Sally Bedell Smith.In All His Glory: The Life and Times of William S. Paley and the Birth of Modern Broadcasting. New York: Random House, 2002.
Paley managed CBS for almost 60 years. He was very involved in programming decisions, As the author notes, “since programming is an instinctive, almost mystical process Paley was viewed by many underlings not so much as an executive but an oracle.”
In the 1940s, Paley moved CBS towards mass appeal.He rejected the advice of his top aide that CBS establish itself asa more elite network that would attract fewer viewers. Still, Paley insisted in certain standards. He demanded the news department be top notch. CBS News thus became known for delving into important topics such as politics, war, and race, The programming included programs of class along with those with more general entertainment value.
Paley intensely scrutinized programming decisions, He would call his employees multiple times about similar issues Often, though, the questioning process led to a programming schedule similar to what was originally proposed.
Paley attended the Wharton School, which he considered “ a farce”. After graduating, he worked in his father’s cigar company.
Paley was fascinated with the emergence of radio. WKDA was the first commercial radio station in 1928. 2.3 million radios were purchased in 1923. There were 1,400 licensed broadcast stations approved by the Commerce Department in 1924. The Federal Radio Commission began in 1927. Many early stations were broadcast in department stores, laundries, stockyards, and poultry farms to reach listeners. The fist station to sell advertising was WEAF (Wind, Earth, Air, and Fire) in New York. Other stations then sold ads, which was called “toll broadcasting”. AT&T owned WEAF and other stations which made a $150,000 profit in 1925. The craze diminished in 1926 and the number of radio stations fell to 620.
The Radio Corporation of America, formed by General Electric, Westinghouse, AT&T, and United Fruit Company distributed RCA radios manufactured by General Elective and Westinghouse. RCA had a radio network. AT&T sold its network stations to NBC.
David Sarnoff convinced the RCA Chairman that RCA should become involved in broadcasting as well as selling radios Sarnoff became General Manager of NBC. NBC began with two networks, the Red and the Blue, with 25 stations total.
Leon Levy and Isaac Levy, who were brothers, bought WCAU which was broadcasting from the Philadelphia Hotel at 39th and Chestnut. In 1927, Arthur Judson and Andrew White joined them. NBC had formed a network of mostly the larger stations yet WCAU, which was important in PHiladelphia, was not included in the NBC network. WCAU attempted to join NBC but was turned down because they lacked the $1 million to join The Unite Independent Broadcasters created as a network and sought out WCAU. The network would pay WCAU $500 a week to broadcast ten hours of network programming Leon Levy recruited 15 other stations for the network. The network was spending $18,000 weekly to 16 stations yet failed to find enough sponsors, Victor Company, which manufactured record players, was moving to merge with RCA. This caused another record player manufacturer, Columbia Phonograph, in 1927, to invest in United Independent which would promote Columbia. Columbia insisted the network change its name to the Columbia Phonograph Broadcast System. Columbia was then responsible for 10 hours of network programming weekly. Five of the hours were the Howard Barlow Orchestra and five were the Donald Voorhees dance band. Broadcasting began in 1927. Thunderstorms and static disrupted some broadcasts. The flagship station WOR in New York used its only soundproof room which the mens bathroom. The network lost $100,000 in its first month and Columbia Phonograph withdrew from the network. Leon Levy turned to his father in law Sam Paley. Sam Paley invested $50,000 and Isaac Levy invested $50,000 into the network.
Sam Paley was pleased that advertising on this network resulted in higher cigar sales for hi company. Sales rose form 400,000 a day to 1,000,000 a day. The Levys spent $235,000 to control Columbia. Jerome Loychheim invested almost $500,000. The network lost almost $1 million. Vitaphone provided $750,000 in advertising just days before the Ike Levy and Louhheim were going to abandon the network.Louchheim fractured his hip and requested Leon Levy to take over his job as Columbia’s President. The network was placed for sale and Bill Paley bought it after his father declined doing so. Bill Paley paid $45,000 which he would lose if he did not come up with $503,000 for 50.3% of the company in ten days. Paley met with advertising personnel who were pessimistic about radio’s future except for John Orr Young and Raymond Rubican. William Paley informed his father he wanted to spend what was half his fortune on the radio network. Sam Paley approved and invested Sam’s own money. In 1928, William Paley paid $417,000 with his father two uncles, and an uncle’s wife putting up the rest. Bill, Sam, and Jay Paley invested $150,000 in a third interest in WCAU.
Paley changed the network arrangement. The network would provide 20 hours of network programming yet the station would not be paid their $50 an hour until the end of the sixth hour. There were no sponsors for the first five hours that were provided by the networks were thus broadcasting without being compensated. The networks then provided 15 hour of sustaining programs. Columbia, unlike NBC, required stations to broadcast network programs.This requirement pleased advertisers.
12 independent stations in Southern states liked the 20 hours of programming and joined Columbia.
