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ABC, Part 2: Road to the ’70s
Tonight! In full color! The incredibly true story of America’s boldest TV network, brought to you as only ABC can! (Music theme of Wide World of Sports) In the battle of the balding billionaires, first they endured the Agony of Defeat. Then, in a blaze of shamelessly popular entertainment, they tasted the Thrill of Victory! It’s all here, the dreamers, the hustlers, the lawyers, the regulators, in the boardrooms and bedrooms of Hollywood and of Central Park West! (Wide World of Sports theme rounds the final turn and heads for home with a fanfare of trumpets), This…is part 2 of the story of the American Broadcasting Company! It’s headed your way, and it all begins…right now!
There’s an expression in show business, “Nothing’s as cheap as a hit.” One hit, if it’s big enough, can turn around a viewer’s impression of the channel it’s on. The Untouchables had been such a hit, a lurid, staccato crime thriller at the turn of the darkening Sixties. By the fall of 1965, ABC was poised to launch another influential hit show, Batman. They chose to make it a mid-season replacement, holding it back until early 1966. It was a wise move. The show’s timing was perfect, riding in on a wave of pop culture and comic-book-based pop art.
ABC wanted to sell itself to ITT, one of Wall Street’s most aggressive conglomerates, headed by Harold Geneen, one of the most famous tycoons of his day. It would be a stock swap, with ABC management retaining some seats on the merged board. The company badly wanted this deal to go through. Washington was their obstacle. Because it involved a broadcaster, it required signoffs from the Justice Department and the FCC. Senior staff of both companies devoted months of their time to the agreement. The legal work ran into tens of thousands of billable hours. And…
The government turned ABC down flat. There was a silver lining: Forced to finance its expansion with its own cash flow, the company discovered efficiencies that other broadcasters hadn’t been pushed to find. Dollar for dollar, they became the most profitable of the Big Three.
ABC was the last of them to embrace color television. All three networks’ costs of converting to color included higher payments to the studios who made TV shows, due to their own higher technical expenses for film, costumes, makeup, lighting, and sets. The ratings of ABC’s black-and-white shows weren’t suffering yet: Burke’s Law, Peyton Place, The Addams Family, The Patty Duke Show, 12 O’ Clock High, Combat. But by 1964, color TV sales were finally taking off, and ABC was forced to catch up.
In 1966-’67, Batman helped ABC in two ways: by giving the network the enormous advertising revenues attached to a surprise smash hit; and by giving other show producers (on rival networks) the fatal temptation to imitate Batman’s wacky, cartoonish style, above all its nodding-and-winking lack of belief in the show’s premise. It worked for Batman; it sank The Man From U.N.C.L.E. Batman was such a hit that ABC scheduled it twice a week, as they’d done with Peyton Place.
The network tried for a follow-up hit with The Green Hornet. They failed, but that show’s second lead ended up going somewhere—Bruce Lee. The color era brought ABC action shows—The Rat Patrol, Garrison’s Gorillas—and kept up ABC’s groove with middle-of-the-road family shows like The Big Valley, Marcus Welby M.D., and The FBI.
ABC did inventive things. They did occasional live prime-time dramas. Lacking their own hit spy show, they imported The Avengers from the UK. They wrung profits from daytime with soaps like General Hospital. They had a paranoid UFO show, The Invaders, three decades before The X-Files. They even filmed a TV movie, Shadow on the Land, that was going to lead to a weekly series about present-day America being run by a fascist government. Hard to picture that as competition for Bonanza or The Dean Martin Show.
Every network’s largest profit centers included their advertising-rich “O and Os,” their five owned-and-operated big city TV stations–in those days, the limit of what each network could outright own. The many hundreds of ABC’s other affiliated stations were, like those of the other two networks, bound to them by no ideology or sentiment but by short-term contracts. Affiliate relations were important to maintaining a tenuous and highly breakable loyalty, based on sharing advertising time and revenue. The most effective conservative protests of the classic TV network era weren’t mass movements of millions of viewers, but of hundreds of representatives of restless network affiliates, meeting several times a year, whose regions didn’t always like what was coming down the coaxial cable from New York.
