The Minneapolis Star from Minneapolis, Minnesota • Page 11

switch was matter of time THE MINNEAPOLIS STAR 11A Sept. 12, 1978 Long loyalties eroded with NBC slump By JOHN CARMAN Minneapolis Star Staff Writer Donald Swartz answered the phone in his hotel room at the plush Century Plaza Hotel in Los Angeles. It was 6:30 p.m. on Aug. 28.

Robert Fountain, ABC Television's vice-president for affiliate relations, was on the line. Fountain was calling from New York City. "Don, I hate to be the one to break the news to you," Fountain told the 62-year-old Swartz, who is president and general manager of the Twin Cities' KMSP-TV (Channel 9). Fountain pressed on with the bad news. ABC had struck a deal with Hubbard Broadcasting Inc.

Swartz was losing the ABC affiliation in the Twin Cities to Hubbard's KSTP-TV (Channel 5). Swartz was aghast. "You've gotta be kidding," he said. Fountain wasn't kidding. The notice was posted the next morning in the cafeteria at KSTP's headquarters on University Av.

in Minneapolis. At the KMSP plant across from among news personnel, about faulty equipment, about relatively low salaries for members of the on-camera 'news team and about one-man "crews" being sent with reporters to carry recording, lighting and camera equipment. Swartz insists that "our equipment can stand up against anybody else's in the marketplace" and that Channel 9's salaries generally are as good as those at rival stations. KMSP's sporadic efforts to upgrade its news accelerated after Duffy's message to Swartz. Swartz hired a new news director, George Noory, from Detroit, and delegated more authority to him than Noory's predecessors had.

As for ABC, it had been pouring money into network news. It hired Barbara Walters from NBC in 1976, at a $l-million-a-year salary. It put its television sports genius, Roone Arledge, in charge of news. Ar-ledge switched ABC to a multianchor format this summer. ABC's campaign to lure new affiliates was one reason for its increased emphasis on news.

Prospective affiliates in several cities were hanging back because of doubts about ABC News. KSTP, first in the local ratings with its newscasts, could provide ABC with a linchpin to move other affiliates into the ABC camp. In the most recent Arbi-tron ratings, KSTP's 10 p.m. newscasts were five of the 10 most-watched shows in the metropolitan area, A critical link in the chain of events binding KSTP and ABC was provided in February when the FCC ruled that "mother" stations could feed programing to outlying areas by microwave, with the TV signals traveling over a series of relay towers called translators. The Hubbards recognized the FCC's ruling as a chance to expand KSTP's business base.

KSTP's signal could reach TV viewers in the Alexandria, and Eau Claire, areas. Both cities already have NBC affiliates; neither has a station with a primary ABC affiliation. 'hm Vl yT'X Ml1 i 1 i Star Photo by Stormi Greener Stanley E. Hubbard, 81, and son, Stanley S. Hubbard, 45 Swrt7 ui.iiuh; auuping kernel, stunned employees began spreading the word.

Commercial television's profit pie in the Twin Cities, which amounted to $15.2 million before taxes last year, would be sliced differently beginning in March. KSTP would become the 21st station signed by ABC in 30 months. Because of KSTP's industry prestige, and because the Twin Cities area is the nation's 14th biggest market, it was ABC's biggest prize yet, and it could be bait for other ABC acquisitions. SHOCK WAVES SWEPT through the broadcasting industry: anger at NBC's New York headquarters; columns in the Los Angeles Times and the Washington Post; a lead news item in Broadcasting magazine; apprehensive shudders in Tampa and Albuquerque, and bafflement at WCCO-TV (Channel 4), KSTP's archrival. It seemed unthinkable that Stanley E.

Hubbard, 81, and his ambitious son, Stanley S. Hubbard, 45, would sever the 50-year-old ties between KSTP and the NBC network to take up with ABC, the saucy blonde of U.S. broadcasting. Here is what happened: On Dec. 12, 1971, Gen.

David Sarnoff, the Russian immigrant who had fathered network broadcasting in the United States, died quietly at the age of 80 in his Manhattan home. Sarnoff was the founder of NBC. He was keenly respected by his friend and fellow broadcasting pioneer, Stanley E. Hubbard. Hubbard had been an audacious maverick who started KSTP radio in 1928 and joined the fledgling NBC network.

In 1948, when television still seemed a risky venture, Hubbard made KSTP-TV the nation's third television station to go on the air. Later, it became the first station with regularly scheduled news, and the first all-color station. Three years after Sarnoff died, a small news item in The Minneapolis Star said that KSTP-AM was ending its relationship with the NBC radio network. Scarcely anyone noticed, but it might have been a signal. Hubbard and NBC weren't necessarily wedded for life.

Sarnoff's death isn't what caused KSTP's decision two weeks ago to abandon NBC. But it wouldn't have happened if Sarnoff had lived on. In an interview last ABC OFFERED TO LEND the Hubbards money to build the relay system of translator towers. The offers still stands; the Hubbards say they have neither accepted nor rejected it. As the Hubbard-ABC talks gained momentum, alarmed executives at NBC moved to forestall KSTP's switch.

