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Originally published Saturday, August 30, 2014 at 6:07 AM

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Rural TV chief takes 2-by-4 to cable mergers

The chairman of a media group whose TV stations focus on such rural attractions as polka parties and tractor pulls is on the rampage, campaigning to stop the multibillion-dollar purchase by Comcast of Times Warner Cable. The resulting giant would kill his stations, he argues across the Heartland.


The New York Times

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MEDINA, Minn. — As the oom-pah-pah of the band fades, Patrick Gottsch makes his way through silver-haired couples circling the dance floor at “The Mollie B Polka Party” in this quiet Midwestern town.

Gottsch, chairman of Rural Media Group, steps under a disco ball and issues a warning.

“As you folks in rural America know, every once in a while, you’ve got to take a two-by-four and hit the mule between the ears,” he says. “That is what we want to do now with Comcast and Time Warner.”

He says Comcast’s proposed $45 billion purchase of Time Warner Cable threatens the future of his television stations, which broadcast rural-themed shows like “The Mollie B Polka Party,” “National Tractor Pulling” and “All American Cowgirl Chicks.” And he urges the dancers, numbering about a thousand, to file protests about the merger with the Federal Communications Commission, which is reviewing the deal. (The public comment period closed on Monday. The FCC isn’t expected to make a decision before January.)

“There can’t be a wall built between urban and rural America,” Gottsch says later.

Raised on a family farm in Elkhorn, Neb., Gottsch, 61, has emerged as one of the country’s most vocal critics of the proposed media consolidation, which would reshape the video and broadband landscape.

His warnings about the Comcast deal, as well as AT&T’s $48.5 billion bid for DirecTV, echo a fear that some television groups have expressed about the pending mergers: The deals would create behemoths that will use their heft to push around networks, forcing them to either cut the fees they charge for their programming or risk being thrown off the air. Some executives say the consolidation would result in challenges for new networks, especially those with niche or underserved audiences, and a lack of diversity on TV.

“As media companies get bigger, there always is the sense that the East Coast, West Coast and the NFL cities are very well represented,” said Amy Yong, a media analyst at Macquarie Securities. “The rest of the U.S. gets ignored sometimes.”

While few executives at larger broadcasters have publicly opposed the deals — though they complain privately — Gottsch has stirred up a dust storm. The polka party this month was his first stop on a tour of state fairs, rodeos and farmers’ conventions to rustle up opposition.

In Washington, Gottsch has hired a lobbying firm and appeared before a House antitrust subcommittee, the FCC and the Justice Department. His two stations, RFD-TV and Family Net, have run spots urging viewers to speak out. Of the more than 63,000 comments filed to the FCC about the proposed merger, about a fifth mention RFD-TV.

The Comcast acquisition would give it control of 35 percent of the country’s broadband Internet service coverage and 16 of the country’s top 20 cable markets.

In a letter to Gottsch dated Aug. 15, David L. Cohen, an executive vice president at Comcast, wrote, “Your efforts to drive a wedge between Comcast and rural viewers as a means to promote your own business interests is unfair and grossly inaccurate.”

Cohen said Comcast had not abandoned rural programming and continued to carry the network in cities like Nashville, Tenn., and Salt Lake City. He said Gottsch’s campaign had confirmed what his company knew: Some viewers want rural-themed programming.

Gottsch fears he has much to lose. He dreamed up the concept of a rural-themed network in the 1980s while selling satellite dishes. In the 1990s, he put together a business plan for RFD-TV, named for the Rural Free Delivery services established in the late 19th century to deliver mail to farm families.

But after Gottsch had trouble securing financing and getting his programming picked up, he started RFD-TV as a nonprofit public-interest channel. RFD-TV became a profit-making entity in 2007.

Today, the 24-hour cable network is carried by more than a half-dozen cable and satellite providers, reaching about 40 million homes. Still, it attracts a relatively small audience. This year, through July, RFD-TV had an average of 137,000 viewers during prime time, according to Nielsen. In contrast, Comcast’s USA Network drew 2.3 million prime-time viewers and Time Warner’s Headline News network 335,000.

Rural Media Group, which is based in Omaha, Neb., also includes a satellite radio station and a magazine. It is profitable and on track to make about $40 million in revenue this year, Gottsch said. Its flagship, RFD-TV, features 6½ hours of rural news a day and a mix of agriculture, equine, rural lifestyle and entertainment programming. Like other TV companies, it makes money two ways: through fees from the providers that carry its programming and by selling ads. The more homes a network is in, the bigger the potential audience for advertisers, and the more money for the network.

Fewer homes probably mean less money, and the planned mergers have Gottsch worried about his company’s fate. A warning sign came last year when Comcast pulled the network off the air in Colorado and New Mexico. RFD-TV’s contract with Time Warner Cable has expired. DirecTV does not offer Family Net, and AT&T’s U-verse has not had an agreement to carry RFD-TV, though it does carry Family Net.

At the polka party, Gottsch’s jeremiad had fans concerned that his stations would disappear. f

“If they take him off, we are going to throw the TV out,” Alfons Speidel, 75, of Goshen, Ind., said between dances.

Eileen Tlusty, 73, of Protivin, Iowa, said, “I can’t live without it.”



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