Point-man Padden presses anti-pairing
Mouse lobbyist fighting AOL/TW merger
The smooth-talking lobbyist for the Mouse House has been all over the news in recent weeks for his very public battle against the proposed AOL/Time Warner merger. Disney insists, among other things, the pairing will result in a virtual monopoly of interactive TV.
Since the summer of 1998, Padden has been senior VP of Disney and head governmental affairs honcho. He got his stripes working for Rupert Murdoch's News Corp.
It's unusual to see Hollywood giants go at each other so publicly, and Padden's role as point man is risky. To be sure, he's earned the ear and trust of Disney chairman Michael Eisner and is clearly an influential Washington player. But as leader of the Mouse charge, he could be the first to fall if something goes awry.
If Padden has the attention of powers-to-be inside the Beltway, that's partially because no other such high-profile exec has joined him from any other Hollywood studio.
At last week's long-awaited FCC hearing on the merger, Padden found himself the only representative from a TV network or studio. NBC filed a letter of concern with the Federal Communications Commission, but has otherwise stayed in the wings. Cablers sent reps but none of the stature of Padden.
Though no one took such a high profile in the run-up to the FCC hearing, a number of politicos did adopt Disney's arguments nearly verbatim in their comments on the merger.
A July 20 letter from Illinois Rep. Bobby Rush to the Federal Trade Commission contains identical language to Disney's official, July 25 FCC filing. Rush refers to AOL as a "walled garden," just as Disney's document does.
The echo does not end there. Rush goes on to suggest that a merger will result in TW abusing its "cable bottleneck," another phrase in the Disney doc.
Padden appeared confident and relaxed at the FCC forum, once again warning that an AOL/TW duo would promote monopolistic tendencies already displayed by both partners.
Thanks to a trick of the camera, C-Span's footage of the event made it seem as if Time Warner topper Gerald Levin was sitting immediately behind Padden. Several times during Padden's comments, Levin seemed to roll his eyes, and indeed did turn his face away several times as though in disgust.
TW president Richard Parsons, sitting on the same panel as Padden, did not hide his disdain for the lobbyist's campaign. Parsons told the five FCC commissioners that Disney's opposition boiled down to a business dispute disguised as a public policy debate.
Parsons alleged that Disney threatened this spring to "throw cold water all over your merger" if TW didn't agree to Disney's terms during negotiations of a cable retransmission contract. It was the breakdown of those discussions that led to TW's decision to yank the Disney-owned ABC off the air.
A public relations fiasco for TW, the retransmission contract was quickly worked out and ABC returned to TW cable systems.
Padden lost his cool only once at the FCC hearing, when Barry Schuler, AOL president of Interactive Services Group, began to quote Disney's FCC filing, finishing off with "blah, blah, blah."
"Don't," Padden interrupted, "say blah, blah, blah."
Padden himself came in for a knock from FCC chairman William Kennard, who warned that Padden better not be using the merger fight to leverage Disney's position with TW.
When Padden first took the anti-merger campaign to Capitol Hill, he wanted the mission kept quiet as he met with different staffers and politicos.
His strategy changed when TW pulled ABC off its cable systems in key markets, including New York and Los Angeles.
Padden shifted into a highly visible campaign to vilify TW and AOL. He even presented members of Congress with a stylized video detailing the dangers of the merger. Padden said Disney wanted to present the information in an easily-understood format, since interactive TV involves complicated technology.
Despite Padden's frontal assault, few doubt that the merger won't go through.
Padden's contribution to the debate may simply be to drive home the point that the merger must be contingent upon "open access" for all players.
But this is a long haul, and Disney's attention now turns to the FTC review of the merger.
