Despite warnings from Congress and media watchdog orgs, the FCC voted 3-2 on Tuesday to approve chairman Kevin J. Martin's landmark proposal for loosening the newspaper-broadcast cross-ownership ban, which would allow companies to own a newspaper and TV station in the nation's top 20 markets.
The vote, which as expected went along straight party lines for the five-member commission, provoked bitter reaction from the FCC's two Democratic members, and prompted at least one advocacy org to vow a legal challenge if Capitol Hill does not fulfill a promise to intervene to stop the measure. Martin's controversial proposal even raised the ire of conservative groups that generally support his initiatives.
Ironically, the Dems later provided Martin with the only supporting votes on another controversial measure of his - capping horizontal cable ownership at 30% - which Martin's GOP colleagues opposed, and which a federal court blocked when the FCC made a similar attempt in 2001.
Throughout the proceeding, Martin and fellow Republican commissioners Deborah Taylor Tate and Robert McDowell repeatedly described the proposal to relax the cross-ownership ban as "modest" and "minor," noting that it would only apply to the top 20 markets in the country and would exclude cross-ownership of the top four broadcast stations in any one market.
Martin's main justification for easing the ban has been that newspapers need relief from shrinking ad revenues and declining readership.
"Allowing cross-ownership may help to forestall the erosion in local news coverage by enabling companies to share these local news gathering costs across multiple media platforms," Martin said.
After settling a lawsuit with Peter Jackson on "The Lord of the Rings," New Line co-chairmen/co-CEOs Bob Shaye and Michael Lynne announced jointly with MGM chairman Harry Sloan that the way is clear to turn J.R.R. Tolkien's "Hobbit" into two live-action films.
The resolution clears the way for "Spider-Man" helmer Sam Raimi to direct. While Shaye said no creative alignments have yet been made, Raimi has long been interested -- as long as Jackson was involved or gave his blessing.
The studios hope to start production in 2009, shooting two films simultaneously and releasing them in December 2010 and December 2011. New Line will run production and distribute domestically, while MGM will release internationally. The studios will co-finance the films.
Jackson's Kiwi stages, post-production and visual effects facilities -- which he built to accommodate "LOTR" -- likely will be used to mount "The Hobbit." And New Zealand once again will be used as the visual backdrop for Middle-earth, this time to tell the story of how Frodo's uncle, Bilbo Baggins, ventured from the Shire and wound up taking the Ring of Power from Gollum.
The key to moving forward was settling all litigation between Jackson and New Line over funds owed the filmmaker for "LOTR."
Jackson and partner Fran Walsh filed suit in Los Angeles Federal Court in 2005, charging they were shortchanged in profit participation on "The Fellowship of the Ring." A bitter war of words set Jackson and Walsh in one corner, Shaye and Lynne in the other.
Jackson's next two directing gigs are both for DreamWorks. He optioned Alice Sebold novel "The Lovely Bones" and wrote the script with his "LOTR" partners Walsh and Philippa Boyens. He'll also team with Steven Spielberg to co-direct "Tintin."
While those commitments will keep Jackson from directing "The Hobbit," the settlement deal is helpful not only for Shaye and Lynne but also for MGM's Sloan, who helped put the parties together.
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