Originally Paid $415 Million for 32% Stake in TV Company

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NEW YORK (AdAge.com) -- NBC Universal is closer to assuming control of Paxson Communications, the company with which it has had a contentious and litigious relationship, after a financial restructuring that paid Lowell “Bud” Paxson $25 million for the call right to all of his shares, including voting stock.
In 1999, NBC invested $415 million for a 32% stake in Pax TV.
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As part of the reorganization, Mr. Paxson stepped down as CEO, ceding control to NBC’s former exec VP-business development and international channels, Brandon Burgess.

Reaches 91 million homes
Paxson Communications owns about 60 TV stations, most of which are low-powered UHF outlets accessible primarily through cable. Through its over-the-air, cable and satellite distribution systems, it reaches 83% of domestic households or 91 million homes.

The news is the latest development in a saga that started in 1999 when NBC invested $415 million for a 32% stake in Paxson. The deal soured as the two later disagreed about its terms and, in 2001, Paxson unsuccessfully tried to block NBC from acquiring Spanish-language network Telemundo, saying that it would hinder NBC’s plan to assume greater ownership of Paxson. As recently as April NBC threatened legal action when Paxson decided to turn their jointly owned broadcast network, Pax TV, into an infomercials channel and to terminate its sales agreements with NBC Universal.

Settles all litigation
The $25 million NBC has thrown at Mr. Paxon not only gets him off the stage but also settles all current litigation and could allow NBC to salvage its investment by finding a strategic partner to re-launch the network. NBC could only exercise the rights on its own if there’s a change in federal regulations concerning station ownership caps since it would be forbidden under current Federal Communications Commission ownership limits.

NBC Universal Chairman-CEO Bob Wright in a statement said NBC continues to "believe that Paxson Communications has a compelling national platform. This agreement gives Paxson Communications the flexibility to invite new partners and investors who do not face the same FCC limitations that we do and who are interested in investing in and programming a nationwide television distribution platform.”

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