The American Broadcasting Company (ABC) is an American English-language commercial broadcast television and radio network owned by the Walt Disney Company through its subsidiary, Disney Entertainment. Along with NBC and CBS, ABC is one of the traditional "Big Three" American television networks.
ABC was founded as a radio network in 1943 as the successor to the NBC Blue Network. It extended its operations to television in 1948, following in the footsteps of established broadcast networks CBS, NBC, and the lesser-known DuMont. In the mid-1950s, ABC merged with United Paramount Theatres (UPT), a chain of movie theaters that formerly operated as a subsidiary of Paramount Pictures. In the 1980s, after purchasing an 80 percent interest in cable sports channel ESPN, the network's corporate parent, American Broadcasting Companies, Inc., merged with Capital Cities Communications, owner of several print publications, television, and radio stations. Most of Capital Cities/ABC's assets were purchased by Disney in 1996.
Blue Network (1927–1945)
In the 1930s, radio in the United States was dominated by three companies: the Columbia Broadcasting System (CBS), the Mutual Broadcasting System, and the National Broadcasting Company (NBC). The last was owned by electronics manufacturer Radio Corporation of America (RCA), which owned two radio networks that each ran different varieties of programming, NBC Blue and NBC Red. The NBC Blue Network was created in 1927 for the primary purpose of testing new programs on markets of lesser importance than those served by NBC Red, which served the major cities, and to test drama series.
In 1934, Mutual filed a complaint with the Federal Communications Commission (FCC) regarding its difficulties in establishing new stations in a radio market that was already being saturated by NBC and CBS. In 1938, the FCC began a series of investigations into the practices of radio networks and published its Report on Chain Broadcasting in 1941. This report recommended that RCA give up control of either NBC Red or NBC Blue. At that time, the NBC Red Network was the principal radio network in the United States and, according to the FCC, RCA was using NBC Blue to eliminate any hint of competition. Having no power over the networks themselves, the FCC established a regulation forbidding licenses to be issued for radio stations if they were affiliated with a network which already owned multiple networks that provided content of public interest.
Once Mutual's appeals against the FCC were rejected, RCA decided to sell NBC Blue in 1941, and gave the mandate to do so to Mark Woods. RCA converted the NBC Blue Network into an independent subsidiary, formally divorcing the operations of NBC Red and NBC Blue on January 8, 1942, with the Blue Network being referred to on-air as either "Blue" or "Blue Network". The newly separated NBC Red and NBC Blue divided their respective corporate assets. Between 1942 and 1943, Woods offered to sell the entire NBC Blue Network, a package that included leases on landlines, three pending television licenses (WJZ-TV in New York City, KGO-TV in San Francisco, and WENR-TV in Chicago), 60 affiliates, four operations facilities (in New York City, Chicago, Los Angeles, and Washington, D.C.), contracts with actors, and the brand associated with the Blue Network. Investment firm Dillon, Read & Co. offered $7.5 million to purchase the network, but the offer was rejected by Woods and RCA president David Sarnoff.
Edward J. Noble, owner of Life Savers candy, drugstore chain Rexall, and New York City radio station WMCA, purchased the network for $8 million. According to FCC ownership rules, the transaction, which was to include the purchase of three RCA stations by Noble, would require him to resell WMCA with the FCC's approval. The Commission authorized the transaction on October 12, 1943. Soon afterward, the Blue Network was purchased by the new company Noble founded, the American Broadcasting System. Noble subsequently acquired the rights to the American Broadcasting Company name from George B. Storer in 1944. Additional broadcasting rights to the American name, including from the moribund American Network, were obtained at the cost of $10,000."Realigned Blue Slated to Be ABC Network", Broadcasting, September 25, 1944, page 1. The parent company adopted the corporate name American Broadcasting Companies, Inc. Woods retained his position as president and CEO of ABC until December 1949, and was subsequently promoted to vice chairman of the board before leaving ABC altogether on June 30, 1951.
Meanwhile, in August 1944, the West Coast division of the Blue Network, which owned San Francisco radio station KGO, bought Los Angeles station KECA from Earle C. Anthony for $800,000.Billboard, March 17, 1945, p. 6. Both stations were then managed by Don Searle, the vice-president of the Blue Network's West Coast division.
Entry into television (1945–1949)
The ABC Radio Network created its audience slowly. In 1946 it acquired Detroit radio station WXYZ from King-Trendle Broadcasting for a little less than $3 million (the station remained under ABC ownership until 1984).
