RKO General
RKO General, Inc. was the main holding company from 1959 through 1991 for the noncore businesses of the General Tire and Rubber Company and, after General Tire's reorganization in the 1980s, GenCorp. The business was based around the consolidation of its parent company's broadcasting interests, dating to 1943, and the RKO Pictures movie studio General Tire purchased in 1955. The holding company acquired the name of RKO General in 1959 after General Tire dissolved the film studio portion of RKO Teleradio. The original RKO Teleradio, Inc. corporation name was then changed to the present day RKO General, Inc. Current RKO Radio Pictures copyrights are held by this corporate name. Headquartered in New York City, the company operated six television stations and more than a dozen major radio stations around North America between 1959 and 1991.
RKO General still exists, at least nominally, registered as a Delaware Corporation. In addition to broadcasting, its other former operations included soft-drink bottling and hotel enterprises. The original Frontier Airlines was a subsidiary from 1968 to 1985. In 1981, the company revived RKO Pictures on a small scale. It is as a broadcaster, however, that RKO General left its mark. Recognized as the owner of some of the most influential radio stations in the world and as a pioneer in subscription TV service, RKO General also became known for the longest licensing dispute in television history.
History
Early days
General Tire entered broadcasting in 1943, when it bought a controlling interest in the Yankee Network, a regional radio network in New England. The Yankee Network owned and operated four stations: flagship WNAC in Boston; WAAB in Worcester, Massachusetts; WEAN in Providence, Rhode Island; and WICC in Bridgeport, Connecticut. With the Yankee Network purchase, General Tire also picked up its contracts with 17 independently owned affiliates and acquired a stake in the Mutual Broadcasting System, a cooperatively owned national radio network.On June 21, 1948, the Yankee Network launched New England's third television station: Boston's WNAC-TV went on the air just days after WBZ-TV, also in Boston, and WNHC-TV, licensed to New Haven, Connecticut. The TV station's transmitter site also served a new FM outlet, the first and only station to be established under General Tire ownership. While the Yankee Network had been operating experimental FM stations since 1939, WNAC-FM was the first that would survive past the early 1950s.
In December 1950, General Tire purchased the Don Lee Network, a long-standing West Coast regional network, for $12.3 million. This brought three more leading stations into the General Tire stable—KHJ in Los Angeles, KFRC in San Francisco, and KGB in San Diego. The acquisition also expanded the company's holdings in the Mutual Broadcasting System. Under the terms of the deal, the Columbia Broadcasting System acquired Don Lee's Los Angeles television station, KTSL. In 1951, General Tire acquired its own station in the city when it bought KFI-TV from Earle C. Anthony, changing the call letters to KHJ-TV.
In 1952, General Tire purchased General Teleradio, owner of WOR-AM-FM-TV in New York, from R.H. Macy and Company. Bamberger itself was a Macy's subsidiary. In the deal, General Tire acquired the rights to the name General Teleradio, under which the company merged its broadcasting interests as a new division. The deal also gave General Tire majority control of the Mutual Broadcasting System. The company moved into Memphis, Tennessee in 1954 with its purchase of WHBQ radio and WHBQ-TV. Exiting two mid-sized urban markets that same year, General sold off WEAN to the Providence Journal and KGB to the San Diego station's general manager, Marion Harris. On the evening of July 8, 1954, WHBQ disc jockey Dewey Phillips introduced a song called "That's All Right ", the first ever recording to air on the radio by a local singer named Elvis Presley.
The RKO purchase
General Teleradio's chairman, Thomas O'Neil recognized that his television stations needed access to better programming. In 1953, he tried to buy the film library of RKO Radio Pictures—including many of the most famous movies made by Fred Astaire, Ginger Rogers, Katharine Hepburn, and Cary Grant—but was rebuffed by the studio's then owner, Howard Hughes. However, after Hughes failed in a bid to acquire total control of RKO, he sold the studio to General Tire for $25 million in July 1955. Merging RKO with General Teleradio to form RKO Teleradio Pictures, General Tire quickly recouped most of the purchase price by selling the primary rights to RKO's film library to C&C Television Corp, a subsidiary of beverage maker Cantrell & Cochrane, for $15.2 million. Historian William Boddy describes the sale of the RKO library as "the trigger for the flood of feature films to television in the mid-1950s."On the broadcasting front, RKO briefly owned WEAT and WEAT-TV in West Palm Beach, Florida; they were sold off before the company's next reorganization in 1959. In 1956, WOR became the New York market's number one station with the success of its new "Music from Studio X." Hosted by John A. Gambling, the "easy listening" show was broadcast out of an innovative high-fidelity studio where, according to reports, "each clean new record was touched by a needle only one time." Also in 1956, a new General Tire subsidiary, RKO Distributing, acquired a controlling interest in the Western Ontario Broadcasting Company, which operated CKLW-AM-FM-TV in Windsor, Ontario. The AM station, in particular, served a large swath of the U.S. Rust Belt, centered on the major market of Detroit. CKLW was also yet another shareholder in the Mutual Broadcasting System.
