The Man Who Stole Jack Benny

Wild Bill Paley loaded his purse and went raiding for comedians. Rival networks didn’t find it a bit funny

JAMES DUGAN April 15 1949

The Man Who Stole Jack Benny

Wild Bill Paley loaded his purse and went raiding for comedians. Rival networks didn’t find it a bit funny

JAMES DUGAN April 15 1949

The Man Who Stole Jack Benny

Wild Bill Paley loaded his purse and went raiding for comedians. Rival networks didn’t find it a bit funny



SOME fellows hoard milk-bottle tops and others breed black cows, but William S. Paley of the Columbia Broadcasting System collects radio

comedians. In three recent months Paley virtually cornered the U. S. market on profitable radio drolls. He bagged Amos ’n’ Andy, Jack Benny, Bing Crosby, Red Skelton, Edgar Bergen, and Ozzie and Harriet from rival networks. A few top comics have not been lured away at this writing—Bob Hope, Ed (“Duffy’s Tavern”) Gardner and Fred Allen—but some may have gone to CBS before you read this. Wits have thought up a new network announcement, “This is CBS, The National Broadcasting Company.”

When the figures were totted up early last month radio was rocked by the realization that NBC had lost $7 millions in business to CBS.

Variety, the bible of show business, refers to the great talent raids as “The Year of Paley’s Comet.” The runaway asteroid flashed for 100 days across the winter sky, gathering nebulae worth millions of dollars and hundreds of aggregate points in the Hooper and Nielson ratings (by which the size of a program’s audience is valued). Paley’s comet may determine the future course of radio and television. It has already rocked great corporations.

The first clear result is that CBS has replaced the National Broadcasting Company as the leading U. S. radio network, after 21 years of hot rivalry. And it may mean hard times for one or two of the four existing U. S. radio networks. In the spotlight are the dwindling fortunes of the American Broadcasting Company and the Mutual Broadcasting System.

Although loose talk of multimillions was stirred up by Paley’s raids, he wagered less than $6 millions in Variety’s estimate— small potatoes compared with the big stakes that will be won and lost as a result. CBS’ gain and the rue to its rivals can only be counted by a complex and shifting formula: take the present-day radio audience squared by television, times the hypotenuse of Paley’s comedians, multiplied by the coming economic situation, plus “X.” “X” is Wild Bill Paley.

Now 48, Paley is marking his 21st year as head of CBS. In the cant of the hucksters he is known as “the keyest of the key guys in radio.”

End Run for King Comic

1AST summer, smarting under NBC’s domination of the top Hooper ratings, Paley made a quiet remark which may not hqve been properly heeded in rival camps. “The difference in over-all listening between NBC and CBS is chiefly due to two or three stars on NBC,” he said. He must have been referring to Jack Benny, Bob Hope and Fibber McGee and Molly, NBC’s powerful 25-point battery in the audience ratings. Not only did they command the listeners, but they had a huge network value as pivotal attractions, around which lesser shows could be scheduled at higher sponsor fees than they would otherwise command.

The best example was NBC’s fabulous Sunday night, lineup, now totally shattered by Paley’s raid. Sunday night from 6.30 to 9.30 (EST) is radio’s “cream time” in the U. S. Jack Benny, the most listened-to man in radio, ruled the choicest

time slot at seven o’clock, the hour established by hordes of pulse-feelers and head-counters as the period most North Americans are en famille and vulnerable to kilocyclic assault. King Benny’s estimated 21 million dial settings swept the rest of the three-hour lineup with him.

Figuring that by taking out Benny the whole NBC line would crumble, Paley first moved in an oblique manner. He huddled with sharp brains of the Music Corporation of America, one of the biggest U. S. talent agencies, and together they dreamed up the famous capital-gains tax gimmick, which was the jimmy that pried the comedians loose.

The tool was first used last September on Amos ’n’ Andy who were ninth in the Hooper valuations. Paley showed them how to receive $2 millions and keep three quarters of it from the ravages of the U. S. income tax. As personal income this amount of money is subject to about 80% tax levy. But Paley was not offering Freeman Gosden and Charles Correll $2 millions for their personal services. He was trying to buy their dramatic property, Amos ’n’ Andy. The dramatic idea was theirs to sell as capital property, just as another industrialist might sell his popcorn factory. The tax rate on capital gains in the United States is only 25%.

