Thursday, December 31, 2009

138 Journalists Died On The Job In 2009

In the past year, 138 journalists have died in the course of their work, the majority were murdered or killed.

The International Federation of Journalists reports that 113 were murdered or killed in other violence, while the remaining 24 died in work-related accidents.

The most recent journalist to be killed was Canadian Michelle Lang, who died in a roadside bomb blast in Afghanistan on Tuesday.

The report identifies the Philippines, Mexico and Somalia as the most dangerous countries for journalists to work in. Last month 31 journalists were killed in the Philippines after being abducted.

In Iraq, the worst country for fatalities among journalists over the past decade, five media workers were killed this year. The Federation argues that, in spite of a pledge by the UN Security Council in 2006, journalists are not given enough protection, especially in countries where armed conflicts are taking place.

The International Federation of Journalists (IFJ) today called for more action from governments and the United Nations to protect media.

"Last year's drop in the murder rate of journalists has been short lived," said Jim Boumelha, IFJ President. "The devastating massacre of 31 journalists and media staff in the Philippines in November and fresh violence against colleagues in Mexico and Somalia have made this a year of terrible bloodshed for media."The IFJ list of work related media killings is coordinated with the International News Safety Institute (INSI) and contains 137 journalists and media personnel who died during 2009 against 109 killings recorded in 2008. Of these, 24 were accidental deaths while journalists were at work.

The question is whether governments are listening or ready to take their responsibilities seriously," said Aidan White, IFJ General Secretary. "There is no room for complacency and indifference. The crisis facing media threatens innocent lives and democracy itself."

As of 31 December, the IFJ recorded the following information on killings of journalists and media staff in 2009:

Targeted killings: 113

Accidental deaths: 24

Overall killed : 137

The deadliest region, for the second year running, was Asia Pacific with 52 journalists and media personnel killed. The Philippines have the region's highest death toll, following the 23 November Maguindano province which claimed 31 lives of media victims.Other countries with high numbers of media fatalities are:

Mexico 13
Somalia 9
Pakistan 7
Russia 6

In 2008, Iraq, India and Mexico were the most dangerous countries in the world. Russia has this year broken into the top five most dangerous countries.

The IFJ is supporting a campaign against impunity in the country and has launched an online database on cases of journalists' murders in collaboration with two leading Russian monitors of abuses against journalists; the Glasnost Defence Foundation and the Centre for Journalism in Extreme Conditions.

The list of journalists and media staff killed in 2009 is available here

The full IFJ report on journalists and media staff killed in 2009 will be published mid January 2010.

This year's death toll of 138 compares with 109 last year and 175 in 2007. This is another sign of the dangerous world we live in. Let's hope for a better 2010.

For more information, please contact IFJ:
Jim Boumelha, President: +44 1865723450
Aidan White, General Secretary: +32 478258669
Ernest Sagaga, Communications Officer: +32 2 235 22 07/+32 477 71 40 29

The IFJ represents over 600,000 journalists in 125 countries around the world. The International Federation of Journalists is the world's largest organisation of journalists. First established in 1926, it was relaunched in 1946 and again, in its present form, in 1952.

Tuesday, December 29, 2009

Broadcasters' Woes Could Spell Trouble for Free TV

By ANDREW VANACORE, AP Business Writer

Assailed by cable and the Web, broadcast TV looks to build a new business model

For more than 60 years, TV stations have broadcast news, sports and entertainment for free and made their money by showing commercials. That might not work much longer.

The business model is unraveling at ABC, CBS, NBC and Fox and the local stations that carry the networks' programming. Cable TV and the Web have fractured the audience for free TV and siphoned its ad dollars. The recession has squeezed advertising further, forcing broadcasters to accelerate their push for new revenue to pay for programming.

That will play out in living rooms across the country. The changes could mean higher cable or satellite TV bills, as the networks and local stations squeeze more fees from pay-TV providers such as Comcast and DirecTV for the right to show broadcast TV channels in their lineups. The networks might even ditch free broadcast signals in the next few years. Instead, they could operate as cable channels — a move that could spell the end of free TV as Americans have known it since the 1940s.

The future of free TV also could be altered as the biggest pay-TV provider, Comcast Corp., prepares to take control of NBC. Comcast has not signaled plans to end NBC's free broadcasts. But Jeff Zucker, who runs NBC and its sister cable channels such as CNBC and Bravo, told investors this month that "the cable model is just superior to the broadcast model."

The traditional broadcast model works like this: CBS, NBC, ABC and Fox distribute shows through a network of local stations. The networks own a few stations in big markets, but most are "affiliates," owned by separate companies.

"Good programing is expensive," Rupert Murdoch, whose News Corp. owns Fox, told a shareholder meeting this fall. "It can no longer be supported solely by advertising revenues."
Fox is pursuing its strategy in public, warning that its broadcasts — including college football bowl games — could go dark Friday for subscribers of Time Warner Cable, unless the pay-TV operator gives Fox higher fees. For its part, Time Warner Cable is asking customers whether it should "roll over" or "get tough" in negotiations.

Traditionally the networks paid affiliates to broadcast their shows, though those fees have dwindled to near nothing as local stations have seen their audience shrink. What hasn't changed is where the money mainly comes from: advertising.

Cable channels make most of their money by charging pay-TV providers a monthly fee per subscriber for their programing. On average, the pay-TV providers pay about 26 cents for each channel they carry, according to research firm SNL Kagan. A channel as highly rated as ESPN can get close to $4, while some, such as MTV2, go for just a few pennies.

With both advertising and fees, ESPN has seen its revenue grow to $6.3 billion this year from $1.8 billion a decade ago, according to SNL Kagan estimates. It has been able to bid for premium events that networks had traditionally aired, such as football games. Cable channels also have been able to fund high-quality shows, such as AMC's "Mad Men," rather than recycling movies and TV series.

That, plus a growing number of channels, has given cable a bigger share of the ad pie. In 1998, cable channels drew roughly $9.1 billion, or 24 percent of total TV ad spending, according to the Television Bureau of Advertising. By 2008, they were getting $21.6 billion, or 39 percent.

Having two revenue streams — advertising and fees from pay-TV providers — has insulated cable channels from the recession. In contrast, over-the-air stations have been forced to cut staff, and at least two broadcast groups sought bankruptcy protection this year.

Fox illustrates the trend: Its broadcast operations reported a 54 percent drop in operating income for the quarter that ended in September. Its cable channels, which include Fox News and FX, grew their operating income 41 percent.

Analyst Tom Love of Zenith Optimedia said he expects the big networks will end the year with a 9 percent drop in ad revenue, followed by an 8 percent drop in 2010 and zero growth in 2011.

A small chunk of the ad revenue is being recouped online, where the networks sell episodes for a few dollars each or run ads alongside shows on sites such as Hulu. Media economist Jack Myers projects online video advertising will grow into a $2 billion business by 2012, from just $350 million to $400 million this year.

But that is not significant enough to make up for the lost ad revenue on the airwaves.

Advertisers spent $34 billion on broadcast commercials in 2008, down by $2.4 billion from two years earlier, according to the Television Bureau of Advertising.

So rather than wait for the Internet to become a bigger source of income, the networks and local stations are mimicking what cable channels do: They're charging pay-TV companies a monthly fee per subscriber to carry their programming.

Since 1994, the Federal Communications Commission has let networks and their affiliates seek payments for including their programming in the pay-TV lineup. Not everyone demanded payments at first. Instead they relied on the broader audience that cable and satellite gave them to increase what they could charge advertisers.

The big networks also were content to let their broadcast stations essentially be subsidized by higher fees for the cable channels that fell under the same corporate umbrella. A pay-TV company negotiating with the Walt Disney Co., which owns ABC, is likely paying more for the ABC Family channel than it otherwise would, with the extra assumed to help Disney cover its costs for the ABC network broadcasts.

But over time — such contracts generally run about three years — more networks began demanding payments for the stations they own. And affiliates already receiving the fees have bargained for more money.

