Networks Reject Firm’s Ad That Scores Deficit

Not unlike the government, W. R. Grace & Co. is having trouble fighting the federal deficit.

The New York-based chemicals conglomerate has conducted a one-company advertising campaign against the deficit since November, 1984. Recently, however, the three television networks refused to air its newest ad because they found the spot too controversial.

The networks based the decision on their interpretation of the basic federal regulation governing television, the so-called “fairness doctrine.” It states that stations presenting one side of a public controversy have an obligation to grant the other side reasonable time. If broadcasters violate the rule, they can be forced to provide free time for opposing views.

“Controversial issues are best handled in news and public affairs programs where they can be presented by experienced journalists without axes to grind,” said Richard Gitter, NBC vice president for broadcast standards, East Coast.

However, others familiar with television advertising suggest that the case illustrates longstanding network policies that discourage public debate on television and restrict controversy to those programs the networks control.

“To say they are going to suppress advocacy advertising and address these issues in their news coverage just places much more power in their news coverage,” said Michael P. McDonald, general counsel of the American Legal Foundation, a conservative Washington foundation concerned with media. “It is a kind of private censorship.”

‘The Deficit Trials’

Grace’s bleak, futuristic ad, called “The Deficit Trials,” depicts a scene 31 years from now in which the children of America have placed their elders on trial. An old man, standing in a glass-enclosed witness box, is pleading before an adolescent prosecutor and a jury of children.

“Don’t you see,” he says, “no one was willing to make the sacrifices?”

“Maybe so,” answers the 12-year-old prosecutor, “but I’m afraid the numbers speak for themselves. In 1986, the national debt reached $2 trillion. Didn’t that frighten you?”

“Are you ever going to forgive us?” the accused asks, leaving the stand.

At the conclusion, an unseen announcer says: “You can change the future. You have to.”

Shot in an abandoned church in London, the eerily lit courtroom suggests that the deficit has brought economic collapse.

Ridley Scott, the director whose grim vision of the future distinguished the science fiction movies “Alien” and “Blade Runner,” directed the spot.

“We simply want to raise awareness,” explained Stephen Elliott, director of corporate advertising for Grace, “to air the issue, and let people decide for themselves what to do about it.”

Grace sought to place the ad on national television following President Reagan’s State of the Union address, but the networks refused.

“We do not accept advertising that promotes an advocacy position on controversial issues of public importance,” explained George Schweitzer, a CBS spokesman.

Grace argued “that the commercial was not controversial because nobody was in favor of deficits that we could think of,” Elliott said.

A Political Issue

However, CBS disagreed, because the deficit is a political issue and CBS prefers to avoid ads from companies dealing with politics.

“If you take corporate ads that go beyond goods and services into editorializing, those companies with the ability and the money to buy TV time can skew the public debate,” said Alice Henderson, vice president of program practices for the CBS broadcast group.

At ABC and NBC, which aired Grace’s first ad, the reasoning was more specific. This new ad was controversial, they thought, because it advocated a specific position, which Grace’s first ad did not.

The first commercial showed two bureaucrats presenting a $50,000 bill to a newborn infant--Grace’s estimate of the deficit liability every child yet unborn will have to assume.

“The baby ad seemed to imply a factual statement,” ABC spokesman Jeff Tolvin said. “It did not draw any conclusions.”

But the new ad, NBC Vice President Gitter said, “conveys the message that the existence of a sizable federal deficit is leading the country, and perhaps the entire world, toward a disaster of extraordinary proportions.

“In fact, many economists do not consider the current debt to represent anything critical, let alone cataclysmic,” Gitter said.

“No one is arguing that deficits are good. The break point is how bad the deficit actually is,” Gitter said. He added that in retrospect NBC has decided even the first Grace ad should not have run.

At least one attorney familiar with broadcasting law agrees that Grace’s treatment of the deficit is controversial under the fairness rule, but does not believe that airing it would require the networks to allow other points of view free time.

Called ‘Advertorial’

“This is what we call an ‘advertorial,”’ an ad that advocates a position on a public issue, said John F. Banzhaf III, the George Washington University law professor who forced cigarette ads off television by invoking the fairness doctrine. “And with advertorials, the fairness doctrine applies.”

But, Banzhaf added, “running a few ads on the deficit, say 10 a month, is more than balanced by (NBC anchorman Tom) Brokaw and company talking about it every night on news.”

Grace offered to compensate NBC for any time it provided opposing views under a fairness argument, but the network declined.

“My personal view is that the networks tend too much to shy away from robust debate on public issues,” Banzhaf said. “Having to give some time occasionally under the fairness doctrine is not all that bad.”

Actually, all three networks said that if the fairness rule were abolished they would retain the policies that caused them to reject the Grace ad.

“In our opinion the spot employs scare tactics which we believe to be problematic in the presentation of a highly complex subject,” said ABC’s Tolvin.

“We are guests in people’s homes,” said NBC’s Gitter, “and guests should behave a certain way.”

Some experts on network ad policies take issue with that position.

“The argument that they are afraid of offending people is specious,” said McDonald of the conservative American Legal Foundation. “All the things they do in entertainment--such as ABC’s program about the effects of a nuclear attack--are really advocacy under the cover of fiction.”

ABC offered to air the Grace spot during the half-hour each day it reserves for the occasional advocacy ad, midnight to 12:30 a.m., if Grace would add a disclaimer labeling the commercial paid advertising.

Grace refused, Elliott said, because it wanted the ad in prime time and because “The Deficit Trials” already was designated an ad by the Grace logo.

Since the network refusal, Grace has run the ad on several cable systems and local stations, including KTTV Channel 11 and KHJ Channel 9 in Los Angeles.

Neither KTTV nor KHJ reports complaints or requests for opposing time.

The spot also has appeared on Cable News Network, Independent News Network, WGN--a cable super-station in Chicago--two independent stations in New York, and two locally owned network affiliates in Washington.

But Grace still wants the networks, where roughly three quarters of all viewers tune.

“I would love to reopen the negotiations with the networks . . . because clearly there is a great deal of disagreement (among television stations) about what constitutes controversiality,” Elliott said.

Elliott’s company launched its campaign after its chairman, Peter J. Grace, headed a government panel in 1984 studying federal waste and inefficiency. Besides chemicals, the international firm is involved in selected consumer services.

Grace’s first ad, aired at a cost of $2.3 million, generated 118,000 phone calls to a toll-free number from viewers seeking details on the deficit. The company has budgeted $900,000 to run this year’s ad, which cost $300,000 to produce.

Most newspapers--which are not subject to a federally imposed fairness doctrine--have more liberal advertising policies than the networks. The Los Angeles Times generally accepts most controversial ads, once the paper has determined they are legal, fair and not libelous, said Donald J. Maldonado, director of display advertising.