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Storer Defends WITl-TV Buy: Elaborate and carefully documented presentation was offered to FCC this week by Storer Broadcasting Co. as it sought to settle Commission’s doubts about approving its $4,462,500 purchase of independent WITI-TV, Milwaukee-Whitefish Bay (Ch. 6) — and its 20pp. document was endorsed by seller Jack Kahn, et al (Vol. 14:32 et seq).
A major theme of Storer’s letter was that it’s not in the business of buying & selling stations indiscriminately — that in fact it has bought & sold only 2 stations : KGBS-TV, San Antonio (Ch. 5); WBRC-TV, Birmingham (Ch. 6). Furthermore, it said, sole purpose was to reinvest proceeds in other stations.
Storer pointed to its record in uhf — how it invested $2,350,000 in KPTV, Portland (Ch. 27), and $1,050,000 in WGBS-TV, Miami (Ch. 23) and did its utmost to put them across before bowing to inevitable defeat in intermixed markets.
“Concentration of control” won’t increase when WITITV is substituted for now-dark WVUE, WilmingtonPhiladelphia (Ch. 12), Storer stated, because WITI-TV reaches fewer TV homes and less area than WVUE did. In addition, it noted, each of 4 other multiple owners covered more people with its stations — CBS, NBC, Westinghouse. General Teleradio. Another factor: No overlap with other Storer stations — none being nearer than 250 mi.
Storer listed TV-radio-newspaper facilities in Milwaukee area to show it will have plenty of competition there.
FCC’s concern that Storer will offer “combination rates” for WITI-TV and its other stations was answered by statement that it simply won’t do it.
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How can Storer operate independently in Milwaukee — when it couldn’t in Wilmington-Philadelphia? Best answer, Storer said, was that WITI-TV is now profitable — grossing $632,770 in 9 months of 1958 vs. $511,523 in same 1957 period, with estimated Oct. gross of $100,000 and
operating profit of $6500 after depreciation of $7600. Other factors:
(1) WVUE faced competition from 3 entrenched vhf stations, whereas in Milwaukee WTMJ-TV (Ch. 4) is the only “truly ‘established’ TV station.”
(2) WVUE had “serious programming problem,” because Philadelphia stations had tied up major feature film packages, substantially all good syndicated film and sporting events. It said it had to pay WFIL-TV more than $1,500,000 for sublicense on the RKO package.
(3) Serious reception problems — rising from its transmitter site at Pitman, N. J. at “wrong end” of receiving antennas when compared with the 3 Philadelphia stations, all located at antenna farm. WITI-TV, it said, has no orientation problem.
(4) Operating costs for WVUE were extremely high — dictated by Philadelphia wage rates, film prices, cost of rights to sports events, etc. — compared with lower costs in Milwaukee.
(5) WVUE “ran a very poor fourth” in ratings, whereas WITI-TV “is very close to the third network station, making it a relatively easy sale on a cost-perthousand basis.”
Notwithstanding WITI-TV’s strong independent operation, Storer said, it would try to get network affiliation if one becomes available.
Over-all, Storer pointed out, its major business is broadcasting. It noted that founder George B. Storer, his 3 sons and key executives have been with the organization for virtually their entire business lives; that more than 95% of company’s revenues come from broadcasting (it received $107,642 dividends in 1957 from Standard Tube Co., Detroit steel fabricating firm, never received any from Miami Beach Sun.)
Revenue-expense figures for all uhf stations and those vhf’s in intermixed vhf-uhf areas are sought by FCC in special request sent to 125 stations. They’re asked to supply figures for first 6 months of 1958. Commission notes that data is requested “in connection with the Commission’s current allocation studies.” Commission’s purpose is to get fresh information, since its latest financial data is for 1957. It doesn’t mean any sudden change in allocations possibilities, according to FCC.
ADVERTISING AGENCIES: John F. Whalley, ex-NBC, named financial v.p. of Needham, Louis & Brorby, Chicago, succeeding Max D. Anwyl, resigned; Charles D. Ewart, Richard H. Needham, George W. Oliver & Robert F. Steinhoff named v.p.’s . . . Fred B. Manchee retiring as exec, v.p.-treas. of BBDO Jan. 1 after 32 years; v.p. Thomas C. Dillon assumes some of his duties as marketing, research & media director . . . Victor M. Ratner, Benton & Bowles v.p. and onetime CBS adv. & promotion mgr., resigns from agency . . . Norman Gladney dissolves own market consulting firm to become TV-radio director of Calkins & Holden, N. Y. . . . Raymond A. Robinson, promoted to v.p., Foote, Cone & Belding, Los Angeles . . . Ben Alcock promoted to v.p. of Grey Adv. . . . Fred Klein, ex-Earle Ludgin, Chicago, heads new Doyle Dane Bernbach office . . . Frank O’Connor, asst. v.p. of Ted Bates, resigns Nov. 15 to return to active TV production.
Success Story: Reflecting intensity of TV viewer interest, 5-year-old TV Guide took full-page newspaper ads this week to report largest circulation in weekly magazine history — 6,500,000 vs. 6,000,000 for Life, 5,800,000 Saturday Evening Post, 5,500,000 Look.
CATV-microwave freeze is quite justified, FCC told Court of Appeals this week, because it must first conclude its general inquiry into impact of community antenna systems, translators, etc. on TV station growth. Commission stated: “In view of the complexity of the interrelated questions involved in the inquiry and the large number of responses w’hich the Commission has received, it cannot, under any circumstances, be properly argued that the Commission has taken an inordinately long period of time to reach a determination of the issues involved in the general inquiry.”
CATV-station suit in Helena, Mont. (Vol. 14:36, 38, 42) was dismissed this week by U. S. District Court Judge W. D. Murray on petition by Ed Craney’s stations — ^which had sought to stop Helena community antenna system from picking up and distributing signals of his KXLF-TV, Butte (Ch. 4). Judge made no ruling on merits of case, in which Craney had asserted system illegally “rebroadcast” signals. System plans to distribute signal of KREM-TV, Spokane (Ch. 2), despite fact station asserts it hasn’t given permission.