General Tire retained the broadcast rights to the RKO films in the cities where it owned television stations, but it had little interest in the studio itself. After a brief, half-hearted dip into the movie industry, General Tire shut down both production and distribution early in 1957, at the same time the company dropped "Pictures" from its name, shortening it to RKO Teleradio. That summer, it sold its entire, majority stake in the Mutual network to a syndicate led by famed entrepreneur Armand Hammer. By the end of the year, the company had sold off the RKO Pictures studio facilities and backlot. Several unreleased films were put out by other studios and distribution exchanges through the spring of 1959. That same year, RKO Teleradio was renamed RKO General.
A leading broadcaster
The classic RKO General station lineup was based around the WOR stations in New York City, the KHJ stations in Los Angeles, KFRC-AM-FM in San Francisco, WGMS-AM-FM in and near Washington, D.C., the WNAC stations in Boston, the WHBQ stations in Memphis, and the CKLW stations in Windsor/Detroit, which RKO purchased outright in 1963. The company later acquired radio outlets in the major markets of Chicago and Miami–Fort Lauderdale. Between 1960 and 1972, RKO owned a sixth TV station, WHCT, a UHF outlet in Hartford, Connecticut. After the Canadian government tightened rules on foreign ownership of radio and TV stations, RKO General was forced to sell off the Windsor group in 1970. In the mid-1970s, RKO sought to dispense with the FM outlets it had established in some of its oldest markets, while maintaining its presence on the AM dial: San Francisco's KFRC-FM was sold in 1977; around the same time, WHBQ-FM in Memphis was divested as well. An attempted sale of the company's Boston FM station was aborted.In 1959, RKO and NBC reached an agreement on what would have been the highest-priced license transfer in broadcasting history to that time. The deal would have seen RKO acquire NBC's WRC-AM-FM-TV in Washington, swap WNAC-AM-TV and WRKO-FM in Boston to NBC for that company's WRCV-AM-TV in Philadelphia, and sell the WGMS stations in Washington to Crowell-Collier Broadcasting. The deal was an attempt to resolve a controversy surrounding a 1956 swap of NBC and Westinghouse Broadcasting stations in Philadelphia and Cleveland. In 1965, the FCC declared the 1956 trade null and void, effectively reversing the swap, and denied the proposed license transfers on what would prove to be the ironic ground that NBC would enter the Boston market as the product of its dishonesty in the Philadelphia/Cleveland transaction. Coincidentally, RKO's former Boston TV station became an NBC affiliate in 1995 after its longtime affiliate, Westinghouse-owned WBZ-TV, switched to CBS in a precursor to that network's merger with Westinghouse, which includes the aforementioned Philadelphia stations.
RKO General's lineup included some of the leading top 40 and urban contemporary radio stations in North America. In May 1965, KHJ introduced the highly successful Boss Radio variation of the top 40 format. Consultants Bill Drake and Gene Chenault, who had devised the restrictive programming style, soon brought it to RKO's AM stations in San Francisco, Boston, and Memphis, also with great success. The format helped Windsor's CKLW to become the dominant station not only in Detroit, but also in more distant cities such as Cleveland and Toledo, Ohio. Before long, many non-RKO broadcasters around the country were hiring the Boss Radio consulting team to convert them to the format, or simply imitating it on their own. In October 1972, KHJ-FM debuted Drake-Chenault's new automated rock oldies format, Classic Gold, another major hit. As WOR-FM and its later incarnations, rock-formatted WXLO and urban WRKS-FM, RKO's New York FM station pioneered a number of styles, including a more oldies-heavy version of Boss Radio and, later, so-called rhythmic formats. In 1983, it became one of the first major stations to play rap music on a regular basis. In late 1979, the company launched the RKO Radio Network. In 1981, the network began transmitting what has been claimed as the first national talk show delivered by satellite—the six-hour-long America Overnight broadcast out of Dallas and Los Angeles.
As a television broadcaster, RKO General was known as an operator of independent stations. New York's WOR-TV ran without network affiliation during its entire tenure with RKO, as did Hartford's WHCT. Los Angeles's KHJ-TV was a DuMont affiliate until 1955 and independent for its next 34 years under RKO control. Windsor's CKLW-TV was nominally an affiliate of CBC Television, but was programmed largely as an independent. Two of the company's stations were run as network affiliates: Boston's WNAC-TV, originally a CBS affiliate, also aired DuMont and ABC programming during its early years. It became a full-time ABC affiliate in 1961, returning to CBS exclusively in 1972. Memphis's WHBQ-TV was a dual CBS/ABC station at its 1953 launch; it joined ABC full-time in 1956.
