Paramount TV and the Formation of ABC
Television Looks to the Independent
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
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.
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
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
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
This story is continued with Disneyland:
How Walt Disney's Theme Park Influenced the Independent Movement in Hollywood
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
"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.
ABC-Paramount merger approved: "Paramount, A.B.C. Cleared
To Merge," NYT, February 10, 1953, pp. 1, 36, 43.