Some talks have been tense. In 2007, Sinclair Broadcast Group, which operates 32 network-affiliated stations around the country, pulled its signals for nearly a month from Mediacom Communications Corp., which provides cable TV to about 1.3 million subscribers, mainly in small cities.

The American Cable Association says its members — mainly small cable TV providers — have seen their costs for carrying local TV stations more than triple over the past three years. The group's head, Matt Polka, says those fees have gone "straight to consumers' pocketbooks" in the form of higher cable bills.

Gannett Co., for instance, which operates 23 stations, has taken in $56 million in fees from pay-TV operators this year after negotiating a new batch of agreements, up from $18 million in 2008. Dave Lougee, president of Gannett's broadcast arm, defends the fees, saying "broadcasters were late to the game in really starting to go after the fair market value of their signals."

Analysts estimate CBS managed to get as much as 50 cents per subscriber in its most recent talks with pay-TV providers that carry CBS-owned stations. CBS Corp. chief Leslie Moonves said such fees should add "hundreds of millions of dollars to revenues annually."

That could be just the beginning. CBS and Fox are also asking for a portion of the fees that their affiliates get, arguing that the networks' shows are what give local stations the leverage to ask for fees.

Over time, the networks might be able to get even more money by abandoning the affiliate structure and undoing a key element of free TV.

Here's why: Pay-TV providers are paying the networks only for the stations the networks own. That amounts to a little less than a third of the TV audience, which means local affiliates recoup two-thirds of the fees. If a network operated purely as a cable channel and cut the affiliates out, the network could get the fees for the entire pay-TV audience.

If forced to go independent, affiliates would have to air their own programming, including local news and syndicated shows.

Fitch Ratings analyst Jamie Rizzo predicts that at least one of the four broadcast networks "could explore" becoming a cable channel as early as 2011.

Any shift would take years, as the networks untangle complicated affiliate contracts. At an analyst conference last year, CBS's Moonves called the idea an "a very interesting proposition." But he added that it "would really change the universe that we're in."

Monday, December 28, 2009

Fewer Actors, Other Trends You'll See in 2010

The Wall Street Journal

The economy may continue its gradual recovery next year, but advertising is expected to show the influence of the recession through 2010.

Don't expect a letup in the rough-and-tumble sales pitches that hit the airwaves, Web and magazines this year, as advertisers like Campbell Soup and Verizon Wireless, owned by Verizon Communications and Vodafone, took direct aim at their competitors. Advertising executives expect such barbed comparison ads to continue.

Other companies, meanwhile, will be showing their softer sides. In the bleak aftermath of the recession, many marketers think consumers will respond to brands they perceive as giving back to the community.

PepsiCo, for example, recently decided to bypass Super Bowl advertising in favor of an online campaign that doles out funds for charitable purposes.

"There are lots of issues and problems in the world, and we are seeing a rise in corporations doing good, because government can only go so far. There are lots of issues and problems in the world, and it's cool to do good," says Rob Schwartz, chief creative officer of Omnicom Group's TBWA/Chiat/Day Los Angeles. Industry executives also are convinced it will be effective.

Another of next year's prominent themes will be a throwback to the early days of television. Ad executives say they expect an increase in live TV commercials, which made a comeback in 2009.

In the spots, talk-show hosts like Jimmy Kimmel perform skits featuring the advertiser's product. "We are looking at ways to keep the consumer engaged, and live TV ads are helping us do that," says Richard Gagnon, chief media officer at Interpublic Group's DraftFCB.

Madison Avenue executives say they will rely on these and other strategies, such as using fewer actors and more animated characters, and spots that share the screen with TV programs to thwart ad-skipping. Here's what they say you'll be seeing in 2010.

Rising Stars

Social-network personalities will make their way to mass-media stardom next year, says Christian Haas, creative director of Omnicom's Goodby Silverstein & Partners. Mr. Haas says consumers will see the ubiquitous press quotes that pepper movie and car ads share screen time with the average Joe's tweets.

Divided Attention

TV networks are increasingly looking for ways to stop consumers from ad-zapping, says Mr. Gagnon of DraftFCB. He says TV viewers will see more split screens that give them a glimpse of what is going on behind the scenes of a show while a commercial runs on the other side of the split.

DraftFCB is looking at doing a test of the ad format for one of its clients during a prime-time talk show. Consumers would see the talk-show host getting ready for his next segment on one side of the screen while the ad plays on the other side. Expect to see more of these ads during live programs and sporting events, Mr. Gagnon says.

Mobile, for Real This Time

Mobile advertising has long been promised and largely underdelivered. David Lubars, chief creative officer of Omnicom's BBDO, says he thinks a breakthrough is right around the corner. It'll have something to do with longer-form entertainment, he says.

Daryl Lee, president of global communications planning at Interpublic's Universal McCann, predicts mobile marketing will find a purpose: helping consumers find what they are looking for at local stores, probably in the form of apps, gadgets and widgets, not regular ads.

Tiger Fallout

As the fallout from Tiger Woods's alleged infidelities continues, the episode will have a drastic effect on sports marketing, says Tony Ponturo, former head of global sports marketing for Anheuser-Busch InBev. Consumers will see fewer big-name celebrities and athletes pitching for brands. Mr. Ponturo says marketers will look more to sponsor teams, leagues and events, rather than individuals, an approach with fewer risks.

Getting to Know You

Consumers will give their personal information in return for getting the ads they want to see, predicts Tracy Scheppach, innovations director at Publicis Groupe's Starcom MediaVest Group. "I just see the stuff I have opted to receive because I am a mom—that's advertising," she adds.

Cheaper Pitchmen: Employees

Employees are well-versed in the products they represent, and their enthusiasm can enhance a brand exponentially on the Web, says Marian Salzman, a trend spotter for Havas's Euro RSCG Worldwide. Best Buy has been ahead of this curve, Ms. Salzman says, with employees, called Blue Shirts, who pitch for Best Buy in TV ads and on Twitter, Ms. Salzman says.

Lux 2.0

Luxury, one of the last industries to embrace the Web, will leapfrog other categories in digital marketing, says Mr. Lee of Universal McCann, "as we watch the rapid rise of the luxury geek."

Avatar Envy

Thanks to the new sophistication in animation, "We are going to see more animation and virtual talent in ads. It's cheaper than hiring actors," and it avoids the risk of having your brand associated with a celebrity, says Mr. Gagnon of DraftFCB.

Watch One, Get One Free

Paying for content is the foundation of the ad business. But as consumers tune out ad messages, companies that offer tangible benefits will most likely win their attention, says Mr. Haas of Goodby. Sprint Nextel started offering free Wi-Fi in the airport; Google is paying for it on the plane. "Anyone interested in comping my cable modem at home?" Mr. Haas says.

Less Glitz

More ads will be made on the cheap, as advertisers continue to cut costs and seek a way to connect with digitally savvy consumers who see the world through their iPhone, says Mr. Schwartz of TBWA.

Write to Suzanne Vranica at

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Wednesday, December 23, 2009

Labor's Messy Health Care Bargain

By Harold Meyerson
The Washington Post

The Net roots is up in arms about the Senate's version of health-care reform, with many rooters demanding it be voted down. The liberal establishmentarians lament the compromises they were compelled to accept but support the bill's passage. In between the two, indignant and stuck, is organized labor.

"There's an excise tax on policies, but there's no public option to hold down the cost of those policies," says Leo Gerard, president of the United Steelworkers. "There's no Medicare buy-in, no pay-or-play mandate for employers. There's no Canadian reimportation to hold down drug costs, on the grounds of 'safety.' No one gets sick from Canadian reimported drugs," adds Gerard, who is Canadian. "I know a guy who got sick from a Chinese-made ingredient in an American drug, but there's no restriction on Chinese drug imports."

Gerard is hardly alone in his criticisms. Labor believes, rightly, that the cost controls in the Senate bill come chiefly from insurance policy holders (among them, labor's members), rather than from insurance and drug companies. Both the AFL-CIO and the Service Employees International Union have condemned these provisions, while hailing the bill's epochal creation of affordable health insurance for 30 million Americans. They're careful, too, to exempt President Obama from their criticisms.

