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.
10. The Importance of Being First

Bill Paley always hated being number two. In 1948, after two decades of rule at CBS, and despite his remarkable success, it bothered Paley that NBC, with its early head start and vast resources, was still number one. He always wanted to be the best. (Once, Mike Dann had arranged for a CBS special on Picasso which required months of delicate negotiations. Dann was justifiably pleased with himself—it was a quality idea, and made better by the fact that Picasso spoke English. Picasso, Dann thought, Paley, prestige. And Paley was somewhat pleased, though he dampened Dann's pleasure by saying yes, Picasso was good, "but I’d rather go after Matisse. Can't we go after Matisse, Mike? You know, on today's market, a Matisse is much more than a Picasso.”) A certain condescension crept into his voice when he talked about General Sarnoff; he felt that Sarnoff had no serious interest in broadcasting, not as Bill Paley envisioned broadcasting. Murrow and the CBS News team had given Paley vast prestige, but the network was nonetheless second to NBC in programming, advertising revenues, and profit, as it always had been. It was a reality that Paley had never accepted, and in 1948 he was ready to move. He knew that the era of television was fast approaching, and he had a strong private belief that only the very best in radio would survive. He also sensed that a dominance in radio might lead to dominance in television. Quietly, through intermediaries, he started sounding out some of NBC's star radio comedians about switching networks. The struggle soon centered around Jack Benny.

The NBC stars were restless, not so much with the network as with the U.S. government, which was taxing many of them at about 90 percent. CBS consulted with MCA, the talent agency, and determined that stars like Benny could be taxed as companies rather than as individuals, and could thus sharply reduce the portion of their salary handed over to the government. Radio was then at its zenith and Benny was its biggest star, the 7 P.M. centerpiece of a star-studded NBC Sunday team. His contract was soon to end, and he was in a position to set a pattern which his colleagues might follow.

Here the difference between Paley and Sarnoff was crucial: Paley loved entertainment. When a star came to CBS for lunch, Paley was at his best—flowers, charm, style. Sarnoff, on the other hand, convinced that the key to NBC's success was its engineering superiority, its clear-channel stations. His was the greatest theater in the world, as he saw it, and could put on whatever he wanted because the sound system was so good and the seats so comfortable that people would keep coming. General Sarnoff was, in his life-style at least, a modest man, a Russian-Jewish immigrant who made a very great fortune from his position (indeed, the disparity between his and Paley’s wealth was something that always grated on him. Paley owned CBS, but Sarnoff was a salaried executive at RCA.) He was a proper man, sensitive about his own simple background and the need to be worthy of his position in America. Dignity was important to him and stars rarely, to his mind, had dignity. A system which built up stars with huge, vulgar salaries was distasteful to him. (Once, at the height of television's success, he found out how much money Jackie Gleason was making. "That's more money than I make," he complained. "But, General," said his aide Pat Weaver, referring to a patented Gleason trademark, a pratfall, “you can’t do the fall.") Not surprisingly, even by 1948 Sarnoff had never met Jack Benny, his number one star. Moreover, he had no intention of competing with Bill Paley in wildcat offers for comedians, ventriloquists, and people of that ilk. Some of his aides told him not to worry, that television was coming, and radio stars like Benny would soon be passé. So while Paley turned on the full charm, letting Jack Benny know how much he cared about talent, and that the key to CBS was going to be entertainers, Sarnoft did relatively little. Benny switched.

The American Tobacco Company was nervous about the change, since NBC's audience for these stars was so huge, so Paley promised to pay them $3000 for every Hooper rating point that Benny lost in the move. The moment Benny left, Sarnoff aaid, All right, we'll put Horace Heidt in his slot at 7 o'clock. Horace Heidt. It was a disaster. Benny had a Hooper rating of 27, 3 points higher than he had had at NBC. Sarnoff, tied into a bad policy, valuing machinery above talent, could not hold his other stars. Benny helped persuade them, and across the DMZ they came: Edgar Bergen, Burns and Allen. Red Skelton; At the last minute Sarnoff switched his policy and paid a small ransom to hold Bob Hope. By the time it was over, Bill Paley had stolen NBC's Sunday night. Benny was bigger than ever. More important, the raid strengthened CBS radio and gave CBS precisely the lead over NBC that Paley had wanted for the move into television.