For a few months, I’d get to see ABC up close.
In March 1970, I registered for the draft, on the morning of my 18th birthday. From 1967 on, cities and college campuses all over the country had been wracked with demonstrations against the Vietnam War. The very next morning, a block and a half from my NYU dorm at 55 East 10th Street, a building at 18 West 11th Street was reduced to rubble when three radical bomb-makers accidentally blew themselves up. By May, even schools without riots canceled classes a month early. This national crisis was screwing up my plans of making some money over the summer. Fortunately, a distant relative got me an interview at ABC, and I was hired for a mailroom temp job. It paid $1.50 an hour; not bad.
ABC’s Manhattan headquarters was a new skyscraper that had just recently joined “broadcaster’s row” on 6th Avenue. NBC was (and still is) in its original, Depression-era home in Rockefeller Center near 50th Street. CBS was in an elegant Eero Saarinen-designed headquarters, nicknamed Black Rock, at 6th Avenue and 53rd Street. ABC was at 6th and 54th. In those pre-cable, pre-internet days, that’s a lot of media power concentrated in four city blocks. The New York Times, the Associated Press, the Hearst company, the Time-Life magazine empire, the head offices of MGM, United Artists, Columbia, and Paramount studios, and many of the ad agencies of Madison Avenue, were a ten-minute walk from ABC’s front door.
I worked noon till 8. The end of the day was busy for send outs, peaking from 4 to 6. After that, volume usually slowed, slacking off after 7. Almost every night ended with a couple of us preparing a case of memos and documents to go air courier overnight to ABC’s offices in Los Angeles, rushed to La Guardia and JFK by ABC News motorcycle messengers, who otherwise spent their days bringing unprocessed news film from airport tarmacs right to the door of the developing labs.
Getting out of work at 8 pm wasn’t always ideal, but it was summertime. My girlfriend often rode into the city to surprise me, waiting in the lobby when I left work. I instinctively knew I’d never take that for granted. We’d make a plan on the spot and go out, to one of midtown’s countless movies or restaurants. Even on the hottest of days, it was usually cooling off by 8.
I rarely saw famous actors at headquarters. British singer Tom Jones walked in. He had a show on the network. Local ABC 7 worked out of studios on the west side, so we rarely saw the Eyewitness News team. But we did see a lot of athletes when they came through New York. ABC Sports frequently did talent signings and press conferences in front of corporate backdrops and symbols. Sports had done far more than their share in making ABC profitable, so much so that Sports division supremo Roone Arledge would later be given a reward he coveted: a controversial promotion to be head of ABC News.
One time, my girlfriend entered the lobby ahead of a pair of men. One had a distinctive voice so loud it boomed off the marble-clad walls. She turned and saw a tall, vague-looking middle-aged man. “Young lady,” he demanded, “Do you know who I am?” My gal had the courtesy not to say, “Why don’t you ask the receptionist? She’ll know.” Instead, she said, no doubt politely, “No, but your voice sounds familiar.”
“I’m Howard Cosell!” he harrumphed before walking away.
Even as ABC entertainment ratings soared, ABC News stayed mired in third place. News Division had its bright spots, like space and science reporter Jules Bergmann, a favorite of the astronauts. The Nixon White House felt the network was the only one of the three that even tried to be fair, and Nixon granted a rare one-on-one interview to ABC anchor Howard K. Smith.
To a greater degree (at the time) than the other networks, ABC ran their TV programming and production out of semi-autonomous offices on the Coast. Chairman Leonard Goldenson didn’t see himself as ABC’s showman, but as its wise man, the dealmaker. The New York headquarters was mostly unglamorous business: ad sales, billing, banking and payroll, government and legal affairs, public relations, and affiliate relations. HQ was impressive, all shiny and new, but functional, not fancy. The whole building understood The ABC Way: keep an eye on costs. Even network VPs kept long-distance calls short. Mail went first class, but not certified or registered.
