Broadcasting (July - Dec 1940)

Program and Power Expenses Are Analyzed in FCC Report Total Program Expense Is Placed at 40 Millions; Power Bill Is Fonnd to Be 1.6 Millions Tobey requested that he furnish the committee with a complete list of all property held by himself and his wife, as well as all bank books and records for the 1932-33 period. Burglary Indicated Reappearing for further testimony, Mr. Whiteford estimated that a total of $16,996 had come into his hands from RCA, all but $5,221 of which he had passed on to other persons, as related in his previous testimony. Aside from again denying having passed any money to Senator Moses, as alleged by E. 0. Keller, Mr. Whiteford developed a new "mystery" angle to the proceeding as he recounted that certain of his records were missing, and under such circumstances that it pointed to burglary. He pointed ouU that since the missing records covered three separate accounts — the firm, his personal checks and a special account for a farm he owns — all for the 1932-33 period in question, a reasonable deduction was that they had been taken by someone who knew the dates but not the accounts. It was not made clear just what purpose might be served by burglary of the checkstubs and other records, and Mr. Whiteford did not attempt conjecture on the matter. In this connection, Mr. Whiteford developed that he had made a loan of $2,500 on Oct. 8, 1932, to Albert Hislop, a personal friend in Portsmouth, N. H. Mr. Hislop also was a friend of Senator Moses, and had cooperated in arranging details of the Sarnoff-Moses meeting, he stated. This $2,500 check had been lost sometime after he had had it in hand on Aug. 11, he explained, but Federal Reserve records would substantiate identities and amount. Disowning identification as "payoff man" for RCA in 1932, Mr. Whiteford pursued the missing check question further after a noon recess in the day-long proceeding. He stated that the check had not been endorsed by Senator Moses, but had been endorsed for deposit by Mr. Hislop. The cotirse of the money could be traced through Federal Reserve records, he suggested. Sarnoff Reappears Making his final appearance on the stand, Mr. Sarnoff denied he had told Mr. O'Callaghan to keep his "devious methods" from Col. Davis. He declared that he, along with Owen D. Young and Gen. James G. Harbord, knew of the modus operandi in securing a continuance, except for the real estate men. He declared that it was a mystery to him why Mr. O'Callaghan had come before the committee and plead privilege, adding that another mystery in the case is "what hold Keller has on O'Callaghan". Commenting further on Mr. O'Callaghan, he said, "I do not belittle or decry him. I feel sorry for him." An extended colloquy grew out of an inquiry by Senator Tobey whether Mr. O'Callaghan had been "fired" by RCA for his handling of the 1932 situation. Both Mr. Sarnoff and Col. Davis pointed out that he is no longer a member of the RCA staff, although he receives SUPPLEMENTING its report on network and station time sales during 1939 [Broadcasting, Aug. 1], showing that the three major network organizations and 705 stations sold approximately $130,000,000 worth of time to sponsors, the FCC on Aug. 13 issued two reports — one analyzing program expenses and the other detailing the costs of power used by various categories of stations. Covering 519 stations and the three networks, or only those stations having time sales of $25,000 or more during the year, the program cost report shows that their total program expenses last year amounted to $39,979,247. Of this amount the networks acounted for $14,469,768 and the 519 stations for $25,509,479. Station-Network Costs The breakdown for the stations follows : Salaries and wages of program departments, $6,417,118; talent expenses, $9,504,431 ; royalties and license fees relating to program material, $4,289,454; cost of wire services, exclusive of transmitter line, $2,305,434; other expenses directly related to programs, $2,993,042. For the networks the breakdown was : Salaries and wages of program departments, $2,382,846 ; talent expenses, $5,376,229; royalties and a $10,000 a year retainer under a two-year contract. 'Broadcasting' Enters In Questioned on his holdings outside RCA, Mr. Sarnoff said he had no interests outside of 5.000 shares of RCA common stock. He revealed that his brother is one-third owner of Bruno Corp., RCA distributors in the New York area, while another brother is an insurance salesman handling some RCA insurance. Mr. Sarnoff also was asked if RCA or he himself had any interest in Broadcasting, or any relatives in its employ. He replied flatly in the negative. Considerable attention was given by Senator Tobey to the previously discussed report of J. Austin Smith, alleging improper financial practices to the detriment of RCA stockholders. He castigated both Mr. Sarnoff and Col. Davis for sanctioning RCA's employment of "a person who blackmails, blackballs and sticks a knife in your ribs". As he stepped from the committee table, Mr. Sarnoff remarked, "One of the values of these hearings has been to make us wiser." Col. Davis concluded RCA testimony by reviewing briefly Mr. O'Callaghan's present status with RCA. Asked by Senator Tobey if Mr. O'Callaghan was not reallv being given a "toboggan retainer" from which "he'll slide out of RCA in a couple of years". Col. Davis answered, "He may." license fees relating to program material, $519,857; cost of wire services, exclusive of transmitter line, $5,145,223; other expenses directly related to programs, $1,045,613. The report further shows that 361 stations affiliated with networks spent $21,280,097 on programs while 158 stations not affiliated with networks spent $4,229,382. The 33 fulltime clear-channel stations alone accounted for $7,377,439 of program expense; the 198 fulltime regionals, $10,681,963; the 165 fulltime locals, $2,843,549. The power bill for the 519 stations doing $25,000 or more business amounted in 1939 to $1,639,117, with the breakdown as follows: 33 50,000-watt stations, $623,089 an average of $18,881 per station; four part-time 50,000-watt stations, $70,816 an average of $17,704; 19 fulltime stations of 5,000 to 25,000 watts, $104,651, an average of $5,508; five part-time stations of 5,000 to 25,000 watts, $17,030, an average of $3,406; 198 fulltime regionals, $548,286, an average of $2,769; 56 limited and daytime regionals, $80,170, an average of $1,432; 24 parttime regionals, $42,688, an average of $1,779; 165 f ulitime locals, $135, Radio Strip for Papers REVERSING the usual situation, a comic strip series first presented by radio is being made available for sale to newspapers. The strip, "The Adventures of Gabby Scoops", based on the work of a roving reporter, is written by Bill Treadwell and for the last four months was presented Friday nights on the Uncle Don program on WOR, Newark. It is being offered to newspapers through hte McClure Syndicate. The strip also is published in Whitman Publishing Co.'s "Crackjack Funnies" magazine. 971, an average of $824; 15 day and part-time locals, $16,416, an average of $1,094. Ti^ LDNE^ CHAIN .COLORADO I MISSOURI TUCUMCAftJ « CIOVIS • NEW MEXICO BAOWNSVIUE WE ONiy ADVERTISING MEWUM FOR HOLEPnoOH' COVERAGE FROM THE TEXAS PAN-HAN DLEi TO '; THE MEXICAN BORDER / Ferrates and availabilities contact any LSC sta;tibn, Howard Wilson Co.,ov James W. Pate LSC Managing Director, Star Telegram Bu i Idi ng,,K,QKp;F6TtWtirth/ BROADCASTING • Broadcast Advertising August 15, 1940 • Page 93