Variety (Jul 1946)

22 RADIO Variety Wednesday, July 3, 1946 Stern Gets Fat Plum in WCAU Deal, Plus $1,200,000 for Operations Washington, July 2. Details of the financing plan which will transfer WCAU, Phila- delphia, from the Levy Bros- to J. David Stern's Philadelphia Record for $6,000,000—largest station sale in radio history—were revealed yester- day (1) when the formal transfer application was filed with the FCC. Application, filed by Stern's law- yers, Conn and Marks, declares that Ike and Leon Levy, largest holders of WCAU, are anxious to sell and "to confine their interests to network holdings." The Levys have a big piece of CBS. According to the application, the price for the station and its FM af- filiate comes to about $2,650,000. Here is the way that works: Total price is $6,000,000. But Stern Rets $3,250,000 in cash in bank and govt, bonds, plus another $600,000 in mis- cellaneous assets. However, there are outstanding liabilities of about $500,000, of which $485,000 repre sents income taxes owed to the Gov ernment. Reason for the transfer of cash and bonds appears to be to duck in- come tax which would have to be paid on therri if they were declared as dividends. The way the deal is worked out, the present owners of WCAU will only have to pay the longterm capital gains tax which is 25%, much smaller than income taxes would be. * The financing operation Is exceed Jngly involved. Reduced to its sim- plest fundamentals, it will work as. follows: The Courier-Post Co., of Camden, N. J., the parent company which holds the controlling stock of the Philly Record, will borrow $5,- 500,000 from the Jefferson Standard Life Insurance Co. and Pilot Life Insurance Co., both of Greensboro, N. C. (Jefferson', incidentally, owns Station WBT, in Charlotte, and through a subsidiary, owns WBIG, in Greensboro.) Courier-Post then lends $4,250,000 to the Record, its subsidiary. This will be used for the sale and to clean up certain other outstanding obliga- tions, so that the insurance com- panies will wind up as the sole long- term creditors of the newspapers, holding 4%% bonds of the Courier company, due in 1961. Remainder of the $6,000,000 price will come from the liquid assets of WCAU. itself Under the terms of the financing there will be no lien or mortgage on the assets devoted to broadcast- ing, the sole lien being against the Courier and the Record, $1,206,000 Cash on Hand When the deal is cleaned up, the Record and Courier will be left with about $1,200,000 cash on hand, which will be additional: operating capital and will bemused, presumably, for the construction of the new radio station building planned for WCAU. Under the arrangement the WCAU Broadcasting Co. will be liquidated -and its stock turned over to the Philly Record. The $6,000,000 deal calls for. transfer of the full 1.000 shares of WCAU stock. These are presently owned as follows: Ike and Leon Levy, 326 2/3 shares apiece; Wm. S. Paley (CBS board chair- man), 110 2/3 shares; Samuel Paley, 108 shares; Ramraff & Co., of Los Angeles; a sort of dummy corpora- tion, holding 100 shares in trust for Jacqueline Paley, daughter of Jacob Paley: Edna Bortin, 10 shares: Stan Lee Broza, 10 shares, and Jacob Paley, eight shares. Figures reveal that WCAU is a fat plum. For the period from Jan. 1 through May 12, '46, station showed a profit of $015,497. of which $300,- 000 came from a stock transaction. Broadcast income during that period was $536,540. and operating expenses only $324,498. For the year ending Dec. 31. 1945, profits were $625,000 before taxes. Bob Allen on D. C. News Programming structure discloses that Robert S. Allen (ex of Pearson- Allen) will have charge of Washing- ton news for the station and will do a weekly broadcast. Deal also discloses that Smith Davis, of Cleveland, who set up the Kapner Exits Hearst Radio Leonard Kapner is bowing but as general manager of Hearst Radio, Inc., which operates WBALi Balti- more; WINS, New York and WiSN, Milwaukee. However, he continues as president of WCAE; Pittsburgh. Latter station, though tying in through Hearst Consolidated stock, is' owned by the Pittsburgh Sun- Telegraph and is not part of the Hearst-Radio operation. Kapner's bowout has cued trade speculation as to who takes over. Reynolds Pubs Piracy Charges Hollywood, July 2. Four-way action