The company's independent television stations were known for showing classic films under the banner of Million Dollar Movie. The trend-setting movie package was launched by WOR in 1954, nearly a year before General Tire's acquisition of RKO Pictures and its library. Into the 1980s, Million Dollar Movie—introduced by music from 1952's Ivanhoe and, later, Gone with the Wind—aired RKO productions and those of many other studios as well. In summer 1962, RKO General initiated on WHCT what became the first extended venture into subscription TV service. Until January 31, 1969, the station aired movies, sports events, concerts, and other live performances without commercial interruption. The operation generated income from installation and weekly rental fees for descrambling devices—provided by RKO's partner, Zenith Electronics—as well as individual program charges. During its final decade as a significant business entity, the company would reenter the movie industry that had given it its name, reviving the RKO Pictures brand in 1981 for a series of coproductions and then its own independent projects. This new RKO Pictures was involved in the production of about a dozen feature films, the best known including a 1982 remake of the RKO classic Cat People and the Vietnam War movie Hamburger Hill.
''Weirum v. RKO General, Inc.''
In the summer of 1970, KHJ in Los Angeles held a promotion called the "Super Summer Spectacular". The promotion involved contests in which a disc jockey would drive "a conspicuous red automobile" to a particular area, which an announcer would describe over the air. The first person who found the DJ and fulfilled a specified condition, such as answering a question correctly or wearing a certain item of clothing, would receive a cash prize and be interviewed live.On July 16, 1970, two teenagers, who were following a KHJ DJ in separate cars, drove at speeds up to 80 miles per hour so that they could be closest to him when the next contest was announced. One of the teenagers forced 32-year-old Ronald Weirum's car off the road; Weirum was killed when his car overturned. Weirum's wife and children filed a wrongful death action against both teenagers, the manufacturer of Weirum's car, and RKO General. One of the teenagers settled with the plaintiffs before trial. A jury found the second teenager and RKO General both liable for the accident, awarding the plaintiffs $300,000 in damages. RKO General appealed. In 1975, the California Supreme Court affirmed the jury's verdict that RKO General was legally liable for the accident, holding that there was sufficient evidence to permit the jury to find that the contest's risk of harm to the public, including Weirum, had been "foreseeable":
We need not belabor the grave danger inherent in the contest broadcast by defendant. The risk of a high speed automobile chase is the risk of death or serious injury. Obviously, neither the entertainment afforded by the contest nor its commercial rewards can justify the creation of such a grave risk. Defendant could have accomplished its objectives of entertaining its listeners and increasing advertising revenues by adopting a contest format which would have avoided danger to the motoring public.
The California Supreme Court's ruling in Weirum v. RKO General, Inc. became a touchstone decision on the subject of the duty of care in tort law.
The licensing saga
Troubles begin
In 1965, RKO General applied for renewal of its license for KHJ-TV in Los Angeles. Fidelity Television, a local group, challenged the renewal, charging RKO with second-rate programming. Later, and more seriously, Fidelity claimed that General Tire conditioned its dealings with certain vendors on the basis that they would in turn buy advertising time on RKO General stations. Arrangements of this type, known as "reciprocal trade practices," are considered to be anticompetitive. RKO and General Tire executives testified before the Federal Communications Commission, rejecting the accusations. In 1969, the commission issued an initial finding that Fidelity's claims were correct. That same year, RKO faced a license challenge for WNAC-TV in Boston, again charged with reciprocal trade practices. In 1973, the FCC ruled in favor of RKO in the Los Angeles case, pending findings in the still ongoing investigation of the Boston charges. When RKO applied for renewal of its license for WOR-TV in New York in 1974, the FCC conditioned this renewal on the WNAC-TV case as well.In 1969, the Canadian government decided that Canada's radio and TV stations should be at least 80% Canadian owned. RKO General was not interested in a minority stake. Therefore, in 1970, they sold CKLW-AM-FM-TV to a joint venture of Baton Broadcasting and the CBC. In 1975, the partnership was split with Baton taking over the radio stations and the CBC taking over the TV station with the call letters changed to CBET.
On June 21, 1974, an administrative law judge renewed the WNAC-TV license despite finding that General Tire and RKO General had engaged in reciprocal trade practices. In December 1975, Community Broadcasting, one of the companies competing for the Boston station, asked the FCC to revisit the case, alleging that General Tire bribed foreign officials, maintained a slush fund for U.S. political campaign contributions, and misappropriated revenue from overseas operations. RKO expressly denied these and other allegations of corporate wrongdoing on General Tire's part during a series of proceedings that followed over the next year and a half. On July 1, 1977, however, in settling an action brought by the Securities and Exchange Commission, General Tire admitted to an eye-popping litany of corporate misconduct, including the bribery and slush fund charges. Nonetheless, the RKO proceedings dragged on.