"I'm not blaming the president," says Gerard. "He wants to believe people will do the right thing."

The unions have few illusions that the public option will be restored in the House-Senate conference committee, but they are working to promote the chief funding mechanism in the House bill (a tax hike on individuals with incomes over $500,000 and couples with incomes over $1 million) over that in the Senate bill (a tax that, to start, will fall on health insurance policies that cost more than $23,000 for a family of four).

With medical costs unchecked by a public option and drug reimportation, they fear that the value of their members' policies will rise above the threshold by the middle of the next decade.

There's a political problem as well. During the fall of 2008, the unions spent millions persuading older working-class whites to vote their pocketbooks instead of their prejudices in such key swing states as Pennsylvania and Ohio.

Just about the only issue that moved these voters from John McCain's column to Barack Obama's, they discovered, was that McCain supported taxing their members' health insurance and Obama didn't. "We negotiate and fight hard for our health-care benefits," said one widely distributed piece of AFL-CIO literature. "Now, Republican John McCain wants to tax them."

"This was our mantra," says Gerard. "Obama was polling better with our active members than with our retirees, which is very unusual, until we focused on McCain's plan to tax benefits. Our retirees are in expensive plans; that kind of tax would be devastating to them."

Politically, in fact, the tax could set in motion the kind of dynamic that undermined many Great Society anti-poverty programs: taxing the working class to provide benefits to the poor (or, in this case, the uninsured). Richard Nixon and Ronald Reagan smashed the Democrats' New Deal coalition by fanning the racial and class tensions endemic to such programs. Does anyone believe that today's Republicans will think better of mounting such attacks?

In theory, the House-Senate conference committee should be able to split the difference on funding by raising the Senate's threshold on taxing insurance policies and combining it with a scaled-back version of the House's millionaire tax. If the conference does that, raises the subsidies for people buying policies on the exchanges and extends Medicaid to more poor families, liberals and labor will likely have gotten all they can plausibly hope for, given the constraints that the Nelsons, Liebermans and Republicans have imposed on the bill.

Labor is boiling mad about those constraints, but unlike some of the Net-rooters, they can't and won't call down curses on the Senate Democrats -- yet. "We've played an inside game," says one of Gerard's fellow union presidents. "We've delivered our criticisms privately." Labor's leaders still hope a scaled-back version of the Employee Free Choice Act (EFCA) -- the bill that would restore unions' ability to organize private-sector workers -- will pass the Senate next year.

They've seen the White House and congressional Democrats move their way on jobs legislation, and they welcomed last week's unveiling of a $5 billion tax credit to bolster green manufacturing, a long-overdue step toward rebooting manufacturing in America.

But it will take more job creation and the enactment of EFCA to motivate unions to go all out in the 2010 elections. Anything short of that, and their anger will take a toll on the Democrats' electoral prospects.

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Health Interests Spend $600 Million to Sway Congress

by Jonathan D. Salant and Alex Nussbaum

(Bloomberg) -- More than $600 million has been spent so far this year trying to influence U.S. lawmakers working to overhaul the health-care system, reports show.

The health industry spent $396 million through Sept. 30, more than any other industry and up 9 percent over the same period a year ago, according to the Center for Responsive Politics, a Washington-based research group.

Those numbers don’t include spending on lobbying by insurers such as the Blue Cross and Blue Shield Association and its member companies, which spent $16.7 million in the first nine months of 2009, compared with $16.2 million in all of 2008.

“The health-care industry has a full-court press on members of Congress,” said Representative Dennis Kucinich, an Ohio Democrat.

Another $200 million has been spent on television advertising for and against overhauling health care, according to TNS Media Intelligence/Campaign Media Analysis Group, an Arlington, Virginia-based company that tracks political advertising.

The U.S. House passed health-care legislation last month. The Senate has overcome procedural hurdles to pave the way for approval of its version by Dec. 24.

Working With Lawmakers

“The Blue Cross and Blue Shield companies represent 100 million people across the country in every zip code and have 80 years of experience in health care,” said Brett Lieberman, a spokesman for the Blue Cross and Blue Shield Association in Washington. “We’ve been working with members of Congress sharing that experience.”

The Senate health legislation exempts some nonprofit health plans from a $70 billion tax on the insurance industry, including some Blue Cross plans in Alabama, Michigan and Pennsylvania.
Health-industry shares have risen 18 percent this year, as measured by the Standard & Poor’s 500 Health-Care Index. Tenet Healthcare Corp., the Dallas-based hospital chain, led the index with an almost fivefold gain, followed by Intuitive Surgical Inc. of Sunnyvale, California, a maker of robotic surgical systems, which has more than doubled.

The S&P index of six managed-care insurers has risen 34 percent this year. Cigna Corp. of Philadelphia, up 120 percent, and Coventry Health Care Inc. of Bethesda, Maryland, up 69 percent, have led the advance. The index has jumped 12 percent since Dec. 9, when Senate Democrats dropped a proposal for a government-run plan to compete with private insurers.

Drugmaker Gains

Drug companies have gained 16 percent this year, as measured by the by S&P Pharmaceutical Index. New York-based Pfizer Inc., the world’s largest drugmaker, rose 5.5 percent.

The Senate on Dec. 15 rejected an amendment to allow imports of cheaper drugs from Canada, a provision opposed by the pharmaceutical industry. Drugmakers earlier agreed to contribute $80 billion over 10 years in return for blocking other profit- endangering proposals.

Pfizer’s trade group, the Pharmaceutical Research and Manufacturers Association, spent $19.9 million through September. That’s the third-highest amount behind the U.S. Chamber of Commerce and Irving, Texas-based Exxon Mobil Corp., and almost as much as the $20.2 million the group spent in 2008.


There are 3,300 lobbyists registered to lobby on health care, Senate records show, six for each of the 535 members of the House and Senate. More than 1,400 of those lobbying on health care formerly worked for Congress, the White House or federal agencies, including 55 former lawmakers.

“This is the way the political system works,” said Representative Patrick Kennedy, a Rhode Island Democrat. “People curry favor in all kinds of different ways.”

Many of those lobbyists visited the White House to meet with President Barack Obama and top administration officials, according to visitor logs. Health-care visitors included Karen Ignagni, president of America’s Health Insurance Plans, the trade group for private insurers; Phrma President Billy Tauzin, a former U.S. representative; and Richard Kirsch, national campaign manager of Health Care for America Now, a coalition of labor and advocacy groups such as the AFL-CIO.

To contact the reporters on this story: Jonathan D. Salant in Washington at ; Alex Nussbaum in New York .

Analyst Lowers TV Revenue Expectations

BIA/Kelsey VP Mark Fratrik has knocked another billion off his final forecast for 2009 TV station revenues, now put at $15.6 billion. He sees things getting a little better going forward, but only a little.That $15.6 billion forecast for over-the-air revenues is down 22.4% from $2008.

That includes $518 million in TV station revenues from the Internet, up 12% from $463 million last year. Back in July the analyst had been looking for a drop of 17.3%.The picture looks a little better for 2010. Fratrik now predicts that TV station revenues will rise 3% to $16.1 billion, including a $130 million increase in Internet revenues.

"While television's numbers are tapering down due to audience erosion from other media delivery options, we continue to see that local TV remains a valuable way to reach relatively larger audiences, critical for mass communications in political campaigns. Additionally, online revenues are expected to grow as stations get more sophisticated in the way they sell to advertisers and integrate their mobile and Internet offerings with their broadcasting operations," Fratrik said as he released his updated forecast.

RBR-TVBR is great! Add to favorites
The Wall Street Journal

Comcast Corp. agreed to pay Chief Operating Officer Steve Burke signing bonuses of $18 million in cash and stock, as part of a five-year contract extension following Comcast's successful conquest of NBC Universal.

Mr. Burke's new contract was disclosed Tuesday in a securities filing.

