UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 4, 2001
PAXSON COMMUNICATIONS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-13452 59-3212788
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(State or other (Commission IRS Employer
jurisdiction of File Number) Identification No.
incorporation)
601 Clearwater Park Road, West Palm Beach, FL 33401-6233
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 659-4122
N/A
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
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On December 4, 2001, the Registrant issued the following press release:
FOR IMMEDIATE RELEASE:
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For further information, please contact: Investor Contact:
Nancy Udell, V.P., Publicity Tom Severson,
(561) 682-4419 S.V.P. & Chief Financial Officer
Sharyn Traub, Publicist (561) 659-4122, Fax: (561) 659-4754
(212) 603-8492
PAXSON BRINGS ACTIONS AGAINST NBC FOR CONTRACTUAL BREACHES AND FCC VIOLATIONS
(West Palm Beach, FL, December 4, 2001) - Paxson Communications Corporation
(AMEX:PAX) announced today that it has commenced a binding arbitration
proceeding against NBC, a wholly owned subsidiary of the General Electric
Company (GE), for breaching agreements between Paxson and NBC as well as NBC's
breach of fiduciary duty to Paxson and Paxson's shareholders. Paxson has engaged
the law firm of Boies, Schiller & Flexner to pursue the arbitration claim which
asserts that NBC's proposed acquisition of Telemundo violates the terms of the
agreements governing the investment and partnership between Paxson and NBC.
Additionally, Paxson has made two filings with the Federal Communications
Commission. The first FCC filing requests a declaratory ruling as to whether
conduct by NBC has caused NBC to have an attributable interest in Paxson in
violation of FCC rules or has infringed on Paxson's rights as an FCC license
holder. The second FCC filing seeks to deny FCC approval of NBC's acquisition of
the Telemundo TV stations.
Paxson's arbitration claim asserts that NBC agreed it would take no action to
create additional regulatory hurdles to complete the acquisition of Paxson. The
Telemundo transaction, if consummated, would make it virtually impossible for
NBC to complete its path to control of Paxson. Paxson believes an
NBC/Telemundo/Paxson combination would require major market station divestitures
of Paxson's stations in New York, Los Angeles, Chicago, Miami and Dallas, thus
severely cutting into the national coverage of the PAX network and destroying
the ability to create multiple nationwide networks on Paxson's digital TV
station platform. For these reasons, Paxson is asking the arbitrator to enjoin
NBC from going forward with the Telemundo transaction. The arbitration claim
further asserts that NBC violated its fiduciary duties to Paxson and its
shareholders by seeking to improperly influence the conduct of NBC directors on
Paxson's board. Paxson believes NBC's conduct, in light of the Telemundo
transaction, reflects its goal of trying to reduce the price of its path to
control of Paxson and to exert leverage to force Paxson to restructure the
arrangement so as to provide even more favorable terms to NBC to the detriment
of Paxson's shareholders.
Paxson's request for a declaratory ruling before the FCC seeks a determination
of whether NBC's influence and apparent control over the NBC directors on
Paxson's board has caused NBC to have an attributable interest in Paxson's
stations or whether NBC's conduct as a whole has infringed on Paxson's rights as
an FCC licensee. This action at the FCC, along with the petition to deny the
acquisition by NBC of the Telemundo stations, seeks to have the FCC take the
necessary steps to correct NBC's actions and block the Telemundo acquisition, or
in the alternative, to require NBC to divest its investment in Paxson.
Chairman Lowell "Bud" Paxson said, "Our efforts are intended to require NBC to
honor its agreement to acquire Paxson, conduct the partnership in accordance
with FCC rules and terminate its acquisition
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PAXSON RELEASE/Page 2
of Telemundo. Alternatively, we want to be free to explore other opportunities
to sell the company or team up with other strategic partners to increase
shareholder value."
Paxson's President and CEO, Jeff Sagansky, said, "Under the terms of the
agreements we entered into with NBC in September of 1999, both parties agreed to
work toward resolving, not creating additional regulatory hurdles to the
consummation of the Paxson acquisition by NBC. This partnership with NBC was
intended to provide financial and strategic benefits to Paxson and strengthen
Paxson's ability to offer family-friendly programming to the nation's television
viewers. Instead, NBC has engaged in a pattern of board conduct that, in light
of the Telemundo deal, evidences a breach of its agreements and its fiduciary
obligations, all to the detriment of our company and its shareholders." Sagansky
concluded, "Paxson's decision to pursue all legal means available against NBC to
enforce our rights is intended to protect Paxson and its shareholders from NBC's
apparent indifference to its contractual obligations and FCC rules. Our
arbitration and filings at the FCC seek to prevent NBC from acquiring Telemundo
and to require NBC to abide by the letter and spirit of our agreements."
