Variety (Jul 1946)

Wednesday, July 24, 1946 RADIO S3 O&O ERS KEEP WEBS OUT OF RED ABCs Stock Issue, Purchase Of King-Trendle Stations, O.K. Now Washington, July 23. ♦ The competitive position of the ABC net as a big league operator was hypoed here last week (17) when the FCC okayed the net's plan to bring in $13,200,000 of new capi- tal through a public sale of stock. At the same time, the commission, in a lour-lo-two vote, okayed ABC's purchase o£ the King-Trendle Broadcasting Co., which adds a fifth, wholly-owned station in a major market to American's station operar tions. . . In the King-Trendle deal, ABC ac- quires WXYZ, Detroit, key station of the Michigan Radio Network, which includes eight Michigan out- lets, seven of them already. ABC affiliates. Also part of the King- Trendle package are FM and tele- vision permits in Detroit. ABC al- ready is licensee of WJZ, N. Y.'; WENR, Chicago; KGO, San Fran- cisco, and KECA, Los Angeles. The net has applied for corresponding FM and television stations in all four cities. Through the stock issue, ABC hopes to almost double its existing capital, pay off bank loans, plow capital into its FM and television operations/and get additional money for operating revenues in the stand- ard broadcast field. Durr, Walker Dissent Although four FCC members put their stamp of approval on the King- Trendle deal, Commissioners Clif- ford J. Durr and Paul Walker dis- sented, on the ground the price be- ing paid for WXYZ—$2,800,000—ap- peared out of line. The two also took the position that ABC could adequately cover the Detroit area at a fraction of the cost with an FM station. King-Trendle already has a conditional grant for an FM opera- tion there. The FCC okay of the King- Trendle purchase was conditioned on ABC's holding in trust the assets and future profits of a second King- Trendle station, WOOD, Grand Rapids, pending its resale to a third party. Under FCC's multiple-own- ership rule, ABC cannot control sta- tions in both Detroit and Grand Rapids. Net has begun, negotiations to turn over WOOD to the Liberty Broadcasting Co. of Michigan for $850,000; but the sale, FCC ruled, must be subjected to the AVCO pro- cedure. ABC's 200-plus affiliates also get a break in first call on the net's new slock issue. A total of 100,000 shares of the new stock will be offered first to affiliates on a pro rata basis at a bonus price of $14 a share; the public will pay $15 a share, which includes a $1 broker's fee. Marshall Field Buys KJR for 700G Seattle, July 23. Station KJR, local ABC outlet, has been sold to Field Enterprises, Inc. (Marshall Field) for $700,000 by Birt Fisher, owner. Sale details have been concluded and now await approval of the FCC, In-: eluded in the sale are all the real and personal properties of the sta. tion. Fisher said he believed the outlet would continue to operate as Totem Broadcasters, and that Field would serve as president. Purchase gives Field a second sta tion in the Pacific northwest,, as he recently purchased KOIN in Port- land. There were many rumors flying around here when Field visited the northwest some months ago, with various groups urging him to buy or . start a new daily paper and/or a radio station. KJR was separated from its sis- ter station, KOMO (NBC) in Nov., 1645, and at that time Birt Fisher, who had been manager, bought the property from the Fisher Flouring Mills;. Birt is no relation of O. D. and Wallace Fisher, owners of KOMO. NBC's Trailerizing NBC is going to put on a big showcasing campaign for next sea- son's shows, teeing off with at least one, maybe two big trailerizing shows in October. Promotion. campaign for the new season has already started, unusu- ally early, and indicates that thor-. ough preparations are being made for extra-heavy ballyhoo. Luncheon to announce showcasing plans is skedded at the Waldorf- Astoria, N. Y., today. (Wed.). Nlles Trammell, NBC prexy, will go on a closed circuit tomorrow (Thurs.) to explain the new plans to affiliates. CIO-PAC Bridging Two-Year Gap On Radio Handbook Despite the sudden death of Sid- ney Hillman, the CIO Political Act on Committee is planning a vigor- ous campaign in the 1946 elections, and radio is expected to play a big part in that campaign. That became evident last week when it was disclosed-that a. special committee, including among its members some prominent scripters, radio producers and directors, has already started drafting a revision of CIO PAC's 1944 Radio Hand- book. The committee held its first meet- ing in New York two weeks , ago. Joseph Gaer, author of "the First Round," which was a summary of PAC's promotion efforts during the 1944 campaign, was put in charge of the revision for the 1948 Radio Handbook. While specific plans for the PAC radio campaign are as yet to be worked out under the new adminis- tration which has been named to run PAC for this year's election campaigns in the states,, the commit- tee is proceeding with suggested revisions. - Stress this year will be laid on the fact that the. NAB has changed its code, so that stations can now ac- cept payment for airing 1 controver- sial issues. The new Hand Book is expected also to lean heavily on the new FCC dicta re-broadcasting as defined in the Blue Book. All of the various labor victories in fights with radio stations in the last couple of years will be pointed up in the Hand Book. It's