Paramount TV and the Formation of ABC

Television Looks to the Independent Producers

Excerpt from Hollywood Renegades by J. A. Aberdeen

Paramount Studio Television Interests

Back in April 1949 when the Paramount stockholders agreed to spin off the theater chain, both the Paramount studio parent and the theater corporation had an interest in broadcasting and the future of television. So when the motion picture holdings were divvied between the corporations, the Paramount television interests were split under the divorcement terms as well.

Paramount Pictures retained the Los Angeles TV station KTLA and the stock in the DuMont network. United Paramount Theatres controlled the Balaban & Katz broadcast division that owned the Chicago television station WBKB and various radio interests. As mentioned previously, Paramount experimented with theater television by furnishing movie houses with broadcast reception capability designed for "instantaneous newsreels" of major news and sporting events. In 1951 United Paramount planned to have 27 such communal television theaters—until the costliness of the project, launched in 1949, was overtaken by home television.

American Broadcasting (ABC)

In a surprise move Leonard H. Goldenson, the ambitious president of United Paramount, entered into merger negotiations with the struggling network upstart, the American Broadcasting Company. ABC was then only eight years old, having been created out of the old NBC Blue Network during the war. ABC had expanded its television franchise into New York, Los Angeles, Detroit, San Francisco, and Chicago, but had difficultly competing with the CBS and NBC broadcast powerhouses.

Goldenson believed that the cash-rich United Paramount theater circuit could provide the under-financed network with the working capital—not to mention the industry connections brought by the veteran Hollywood exhibitors—to transform ABC into a major broadcaster. United Paramount, then worth about $119 million agreed to acquire the $25 million, 14-station ABC network pending FCC approval. The proposed merger made front page news when it was announced in May 1951, right around the same time that SIMPP fulfilled the Detroit deposition requirement and prepared for trial against the United Detroit subsidiary.

The FCC took more than a year to approve the merger, citing Paramount's notorious track record which involved over 180 antitrust actions since the Zukor years. Regardless, Leonard Goldenson planned the future of the company as if the merger had already taken place. His adjustments also brought changes to the SIMPP Detroit case.

The Paramount Theater Monopoly in Detroit

Interestingly, back in 1937, Goldenson rose to prominence at Paramount by turning the Detroit branch into a profitable regional monopoly. Goldenson personally fired the previous Detroit manager George Trendle, and instated Earl Hudson as general manager. Also, as Goldenson candidly admitted in his memoirs, during the brief but bitter struggle with the Cooperative Theatres of Michigan, he threatened to fix prices unless the Cooperative relinquished control of the Michigan theater that would complete Paramount's monopoly. With his reputation enhanced at the studio, Goldenson then decided to make amends with the Cooperative for an even stronger position. As he said after the Cooperative battle, "we became good friends," creating the combine that SIMPP took to court.

In 1951, while the United Paramount-ABC merger was still pending FCC approval, Goldenson spearheaded a new corporate strategy. First of all, he involved the two companies in an executive shuffle that sent three of Goldenson's trusted United Paramount representatives immediately to ABC. One of these three was Earl Hudson, a defendant in SIMPP v. United Detroit, who became head of ABC west coast operations.

Goldenson's Plan

Another of Goldenson's main objectives was to bring movie showmanship to television. Contrary to the prevailing historical consensus, Hollywood was not always antagonistic toward the television industry. Early on, the major studios considered television as an important element in their diversification efforts into new entertainment media, and Paramount Pictures for instance found it in their best interest to help shape the television infrastructure. The hostility toward television developed as the FCC restricted the Hollywood studios from television due to the antitrust charges during the Paramount case that forced the film companies to sit on the sidelines as the radio broadcasters signal standards became adopted by the FCC. Only after Hollywood faced these setbacks that prevented them from dominating televison did the film establishment eschew the new medium as a rival.

For many years thereafter, Hollywood's anxiety toward television was evident in the reluctance of the majors to create original programming and the hesitation toward the sale of their old films to television. In 1951, the Screen Actors Guild, openly critical of the sale of Hollywood films to television, threatened to ban their performers from any producer who sold a recent (post-1948) movie to television. They carried out the boycott when independent producer Robert L. Lippert challenged the guild.

So by the time Leonard Goldenson looked for ways to integrate Hollywood production into the ABC network, he confronted a hostile film industry, and needed to look for an alternative outside of the major producer-distributors. He knew that the independent producers, on the whole, did not have the same reservations about television as many of the studio production heads. In fact, for most independents, the selling of their catalog of movies to television was seen as an extension of the profit-generating activities essential for their survival as independent filmmakers. Goldenson decided to pursue the independent producers of SIMPP to interest them in providing programming for the network.