Paley leased time for programs from WOR and WABC. Paley decided to use and own one flagship station for all programming. WABC, the lower priced of the two stations, was bought for $190,000. A two floor soundproof windowless studio was created. A headquarters was leased for ten years at $63,000 annually.
Political campaign advertising became an important revenue source. CBS received almost $200,000 from the two 1928 Presidential candidates. NBC receive even more campaign advertising revenues.
CBS offered discount rates for ads that were on the entire CBS network. This increased revenues.
CBS merged United Independent and Columbia into Columbia Broadcast System in 1928. CBS announced in 1929 hat it was the largest network although NBC was larger with 49 stations.
“Amos ‘n’ Andy” was one of the first popular radio programs on NBC. It was recorded and distributed to 30 stations It was not originally a network show NBC then signed “Amos ‘n’ Andy” in 1929 for $100,000 a year, It attracted 40 million listeners.
Paley realized CBS needed comedy programming, music, and soap operas.
Paramount offered to buy CBS for $4.5 million in Paramount stock, Paley refused the offer. Paramount purchased a half interest in CBS for $3.8 million of Paramount stock in 1929. In 1932, Paramount bought their stock back for $5 million. Paramount also received one hour of free CBS broadcast time weekly.
Paley received $40,000 a year as Columbia’s President. He also received a 2.5% bonus of any after tax profits over $600,000.
The largest advertiser on NBC was American Tobacco. American Tobacco then sponsored a military music show. Paley pretended to be indifferent about creating the show knowing it would entice American Tobacco into jumping at the show as it would appear to its customers.
In 1930, the Association of National Advertisers created a rating system through using telephone surveys to determine audience size and composition. NBC shows were initially the more popular. NBC’s “Amos ‘n’ Andy” had 53% of listeners. NBC’s “Rudy Vallee Varieties” was the second most popular show with 36.5% of listeners. No CBS show attracted more than 3.3% of listeners. Paley called for an audit of the survey. Paley hired Price Waterhouse to conduct a postcard survey of 240,000 radio owners. 40,000 stated they listened to CBS most often. NBC responded that the survey was paid for by CBS and was sent only to cities with CBS stations and not to cities where there was no CBS station.
CBS received $14.5 million in advertising revenues in 1931.
In 1932, CBS persuaded some NBC stations to switch to CBS.
Federal Radio Commissioner Sam Pickard allowed some CBS affiliates to have greater transmission power. It was later discovered that Pickard had a part ownership of a CBS affiliate in Albany, WOKO. WOKO’s license was rescinded.
Morton Downey became one of CBS’s most popular performers, receiving the most fan mail at CBS. Paley alsoput Fats Waller, Kate Smith, the Mills Brothers, and the Boswell Sisters on CBS. Bing Crosby had six 15 minute shows weekly at 11 pm for $1,500 a week. Most other radio performers received $100 weekly. Crosby’s drinking problem affected the show. Paley hired guards to successfully keep Crosby from drinking.
CBS also presented George Burns and Grace Allen, Will Rogers, Jack Benny, Fred Allen, as well as Goodman and Ace. CBS persuaded Al Jolson Nelson Eddy, and Major Edward Bowes to move to CBS from NBC.
In 1936, NBC received $26 million in advertising revenues leading to a $3.5 million profit. CBS received $18 million in advertising revenues in 1936 for a $3.9 million profit.
In 1937, NBC received $46.7 million in advertising for a $3.7 million profit. CBS received $4.2 million profit. CBS received more profit from less revenues by spending less on unsupported programming.
Ed Klaauber was Paley’s Administrative Assistant. In 1936, Klauber’s salary was $71,000. Paley’s salary in 1936 was $140,000.
The National Commission on Education by Radio urged Congress to require that 15% of radio channels be for education. Paley testified before Congress against the proposal. Paley noted only 22% of the CBS schedule was sponsored programming, although they were on when there were the largest numbers of listeners. Much of the rest of CBS was the last expensive shows to present, namely symphonic music. Paley also spoke of freedom of speech. Congress did not pass the requirement for educational shows.
The public affairns programming resulted at time periods where sponsored programming was unavailable. In 1932, NBC spent $2 million and CBS spent $827,00 on cultural programming, Arthur Toscainni conducted the New York Philharmonic at $35,000 a year during Sunday afternoons when no sponsors bought time. Paley hoped the show would bring ore upper class people to becoming radio listeners. NBC broadcast the Metropolitan Opera at $191,000 a year on Sunday afternoons.
Classical music was 26% of CBS programming in 1930 and 10% by 1935.
In 1933, Senators Robert Wagner and Henry Hatfield proposed reassigning all radio licenses and giving 25% to educational operators This was defeated.
Paley created network standards. Commercials would be limited to 10% of nightly broadcast times and 15% of daytime broadcast times. Children’s programs could not glorify gangsters. CBS would not broadcast ads that advertised deodorants, laxatives, or other internal bodily functions. All of CBS’s children’s shows moved o NBC CBS then loosened some of its standards for children’s shows. Further, the CBS prohibition on advertising was for new advertisers and not existing advertisers This allowed laxative advertising to continue on CBS. NBC felt compelled to follow the CBS rules.
