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Fast Track

Paxson's New $40M Man?

The NBC Universal executive taking the helm of Paxson Communications has plenty of incentive to turn the ailing broadcaster around: a pay package that could easily be worth $40 million.

Securities filings show that Brandon Burgess, previously executive VP of business development for NBC U, will collect an annual salary of $1 million, plus a bonus—if awarded—of no less than $1 million. He also got a one-time $1.5 million signing bonus.

But the real riches lie in a lucrative stock-and-option compensation package covering 24 million Paxson common shares. With the ailing company trading as a penny stock in recent months, the package tremendously amplifies even a modest improvement in the company's price. A swing from $1 to $2 per share—a benchmark set by NBC U—would make Burgess' four-year deal worth $44.1 million.

That could be worth it to everyone if Burgess can avert the financial crisis looming at Paxson. The company is struggling under a $2 billion debt load and cannot handle a substantial increase in interest costs due to kick in next year. At the same time, its family-friendly Pax TV strategy has collapsed and converted to iNet, mostly pumping infomercials through its portfolio of stations.

Installing Burgess is part of NBC U's plan to rescue its $600 million investment in the company. NBC owns preferred stock convertible into 32% of Paxson shares at $2 each. However, FCC station-ownership rules prevent NBC U from exercising too much control. With investment banker Lazard Freres negotiating on behalf of a committee of independent shareholders, NBC agreed to restructure its investment, giving up $100 million in dividends owed by Paxson and starting the company on the road to a bigger restructuring.

The central question is how to program Paxson. The company's stations reach 90 million homes, and digital broadcasting may provide another five channels.

Burgess is first looking for a sizeable strategic partner who wants to flex its programming muscle but not take on the risk of buying the company outright. He says, “I think people have figured out that launching digital [cable] networks is harder than expected.”—John M. Higgins

New Chief for Tribune Broadcast

Tribune Co. has tapped John Reardon to be president/CEO for its broadcast group. Reardon, a 20-year Tribune veteran, will oversee the company's 26 TV stations, WGN Superstation, WGN Radio and Tribune Entertainment.

Tribune also named John Vitanovec executive VP. Both Reardon and Vitanovec have been group vice president since March 2004.

Reardon takes over for former Tribune Broadcast chief Pat Mullen, who exited last month. Most recently, Reardon has been responsible for Tribune stations in the West and South. From 1996 to 2004, he was general manager of KTLA Los Angeles.—Allison Romano

Copps and Tate Nominated to FCC

The White House last week nominated Democratic FCC Commissioner Michael Copps to a second term and Tennessee regulatory utility Commissioner Deborah Tate to the vacant Republican seat of former Chairman Michael Powell.

Tate has been a member of the Tennessee Regulatory Authority and had been on several short lists for the FCC.

Powell, who left in March, was replaced as chairman by sitting Commissioner Kevin Martin. Kathleen Abernathy is ready to leave whenever the nominee for her seat is confirmed.

White House telecom-policy adviser Richard Russell had been targeted for Abernathy's seat but was reportedly not a favorite of Senate Commerce Committee Chairman Ted Stevens (R-Alaska), who is said to be still looking for another candidate for that seat.

Abernathy's term expired in June 2004, but she is allowed to stay until either the end of 2005 or a replacement is confirmed.—John Eggerton

Fox Pulls 'Arrested,' 'Kitchen' for Sweeps

Fox, having a tough time on the comedy front this season, has yanked the ratings-challenged Monday-night series Arrested Development and Kitchen Confidential for the rest of November sweeps, replacing them with a rerun of Prison Break at 8-9 p.m.

They will finish out their runs in December, with House slated to move as planned into the 8-9 p.m. slot in January. —Jim Benson

Liberty Names Maffei CEO

Former Oracle and Microsoft executive Greg Maffei was tapped to replace Liberty Media's outgoing CEO, Dob Bennett. Maffei was immediately appointed a director and CEO-elect and will assume the full job next spring when Bennett retires.

Maffei was most recently CFO and one of three co-presidents of enterprise software giant Oracle, a job he held for just four months. Before that, he spent five years as chairman/CEO of telecom firm 360networks.

Maffei is best-known for his seven years at Microsoft, most recently as CFO. He was responsible for financial operations and Microsoft's investments in smaller companies, something that will come in handy as Liberty tries to reorganize its portfolio of media assets.


House OK's Cameras In Federal Courts

Only hours after the Senate Judiciary Committee heard testimony on allowing cameras and microphones in federal courts, including the Supreme Court, the House passed a bill that will do just that.

An amendment to the Secure Access to Justice and Court Protection Act (H.R.1751), offered by a bipartisan group of legislators including Steve Chabot (R-Ohio) and John Conyers (D-Mich.), would allow cameras in federal appeals and district courts at the discretion of the judge.

Cameras are already allowed in most state courts and in federal appeals courts, although some federal judges apparently are unclear on what they can do.

The House bill authorizes the Judicial Conference of the U.S. to come up with guidelines for judges. That bill now goes to the Senate.—J.E.

USDTV Launches In Dallas

Broadcast wireless cable operator USDTV is set to light up a new market this week, expanding into Dallas. The company also plans to “relaunch” the service in its existing markets: Salt Lake City, Las Vegas and Albuquerque.

USDTV President Steve Lindsley wouldn't identify which broadcast stations were contributing some of their digital spectrum to allow the system to launch. But among the investors that recently put $26 million into USDTV, are Dallas station owners LIN Broadcasting (20% of KXAS) and Fox Television (KDFW).

Subscribers to the mini wireless cable system could buy a special set-top box to see a dozen or so cable channels—plus all the local digital broadcast services—even if they don't have a high-priced digital TV.—J.M.H.


BBC America is wholly owned by the BBC, but its distribution and ad sales are handled by Discovery Networks. The relationship was not clear in the Breakout Networks Special Report (B&C, 10/31, p. 28).

Copyright Crackdown

The Justice Department has sent Congress proposed legislation that would help it crack down on intellectual-property crimes like the illegal duplication and distribution of copyrighted video and audio.

In announcing the legislative package, U.S. Attorney General Alberto Gonzales said, “Intellectual-property crimes have become too common. Counterfeit and pirated goods are easy to access—from bootleg CDs, DVDs and games ... to fake watches and sunglasses on street corners ... to online file-sharing.”

Gonzales said the new laws would “strengthen penalties for repeat copyright criminals, expand criminal intellectual-property protection, and add critical investigative tools for both criminal and civil enforcement.”

Some of those tools don't sit well with “fair-use” fans, however. Making the “attempt at copyright infringement the same as actual infringement puts it in the same category as far more serious criminal offenses,” said Public Knowledge, a fair-use lobbying group, in a statement. “The bill would eliminate the requirement that a copyrighted work be registered before the government could pursue a criminal copyright-infringement claim.”—J.E.