Mr. Burke will oversee the integration of NBC Universal into Comcast. Comcast agreed this month to buy control of the television and movie company from General Electric Co. for about $13.75 billion in cash and assets. The deal now faces as much as a year of review in Washington.
Michael Angelakis, Comcast's chief financial officer, also signed a contract extension, the filing said. As part of his agreement, extending three years, Mr. Angelakis will receive signing bonuses of $9 million in cash and stock.

Mr. Burke's signing bonuses comprise $6 million in cash and $12 million in restricted stock, with half of each granted at signing and the remainder when the NBC Universal deal closes, or by June 30 at latest. Mr. Angelakis's signing bonuses are structured similarly. Neither man's new contract increases his base salary or normal cash bonus opportunity.

A Comcast spokeswoman said the company entered the new agreements "with Steve and Michael because they are the best in the business, and their roles in leading the integration of NBC Universal are critically important."

Printed in The Wall Street Journal, page B4 December 23, 2009

Friday, December 18, 2009

Sam Zell Must Face Tribune Employee Pension Plan Suit

By Andrew M. Harris

Dec. 18 (Bloomberg) -- Sam Zell, the real estate investor who took the Chicago-based Tribune Co. private in an $8.3 billion stock buyback two years ago, must face an employee lawsuit claiming he knowingly violated federal pension laws.

U.S. District Judge Rebecca Pallmeyer in Chicago rejected Zell’s request to dismiss the suit filed last year. The employees accuse Zell of working with board members and others who allegedly breached their fiduciary duty to the workers.

The judge, in a ruling posted yesterday on the court’s Web site, said that Zell helped engineer the transaction that left Tribune with almost $13 billion in debt even if he wasn’t responsible to the Employee Stock Ownership Plan that privatized the newspaper and broadcasting company.

The company, owner of the Chicago Tribune and Los Angeles Times newspapers, filed for Chapter 11 bankruptcy protection last year. The employee stock ownership plan that acquired the shares in the buyback is a federally protected pension plan.

As many as 10,000 workers may have lost money as a result of how the shareholder buyout was executed, said Daniel Feinberg, an attorney for the employees in Oakland, California. While only six workers are named as plaintiffs in the suit, he said he will seek class-action certification to sue on behalf of other employees.

“This deal was misguided from the very beginning,” Feinberg said today in a phone interview. “It was obvious from the start that this deal had a huge risk of insolvency because of the amount of debt.”

Pallmeyer dismissed claims against several Tribune board members, ruling they had delegated their fiduciary duty to Greatbanc Trust Co. The judge said in her ruling that Greatbanc, the trustee for the employee plan, must face the lawsuit.

Terry Holt, a spokeswoman for Zell, declined to comment.

Two lawyers for the Tribune and other defendants, David Bradford and Craig Martin, were said by their office to be travelling today and didn’t immediately respond to e-mail messages seeking comment.

The case is Neil v. Zell, 08cv6833, U.S. District Court, Northern District of Illinois (Chicago).

Sam Zell Sued By Tribune Writers
By Bob Norman

The lawsuit contends that, since the inception of the deal, it appears that Zell and his accessories have planned to enrich themselves, tax-free, by perverting laws passed by Congress intended to benefit rank and file American workers.

The employee-owners of Tribune Company had everything, including their retirement plans, at great risk and little to gain in this deal, while Zell had everything to gain and little at risk.

Among the deal's outrages outlined in the complaint: Zell set up a mechanism to buy 40% of the company – valued at more than $8 billion at the time the ESOP took ownership – for as little as $500 million. It’s a classic grift, played out under the cover of legal technicalities. The real losers in this deal, however, are Americans who rely on news and information collected and disseminated by the respected Tribune news organizations.

In the 1970s and later in the 1980s when Senators Bob Dole (R-Kansas), Russell Long (D-Louisiana) and others in Congress spearheaded efforts to promote ESOPs with generous tax benefits, the intent was to empower employees eager to own and manage the companies where they work.

When it comes to Tribune Company’s ESOP, nothing could be further from the truth.

Employees were never asked if they wanted to own Tribune Company.

They had no opportunity to question the wisdom of saddling a media company with $13 billion in debt at a time when the industry faces serious challenges.

Even though they are nominally the owners, they have no voice on the company’s board and no say in its management.

When Zell hung “You own this place now” banners at Tribune newspaper and TV stations across the country, employees could not know the high price they would pay for this “privilege.”

According to the complaint, Zell de-funded employees retirement packages, raided the employee pension fund for more than $400 million, and eliminated more than a thousand Tribune Co. jobs.

Meanwhile, Zell and his band of publishing rookies were wrecking the company’s marquee properties – including the Los Angeles Times, the Baltimore Sun, and the Chicago Tribune – alienating readers by launching aimless redesigns while dramatically cutting coverage. Seemingly ignorant of journalistic ethics, they, for instance, turned control of the Los Angeles Times Magazine over to the advertising staff, with no indication to the reader that this product is now a “pay-to-play” advertorial. All the while, revenues have continued to decline.

Despite a slowing economy, a precipitous drop in ad revenue in the real estate, classified, and automotive sectors along with the de-monetizing of content put on the web and the spiraling cost of newsprint – the Tribune Company continued to be profitable throughout this decade. Without the staggering debt load from the Zell deal, Tribune's newspapers and TV stations would be solidly profitable today – without eviscerating news gathering operations.

For more information contact:

Attorney for the Plaintiffs Plaintiffs’ spokesmen:
Joseph W. Cotchett, Dan Neil, and Philip L. Gregory
(818) 508-1000
Cotchett, Pitre & McCarthy
San Francisco Airport Office Center
840 Malcolm Road, Suite 200
Burlingame, CA 94010

Wednesday, December 16, 2009

AFL-CIO President Trumka Answers Questions From Members

Trumka Answers Your Questions, Lays Out Economic Vision
by Seth Michaels, Dec 16, 2009

In a great live Web discussion yesterday, AFL-CIO President Richard Trumka answered a wide range of questions on the nation’s economic crisis, setting out a vision for short-term job creation and long-term progress toward a fairer economy.

Trumka touched on trade, green jobs, the challenges facing young and older workers, unity in the labor movement and more in an hour-long conversation. More than 6,700 union members and activists took part by submitting and voting on more than 150 questions.

The AFL-CIO has offered a five-point plan to put people to work and turn around the economy. We can and must create jobs now and spur consumer demand, Trumka said in explaining the plan.

Our current economic crisis is just a symptom of larger long-term weakness and inequality in our economy, Trumka said, and good jobs are the solution:

Remember, wages have been stagnant for years, so people had to start borrowing…we got to the point where people just couldn’t borrow any more and the economy just sort of collapsed at that point…we reached the limit of that. Debt can’t continue to be the engine that fuels the economy.

When we talk about stimulating or rebuilding the economy, Trumka asks, we need to ask: “To what end?”

If we’re just rebuilding the old broken economy—with an under-regulated financial sector taking precedence over the real economy—then we haven’t really gotten anywhere. We need an economy where productivity is rewarded and prosperity is fairly shared.

In particular, Trumka says that to ensure the economy is really working in the long term, we need to give workers the ability to bargain for a fair share. The freedom to bargain means we won’t just create jobs, we’ll create good jobs. That means passing the Employee Free Choice Act and giving workers the freedom to form a union—and it means training more organizers to help workers across the country form a union and get a fair contract. That will give people the wages and the economic security they need to support the economy, provide for their families and get engaged in their communities.

You can watch more of this great conversation here.

More questions answered by AFL-CIO President Trumka here at:

Monday, December 14, 2009

American cable Asso. Attacks TV LMAs

The American Cable Association is calling for an FCC investigation into local marketing agreements (LMAs) between television stations, particularly when the operating partner in such an agreement handles MVPD retransmission consent negotiations for all of the stations."

ACA believes the FCC should now determine whether LMAs are skirting national policy intended to promote local broadcast competition," ACA President and CEO Matthew M. Polka said. "LMAs set the price for retransmission consent for one broadcaster and its direct horizontal competitor, leading to higher retransmission consent costs for consumers."