NBC’s David Sarnoff detested comedy programs and refused to listen to “Amos ‘n’ Andy”. Paley had a good understanding of programming for mass appeal and enjoyed his own programs.
CBS began selling limited public shares in 1935. 7% of CBS was sold for $1.3 million Paley’s share of CBS fell to 26.3%. Paley sold 100,000 more of his shares to the public in 1940 for $2.4 million, Paley’s share of CBS fell to 20%.
CBS bought its former co-owner Columbia Phonograph for $700,000. Ted Wallerstein was hired to manage Columba Records. Wallerstein lowered Columbia record prices which created huge sale increases. RCA followed by lowering its prices.
Frank Stanton reported that 78% of the 24 million radios were turned on daily. They were on for an average of 4.5 hours. The popularity of shows were variety, then comedy, then popular music, then classical music, and then drama. Women listened more and did so while doing housework. Men listened while eating, resting, or reading.
Frank Stanton and Paul Lazarsfeld, with a $75,0000 Rockefeller Foundation grant, developed a listener response survey. Radio listeners would hit a green button when hearing something they liked and hit a red button when hearing somethign they didn’t like. Stanton’s research became a part of CBS reserach. CBS would make changers according to the analysis stating the results were about 85% accurate.
NBC had more listeners and better radio dial positions CBS was more aggressive in getting advertisers, NBC offices closed at 4:30 pm. CBS would work later and on Saturdays working with potential advertisers.
In 1931, CBS called itself “Columbia, The News Network” as it had 415 special news events compared to 256 on both NBC networks. This happened even though CBS broadcasters mostly read rewritten wire services news with soe analysis by H.V. Kaltenborn and others.
Father Charles Coughline broadcast on Detroit’s NBC station WJR. Paley got WJR to switch to CBS and agreed to a condition to let Father Coughlin pay to be on CBS. Coughlin’s anti-Semitic remarks caused CBS to cancel his show despite CBS receiving 400,000 letter supporting Coughlin. CBS then rotated Catholic, Protestant and Jewish speakers.
CBS broadcast a show “Voice of the Crusaders” which featured attacks on the New Deal. In 1935, CBS broadcast the “Ford Sunday Evening Hour” which played classical music and featured William J. Cameron attacking the New Dean and defending Henry Ford and his anti-Semitic views. CBS cancelled both programs as they became too controversial.
Advertisers could sponsor journalists on CBS. Sun Oil produced NBC news. Edward Murrow was among gthe first to protest these arrangements.
Paley moved CBS toward more favorable broadcasts towards Franklin Roosevelt’s politics in 1936. NBC but not CBS gave the Republican National Chairman airtime to respond to President Roosevelt’s State of the Union. CBS commentators were generally favorable to FDR. H.V. Kaltenborn endorsed FDR’s reelection.In 1937, Palye decided CBS would be non-partisan.
Wire services, under pressure from newspapers, stopped providing news to radio broadcasts in 1931. CBS had to create its own news service, General Mills paid half of the CBS news expenses up to $1,500 a week in return for being the only news sponsor. Paul White led a group of 600 mostly part-time reporters worldwide. Lowell Thomas broadcast the news. Walter Winchell broadcast crime and gossip stories on Sunday evenings.
In 1933, an agreement was made that CBS end its news organizations and that wire services would supply radio with news. Radio could not use more than 30 words from any news wire item. Radio networks could broadcast five minutes of news shows after 9:30 am and after 9 pm. The broadcasts were required to tell listeners to obtain more details in the newspapers.
Edward Murrow and William Shirer worked on CBS’s international news. Shirer was repeatedly rebuffed on attempts to air inside information on Hitler’s rise and instead had to concentrate on arranging children’s choirs programs. CBS finally allowed Shirer to broadcast from London once Germany invaded Austria Murrow and NBC’s Max Jordan broadcast from Vienna. CBS created “World News Roundup” with broadcasts from several nations.
CBS tried to get Winston Churchill to be on CBS for 15 minutes. Churchill wanted $500 and CBS offered $50. The broadcast never happened.
The news programs attracted advertisers. Camel’s sales increased following their broadcast advertising,,
CBS had a rule against broadcasting from tape recordings. They feared a taped show would decide to then market itself, This rule applied to the news division which argued for taping news events for later broadcast.
Paley was slow to consider the growing importance of TV. It took CBS executives, especially those connected to major shares owner Paramount’s interests, who were concerned that CBS was falling behind NBC, to get Paley to move into TV. Paley, in 1929, thought TV would be shown in theaters on large screens, He saw it showing things like live sports events, He did not see TV being used at home.
