Zaslav: Zealous Cable Guy - Multichannel

Zaslav: Zealous Cable Guy

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When NBC was getting ready to launch business-news channel CNBC in 1989, Ted Turner and his cable-operator partners were worried about how much damage the newcomer would inflict on Turner's beloved Cable News Network.

"Turner and CNN were absolutely paranoid about what the real plans for CNBC were," recalled Tom Rogers, the NBC Cable ex-president and executive who spearheaded CNBC's debut. "And all kinds of cable operators were looking out for Turner's interests."

The task of securing cable deals for the nascent Consumer News and Business Channel — and assuaging fears — fell to David Zaslav, a young lawyer who'd been hired by Rogers and Bob Wright, now the NBC chairman, that year.

The skills that served him well at that time with CNBC should pay dividends as Zaslav's new role takes shape at NBC Universal.

"It really required an incredible deftness to be able to strike good deals and build relationships," Rogers said. "David showed at that time he could do both: get a good deal done, but also ingratiate himself to the other side and to operators."

Last week, General Electric Co. was sketchy about what its management team will look like after it completes the $14-billion acquisition of Vivendi Universal Entertainment, which adds USA Network, Sci Fi Channel and Trio to NBC's portfolio of CNBC, MSNBC, Bravo, Telemundo, Mun2 and ShopNBC.

Unless there's a surprise, 43-year-old Zaslav, now president of NBC Cable, is widely expected to be NBC Universal's behind-the-scenes point man with MSOs and other distributors on new technologies such as video on demand, HDTV and digital TV.

Those technologies are crucial to NBC Universal's strategy, according to Wright, who touted them in a press conference last week.

One slide showed a menu for "NBC Universal on Demand," with programming like USA's The Dead Zone
in the lineup.

Wright sees VOD as a future profit center for the newly minted media conglomerate.

NBC has already been an early player in this arena, by participating in Comcast Corp.'s VOD test in Philadelphia, and by launching Bravo HD.

Dealing from wealth

In an interview, Zaslav noted that NBC Universal's "wealth of content" — from TV networks to a library of movies and TV shows — present opportunities for "personalized television."

Zaslav said he believes new technologies could provide an avenue to relieve some of the tensions between cable operators and programmers, by creating "another bite of the apple" in terms of reaping financial rewards from content.

"Long-term, if we're going to be successful, we have to figure out how we can grow and how our distributors can grow," Zaslav said. "The distributors are trying to hold their costs, and as programmers, we're looking to increase our fees so we can reinvest in better programming and grow our businesses. There's a lot of friction there.

"But a lot of these new technologies can provide new opportunities that we can pursue together that will help us structure win-win situations."

Zaslav's value to NBC lies in the relationships he has forged with cable operators, "relationships that still exist today that have allowed NBC to succeed," Rogers said.

His skills on the affiliate-sales side of the business will likely be called upon as USA tries to hold its license fees steady, or secure increases, when its carriage deals start to expire over the next year and a half.

USA's ratings had slid the past few years, making it vulnerable in its coming round of renewal negotiations.

"We're going to focus now at looking hard at all the cable channels, both from a programming perspective and taking a good look at how they're being sold, what the distribution deals look like when they come up and how we can advance those," Zaslav said.

He's passionate

During his tenure, Zaslav managed to extract a surcharge for the Olympics on CNBC and MSNBC, a move that initially ruffled feathers and irked distributors, who eventually fell in line and did the deal.

"David is very passionate," one cable operator said. "He can be very tough when he wants to be. But in the end, he's reasonable. That's probably his greatest credit."

In most of the cable industry, the chieftains of cable-network groups — those who hold titles like president and CEO — are usually heavily and actively involved in the content on their services. These top executives often have programming and entertainment backgrounds.

That's the case with Tom Freston, CEO of MTV Networks; Billy Campbell, president of Discovery Networks U.S.; Anne Sweeney, president of the ABC Cable Networks Group; and first Jamie Kellner and then Phil Kent, past and current chairman and CEO of Turner Broadcasting System Inc.

As NBC has expanded its cable unit, it's never had a real counterpart to those executives. Rogers and Zaslav were both lawyers, without pedigrees in programming.

Zaslav is "a deal guy," an affiliate-sales veteran who has crafted countless carriage deals for NBC's cable services. He navigated the tricky waters of retransmission-consent for NBC, starting back in the beginning in 1993.

NBC's use of retransmission consent for NBC TV stations was instrumental in the launch of MSNBC, which evolved from America's Talking in 1996.

At NBC Universal, NBC Entertainment president Jeff Zucker is considered the odds-on favorite to be put in charge of all its entertainment programming.

Cable hooked him

Zaslav started his career with the New York law firm of LeBoeuf, Lamb, Leiby & MacRae. The former counsel for Warner Cable joined the firm, bringing with him clients like Times Mirror Cable and Discovery Channel.

As a result, Zaslav did affiliation and programming contracts for Discovery. And when Discovery founder John Hendricks's general counsel went on maternity leave, Zaslav essentially filled in.

"I traveled with [Hendricks] a bit," Zaslav said. "It was a very exciting time. He was working on building his programming library, hiring people, trying to raise more money and structuring new carriage arrangements."

When he returned to the law firm, Zaslav was assigned to write a prospectus for a reinsurance company. He yearned for the excitement and entrepreneurial spirit of the cable industry. "I thought to myself: I've got to get into that business."

He picked up a copy of Multichannel News
at Discovery's office one day, and saw a front-page story in which Wright, an ex-head of Cox Cable, talked about NBC's desire to get a play in cable. He shot a letter over to NBC talking about his outside counsel work for Discovery.

That led to his being hired by Wright and Rogers as general counsel for cable, eventually adding duties as head of cable business development.

Zaslav, who succeeded Rogers as NBC Cable president in October 1999, was involved in NBC's acquisitions of stakes in numerous cable services, such as Court TV, News 12 Long Island, the then-SportsChannel America, The History Channel, National Geographic Television and, eventually, its outright purchase of Bravo.

Relationships key

He views affiliate sales as the cornerstone of success for any cable network.

"The relationship that we have with our major distributors, the economics of our carriage agreements, the sturdiness of those agreements and the additional carriage you can get is probably the largest element — ingredient — to get success with a cable network," Zaslav said. "Clearly, you need to have ratings and strong programming, but foundationally, in order to get to that — in order to be in a position where you can execute on ratings, brand and viewership — you have to get the carriage."

On the VOD front, Zaslav noted NBC has provided content — local newscasts from owned-and-operated stations, NBC Nightly News With Tom Brokaw, Dateline NBC
and Meet the Press
— for Comcast's VOD test bed in Philadelphia. NBC is eager to learn how eagerly consumers use VOD, according to Zaslav.

"He's [Zaslav] very well respected in NBC," said one cable veteran. "He's a deal guy, but he knows the business extremely well.

"NBC is looking at what the future is going to be holding, which is sort of transactional opportunities there are to give content to consumers. He gets that. And NBC is very technologically driven, in terms of the future models of television."

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