ACA says that the rules generally prohibit owning two or more television stations in a market to protect consumers and advertisers from anticompetitive behavior, and that LMAs are used to get around the prohibition.

"We hope the FCC takes this opportunity to fix a broken retransmission consent process that permits a broadcaster like Sinclair to pull its signals from cable systems while a retransmission consent grievance is being reviewed by the FCC, inflicting harm on consumers who expect uninterrupted access to local news, weather and time-sensitive information such as school closings, traffic delays and missing-child alerts," Polka said.

Polka concluded, "ACA has long advocated for retransmission consent reform because of the vulnerability of ACA members and their customers in retransmission consent negotiations due to a lack of market power. As the FCC noted when News Corp. took effective control of DirecTV, small and medium-sized cable operators are particularly vulnerable to the withdrawal of `must have' programming."


Rainbow pushes anti-Sinclair proceedings

The Rainbow PUSH coalition has been on Sinclair Broadcast Group’s case since 1998, saying that its operation of stations licensed to other companies constituted “the largest broadcast ownership fraud scheme in history.”

Now it is going to bat for cable operator Mediacom in its retrans battle with Sinclair.David Honig put on his attorney’s hat to represent Rainbow in its latest filing, apart from his leadership role with the Minority Media and Telecommunications Act.

Honig noted that numerous challenges to Sinclair license renewals, and to relationships with stations in certain markets creating de facto duopolies, have gone unaddressed by the FCC.

He cited evidence the Rainbow believes warrants a full FCC investigation into Sinclair’s fitness to be a licensee.Rainbow contends that Sinclair has de facto control over Cunningham Broadcasting Stations, and that it has “brazenly violated basic broadcast disclosure requirements and federal campaign report spending rules” in a variety of ways.

And that’s where Mediacom comes in: “Mediacom’s recent retransmission complaint against Sinclair again raises the issues of Sinclair’s character, fair dealing, and questionable control over broadcast television stations. As Mediacom’s complaint illustrates, Sinclair has refused to engage in good faith negotiations and has made anticompetitive demands that violate the Commission’s policies favoring competition.

Specifically, Sinclair has used its bottleneck control over multiple stations in a market as a bargaining chip.”Mediacom notes that in many markets, Sinclair controls two of the top four stations, a combination that would have been prohibited had Michael Powell’s relaxation of television duopoly rules survived the Prometheus case after Powell’s 2003 dereg attempt.

A pdf file of the document can be read at .

Thursday, December 10, 2009

Ask AFL-CIO President Trumka About the Jobs Crisis

Hi, All:

Wanted to let you know that today we are launching a new online event focusing on jobs, with AFL-CIO President Richard Trumka. Using online moderation tools, union leaders and working familyactivists across the country can submit questions for President Trumka about the jobs crisis and vote on questions already submitted.

President Trumka will answer the top-rated questions in a live online video discussion on Tuesday, Dec. 15, at 4 p.m. EST.

Please save that date.Visit to submit a question and vote on the questions.

* Sign in here to participate if you have a Google account:

* If you don’t have a Google account, create one here:

* More on the AFL-CIO’s five-point jobs plan here:

Please spread the word!


Tula Connell
AFL-CIO Managing Editor
815 16th St.,
N.W.Washington, DC 20006
Follow the AFL-CIO atFacebook:
From Bob Daraio:

I sent in the following four questions for the "Ask President Trumka About the Jobs Crisis" program:

) "Will you support legislation to curb out-sourcing by requiring subcontractors of work formerly performed by employees of businesses with collective bargaining agreements to have a union contract?"

2) "Will you support legislation that requires employers with union contracts to bring their collective bargaining agreement with them when they move their facility to any other city or State?"

3) "Will you support an AFL-CIO position that no collective bargaining agreement should continue to have a "No strike clause" or at least require contract language requiring all union members to honor any and all sanctioned picket lines?"

4) " Will you fight for legislation to eliminate the "While you can't be fired for striking, you can be permanently replaced" rule?

I'd be interested in Brother Trumka's position on these questions. What do you think?

Thank you to the AFL-CIO for providing the opportunity for the rank and file to ask our AFL-CIO leadership questions and for allowing our input into policy decisions at the highest levels in organized labor. Communication will make us stronger.


Bob D

Wednesday, December 9, 2009

Tuesday, December 8, 2009

Stations Shift to Talent-Run Teleprompting

By Hillary Atkin

Stations following the credo of doing more with less are now moving toward talent-run teleprompters as a cost-cutting measure, either reassigning prompter operators to other news production tasks or cutting them completely.

As with any change or cutback in the news business, the move has been met in some quarters with resistance and controversy — especially in major markets, where news anchors have historically had large teams of production professionals taking care of the technical aspects of the newscasts.

As one unidentified newsroom employee put it in a recent Washington Post article about local Fox station WTTG-TV implementing anchor-run prompters: “It’s kind of like a literal one-man band — singing, banging a drum, crashing cymbals, playing a trumpet and strumming a guitar ... except we’re not playing show tunes here.”

Yet for some professionals in smaller markets who are used to more meager resources, the adjustment has been easy.

Loriana Hernandez, news anchor at Austin, Texas, Fox affiliate KTBC-TV, has found having the added chore of running her own teleprompter to be her preference. She’d had previous experience doing it when she worked at CNN and CNN en Espanol, but this time around it’s different.

Fernandez, co-anchor of the Fox O&O station’s 5 p.m. and 9 p.m. newscasts with Mike Warren, used to work with a hand-controlled device that she said she found restrictive. Now she and Warren — and the station’s other on-air talent — can operate the prompter from eight separate foot-pedal locations in the news studio.

Teleprompters — devices that project upwardly scrolling copy in front of a camera lens so that talent can read it without losing eye contact with the viewer — were invented in the mid-1950s and have been a crucial part of the television landscape ever since.

Fox stations have led the way toward self-prompting. Company executives say the switchover has gone smoothly not only in Austin, but at WOFL-TV in Orlando, Fla., where anchors have been scrolling their own prompters for several months now. At its affiliates in Tampa and Memphis, WTVT-TV and WHBQ-TV, one newscast at each station is currently using anchor-driven prompters.

Duffy Dyer, general manager of WTTG, the Washington Fox station from the Post article, said he is confident of the outcome, that the quality of the newscasts will not be affected, and that viewers won’t notice any change. “The feedback is very positive,” he said. “We have been meeting with anchors and reporters. I’d say that, to a person, everyone is looking at this as a positive move. Some are looking forward to learning a new skill and becoming more valuable to the company, and there are a fair amount of people who have done it in markets like Utica and Eureka.”

In the lead-up to the switchover, Dyer said station management is being very patient and making sure that all talent is comfortable with the process. “We’ve made it clear that we have a great news product because of their and management’s efforts, and we won’t do anything to put that at risk,” he said.

Previously, a mix of people from production assistants to the tape library manager was operating the teleprompter, and Dyer said none of them would be laid off.

WTTG was scheduled to install the new prompters in mid-November, and then train about 12 on-air talent who will be using them. The plan was to begin anchor-controlled teleprompting on the weekend shows before rolling it out on the weekdays.

According to those who have already taken the plunge, the actual training is more a matter of becoming at ease than any sort of steep learning curve. “We got together with the morning and evening teams, got the system in place, ran rehearsals and let them get acclimated with how the functions worked,” said Jeff Zeller, vice president and news director of Fox O&O WOFL in Orlando. “We did rehearsals for about a week and then let them at it.”

KTBC’s Hernandez said it was a breeze. “There’s nothing to train,” she said. “You run your own pedal, and are in charge of your pacing and speed. If there is a situation where I need to ad lib, I do. I didn’t feel any training was necessary,” Hernandez said, and gave this advice, “I would say, ‘Plug it in, let them play with it for 10 minutes and let them go.’ ”

What happens when the newscast producer makes fast page kills or floats a story at the last second, as regularly occurs in a fast-paced broadcast? The anchors do not have to deal with pulling pages from the prompter at the last moment. The floor director or someone in the control booth makes those adjustments as the anchor continues reading the copy.