The Independent Producers of Hollywood

Leonard Goldenson observed that the independent producers' interest in television could provide him with a breakthrough television show that might evaporate Hollywood's resistance to television production. "I had to find a way to crack the market and get Hollywood into production," Goldenson said of his plans to bring film talent to TV. "Otherwise we'd be dead pigeons." He also pursued the independent producers because they were among the few behind-the-camera Hollywood personalities with household-name recognition, which would help elevate ABC's ragtag image.

Among the many Hollywood figures with whom Goldenson established close friendships over the years were his poker buddies Sam Goldwyn and David O. Selznick. But both of the prestige filmmakers were too wrapped up with their own feature film projects to consider a weekly television show. In the fall of 1950, ABC commissioned Walter Wanger to produce a fantasy television series Aladdin and His Lamp. The first episode was filmed, but the show failed to make it to broadcast when ABC had difficulty finding a sponsor for the ahead-of-its-time color program. And when Goldenson gave Orson Welles $200,000 and artistic freedom to create a pilot episode, the network deemed it un-airable.

CLICK HERE for more information on the Independent Producers and the Early Days of Television

The reaction to Walt Disney's first television special was sensational. (A clipping from the Hollywood Reporter: Thursday, December 28, 1950)

In 1951, while the FCC still mulled over the ABC-Paramount merger, Goldenson visited the Disney studio to interest the Disney brothers in a television production deal. Walt Disney had already produced an hour-long program at NBC for Christmas 1950, and the success of this bold move would lead to another NBC special the following Christmas. The Disneys were unimpressed with ABC, which Walt called the "peanut network"—a distant third in television network rankings. Furthermore as an independent producer party to the pending Detroit lawsuit, Disney resisted a deal that would put him in a compromising situation.

ABC-Paramount

Meanwhile the merger approval for ABC and the Paramount theaters finally came on February 9, 1953, in a five-to-two split decision by the Federal Communications Commission—the largest transaction ever in broadcasting. The FCC approved the merger on the basis that Paramount cash could enable a viable third network to provide additional competition that would in fact be in the public's best interests. American Broadcasting-Paramount Theatres was formed, and the head of the company Leonard Goldenson symbolized the new kind of media mogul that emerged as the Hollywood studio system was being swept away by industry change.

This story is continued with Disneyland: How Walt Disney's Theme Park Influenced the Independent Movement in Hollywood

SOURCES:

Paramount divides television holdings: "Paramount Reorganization Plan Completed 2 Months Ahead of Time," NYT, December 31, 1949, pp. 19, 21.
Theater television: "A.B.C., United Paramount Merge in $25,000,000 Deal," NYT, May 24, 1951, pp. 1, 54; Bosley Crowther, "Anybody's Guess," NYT, June 3, 1951, sec. II, p. 1.
United Paramount-ABC proposed merger: "A.B.C., United Paramount Merge in $25,000,000 Deal," p. 1, 54; "Sharper Rivalry in TV Field Seen," NYT, May 25, 1951, p. 40; "Officers Named in Proxy Statement for Vote on ABC-United Paramount Theatres Merger," NYT, June 30, 1951, p. 20; "Merger Plan Filed," NYT, July 15, 1951, sec. III, p. 4.
Leonard Goldenson history and United Detroit in 1937: Goldenson, Beating the Odds, pp. 34-40.
"We became good friends": Ibid, p. 37.
Earl Hudson becomes ABC administrative head: Ibid, p. 103.
For additional information on the early history of the Hollywood studios' interest in television: see Christopher Anderson, "Television and Hollywood in the 1940s," chapter 13 from Schatz, Boom and Bust, pp. 422-444.
Screen Actors Guild and Robert L. Lippert: "Actors Move To Bar From TV Films Made Since 1948," MPH, July 7, 1951, p. 17. Lippert, who owned a chain of theaters in California and Oregon, branched into production and began feeding his theaters with his own B-features in the late-1940s.
"I had to find" and Goldenson visit to Disney in 1951: Thomas, Building a Company, pp. 184-185. Also see Schickel, The Disney Version, p. 313-314, and Mosely, Disney's World, p. 233. Goldenson with independent producers Goldwyn, Selznick, and Welles: Goldenson, Beating the Odds, pp. 63-64, 143. Wanger television pilot episode: Bernstein, pp. 266-267, 270.
ABC-Paramount merger approved: "Paramount, A.B.C. Cleared To Merge," NYT, February 10, 1953, pp. 1, 36, 43.

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