A few days after the raid an irate David Sarnoff called Bill Paley to ask how he could do it: How could he violate their long-standing unwritten agreement not to steal each other's stars? How could he do it?

There was a long pause, and then Paley said (it was, said someone who was sitting in the room with him, the first time he had ever heard Bill Paley sound sheepish): "Because I needed them."

Indeed he did. Within a year CBS was first in programming, revenues, and profits, and was moving headlong into television. Some CBS newsmen began to sense that Bill Paley's need for Jack Benny and Amos and Andy presaged a diminishing need for reporters. The correspondents became a little less important, secondary to the other operations of CBS, as David Schoenbrun soon found out.

Schoenbrun, CBS's man in Paris, once received a phone call from Bill Paley. Jack Benny and Mary Livingstone would soon be traveling through France on their vacation and Bill would like David to keep an eye on them. Paley knew how influential David was in Paris. The message was that it was important to the company that David show Jack Benny a good time. Sensitive negotiations with Benny were about to start again, and he needed to be reminded what a great organization CBS was, how much influence it had, even in France. Bill Paley did not have to underscore how important Jack was to the company. Besides, David would just love Jack and Mary.

The last, at least, was not true. Very quickly David Schoenbrun came to dislike both Jack and Mary. Jack Benny had been portrayed all those years on radio as a stingy man, and he did not seem eager to dispel his own reputation. Nor did Schoenbrun come to like Mary, who nagged at him constantly. A week passed, and finally Schoenbrun thought the visit was over. But on the night of Friday, July 13, Mary called Schoenbrun to say that she wanted some perfume, the kind that Babe Paley used, which was, of course, the best. They were, she added, leaving Paris early on Monday the sixteenth.

"I need two quarts," she said.

"What kind is it?" asked Schoenbrun.

"I don't know, but it's the best; Babe uses it.'

So Schoenbrun listed all the various great perfumes and finally got to Vent Vert. "That's the one!" said Mary.

When do you need it? he asked. By Sunday night, she said.

"Then you've got troubles, because tomorrow is the fourteenth, which is like the Fourth of July, and this town locks up."

"Well," she said, "Bill Paley said you owned this town and you could do anything you wanted and that when Jack saw what you could do we'd be glad to stay at CBS and not go to another network. So do it." And she hung up.

"Resign," said Mrs. Schoenbrun to her husband.

But Schoenbrun's journalistic pride was challenged, and off he went. He raced to Pierre Balmain's store, for Balmain, who made Vent Vert, was a friend, and perhaps things could be arranged. But all he found was a security guard. Eventually the security guard confided that Balmain was at his horse farm in Normandy, and after more wrangling Schoenbrun got the private number there and reached Balmain. Balmain assured Schoenbrun that he was crazy, that the store was closed, locked up for the holiday weekend. "But it's for Jack Benny," pleaded Schoenbrun.

"Who is Jack Benny?" asked Balmain. After several more calls, Balmain surrendered, called the security guard, and told him the perfume was in the vault with the mink coats. The vault was opened and Schoenbrun stuffed a briefcase full of Vent Vert. Immensely pleased with himself, he called Mary Livingstone to tell her his accomplishment.

"Bill Paley said you could do it," she said by way of thanks.

Schoenbrun wrote Paley relating his triumph. He never received an answer. He suspected that if it had been the other way around, Jack Benny would have received an answer. Sunday-night comedians, it seemed, were more important than journalists, even those who owned France and personally knew Charles de Gaulle.

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