Variety (Apr 1939)

18 VARIETY RADIO Wednesday, April 26, 1939 Worid Deal Called CoU, But Revival WoiilAi't Surprise Biz; CBS's Snddoi Siift a Mystery Speculation was the immediate re- suit of the official announcement late Monday afternoon from. Columbia Broadcasting System that its deal to purchase the transcription com- pany, World Broadcasting, had been called off. This came suddenly after the whole thing looked set late last •week. It followed, too, testimony in Washington by a, CBS official only a few days a^ and, a week before that, the tactic «f protecting from publicity the nature of the CBS- World deal on the grounds It woiild be prejudicial to its consummation. FCC probe committee gave this'pro- tection. Belief persists in the trade that even though CBS has announced that the purchase of the World has been dropped there is a chance of the deal being revived in the near .future. Officials at ' Electrical Research Erodtacts, Inc, adndtted yesterday (Tuesday) Ihat CBS had on Friday (21) notified them that it couldn't accept the terms and oondiitions asked Iqr ERPI in regard to its sonnd recording licenses, but what mysti- fied these ERPI^ officials was the suddenness of Columbia's decision, since it was fully aware - of sudi' terms «ikd conditions for five months. One EBPl official advanced the opinion tiiat. there was something far removed Jiom- the licensing angle that had-.prompted the network to call off the deal EBPI holds a mi- nority interest In World, but-it was prepared to turn this stock ov«r to CBS as part of the money deal agreed On betwen Percy L, Deutsch, World prez, and the network. Competitive companies in tfie traucriptiDn field are convinced that even If tiie -acquisition of World by-CBS doesn't eventuate the net- work will become an important fac- tor in transcription maldng. Colum' bia is determined to develop an or ganizatlon that can meet the sales activities of NBC's transcription di' vision. On Monday (24) CBS Issued a statement and on Tuesday World fol ■lowed suit Both statements are . brief and, to outsiders, ambiguous. Both spoke of ERPI licensing and croBs-licensing difficulties, but threw no real light on the subject Mys- tery developed in that ai' high offi- cial of CBS, as recently-^as Friday (21), had told'business acquaintances the deal was all set . It was too soon to be known if World's position with radio stations had been affected by -the od'd, prC' dicament in which it finds Itself. On the one hand. World's corporate value was dramatized and, with that, by'implication, the criticism of the CBS action was'flattering to World, namely, that It was the most Important independent program source outside the networks in the radio industry. World has been In pretty good shape for some time, although once badly In hock to ERPI. Organize' tion had launched its iso-ealled (Sold Group- with pA)$pects. of success. This is to be revitalized under the resumption of independent status. Although never clarified, - and per haps, not fully considered, the as- sumption of the radio trade had been that under CBS domination the Grold Group Idea would have lapsed. profitable extension of Columbia Broadcasting-System's activities in a field that was related in several ways,' Murphy . explained, terming the American Becord deal a 'step- piqg stone' on the way to active par- ticipation in tbe transcription busi- ness. Without revealing exact terms. Murphy conceded the price paid for World Is substantially in excess of the amount that would be required to provide studios and equipment for American Reciord. While the latter figure is only 40% of the sum in- volved in tbe WBS deal, he noted the desirability of taking over a go- ing business instead, of beginning at the bottom. Policies have not been worked out beyond genieral outlines, the CBS exec 'testified, but it is planned to run World as a separate outfit ex- cept for the tie-up to help network' advertisers needing transcriptions^' He admitted that World In a sense' liad haea competitive -with Columbia, but did not anticipate any curb on competition. Network doesn't plan to bar other companies from mak- ing off-line recordings or from run- ning -wires into its studios, although there may be a service fee -for the privilege^ he said. Questioning brought out that CBS made first move to get Into the tran- scription business 18 months ago. Agreement with 'Independent Re- search Corp., negotiated Oct 5, 1937, allows Columbia right to use their recording process, but the non-ex- clusive license has been used only experimentally. Murphy said. Meanwhile Murphy Was On Stand m Washington Washington, April 23. Acquisition of World Broadcasting System by CBS will not remove competition and may lead to more Intensive rivalry between disc mak- ers, FCC chain-monopoly prob- ers heard last week as the lengthly hearings reached a finish. With detalU of tiie transaction still shrouded in secrecy, Commish learned Columbia's reason for buying World was to acquire studio facili- ties and equipment for American Record Corp. and to provide better ' service to ^ents who confront spe- cial advertising