suit brought by Craig Reynolds • against the Biow agency, NBC, Philip Morris for al- leged .plagiarism of. Reynolds' vet- erans canteen idea on the Ginny Simms show was withdrawn from Federal Court Monday (1), by the plaintiffs. Charge of improper procedure in transferring the case between jus- tices was withdrawn by attorney Jesse Levinson, when Judge Leon Yankwich explained the transfer by customary verbal approval had been granted by Senior District Judge Paul J. McCormick. ) Original action was dismissed in July, 1945, on grounds that the plain- tiff failed to show cause. On Jan 19, 1946 the case was dismissed on a direct verdict by Justice J. F. T. O'Connor. Levinson sought vacating of latter on grounds that he was disqualified since O'Connor owned stock in station KMTR (now KLAC) Church Buys WCKY Show To Present Catholic View On Controversial Issues Cincinnati, July 2 With charges being thrown about that stations are stalling: oh the apportionment of time to religious shows, the Catholic dioceses of Cov ington, Ky., has purchased time out right on WCKY, Cincinnati indie, to air the "Hour of Truth." Show, designed to project the Cathol point of view on controversial sub jects, preemed last Sunday (30) at 9:30 a. m. Nine priests, from the diocese are slated to be heard during the series. Programs are written, prepared and conducted by the priests uriUer the supervision of Rt. Rev. William T. Mulloy, bishop of Covington. Retry Survey Proves You Cant Laugh Off Effectiveness of Spots Top Womai Ncwtcatttr! LUCILLE HASTINGS Awarded first honors for selection nd preparations or a radio news- ust by National Federation oC.Press Women. KLZ, DENVER FCC MULLS NEW YARDSTICK FOR ENGINEERING Washington, July 2, FCC chairman Charles R. Denny has called an informal engineering lonference of govt, and industry men for July 15-16 to discuss new stand- ards for technical operation of all U. . S. radio stations. . New yard sticks, drawn up informally by FCC's engineering dept. were laid before ■ the commission here yester day (1), as third and final session of the clear channel radio hearing got under way. Results of the July parley will be nailed down at a second conference of the full FCC membership Aug. 5 where a definite decision favoring or opposing the new standards is ex- pected. A final ukase on the fate of clears generally, according to Denny, is due in September. Meanwhile, Charles E. Noble, In- ventor of the Westinghouse "Strato- vision" technique of airborne broad- casting, took the stand here yester- day to report on his company's tests with use of Stratovision in the stand- ard broadcast field. Generally favorable, the tests showed that a one kw transmitter in a flying plane is as good as' a 50 kilowatter on the ground. Less conclusive was the testimony on coverage, with FCC engineers unable, to determine whether Stratovision broadcasts have skywave night-time coverage is much greater than regular station transmissions. Last batch of testimony is expected this week from KFAR, Alaska; the governor of Wyoming; KXLA and WLW, Cincinnati. Twin Cities Gospel Beef .Minneapolis. July 2.. More than 50,000 Twin Cilians have signed petitions asking/a return of gospel broadcasting to Twin Cities radio stations, it was an- nounced at a rally conducted here in. protest to banning religious broad-. casts - , j The rally was the second called after WDGY cancelled wcek : day religious broadcasts June 1 on the ground their listenership was minor. FCC Bars Down On 'live Shows' Washington. D. C, July 2. FCC made four changes today (2) in their definitions of program types as set forth in the Blue Book. Most significant one states that outlets can now report local live shows which they record for delayed broadcasts as live shows, rather than as transcriptions as previously required. Second change makes it clenf that the so-called cooperative programs are to be reported to the FCC as network and not as local' shows. Where a cooperative show is not locally sponsored, it is to be con- sidered as a network suslainer. If there is a local sponsor, show must be counted as a network commercial program, even though the plug is read by a local station announcer.' Third revision changes designa- tion of '.'public service" spot an- nouncements to "non-commercial" announcements. Fourth