Raymond Timothy, NBC's executive vice-president for affiliate relations, took the lead. NBC argued that KSTP would gain only a marginal number of viewers by broadcasting ABC shows into the Alexandria and Eau Claire areas. Besides, the network said, KSTP could install translators and send NBC programs another direction toward the southwest. NBC also contended that ABC simply wanted to use KSTP's news strengths to bolster ABC's network news. The result would be that KSTP's news ratings and quality would suffer.

The Hubbards were told that if ABC were talking about raising its rates the base figure from which network advertising revenue rebates to affiliates are calculated NBC was ready to meet any offer ABC would make. Finally, NBC executives insisted that ABC's prime-time preeminence would be short-lived. NBC, after all, had hired programing wizard Fred Silverman away from ABC and made him president of NBC. It culminated with an Aug. 23 meeting in Stanley E.

Hubbard's office. Silverman, Timothy and NBC vice-chairman David Adams flew to Minneapolis on an RCA (NBC's parent company) plane to dissuade the Hubbards from abandoning NBC. In 1960, 20th Century-Fox acquired the station. Swartz stayed on as president of United Television, which became a 20th Century-Fox subsidiary and which now runs stations in Salt Lake City and San Antonio. In 1961, ABC moved from WTCN to KMSP.

The network was in the midst of its lean years, and nowhere was it leaner than in its news division. KMSP had the same news status locally perennially it has lagged behind KSTP and WCCO in the news ratings. Then, in recent years, local news operations began to increase in importance. FIRST, THEY MOVED from being loss leaders to, commonly, the most profitable local programing that stations have. Second, the early evening newscasts began to deliver audiences to the networks for their prime-time programs.

Third, local news departments supplied assistance to the network news operations. And fourth, highly publicized news teams have become local stations' badges of identity in their communities. Local news teams are also features of their networks' corporate faces something especially significant in places such as the Twin Cities, where several big national advertisers have their headquarters. One former KMSP employee said of the station's news operation, "It's not the worst affiliate ABC has, by far." Yet numerous interviews with past employees indicate that Channel 9's record and reputation are anything but ideal. A former management-level employee said the station's news budget for one recent year was under $600,000 apparently less than half what KSTP and WCCO spend on news.

Channel 9 sent no one to Florida, where Muriel Humphrey was vacationing when she accepted a seat in the U.S. Senate last winter. It sent no one to Pope County when state troopers were called into the power-line fracas in January. THERE WERE STORIES about the high turnover The Hubbards had been souring on NBC's management when, in March 1977, ABC sent a feeler. A network official merely told the Hubbards that ABC would like to get to know them.

The Hubbards held off. NBC got wind of It quickly. In May 1977, Herbert Schlosser, then president of NBC, buttonholed Stanley S. Hubbard at a convention. Schlosser reminded Hubbard he'd been on the job less than a year and deserved a chance to prove himself.

"That's right, Herb, you do," Hubbard replied. ABC was looking around elsewhere, too. There had been numerous contacts with the Twin Cities' independent station, WTCN-TV (Channel 1 1). And ABC's Fountain discussed affiliation in general terms with his old friend, Paul Hughes, who was managing CBS affiliate WCCO-TV (Channel 4). SCHLOSSER LOST HIS JOB at NBC in January.

Soon afterward, Fountain again contacted the younger Hubbard. This time, Hubbard was ready to talk. He met with Fountain in Florida in February. The next meeting was in April, and several more followed. Swartz, whose station held the ABC contract, knew nothing of the Fountain-Hubbard meetings.

He did know that WTCN was interested in ABC, and in mid-February, he got what amounted to a warning from the network. Swartz was on a business trip to New York when James Duffy, president of ABC Television, chatted with him briefly. Duffy told him other Twin Cities stations Swartz assumed that meant WCCO had been in contact with ABC. Swartz should be concerned, Duffy added. Swartz knew where he was vulnerable: news.

KMSP had been started in 1955 by a local group called Baker Enterprises. Swartz, a former film distributor, headed another group that bought controlling interest in the station two years later. Channel 9, then a nonaffiliated station, was losing $30,000 a week at the time. It was six months before Swartz made any money at KMSP. week, the elder Hubbard said it plainly.

"We wouldn't have done it if Dave Sarnoff was still alive," he said. Hubbard paused and glanced at the long cigar in his hand. "The old people are all gone," he added. TIME AND DEATH eroded the elder Hubbard's fidelity to the network. At the same time, NBC's fortunes were slipping.

It had been a respectable second to CBS in the prime-time ratings for many years. Then, in the spring of 1976, ABC climbed over both to grasp first place. ABC's triumph was a Cinderella story. In October 1943, under pressure from the Federal Communications Commission (FCC), NBC sold its "blue" radio network to Life Saver candy baron Edward Noble. The modern NBC is the descendant of NBC's other radio grouping, the "red" network.

