caused numerous clashes on Capitol Hill and Fin Syn would prove to be an alba­ ,_r independents such as Tandem, MTM and Lorimar can attest. First-run syndicators tross for the chairman and his commission throughout the 1980s. Ultimately, it was Fin ["'roducers of shows such as Wheel 0/ Fortune, Entertainment Tonight, ctc.) also Hour­ Syn that provided the key to entirely new dimensions of industrial structure, efficiency .shed as syndication revenue spiked from about $520 million in 1980 to over $2 billion and synergy in broadcasting. :to 1994 (Harris, 1995, p. 86). Primarily; though, Fin Syn merely strengthened the :'osition of the major Hollywood studios and solidified a specific political economy in Fin Syn :.he broadcast industry that was based on a delicate balance of two mighty forces: the If the regulatory climate was the principal force shaping the blueprint of the broadcast studios and the broadcast networks. The net result for Hollywood was a secure position industry over the last two decades, then the Financial Interest and Syndication rules as the largest supplier of television shows as well as what looked to be permanent. served as the chief architect. The FCC instituted these rules in 1970 in order to increase ~uaranteed access to this all-important market. diversity in programming and prevent the three networks from dominating the market As for the networks, Fin Syn seriously damaged their collective and competitive pos­ through their control of the airwaves. Fin Syn prohibited the networks from having an ition. After all, only pockets as deep as the studios' are capable of enduring deficit ownership stake in their prime-time programming and severely restricted their partici­ nnancing (whereby the producer receives payment from the network that is far below pation in syndication, considerably eroding the network's control of their own industry cost during the programme's first run, gambling on the enormous potential windfall that and making them dependent on the Hollywood studios for product. svndication could bring). With the advent of cable, these rules were becoming even more In 1970, the three broadcast networks had financial interest or syndication rights to profound in terms of their restrictions because cable introduced an expanding pool of 98 per cent of their programming and independent producers were practically shut out riches that the networks were barred from earning as the market exploded. The chan­ of the market (MacDonald, 1990, p. 186), The network power was such that there was nels that would require product - syndicated product - continued to grow and the nothing to challenge their control over the industry. Programme suppliers, mainly con­ networks were forced to watch the spoils go to the Hollywood studios. sisting of the Hollywood studios, were furious over the terms extracted by the networks Consequently, producers and distributors became instantly deadlocked, waging a lob­ for airing their products - often a stake in the profits or distribution rights for reruns in bying war over Fin Syn's existence and legitimacy. As predicted by insiders, President other markets. The FCC performed an exhaustive inquiry of the networks' monopolis­ Reagan ignored the momentum in Washington to repeal the laws and personally tic behaviour in the late 1960s and in response to the abuses of power that they perceived, got involved. One day after a closed-door meeting with MCNUniversal chief Lew the FCC established Fin Syn and the Access Rule (PTAR) in tandem. 'i\?asserman - who was also his agent in Hollywood during his days as an actor and a per­ PTAR prohibited network-affiliated television stations in the top fifty television sonal friend - Reagan stepped in and overruled Fowler's commission. Suddenly, the markets from broadcasting more than three hours of network or 'off-network' (i.e., rerun) hands-off President was in up to his elbows re-regulating the broadcast industry and programmes during the four prime-time viewing hours. It was intended as a means of directly contradicting his own FCC. In the end, Reagan's allegiance to the studios promoting the growth of independent stations and was to be implemented in the Autumn prevailed and he saw to it that the rules were not modified during his administration. 1971 season. The Financial Interest and Syndication rules were enacted with similar goals in mind: to loosen the grip of network power over the industry and also expand the market Post Fin Syn for independent producers. TIley were formulated largely as a response to insistent lob­ The FCC again considered modifying Fin Syn at the end of Reagan's tenure, largelydue to bying from the Hollywood studios, who were having serious troubles of their own in the lobbying pressures by the networks and the undeniable changes in the industry that bile! late 19(,Os and were increasingly reliant on their revenues from television production. taken place since the niles were implemented. By the late 1980s there was a fourth network 'V'"...­

. per cent of its prime-time schedule, including ten weekly entertainment series ,mel settling into place and various new forms of competition (cable, home video, satellite scr­ :': owned 71 per cent of its prime-time lineup (McClellan, 2000, p. 30). NBC aired vices, pay-per-view movies, eic.) were steadily eroding the dominance of the broadcast ,.,".ell shows produced in-house. In all, the six broadcast networks owned or co-owned networks. None or these clements represented any significant threat in 1970 when Fin Syn ':,)re than half of their new shows, and three of them had a stake in rnore than 75 per was enacted and the networks' combined share of the television audience was around 90 c·,"t of the 2000 schedules (Schneider and Adalian, 2000, p. 151. per cent (as opposed to the low of 57 per cent that would hit in the early 1990s), Further­ more, emerging media conglomerates were reaping the benefits of vertical integration in the How can you go broke buying the Rembrandts of the programming cable landscape, but the broadcast networks were precluded from doing the same thing. business, when you are a programmed' Ted Turner, Vice Chairman, Initially, in light of the changing marketplace, Fin Syn was relaxed to allow each net­ work to produce up to three hours of prime time in the 1986-7 season and up to five ",\OL Time Warner ::d Turner was not subject to the limitations of Fin Syn and consequently was well ahead hours in the 1988-9 season. Gradual