NBC Buys 38% Share of British TV News Agency

NBC, seeking to cut its overseas costs while expanding overseas markets for its domestic news reports, said Thursday it has bought nearly 38% of Visnews, a British-owned TV news agency with which NBC has had ties for nearly 20 years.

Under terms of the $10-million deal, which becomes effective Jan. 1, the Reuters news agency--still Visnews’ majority owner--can buy back NBC’s share of Visnews in 1998 if it and NBC decide to end the deal.

There has been speculation that NBC’s move is aimed at letting it reduce its overseas news operations, thus saving money--and in the process changing the way it gathers and reports news from abroad by relying more on lower-paid Visnews crews and reporters.

NBC News is under pressure from top NBC management to break even financially by 1990.

One former senior network news executive, when asked Thursday to assess the impact of the Visnews deal on NBC News coverage abroad, expressed concern. “I think it’s going to diminish it considerably,” he said.

“It’s the difference between having your own staff and going to a wire service,” said the former executive, who asked not to be identified. “It’s as though the L.A. Times said, ‘What do we need foreign bureaus for? We have the Associated Press.’ ”

But NBC News officials said Thursday that none of the division’s 22 overseas offices will be closed. The largest bureau is London, a major story editing and relay post as well as news center. It has about 60 staff members.

No major personnel changes are afoot, either, the officials said. At most, they said, only 20 of NBC News’ 170 staffers abroad will be axed or transferred into Visnews.

Nor are there long-range plans to turn NBC’s foreign bureaus into Visnews operations, said Natalie Hunter, NBC News’ vice president for finance and administration.

“No, not really--NBC News will maintain its identity on the scene,” she said by phone from London, where she and other NBC officials concluded the company’s purchase of 37.75% in Visnews.

Established in 1957, London-based Visnews, which has bureaus here, in Washington and Miami, says it has more than 400 employees worldwide, the majority of them in Europe. It says it serves more than 400 broadcasting organizations in 84 countries.

Although NBC will have two members on the Visnews board, Reuters will keep its controlling interest in the company, owning 51% of its shares. A third owner, the British Broadcasting Corp., will retain the 11.25% interest it had before the deal.

Reuters also will retain editorial control of what overseas stories Visnews covers, although NBC will now have a voice in the decision-making process.

One source close to the Visnews agreement, agreeing with one estimate that the deal could save NBC up to $5 million annually in overseas newsgathering costs, said that most of the benefits from the deal involve the overseas free-lance TV crews that NBC hires for work on specific stories.

“We employ a lot of free-lance people overseas, but now will be coming to Visnews instead,” the source said. “And I think . . . we’ll be able to lay off some of our free-lance costs onto this new operation. . . .”

Another plus is a reduction of duplication of effort by NBC and Visnews news crews, officials said.

It’s “crazy” to have two separate crews on the same story and booking separate satellite feeds for it, Julian Kerr, Visnews’ managing director, said in a phone interview from London.

“That’s the sort of unnecessary duplication which can be terminated very, very quickly indeed.”

A third “major benefit” for NBC is the potential for profit from the new arrangement, Hunter said.

The “explosion” in demand overseas for TV news material, coupled with NBC’s news operation partnership with Reuters and BBC, “will stand NBC in very good stead when it comes to marketing raw news and NBC’s (news) programs overseas,” she said.

NBC News President Michael Gartner wasn’t immediately available for an interview. But he said in a statement that the new deal “will continue and will enhance our worldwide news-gathering abilities.”

The Visnews deal isn’t the first time a major U.S. network has bought into a foreign TV news operation based overseas. Six years ago, ABC bought an interest--now 45% --in Worldwide Television News, which, like Visnews, is based in London. Worldwide’s clients include both ABC News and CBS News.

Under its new agreement, NBC will continue to supply Visnews exclusively with domestic news reports and footage for sale to overseas markets, and now will enjoy a share of whatever profits are realized.

Visnews, whose only other U.S. subscribers are public TV’s “MacNeil/Lehrer NewsHour” and public-TV station WGBH-TV in Boston, will continue to provide NBC with foreign news reports and footage.

NBC has used Visnews to supplement its own overseas coverage. That will continue, but now the network can also use Visnews material in the new business-and-sports cable TV service it plans to start in February.