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.
6. How Corporate Wealth. Nourishes Corporate Timidity

CBS was a curious organization, licensed by the government, engaged almost constantly in some form of litigation with the government, and therefore acutely sensitive to the whims of the very powerful. Its main assets were airwaves, invisible and intangible, and thus its awesome financial success did not make it more confident and secure; rather, in a curious way, that very success seemed to underline the insecurity and vulnerability of the entire enterprise. (In 1967, Lyndon Johnson, momentarily annoyed at the network and wanting to keep it off balance, spotted in a speech written by Joe Califano a reference to the "public airwaves." Johnson penciled in "the public’s airwaves," a change in emphasis so sensitive that the next day every major broadcast lobbyist had nervously called Califano to see whether this heralded some dangerous new populist policy at the White House.)

It was all unnerving, so much profit supported by so much vulnerability, and though few stations in the history of broadcasting had lost their licenses, the threat was always there. In 1960 Bobby Kennedy complained to a CBS official about coverage of his brother's campaign. When the-official replied, quite properly, that CBS was covering Jack Kennedy much the way the New York Times covered Jack Kennedy, Bobby said yes, that was true, but CBS was licensed by the government and the Times was not. CBS was dependent upon the marketplace, as newspapers were, but the stakes were so much higher, the possibilities so much more seductive for television as opposed to print, that the marketplace set the norm for television as it did not for newspapers or magazines The result was an essentially timid journalistic vehicle. Bill Paley, however, had a different and somewhat more generous term: "a consensus medium," he called it. But the temptation of the marketplace systematically drove Pa1ey away from the newsroom and toward programming and the business of making money.

As the 1950s began, the Cold War was producing a domestic backlash, McCarthyism, and an accompanying political sterility—creating stories CBS's star reporters insisted on covering. Television was arriving as a new national medium and the greatest advertising vehicle in history. Thus the political threat generated by serious newsmen doing their job coincided with the proliferation of commercial profits beyond the imagination of anyone at CBS.

For the first twenty-five years, ending in 1952, CBS's profits always seemed to level out at $4 or $5 million a year. In 1950, the year Joe McCarthy gave his Wheeling, West Virginia, speech, television was just beginning on a national hookup. Profits for that year were $4] million. In the same year, Jack Benny, Burns and Allen, and Steve Allen made their first appearances on television. By 1951, Americans owned 16 million television sets. By 1953, television reached 21 million homes and CBS's profits reached $8.9 million. The next year, 1954, the year of Ed Murrow's McCarthy show, profits reached $11.4 million. ln 1957, 42 million homes had television sets and profits had mounted to $22.2 million. (By 1965 the profit drive seemed to dominate the entire company at the expense of its other responsibilities, and at one point Fred Friendly asked Paley how much profit CBS had earned that year. "Fifty million," the Chairman answered. "That's enough!" shouted the bumptious Friendly, but he was wrong. It was not enough. A decade later, profits had more than doubled.)

These riches and the corporate timidity that nourished them did not ennoble CBS's sense of journalistic mandate. The very reporters who made CBS so respectable during the war now threatened the network's commercial success. As television became more and more powerful, politicians began to monitor television reporters as they had never monitored print reporters. As profits increased, CBS diversified (spending the profits in corporate purchases so they could not be taxed), increasingly buying outside CBS so that the company would he less vulnerable to government regulation. As the company grew, the corporation dominated, and accountability in any true sense diminished. Accountability was owed only to the corporation, which meant only to profit and the bottom line. Year by year, as CBS News became more controversial and more troublesome to its superiors, it also became a smaller and smaller part of the corporation.

Bill Paley, in turn, became more and more a mercantile figure. On rare occasions when friends complained about the types of shows CBS was running, he answered that his job was to drive up CBS stock. He would tell his top aides at high-level meetings that he wanted a 15 percent increase in profit every year. That sort of profit margin could be maintained only by cutting back on documentaries and experimental plays. Did he really have to do this? a friend asked. After all, the network was very profitable anyway. Yes, he answered, the board forced him to. In fact, the board was his own handmade rubber stamp. Or he answered that he personally would like to see more and better documentaries, but he had responsibilities to the stockholders of CBS to consider, the universities which had bought stock, and the widows with children whose futures depended on him. It was too bad, he continued; the worst mistake he had ever made was going public and bringing these pressures upon himself.

