Fairness in Media Says It Dropped Plans for a Proxy Fight for CBS

Fairness in Media, the conservative group that has vowed to buy control of CBS because of what it considers the network’s liberal bias, on Friday abandoned plans to wage a proxy fight at the CBS annual meeting April 17.

The Raleigh, N.C.-based group, which is allied with Sen. Jesse Helms (R-N.C.), said nothing, however, about halting efforts to buy a controlling interest in the network through a tender offer for CBS stock.

Helms has written to more than a million voters identified as conservatives asking them to buy CBS stock so that they can end the network’s “liberal bias” and “become (CBS News anchor) Dan Rather’s boss.”

The decision against the proxy fight, which was made in a meeting with U.S. District Judge William C. Conner in New York, apparently forestalls a confrontation that already has Wall Street speculators investing heavily in CBS, driving up the price of the communication company’s stock.

Shares Rose Sharply

CBS shares rose $4 Friday to close at $109.75 on the New York Stock Exchange. The shares have risen $24 each since March 8.

Fairness in Media claimed two reasons for deciding against a proxy fight three weeks from now. First, the group received CBS’ shareholder list just this Wednesday. Its efforts to get the list sooner were delayed when CBS filed suit arguing that the group might use the list for political and “improper” purposes.

CBS finally relinquished the list to North Carolina newspaper publisher Hoover Adams, a CBS stockholder who had sued the network for the list on behalf of Fairness in Media.

“We had determined that 2 1/2 weeks was not sufficient time to wage a full-scale proxy fight, particularly in light of the fact that CBS mailed its (own) proxy material (to shareholders) some two weeks ago,” said James Cain, the organization’s attorney and spokesman. The group had been attempting to collect enough proxies to win at least one seat on the CBS board.

Fairness in Media, which was established with the stated intention of gaining control of enough CBS stock to influence the network’s news and programming policies, obtained the shareholder’s list on the condition that it could use it only for the proxy fight and that it return it following the annual meeting.

CBS has said the group may have access to the list again on five days’ notice, but the group claims that it should be allowed to keep the list.

Cain also said in a prepared statement that the group decided to abandon the proxy fight in exchange for an agreement from CBS that it not proceed with plans for a series of anti-takeover measures at the annual meeting. Cain said he had discovered that the network was preparing to mail a new set of proxy materials to stockholders, “which could have given them the opportunity to implement various anti-takeover resolutions.”

Didn’t Plan Mailing

CBS spokeswoman Mary Boise, however, said the network “never planned to mail a second set of proxy materials.”

The run at CBS has gained attention both nationally and on Wall Street. Cable-TV and sports entrepreneur Ted Turner reportedly has acknowledged discussing joining the Helms group in its bid for CBS. Turner also has discussed plans to try to buy CBS with the Federal Communications Commission.

Stock-market analysts, however, doubt that Turner or the Helms group--either separate or in consort--could raise the money to make a serious bid.

CBS is considered vulnerable, in part, because no single interest controls CBS stock. The largest block is held by company founder William S. Paley, but his stake is just under 5%.