Viacom, CBS pull out of NAB on eve of Vegas convention

Kevin Ferguson

Friday, April 6, 2001 | 10:56 a.m.

Fifteen days before the National Association of Broadcasters comes to Las Vegas for its annual conference, the trade association suffered the loss of two media giants -- CBS Television and radio sister network Infinity Broadcasting.

The two Viacom subsidiaries resigned from the NAB Wednesday over the NAB board's decision to support federal limits on station ownership.

The statement came an hour or two after the NAB board met and voted to re-affirm the association's support for a cap on TV station ownership.

The federal cap aims to prevent a single network from reaching more than 35 percent of U.S. households that own televisions. CBS says the the cap is no longer justified with the growing number of competing media outlets.

Conversely, locally owned stations oppose a cap increase. Their concern is that an increase would put them at a disadvantage when negotiating for shows. The networks distribute many of the shows to their affiliates.

"We support a competitive marketplace and the 35 percent cap benefits consumers by ensuring the strength of the traditional locally delivered television system," said Jeffrey Bobeck, NAB vice president of communications.

The Wednesday meeting of the NAB board was called by its president, Eddie Fritts, to determine if the association could continue to represent both the networks and their affiliates in light of the strained relationship, according to the weekly trade publication Broadcasting & Cable.

B&C cited unnamed sources that suggested Fritts was trying to provoke CBS and ABC to withdraw from the association. Fritts said the NAB is supposed to be the umbrella organization that represents all of broadcasting, not just the major networks, according to the trade publication.

ABC, owned by Walt Disney Co., remains as the only major network as an NAB member. The association lost NBC, owned by General Electric; and Fox as members about two years ago over the same issue.

"It is regretable when any member leaves the organization," said Dennis Wharton, NAB senior vice president of corporate communications.

The NAB has 7,000 radio and TV stations as members. The association represents broadcasters before Congress and the FCC.

When Viacom completed its $80 billion merger with CBS last May, it put the media giant over the 35 percent cap.

"For some time we have called for the elimination of the national broadcast ownership cap as well as other outmoded regulatory constraints on broadcasters," said a CBS and Infinity statement. " We are optimistic that through either the courts or the FCC, that reasonable goal may soon be achieved."

Locally, KLAS is the CBS television affiliate. Infinity Broadcasting owns six radio stations: KLUC, KMXB, KMZQ and KXTE on the FM dial; and KXNT and KSFN on the AM dial.

Dana McClintock, CBS vice president of corporate communications, declined to say how much Viacom remains over the cap.

CBS and Infinity Broadcasting have not decided if they will participate in the NAB conference, McClintock said Wednesday.

The conference, slated for April 21-26, is expected to draw 115,000 visitors to Las Vegas. It's scheduled to be held at the Las Vegas Convention Center, the Las Vegas Hilton, the Sands Expo Center and the Venetian hotel-casino.

Viacom Chairman and Chief Executive Sumner Redstone, speaking about the Internet industry, stressed in his NAB keynote speech last year that broadcasters still had the lead over the "dot-communists," because TV and radio networks had profits.

This year, Jack Valenti, president of the Motion Pictures Association of America, is scheduled to keynote.

If the FCC does not raise the ownership cap, Viacom has until May to comply.

Viacom owns also owns MTV, VH1, Blockbuster, Nickelodeon, Paramount Pictures, book publisher Simon & Schuster and UPN.