Sarnoff at NBC, saw TV as a mass communications means in 1923. NBC and RCA created a TV station W2KBS in New York in 1930 that showed “Felix the Cat” cartoons. Vladimir Zvodrykin, who had working on TV in Russia, was provided $1 million to develop an electronic NBC system.
CBS created the TV station W2XAB in 1931. It showed a variety show hosted by Ted Husay nightly from 10:15 pm to 11 pm. Mayor Jimmy Walker appeared on the first show. There were about 7,500 TV sets in the New York area.
A TV transmitter just for CB was built in 1937. Paley still was uncertain about TV’s future.
RCA had a Hall of Television at the 1939 New York Worlds Fair. Visitors watched NBC programs on RCA sets. The sets had screens ranging from 5 to 12 inches and cost from $200 to $600.
CBS kept its costs down by airing ost movies. By the early 1940s, CBS spent around $700,000 on its TV network with a staff of 30.
The FCC allowed commercials to be sold in 1941.
During World War II, an excess profits tax which reached 90% of excess profits was created to deter war profiteering, This caused several companies to reduce profits by increasing advertising spending. Radio and TV networks benefitted.
H.V. Kaltenborn editorialized against Hitler. This controversy caused General Mills to withdraw sponsorship of his program in 1939. A new sponsor, Pure Oil Company, emerged. Kalternborn and Pure Oil switched to NBC in 1940.CBS banned tye word “commentator” and used “news analyst” instead.
Elmer David commented on the news from 8:55 to 9 nightly. Paley often felt David provided too much opinion. Davis became the head of the U.S. Office of War Information in 1942. CBS worked with this office to broadcast in 18 languages in Europe.
CBS tackled race issues with a 1943 broadcast entitled “Open Letter of Face Hatred”. It included Wendell Willkie equating racism to fascism. Several CBS Southern stations declined to broadcast this show.
CBS dismissed Cecil Brevin for his commentaries in 1942. CBS feared the commentators would scare advertisers away.
In 1941, the FCC proposed to prevent what it saw as NBC and CBS from having too much control over the radio industry. The FCC moved to prevent networks from taking over local stations’ schedules. It also sought for NBC to divest one of its networks.
The FCC then decided to divide the broadcast day where three hours could be controlled by the networks, The Commerce Department filed suit against NBC and CBS declaring them together as being a monopoly. RCS sold its Blue Network for $8 million to Edward Noble who owned WMCA in New York. This network became ABC.
Paley expanded stations into South America. 64 stations in 18 countries joined his network, La Cadena de las America. The U.S. Inter-American Affairs Coordinator Nelson Rockefeller oversaw broadcasts, These were to counter Nazi infiltration.
Paley became an Honorary Colonel consulting the War Information’s Psychological Warfare Branch in Eisenhower’s Algiers headquarters. BBC provided 107 of its 1,100 weekly broadcasts to American programming. Paley insisted propaganda had to be truthful. Lies would permanently damage one’s reputation. When Germany surrendered, Paley controlled the de-Nazification of their media.
The amount of CBS network time with corporate sponsorship was one third before World War II and two thirds afterwards. 85% of revenues came fro CBS’s own stations.
Paley moved CBS from programs produced by advertisers to producing the networks own program.s This would require more money and staff. Paley made Frank Stanton CBS President. CBS developed shows such as “Our Miss Brooks” and its largest listenership to shows by Arthur Godfrey. Godfrey, at his height, had two niightly shows and one daytime show. CBS’s “My Friend Irma” joined “Arthur Godfrey’s Talent Scout” as a second Top 10 show in listenership in 1947.
The tax rate of income over $70,000 then was 77%. CBS sold its physical assets including scripts and characters as it would be taxed as capital gains at 25%.
In 1948, Jack Benny, was feeling unappreciated at NBC, where Sarnoff never socialized with him.CBS offered $2.6 million paid to his Amusement Enterprises as well as $10,000 weekly salary for Benny and co-stars salaries. CBS had kept dividends low and had $10 million in cash. NBC countered with a $4 million deal. Paley called and asked to fly to California to meet with Benny in person. Sarnoff refused to make a similar trip. Benny signed with CBS.
CBS made a capital gains arrangements with Benny’s company, The deal was contingent on approval by the American Tobacco Company which sponsored Benny’s program. The sponsor was worried that CBS and its stations with weaker signals reached fewer listeners. Paley personally met with American Tobacco executives and promised a publicity campaign that would increase listenership. Benny’s program switched to CBS, CBS spent $100,000 promoting Benny’s show. Benny first CBS show reached 27.8% of homes, more than the 24.1% it reached on NBC. Ratings, though, slid and CBS was required to pay rebates to American Tobacco. The Internal Revenue Service did approve the capital gains rte, The courts later would uphold performers becoming corporations subject to capitl gains,
Paley then bought 25% of Bing Crosby’s company in 1948 for $1 million. Crosby had left CBS for NBC and then went to ABC Chesterfield agreed to pay $1.5 milion for 39 weeks of Crosby’s show.
