The rules also led the networks to spin off their syndicated divisions, such as CBS' CBS Enterprises, which was renamed Viacom in 1971 and spun off; ABC's ABC Films, which was sold to its five executives and later renamed Worldvision Enterprises; and NBC's syndicated division NBC Films, which was sold to National Telefilm Associates (NTA) for $7.5 million.
The rules changed the power relationships between networks and television producers, who often had to agree to exorbitant profit participation in order to have their shows aired.
[7] The rules also led to the destruction of numerous older television tapes in the 1970s; what could not be sold or given away to an independent syndicator was thrown out or recycled to recover silver content.
[10] It was the repeal of fin-syn that ultimately made newer broadcast networks such as UPN and The WB financially interesting for their highly vertically integrated parent media conglomerates Paramount Pictures (Viacom) and Time Warner, respectively.
Before the fin-syn rules, the networks attained greater control and less risk by forcing production companies to deficit finance their programs while also demanding a percentage of the syndication revenues.
[citation needed] Deficit financing is an arrangement in which the network pays the studio that makes a show a license fee in exchange for the right to air the program.
[12] Deficit financing minimized the substantial risks and costs of developing programs for the networks while initially affording the studios considerable benefits as well.
Instead of syndication, producers have been covering gaps between license fees and rising production costs by selling shows' formats to foreign territories and developing integrated marketing deals with advertisers.
In 1983, the FCC, by this time in a deregulatory mode inspired by President Ronald Reagan, had received demands from the networks to end the fin-syn rules.