repeal finally began in 1991 and the Financial . the pack in the frantic race to vertically integrate, Turner was one of the tirst N e\\ Interest and Syndication rules were otlicially repealed on 21 September 1995 - two H!"llywood moguls to have the vision, resources and drive to unite programme owner­ months ahead of schedule. One year Inter, PTAR was also repealed. and production with distribution. After entrenched network forces and FCC The Telecommunications Act of 1996 also fed into this wave of deregulation by lib­ '::,.:ulators thwarted his 1985 takeover attempt of CBS, TImler was stinging and anxious eralising television station ownership limits. It eliminated the former ownership cap of :.' become a major player in the media industry At the time, 'Iurncrs broadcasting sys­ twelve television stations altoget her and increased the nationwide audience reach limi­ was strapped for product and at the mercy of the major studios that were increasing tation from 25 per cent to 35 per cent. This change in the restrictions on national television ownership has enabled broadcast groups to considerably increase their tele­ licensing fees for old 111ms. On 6 August 1985 Turner made a deal with Kcrkorian to buy MGM/UA for vision holdings, Since the passing of the 199(, act, networks have been furiously lobbying • \.5 billion. For this, Turner received the studio, lot and library of 3,500 MGM films ­ Congress to raise the number higher still, painting apocalyptic portraits of their demise eluding 750 pre-1948 Warner Bros. titles, 700 RKO features and numerous shorts, tele­ in the face of cable competition. TIle speculation is that this cap will be the next restric­ -, .sion series and specials (Hilmes, 1990, pp. 194-5). He now owned many of the most tion to go, c~l?'lsured titles in American cinema - Gone with the '\¥/ind, Casablanca, Citizen Kane and In anticipation of the Telecommunications Act, the industry began a Hurry of merger .:,,' 'Ylizard 01.to name a few. Yet, almost immediately a debt-ridden Turner was forced activity: ABC announced it would merge with Disney and Westinghouse made a deal to 0/ sell all of the studio operations that he purchased in the MGM/UA deal right back to acquire CBS before the ink was even dry. Further, Time Warner, perhaps the biggest t~>_'l'korian, However, the film library was the one asset that he retained. Turner pro­ media giant of all at the time, merged with Turner Broadcasting System and acquired ...cdcd to pump these films directly into his ever-expanding pipelines, beginning \vilh Turner's immensely successful cable networks (TBS, TNN, TNT, etc.) as well as his massive film libraries. Meanwhile, Fox bought all of the stations formerly owned by New \TBS and later funnelling them into TNT after its launch in 1988. By 1989, the MGM library had become 'the core of both a syndication business World, and Gannett TV Group merged with Multimedia. ,:d a sLlccessfulnew network - together worth a projected $1.(, billion by mid-1989' Indisputably the most significant outcome of deregulation in the broadcast industry Goldberg and Goldberg, 1995, p. 397). He bought Hanna-Barbera's library in late 1991 (and speci!1ciilly the repeal of Fin Syn) is the union of programme suppliers with :,'l' $320 million, Turner immediately began showcasing these animated programmes programme distributors - namely, the Hollywood studios and the television networks, _'!l \VTBS, TNT and eventually on his Cartoon Network, the first twenty-Four-hour all­ The fact that Fin Synremained in place throughout the 1980s and early 90s ensured that .mirnation channel, after its launch in October 1992. Yet another outlet for his massive while the industrial economy was shifting, the real seismic activity was yet to come. Once the rules were repealed, the earthquake would soon follow and the abrogation of Fin .iorary was established in April 1994: Turner Classic Movies. Turner even envisioned the Braves and Atlanta Hawks as more programming Syn would ignite the most important reorganisation of the corporate landscape in the .nventory to plug into his distribution networks, even though he admitted that they were industry's history, This was manifested in mergers, takeovers and new studio-based net­ .hc world's worst two sports franchises' when he acquired them in 197(,-7 (ibid .. works that would continue to ensure guaranteed distribution for Hollywood-produced p. 194), Still, he could indefinitely broadcast the games on his or television programming. WTBS sell the rights to other stations. This was part Turner's approach to his business, II.S Now, networks are allowed to hroadcast as much in-house programming as they like of and retain the lucrative syndication rights as well, The percentage of programming pro­ :lC told Forbes magazine, television is like chicken farming: duced in-house by the networks has steadily climbed ever since the repeal of Fin Syn. Modern chicken farmers, thev grind up rhe intestines to make clog food. The feathers go into In 1995, the networks owned approximately 40 per cent of their schedules on average. pillows. Even the chicken manure thev m.ike into fertilizer. Thcv use every bit of the chicken. By the start of the 2000 season, however, CBS had an interest in or owned outriuht ~.

Weil, that's what we try to do over here with television products, is use everything to its ","""'c-time hours. \\'ith the combination of cable TV technology (which made it pu',' Fullest extent. tor UHF stations to iind a viable audience), practically unlimited f1nancing and Maney, J995, p. 18.3 ;,.,),lrCes available from his global media ventures, a government committed to dcrcc­ ,.",un and a sympathetic FCC, Murdoch was primed to explore the possibilities or Time W,lrner announced its merger with Turner Communications just two days after the );';zontal and vertical integration. Furthermore, the Fox target audience of young male' otticial repeal of Fin Syn in 1995. Eight months earlier, the conglomerate had launched "'::"T,l'rl a new age of niche marketing in broadcasting and with it, a new universe of the WB network. When the two companies finally came together in 1996, the result was <'.erti,ing capital and incentive for investors. Remaining below the fifteen hours per a $7.6 billion colossus that encompassed a vast array of entertainment properties from of prime-time programming that defined a full-fledged network, Fox was also free Warner Bros. film and television production, HBO, CNN, TBS, TNT, and