CBS: The Power and the Profits

However the Toynbee or the Gibbon of the future adjudges what happened to American society, he will need to reckon large with the impact of radio and television. By the 1950s, TV had become the greatest new instrument of political and social influence in the nation. How that happened, how TV became both a shaper and a creature of politics, both a maker and a prisoner of public tastes, is most simply told as the story of one broadcasting network, of its founder and indomitable chairman, William S. Paley, and the men who helped make CBS into Paley's golden candy store. David Halberstam has written that story as part of a larger work in progress about centers of power in America and the ways they have been affected by science, technology, and modern communications. This is the first of two installments.
11. Murrow Discovers the Profit Center: "Dr. Stanton, I Presume?"

The success of the raid on Sarnoff’s comedians, coming as it did right before the move to television, tipped the balance in favor of CBS. It was now bigger than ever in radio, and was soon to be equally big in television. For the television revolution was outstripping even the predictions of broadcast executives. Americans had never bought any new device so quickly, and nothing had ever become in so short a time a major part of the culture. Before 1948 the CBS television network was virtually nonexistent. By 1951 it comprised 62 stations, and 16 million American homes had television sets. By 1952, CBS had 74 stations broadcasting to 21 million homes, and in 1954, the year CBS became the largest advertising medium in the world, its programs were broadcast over 202 stations to 32.5 million homes, or to roughly two thirds of the families in America.

The quality of American social life had changed, all sorts of habits were now tailored to television programs. The commercial possibilities were immense; it was like coining money, and by l958 CBS promotion advertisements suggested precisely that: a full-page ad showed a cigarette vending machine with a television set placed in the glass mirror and labeled "the greatest cigarette sales machine ever invented." The ad ran in the New York Herald Tribune and was supposed to run in the Times, but some of the senior people in the news division prevaiIed upon Frank Stanton to cancel the ad.

When the possibilities for financial success expanded, so did the drive for profit. What might have seemed impossible years earlier had now become possible. There were new norms for profit and for success. At meetings with key officials, Paley kept pushing for that 15 percent annual increase in profits, along with reduced budgets. And the company was diversifying. Stanton began to talk about company "profit centers." CBS was not a profit center.

These vast new profits meant a rise in the visibility of Frank Stanton, and a change in the role of Bill Paley. When both CBS and Paley were young, the Chairman had been fresh, open, innovative, available to everyone, a great salesman. But in postwar years, as CBS became more and successful, he changed, he was less accessible e outside world. In the earlier years he had needed access to others; now they needed access to him. Before the war his prime effort had gone into selling the company; now, particularly after the raid on NBC, more and more effort went into protecting the company. Now, increasingly, people wanted things from him, and he became less and less available to them. He designated Stanton as his representative, asked him to run the errands he disliked, deal with the pressures and lobbyists he wanted to avoid, and be loyal enough to make an unpleasant decision sound like a Stanton decision, rather than, as was often the case, a Paley decision. (“I’ve always had a guy like Stanton for jobs like that,” Paley once told a friend about a particularly disagreeable assignment.)

Frank Stanton was a loyalist, a man who discharged decisions faithfully whether he agreed with them or not. By the time of his retirement in 1973 he was one of the profession's foremost spokesmen for the integrity of the news department, genuinely esteemed by senior working journalists. But in the crucial early years of his career he was the man who set standards and norms of profit which systematically diminished the strength, standing, and influence of the news division. Murrow, whose position in the company was declining precisely as that of programming was rising, blamed Stanton for the changing balance. He detested Stanton; to him, Stanton was "the bookkeeper." Murrow, almost to his death, believed that the force of darkness at CBS was Stanton rather than Paley, that the key to revitalizing the network was to get back to the good old days of World War II, when Bill Paley was one of the boys and his sense of public service was self-evident. Paley did little to dicourage the natural rivalry between Stanton and Murrow, two young, attractive WASPs who had joined the company the same year, and Stanton was not about to contradict the Chairman, for to split openly on any issue with Paley would have meant an end to his career.

Frank Stanton's loyalty was to the greater good of the company. He was the impersonal man for an impersonal job, a man of systems and management, and a lobbyist in the most sophisticated sense.

