Broadcasting Telecasting (Apr-Jun 1957)

MANUFACTURING , RECORD YEAR EXPECTED BY CBS • Profits in first quarter already 8% above 1956 • Report given at New York stockholders meeting STOCKHOLDERS of CBS Inc. last Wednesday were told that the company fully expects its profits to exceed the record year of 1956. The annual meeting last week in New York also heard that CBS is exploring opportunities to obtain a fifth vhf station. Highlights of the sessions: • President Frank Stanton, in a report on developments since issuance of the 1956 annual report, estimated that CBS Inc.'s consolidated net revenues and sales for the first quarter this year will run about 8% ahead of the same quarter of 1956, with profits after taxes approximately 32% higher. The profit outlook for the full year is for "some further improvement even over our record year of 1956," he said, unless there are "extraordinary changes in the economic climate or in respect to Washington action." • Mr. Stanton also pointed out that CBS, having received the FCC grant for ch. 1 1 in St. Louis [B«T, April 1], "is now exploring opportunities to obtain a fifth vhf station and thus fill out its quota under FCC's multiple ownership rules. • He reported that while it is still too early to determine concrete results, CBS Radio's recent rate changes — 5% increase in daytime, one-third cut in evening — has created "a substantial amount of advertiser interest" and "there has been some new business. We are hopeful that the rate readjustments will result in a strengthening of the radio network revenues and profits." • The stockholders re-elected Henry C. Bonfig, Arthur Hull Hayes, J. A. W. Iglehart, Robert A. Lovett, Millicent C. Mcintosh, Samuel Paley, and J. L. Van Volkenburg as class A directors, and Chairman Paley and President Stanton, Arthur L. Chapman, Ralph F. Colin, Merle S. Jones, Leon Levy, and Goddard Lieberson as class B directors. • Board Chairman William S. Paley acknowledged that CBS had been considering purchase of the Paramount film backlog, along with other film packages, but said he knew of no negotiations now in progress. He added: "I cannot promise that nothing will develop." • Pay-tv, Mr. Paley said, would have an adverse effect on CBS-TV. But, in answer to a further question, he felt CBS would be in a position to participate in pay-tv operations if it wishes to do so, when and if pay television is authorized. Dr. Stanton, in his formal report, pointed out that estimates of higher first-quarter profits would put per-share earnings for the first-quarter of 1957 at 77 cents as against 60 cents per share for the same period of 1956. Part of the increased profits, he noted, result from the liquidation of CBS-Columbia, whose losses were reflected in the 1956 report. He said there was reason to hope that CBS-Hytron, under the new presidency of Mr. Chapman, would lose less this year than last and become a profitable operation in 1958. He also pointed out that since the annual report was issued CBS Labs, has signed for confidential work for both Minnesota Mining & Mfg. Co., and Eastman Kodak Co. Without giving details, he said that MM&M — which is one of the largest suppliers of recording tape, including that used in the new video tape recording equipment — wishes to broaden its operations in the electronics field, while the work for Eastman is "in certain phases of the computor field." He reviewed briefly the Washington investigations of broadcasting reiterating his statement to CBS-TV affiliates a few weeks ago [B»T, April 8] that he could not predict the contents of the various reports to be issued but that he had "no reason to believe that they will be entirely favorable." He added: "But of course various steps would be necessary to implement these reports — steps consisting either of legislation or of administrative rule-making. Before any final action would be taken, therefore, I would anticipate further hearings." With regard to Justice Dept. antitrust probings, he noted that "we have freely supplied information to these investigators" and that "for many years we have worked in extremely close cooperation with our outside attorneys to assure ourselves of compliance with the antitrust laws. Our attorneys ... in turn have assured us that the several network activities currently under investigation are consistent with the antitrust laws." One flurry at the meeting resulted in the stockholders voting down — as out of order — three resolutions offered by two stockholders who also are plaintiffs in suits totaling almost $10 million against CBS and other radio-tv entities. The resolutions proposed: (1) That CBS divest itself immediately of its stock interest in BMI; (2) that CBS be barred from buying licenses to the BMI 337 YEARS LATER RCA technicians will maintain around the clock radio contact with Mayflower II on its six-week trip from Plymouth, England, to Plymouth, Mass., according to RCA Communications Inc. Technicians said that while excellent radiotelegraph communication is possible, the small transmitter aboard the vessel will prevent voice contact until the ship nears midAtlantic. At that point, a live voice pickup reporting the ship's progress will be made available for network rebroadcasting in the U. S. Mayflower II is a replica of the 17th Century original. April 22. 1957 • Page 101