the WE Net­ . s.ndicatc their hits and begin to mount a growing challenge to the established net­ work to Warner Bros. Records, Time Life, Turner's world-class 111m library, the Atlanta '"k, in the face of widespread skepticism and doubt. Their surprisingly tremendous Braves and Atlanta Hawks and . While this was less than half of the .:((CSS (especially after adding twelve more affiliates in 1994, most from CBS when Fo., price of the Disncy/ABC merger, it brought a much larger magnitude and range of assets :._+lired their rights to NFL foothall) inspired further expansion and similar srratccic under the same corporate insignia and far greater potential for vertical arrangements. .; ... .i.mces. AFterthe prescience of Turner and the trailblazing of Fox, there were two 111mc Deregulation made the deal attractive and Turner's prescience and years of stealthy, stra­ ,clio-owned broadcast networks - UPN and WE - on air by 1995. tegic acquisitions made it irresistible. With AOL:s purchase of the company in 2000, the largest internet service provider merged with the largest film and as walk out the door each morning as a fully vertically integrated well as a host of cable systems and programmes that reach 20 per cent of American executive'. Robert lger, President and COO, Co. homes. At present, the marketplace has yet to return a verdict on whether or not such ;'le quintessential New Hollywood marriage of product and pipeline was achieved in an expansive alliance can function efficiently and profitably. )95 when Disney bought ABC for $19 billion. This was the first merger of the post-Fin Back when Turner was buying MGM/UA, Australian mogul Rupert Murdoch "',n landscape between a studio and (even though it was announced (Turner's archrival) was designing his own aggressive blueprint for vertical integration in :,;onths before the official repeal of the rules) and in 1995, was the second largest cor­ American media. In 1985, Murdoch's bought 20th Century-Fox from ,~.orate deal ever made. It occurred in the midst of unprecedented consolidation in the Marvin Davis. That same year, Murdoch made a deal to buy six stations from major entertainment industry - worth more than $40 billion in 1995, with over $200 million group owner - well-placed, independent, successful properties in Wash­ -ClOre spent on severance packages to those who lost their jobs in the crunch (Eller and ington, DC, , Chicago. Los Angeles, and Dallas - and formed Hofmeister, 1995, p. 1). Disney was paying an exorbitant amount for the network (three Fox Television Inc. to do so. His CEO, Barry Diller, had been cultivating the dream of urnes the price that Westinghouse paid for CBS that same year). Still, the press hailed a fourth network since his days at Paramount in the late 1970s and was deeply involved IjC merger as 'the type of combination other media moguls dream about' and Wall St in the entire process. Since then, Murdoch has gone on to become the largest producer ':.'"s lauding the deal as 'the benchmark for the rest of the industry' (Smith, l 999, p. 15 i. of prime-time television, set the standard for the vertically integrated global media giant The announcement was impeccably timed, and Disney/ABC rode the crest of the Fin and is widely regarded as one of the shrewdest strategists in the industry. ,;';n repeal to a smooth FCC approval. At the time, the new conglomerate represented TIle timing for the new Fox network was in perfect synchronicity with the regulatory ,he promise of boundless synergy for a brave new Magic Kingdom. climate in Washington, DC, in the 1980s. At the onset of the Reagan administration, the ABC and Disney had both come a long way since the first time they combined forces Fowler I~CC began immediately licensing new broadcast stations in unprecedented num­ in 1954, in order to create Disneyland, ABC, bought by Capital Cities in 1985, was th,,, bers and the industry began to change shape. Since most markets already had a full slate most profitable and highest-rated television network at the time, the majority owner of of network aFfiliates, the majority of these newer stations were independent. According cable networks ESPN and ESPN2, and a partner in the A&E and Lifetime cable net­ to the Association of Independent Television Stations (INTV), the number of unaffili­ works. The company also owned ten TV stations, thirty radio stations and fed more rhun ated stations rose by 150 per cent in the Iirst six years of the Reagan presidency, from '::00 affiliates on the ABC television network. The Disney studio was an immense glob>! 112 in 1980 to 272 in 1986 (mock, 1990, p. 125). Murdoch was able to take advantage entertainment juggernaut of its own in 1995, a $12 billion dollar powerhouse engineered of this development and in 1986, there were finally enough independent stations to bv Michael Eisner, Frank Wells and Jeffrey Katzenberg during the 1980s. The stealth. support a fourth broadcast network. merger happened almost before anyone in the business realised what was occurring, Murdoch proceeded to combine his Metromedia purchases with product from his stu­ unlike the CBS-Westinghouse buy, which was public for weeks before closing. However. dio and launched the Fox Network, the Iirst to rival ABC, CBS and NBC since the the astronomical cost involved incited some skeptics to scoff at the potential upside lor demise of DuMont, thirty years earlier. Fo, hcgc1l1 programming mainly in weekend svnergy in such an overloaded and expensive deal. -_._------_.- ----­

