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Cable Is More Fun Than Corporate Law

The Discovery Channel has never been the sexiest player in the TV business, even in the old days when it aired animal-husbandry scenes. But it was alluring enough to attract David Zaslav into the cable business.

Zaslav, now president of NBC Cable Networks, started out as a corporate lawyer at New York firm LeBouef, Lamb, Leiby & MacRae. Managing Partner Richard Berman, a former Warner Cable executive, counted among his clients John Hendricks, who was launching financially shaky Discovery Channel. In 1988, Hendricks's number two was out on maternity leave, and Zaslav was assigned to pick up some of the slack.

"I got to travel around with John a lot," Zaslav says. "It was exhilarating. They were bursting out. They were trying to buy content, trying to build a brand, trying to get distribution."

Thereafter, Zaslav was simply bored with corporate law. At work on a reinsurance company's IPO, "I remember thinking at 2 a.m. that cable was a lot more fun."

And he started down the path to the top of NBC's cable division. Zaslav is responsible primarily for the distribution side of the number-one broadcaster's cable portfolio: CNBC, MSNBC, CNBC World, Shop-NBC, Telemundo, mun2. He's also responsible for securing cable distribution for parts of NBC's biennial Olympics coverage and the company's investments in A&E Networks and Cablevision Systems' Rainbow Media. In addition to affiliate sales and marketing, Zaslav is responsible for strategic development of new ventures and helped negotiate NBC's recent acquisition of arts network Bravo from Cablevision.

Zaslav joined NBC when President Bob Wright—himself a former cable-system executive—decided to expand NBC's cable holding, first by starting up the Consumer News and Business Channel. At the time, CNBC was envisioned as a softer counterpoint to Financial News Network.

Zaslav pitched then-NBC Cable President Tom Rogers to get the general counsel job. "There weren't a lot of lawyers that had cable experience at that time."

He migrated toward NBC Cable's core function, affiliate sales, just as Congress snatched away cable operators' right to simply retransmit the signals of local broadcast stations. Now they had to secure "retransmission consent" from major stations, many of which wanted serious cash for carriage. Operators, of course, had no interest in paying what could easily have been a $3 billion to $5 billion annual tab.

Zaslav sold operators on a plan of committing to full distribution of CNBC plus startup network America's Talking (which later became MSNBC). Rival CBS kept demanding cash but walked away literally with nothing, its leverage dissipating when NBC and Fox worked out carriage deals.

He doesn't like the kinds of fights Fox and Disney have had with operators in recent years. "Our approach is to try to find a way to find a reasonable compromise."

The downside is that NBC's portfolio is loaded with some of the lowest-rated networks in cable. The stock-market crash has slammed CNBC's ratings. Before the war with Iraq, MSNBC's audience was just a fraction of Fox News' or even second-place CNN's. Newly acquired Bravo's viewership has been even lower for years.

Zaslav says low-ratings go with the territory. "The real strength of cable is that it's niche. Look at CNBC: It has carved a very meaningful place for itself. We just need to be the best business network."

He believes that many cable networks have made a mistake by striving to grow their ratings every year with moves that dilute their identity. "They've added programming, like movies and network series, that takes them away from their core."

He won't comment, however, on A&E's pursuit of that strategy. As for Bravo's initial steps down that road, Zaslav notes that NBC has owned the network for only three months. "One of the keys to Bravo: Stay focused on the niche and stay true to it."