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SBCA Begins Search For New Chief

By | September 15, 2003

      The departure of the Satellite Broadcasting and Communications Association’s (SBCA) top executive is occurring at a time when the financially constrained organization faces a number of formidable challenges in Washington.

      The political firepower of the satellite-broadcasting sector is far less than the clout wielded by broadcasting, cable and telecommunications interests. However, that limitation did not prevent the Alexandria, Va.-based SBCA from gaining the ear of some key lawmakers and regulators under the guidance of outgoing President Andy Wright.

      Wright took over the SBCA’s top job in late 2001 and has improved its financial position and extended its membership base by adding satellite radio to the group’s traditional focus of satellite TV. The group also has its Satellite Industry Association affiliate that provides a voice for the broader satellite industry.

      Now, the SBCA is faced with the need to find a new full-time leader to fight a proverbial “David versus Goliath” battle against deeper pocketed rivals.

      The defense of the satellite broadcasting industry will be turned over on an interim basis to a team of senior SBCA officials upon Wright’s departure as the group’s top day-to- day leader. It is possible Wright could assist with the transition after he officially steps down as president on Sept. 30.

      “I wanted to be sure that SBCA had plenty of opportunity for a good transition,” Wright said. “We’ve got a solid senior staff here that will be managing things day-to-day once I’m gone. SBCA is an important trade association for this industry and [it] will continue [to be] successful under new leadership.”

      Formidable Challenge

      Chuck Hewitt, who was president of the SBCA before he retired in August 2001, said Wright has done a “superb job” in a very difficult position. Hewitt headed the SBCA from its inception in April 1994 until his retirement and led the association when Wright initially was hired during 1998 as general counsel and vice president of government affairs.

      “The SBCA lacks the resources to play the Beltway game the way that the cable operators and broadcasters do,” Hewitt said. “For example, in 2000, both the [National Cable and Telecommunications Association] and [National Association of Broadcasters] had roughly $800,000 each in PAC money. The most we ever had at the SBCA was $20,000 and normally we had around $7,000. This does not include the extensive in-house legal and lobbying staff or the millions of dollars used by other trade organizations for outside lobbying and legal firms.”

      “The bottom-line is that the game in D.C. takes resources for political contributions and a big enough staff to work effectively with the Republican and Democratic members of Congress in both the House and Senate, as well as with the regulators at the [Federal Communications Commission],” Hewitt said. “They all have different staffs that you need to know. You also have to develop good working relationships at each place. In addition, you need resources for outside lobbying and legal firms to prepare in making technical and legal arguments. Those resources have been dearly missing from the SBCA since its inception.”

      SBCA member companies need to decide what role they want the association to play, and they need to ensure the resources are available to meet the goals and objectives established, Hewitt said.

      The lack of stability at the top of the SBCA also needs to be addressed.

      “It is difficult to play a football game without your quarterback,” said Blair Levin, a regulatory telecommunications and media analyst with Legg Mason, a Baltimore-based investment firm.

      The association will be best served by trying to find another capable quarterback to lead it as soon as possible, he added.

      Mounting Threats

      A key issue before the satellite broadcasting industry involves regulatory and legislative decisions that support giving proposed wireless multichannel TV competitor Northpoint access to direct broadcast satellite (DBS) spectrum at no charge. DBS providers have argued that the Northpoint service would cause harmful interference.

      Also going against the SBCA was a Federal Communications Commission (FCC) decision last week to update rules for digital, plug-and-play television sets to meet the needs of cable operators and consumer electronics manufacturers. FCC discussions prior to the promulgation of the new rules omitted satellite companies (SN, Sept. 8, p. 7).

      “With all that’s at stake at the government level — Northpoint, plug-and-play, state taxation and the News Corp [NYSE: NWS] and Hughes Electronics [NYSE: GMH] merger, to name but four – it’s a tough time to be making the inevitable multi-month transition to a new leader,” said Jimmy Schaeffler, president of The Carmel Group consulting firm.

      Lon Levin, co-founder and senior vice president of regulatory affairs at Washington-based XM Satellite Radio [Nasdaq: XMSR], is an SBCA board member. He said Wright was instrumental in advancing the goals of the association.

      “The SBCA is a strong institution and I am not concerned about the organization’s future,” Levin said. Wright will leave the SBCA in good financial shape and with respect in business and Washington circles, he added.

      “It is through Andy’s efforts that he brought in and established a satellite radio division at the SBCA that now includes XM and Sirius [Nasdaq: SIRI],” Levin continued. “He saw it would only strengthen the organization to broaden its scope. He eased the new kids on the block into the association and figured out a way to let us be full participants. SBCA has turned into the primary advocate of the satellite radio industry in less than two years. From my perspective, he is going to be missed.”

      Wright, an attorney who has more than 20 years experience in Washington, is someone Levin has relied on “consistently for advice and counsel” on issues affecting XM. “He is a talented and smart executive, and I am sure he has a great job lined up,” Levin said.

      Prior to joining the SBCA, Wright served as chief of staff and legislative counsel for Rep. Rick Boucher (D-Va.). He previously served as vice president of federal affairs at the American Insurance Association.

      The SBCA finance committee, in conjunction with the board of directors, is spearheading the search for prospective candidates to replace Wright. The finance committee consists of SBCA Chairman Eddy Hartenstein from DirecTV; David Moskowitz from EchoStar Communications [Nasdaq: DISH]; Tom Hayden from Showtime; Janice Aull from HBO; and Rik Hawkins from Starpath Communications.

      –Paul Dykewicz

      (Andy Wright, Rob Udowitz, Satellite Broadcasting and Communications Association, 703/739-8351; Chuck Hewitt, 410/544-4108; Blair Levin, Legg Mason, 202/778-1595; Jimmy Schaeffler, The Carmel Group, 831/643-2222; Lon Levin, XM Satellite Radio, 202/380-4068)

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