Ne\'ertheb;s, CEO Michael Eisner was repeatedly quoted as being 'totally optimistic schedule, including six weeklv entertainment series (i\lcClellan, 200n, that one and one will add up to four in this situation' when explaining the deal to the 0\.1 I. The 1996-7 season was the first time Disney would have the opportunity to tak" press, 'There are synergies under every rock we turn over,' he beamed, Suddenly, verti­ «r.untage of their network assets, in light of year-long lead times for series development cal integration was resurrected from the list of taboo phrases in Hollywood ... it was i:; the three years immediately following, Disney launched only ten shows at ABC, live widely discussed in the press as the strategy for the new millennium and became the c'( which lasted one season (Schlosser, 1999, p. 23), Now that the company has taken buzzword on the lips of all merger-minded moguls. For its part, Disney was not at all shy steps to remedy the notoriously antagonistic relationship of studio and network execu­ about discussing the role vertical integration played in the ABC purchase. :,1.('5, perhaps the wonderful world of synergy will be more promising for Disney. For the .2' !OO-1 season, over half of the Disney-owned television product ions have been sold The purpose of the acquisitionwas to protect the mouse, to ensure that no other institution .i.rectly to ABC (Producer Scorecard, 2000, p. 34). could block us from getting our shows access on the networks and on cable ... At Disney, we The merger of Viacom and CBS was also a family reunion of sorts, made possible like to control our own destiny, and we concluded that the onlywaynot to be at the mercyof ::lC mid-1990s wave of deregulation. Viacom was once merely a small syndication other institutions ('gatekeepers') was to assure our own access. ":',mpany spawned by CBS in the wake of Fin Syn. However, after a long, steady diet li Mcrmigas, 1998a, p. -16 ,',-,crgers, acquisitions and an expanding entertainment economy, the minnow returned .i.id swallowed the whale whole with its $35 billion deal for CBS in 1999. It \\''1S the In 1999, Disney/ABC consolidated even further, combining Disney's TV production and higgest entertainment industry conglomerate ever - for four months, until they dropped ABC's prime-time programming division into a single entity known as ABC Entertain­ lU second place in January 2000 when AOL Time Warner's $135 billion merger was ment Television Group. Suddenly, studio series production and network scheduling were .innounced. not only under the same roof, they were merely separated by an adjoining door. The goal The Viacom story is one of deregulation's great ironies. 'X~l.ilc attempting to harness of capitalising on a vertically integrated entity in order to guarantee Disney access to .-,ctwork control, the FCC actually helped to usher a far more formidable power into the ABC's prime-time hours was readily acknowledged and reported. For the first time, the media landscape. Reminiscent of the way in which the government's forced breakup of threat of regulation was eliminated and there would be no secret of the preferential treat­ lohn D. Rockefeller's Standard Oil led to the creation of two of the world's largest oil ment that would be a foundation of this studio-network relationship. 'The aim,' ABC :ompanies (Exxon and Mobil), Viacom's path also offers a revealing chart of America', executives explained, 'is to streamline and to get more Disney-owned product on ABC's .nrersecting regulatory cycles and political tides. air' (Hofmeister, 1999, p. 5). In 1970, when Fin Syn declared syndication revenues to be unlawful revenue for the However, managing this synergy has not been a magic carpet ride for Disney ... it has major networks CBS formed Viacom Inc. in order to comply with federal regulations. been more of a stomach-churning roller-coaster. ABC experienced a dramatic ratings C:BS transferred its syndication operation and its programme library to Viacom by 1971. slide in prime-time and news programming after the takeover and languished in third :\ow, the company that began life in order to separate a network from its programming place in the ratings race for years, nearly overtaken by fourth-place Fox for the first time ..brary has not only turned the clock back by buying that network, but it had also bought ever. Numerous high-profile management shake-ups and personnel crises also plagued the syndicated production that all of the networks were forced to divest after Fin Syn ABC; they were forced to fire 200 employees in 1997 and News Chairman Roone along the way. The pre-1973 television libraries of ABC, NBC and CBS are now under Arledge and Entertainment President Jamie 'Iarses both left the network. The success of one roof, as part of Viacom's Paramount Domestic Television, offering CBS a might. IV1loo W{mts to Be a Mill/ol/ilin';) in 2000 resurrected the network from the ratings cellar programming weapon. This gold mine includes 55,000 hours of programming and 18(1 but the Ions-term prospects for ABC are unsteady at best, presently resting on a very Jifferent series such as CBS's I LOI'e Lucy and Perry Milson, NBC's Bonanza and Cd narrow strategy of reality-based programming. As analysts have noted that Disney/ABC's \ii!art and ABC's The FI/gltl/'e and Mod Squad (Spring, 1999, p. 3). In the end, the FCC version of synergy is nothing more than cross-promotion, exploiting one idea or property belped to restore what it dismantled, effectively putting the pieces of Viacom and CBS in several channels of distribution rather than creating anything new. The company has hack together with relaxed ownership rules and the repeal of Fin Syn. yet to create any successful new ideas or visionary programming for their properties, The marriage of Viacom and CBS has also united two different corporate philoso­ ABC represented just 8 per cent of Disney's corporate profits Ln 1997 (Mermigas, phies - that of Sumner Redstone, Chairman and CEO of Viacom whose mantra has 1998a, p. 46), thus its significance has been largely as a distribution network and always been 'content is king', and the 'distribution is king' approach as embraced bv marketing tool for Disney's other products and subsidiaries. However, its importance CBS. One look at the constitution of the New Hollywood royalty, however, and it is clear to Disney's bottom line is growing, as broadcasting revenues were 24 per cent of that entertainment conglomerates in the post-Fin Syn era no longer have to choose Disney's empire at the start of the millennium (1999 Annual Report). Furthermore, as between the two. They can have it all in their vertically integrated media empires. of the beginning of the 2000 season, ABC had an ownership stake in 44 per cent of their Yiacolll-CBS owns a multitude of broadcast content (King \l(7(1rld Productions. Paramount Pictures, Paramount TV, CBS Prods., Spelling Entertainment), a tremen­ . market, have rendered this model inadequate. The idea of the public interest itscli dous distribution enterprise (CBS network and it, chain of 212 'IV affiliates, thirty-five 31>0 been consistently redefined and does not have a definition that satisfies current TV stations, Infinity Broadcasting's 163 radio stations and UPN), as well as some of the . ',;,Ltions. Further, the FCC emphasis on localism and the community-oriented nature top cable brands, such as MTV, VBl, BET, Nickelodeon, Country Music Television, :-'~c1adcasting