When the U. S. Treasury approved the Amos ’n’ Andy transaction under capital gains, Paley laid siege to the richest dramatic work of the century, Jack Benny.

Although it was out of the question for Benny to claim he was a memorable figure in dramatic literature, the formula and characters in his weekly play readily fell under the classification of literary property. Paley saucily dangled a cheque for $2,300,000 under Benny’s nose, as an offer for Mary, Rochester and all of Benny’s subsidiary movie and radio interests conducted by his Amusement Enterprises Corporation. Benny’s own acting was not included in the deal: he would come to CBS as unpaid custodian of the merchandise, still in contractual bondage to his tobacco sponsor at $10,000 a week solace.

Niles Trammell, head of NBC, got the wind up at seeing his biggest asset dickering with Paley. Trammell offered a deal similar to the CBS offer. Trade gossips said that NBC would not guarantee it, however, if the U. S. Government tax people disapproved of the capital-gains formula.

Paley was lurking in the wings, and when the Benny-Trammell talks stalled, Wild Bill told Benny CBS would take the chance on Government approval. Benny signed with CBS.

Later the Government informally expressed disapproval of the arrangement, but a favorable decision is expected when the details are known.

McCarthy Moves Bergen

ONE of the assets Paley purchased was a $750,000 film Benny had produced called “The Lucky Stiff.” The film opened recently in New York and turned the Globe Theatre into a morgue. Paley wall be lucky to recover half of the cost. But even if Paley’s purchase isn’t a literary figure or a successful movie producer, he was the detonator of the biggest explosion in radio history. In Jack Benny Paley had the anchor man to swing almost any star

Continued on page 45

Continued from page 8

he wanted to the CBS network.

Paley next went after Bing Crosby of the ABC. He bought The Groaner for a piffling million dollars, representing a 25% investment in two Crosby corporations. Paley waived the CBS rule against recorded programs to allow Bing to transcribe his show.

NBC tried to shore up its crumbling redoubts by moving Red Skelton into Benny’s vacant pew on Sunday night, according to the trade press. But Skelton’s soap sponsor was said to have figured Skelton on Friday night would have more listeners than bucking Jack Benny on Sunday. He said, “No soap.” A few days later the same sponsor decided to put his boy Skelton on CBS next fall.

NBC’s Edgar Bergen was next. He had announced his retirement from radio after this season. The next thing heard from the ventriloquist was that Charlie McCarthy was going to CBS next fall. Trade gossip had it that Bergen’s first CBS shows will employ another ventriloquist as aide to Charlie, to demonstrate that Bergen, too, was peddling dramatic property. Bergen, the man, has always had an uphill fight against the personality of his dummy: now Charlie may have finally fired Bergen.

Ozzie and Harriet left NBC for CBS without financial inducement. They had been on the now-ruined Benny Sunday-night team. CBS announced that two more unnamed NBC shows had come over to play before and after Benny. The rumors flew that Paley

was talking to every leading star still remaining outside. Lurid sums of money were being mentioned. The fact is that Paley hasn’t spent a nickel since the Crosby deal; he doesn’t have to—the talent is glad to get in free.

Paley is a six-footer with brown eyes, a full head of hair turning grey, and a warm direct manner. He dresses in a nonhucksterish array of white shirts, dark suits, conservative neckties, black shoes and beatup hats. He circulates easily among producers, writers, musicians, actors and painters.

His $50 million (estimate) fortune is generously available to such noncommercial enterprises as the Museum of Modern Art and the New York Philharmonic Society of which he is a director. His charitable contributions are placed by the Paley Foundation.

Paley’s a “Program Man”

He is the hardest worker in the CBS building on Madison Avenue, New York City, generally leaving his 20thfloor office after the help has gone. His black Cadillac is equipped with a mobile telephone, on which he receives a round of continental calls as he is driven to his estate at Manhasset, Long Island. The most important calls may be from MCA’s Jules Stein and the flicker tycoon, David Selznick, producer of “Cone With the Wind.” The PaleySelznick conversations are a busy speculation in radio row, where it is thought they are planning Paley’s next explosion—in television.