One useful life lesson to a teenager: to my surprise, the offices of the top bosses were often the last ones to leave the building each night. What do you know; the big boys didn’t always have it as easy as I thought. An open memo was sent to network vice presidents, including big shots like Fred Pierce, Elton Rule, and Martin Starger, reminding them that Goldenson personally insisted that complaints raised by affiliates get an immediate response. Another open memo to a small group of executives noted that everyone, even the chairman, flew economy class, and expense reports should reflect that.
Sometimes, after much of the staff left for the day, a mail room worker was dispatched to the corner newsstand to buy a copy of the New York Post, an evening tabloid, and bring it to Mr. Goldenson’s secretary, up on the umpteenth floor, so he could read it on his ride home. It seemed like an odd little thing for a teenage kid to be in on, being privileged to see the common man touch in the quietest of TV’s founders. You could never picture, say, CBS’s Bill Paley ending his workday reading anything like the New York Post. Maybe that’s one of the reasons that by 1970 ABC was a respected competitor coast to coast, entering a decade when it would finally reach the top.
The aftermath for me: Working at ABC was a great summer job for an 18-year-old. In the fall, I went back to film school. What about that girl who waited for me so many summers ago, like the one in the lyrics of Five O’ Clock World? She’s sitting across the table smiling while I type this.
The aftermath for ABC: The Seventies would be a golden age for ABC’s golden coffers. Love, American Style begat Happy Days, which led to Laverne & Shirley and Mork & Mindy. Starsky & Hutch were no ratings slouches either. CBS programming phenom Fred Silverman came to ABC in 1975. By the time Silverman left in 1978, ABC was #1, thanks to shows like Charlie’s Angels. Was there schlock on TV? Of course; there always will be. But there were also moments of pop culture greatness.
ABC’s broadcast of Roots was the surprise hit of 1977, a genuine phenomenon. Its reputation and adherence to history look tarnished today, but give some credit to what Roots was in its time. For people old enough to remember those broadcasts, it may be one of the few, fairly-well agreed-on high notes of the vanished age when three networks ruled the commanding heights of television.
Published in General
Yes, there is a price that would work. I am reminded of an anecdote about Oscar Wilde that goes like this:
The streamers are all hurting. Netflix is cutting back on content creation. The difference could be that since Blackrock, Vantage, and State Street are using ESG scores as a basis for who gets the short term loans that many of them need to maintain solvency.
Sony being for sale is my own speculation… Sony’s reason for owning a movie studio is no longer applicable. Sony bought Columbia Pictures back in the 90s for support in the format war between HD-DVD and BlueRay… There will be no more format wars so Sony doesnt really need a movie studio anymore.
I think pretty much everything in Media is for sale right now… Given the giant’s debt problems and increasing interest rates – I could see them dumping all kinds of assets for debt relief…
I was hoping that the new owner of Sony Studios goes to Disney and Warner to pick up non-core assets from those 2 companies … Not the other way round… I like Sony’s general strategy of being a programing provider for the streaming services – rather than try to get into streaming themselves.
I think Sony is the smallest of the major movie studios now… I’d like to see them bulk up for survival.
The big 3, Warner, Disney, and Universal are the survivors. 4 and 5 are open to speculation… The reason I’d want Sony to take out Paramount, is that I dont want Paramount to taken out by netflix.
I like it! While Barbara Broccoli inflicts an even more woke 007 on an undeserving world, Apple could turn Matt Helm’s toxic masculinity up to eleven and rake in the moolah.
Sony bought Columbia in 1989 to get into the content business. The DVD wasn’t introduced until 1995 and Blu-Ray was introduced in 2006. If you want to understand why Sony owns entertainment assets like Sony Picture and Sony Music (and arguably Sony Interactive Entertainment) read the 2023 Strategy Document.
Sony is a cash rich company without a lot of debt.
I agree. There was no better strategic decision made by Sony than to not go into the general entertainment streaming business. Sony does own niche (and profitable) streaming businesses in anime (Crunchy Roll) and Faith (Pure Flix), and general entertainment in India.
I got this from from asking Google for a list. Not sure about the methodology, but Sony is not the smallest.