change per- mits a . M'-i-minute unsponsbred show that is not interrupted by a spot announcement to be considered a sustaining program. Earlier definition related only to 15 minute segments. Rainey Charges Conspiracy, Asks FCC Action Vs. Texas Quality Net Stations Washington, July 2. Homer Rainey, candidate for gov- ernor of Texas, yesterday (1) called on the FCC for an immediate hear- ing to air his charges that four powerful stations of the Texas Qual- ity Network are violating the radio act by limiting time given to politi- cal broadcasts. (At deadline FCC was reported ready to grant Rainey's request for an immediate hearing). Rainey, former President of the University of Texas, claims a "con- spiracy" in violation of the radio statute was agreed upon by the four stations—WBAP, Ft, Worth; WFAA. Dallas; KPRC, Houston and WQAI. San Antonio—when they learned of his candidacy for the governorship. Three of the four stations, Rainey told the FCC, are publishers of daily newspapers which have opposed his original deal, gets $27,500 in commis-| campaign and subjected him to a sions. This is much smaller than an- ticipated on a transaction of this size and would indicate that a different plan for financing was probably made after Davis' original one. Tie-in. of the Levys with CBS has frequently been a sore spot with the FCC and the sale may ease pressure of the commission which has been refusing to permit CBS to expand beyond its seven owned and oper- ated stations. The Levys own over 20,000 shares of CBS stock. 'barrage of editorials ^nd shaded biased news stories.". By limiting discussion of campaign issues over (heir stations, the newspaper-radio licensees are; according to Rainey, presenting to. the public an unfair and incomplete picture of the politi- cal race. In a petition filed by his counsel Colin & Marks, fhe former Texas U. prexy, said the FCC should either revoke the licenses of the stations or require them to change their policies "to conform with the letter and spirit of the Communications Act." The alleged restrictive agreement among Texas Quality Network sta tions provides that no. broadcast time would be sold to any candidate be fore June 11: that only 30 minutes of time would be available to any candidate for state office for the entire period between June 11 and July 13; and that between July 13 and 27—date of the primary^-time would be prorated in an indefinite manner among the various candi dates. Rainey, one of 14 candidates for governor, earlier protested the sta lion's actions as. a possible anti trust violation to the Department of Justice and the FCC. While the radio act does not obli gale stations to sell any time for po litical broadcasts, the charge here is that the four individual licensees re linquished' individual responsibility and conspired to limit the time sold to keep Rainey—a formidable con tender—off the air. With his pefi tion, Rainey filed photostatic copies of editorials and news stories.print cd in the station-owned newspapers which opposed him when he was re> moved as president of Texas U. in 1944 and later when he tossed his hat in the gubernatorial race. Jritish Airers to 'Sell' Immigration to Aussie Newest Program Quirk Iri the U. S. at present doing a roundabout to London is Paul S. Jacklin, program director of station 2UE, Sydney, Australia, key station of Major Network, Inc. After a look-see in Manhattan, he left Fri- day (28) for Hollywood to be pres- ent at the cutting of a series of spe- cial transcriptions made for the next Australian postwar loan. These disks with film names will be cut at the C. P. MacGregor waxworks on the Coast. Jacklin's mission to England is for a- purpose perhaps unique in radio history. As radio program rep for the Australian govt., he will cooper ate with BBC officials in lining up broadcasts to "sell" immigration to Australia. The Antipodes is getting 1,000 applications a week from Britons but wants 3,000 a week Ultimately the new Australia will have 20,000,000, population instead of the present 8,000,000, in the hopes of that member of the British Com monwealth of Nations. 