Paxson Asks FCC to Block NBC Deal

Paxson Communications Corp. accused General Electric Co.’s NBC of breach of contract and is trying to block NBC’s proposed $2.7-billion purchase of Telemundo Communications Group Inc.

NBC owns 32% of Paxson, which operates the Pax TV network and station group, and has an option to raise its stake if TV station ownership rules change. Paxson claims that buying Telemundo would raise regulatory hurdles for NBC to acquire the rest of Paxson, violating the companies’ 1999 purchase agreement.

Paxson Chief Executive Jeff Sagansky also said NBC is trying to keep Paxson’s share price depressed so it eventually can buy the company at an artificially low price. NBC officials weren’t available to comment.

“They are the 800-pound gorilla here, and unfortunately they are acting like it,” Sagansky said in a conference call.

Paxson has filed a petition with the Federal Communications Commission asking the agency to block NBC’s acquisition of the Telemundo stations. Spanish-language broadcaster Telemundo declined to comment on the filing.

West Palm Beach, Fla.-based Paxson also is asking an arbitrator to determine whether NBC violated its agreement.

Paxson was up 80 cents, or 9%, at $9.75 on the American Stock Exchange. GE rose 43 cents at $37.35 on the New York Stock Exchange.