In the great boardrooms of New York, no one looked better than Frank Stanton; he was probably offered more jobs, good jobs—head of corporations, universities, foundations—than anyone else in America. He turned them all down because he preferred the one job he thought he had been promised, that of operating head of CBS.

Stanton was the one man in all those years whom Paley had never ground down. The two of them, different in style, taste, manner, and values, were like two strong people locked in a terrible marriage, two people who need each other, dislike each other, and yet cannot divorce each other. The tensions grew greater as the calendar moved toward 1966, the year that Paley was supposed to retire and let Stanton, seven years his junior, take control of the company. As that happened, Stanton cast a larger and larger shadow, the shadow of Paley's mortality.

In the mid-sixties Paley irritably turned to one close friend: "What the hell does Frank really want?" he asked.

The friend answered that Stanton wanted to be the chief executive officer of CBS, as he had been promised.

"Why does he want that?" Paley complained. "Why should he want that? Look at all I've done for him! I've made him a millionaire, I've made him a big man in broadcasting—the statesman of broadcasting. Why does be want to be the head of the company?"

In February 1966, all the arrangements for Stanton's succession had been made. But Paley could not go through with it. He could not give up his company and become, overnight, an old man. In retrospect, it seems the most predictable of Paley's decisions, but Stanton was shattered. He told friends he learned of Paley's turnabout only five minutes before the promotion was to become official. Later in the day another CBS executive ran into Stanton and was surprised to find him almost in tears. "This is the worst day of my life," Stanton said. Why? the friend asked. "Because the Chairman has a resolution which someone else will offer asking that his term be extended. I've been promised that I would run the company, and now it's all gone. This is the worst day of my life." Well, said the friend, who knew the CBS profits and knew Stanton's financial position, if you feel that strongly, why don't you quit? "Because I just bought fifty acres on the Big Sur and I'm damned if I'm going to take my stock options to pay for it," he answered.

Except for remarks like these, he remained publicly silent. He told one close friend, a journalist, "I'm never giving a real interview, or writing a book—it violates my contract." But he got a revenge of sorts: he asked Paley for a cost-of-living clause in his retirement pay. Paley, knowing the precise amount of Stanton's wealth, was enraged. Some thought that Paley had an additional reason for his unwillingness to turn the company over to Stanton. In his heart, they felt, Paley did not think that Stanton was tough enough. He believed that Stanton was too concerned with image, that over the years he had begun to believe his own speeches, that his essential views of broadcasting were too much like those of the critics who wrote all those lofty newspaper and magazine articles but did not understand the real world of broadcasting. By the mid-sixties, Stanton's role was so identified with moral and professional purity that he talked as though a network could be run on ideals. His role had been to convey respectability; now he had in some ways become too respectable, too concerned with images.

To Stanton, the way things looked was often as important as what they were. Stanton felt that a news program should never be called a show. Always a "program." He had a doctorate in psychology from Ohio State, and he took it more seriously than do many Ph.D.'s; he liked being called Dr. Stanton. He was a clean man, almost surgically so, the man who arranged for all CBS stationery to have a dot in just the right place so that all CBS letters typed by all CBS secretaries would have the right balance. He had started out with the hucksters in the company, but he was always a little ill at ease with the advertising and manipulative aspects of broadcasting, as if he feared he might be tainted by them, and he could not return to academe.

His career seemed to parallel the growth of the company. First he sought order so as to control the swiftness of corporate growth. Then came corporate expansion, as cash flow generated a need to expand: the acquisition of a television set manufacturing company, an amusement park, a music publishing company, a guitar factory, finally a baseball team (the New York Yankees) and a publishing company (Holt, Rinehart '& Winston). He helped to develop the corporate norm, which was profitability. Then, the third and most important role: Stanton the lobbyist and statesman. As the company became successful and powerful, the immensity of its profits staggering, good relations with Washington became crucial. Stanton would testify before congressional committees, and when he spoke, the facts about violence and mindlessness in programming, and the profits derived therefrom, seemed very distant. He had become by the sixties, the major spokesman for the broadcasting industry—as Murrow had been in an earlier era—but with this crucial difference: Murrow had criticized not just the society at large, but broadcasting as well. Stanton spoke the same lofty thoughts and envisioned the same wondrous future, but he did not speak ill of the corporation. He stood for all the best things in the best of all possible ways—and when it was all over he had made well over $20 million at CBS.

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