When the Cadillac reaches Manhasset it enters Paley’s big estate, formerly the property of newspaper publisher Ralph Pulitzer. The Paley manor is somewhat smaller than the Blenheim layout of the Duke of Marl-

borough’s, and contains Mrs. Paley, t he former Barbara Cushing Mortimer, and their baby son, William Cushing Paley. She is one of the three beautiful daughters of the late distinguished brain surgeon, Dr. Harvey Cushing, of Boston. She married Paley five days j after he was Reno-divorced by Dorothy j j Hart Paley in July, 1947. The new j Mrs. Paley’s sisters are married to : j Vincent Astor and John Hay “Jock” Í I Whitney, who are lots richer than Wild j Bill.

'The place also shelters a leading private collection of contemporary French painting, a form of wealth Paley was among the first in the entertainment world to collect. Scattered among the objects of art are television sets, radio speakers and transcription turntables. The chairman of the board of CBS is the ideal radio listener. The l boiler rooms of the Hooper Ratings call ¡ up 2,000 people an hour in 36 cities to j find out who is listening to what, and find that only an average 40% are ; listening at all. If Hooper’s interrogaI tors should call a certain unlisted J Manhasset number, they could improve the percentage. One hundred per cent of Paley’s household listens to CBS.

The next day Paley memos sluice down from the 20th floor and permeate cubbyholes in the great CBS ant heap, j giving shrewd Paley critiques on all j kinds of shows. Paley sometimes rej writes radio scripts. CBS producers | have stated that he usually improves j them.

Paley isa “program man.” In radio ; this means an executive who values j ( lie quality of the air stuff as much as ¡ its saleability. In network radio program men are almost as rare as executives who listen to the; radio.

Rich Boy Makes Good

Paley bought the puling 19-station ; Columbia network from Jules Louchheim in 1928 for a reported $1,500,000, j earned from his family’s cigar business in Philadelphia. The network, now with 167 outlets (eight in Canada), is still family-owned. As prime minister of a closely held enterprise, Paley can move with greater spryness than Trammell of NBC, who has to have i mandates from his corporate parent, Radio Corporation of America. NBC j was founded a year before CBS for the j purpose of selling RCA radio sets. Paley got into the broadcasting business to sell time. This salient fact has j colored the whole history of Paley and j CBS, has set its high program stan| dards and nurtured its crack staff of I creative people who originate most leading shows.

I Paley’s life is the stirring epic of a boy who fought his way up from a ¡ I million dollars. He was born in 1901 in :

I a rich Chicago cigar-manufacturing j j family, t he only son of Sam and Goldie j Paley. He attended the Western Military Academy and, for one year,

I the University of Chicago, before the I Paloys moved the cigar plant to PhilaI dolphin to avoid labor troubles.

; He completed his education at the University of Pennsylvania, spending his college vacations working in Cuban tobacco fields. He became advertising manager of the business.

In 1927, while young Bill was in Europe, Sam Paley made a move lie soon regretted. He signed a $50,000 radio-advertising contract for 13 weeks ! on the newfangled CBS network, ! owned by friend Louchheim. The unj consulted advertising chief arrived ; home to find his parent holding his I head in front of a Bakelite cornucopia ! j from which poured a jumbled someI j thing called the “La Palina Smoker.” ; I Sam was paying his good money for it. j 1 Far from chiding his father, Bill Paley i

got excited about radio, and renewed the show for 13 more weeks. After 26 weeks La Palina cigar sales had increased 150%).

Bill Paley said later, “My imagination went wild over the possibilities of radio.” He bought the network from Louchheim. “As wild as my imagination went, it didn’t get wild enough to keep up with the realities of radio,” the 27-year-old executive found. He took up the phone and performed the first of his amazing compositions on the instrument by signing up 27 new stations. CBS took off into the blue. Profits were increased 270% in the first year, 1 0% for eacli new station he talked into the web.

Swift With Blue Chips

Then came the crash. (Sad music, professor.) But nobody went out the window at CBS. Paley quadrupled Columbia’s income between 1929 and ’35, the abysmal years of the depression. He passed NBC’s Blue Network and began the long contest with NBC Red for first place in U. S. radio. Due to an antitrust decree 10 years ago, the Blue Network is now American Broadcasting Corporation and the Red is simply NBC.

As a headline-maker Paley often seems impetuous, when he is really calculating to fractions. His moves are always carefully and privately planned before the blow falls. The noisy hullabaloo and big money talk that surround his actions are the result of strategic surprise. The sage who said, “There is nothing as conservative as a million dollars,” was no student of Paley. He moves the blue chips with the speed of an oil-rich Texan.

During the war Paley served two years in Europe as a radio propaganda chief. There he worked efficiently with Brigadier-General David Sarnoff, head of RCA, who will have to marshal NBC’s counteroffensive against Paley’s rocket attack.

