Why Does Comcast Refuse to Tell Shareholders How NBC, MSNBC and CNBC Reduce the Risk of Libel Suits?
Company Brought In Outside Law Firm to Help It Fight Shareholder Who Simply Asked for a Report on Fact-Checking Procedures at NBC, MSNBC and CNBC
Comcast CEO to Be Asked How Its Networks Make Certain Its Broadcasts are Accurate, and Why It is Fighting Disclosure of this Information to Shareholders
Philadelphia, PA / Washington, D.C. - This morning, at the 2013 shareholder meeting of Comcast, owner of MSNBC, NBC and CNBC, David Ridenour, president of the National Center for Public Policy Research, intends to ask Comcast CEO Brian Roberts why his company used shareholder dollars to fight a shareholder's proposal asking Comcast to prepare a low-cost report, omitting proprietary information, describing the procedures Comcast uses to avoid the risk and exposure of libel, slander and defamation lawsuits.
The proposal had been filed by Amy Ridenour, chairman of the National Center and a long-time Comcast shareholder, after Rachel Maddow of MSNBC falsely accused the National Center, under her leadership, of bribing Members of Congress, a felony. When Amy Ridenour and the National Center requested a correction, they instead received a hostile letter from MSNBC President Phil Griffin that made additional false statements.
"As a long-time shareholder, my wife was appalled," said David Ridenour. "Although she did not imagine Rachel Maddow was going to rush to correct the error, she believed Comcast's and MSNBC's management, the so-called 'suits,' had a corrections procedure in place, if only to avoid the expense of defending libel suits. Instead, MSNBC's president responded with malice, which risked making a libel suit more likely."
"The company showed an utter disregard for avoiding the cost of defending a libel suit," said Ridenour, "and its management, instead of being 'the grownups,' actually made a libel suit more likely." Rather than sue, however, "she filed a shareholder proposal asking Comcast's board of directors to prepare a simple, low-cost report, omitting any confidential information, describing the procedures Comcast uses to avoid exposure to libel, slander and defamation lawsuits."
"Typically in these cases," Ridenour said, "companies don't mind issuing reports, and will issue them as long as the shareholder drops the proposal. That's not what Comcast did here. Instead, it fought tooth-and-nail, even bringing in an outside law firm to help, against the proposal and thus a report. But why is Comcast's management so dead set against explaining to its shareholders how it avoids libel risk?"
"The Securities and Exchange Commission sided with Comcast, concluding that the media company's strategy to avoid libel risk was a 'legal compliance program,' and thus, immune from disclosure, even to shareholders," said Amy Ridenour, "although we believe the SEC ruled in error. First, media companies avoid libel risk by being accurate in their reporting, not through a legal strategy. They use editors, not lawyers. Second, the SEC has issued guidance saying it will allow proposals of this type on issues of significant public concern. It is certainly a matter of major public concern that networks such as NBC, MSNBC and CNBC try their best to be accurate in their reporting. Unfortunately, however, the tight schedule under which these decisions are made did not allow us the opportunity to appeal what we believe was an erroneous decision."
Since Comcast fought allowing shareholders to vote on whether they wanted such a report, David and Amy Ridenour decided to simply ask Comcast CEO Brian Roberts what procedures Comcast has in place to ensure accuracy in its broadcasting, and protect shareholders from exposure to libel. David Ridenour is attending today's Comcast meeting for that purpose.
Amy Ridenour's original proposal, Comcast's legal team's objections to it, Ridenour's response and the SEC's ruling can be found on the SEC's website here.
"We have raised questions about MSNBC's bias in the past," said David Ridenour, who debated GE CEO Jeff Immelt about MSNBC's bias in 2010 when GE controlled NBC Universal. " But what we're asking about here is not about bias, just accuracy. Surely the left and the right can agree that news networks should strive to be accurate. Certainly shareholders prefer to avoid libel costs."
The text of David Ridenour's question, as prepared for delivery, can be found here.
Amy Ridenour and the National Center for Public Policy Research are Comcast shareholders.
The National Center for Public Policy Research is a Comcast shareholder.
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than 4 percent from foundations, and less than 2 percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.
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