The loss of WNAC-TV
After a half-decade in the most recent round of hearings and investigations, the FCC stripped RKO of WNAC-TV's license on June 6, 1980, finding that RKO "lacked the requisite character" to be the station's licensee. Factors in the decision were the reciprocal trade practices of the 1960s, false financial filings by RKO, and the gross misconduct admitted to by General Tire in nonbroadcast fields.The basis for revocation, however, that would prove most disgusting was RKO's dishonesty before the Commission. In the course of the WNAC-TV hearings, RKO had withheld evidence of General Tire's misconduct, including the fact that the SEC had begun an investigation of the company in 1976. RKO also denied that it had improperly reported exchanges of broadcast time for various services, despite indications to the contrary in General Tire's 1976 annual report. The FCC consequently found that RKO had displayed a "persistent lack of candor" regarding its own and General Tire's misdeeds, thus threatening "the integrity of the Commission's processes." The FCC ruling meant that RKO lost the KHJ-TV and WOR-TV licenses as well.
RKO appealed the decision to the District of Columbia U.S. Court of Appeals. The court upheld the revocation solely on the basis of RKO's lack of candor, writing in its opinion that "he record presented to this court shows irrefutably that the licensee was playing the dodger to serious charges involving it and its parent company." However, the court interpreted the candor issue so narrowly that it applied only to WNAC-TV, and ordered rehearings for the WOR-TV and KHJ-TV licenses. RKO General again appealed, this time to the U.S. Supreme Court. On April 19, 1982, the court refused to review the license revocation. RKO had lost the case for good. As a result of the decision, RKO General sold WNAC-TV's assets to New England Television, a new company resulting from the merger of Community Broadcasting and another competitor for the license, the Dudley Station Corporation. As part of the settlement, the FCC granted a full license to NETV, which renamed the station WNEV-TV. The station has since changed its call letters to WHDH-TV.
Endgame
In February 1983, the FCC began a concerted effort to force RKO out of broadcasting once and for all. It began taking competing applications for all of the company's broadcasting licenses. RKO, however, was about to get a partial, and temporary, reprieve. Congress passed a law, sponsored by New Jersey senator Bill Bradley, requiring the commission to automatically renew the license of any commercial VHF television station relocating to a state without one, “notwithstanding any other provision of law.” The only states qualifying at the time were Delaware and New Jersey, where no commercial VHF outlet had been licensed since 1962. On April 20, 1983, RKO General officially changed WOR-TV's city of license from New York to Secaucus, New Jersey, where it remains today. The FCC required the station to move its main studio to New Jersey and step up coverage of events in the state. Nonetheless, with featured programming such as New York Mets baseball games, WOR-TV maintained its identity as a New York station. Ironically, WOR radio was first licensed to nearby Newark, New Jersey, and didn't move to New York until 1941.A year after the renewal of the WOR-TV license, General Tire reorganized its farflung corporate interests into a holding company, GenCorp, with General Tire and RKO General as its leading subsidiaries. The RKO Radio Networks operation was sold to United Stations. The WOR move did little to relieve the regulatory pressure on RKO General, and GenCorp put the station on the market early in 1986. A joint venture between MCA/Universal and Cox Enterprises outbid Chris-Craft and Group W for control of the station, receiving FCC approval for the purchase in late November. On April 29, 1987, MCA changed the station's call letters to WWOR.
The timing of the WOR-TV sale was fortunate for RKO. In August 1987, FCC administrative law judge Edward Kuhlmann found RKO unfit to be a broadcast licensee due to a long history of deceptive practices. He ordered RKO to surrender the licenses for its remaining two television stations and twelve radio stations. Among other things, he found that RKO misled advertisers about its ratings, engaged in fraudulent billing, lied repeatedly to the FCC about a destroyed audit report, and filed numerous false financial statements. Kuhlmann described RKO's conduct as the worst case of dishonesty in FCC history. After declaring that all of the employees responsible for the misconduct had been fired, GenCorp and RKO entered an appeal, claiming that the ruling was deeply flawed. The FCC advised RKO that it would almost certainly deny any appeals, and persuaded them to sell off their remaining stations to avoid the indignity of having their licenses stripped. RKO's parent company, GenCorp, then battling a hostile takeover bid by an investor group, was hungry for cash as a result of paying a premium on its own shares to stave off the attack. Liquidation of assets on the verge of being lost was the obvious course.