'Gloom's' Summer Hiatus Brightens WHN Picture WHN. N. Y. indie, has lined up more live shows for the summer season than.it's had for a long time as a result of the summer hiatus of the station's "Groom Dodgers,' morning serial. "Dodgers" has been split up. into four evening shows, all sustaining. Reshuffled schedule went into effect Monday (1). "Melody Theatre," featuring vo calist Bob Shackleton. juve lead in several Broadway musicals before entering the Army, and Don A) bert's orch, went into the 6:35-7 p.m slot on Mondays. Tuesdays and Sat urdays and 6:35-6:55. p.m. on Wednes- days, Thursdays and Fridays. Liza Morrow-BOb Houston musical va. riety show, with Don Bestor's orch follows from ' 8-8:30 on Tuesdays through Fridays. "Vic Damone Sings." with Beslor prch r is in the 10-10:15 slot on Wednesdays. Thursdays and Fridays and "Rhumba Rhythms." with th Albert combo, is now heard from 10:30-10:45 p.m. from Mondays through Saturdays. Raymond Katz, WHN program director, is producing all four shows. ♦ Trade reaction to results of Ed- ward Petry & Co.'s. recent survey of spot announcements in St. Louis, ;ij disclosed In N. Y. last Thurs. (27), was definite and brisk, indicating wide ■ interest in the study. Feeling was that the survey gave new proof of the effectiveness of the medium. Several people said that they guessed or even knew the results, but kept their : thoughts q.t. so that others wouldn't take advantage of it, while others were astonished at high per- centage of figures shown. . Survey, first of its kind, concerned itself only with spot announcements, instead of programs, on the theory that in previous studies audience re- action to commercials has been over- looked. In other words, "what'radio ■ research forgot." Petry, lop station rep outfit in the business, made its survey in St. Louis, where it repre- sents no station, in January and Feb- ruary. Seven leading advertisers and their agencies, plus local St. Louis stations, helped. Question to be answered was—can people recognize commercials after being on the air one and two months? Petry recorded new commercials; did a prc-test survey, playing 1he commercials oh phonographs in St. Louis homes in December before they went, on the air; put thein on the air Jan. i, then made one survey end of January, another end of Feb- ruary. Eight different commercials- straight talk, dramatizations, jingles —were broadcast over five different stations, at various times, five to 16 messages a week. Survey showed an average of 44% istenors recognizing a commercial at end of first month, 48 < -u at end of second month. It proved, according to Petry, that spot radio builds with great speed; that in addition to being fast, spot radio is also very inexpen- sive. In other words, spot radio't-ives advertisers more results, faster, at less costs, than any other medium. Breakdown of commercials tested, and first second month's findings, is as follows: One Two month months Mennen Baby Powder (one .minute, two voice ET — non — 5 KXOK, 5 KWK) 34% Adams Clove Gum (sta- tion break, jingle— evening—5 KMOX).. 50 Beechnut Gum (station break, live — day — 6 KSD, 4 KMOX, 6 KXOX) 49 Marlin Blades (one min- ute, jingle — early morning—3 KXOK, 2 WEW) 27 Colgate Hand Cream (one minute, two voice ET — daytime — 10 KWK,-3 KMOX) 51 Goodyear Soles (sta- tion break, talk—eve- ning—5 KMOX, 5 KWK) 30 Ludcn's (station break, talk — evening — 5 KMOX) 51 Chiclets (station break, jingle—early morning —5 KMOX) 48 Henry Gringold, speaking for Pe- try before 150 ' station reps, lime salesmen and execs from nrt work spot sates depts., further analyzed the scores, suggesting other conclu- sions that might be drawn from ihe survey. Since spot commercials built attention, so swiftly, perhaps copy Ought to be changed or rotated move often that in the past., Perhaps pres- ent broadcast schedules .should re- flect greater variation as to lime of clay and type of program. Maybe survey indicates that air.lime before 8 a.m. is more productive Ihaii is generally thought. 37'.4 61 51 26 51 SI 51) MacGregor Checks Into NBC as Senior Producer Kenneth MacGregor, who pro- duced the "Grand Ole Op.ty" NBC Saturday night show for Win. Esty agency, has checked in at NBC <is senior radio producer. MacGregor's initial production chore will be the upcorning / "C;:riii- val With Bernie West." new liilent development show going into 'ihe Saturday 7:30 period. MacGregor has been iclenlifn'l with a number of top airer. 1 l'«r years with Esty, Benlon & Bowles, etc.