Networks, Studios Battle at Hearing on TV Syndication

Network and Hollywood executives traded accusations Friday over who has the most power in deciding what gets aired on American television and how fairly they wield it.

The forum was a Federal Communications Commission hearing on whether changes should be made in rules that limit the financial interest that networks can have in programs they broadcast and that prohibit them from sharing in revenue from reruns sold to domestic independent stations and abroad.

ABC, CBS, NBC and Fox executives were unanimous in insisting that nothing short of repeal of the rules is acceptable. Anything less, warned CBS boss Laurence A. Tisch, threatens the future of American television.

Hollywood executives cautioned that relaxing the rules would allow the networks to use their leverage to demand creative and financial concessions from producers that would damage the diversity of television fare.

The exchange of barbs between the sides, while shedding little new light on their positions, was both diverse and creative.

Tisch called the studios, which provide much of the prime-time programming for the networks, a “Hollywood cartel.” NBC President Robert C. Wright went further, comparing the studios to the Mafia. He contended that they have pressured independent producers against speaking out in favor of repealing the rules.

Leonard Hill, a leading independent producer, countered that only the networks can intimidate his industry because they decide whether a producer can get a show on television. Removing the rules, he said, would be akin to “deregulating Exxon to protect Alaskan wildlife.”

Declining audience share has only transformed the networks from “900-pound gorillas . . . to 850-pound gorillas,” said Richard Frank, president of Walt Disney Studios.

But it was Jack Valenti, demonstrating why Hollywood makes him Washington’s highest-paid lobbyist, who got off the best line. Producers do not want the networks free to buy into their shows because they fear “the fiscal kiss . . . from lips laced with the curare of anti-competitiveness,” he said to great laughter.

The fate of independent producers appeared to concern some FCC commissioners. The rules were passed in 1970 to break network dominance over programming. Since then, more than 200 producers have sprung up.

“If the networks are in a position to exact--by methods akin to extortion--financial or syndication interests, then some continuing commission role would be warranted,” said Chairman Alfred C. Sikes.

Robert Daly, chairman of Warner Bros., said that is exactly what the studios and producers fear will happen if the rules are removed. Daly, who spent 25 years in network television, said he was speaking from experience.

“When I was at CBS, we took the syndication rights from Norman Lear for ‘All in the Family,’ ” Daly said. “Shortly thereafter, the rule was adopted, so we could not take those rights on Norman’s next show, ‘Maude.’ ”

Jeffrey F. Sagansky, the CBS executive in charge of negotiating with producers for programs, said competition among the three networks and other outlets would permit a producer to simply take his show elsewhere if one network got greedy.

Sikes and Commissioner James H. Quello appeared most responsive to the networks’ contention that the rules put them at a competitive disadvantage with foreign companies buying Hollywood studios. But the sentiment was not shared by their colleagues.

During discussion of foreign ownership, Commissioner Andrew C. Barrett said there are three commissioners who do not believe that foreign ownership is a relevant issue.

With the exception of Quello, the commissioners did not tip their hands on how they plan to vote. Despite joking that it was “like having to choose between Iran and Iraq,” Quello made clear that he favors substantial relief for the networks because of their eroding audience share and competition from cable and other entities.

The commission expects a decision by March.