CBS then got George Burns and Gracie Allen, Red Skelton, and Edgar Bergen to switch from NBC to CBS. The questionable capital gains proposal was not made in any of these cases.
In 1949, CBS had $105.4 million gross revenues, an increase of $7 million from 1948. The CBS net income fell from $5 million to $4.2 millioni in 1949 because of higher TV development costs.
Pale wanted radio to dominate as long as possible. He sought to slow the rise of TV.
Of CBS radio shows, only Jack Benny made a popular transfer to TV. “Amos ‘n’ Andy” was on CBS for two years until the NAAC and others brought CBS to drop the racist show, even thought it had high ratings among Blacks.
NBC had Red Skelton return to TV in 1951. His show became the fourth most popular TV show.
CBS surpassed NBC as the leading network in ratings in 1955 with 10 of the top 1 shows. Ed Sullivan’s inept introductions of acts won viewers and Sullivan’s connections brought i leading guests to his successful show. Arthur Godfrey’s informal-ness appealed to viewers and his two prime time plus his daytime show reached 80 million weekly.
Jackie Gleason was brought without an appointment to see Frank Stanton, where it was insisted Stanton meet with Gleason before he passed out fro alcohol. Gleason jumped from the Dumont network to CBS for $66,175 a week for 13 weeks, even though CBS did not have a firm sponsor on hand. No sponsor emerged for months,Spots were sold to three different advertisers. Gleason’s show was in the top ten in 1953, became the highest rated show in 1954,and then was the top show. Gleason received $11 million and a house for two years. CBS agreed to move the show to Miami at Gleason’s request so he could golf daily.
Lucille Ball formed a television company with her husband Desi Arnaz for her CBS radio show “My Favorite Husband”. Paley did not want Desi Arnaz to play the husband and thought Ball would work for salary on TV. Lucille Ball and Desi Arnaz spent $5,000 on their own pilot. Philip Morris bought sponsorship of the TV show “I Love Lucy”. It was the top rated show in 1952.
CBS had 120 people, including 50 who were scientists, engineers, and physicists working on two building floors developing color TV in 1945.
There were 6,000 color TV sets in 1945. Almost all were in bars.
In the 1940s, CBS formed a TV network with stations in New York, Chicago, Boston, Los Angeles, and San Francisco.
Sarnoff and NBC spent $50 million developing electronic black and white TVs. H felt color TV appeared murky ad was not feasible..Sarnoff believed when color was ready it would be able to reach existing electronic black and white sets, CBS foresaw consumers needing new color TV sets.
RCA sold 10,000 TV sets in 1046 at $385 per set.
CBS went fro 20 hours of TV shows over five days to 38 hours over seven days in 1948. Almost all of it was shown live.
CBS developed the long playing 33 1/3 rotations per minute vinyl line record. RCA then announced it developed a 45 revolutions per minute smaller size record. RCA accepts the long playing records two years later.
The FCC approved using CBS’s color adapters, which cost $150 for two devices. The RCA system’s colors were less natural. CBS sued The US. Supreme Court let the FCC decision stand,
CBS began color broadcasts in 1951. Of the 10 million TV sets, only 25 could watch color.
Korean War production needs halted the development and production of color TVs.
Leon Levy and Ike Levy sold their radio shares to the Philadelphia Bulletin newspaper in 1946.
CBS lost $30 million over ten years in Hytron color television sets. It stopped production in 1956.
Edward Murrow wanted TV to show commentary. This violated the FCC’s Mayflower Doctrine in place since 1941 that did not allow broadcasters to present their opinions. The FCC eventually allowed commentary.
A weekly newsletter “Counterattack”, launched in 1947, claimed Communists were involved in broadcasting, Sponsors feared buyer retaliations. Liberal voices were silenced. The “Counterattack” people distributed a list of 131 journalists and entertainers they considered as Communists.
Edward Murrow went to Korea and reported the military was in chaos and in retreat and that the U.S. was unnecessarily involved in a civil conflict. Murrow abandoned his own previous beliefs on the war in editorializing against it.
CBS engaged in secret screenings for communists at CBS. People suspected of being communists were eliminated from employment. Rumors costs people their jobs. Suspected communists were kept off CBS shows. One accused of being a communist, Dan Hollenbeck, anchor of the “CBS Views the Press” radio show committed suicide.
The CIA sometimes posed as CBS correspondents, The CIA used the Paley Foundation to over funds overseas.
Paley was unable to join the Metropolitan Club of Washington in the early 1950s because he was Jewish.
CBS News had 14 full time employees in 1950 and 376 in 1856. In 1956, the annual budget fof CBS News was $7 million, CBS News lost about $10 million annually through the 1950s.