I dont think Sony Studios is a distressed asset, the revenue from Music Publishing alone, would paper over many mistakes (which I dont think Sony management is making) … Sony’s Music business? AC/DC, Beatles, Elvis, Michael Jackson, P!nk, and 100s of others… I bet they clear billions quarterly in music royalties…
I think I like Tom Rothman, I like his comments at the CinemaCon panel last month. Its really the first I’ve heard of him, but I liked what he had to say.
I just think that Sony’s business case for owning a movie studio has weakened and they could better allocate capital in their core business better than owning a movie studio…
Almost everything else in American Media is a distressed asset. Look at a 30 day chart of PARA… its down more than 30% in a month! Their market cap is down to $9.9 Billion…
Just a nit, but Sony Music Entertainment which includes Sony Music Publishing is a separate entity from Sony Pictures Entertainment. I’m an insider, so details like this matter to me. But you are correct, music did not die from Napster, it is now bigger than ever, and Sony Music is a huge player. It is very profitable.
Tom Rothman is the ultimate mensch. His town hall meetings were just great. I think you would like this interview with him: https://deadline.com/2022/05/sony-tom-rothman-spider-man-ghostbusters-1235024137/
Sony appears to believe that owning creativity from creator to delivery is a good strategy. We will see.
If you see one media conglomerate you’ve seen ’em all. Just the same there are some interesting comments in this thread as well as a few items and names I’ve heard of.
I am a very very far outsider. Ive never even been to California – let alone had anything to do with a studio. I did get a letter from HBO once. I look at Sony Picture Entertainment as a complete monolithic entity. Money gets blurry between so many divisions…
I like Sony’s strategy of being creative something the other studios (Disney!) completely lacks. It was explained as: the streaming services are in an arms race, Sony is the Arms dealer instead of a competitor.
I often wondered. Why do movie studios keep smaller production houses alive, rather than just merge them into the main company? Like New Line Cinema for Warner, or TriStar for Sony? Wouldn’t it just be cheaper to have 1 company with 1 management team and support staff? Why keep the brand alive? For most movie fans I dont think it matters…
I understand the outsider perspective. I am a deep insider having worked around the Los Angeles entertainment industry in consulting and as an employee since 1995. So don’t worry that you don’t understand the insides. No doubt true about many industries that I don’t know.
“Arms Dealer” is the term Tony Vinciquera used to describe the strategy and it is a good one. And, I think, a good strategy.
Keeping the smaller production houses alive enables the people who come up with the ideas for movies to focus on different types of movies. New Line and TriStar do slightly off mainstream titles that might start with limited releases or be lower budget than the tentpole productions of Columbia and Warner Bros. It’s a matter of having a set of people to manage the talent at the scale you want the production.
Also, smaller production houses are created for big stars to keep them happy (e.g., Happy Madison and Adam Sandler) and producing for the studio that is giving their production company a home.
I’m sure Gary could provide more detail than I have.
And, to be clear, all the corporate functions like Finance, Human Resources, and even management of the back lot is done in common and not by the production houses.
I agree that studios do not have brands (except perhaps for Disney) and the real brand is the film or franchise itself.
Even if it was distressed, Sony would rather die than join any non-Japanese Borg.
New Line Cinema, has Nightmare on Elm Street… 9 very cheap movies that have collectively pulled in nearly $500 Million… (I thought there were way more than 9) … I was thinking of the Studio as the brand… I guess the only place that really matters is Star Wars… Some people like the older movies and hate Disney Star Wars… So I thought that was the reasoning to keep the company – like a fan of Nightmare would not like it, if it were a Warner Bros film…
You have the Star Wars reasoning 180 degrees out.
I don’t think it’s like that, although I agree that a lot of hard core Star Wars fans would laugh and cheer if Disney’s name was taken off the films, and Kathleen Kennedy’s with them. Note that they don’t hate it “because it’s Disney”, but because of what Disney’s done to the saga. But most people are not hard core fans. For most people with children, the Disney name is still gold, so if anything it’s a net plus.
Yes, that’s right; there still isn’t the mass revulsion you read in Breitbart or RedState. There’s growing revulsion, sure. I’d bet it’s crept up from 1% to 5%. That’s not nothing; Bob Iger should look at that and see a real risk it could easily jump from there to 20-25%, just based on current stubborn resistance to transgenderism, which is turning into the new Kwanzaa, and the large political profile of his main opponent.
