Tuesday, April 18, 2006

Radio Network Week, Part 2

ABC was the next large network
NBC had blazed a trail. And the implications were obvious to the men with the money. In 1940 the FCC had issued a Report that basically proposed NBC sell off either their Red or NBC Blue netowrks. The report also said RCA used NBC Blue to suppress competition against NBC Red. At the time, the NBC networks controlled the overwhelming majority of high-powered stations. the accusation was pretty signifigant, and essentially true.

The hearings dragged on. If the network must be broken up, who could afford to buy it? who would the FCC allow to make such an acquisition? The task of selling of NBC Blue was given to Mark Woods who, up until that point had been NBC's treasurer.

Edward Noble, the owner of Lifesaver candy, Rexall Drugstores, and WMCA in New York, was interested, but his initial bid was too low. Mark Woods convinced investment company Dillon Reed and Co. to offer of $7,500,000 but it wasn't quite enough. He went back to Noble and got him to pony up. But there was a string attached. The FCC would force Noble to divestWMCA in the deal. The transaction involved the sale of three stations from RCA to Noble, and one from Noble to whomever, it was complicated, so yet more FCC hearings were necessary.

Noble as chairman and Mark Woods as president of the new company were both questioned. FCC chairman James Fly asked Woods if the new network would sell time to the (AFL) American Federation of Labor; Woods responded "No." Fly then threw his papers down and advised Noble to do some rethinking. Something happened, off camera, and off the record.

In October 12, 1943 the sale was approved 'NBC Blue' became The ABC Network. It was purchased for $8 million dollars by Edward J. Noble, the Developer of Life-Savers candies. He was also the owner of the Rexall Drug Store chain. Thus the (A.B.C.) American Broadcasting Company was born. Incidently, ABC retained 'The Blue Network' name for about 3 yrs in some markets for the name recognition. Info Here, and here:

Although Noble was a good buisness man his lack of media experience was an immediate problem. By the early 1950s they were in a financial slump. He rescued the company from this by arranging for a merger with United Paramount Theatres Inc. United Paramount itself had only just been spun off from Paramount Pictures Corporation three years prior. Thsi was another risky, hotly contested media conglomeration. It set off another prolonged set of FCC hearings. This one went through after only 2 years. [united paramount later becomes UPN]

Things go well.. really well. ABC is bought by Capital Cities Communications in 1986 and then inturn purchased by The Walt Disney Company. All of these... a series of media buys and mergers that would never have been allowed a few decades earlier.

Note on James Fly. He was a no-hold-barred ass-kicker for the American people. A true public servant. Before the FCC, Fly was general counsel for the Tennessee Valley Authority and won two Supreme Court cases that let TVA continue bringing electricity and flood control to impoverished people during the great depression. He also played a large role in protecting individuals from wiretaps and battled J. Edgar Hoover to prevent wiretaps without a court order. We could use more men like this today. read more here: Tough Old bastard