“See It Now” hosted by Edward Murrow showed clips of Senator Joseph Kennedy making demagogic statements Murrow concluded on air “this is no time for men who oppose Senator McCarthy’s methods to keep silent.” Public support swung towards Murrow’s position ABC, but not CBS, broadcast hearings led by Senator McCarthy. ABC had fewer daytime programs. ABC won praise for showing the hearings which brought new advertisers to ABC. The hearings led to further condemnation of McCarthy. In 1956, “See if Now” expanded from 15 minutes to 30 minutes.
The Murrow criticism of McCarthy helped bolster support for CBS from people who earlier were angry at CBS for its blacklisting.
“Where We Stand” included Howard K. Smith and Eric Severaid delivering commentary. Paley did not object to show being broadcast yet was often upset by what they stated.
Murrow also had a celebrity interview show “Person to Person”.
Paley was friends with Dwight Eisenhower. When Eisenhower announced he was running for Preident, Paley sent CBS News to cover the announcement live. Eisenhower at first declined as he was uncertain how he would do before cameras yet allowed it when realizing the efforts CBS undertook.to travel to Abiline, Kansas where the announcement was made.
Murrow secretly gave Adlai Stevenson, who ran for President against Eisenhower, advice on how to appear on television.
The CBS game show “The $64,000 Question” appealed to both wealthy and poor viewers who appreciate contestants winning money for answering increasingly difficult questions, The sponsor Revlon saw its sales increase.
To attract smaller advertisers who could not sponsor shows, Sylvester “Pat” Weaver in 1953 crated the shows “Today”, “Tonight”, and “Home” for NBC. Each show sold commercial tie by the minute instead of using show sponsors. CBS followed with selling advertising time in 1954.
In 1958, a stand-by contestant on the CBS game show “Dotts” let it be known that contestants were advised by show official how to answer questions. This followed an earlier accusation that had not been widely noticed by a contestant that NBC’s “Twenty One” gave correct answers to some while telling others to give wrong answers. Congress and the District Attorney launched investigations. Edward Murow, whose show had been earlier cancelled, attack Paley and CBS over their hypocrisy.
In 1959, CB began the monthly “CBS Reports” The show later ran weekly.
The CBS symbol The Eye was conceived by graphic designer William Golden and approved with a simplifying adjustment by Frank Stanton in 1939.
Stanton, as CBS President in 1946, earned $94,010 salary while Paley earned $66,000. In 1955, Stanton received $281,522 in salary and bnous while Paley received $225,000. Paley earned more overall due to his stock ownership earning $796,132 in dividend in 1950 compared to Stanton’s dividends of $151,168.
In 1956, Paley and Stanton received the same salary of $510,000. In 1957, they both earned $299,807. Paley blamed Hyton’s failure on Stanton Paley wanted both to have a symbolic same salary. Stanton was the visible leader while Paley had the power.
Paley contributed $25,000 to the Richard Nixon for President campaign in 1960. He hoped to gain a diplomatic position,
In 1960, the CBS news of Douglas Edwards fell from first to second place in news show ratings. NBC’s Chet Huntley and David Brinkley became the top rated news show. Paley decided to replace Edwards with Walter Cronkite. Cronkite, for CBS, had covered the Korean War, hosted political coverage beginning in 1952, hurt his journalistic image by hosting the historical recreation drama show “You Are There” and then became the chief correspondent of the “Eyewitness” public affairs show. Cronkite would return CBS News to the top ratings four years later.
Howard K. Smith presented a documentary on race issues in 1961. CBS affiliates in Southern states were upset. That concern upset Paley.
When President Kennedy was assassinated, Stanton stopped showing commercials on CBS. NBC President Robert Kintner was livid yet NBC and ABC also canceled commercials for four days. This cost the three networks about $4 million each.
Walter Cronkite’s long verbal analysis at the 1964 Republican National Convention drew poor ratings against Huntley’s and Brinkley’s coverage. CBS had Roger Mudd and Robert Trout anchor CBS for the 1964 Democratic National Convention.
CBS’s profits were $25.2 million in 1959 and $49 million in 1962.
CBS TV President James Aubrey programmed successful show offerings. A CBS employee wrote the formula was a basic one of “broads, bosoms and fun”. All series were filmed as live dramas ended. CBS became the top network with shows like “The Beverly Hillbillies”, “Petticoat Junction”, “Green Acres”, and “My Favorite Martian.”CBS had 9 of the top 10 shows. Paley hated “The Beverly Hillbillies: but showed it up to air.
Jack Benny’s show’s ratings fell. Benny was upset when CBS changed his time period for his show. Benny left CBS for NBC where his show ha lower ratings against CBS’s “Gomer Pyle”.
A gossip magazine accused Aubrey of taking kickbacks from Keefe Brasselle of Richeliou Productions for scheduling three Richekiou shows without seeing the pilots. The FCC was concerned. Stanton hired a detective who discovered Aubrey had a chauffeured limousine owned by Filmways Productions and that FIlmways paid for paid of Aubrey’s apartment. Stanton concluded there were conflicts of interest but not illegal. The FCC did not pursue this.