Noble's acquisition was renamed the American Broadcasting Co. At its hub were two wholly owned radio stations, and part of a third. Broadcasting at the time was on the brink of the television age, but development of the new medium was being deferred until after World War II. Television would require a huge infusion of capital, which was problem enough for ABC. The FCC made things worse in 1948 when it slapped a "freeze" order on the industry and stopped granting new licenses and TV construction permits.

The freeze wasn't lifted until 1952. NBC, CBS and their affiliates had already snapped up most of the desirable VHF channel allocations (channels 2 through 13). ABC was left unrepresented in many cities. In others, it was stuck with UHF tions. TRANSITION TO COLOR broadcasting, requiring fresh millions of dollars, compounded ABC's handicaps.

The young network scraped by, losing money through nearly all of the 1950s and 1960s. During the late 1960s and early 1970s, ABC persisted In devising Droerams for a young and, it claimed, SILVERMAN DELIVERED a pep talk. All three urged the Hubbards at least to delay making a decision for several months. Silverman then left early to take the RCA plane to California. The Hubbards later drove Timothy and Adams to the airport.

The NBC executives returned to New York with the impression that the Hubbards hadn't made a final decision. The elder Hubbard especially seemed uncertain. On Friday, Aug. 25, top Hubbard executives were sent home for the weekend with instructions to mull over the situation. The Hubbard corporate family reassembled on Monday.

Stanley S. Hubbard says it was unanimous the move was on to ABC. That afternoon, the Hubbards placed phone calls to the two networks. The Hubbards say one important factor in their decision was the financial performance of ABC's five network-owned and -operated stations. They include Chicago's WLS-TV sometimes called the nation's most profitable station New York's WABC-TV and Los Angeles' KABC-TV.

Networks traditionally cultivate their future top managers at the stations they own. Another inducement was the fact that KSTP's Iowa-based news consultant, Frank Magid, also has ABC News as a client. Magid has had great influence in the development of KSTP's news format; the Hubbards, to put it mildly, like his work. Also, the Hubbards think that Silverman is overrated. "They've got fine people at NBC," Stanley S.

Hubbard said in an interview last week. "We just don't think one guy is going to turn it around overnight." HIS FATHER ADDED, "They're (NBC) the third network. Now, how long can you continue that way? On the other hand, with the first network nobody could ever touch us. It's a pretty good insurance poli-cy." The news broke on Tuesday morning, Aug. 29.

There were immediate suspicions in far corners of the nation. In Tampa-St. Petersburg, the Hubbards own a UHF station with no network affiliation. In Albuquerque, they own a VHF station affiliated with NBC. Duffy, the ABC Television president, phoned Todd Spoeri, general manager of ABC affiliate WLCY-TV in Tampa-St.

Petersburg, to assure him his affiliate status was secure. Fountain made a similar call to Max Sklower, general manager of the ABC affiliate in Albuquerque, KOAT-TV. There was no "extra" deal. NBC was sure it lost KSTP because of the Hubbards' desire to expand toward Alexandria and Eau Claire. The network resented the fact that its reputation suffered a bloody nose nationally.

"ABC is promoting the idea that this came as a sudden shock, that we were making desperate efforts to persuade the station to stay with us, and that the station moved over because they regarded ABC as the network with the best management which of course is a direct slap at Silverman," said one top NBC executive. "Well, I can tell you with absolute certainty that if it weren't for the peculiarities of coverage, there wouldn't be a dream of their going with ABC." ABC officials were, in fact, gloating. "We won't just be No. 1 in the Twin Cities," one of them said. "We'll be God." kl Silverman Timothy Fred Silverman sends hopes soar-iog at NBC: Page IOC.

untapped market. Its determination finally paid off with shows like "Mod Squad" and, later, "Happy Days," "Starsky Hutch" and "Charlie's Angels." But ABC still had problems. It trailed NBC and CBS in the number of affiliates carrying the network shows and advertisers can't sell goods to people who can't see their commercials. Affiliates with UHF dial positions didn't help, either. Beginning in 1976, ABC disrupted the relative stability of network affiliate line-ups.

Its affiliate relations division began wooing attractive stations that were aligned with the old-guard networks. As a result, ABC now has 200 affiliates 38 of them UHF stations. NBC has 211. CBS says only that it has "about 200" affiliates. ABC lured KRGV-TV in Weslaco, near Brownsville, from NBC in March 1976.

Next came the CBS affiliate KEVN-TV in Rapid City, S.D. Then it got stations in Providence, San Diego, Baton Rouge, Charlotte and other cities to switch to ABC. BUT THAT'S JUST the beginning. "ABC is interested in affiliates all over," said an NBC source. "There are about 20 or 30 places where they would love to get in where they have a very weak affiliate, or they have a UHF, or they're not in the market at all.

"We know, and the world knows, and CBS knows, and ABC knows that we know, that we can identify 20 or 30 markets where ABC would like to improve its position. And in each of these we know that AM t.p- W.i Associated Press 1 1 they're always pushing." Gen. David Sarnoff, NBC founder, died in 1971 I i.