believed that more sample scripts will be included this, year, with PAC drawing on some of the better examples of radio showman- ship aired during the last year by CBS on "Cross Section CIO" and by ABC on its Saturday night labor show. A stock of spot announce- ments, jingles used in the automobile and steel strikes, and transcriptions being currently used in the CIO's drive to organize . the South will also probably be included among the sample scripts. There is a possibility, too, that CIO PAC may set up its own tran- scription service this year, actually recording open-end platters for air- ing by local organizations over the country. NYU Workshop Chief Upped to Full Dean Paul McGhee, under whose juris- diction the New York University Summer Radio Workshop. is con- ducted, has been named full dean of the Division of General Education. Promotion is credited in part to success of various radio courses and the summer workshops, McGhe'e's bailiwick is entirely separate from the N. Y. U. School of Education wherein Charles Seip mann has recently been appointed professor of communications. THEIR IMPORT A couple weeks-back when he was appearing in Washington before the FCC in ABC's bid to acquire the King-Trendle properties, Mark Woods, network prexy, made a signi- ficant statement that pretty much reflects. Jme financial standing not only or ABC, but of all the webs, and just how important a financial role the owned-and-operated sta- tions play. Said Woods: "We know today that we are operating ABC at a loss and' we have lost money on the operation of the network ever since we were organized as a separate company in 1942." The Commission failed to take him up on the point and the brief, revealing statement wasn't elaborated upon. Later on, Woods made the equally revealing state- ment that, with only three and a half o. & o. stations to its credit, the earning power of ABC was being seriously curtailed. Now that the FCC has okayed the sale (see separate story), best guess is that WXYZ in Detroit will earn for Ed Noble & Co. somewhere ber tween $750,000 and $1,000,000 a year, before taxes. Just how important those o. & o. stations are to the webs in. the over- all financial picture is also revealed in a statement Woods is known to have made, though not publicly, to the effect that WJZ, the web's N. Y. flagship station, was responsible for 70% of the web's earnings last year. It's more than likely that WABC, the CBS key station in N. Y., pro- vides an equally important financial backbone in the Columbia network operation. One has only to recall the testimony of several weeks back before the FCC, when CBS was put- ting up a desperate but futile fight to add a San Francisco station to its o. & o. properties. It was pretty much an acknowledgment that pos- session'of the Frisco property would be the difference between the net- work showing a loss or a profit on its operation. While statements and figures are lacking to indicate the financial status of NBC as a network, the as- sumption is that the web can thank its lucky stars for WEAF and its other lucrative o. & o. stations. Pearson's Subs Set Eric Johnston, head of the Motion Picture Assn. of America, has been added to the list of speakers to pinch-hit for Drew Pearson while the latter goes on a six weeks' trip to Paris to cover the peace confer- ence. Starting next Sunday (27), the summer subs will include Harold Ickes, Frank Sinatra, Orson Welles, Johnston, and Gen. Omar Bradley. Jimmy Cannon is practically set as the sixth name. Lee Hats bankrolls session. Labor Unions Seen Out of N. Y. FM Running As Result of Reservoir Rule MBS Up 47% for 6 Mos. Mutual's network gross billings for first six months of 1946 increased 47.2% over same period last year, according to Jess Barnes, v.p. in charge of sales. Advertisers spent $13,556,944.16 in '46 as against $9,209,353.10 same pe- riod in '45. , , ABC. Up 0.58% The ABC network, also, went up in its billings for the Arst six months of this year, as compared with the same period in 1945. On this net, total billings Jan.- June 1946 amounted to $20,923,761, up 0.58% over last year's $20,803,000. FM Reservoir Set By FCC, Only five For N. Y. in 1946 Washington, July 23. . The FCC last wek served notice on the radio industry that it would withhold one out of every five metropolitan FM channels for as- signment- at some date after June, 1947. At the same time, the com- mission indicated it would study the wisdom of holding out some Class A, or community-type FM slots, as well. The commission order came hot on the heels of oral argument on the FM reservation plan here July 12, in. which the AM industry opposed the plan to a. man, while FM inde- pendents, cooperatives and unions gave it their blessing, The plan, as suggested, will hold put some 92 channels throughout the country. No slots will be reserved in a town which has been allocated no more than four metropolitan chan- nels, Cities with from five to nine channels allocated will have one held out for use after June, 1947; two channels will be withheld if 10-14 channels are listed; three if 15-19 are listed, and four if 20 are allocated. The reservation plan did not ex- cept New. York City, as requested by Morris Novik, ILGWU representa- tive, and Hoyt Haddock of the Na- tional Maritime Union, at FCC hear- ing July 12. This means only^ five of New York City's