Mistakes can happen, whether there’s a separate operator or when the prompter is anchor-run. “In a typical newscast it’s forced us all to communicate better. I can tell you there’s been no disasters,” said Hernandez. “We have our little system. It’s like a dance.”

“Honestly, it’s been a very smooth transition,” Zeller said. “In practice runs, we made sure they’re not running it too fast. As far as on-air, in the end, it’s a teleprompter, being operated by someone differently than it was before.”

The original prompter manufacturer, which spelled its name TelePrompTer, no longer exists, but there are at least a half-dozen vendors that manufacture prompting products.

AutoScript Inc. is one of the industry leaders, with competitors that include QTV, Telescript and Listec. Typical software/hardware packages run from $1,000 to $7,000, in addition to the cost of outfitting each camera with a prompter, which runs between $2,000 and $8,000.

For most talent running their own prompter, the most desired setup is the foot pedal out of camera view. But there are also wireless hand controllers, called “rats,” with forward and backward buttons.

Seeing a trend over the last year or two of talent doing their own prompting, especially in smaller markets, AutoScript developed a new product. “It’s called Magno Foot Control with Deskpad,” said Gordon Tubbs, vice president of AutoScript. “It uses magnetic encoder technology and sits under the desk. If talent is standing, it’s out of shot on the floor. The farther they push, the faster it moves, like a gas pedal. That is probably the most common way of talent prompting themselves. That’s typically what they’re buying.”

At WTTG, the new system will be a combination of foot pedals and wireless hand devices.
“The system we’re going to be using gives talent the ability to advance to the next story. That’s the kind of feature that will make it virtually invisible to the viewer,” said Dyer. “Individuals will have preferences for foot pedals or wireless hand devices. Situations will call for one over the other. We don’t want to push a square peg in a round hole, and will make sure people can make decisions to do it the best way through a combination of devices in various positions.”

For Hernandez, who said she likes to wear 4-inch heels, her most comfortable position is kicking her shoes off before scrolling away on the prompter foot pedal.

Saturday, December 5, 2009

Democrats Take Dim View Of Comcast/NBC

Two Democratic members of the House of Representatives and a Democratic FCC Commissioner with a history of anti-consolidation activism have weighed in on Comcast’s plans to acquire a controlling stake in NBCU.

The nicest assessment of the deal was that it is questionable; another called it devastating.

Ed Markey (D-MA), who has long had a leadership role in communications matters on the Hill, was the one who finds the deal questionable. He said, “This proposed deal raises significant questions about consumer choice and competition, innovation and investment in the media marketplace that merit close scrutiny by Congress, the FCC and the Justice Department. While the companies have determined that this merger advances their business interests, it is essential that the public interest is served. As the author of the Internet Freedom Preservation Act to ensure network neutrality along with Energy and Commerce Chairman Henry Waxman and Congresswoman Anna Eshoo, I want to ensure that the combination of a major network operator and a large content owner does not open the door to discrimination on the Internet to the detriment of users. I look forward to working with my colleagues and the Administration on this important matter as the process moves forward.”

Maurice Hinchey (D-NY), who has taken a leadership role in pushing back against media consolidation, had a much more negative reaction -- in fact, it was completely negative.

He said, “Comcast's acquisition of NBC Universal would have a devastating impact on the already decreasing ability of the American people to receive unfiltered access to news, information, and entertainment programming from a wide array of sources."

"Given that we've already seen Comcast try to censor the Internet when it sought to undermine network neutrality several years ago, the American people should have no faith that Comcast would allow them to have access to a wide array of television programming…A diverse media system is critical to a properly functioning democracy. Further consolidation would shortchange the wide array of ideas and content needed to keep the American people informed about their elected officials. This acquisition must be stopped.”

FCC Commissioner Michael Copps, a longtime foe of consolidation, will have an opportunity to review the transaction. He said, “Some may have thought the era of media consolidation—fewer huge companies controlling more of the nation’s media assets—was behind us. This transaction proves those analysts wrong. The push to combine content and distribution continues and, as the economy recovers, we will see more proposed media industry combinations.”

Copps continued, “While I look at each proposed transaction on its individual merits, my long-tanding skepticism about the harms imposed by so few controlling so much persists.

And this particular transaction raises a multitude of important questions:

What is its impact on the prices consumers will pay?

Would the combination mean more newsrooms (but perhaps fewer reporters) controlled by one entity?

How would the transaction affect minorities and diversity on the airwaves?

Would this merger lead to fewer voices on both traditional and new media?

Does the nature of the transaction make even more urgent the need for FCC network neutrality rules?

What about the future of competition in the several markets these companies serve?

The list of questions and consequences goes on. Clearly this proposal requires close and comprehensive Commission review.

The lodestar for this review must be the public interest.”He concluded, “I look forward to broad stakeholder reaction to today’s announcement—and, indeed, every citizen has a stake here. I am anxious to hear more from the parties to the deal about how they believe the proposed transaction, as presently constructed, advances the public interest. It will come as no news to them that they face a very steep climb with me.”


Friday, December 4, 2009

Merger plans for Comcast And NBC Ignite Battle Over Television Access

Washington Post Staff Writer

Comcast, the nation's biggest cable and broadband Internet company, on Thursday announced plans to take over NBC Universal, creating a new kind of media colossus that would not only produce some of America's most popular entertainment but also control viewers' access to it.

The roughly $30 billion deal set off immediate reaction from consumer groups and lawmakers in Washington, heralding an epic regulatory battle over concentrating so much power in one company. Almost one in four cable subscribers in the U.S. is a Comcast customer. NBC Universal owns cable networks such as Telemundo, MSNBC and Bravo, TV shows such as Jay Leno's, regional stations such as Washington's WRC (Channel 4), and Universal movie studios.

Sens. John D. Rockefeller IV (D-W.Va.), chairman of the Commerce Committee, and Herb Kohl (D-Wis.), chairman of the Judiciary antitrust subcommittee, called for hearings to review the deal's impact on television competition and consumers. Michael J. Copps, a Democratic member of the Federal Communications Commission, said that the merger faces a "very steep climb with me" and that it raises many doubts over whether it would be in the public's interest.

Analysts said the deal would face a lengthy regulatory review -- from one year to 18 months -- but would probably be passed with significant conditions. A great part of the debate for federal regulators will be how the merger would impact the future of television programming, which will be viewed online on mobile devices and computers as well as on the box in American living rooms.

"My long-standing skepticism about the harms imposed by so few controlling so much persists," said Copps, a staunch advocate of media-ownership rules that prevent consolidation between newspapers and broadcasters in the same market.

Critics worry that the consolidation of the two big companies could drive up cable TV bills and make some content off limits to anyone who doesn't subscribe to Comcast's services. The Philadelphia company has said it wants to keep NBC and Universal entertainment available to the widest possible audience. It did not address the cost issue on Thursday.

The deal also must overcome the poor track record of previous mergers between media giants, most notably the disastrous pairing of AOL and Time Warner.

In a conference call, Comcast chief executive Brian Roberts touted the synergies of the merger, saying the acquisition would further his family's vision of developing the company into an entertainment powerhouse from its humble beginning as a single cable system operator in rural Mississippi. Roberts said he thought the deal was "approvable" by regulators.

"This is pro-consumer and is going to accelerate what I believe consumers want, which is to access all different types of content on different platforms at different times," he said.

Appeasing regulators

Comcast made several commitments to fair play in the television market to appease regulators. The company said it would keep NBC's local television stations and expand programming to diversify its offerings. It said it would abide by program access rules that require it to share shows and channels with competitors.

The FCC will review the deal to see whether it benefits the public. Antitrust watchdogs at the Justice Department or Federal Trade Commission will scrutinize whether it would harm competition in the market.