has also become quite ironic and hypocritical, since the commission is a Showtirnc and the Movie Channel. Additionally, the company's assets include Block­ .r.:«: ,l""C;'~, federal agency regulating a profit-driven, global industry designed to appeal buster Entertainment, billboards that sprawl across the nation, sizeable theatre chains widest possible audience. In reality, the local market and the public interest have and a commanding presence in the internet economy. ',c::ome nothing more than theoretical constructs, or figments of the regulatory imagin­ Under existing rules, Viacom will still have to sell several television stations as well as left behind in all but the language of broadcast regulation. the UPN network to satisfy government regulations. The FCC still restricts any company from reaching more than 35 per cent of the nation's TV audience and with this merger, Seiling movies to the networks is just not as much fun as it used to be.' Viacom reaches 41 per cent. When asked how Viacom-CBS would remain within the }~"Jhn Dempsey, Variety, 2000 35 per cent cap when their holdings reveal a 41 per cent audience reach, CBS President the end, is it possible to discern how corporate holdings translate into an evening of Mel Karmazin responded, 'We believe that the 35 per cent cap is a very antiquated rule. :cnainment and opportunity? Is a conglomerate built on the principle of synergy We believe that the rule will go away' (Jessell and McClellan, 1999, p. 30). Karrnazin's I.'.c'ssarily able to exploit that potential fully? Structural deregulation and consolidation public confidence is instructive in the way that it belies a shifting balance of power in certainly helped to enhance those opportunities for the major players, especially the regulatory arena. The industry's expanding sense of entitlement swells with each respect to their broadcast properties. Presently, Viacorn and its subsidiaries have mega-merger, their security enshrined by the government's staunch reluctance to curtail ,::,ty-eight shows on the air in 2000-1 season, spread over all networks, with more the consolidation of the entertainment industry. As Patricia Aufderhide has noted, half (fifteen of them) broadcast on CBS. 20th Century-Fox has eighteen shows on these companies 'no longer feel like they need to kiss Congress goodnight' (Aufderhide, autumn schedules, ten of which air on its own network. Warner Bros. has sold eigh­ 1997, p. 1(2). shows, with seven of them airing on WB and Disney has produced nine True to Karrnazin's prediction, the 35 per cent cap is actually quite likely to 'go away' :·:..,grammes, five of which are on ABC. under the stewardship of Bush administration FCC chief, Michael Powell. Powell is In addition to servicing their own networks, the big four (AOL Time Warner, Fox, Iirmly committed to deregulation and perhaps the new bearer of the Fowler flame. He "Kom-CBS and Disney) are still making significant deals with their competitors for has already made his disdain for the ownership cap well known during his first month :,:",c:ramming. For example, currently Warner Bros. (or a subsidiary) is producing ER. on the job, saying '1 am quite skeptical that anyone has any demonstrable case that such ':i''ldS and The West 1\7ing for NBC rather than funnelling these programmes directly caps actually inure to the benefit of consumers in the form of greater and more diverse their own WB Network. Fox Television produces two of ABC's most popular pro' product' (Labaton, 2001, p. 1). The FCC approval of Fox's purchase of rival Chris-Craft .immes, Dharma & Greg and The Practice, CBS's Judging Amy, as well as one ofWB's Industries in 2001, which put Fox at a 40 per cent reach, eliminated any remaining ..agship hits: Buff)' tbe Vampire Slayer. (However, Buff)' is a complicated example, as the doubts about the fate of present ownership caps. .how moved in 2001 to Viacom's UPN - a network in which Fox's parent company has Currently, both the FCC and the Department of Justice review all telecommunica­ " vested interest - after a high-profile bidding war.) Disney still sells Felicity and Popu­ tions mergers. (The Federal Trade Commission also has authority to review such mergers to WB instead of to their subsidiary ABC, and Paramount Television is producing hut rarely does, deferring instead to the Justice Departmcnt.) While each administration :','0 hits for CBS rivals - Frasier for NBC and Sabrina for WB. brings diff, rent appointees to those offices, partisan politics are no longer a reliable pre­ On the surface, these arrangements seem to undermine many of the strategies and dictor of procedure in the broadcast arena. After all, it was the Department of Justice inherent benefits of a carefully crafted entertainment conglomerate. After all, why would under Republican President that mandated the split of CBS and Viacom, nne of these companies put money directly into a competitor's pocket or send popular while President Clinton's activist Department of Justice was the one that approved the Aogramming to a rival? News Corp.'s COO Peter Chernin points to the big picture and reunion merger. However, since the days of the Reagan administration, the Department the personal relationships that drive business in Hollywood when he explains why Fox, of Justice has often regarded consolidation in the media as benign and even beneficial r-roduced shows air on rival networks. to surviving in the competitive global marketplace. The FCC rules continue to bend capriciously in order to accommodate the changing Wewould limit the creative talent we are in business with if we only produced for [he Fox parameters of the conglomerate structures, largely because the foundational principles of network ... There are plenty of profits to be derived at all different parts of this chain, and regulation are becoming increasingly irrelevant. Thc public interest standard, for example, we don't have to control everypiece of it. is based on the notion of the broadcast spectrum's scarcity, but new technologies and Hofmeister, 2001, p. C5 Another explanauon can be f~,und in the expanding docket of lawsuits starring some many other things) that Disney sold television rights to its movies at a high dis­ of TV's biggest profit participants who are accusing their parent corporations of 'self­ . w its network subsidiary, ABC. Apparently, Disney was charging ABC a licence dealing'. In :1 series of well-publicised cases (all settled out of court), prominent