nine remaining channels will be assigned this year. Applicants for the reserved chan- nels may file at any time, and FCC will consider their bids after July 1, 1947. Cancelled $10,000,000 Going Back Into Radio, But Through Back Door At least half of the $10,000,000 of radio cancellations marked off in past few months by big-coin bank- rollers is going back into radio again through different channels, and before the year the entire $10,- 000,000 may be in kilocycle circula- tion again. That became apparent last week when consumer-goods manufactur- ers who've been ostensibly pulling in their radio horns were discovered getting back into radio again—but through the "small market" back door. '" . The bankrollcrs include auto- motive firms, food, drug and soap manufacturers, makers of electrical appliances and refrigerators, and auto accessory people among others. Recent figures published by the U. S. Dept. of Commerce, showing that average agricultural employ- ees' earnings had risen 331% by comparison with pre-war years, are in part responsible, for this deflec- tion of money from the metropoli- tan markets to the grass roots areas. Manufacturers who already have goods to sell, or expect to Have con- sumer articles very ' soon, have awakened to the-importance of this market — prodded by advertising agencies, station reps and grass-root networks like Keystone Broadcast- ing System who have not been slow in calling their markets to the at- tention of the money people. Sixty percent of the retail trade In the country is spent in the cities and towns of 50,000 population and over. And the advertisers budgeting their radio dollars' are. beginning to go after those .heavy markets. KBS itself—which last week in- creased the number of its affiliates from 205 to 216—has made another survey which is also garnering at- tention. Contrary to expectations that the war would cut the bottom (Continued on page 40) . By SAUL CARSON While the FCC hearings for FM applicants - in the New York City area dragged on into the third week, two important developments cropped up, one in Washington and the other in N. Y. They wet*: 1) The FCC ruling in Washing- ton for withholding every fifth FM license. That means that of the. 18 license applicants in N. Y. now, only five can get licenses. In turn that means that every one of'the would- be newcomers to the radio field via the FM route, including three power- ful labor unions, will probably find themselves out in the cold. 2) J. Alfred Guest, FCC regional director, conducting the N. Y. hear- ings, ruled after a hot fight that he would accept into the record on the N. Y. Daily News' application an analysis of editorial contents of the News. Guest said he had the support of the full commission on that decision. That step leaves the FCC open to charges by the Daily News that the commission is en- gaging in censorship of editorial content of a newspaper. That fight may be carried to the U. S. Supreme Court. Victory for AJC The admissability of the News' editorial content, as material having a bearing on the character of ■ the applicant for an FM license, was a victory for Will Maslow, director of the Commission on Law and Social Action of the American Jew- ish Congress. It was Maslow's second victory in a week, since he received a ruling the week, before permitting him to cross-examine the Daily News FM reps. ' As a result of Guest's editorial* content ruling the Daily News, Maslow entered into evidence 20 News editorials and columns, in-, eluding some by John O'DonnelL Maslow claimed this material showed the News was anti-Semitic and should, therefore, noi be entrusted with a radio station. He also put on. (Continued oh page 48) U.N. Mapping Air Buildup for Sept With Asst. Sec. General Benjamin A. Cohen, of the United Nations, off for South America, and radio liai- son m;ir: Christopher Ooss, In chsrjic of relations with U. S. broad- ca.iUTS on the coast-to-coast tour, woid has spread that something big Ly vjj uL i-auiu expansion may be expected from the UN by September. Cohen left last Saturday (20) for a six-week trip that will take him at least to Brazil, Uruguay, Para- guay, Argentina, Chile, Peru, and Panama. He will return at the end of August. Cross left a week earlier, flying to Seattle and is now making his way back by criss-crossing the country. While Cross is lining up U. S. ra- dio coverage for the opening of the UN General Assembly in September, Cohen is understood to be lining up South American Interest in his over- all plans for a permanent UN radio setup in this country. Steps taken recently by Mayor William O'Dwyer of New York, to woo the UN into making N. Y. its permanent home, are reported to include plans for aiding the UN to establish its own international broad- casting center. One U. S. firm long in the business of international broadcasting had al- ready offered its facilities to the UN. Members of the UN communi- cations division, however, had frowned on this .proposal, pointing out that the UN would tie itself up with one broadcaster who'd profit by letting the UN use his transmit- ters part of the time. There are several powerful trans-, mitters available in the shortwave market, however, and It is believed that if the UN goes in for interna- tional broadcasting it will be at least one of these outlets in the cast, and maybe one more on the Coast.