Star Wars

The four major television networks believe that Matsushita Electric Industrial Co.'s acquisition of MCA Inc. (parent company of the movie studio Universal) will help them in their quest for further deregulation.

Specifically, they believe that the purchase of another film company by a foreign firm will help them win repeal of the 20-year-old Financial Interest and Syndication Rules. These federal rules block networks from entering the $3-billion-a-year syndication market and place strict limits on the amount of non-news programming a network can produce in-house.

(Until this year, the Fox network was exempt from the rules because it did not air enough hours of programming to qualify as a network. But now that Fox has expanded its program lineup, it may have to spin off the television production arm of its Fox studios unless the fin-syn rules are repealed.)

The Federal Communications Commission has wanted to repeal the fin-syn rules for almost eight years now. However, the powerful Motion Picture Association of America—whose members produce most prime-time series—has opposed the move. The FCC brought the two groups together last summer to work out a compromise, but the talks fell apart.

Now, with four of the eight members of the MPAA controlled by foreign companies, the political tide may have turned in favor of the networks. In particular, the networks have struck a populist nerve by noting that they are interested in acquiring studios and could prevent them from being bought by foreigners, but the fin-syn rules effectively block any network studio merger. After Italy's Pathe Communications acquired MGMWA, NBC sent pizzas to 90 key legislators with a note saying that "While NBC can't yet have a piece of the pie, you can."

This is probably more than political gamesmanship. There have been rumors in Hollywood of a Disney-CBS merger for over a year. And ABC is said to be interested in acquiring Paramount. The Matsushita buy-out of MCA may ultimately give them the opening they need.