MEDIA CONFERENCE CALL
Paxson executives, David Boies of the law firm Boies, Schiller & Flexner and
Harry Martin of the law firm Fletcher, Heald & Hildreth will hold a conference
call on December 4th, 2001 at 11:30 a.m. Eastern Time. The press can participate
in the question and answer portion. The dial-in number is 888-848-6510 (U.S.),
712-257-0434 (Int'l), passcode "Paxson." After the call, an audio replay will be
available through December 6, 2001, by calling 800-947-6518 (U.S.) or
402-220-4090 (Int'l).
ABOUT PAXSON COMMUNICATIONS CORPORATION
Paxson Communications Corporation owns and operates the nation's largest
broadcast television station group and PAX TV, the newest broadcast television
network that launched in August of 1998. PAX TV reaches 84% of U.S. television
households via nationwide broadcast television, cable and satellite distribution
systems. Paxson owns and operates 65 stations (including three stations operated
under time brokerage agreements). PAX airs its own original programming
including "It's A Miracle," "Mysterious Ways," "Encounters with the Unexplained"
and "Doc," starring recording artist Billy Ray Cyrus. PAX TV's new season lineup
includes the original series "The Ponderosa," "Ed McMahon's Next Big Star" and
"Candid Camera." Additional Paxson properties include the PAX Family Club, a
branded affinity club that provides travel and product discounts for families,
parenting advice and valuable online information. For more information, visit
PAX TV's website at www.pax.tv.
THIS PRESS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS," WITHIN THE MEANING OF
FEDERAL SECURITIES LAWS, THAT INVOLVE RISKS AND UNCERTAINTIES. ALL STATEMENTS
HEREIN, OTHER THAN THOSE CONSISTING SOLELY OF HISTORICAL FACTS, THAT ADDRESS
ACTIVITIES, EVENTS OR DEVELOPMENTS THAT THE COMPANY EXPECTS OR ANTICIPATES WILL
OR MAY OCCUR IN THE FUTURE INCLUDING SUCH THINGS AS BUSINESS STRATEGY, MEASURES
TO IMPLEMENT STRATEGY, COMPETITIVE STRENGTHS, GOALS, SUCCESS AND OTHER EVENTS
MAY BE ON FORWARD-LOOKING STATEMENTS. STATEMENTS HEREIN ARE BASED ON CERTAIN
ASSUMPTIONS AND ANALYSIS MADE BY THE COMPANY IN LIGHT OF ITS EXPERIENCE AND ITS
PERCEPTION OF HISTORICAL TRENDS, CURRENT CONDITIONS AND POTENTIAL FUTURE
DEVELOPMENTS, AS WELL AS OTHER FACTORS IT BELIEVES ARE APPROPRIATE IN THE
CIRCUMSTANCES. HOWEVER, WHETHER ACTUAL RESULTS, EVENTS AND DEVELOPMENTS WILL
CONFORM WITH THE COMPANY'S EXPECTATIONS IS SUBJECT TO A NUMBER OF RISKS AND
UNCERTAINTIES AND IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS, EVENTS AND
DEVELOPMENTS TO DIFFER MATERIALLY FROM THOSE REFERENCED IN, CONTEMPLATED BY OR
UNDERLYING ANY FORWARD-LOOKING STATEMENTS HEREIN, INCLUDING, AMONG OTHERS, THE
CONTINUED DEVELOPMENT AND VIABILITY OF THE COMPANY'S TELEVISION OPERATIONS, THE
COMPANY'S ABILITY TO MANAGE ITS GROWTH, THE COMPANY'S HIGH LEVEL OF
INDEBTEDNESS, RESTRICTIONS IMPOSED ON THE COMPANY BY THE TERMS OF ITS
INDEBTEDNESS AND PREFERRED STOCK, THE IMPACT OF GOVERNMENT REGULATIONS, INDUSTRY
AND ECONOMIC CONDITIONS, COMPETITION, CHANGES IN OPERATING EXPENSES, INDUSTRY
AND ECONOMIC CONDITIONS AND OTHER FACTORS, MANY OF WHICH ARE BEYOND THE CONTROL
OF THE COMPANY. CONSEQUENTLY, ALL FORWARD-LOOKING STATEMENTS MADE HEREIN ARE
QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE THAT THE
ACTUAL RESULTS, EVENTS OR DEVELOPMENTS REFERENCED HEREIN WILL OCCUR OR BE
REALIZED.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PAXSON COMMUNICATIONS CORPORATION
(Registrant)
By: /s/ Thomas E. Severson
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Thomas E. Severson
Senior Vice President,
Chief Financial Officer and Treasurer
Date: December 4, 2001