about 4.2 pet cent of box-office receipts for its animated features, as opposed to producers and actors have begun suing the owner/distributors of their programmes. They rate of 15 per cent (Ricker, 1999, p. (2). Katzenberg also charged Disney with are charging their parent companies with selling programmes to their own subsidiaries less money for broadcast rights than ABC offered, and even giving the network at a hargain rate, which in turn significantly Jowers the return from profit participation ;'rogramming, in order to make ABC appear more profitable (Schneider, 1999. that the talent receives. The threat of these lawsuits has given conglomerates serious :\[ter an embarrassing and lengthy court battle, Katzenberg's 1999 settlement was pause before engaging in 'sweetheart deals', throwing an enormous wrench into even the "coscdly $250 million. Aside from being a deterrent, these lawsuits have also spawned best-laid synergist plans. fear of becoming embroiled in expensive and lengthy court bat­ n':uge industry of outside consultants examining the merits of intra-conglomerate tles that bring an avalanche of negative publicity has had a dramatic cbilling effect, .' for producers. The studios, on the other hand, are now increasingly inserung sabotaging many potential benefits that could be derived from a vertically integrated -"cO' (for their own 'protection') into contracts that allow thcm to do business with structure. As one industry executive has said, today's vertically integrated companies ,[ subsidiaries without fear of reprisal by profit participants. 'have to constantly remind themselves of the old adage that, like Caesar's wife, they have self-dealing syndrome may also have cost Fox a boatload of money when it dras to he above suspicion' (Dempsey, 2000, p. 17). underbid for the television rights to Titanic. The arrogance and carelessness The most uotable examples of self-dealing conflicts have involved Disney, Fox and their offer cost them dearly in untold sums of advertising revenue and missed ABC. Fox was under the closest scrutiny because, until 2000, it was the conglomerate that ',"1ftunities for cross-promotion. As a co-production of 201h Century-fox and Para­ supplied itself witb the most home-grown product. Steven Bochco sued Fox in 1999 for .unt, the Fox Network was given first crack at buying the IV rights. However, their negotiating whar he saw as a cut-rate deal for syndicated episodes of N'fPD Blue to air ~:.:" million bid was $10 million short of what NBC was happy to pay, and $40 million on one of Fox's cable channels, .bX. Bochco claimed that Fox cheated him out of at least ort of what Paramount and Fox officials later asserted would have been a fair price for

$15 million by selling reruns of his NYPD BlUe! series to the FX cable channel without /c' property. Instead, NBC's $30 million bought them exclusive rights to broadcast seeking out any other offers. Bochco was again slighted by the system in 2000, this time '."Iicfive times in five years, beginning in 2000. This record deal was made even before by ABC, when the network moved NYPD Blueout of its time slot to make way for Gncc '":c film had finished its first run in theatres, demonstrating the pressure that spiralling allil Agaill, a new series produced by Disney-owned subsidiary, . s;s have exerted on film-makers to find ways to offset their production expenses - and David Duchovny also sued FoY: in 1999 011 a charge of self-dealing, accusing the ·e attendant opportunities that such desperation breeds. company of cheating him out of at least $25 million by negotiating a significantly dis­ There are other reasons that can explain why self-contained entertainment conglo­ counted rate for Tbe X Fties to play on its own networks. The star of the Fox series sued :,-:crates would go shopping elsewhere for programming, the primary one being the the show's distributor, 20th Century-Fox Television, for allegedly selling rerun rights to _'mpany's bottom line. For example, the $13 million per episode that NBC is paying cable channel FX at below-market rates. Duchovny also charged that the sweetheart arner Bros. Television for ER is a far greater price than Warner Bros. could ever com­ licensing terms that Fox has been offering to its affilimed stations has precluded higher ~,,:md from siphoning the hit show to its own fledgeling network, \X'B. With the repeal hids from being seriously entertained, which in turn reduces the 110\1' of the $800 million 'rFin Syn and the growth of studio-network alliances, NBC got panicky about the corn­ in profits back to him. The case was also settled out of court for a reported $20 million. ,'ctition in such a form.idable landscape of rivals and began a hysterical odyssey of Fox \\ 1S sucd vet again by Alan Aida, who claimed the studio did not test the mar­ .v.erbidding to retain the popular drama, much to Watner Bros.' delight. ketplace for M'A\(},..J-J before selling the series to its in-house cable network rA at what Another important factor is that the networks have begun developing niche audiences Alda claimed was Iar below market price. The Alda suit was surprising, partly because -nuch like cable stations, which limits the number of in-house productions that would the 255 half-hour episodes have been in syndication since the mid-1970s. This case was C'e particularly appropriate [or their target markets. \1{l]3, for instance, has conceived a settled out of court on the CIT of trial. The suit brought by Malt Williams and Wind strategy based on the eighteen- to twenty-five-year-old audience, while UPN caters more Dancer Productions Group against Disney was another cbarge of self-dealing that to a younger, more urban viewer. The programmes produced by Warner Bros., Para­ was widely reported. The producers of Home! bJlpi"Ol'l'lI7t'l1l sued Disney for failing to mount and their affiliated outfits are not all necessarily going to appeal to those markets. actively pursue a deal with networks besides ABC once their contract was up for renewal. so they take their products to other buyers. Instead of seeking competitive bids from other networks, Disney merelv renewed with Consequently, the industry is not enjoying the incestuous programming free-for-all their subsidiary, ABC. that would be expected now that production and distribution have been reunited Still, the self-dealing accusation with the most publicity and also the most at stake was Conglomerates have learned that negotiating the terrain of this vertically integrated IInc]ollbtedh ",((rev K,lllenh('I':':" '~')8() milliel; y'"inst Di- T,~." ,1,.:"" industry is truly a precarious sport. lf a network allows a sister studio to pay less than ~.----_.. -_.------_. ___ .pW7"