In Paley’s absence NBC came to dominate the big radio time, winning away top stars that had been nursed by Paley. Paley has lost plenty of tough decisions to NBC in a twodecade radio struggle. By the way, radio isn’t just radio anymore—listeners better get ready for three sets of initials which now distinguish the various arms of broadcasting: AM, or amplitude modulation, is what we have had under the name of radio for 30 years; FM, or frequency modulation, is the newest means of broadcasting sound; and TV, or television, is FM sound, plus cathode pictures. We might have had a fourth monogram— CTV, if the Federal Communications Commission had not decided against licensing Paley’s color television last year. He lost $2 millions invested in color when the NBC-fostered blackand-white systenrwon out.

CBS Starts to Move

Home from the war, Paley set about restoring his position. Two houseoriginated shows were nursed into the top ratings, a comedy piece called “My Friend Irma,” and Arthur Godfrey, a former wake-up man, whose ubiquitous presence on CBS morning, noon and night grossed $6 millions in 1948.

Starting with two shows in Hooper’s leading 15, Paley’s raids have given CBS nine, three times as many winners as either NBC or ABC at the moment. The tide continues to run to CBS. When you read this Paley may have a dozen of the first 15.

Paley and RCA (NBC’s parent company are having another dingdong battle over long-playing phonograph records. Paley’s Columbia Records

subsidiary brought out its LP Microgroove disc last summer. Twentyseven minutes of continuous music is etched on a 10-inch record, played at 33}-^ revolutions per minute. Six months later RCA-Victor launched its long-play disc, turning at 45 r.p.m. Aside from paralyzing the mind of the record buyer, the LP battle seems to favor Paley decisively. He got the jump. His speed of 33^ r.p.m. is the one used on the transcription turntables in the 3,000-odd radio stat ions in North America, while Victor’s LP platter requires completely new equipment to play.

Columbia Broadcasting’s nearly 100 million radio listeners are slowly being converted to viewers as television rears its bubbly head. Paley has said almost nothing about television, except to point out depreciatingly that the million sets and 55 TV stations now operating in the U. S. ¡are only one fortieth of radio’s size. Some of his purchased funnymen will go into the cathode flickers next season, but there is no guarantee that Jack Benny or Amos ’n’ Andy will succeed in the new medium. Television may repeal established stars as talking pictures did silent actors. It is still too early to tell.

Squeeze on Stations

One of the experts on radio row who has analyzed Paley’s brain wheels gave the following opinion. “Paley is convinced there is now room for only two of the four current networks. First, television is taking a terrific financial bite out of radio. Billings (radio jargon for air time sold to sponsors) are falling off. Television maybe won’t completely j capture the field for a long time, but j old-line radio is going to be a peanut ' industry, carrying cheap shows or just I broadcasting the sound part of televi! sion. One television station costs as ! much to operate as seven ordinary j stations.

“Paley’s sense of timing is what gets j me. While everybody is over the barrel trying to change over to television, : Paley has all the chips. The squeeze is j terrific on stations. 1 think he’s going : to get a lot of them. He’s after come¡ dians, but he’s after stations, too. ! NBC once had the best radio spots j in the country. (NBC holds 170 j

outlets, including three Canadian.) I’d be willing to bet that Paley grabs two dozen of their best ones in a year, and he might sweep up three quarters of the future top television franchises in the country.

“Then watch out for Paley running wild in television. He’s got the best ¡ sports stuff tied up already—Madison j Square Carden and the Tournament of j Champions for boxing, the Rose Bowl Came, the Dodgers. He’s got the topdraw comics. He has Arthur Godfrey and the best dramatic continuity in television, the Goldbergs.

“When Hollywood sniffs big money and the picture studios move into television—David Selznick will be ready for CBS. Paley is breaking the bank.”

Paley isn’t talking. After he stood radio on its head, he disappeared into the West Indies for a spell in the sun. His office was empty, but radio row knew his brain wouldn’t be idle. The radio riot he created goes merrily on; it was calculated to run automatically after Benny and Crosby were in the sack. It has.

A1 ¡ over the U. S. towers are going up to Tulfill the 123 television licenses that I have been issued. In Canada, things j might be moving next year. Tanning himself on the Jamaican sands, Wild j Bill Paley may have blueprinted the | design of the television revolution, it