Michael Eisner’s team had a good if cynical idea almost 40 years ago. They knew the Disney label prevented them from making “normal” films–Beaches, Moon Over Parador, Ruthless People–without tarnishing it. So they made those films under the labels Touchstone Films and Hollywood Pictures.
Yes. They started out a little timid. I am thinking “Splash!” here… Was only a toe over the line for Disney…Had that Movie been made by Colombia or Warner Brothers, we would have seen a lot more of Daryl Hanna… Even in 1984.
I think Star Wars fans hate Disney Star Wars, because what Disney is presenting as Star Wars now… Had they continued closely to the Legacy of George Lucas, the Disney label would not matter… Because they betrayed Lucas, destroyed his characters (our heroes) they’re hated…
Why does Kathleen Kennedy still run Lucasfilm? Its easily the worst managed movie studio ever. When Indy 5 bombs will that be enough to get her fired?
As Clavius has said, they’re doing very nicely. As Occupant said, when you have people like Tom Rothman you are likely to find an exceptionally well run company. But don’t forget, under the scenarios we’ve been discussing, Sony wouldn’t be subsumed by a non-Japanese Borg. If they joined, say, Apple, they’d bring a thriving management team to the bargain that is stronger than the one Apple created. They’d take advantage of Apple streaming and marketing, and Sony’s expertise in production and theatrical. It could still be Sony.
If the dance partner was Universal (which owns NBC) or Paramount (which owns CBS), then you wouldn’t be talking about assimilation by the Borg, but an honorable outright sale, in which case they wouldn’t be involved anymore in the continuing business. Many business writers have periodically pronounced entertainment to have been outside of Sony’s core mission, but they are succeeding in anyone’s terms and would walk away from this hypothetical deal with terrific return on investment.
Like Clavius says, there’s always a number. There’s a number at which Musk sells Tesla to Apple, so he can concentrate on outer space, and cash out before electric cars truly become a commodity business. There’s a number where Universal buys Paramount. We just don’t know what it is.
That would be a strange number…
Wouldn’t anti-trust stop the transaction because of NBC-CBS networks? Not just all the TV stations but radio stations?
I can’t see that going through. Paramount’s number I’d say $12 – 15 Billion.. or $20-24 a share… For someone who doesnt already own a TV network…
Good question. One or the other would have to divest or spin off their broadcast network. Who’d buy what is sometimes prematurely thought of being a fading part of the industry? One possibility is a major station ownership group. Capital Cities Broadcasting bought out ABC in 1986.
Particularly with new cars no longer being equipped with AM Radios…IF AM Radio starts losing listeners and advertising revenue that would have a profound effect on the major networks…
There’s something about dropping AM that doesn’t add up. It’s claimed that it’s because of the adoption of electric cars, because allegedly the car’s motor interferes with the signal, etc. But I’ve had three electric or “strong” hybrid cars, every one of them had AM, and there was no problem at all. Mystifying. Could it be a push by the radio industry to force drivetime listeners to become paid digital subscribers by starving the AM band of everything but small ethnic and foreign language stations, and a few rural affiliates?
It’s true, as pointed out in the comments, that there’s a network radio dimension that’s missing in the post. Since the main subject was ABC TV, I ignored it. Radio was the lifeblood of the networks once, but that ended fast. After the effective final end of evening entertainment radio, circa 1955-’62, listenership had bottomed out. TV was king.
But two things happened: drive time radio, which AM dominated, and rock n’ roll, which AM originated but FM came to dominate. ABC, like the other two networks, found that local stations could be profitable ad media but it took a while to rebuild Madison Avenue’s faith in network advertising. ABC went farther: it used its leased AT&T network lines, which they were stuck with anyway, to split their affiliates into several (eventually, four) national sub-networks, each tailored to a different musical taste, and each receiving or at least offered an hourly five minute newscast tailored to that
I wonder if its not about politics. AM talk radio is mostly the reserve of right wingers. Since the days of Rush, right wingers have had their largest audiences on the AM dial.