market price for advertising time, or snubs an important outside customer to Lwour cor­ Timeline porate holdings, then both units run the larger risk of losing their competitive edge. Overall, synergy works best when players combine their assets to originate new lines of '-0 Financial Interest and Syndication laws enacted along with the Prime Time business, creating instant economies of scale.Tumer Classic Movies is a perfect example; Access Rule (PTAR) the values of both the MGM library and a cable channel catering to cinephiles instantly Viacom created when cns is forced to divest its syndication operation skyrocketed once they were brought together. By putting them under the same roof, Ted Turner enhanced both properties and created a huge revenue stream that might never "~6 Department of Justice files suit against NBC, CBS and ABC which results in have been realised had they remained independent of one another. News Corp.'s marriage consent decrees being signed with all networks by 19RO. They mirror Fin SnJ of Metromedia's underperforming UHF television stations and the ailing Fox studio restrictions and impose further limitations on the number of prime-time hours jump-started the creation of the new Fox Television network. the networks are allowed to produce

'Content is King' ~'~ 1 Marvin Davis, Denver oilman, buys 20th Century-Fox Film Corp. for $720 million 'Distribution is King' The King is Dead! long live the King!' :-'S-l Kirk Kcrkorian buys MGM/lJA Just as the great merger wave triggered by the Industrial Revolution was sparked by the May: Barry Diller leaves Paramount and becomes Chairman/CEO of Fox desire to capitalise on efficiencies of scale and be more competitive in a transforming 22 September: Michael Eisner and Frank Wells become Chairman and President economy, the wholesale consolidation in the broadcast industry was motivated by simi­ of Walt Disney Productions,JeHrey Katzenberg named Motion Picture President lar incentives. Deregulation and technological change served as supreme catalysts to in October enact a sweeping realignment of corporate terrain. Longstanding safety shields that pro­ ABC buys ESPN ($227 million deal) tected broadcasters from takeovers fostered new competition and threatened their livelihood. Ultimately, the process paved the way for the global media expansion and the :C:85 FCC increases station ownership limits intensive conglomerate consolidation that characterises the entertainment industry Rupert Murdoch buys Fox for $575 million today, perhaps giving the networks a second lease of life. March: Capita] Cities Communications Inc. announces deal to buy ABC for It was also the power of deregulation that propelled the broadcast landscape from one $3.5 billion (deal is official in January 1986) paradigm to another in a span of just thirty years. The industry shifted from one largely run 6 May: Fox announces deal to buy six of Metromedia's seven television stations by the men who founded their networks (i.e., William Paley at CBS, Leonard Goldenson (Los Angeles, Chicago, Dallas-Ft Worth, Houston, Washington, DC, and New at ABC) to one cog in the machine of multimedia empires envisioning networks as York City) for $1.85 billion. These stations would form the core of the fourth part-time promotional vehicles for their web portals. Will the networks ever become the broadcasting network equivalent of the movie studios in the corporate paradigm, the engines driving an entire 6 August: Turner buys MGtvl/UA for $1.5 billion industry or setting an agenda for an entertainment conglomerate? Or are they now reduced to mere satellites, offshoots in a larger structure organised around feature films 1986 3 January: Capital Cities Communications Inc. purchases ABC for $3.5 billion and cable channels? Regulation will surely playa role in determining whether broad­ 9 June: GE buys RCA Corp., parent company of NBC, for $6.4 billion casting w:'! become the tail or the dog, a central focus or mere ancillary distribution form. News Corp. launches Fox, the fourth broadcast network Still, it is important to remember that most regulatory guidelines for broadcasting September: Laurence Tisch and his Loews Corp. gain control of CBS were not designed with an internet economy, 500 channels or a global audience in mind. It is increasingly clear that current standards cannot accommodate the complexities and 1989 June: Time Inc. acquires \'

29 September: Viacom Inc. announces $8 billion deal for Blockbuster Enter­ :'Iuletta, Ken, ThreeBlind Mice'.' Hoio tbc IY Networks Lost Tbci« Way (New York: Vintage tainment Corp. Books, 1992). Auletta, Ken, The Highwaymen (: Harcourt Brace & Company, 1998). 1995 January: launch of UPN (Viacom/Chris-Craft) and WE (Time Wamer) net­ Balio, Tino, 'A Major Presence in All of the World's Important Markets', in Steve Neale and works Murray Smith (eds), ContemporaryHollywood CineJnd (New York: Routledge, 199iS), 31 July: Disney announces deal to buy Capital Cities Communications Inc. /ABC Pl'. 58-73 for $19 billion Bart, Peter, 'VerticalDisintegration', IicIrlety (6-12 May 1996), p. 10. 1 August: Westinghouse announces deal to acquire CBS Inc. for $5.4 billion Bluck, Alex Ben, Out/oxed (New York: St Martin's Press, 1990) 21 September: Official repeal of the Financial Interest and Syndication rules Compaine, Benjamin and Comcry, Douglas, Who Owns the Media? Drd Edition) (London: 23 September: Time Warner announces merger with Turner, $7.6 billion deal Lawrence Erlbaum Associates, 2000). 24 November: Westinghouse $5.4 billion deal for CBS Inc. approved by FCC Dempsey,John, 'Studio Sibs Parry Perils of Pix Pacts', Variety (24-30 July 2000), p. 17. Eiler, Claudia and Hofmeister, Sallie, 'Hollywood's Wildest Ride', Los Ililgetes limes 1996 8 February: President Clinton signs the Telecommunications Act into law (29 December 1995), p. Dl. 30 August: Prime Time Access Rule expires Ferguson, Douglas and Walker, James, The Broadcast 'teleuision Industry (Boston, MA: Allyn and 11 October: Time \'<7arncr and 'lumer Broadcasting System complete $7.6 Bacon, 1998). bill ion merger Galbraith, Jane, 'Turner Keeps Pies, Drops Rest of MGM', Vtiriety (11 June 1986), p. ,.

