Rerun Rights Talks Collapse; FCC to Step In

Negotiations between the television networks and Hollywood studios over who will control the lucrative market for reruns collapsed Wednesday without the two sides ever officially meeting.

The failure to reach a negotiated settlement means the issue now goes before the Federal Communications Commission to determine if the 20-year-old “financial interest and syndication rules,” which bar the networks from earning rerun profits, should be repealed.

Not surprisingly, the networks and studios blamed each other for the collapse of talks.

Negotiators for the three networks said they arrived Tuesday in Hollywood for a final round of negotiations before today’s filing deadline at the FCC only to find, to their surprise, that the Hollywood representatives would not meet with them.

A coalition representing the producers said it considered an informal proposal from ABC and suggested modifications to the plan, but the network then would not endorse the proposed compromise. Officially, the studios said they declined to meet with the network because they needed more time to prepare their filing for the FCC.

The collapse of negotiations ends seven years of on-again, off-again private talks over the so-called fin/syn issue. The dispute is one of the most volatile in Hollywood because it involves literally billions of dollars annually in profits from old TV shows.

In a statement, the Coalition to Preserve the Financial Interest and Syndication Rules, which represents the studios and independent producers, said Capital Cities/ABC Inc. General Counsel Steve Weiswasser proposed privately to Warner Bros. Chairman Robert A. Daly a compromise that could lead to a negotiated settlement.

According to a source close to the negotiations, Weiswasser proposed that the networks might be willing to drop some of their demands, such as seeking the right to sell TV programs overseas, in exchange for a financial stake in programs that they air but do not now own.

Weiswasser said, however, that the studios responded that they would proceed only if the networks agreed to several “preconditions,” including raising the minimum fees that they pay the producers for rights to air programs.

FCC Chairman Alfred C. Sikes, in a statement, said he was not surprised that the parties could not reach an accord. “Seven years of negotiations without agreement hardly leads to optimism.” He promised that the FCC would take up the matter “carefully and objectively in light of contemporary circumstances.”

The focus now shifts to the FCC, where both the networks and studios are expected to launch aggressive lobbying campaigns. Until now, both sides in the dispute have been barred from meeting with FCC commissioners and staff.

The networks will undoubtedly argue that the television landscape has changed dramatically enough over the past decade--through the growth of cable and independent stations--that they should now be allowed to participate in rerun rights.

The studios, however, contend that if the networks are allowed to own the TV programs they air, producers would lose their independence while the networks would use their power to negotiate unfairly low prices for programs.