problems. This was the explanation given by Adrian Myrphy, director of developmental projects for the network. ' Ainericah Record Corp. was pur- chased outright, with $700,000 paid for 100%of tbe capital stock, giving CBS! control also of Brunswick and Columbia phonograph firms. It was felt that the home record business was a natural and ^osslbily RAPEE-PEERCE-FROHAN SUBinnED TO GULF Emo Rapee, Jan Peerce and Jane FToman have been submitted to Gulf Refining by Youn? & Rubicam as the cast for the summer show in the account's Sunday evening spot on Columbia. Threesome would take the place of the Screen Guild show, which is set to fold in three weeks. CfiS Uses 'Groncher' Hollywood, April 25, Split network deal by General Mills for "Grouch Club' terminates April 30 and sponsor concentrates coverage on NB C red web. Both KFI and KFWB carry the program locally. Warners indie station orig- inates the half-hour comedy. Columbia has been taking care of the coverage east to Denver. A RIPLEY Cant Buy Royal Crown Cola in New York—But It'a Advertteed Even though the beverage pro- ducer lacks distribution in the New York area, Royal Crown Cola has added WABC to the list of ouUets for the Bob RIpiey-B. A. Rolfe show. The addition'became effective last Friday (21). When the series, which originates from New York, started two weeks before Columbia's No. 1 key was omitted on the theory that the prod- uct might suffer an unfavorable re- action if it were plugged in the metropolitan area without being made immediate a-vailable. Xhider the present arrangement a Ideal an- nouncer is inserted into the broad- cast over WABC to explain that while Crown Cola is not sold in New York at present, the company ex- pects to have distribution in this ter- ritory eventually. A Columbia account that still does' not include WABC in its hookup, despite the program's New York origination, is Pet Ifilk. Tbe canned lacteal likewise has no distribution in .this territory. Gordon Thompson Dies With Script in Hand; Gmefing Pace Blamed Hollywood, April 25. Gordon Thompson, 35, producer of the Rudy Vallee-Standard Brands program, died 6t a heart attack last Wednesday (19). He -was poring over the script of the next day's program when he slumped back in his chair in the J. Walter Thompson office. Death was almost instant His death shocked agency men into grim comment on tbe pace that kills. As tioaeer pilot of the 'Vallee show niompson was credited with being among the first to .engage stage and screen stars for radio. He came with Thompson in 1928 and the fol- lowing- year he helped launch the 'VaUee series. Tbompson several years later was assigned to organize thr agency's London radio depart- ment Ijast year he suffered a severe heart attack and when he returned to the job he continued for a'while in tiie compaiqr's new business de- partment He returned to the pro- duction of the Vallee Show last De- cember when Tony Sanford was as- sigiied to Keliogg's 'Circle.* Before. Joining the Thompson agency Thompson was on the Phil- adelphia Ledger and the N. Y. Sun. His father, Harry Arthur lltompson, was a former editor of the Country (Hntieman and former associate edi- tor of the Saturday Evening Post Producer leaves his widow and 10- month-^ld. child, his mother and a brother. Body -was sent to Green- wich, Cona, for liurial. Fraoklin Delano, assH mgr. Holly' wood office of Young & Rubicam, goes info double harness this sum- mer with Rosalie Leistikow. COLUMBIA BROADCASTING SYSTEM, INC AND SUBSIDIARY COMPANIES CONSOLIDATED INCOME STATEMENT Three Months ended April t, 1938 (13 weeks) April 1, 1939 (13 weeks) Gross income from sale of facilities, talent and wires $9,984,344.99 $9,705,793.15 Less: Time discount end agency commis- sions 2,985,571.48 2,998,226.15 $6,998,773.61- $6,707,567.00 $3,690,419.80 1,470.748.12 Deduct: Operating expenses.. $3,670,877.32 Selling, general and administrative ex- penses 1,377,754.68 5,048,632.00 Net income for the period before inter- depreciation. Fed- eral . income taxes and miscellaneous income '. $1,950,141Jil Less: Interest ............ $ 11,938.45 $ 12,753X11 Depreciation 139,367.86 137,624,15 Fed. income taxes... 324,624.76 265,180.00 Add: Miscellaneous in- come (net) including interest, discount dividends, profit and loss on sale of securities 475,831.07 $1,474,310.44 20,669.65 Net profit for the period $1,494,980.09 5,170,167.92 $1,537,399.08 415,557.16 $1,121,841.92 29:684.74 $1,151,526.66 .67 Earnings per share •. $ .87 $ (Calculated upon the 1,708,723 shares of $2.50 par value stock either out- standing at April 1, 1930, or to be outstanding upon completion of ex- change of old $5.00 par value stock.) Frank K. White, treasurer. The 1939 results are subject to audit at the end of the year by Certified Public Accountants. GORDON TO N . W. AVER Walte Hoyt Fre-Baseball Away From Tovng ft Bnbloam Gordon Baking Co. has switehed its business from Young 8t Rubicani to N. W. Ayer and is doing some spot campaigning for the spring and summer. First contract involves Waite Hoyt In ■ series of. 10-minuto baseball commenta six days a week preced- ing the play-by-play