Also range. I think the entire push to electric cars is to keep the serfs close to home – FM radio has a much smaller range than AM.
When I was a kid, we used to drive everywhere – Vacations started and ended with 2 days on the road. Most of our vacations crossed 3 provinces. Such trips would simply be impossible with an electric car – waiting 45 minutes to charge a battery 2 or 3 times a day? In boring parking lot with 2 kids? Sounds like a recipe for domestic violence…
Gary, have you written a damned book yet? Take my money!
This brings to mind one of the factors that improved Sony Pictures profitability. They sold off most of their international broadcast networks. Linear broadcast is so yesterday…
The problem is not linear broadcasting. The problem is cannibalization. Don’t tell me, as Bob Iger recently did, that viewing on your linear networks is down if you’re going to no longer give them exclusivity of product. For these station groups and cable operators it’s been like finding out on your wedding anniversary that your wife is a hooker. The sex has been great but the betrayal is the worst.
Sony has no majority owner so even the Murdoch solution is unavailable to them.
Disney owns just one radio station (KRDC Pasadena). GE sold off all of NBC’s radio assets in the 1980s. CBS got out of the radio game in 2017.
And the answer to the anti-trust question is “yes.”
And anti-trust is the elephant in the room. Iger has to tread very carefully here. US v Paramount (1948) could loom very big in their future. Imagine President Ron DeSantis appointing an Attorney General that decides if studios can’t own theaters and broadcast networks are prohibited from having more than a 35% share of total market penetration, why should media companies be allowed to pipe their product directly into consumer’s homes?
There’s a lot packed into this statement. It’s hard to know where to start. Why would you have loyalty to a particular content provider? Why would you feel betrayed by a television network? I get it when fans complain about the directio of a particular television program or movie franchise, but a television network or method of delivery (terrestrial)? Betrayed?
Reading the Wall Street Journal, every merger is taken to court by the Biden Administration. Their hostility is ideological. Fundamentally, the problem with anti-trust law is that there is no clear definition as to what a monopoly is, nor can they seem to write one. It’s like assault weapons, you just know one when you see it.
The result is that judges and government plaintiffs have a lot of discretion in how they decide whether to go after a merger, or target an existing business for breakup.
I remember during the 1970’s when the government was deciding whether to file suit against AT&T to break them up, resulting in the baby Bell’s. It went to President Ford’s desk for a decision. If anti-trust law was straightforward the Justice Department wouldn’t have kicked it to the White House for a decision. Normally the Justice Department eschews presidential involvement in its decisions whether to “prosecute” or not (anti-trust mostly involves civil suits, not criminal prosecutions).
He’s talking about the distribution elements being betrayed by the content elements, who are promiscuous with distributors.
The anti-trust laws are constantly in play for interpretation, reinterpretation, re-legislation, and debate precisely because the role of large, powerful institutions in distorting and destroying the social fabric is constant and dynamic. Does the resulting flexibility result in abuse? You betchya. Is the cure worse than the disease? I don’t believe so. Would a clearer legal posture promote a better protection from abuse? The innovations in abuses are far more dangerous than some flexibility in the anti-trust regime, just look at Big Tech strip mining your every email and cell phone action. Our intelligence community weaponized Google surveillance by positing (without legal precedent) that any evidence of our personal activity (initially involving phone company call logs, now extending to every packet that leaves our devices) in the hands of any other party does not fall under the search and seizure provisions of the Constitution.
We have been a crypto-Soviet society since before the Patriot Act, we are just starting to notice.
No, it’s not difficult. If you’re traveling with kids, 600 miles a day has been the most I’ve done. That’s just one recharge in the middle of the trip. If you have a costly Tesla or a cheaper Nissan Leaf, or some other brands I don’t know. you’ll use DC charging, which takes about 15 minutes.
It’s true that there’s probably a cultural bias against AM because it’s the home of talk radio. But the auto and radio industries are not generally citadels of Woke and don’t go out of their way to make expensive changes. There’s a financial reason here, one that I don’t get but undoubtedly exists. It costs almost nothing to have AM as part of an audio system.