Under the deal, which has been in the works for months, Comcast would pay $6.5 billion in cash upfront and contribute $7.25 billion in cable assets to acquire a 51 percent stake in NBC Universal from its current owner, General Electric, which would retain a 49 percent stake. Comcast would control the joint venture's day-to-day operations. GE would take $9.1 billion in debt to finance the deal. In all, the joint venture would control more than one out of every five television-viewing hours.

While NBC Universal is still highly profitable, some of its major holdings, particularly NBC and the Universal studio, are struggling. But NBC still has some significant assets, such as a contract with the NFL to broadcast games on Sunday nights and the rights to the 2010 Winter Olympics in Vancouver, B.C., and the 2012 Summer Games in London. It also has a prestigious news division that produces the top-rated morning show "Today" and gives its parent company stature in Washington via such programs as "NBC Nightly News With Brian Williams" and "Meet the Press." In addition, WRC has been the most popular local news station in Washington for more than a decade.

Comcast will contribute its cable-network group to the marriage, including such channels as E! Entertainment Television, Style Network, Versus, Golf Channel, Major League Baseball channel and 10 regional sports networks. Among the latter is Comcast Sports Network in Washington, which carries the Capitals, Wizards and University of Maryland basketball and football games locally.

Impact on online video

Public interest groups are particularly concerned about the deal's impact on the nascent but growing market for online video, where new operators such as Hulu, YouTube and Netflix are changing the media landscape with free or low-priced products.

Analysts say the merger will be a test for how regulators will deal with the Internet video market, which doesn't fall directly under the FCC's jurisdiction. But the agency is exploring competition in online video, and it could use the merger to implement conditions that would set guidelines for the burgeoning market.

"The transaction gives the FCC a vehicle to explore policy issues relating to Internet video in ways that might have negative implications for Comcast as well as other cable operators and satellite TV providers," said Paul Gallant, an analyst at Concept Capital.

The FCC imposed conditions on AT&T's merger with Bell South in 2005 that kept the company from controlling customers' Internet access, and consumer groups said they would seek similar rules in exchange for approval of the Comcast deal.

Ben Scott, head of policy for the public interest group Free Press, said such conditions would keep Comcast from potentially charging more for Disney content by metering Internet video consumption of those shows but not for NBC shows.

"A broadband provider has a financial incentive to prioritize that content over someone else," Scott said.

David Cohen, an executive vice president for Comcast, said in an interview that such concerns are being addressed in the FCC's net neutrality proceeding and shouldn't apply specifically to the merger. And he said that Comcast doesn't give better services or prices for its own content today.

"There is no incentive in this transaction for us to favor our content," Cohen said.

Competitors, meanwhile, said they are warily watching the deal.

Herndon-based RCN said Comcast doesn't abide by program-access rules and fears that with more content in its grasp, the company could hurt smaller cable competitors.

"Existing program access rules and prior merger conditions have been largely ineffective in controlling the discriminatory impact of Comcast's existing integration of content and distribution and would be woefully inadequate to mitigate the potential for anti-competitive actions by a combined Comcast-NBC entity," said Richard Ramlall, senior vice president of strategic and external affairs.

Watchdogs lining up to battle Comcast-NBCU deal

No one expects one of the biggest media mergers of all time to sail through regulatory approval quickly, particularly since the proposed deal to have Comcast acquire a 51% stake in NBC Universal from General Electric is the first major merger to face scrutiny by the Obama Administration.

Critics are lining up to try to kill the latest move toward media consolidation.

Free Press and the Consumer Federation of America were quick out of the box with a new analysis showing why the organizations believe the deal poses a major threat to video competition that would seriously harm the public interest."The pundits who are predicting this merger will be a cakewalk haven’t done a careful analysis of the damage it will do to the competitive fabric of the video marketplace. This merger’s potential to foreclose competition and stifle innovation is significant and real," said Mark Cooper, research director for the Consumer Federation of America.

The report claims that:

-- A Comcast-NBC merger would hurt competition in traditional video markets. A merger between the nation’s No. 1 cable operator and a major television network threatens competitive rivalry and diversity in the video marketplace. The new entity could leverage its control over content to charge more to its rivals

— costs that will ultimately be paid by consumers.

-- A Comcast-NBC merger would hurt competition in the emerging online video market. Comcast is the largest residential broadband Internet service provider; NBC produces top-notch content and has a substantial interest in the online video provider Hulu. A merged company would have a powerful motive to starve competing online video sources by denying them access to vital content.

-- A Comcast-NBC merger would trigger more media consolidation. Approval of this deal will undoubtedly trigger a merger wave, as the remaining players in both the distribution and content markets seek to muscle-up to match this new behemoth.

As a result, competition from new entrants will be limited, consumer choice will be restricted, and prices will rise."The Obama administration has made a commitment to reinvigorating the nation’s antitrust laws," said Corie Wright, policy counsel of Free Press. "They can’t ignore the severe threat this merger poses and must take the necessary measures to prevent harm to competition and consumers. The correct response to this merger is to just say no."

Even before the deal was official, the Seattle Times had published an editorial calling for regulators to say no. The newspaper was quick with a second editorial stating that not only should Comcast not own NBC Universal, but that GE shouldn’t either. “NBC Universal should be independent,” the newspaper declared. “The consolidation in media is dangerous — to the economic interests of the public and to democracy itself. The trend toward media giantism should be stopped, and the place to begin is this proposed deal,” the Seattle Times editorial concluded.

“This mega-merger clearly spotlights the dangers of media consolidation in the Internet Age,” declared the Communications Workers of America (CWA).“Comcast is not only the nation’s largest cable company, with 24 million customers, but it has 15 million Internet users and controls most must-have regional sports programming. If it takes on NBC Universal, it adds a major television network, 27 local televisions, cable channels including CNBC, MSNBC, Telemundo, Bravo, USA Network and more, plus Hulu, a growing stop especially for households under age 35,” the union noted.

“This vertical integration of two very different companies – one controlling distribution and another controlling content – would give the merged company leverage over both in broadcast and network television and the market power to control pricing of content on the Internet. It clearly would threaten competition in the distribution of content and programming,” the CWA said.

The union is also worried about what might happen to its members at NBCU under Comcast ownership. “Comcast also has a long history of violating workers’ rights, firing workers who want union representation, refusing to bargain fairly for contracts, running aggressive campaigns to decertify unions and much more,” the union said. CWA said it represents about 2,000 Comcast workers and about 2,500 NBC Universal broadcast technicians and other workers.

The American Cable Association (ACA) issued a statement urging regulators to scrutinize the proposed Comcast-NBC Universal transaction “and take appropriate action, whether through conditions or forced divestiture, to prevent the new programming giant from using its enhanced market power to raise prices and limit choices for consumers of small and medium-sized cable and broadband operators.”

ACA represents small cable system operators, while Comcast is the giant of the industry. ACA has already been fighting for government to curtail retransmission consent payments to TV stations – and worries that Comcast-NBCU will up the ante.

"Without broad government intervention, regulators in Washington, DC will see Comcast-NBCU wield its unprecedented power to drive up artificially the cost of its programming, particularly for its newly acquired local broadcast TV stations and its 'must-have' national and regional cable networks that air live sporting events. Without restrictions, the new media conglomerate will also leverage its enhanced market power to force other pay-television providers to distribute all of its combined Comcast-NBCU programming on basic tiers, regardless of consumer interest in paying for this content," said ACA President and CEO Matthew Polka.

How Comcast plans to make its case in DC

Winning regulatory approval for cable giant Comcast to acquire a majority stake in NBC Universal won’t be easy. Opponents are coming out of the woodwork. But that was anticipated and Comcast has already spelled out how it plans to sell the proposal to the FCC, antitrust regulators and Congress.

Among the documents that Comcast and General Electric posted for investors and reporters dealing with the NBCU transaction was a memo from Comcast Executive Vice President David L. Cohen, whose duties include government relations.

