Weekly television digest (Jan-Dec 1960)

12 JANUARY 4, 1960 Auxiliary Services MORE SKIATRON CHARGES: SEC has accused Skiatron Electronics & TV Corp. of failing to reveal that Matthew M. (Matty) Fox’s Skiatron of America — holder of the exclusive franchise to develop the Skiatron pay-TV system — has a deficit of $3,297,459, Expanding on its charges against Skiatron Electronics (Vol. 15:51 p20, 52 p20), the Commission issued a “statement of matters’’ to be considered at a hearing scheduled for Jan. 13 — at which Fox is slated to be a major witness. At the same time, SEC extended the suspension of trading in Skiatron Electronics shares for another 10 days, until Jan. 7. SEC’s statement indicated that it is particularly interested in Fox’s dealings in Skiatron Electronics stock — and its investigators indicated they wanted to determine whether Fox had hocked his Skiatron pay-TV development franchise. Some of SEC’s specific charges were denied last week by Skiatron Electronics Pres. Arthur Levey. Fox’s Skiatron of America is a separate corporation, not publicly held. The charges grew out of Skiatron Electronics’ attempts to register 172,242 shares of its common stock, of which 125,000 “had been issued or were issuable to Matthew M. Fox pursuant to warrants received by him in 1956 and exercisable at $3 per share.” After an investigation of the registration statement, SEC indicated it suspected hankypanky & concealment. The Commission’s new charges: Premature Stock Sale Alleged (1) That nearly 75,000 shares included in the registration statement have already been placed on the market as a result of Fox’s default on a loan. SEC said Fox obtained the 75,000 shares & warrants to obtain 125,000 more from Skiatron Electronics, and that he gave the shares as collaterial on 3%-per-month notes. He defaulted and the lender — Judson Commercial Corp. — sold at least some of the securities. (2) That Skiatron Electronics failed to disclose that Fox pledged his Skiatron license agreement as security on a loan from Skiatron Electronics Pres. Arthur Levey and others of 206,000 shares of Skiatron stock. (3) That Skiatron Electronics has failed to disclose the financial position of Fox and Skiatron of America “and to disclose the lack of resources available to Fox to pursue exploitation & development of the [pay-TV] system.” Skiatron of America’s April 30 balance sheet showed current assets of $16,728, total assets of $2,427,459, total liabilities of $5,724,418, deficit of $3,297,459. (4) That the company failed to disclose vital facts about its pay-TV operations — the extent of efforts to begin operation, the amount it has spent to exploit & develop the system; the purposes for which funds have been expended to date, “including the expenditure of approximately $1.5 million as interest on borrowed funds”; the sources of its funds; details of costs & construction-time of establishing pay-TV systems and the status of any payTV arrangements or contracts. Skiatron Electronics Pres. Levey, in a statement Dec. 28, took issue with some of the charges. He said his & Fox’s companies are cooperating with SEC “to resolve misunderstandings.” Specifically, he stated, the 206,000 shares loaned to Fox’s Skiatron of America “were my own stock — not shares owned by Skiatron Electronics ... I told some of my actions along this line in a letter to every Skiatron Electronics stockholder on Nov. 12, 1957.” In addition, Levey flatly stated that his company “has financed its developments in the subscription-TV field without borrowing money, without paying any interest whatever on loans for the purpose.” Skiatron general counsel Kurt Widder informally conjectured that SEC may have confused Fox’s company with Skiatron Electronics in making this charge. The upcoming SEC hearing originally had been scheduled for Dec. 30, but was postponed until Jan. 13 at the request of Skiatron Electronics. Vhf translators should be permitted more than that one watt proposed by FCC, in the opinion of Ben Salmon, chmn. of the Edgemont, S.D. Chamber of Commerce. In comments filed with the FCC, he said satisfactoi’y sites for translators are frequently distant from the town to be served, so that one watt is too little to provide service. Translator starts: K74AZ Gallup, N.M. began Dec. 1 repeating educational KNME-TV Albuquerque. K79AK Milton-Freewater, Ore. began Dec. 8 repeating KREM-TV Spokane. Translator for Leadville, Colo. Ch. 72 has been granted to People’s TV Inc. Foreign United Arab Republic loan of $12 million from U.S. will enable it to build its first TV station, in Cairo. The funds will come from sale of U.S. surplus agricultural products to U.A.R., repayable at 4% interest over a 30-year period. The Cairo TV station is slated for July completion. Meanwhile, U.A.R. has established in that city the first institute for TV studies in the Middle East with an inaugural class of 40 students. Abdel Kader Hatem, U.A.R. Deputy Minister of State for Presidential Affairs, reports President Nasser has ordered the introduction of TV into every Arab village and the installation of receivers in national union clubs throughout the republic. New director general of the BBC is Hugh Carleton Greene, veteran broadcaster & newsman who succeeded Sir Ian Jacobs last week (1). Greene has been with BBC for 20 years, was named in 1958 as its first director of news & current affairs for both TV & radio. As director general, Greene is responsible for BBC’s nationwide TV service, 4 national radio networks, a worldwide broadcasting service in 40 languages, a staff of more than 16,000. Thailand will have country-wide TV coverage within the next 2 years, announced Pichai Vasnasong, Thai TV producer-dir., in N. Y. recently as a guest of ABC-TV. Thailand’s govt, will spend $1.5 million to build 3 relay stations— the 2 existing stations now serve only the Bangkok area. Vasnasong also attributed the decrease in illiteracy in his country (from 50% to its present 40%) to TV’s emphasis on education. Strike by French TV-radio actors, production and technical personnel seeking wage increases & better working conditions took all live programming off the state-operated TV-radio networks last week. The technicians, reports Reuters, were slated to stay out 24 hours, but the actors “are continuing their strike on a day-to-day basis.” House of Commons TV coverage is under study by the British govt. Prime Minister MacMillan said the possibility of permitting telecasts of the chamber in action would be explored following a Labor Party complaint that British newspapers don’t cover it adequately.