Goldberg, Robert and Goldberg, Gerald Jay, CitizCli Timler: Tbc \ViM Ris« 0/an American 7)ICOOII 1997 December: Westinghouse becomes CBS Inc. (New York: Harcourt Brace & Company, 1995). News Corp. becomes the largest owner of 1V stations in the USA after pur­ Gomery, Douglas, 'Disney's Business History: A Reinterpretation', in Eric Smoodin (cd.), Tnsnev chasing the rest of New World Communications group Discourse (New York: Routledge. 1994) pp. 71-86. Harris, Kathryn, 'Lights! Cameral Regulation!', Fortune (4 September 1995), pp. 83-6. 1999 1 April: CBS announces deal to buy leading syndicator King World Prods. Inc. for $2.5 billion Herskovitz, Marc L., The Repeal of the Financial Interest and Syndication Rules', Cardozo 11rts [.,. Entcrtainrncnt l.aio [oumal, 110, 177, (1997), p. 15. September: Viacom buys Spelling outright, after owning 80 per cent of stock lIertsgaard, Mark, On Bcmlcd Knee,' The Press am] fl'e ReaganPreslJell(:y (New York Ferrar 7 September: Viacom Inc. announces deal to buy CBS Corp. for $34.5 billion Straus Giroux, 1988). Hilmes, Michele, Hoilvioood and Broadcasting: From Radio tu Cable (Chicago: University of I 2000 10 January: America Online Inc. announces deal to buy Time Warner Inc. in $135 billion merger agreement, largest combination ever in media history illinois Press, 1990). 3 May: FCC approves transfer of control of the CBS Corp. to Viacom Inc., Hofmeister, Sallie, 'Disney Combining Network TV Operations into One ABC Unit', including approval of the transfer of thirty-eight television stations, 162 radio Los Angeles Times (9 July 1999), p. C5. stations, several translator and satellite stations Hofmeister, Sallie, 'Q&A: Murdoch Empire's Chief Engineer', Los Angeles nines (2 September 2001), pp. ci, C5

I 2001 25 July: FCC approves News Corp.'s purchase of rival broadcaster Chris-Craft Horwitz, Robert Britt, 117e irony o/Regulatory Reform (New Yotk: Oxford University Press, Industries for $5.4 billion, This deal gives Murdoch two major stations in Los 1989). Angeles and New York City, as well as a total of thirty-three stations reaching jessell, Harry and McClellan, Steve, "The Viacom Vision', Electronic Media 115 November 41 per cent of the national audience 1999), pp. 28-37 Kidder. Rushworth M., 'FCC's Fowler: Free Market "Ideologue" or Free-Speech Champion?', Sources: Omstiall Science MOil/tor (20 May 1985), National, p. 1. 'Illrlety, Ncw York Times, Los Angeles Times, The 'Waf! StreetJournal, Fortune and Koch. Neal, 'Television's Independents: Working on a Slippery Slope', Nell' York Time'S Benjamin Compainc and Douglas Gomery, Who Owns the MediCI? DO September 1990), p. CI0. Labaton, Stephen, 'New FCC Chief Would Curb Agcncy Reach', New York Timcs (7 February Bibliography 2001), p. C1. Aufderhide, Patricia, 'Telecommunications and the Public Interest', in Erik Bamouw (ed.), Lewis, Jon, 'Disney After Disney', in Eric Smoodin (ed.l, Dl~,,:ey Discourse (New York: )~: ___----",";."!(f,of("[i/:t! ii,,' Mi',!';l (1'1,-,,, \' I'h z· Nt'w Press. 19971, Ill', I R",l1ir',1 '.. iq~q) "p, 87~105. Liebowirz. Dennis H" 'The Networks Go Hollywood', New lark Law [ournal (26 June 1998J. FEDERAL REGISTER vol, 60, no. 167, Rules and Regulations, Federal Communicatiou-, p,5. Commission, 47 CFR Part n [MIvIDocket no. 94-125; FCC 95-314J Radio Broadc.i-t Lyons, Charles, 'Peter's Principle', Daily lariety (J2 October 2000), p, L Services; Television Program Practices 60 FR 4477.>,29 August 1995, MacDonald, J Fred, One Nation under l;,lez'i,iOlz (Chicago: Nelson-Hall, 1990). FEDERAL REGISTER vol. 58, no. 94, Rules and Regulations, Federal Communication, MacLachlan, Claudia, 'TV Deregulation Is Driving the Deals', Tbe National Law Journal Commission, 47 CFR Part n [MM Docket no. 90-162; FCC 93-179] Broadcast Scrvivc-: 114 August 1995), p. BL Syndication and Financial Interest Rules 58 FR 28927, 18 May 1993, Final Rule. McCJcJlan, Steve, 'Fin Syn', Broadcasting and Cable (24 January 2000), pp. 50ff FEDERAL REGISTER vo]. 65, no, U5, Notices, Federal Communications Commission McConville, Jim, Halonen, Doug, Wang, Karissa S., Lafayette, John and Mermigas Diane, The [MM Docket no. 98-55; FCC 00-191J Broadcast Services; Radio Stations, Television Insider', Electronic Medl~1 (22 November 19991, p. 8, Stations, 65 FR 43335, 13 July 2000, Notice. Maney, Kevin, Megall1edia Sbaleco«: (New York: John \Vtley, 1995). Standard & Poor's Industry Surveys: Broadcasting/Media, 1980-90. Mayer, Caroline E., 'FCC Chief's Fears' lY7ashiligtolZ Post (6 February 1985), pp. Klff. Merrnigas, Diane, 'Eisner Justifies ABC Purchase', Electronic!'vIedia (12 January 1998a), p. 46. Mermigas, Diane, 'Can the Old Networks Survive in a New Era?', Electronic Media (27 July 1998b), p. L Nossiter, Bernard n, The FCC's Big Giveaway Show', Tbe Nation (26 October 1985), pp. 402-4. Orwall, Bruce and Pope, Kyle, 'Disney-ABC Merger Has Yet to Add Up', Houston Chronicle (18 May 1997), Business, p. 4. Powell, Bill, Smith, Vern E. and McAle\'ey, Peter, 'Turner's Windless Sails', Neiostoccl: (9 February 1987), p. 46. Prince, Stephen, J1 New Pot of Gold Hollywood under the Elcctromc Rainboui, 1980-1989 (New York: Charles Scribner's Sons, 2000). Producer Scorecard, Hollvioood Reporter2000--01 GUide to the Fall IT Season (September 2000), p. 34, Ricker, Di Mari, 'X Files' Star David Duch,'I'I1Y's Suit Seeks Answers to How Hollywood Keeps

Its Books', Legal II'l:'lC.' (27 September 1999), p, 62. Schlosser, Joe, 1\ Mouse In-House', Broadcasting & CaMe (29 November 1999), pp. 22-30, Schneider, Michael, 'Vertical Disintegration', Elertrouic 1I1edia (10 May 1999), p. 4. Schneider, Michael and Adalian, Josef, 'Nets Get It Together', landy (22-28 May 2000), p. 15, Shawcross, William, lIIztrdoch (New York: Simon and Schuster, 1992). Smith, Roger, 'It's Only Money', Daily variety (13 October 1999), p. 15, Spring, Greg, 'Paramount's Syndication Nation', ElectronicA1edia (2 August 1999), p. 5.

Broadca: ting magazine articles - no author given 'Dow11 to the Wire on Fin-Syn' (24 October 1983), pp, 27-9. 'Valenti Repeats Criticism of Fin-Syn Repeal' (I7 October 1985), p, 54. 'Ganging up on the Networks RE Fin-Svn' I] November 19831, pp. 31-5. 'The Bittersweet Chairmanship of Mark S. Fowler' (I8 February, 1985), pp. 1,41-3, 'The Lobbyists' (25 February 1985).

Comments of the staff of the Bureau of Economics of the Federal Trade Commission before the Federal Communications Commission, Washington, DC In RE: Review of the Prime Time Access Rule, Section 73.658(kl of the Commission's Rules MM Docket no. 94-125, 7 March 1995.