In it, he spelled out the points that Comcast will make in trying to persuade the government that the deal to have Comcast acquire a 51% stake in NBCU from GE should be approved.“While we believe that this transaction is, and will be determined to be, pro-competitive, proconsumer, and strongly in the public interest, we recognize that competitive concerns will be raised about the combination of such significant multiplatform assets in a single company,” he said, in what may be quite an understatement. “Therefore, we also intend to make a number of affirmative voluntary commitments in our applications for approval that we believe will effectively address any such concerns.”

Cohen spelled out how Comcast-NBCU will enhance its public interest commitments, saying the combined company will build on the “strengths and histories of Comcast and NBCU in children's programming, diversity, and local programming, and reinforcing the combined companies' commitment to broadcasting, the companies make the following commitments:

1. NBC has a proud history in broadcasting with both NBC and Telemundo. Notwithstanding the turbulence in the current media marketplace and the ongoing threats to the business model of a national broadcast network, the combined company remains committed to continuing to provide free over-the-air television through its 0&0 stations and through local broadcast affiliates across the nation. As we negotiate and renew agreements with our broadcast affiliates, we will continue our cooperative dialogue with our affiliates toward a business model to sustain free over-the-air service that can be workable in the evolving economic and technological environment.

2. The NBC owned-and-operated broadcast stations ("0&OS ") have a demonstrated record of quality local programming in major markets around the country. Comcast also has demonstrated its commitment to local programming, including sports and public affairs, and in providing support for public, educational, and government (PEG) access programming. We want to use the combined resources of NBC and Comcast to strengthen localism:

a. We intend to preserve and enrich the output of local news, local public affairs, and other public interest programming on NBC 0&0 stations. Through the use of Comcasts On Demand and On Demand Online platforms, time slots on cable channels, and use of certain windows on the 0&0 schedules, we believe we can expand the availability of all types of local and public interest programming.

b. With respect to PEG channels, we will not migrate PEG channels to digital delivery on any Comcast cable system until the system has converted to all-digital distribution (Ie., until all analog channels have been eliminated), or until a community otherwise agrees to digital PEG channels, whichever comes first.

c. To enhance localism and strengthen educational and governmental access programming, we will also develop a platform to host PEG content On Demand and On Demand Online within three years of closing.

3. Since NBCU was acquired by GE in 1986, the owners have abided by a policy (summarized in a filing with the FCC) of ensuring that the content of NBC's news and public affairs programming would not be influenced by the non-media interests of General Electric.

a. The combined company will continue these policies with respect to the news programming organizations of all NBCU networks and stations, and will extend these policies to the potential influence of each of the owners.

b. To ensure such independence, the combined companies will continue in effect the position and authority of the NBC News ombudsman to address any issues that may arise.

4. Comcast and NBCU have strong track records in children's programming and children's issues. The combined company will make an expanded commitment to meeting the viewing needs of children, and the needs of parents to better control their family's viewing.

a. We will use Comcast’s On Demand and On Demand Online platforms and a portion of the NBC O&Os' digital broadcast spectrum to speak to kids. We intend to develop additional opportunities to feature children's content on all available platforms.

b. We reaffirm our commitment to provide clear and understandable on-screen TV Ratings information for all covered programming across all networks (broadcast and cable) of the combined company, and to apply the cable industry's best practice standards for providing on-screen ratings information in terms of size, frequency, and duration.

c. In an effort to constantly improve the tools and information available for parents, Comcast will expand its growing partnership with Common Sense Media ("CSM") a highly respected organization offering enhanced information to help guide family viewing decisions. Comcast will work to creatively incorporate CSM information in its emerging On Demand and On Demand Online platforms and other advanced platforms, and will look for more opportunities for CSM to work with NBCU.

5. Comcast and NBCU have been major forces in bringing diverse programming to American television audiences. With the new company's interests in Telemundo and Mun2, and with Comcast’s founding role in TVOne and its extensive offerings of channels meeting the needs of diverse viewers, we will be second to none in providing and promoting diverse programming. But we want to do even more:

a. We intend to expand the availability of over-the-air programming to the Hispanic community utilizing a portion of the digital broadcast spectrum of the Telemundo O&O's (as well as offering it to Telemundo affiliates) to enhance the current programming of Tel em undo and Mun2.

b. We will use Comcast’s On Demand and On Demand Online platforms to feature Telemundo programming.

c. We intend to continue expanding the availability of Mun2 on the Comcast cable, On Demand, and On Demand Online platforms.

The memo makes several other points, as well, designed to hit the hot buttons of regulators and lawmakers. Some of them address the position that Comcast will be in as both a program provider and the nation’s largest cable MSO.

One of those is a voluntary commitment to extend the FCC’s program access rules pertaining to cable/satellite networks to negotiations with other cable companies for retransmission rights to the NBC and Telemundo O&O stations.

RBR-TVBR observation: What stands out is that rather than wanting to exit the broadcasting side of the business, as many expected Comcast to do at NBCU, the NBC/Telemundo O&O station groups are being used as a major selling point for the deal.

“Localism” is a hot issue at the FCC and Comcast is emphasizing how the NBCU television will play a big role in having the merged company promote local programming and public service.

Vote For Sam Zell As "Jobs For Justice" "Scrooge Of The Year".

Each year, national Jobs with Justice gives an “award” to the greediest, most cold-hearted company or person of the year.

Past winners of this dubious honor include: Wal-Mart, George W. Bush, and Goodyear Tire & Rubber. Jobs with Justice National is now accepting nominations for the 2009 “Scrooge of the Year” contest. We are collecting nominations this week and will start the election on December 7th.

Vote For Sam Zell
As The"Jobs For Justice"
2009 "Scrooge Of The Year".

Sam Zell purchased and took the Tribune Company private in a heavily leveraged transaction for $8.2 billion that saddled the Tribune Co. with $13 billion in debt just as the bottom fell out of the advertising market.

Tribune Co. filed for Chapter 11 protection last December because it was struggling to manage the debt from the deal that made the Company a Sub-chapter S corporation owned by the employees to avoid taxes. The employee "owners" did not have a seat on the board of directors, or any say in the running of the company, now in bankruptcy and ESOP shares valued at $ 0, zero, nadda.

To add insult to injury, after massive nationwide layoffs, wage freezes, and benefit cuts at Tribune's newspapers and TV stations in 2009, Sam asked the bankruptcy court to approve $70 million dollars in executive bonuses. Sam's Merry Christmas to his team of bosses is a big Bah Humbug to the rest of his employees.


Thursday, December 3, 2009

Washington Reacts To Comcast/NBC Merger

The two Commerce Committee chairs have weighed in on the proposed acquisition of a controlling interest in NBC Universal by Comcast Corporation, and guess what: they are leery of the deal.

The FCC also issued a tersely-worded statement.

First the FCC: Speaking on behalf of Chairman Julius Genachowski, Jen Howard said, “The FCC will carefully examine the proposed merger and will be thorough, fair, and fact-based in its review.”

House Commerce Chairman Henry Waxman (D-CA) is concerned about the deal and is rounding up his key subcommittee chair Rick Boucher (D-VA) to be a major part of the scrutinizing posse. He said, “The proposed Comcast-NBC Universal joint venture agreement has the potential to reshape the media marketplace. This proposal raises questions regarding diversity, competition, and the future of the production and distribution of video content across broadcasting, cable, online, and mobile platforms. It is imperative that the FCC, the Justice Department, and the FTC rigorously assess whether this transaction is in the public interest. I will work with Rep. Rick Boucher, Chairman of the Subcommittee on Communications, Technology, and the Internet, to schedule hearings on this matter at the earliest practicable date."

Senate Commerce Chairman Jay Rockefeller (D-WV) is starting out with a dim view of the transaction, saying, “I have some serious questions about the deal announced for Comcast to assume control of NBC Universal. A joint venture of this magnitude would benefit from regulatory oversight. When major media companies swell to control both content and distribution, we need to make sure consumers are not left with lesser content and higher rates.”

The rocky path to closing the Comcast-NBCU merger deal will at a minimum go through Capitol Hill, the FCC, the FTC, the DOJ, public debate, and a few other regulatory stops on the itinerary.