While Paley liked having rate rated shows, he wanted more quality shows. Paley get “The Defenders” on the air but only after Aubrey delayed it for a year, Aubrey also stopped the previous practice of having 10% of programming for public service and goodwill.
Paley attempted to keep “The Munsters” off the air, as he considered the premise silly. Yet the show was found by many to be very comical. A programming executive Oscar Katz argued it was his “intuition” that “The Munsters” would be an instant hit. Paley responded “You used the only argument I can’t answer.”
NBC and ABC caught up to CBS in ratings in mid-December 1964. Aubrey realigned the CBS schedule,, including canceling two of the three Keefe Brasselle shows. He showed more movies in their place. Aubrey was fired and replaced by Jack Schneider, who had led CBS stations in Philadelphia and then New York.
Aubrey was later President of MBM for four years and then went into making low budget films.
CBS worked to improve its scheduled. It added a new show “Hazel” that became popular.
Paley in 1965 hated the CBS show “Trials of O’Brien” with Peter Falk. Paley did not like the anti-hero protagonist and felt that audiences were not ready for such a character. Six years later audiences were ready when Falk brought the character back in “Columbo” on NBC.
Paley did not like that Clint Eastwood was given a larger role and that Blacks were added to the cast of “Rawhide”. The show’s ratings slipped. “Rawhide” was canceled at the end of the season.
Ratings also fell for “Gunsmoke”. Some CBS executives wanted to cancel it. Paley objected. “Gunsmoke” remained a successful top ten show show for five more years.
In 1965, CBS had 9 of the top 10 highest rated shows. In 1966, it had 5. Net income was $49.6 million in 1965 and $49 million in 1966 for CBS. In 1966, they moved to $64 million as CBS had 8 of the top 10 shows.
CBS had a lot of cash.CBS. It had $5 million cash in 1963. CBS sought acquisitions to avoid high taxes. Michael Burke became First Vice President in charge of diversificaiton at CBS. CBS bought 80% of the New York Yankees for $11.2 million and later bought the remaining 20% for $2 million.
CBS bought the publishing company Holt, Rinehart & Winston, Inc. in 1967 for $280 million.
In 1963, Aubrey got Paramount to sell CBS the rights to 200 films for $40 million. Paley declined the deal. In 1964, when CBS needed movies to fill its schedule, it paid about $30 million for 100 films from several studios.
CBS invested $360,000 for 40% of “My Fair Lady”, a Broadway show, in 1955. It earned CBS $33 million. CBS then invested in over 40 shows, with a particular emphasis in producing CBS cast albums. CBS made profits in 25% of the shows, larger than the 10% to 12% profit rate of Broadway shows. CBS invested in “Cabaret”, “Camelot”, “Bye Bye Birdie” and “Mame”.
Paley wanted to have CBS produce feature films CBS bought 70 acre Republic Corporation’s 76 acre studio for $9.5 million. Cinema Center Films was created with the designation of producing about ten movies per year for around $3.5 million per movie. Their first film was “With Six You Get Eggroll”. Facing criticism that the studio only wanted to make films that would later be shown ot television, the studio deliberately produced a movie “The Boys in the Band” which could not be televised. The studio also produced successful films as “A Man Called Horse”. “”Little Big Man” was well received yet went over budget at $9 million and was not a financial success. It also produced “Royal Hunt of the Sun” which was a financial and critical failure.
The New York Yankees lost money until 1969. CBS sold it for $10 million in 1973. While Paley argued that with tax deduction the Yankees brought a $5.4 million product. It is noted CBS sold the team for less than what they paid for it.
Peter Goldman in 1960 led the creation of the Electronic Video Recording (EVR) that could show a miniature film onto a TV screen. Paley approved it for education use but feared it could threaten TV broadcasts and denied recommendations on marketing it for home use in 1960 and again in 1964. In 1965, Paley became more interested. IBM produced EVR players that used CBS cassettes. Paley then killed the project when European investors moved ahead with the project and offered CBS a minority interest. Palye approved moving ahead but instead with CBS having 50% interest. Paley refused to invests in software so no products of consumer interest were presented. CBS lost $14 million on the early videocassette venture and in 1972 CBS closed its EVR company.
Stanton’s and Paley’s salaries were $150,000 in 1967 and $210,000 in 1968. They both received identical bonuses of $160,000 in 1968. Paley’s divided income was $2.5 million to Stanton’s $455,000.
The Nixon Administration was upset over networks’ coverage of the Vietnam War. Jeb Stuart Magruder, a Nixon aide, urged the FCC, Justice Department, and IRS to go after CBS, NBC. and ABC.
CBS presented “The Selling of the Pentagon” about the Defense Department’s $30 million propaganda machine. The House Interstate and Foreign Commerce Committee demanded to see the outtakes from the documentary. Frank Stanton refused to provide them. The committees voted that Stanton cite Stanton for contempt of Congress. Congress voted 226 to 181 not to cite Stanton.