The truth was that he loved it, loved those pressures, loved the idea of escalating stock value almost as much as he loved the reality of it. Some who worked closely with him over the years could tell from the tone of his voice at the end of the day whether CBS stock had risen or fallen, noting in his voice either jauntiness or a slight sag and incredulousness. One or two, hearing his voice, would pencil their own predictions, just to check with the New York Times listing the next day. It was not small stuff; one point might mean millions of dollars. In a way, the profits were a daily public announcement of his stewardship, something that the boys in the big world in which he operated understood and respected. A tribute to him and to his manhood. All of this pulled him away from the news division.  He even told a stockholders' meeting in 1965 that profits might have been higher, but news coverage of unscheduled events, such as space shots, civil rights demonstrations, and the funeral of Winston Churchill had cost the stockholders six cents a share. Profits, which had been going up annually in increments of 15 percent or more, had not only leveled off but, in 1965, had dropped slightly. It was a moment of mercantile bluntness. Clearly, there would have to be fewer unscheduled events. A year later, profits were up to more than $63 million,

But journalistic dominance and commitment have rarely been parallel to commercial success in broadcasting; quite the reverse. Often, great moments in public service broadcasting have come when one network was lagging in the ratings race, had a weak programming schedule, and thus had little to lose, little of consequence to interrupt. At such times, boosting news may seem the cheapest way to forge ahead. Robert Kintner did the nation (and ABC) a service in 1954 by deciding to televise the Army—McCarthy hearings. ABC was the only network that did, but that decision was made easier by the weakness of the ABC daytime schedule. Why not let the Senate of the United States provide some excellent programming? Later, when Kintner brought an exciting news orientation to NBC, it was a move dictated again at least partially by need. CBS in those days was so far ahead in everything else, why not make an effort in news, make the station exciting, break in relentlessly on regularly scheduled programs? In 1973, when Gordon Manning of CBS was trying to hire Sally Quinn of the Washington Post to be the instant star of the badly lagging CBS Morning News. Ms. Quinn asked whether CBS News really wanted someone as outspoken as she was, someone so likely to speak the unspeakable. Manning's answer was an extraordinarily revealing statement. "Paley wants controversy, and so does Salant," he answered. "You can get away with much much more at that hour than you ever could on the Evening News." Something congenital to broadcasting: a willingness to take risks only when you are weak. Indeed, some people knowledgeable about broadcasting are ungenerous enough to think that Bill Paley went into public affairs in a big way in the early years precisely because NBC was so much larger, and more powerful in every other way. For in the beginning, NBC dominated. It was born of RCA, and RCA was the giant in the field of radio and electronics, having been created by AT&T, Western Electric, General Electric, and Westinghouse. NBC, with not one but two networks, was started in 1926; at the time it seemed almost invincibly richer and better connected than the fledgling CBS. Thus the attraction for Paley of public affairs, the best and quickest way to make a reputation. Yet Paley had no background in journalism, no sense or feel for it; his guide in these matters was a former New York Times editor named Ed Klauber. Klauber was a dour, morbidly shy man who managed to transfer the best traditions of print journalism to the then seedy, undisciplined, and unprofessional world of broadcasting. He believed strongly that radio as a mass vehicle had special obligations in the field of journalism, that the average listener could make up his mind which toothpaste or what car to buy, but that he had no capacity to judge the reliability of news. That burden, Klauber felt, was totally on the network. He probably saved radio journalism from hyped-up Walter Winchellism, or, equally dangerous, from the kind of vacuum that might have encouraged government-operated broadcasting, as in countries such as France. He helped educate young Paley on the importance of, and responsibility for, good public affairs programs; set the essential standards for broadcast journalism; helped make the subsequent emergence of Murrow and his group possible; and contributed to the aura that somehow CBS was different, just a little better, just a little classier, than NBC.

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