broadcasta on WABC, N. Y. WBNO's Sales Chief New Orleans, April 25. Walter Williams is now general sales manager of station WBNO. Hubert Grant gives up engineering to become station's program director. Frederick Lemieux from WJBO, Baton Rouge, has joined staff as spieler. WMCA Gets Hummert Serials In Big Night'time Deal For Local Station BIG TOWN, POWELL DUE FOR LAYOFFS Hollywood, April 25. Ruthrauff & Ryan' have ordered siestas for their two Lever Bros.' shows. Edward G. Robinson's 'Big Town' and Dick Powell's 'Tuesday Night Party.' Respite for both wIU be for six or eight weeks, subject to Columbia's hiatus policy, starting in mid July. There will be no replacementa. Wamow's 26 for Locldes Mark Wamow orchestra has been renewed for another 13 weeks on the Lucky Strike Hit Parade Satur- day nighta on CBS. New streteh is effective May 6. Makes a full 26 stanzas on the Pa- rade for the Wamow outfit No other band has ever had even 13 strailiht since the program started. Alien Gordon and Herman Wolf produced the gala show Sunday for the Greater New York Fund drive, WJZ, WABC, WMCA and WQXR carried it Blackett - Sample - Huoimert has taken a block of two hours five nighta a week over WMCA, New York, to give a waxed evening ride to eight of its 15-minute daytime network serial shows. Policy will begin May 8 and continue indefi- .nitely. Idea originated In the agency, but the sale was made by Bob Cioldstein, formerly with the B-S-H-afflliated Air Features, Inc., and now sales rep for the station. Runoff to be between 8 and 10 p.m. Shows involved in the deal are 'Stella Dallas,' 'Lorenzo Jones' and •Young Widder Brown' (Phillips Chemical), 'John's Other Wife' (American Home Products), 'Just Plain BlU' (Anacin), all on NBC, and 'Romance of Helen Trent' (Af- filiated Products) and 'Our Gal Sun- day' (Anacin) on CBS. Agency's idea is to see if a night- time audience can be built up in the concentrated New York sales area for the daytime shows. Policy has pre-vlously been tried in spot^ in- stances, but this is believed to be the first time it has been attempted on a large scale. Plan is to extend it to other concentrated population- centers if it clicks in New York. WMCA's contract with B-S-H is for S2 weeks, with the agency holding ,an option for two additional years. SEEK COMMON SENSE ON AIR-PRESS ISSUE Start of an attempted common- sense solution to the difficulties be- tween newspapers and radio will be made at a luncheon at the Waldorf- Astoria, N. Y., tomorrow (Thursday). Committee of tbe National Associa- tion of Broadcasters will meet -with a similar group from the American Newspaper Publishers' Assoctatioin to take stock of the situation and pave the way for cooperation and perma- nent i>eace. Serving on the NAB committee will be Neville MUler, prez; Ed Kirby, public relations director; Frank E. Mason, v.-p. Of NBC, and Clair McCoIlough, g.m. of the Mason Dixon Radio Group, Pennsylvania. Vallee's 500th Airing Hollywood, April 25, May 18 broadcast of Rudy VaUee will be his 500th for Standard Brands in the same Thursday ni^t spot on NBC. Lionel Barrymore will be in one of the guest spots. Federal Law Proposed To Curb Unauthorized Air Use of Recordings Washington, April 25. Legislative ban on unauthorized music canning was proposed last week in attempt , to curb air piracy and misuse of phonograph records. Bill similar to measure pending, in thie New York State legislature was offered Congress by Rep. Fred Schulte of Indiana. Inspired by the American Federa- tion of Musicians, Schulte proposed amendment to the-1934 Communica- tions act which would restrict re- cording or other mechanical repro- duction of any type of program ma- terial. Measure makes it a penal offense -'to offer for sale, sell, lease, or license' or -to possess any un- authorized platter or other type of recording. Fine of $10,000 and im- prisonment up to two years for seri- ous offenses. Although the move appeared to fit in with the plan of A J'.M. leaders to make a new drive on radio, the legis- lation was aimed primarily at small radio stations which have been ac- cused of stealing broadcasta by net- works and rivals. The tunesters claims stringent punishment is necessary to stamp out the practice, which they hold Is partiy responsi- ble for unemployment in the ranks. The bill carries out the idea of the performing artists group headed by Fred Waring to the extent that, it indirectly recognizes the property righta In - renditions beyond the copyright As Waring has attempted throu^ court action, Schulte would outiaw use of records or rebroad- casting 'for profit or gain' without the express consent of the perform- ers. Rappjl,500 Week Radio Scribei Saed by His Agent Los Angeles, April 25. Breach of contract suit for $23,600 was filed here by H. N. Swanson, Inc., against Philip Rapp, radio writer, y^o is charged with walking out on a seven-year managerial deal. Rapp makes $1,500 a week, accord- ing to the agency, which aslcs 10% of the $236,000 he is expected to earn during the balance of the time cov- ered by the pact ' Jack Haley heading east to talk over a radio deal for the summer.^