The Justice Department filed an anti-trust suit against CBS, NBC, and ABC. The suit sought for the networks to divest five local stations.
Paley pressured CBS News into limiting its negative news on the Nixon Administration. This upset CBS News personnel. Stanton was forced tp the reduced role as Vice Chairman. He then became a $100,000 a year consultant.
Jack Scheneider became CBS Vice President and presumed future President. He moved CBS towards broadcasting more in color over Paley’s objections that this would increase the sales of RCA color TV sets. The switch to color upheld CBS shows’ rtings.
Paley began to distrust Schneider . Schneider asked to return to his previous position as President of CBS broadcast Group.
Charles “Chick” Ireland, Senior Vice President of ITT, was next hired as Executive Vice President. CBS was a $1 billion business and it was felt a strong business manager was needed. Ireland made moves that made financial sense but did not grasp what CBS wanted for its image. Ireland’s proposal that CBS buy Josten’s, which made high schoo rings nd jewelry, was turned down by the CBS Board of Directors.
Paley met with President Nixon’s aide H.R. Haldemann, He later agreed to White House criticisms and removed post-speech analysis of Nixon’s speeches by CBS commentators. Paley had been against instant analysis before the meeting. The author believes criticism that Paley caved in to pressure are wrong, Even commentator Eric Severeid noted that Nixon’s generalities in speeches made instant analysis difficult. Paley changed his mind and reinstated instant analysis five months later.
In 1970, CBS President Robert Wood argued that while CBS had top rated shows, they appealed to rural America. He wanted CBS to appeal more to urban audiences. “The Beverly Hillbillies”, “Petticoat Junction”, “Green Acres”, “Red Skelton”, “Hee Haw” and “Mayberry RFD” were canceled. CBS found new hits in “All in the Family”, “Mary Tyler Moore, “MASH” and “Magruder”. In 1974, 9 of the top 10 shows were on CBS.
Paley at first did not like the bigorty expressed in “All in the Family”. When it became a hit, he then loved the show, Paley ignored a study showing the show was causing an increase in bigotry.
Fred Silverman, who helped develop many of the CBS hit shows, wanted greater recognition. CBS denied him that. ABC offered Silverman that recognition, Silverman helped ABC develop such hit shows as “Harry Days” and “Welcome Back Kotter”. CBS used great talent, writers, and expense in developing “Beacon Hill”, which lasted 13 episodes. CBS fell to third in ratings.
Paley agreed to pressure from religious groups and set early evening advertising for family shows. This required moving “All in the Family” and “Kojak to later hours where their ratings decreased.
CBS began showing series featured beautiful women. CBS ran a slogan “Turn us on. We’ll turn you on.
Paley wanted to run his company. He often distrusted the people he put in charge which caused much friction, Paley often waffled by approving and then questioning his decision, slowing it down and then often change of what he gave prior approval.
Paley wanted CBS to venture into a cultural cable channel. Others wanted to expand CBS news into a cable news program.
Paley liked “The Paper Chase”. It was kept on the air despite low ratings to please Paley, Paley disliked “The Dukes of Hazard” that became a hit that anchored the CBS Friday night lineup.
ABC attempted to lure CBS correspondent Dan Rather, then earning $300,000 annually, to become the news anchor for $2 million annually. CBS was considering Rather and Roger Mudd as its next news anchor. CBS then offered Rather $2.2 millionannually over ten years to be its next news anchor. Paley objected. It was pointed out that a one point drop in CBS News would cost about $5 million annually.
CBS Cable operated at a $20 million loss in 1981.
Paley retired as Chairman of CBS Management. He was no longer routinely briefed on business matters and saw many of her perks taken away, He kept an office that he went to daily but he was out of the management loop.
CBS profits were $110.8 million in 1983 and $212.4 million in 1984.
Larry Tisch and William Paley arranged a takeover of CBS. Tisch had $780 million and Paley $257 million of CBS holdings. Paley offered to lead CBS again at age 85.
Paley worked on CBS programming in 1986. His problem with short term memory loss were evident He questioned programs up to eight hours at a tie which frustrated staff. He objected to scheduling “Tour of Duty”, fearing it would fail, and it was scheduled and it did fail.
Tisch chose the new CBS News leader in Howard Stringer. Tisch also gave Diane Sawyer a raise from $400,000 o $1.2 million annually.
Tisch moved to sell CBS Records, which could have brought in $1,25 billion. He also sought to see its publishing which might have brought in $600 million. Palye and others objected. This helped Paley demonstrate his control, Yet Tisch showed he was in charge by closing the acquisitions department and by closing CBS Foundation, both being parts that Paley favored. Tisch also removed $50 million from the $295 million CBS news budget.
A year later, Tisch proposed selling CBS Records to Sony at $2 billion Paley could not argue against that price, Tisch also sold CBS Publishing for $650 million.
CBS sanks in ratings with one show only attracting 8% of viewers.
In 1999, Tisch closed WCAU, the radio station that in 1927 launched CBS.