Broadcasting Telecasting (Apr-Jun 1957)

Katz Corp. (subsidiary), $139,400 including $10,400 in expenses (Mr. Balaban died last April 4); Robert H. O'Brien, financial vice president and secretary of AB-PT, $54,000; Edward L. Hyman, AB-PT vice president, $54,000; Sidney M. Markley, AB-PT vice president, $49,200, and Robert B. Wilby, president, Wilby-Kincey Service Corp., $33,381. Mr. Kintner on March 23, 1956, was issued an option for 9,500 shares of AB-PT common stock for purchase at $25.18 per share at any time during a seven-year period. The option, however, was not exercised and hence was terminated. Among the 15 directors re-elected last week to AB-PT's board, Mr. Goldenson as an individual held the largest number of common shares at the close of business March 20, 1957. He held 52,450 shares, an option for 25,000 additional shares of ROBERT E. KINTNER, former ABC president and now an executive vice president with NBC-TV, last week challenged the portrayal by Leonard H. Goldenson, American Broadcasting-Paramount Theatres' president, of why and how ABC-TV's profits have slumped in the current broadcast season. Mr. Kintner based his recital of the "facts" on what he indicated was Mr. Goldenson's alleged references to "the poor financial showing for the last quarter of 1956 [as being] ... the result of sales efforts that took place" during his (Mr. Kintner's) management at ABC. In summary, Mr. Kintner holds that ABC's profit picture was good in 1956, that sales of prime evening time were up, that the decline in Mickey Mouse Club sales were because of higher costs of the MondayFriday show, and that the "surprisingly poor showing in the first quarter of 1957" did not result from Mr. Kintner's "sales and policies" when he was president but from lower sales from ABC's owned and operated stations, "cancellations by sponsors who had previously used the radio and television networks" and from higher expenses of operating AB-PT's broadcast division. An attorney holding Mr. Kintner's proxy chose about the mid-point of AB-PT's annual stockholders meeting held last Tuesday in New York to read a statement on behalf of the former ABC president. Edward S. Greenbaum of Greenbaum, Wolff & Ernst, New York, was recognized by the meeting chairman, Leonard H. Goldenson, AB-PT president who figured prominently in Mr. Kintner's resignation as ABC president and member of AB-PT's board last October. Mr. Greenbaum said that Mr. Kintner desired to "avoid any public controversy with the company" and for that reason had not answered statements by Mr. Goldenson on ABC's poor financial showing being traceable to sales efforts of last year. But, the lawyer continued, the repetition of the statements at Tuesday's meeting made it "necessary to make a statement on Mr. Kintner's behalf." Mr. Greenbaum said: common and owned 250 shares of common jointly with his wife. Edward J. Noble, chairman of AB-PT's finance committee and board chairman and chief executive officer of Beech-Nut Life Savers Inc., as an individual held the biggest block of preferred shares in AB-PT (225,028). The Edward John Noble Foundation, charitable trust of which Mr. Noble and AB-PT director Earl E. Anderson, vice president and secretary of Beech-Nut Life Savers Inc., are trustees, also owned 15,740 shares of AB-PT preferred and 337,304 shares of common. Re-elected to the AB-PT board last week were Messrs. Anderson, Markley, Noble, Goldenson, O'Brien, Wilby, A. H. Blank, president of Tri-States Theatre Corp., ABPT subsidiary; John A. Coleman, partner in brokerage firm of Adler Coleman & Co.; "In fairness to him [Mr. Kintner] and his associates at ABC, who during the period of his presidency from 1950 until October 1956, played a substantial part in developing the company's business from its small beginnings as the Blue Network to the position which it had attained by October 1956 as a major competitor in the radio and television field, the following facts should be pointed out to AB-PT Inc. stockholders: "1. For the year 1956 the profit earned by ABC as separate from other divisions of AB-PT was substantially higher than in 1955. This represented an all-time high for ABC. "2. At the time of Mr. Kintner's resignation, sales of prime evening time amounted to \9V2 sponsored hours a week, compared to HV2 hours the year before. This represented an all-time high for ABC. "3. Mr. Goldenson correctly points out that the sales results of the Mickey Mouse ■ Club beginning October 1956, were disappointing compared with the corresponding months in the previous year. However, he neglects to say that this was caused by a doubling over the previous year of the guarantee to Walt Disney Pro MR. KINTNER ductions and that it was Mr. Goldenson and Mr. Kintner jointly who made this arrangement, which received the unanimous approval of the board of directors. Because of the importance of the association of Walt Disney with ABC, Mr. Kintner with Mr. Goldenson recommended that the new arrangement be approved. In so doing, Mr. Kintner pointed out that the 1956-1957 financial results from the program would probably be much less favorable because of the substantially higher cost of the show. "4. On the basis of the business of ABC radio and television networks and on the basis of the previous earnings records of the Charles T. Fisher Jr., president of National Bank of Detroit; E. Chester Gersten, vice chairman of the board of Bankers Trust Co., New York; Robert H. Hinckley, AB-PT and American Broadcasting Div. vice president; Robert L. Huffines Jr., board chairman, southern division of Frank G. Binswanger Inc. and director of Textron Inc.; William T. Kilborn, president of Flannery Mfg. Co. and Ft. Pitt Mfg. Co.; Walter P. Marshall, president of Western Union Telegraph Co., and H. Hugh McConnell, second vice president of Metropolitan Life Insurance Co. At the close of last week's meeting, an executive committee of the board was appointed with Mr. Coleman the chairman and including Messrs. Gersten, Goldenson, Marshall, McConnell, Noble and O'Brien. owned stations, it would appear that the surprisingly poor showing in the first quarter of 1957 does not result from sales and policies during the time when Mr. Kintner was president of the division but from cancellations by sponsors who had previously used the radio and television networks, lowered sales by the ABC owned radio and television stations and higher expenses. "This is borne out by Mr. Goldenson's own public statements to advertising agencies, advertisers and station affiliates. There is submitted research and statistical data to prove that in the fall of 1956 ABC had achieved a program and sales position placing it almost on an equal footing with its major competitors. The facts clearly indicate that the reason for the present unfavorable operating results of ABC rest with those who assumed authority after Mr. Kintner. When Mr. Greenbaum concluded his statement, Mr. Goldenson said he wanted to note for the record that in the fourth quarter of 1956 profits of ABC-TV were "way off" and that there were no "cancellations in that quarter." He commented that "nothing further is served by discussion," noting that Mr. Kintner had resigned in October over policy differences and that the AB-PT directors had accepted the resignation. Later, Mr. Goldenson told newsmen he would have no other comment. (An NBC spokesman said later that the network understood Mr. Greenbaum was representing Mr. Kintner in a private capacity and had no connection with either NBC or RCA.) Mr. Kintner had an annual salary of $125,000 when he resigned from ABC on Oct. 12, 1956. He then was paid a settlement for his 10-year contract starting in 1950 and which AB-PT assumed in the ABC-United Paramount Theatres merger of 1953. In that settlement, AB-PT has payable to Mr. Kintner the sum of $230,000 in the years 1957 through 1960. The Kintner resignation was announced Oct. 16 and an exchange of letters between him and Mr. Goldenson released and published [B«T, Oct. 22]. The letters attributed the parting to a "substantial" dispute and "major" differences in policy on ABC's organization and operation. TAINT SO, KINTNER TELLS AB-PT Broadcasting • Telecasting May 27, 1957 • Page 55