ABC became an aggressive competitor to NBC and CBS while continuing NBC Blue's traditions of public service. It aired symphony performances conducted by Paul Whiteman, performances from the Metropolitan Opera, and jazz concerts aired as part of its broadcast of The Chamber Music Society of Lower Basin Street announced by Milton Cross. The network also became known for such suspenseful dramas as Sherlock Holmes, Gang Busters and Counterspy, as well as several mid-afternoon youth-oriented programs. However, ABC made a name for itself by using the practice of counterprogramming, with which it often placed shows of its own against the offerings of NBC and CBS, pre-recording its programming with the use of the Magnetophon tape recorder, technology acquired by the United States from post-WWII Germany. With the help of the Magnetophon, ABC was able to provide its stars with greater freedom in terms of time, and also attract several big names, such as Bing Crosby, at a time when NBC and CBS did not allow pre-taped shows.
While its radio network was undergoing reconstruction, ABC found it difficult to avoid falling behind in the new medium of television. To ensure itself a place, ABC submitted five applications for television station licenses in 1947, one for each market where it owned and operated a radio station (New York City, Los Angeles, Chicago, San Francisco, and Detroit). These applications all requested for the stations to broadcast on VHF channel 7, as Frank Marx, then ABC's vice-president of engineering, thought that the low-band VHF frequencies (corresponding to channels 2 through 6) would be requisitioned from broadcasting use and reallocated for the U.S. Army.
The ABC television network was launched on April 19, 1948, and picked up its first primary affiliate, WFIL-TV in Philadelphia, which would later become WPVI-TV. The first program ever broadcast on the network was On the Corner, featuring satirist Henry Morgan. Other stations carrying the original broadcast were WMAR-TV in Baltimore, WMAL-TV in Washington, D.C., and WABD, the DuMont station in New York City, since ABC's New York station had yet to sign on.
The network's flagship owned-and-operated station, WJZ-TV in New York City, signed on the air on August 10, 1948, with its first broadcast running for two hours that evening.Billboard, August 21, 1948, p. 3. ABC's other owned-and-operated stations launched over the course of the next 13 months: WENR-TV in Chicago signed on the air on September 17,Billboard, September 27, 1952, p. 5. while WXYZ-TV in Detroit went on the air on October 9, 1948. In October 1948, as a result of an influx of television station license applications that it had issued as well as a study it undertook on the use of the VHF spectrum for broadcasting purposes, the FCC implemented a freeze on new station applications. However, KGO-TV in San Francisco, which had received its license prior to the freeze, made its debut on May 5, 1949.Billboard, April 23, 1949, p. 120. On May 7, 1949, Billboard revealed that ABC had proposed an investment of $6.25 million, of which it would spend $2.5 million to convert of land in Hollywood into what would become The Prospect Studios, and construct a transmitter on Mount Wilson, in anticipation of the launch of KECA-TV,Billboard, May 14, 1949, p. 13. which began operations on September 16.Billboard, July 30, 1949, p.8.Billboard, September 16, 1950, p. 5.
In the fall of 1949, ABC found itself in the position of an outsider, with less coverage than CBS and NBC, even though it was on par with them in some major cities and had a headstart over its third rival at the time, the DuMont Television Network. On November 3, 1949, The Ruggles starring Charlie Ruggles debuted, becoming the first family sitcom on the ABC network.
Before the freeze ended in 1952, there were only 108 television stations in the United States; a few major cities (such as Boston) had only two television stations, many other cities (such as Pittsburgh and St. Louis) had only one, and still many others (such as Denver and Portland) did not yet have television service. The result was an uneven transition period where television flourished in certain areas and network radio remained the sole source of broadcast entertainment and news in others.
American Broadcasting-Paramount Theatres
At the end of 1949, movie theater operator United Paramount Theatres (UPT) was forced by the U.S. Supreme Court to become an independent entity, separating itself from Paramount Pictures. For its part, ABC was on the verge of bankruptcy, with only five owned-and-operated stations and nine full-time affiliates. Its revenues, which were related to advertising and were indexed compared to the number of listeners/viewers, failed to compensate for its heavy investments in purchasing and building stations. In 1951, a rumor spread that the network would be sold to CBS. In 1951, Noble held a 58% ownership stake in ABC, giving him $5 million with which to prevent ABC from going bankrupt; as banks refused further credit, that amount was obtained through a loan from the Prudential Insurance Company of America.
Leonard Goldenson, the president of UPT (which sought to diversify itself at the time), approached Noble in 1951 on a proposal for UPT to purchase ABC. Noble received other offers, including one from CBS founder William S. Paley; however, a merger with CBS would have forced that network to sell its New York City and Los Angeles stations at the very least. Goldenson and Noble reached a tentative agreement in the late spring of 1951 in which UPT would acquire ABC and turn it into a subsidiary of the company that would retain autonomy in its management. On June 6, 1951, the tentative agreement was approved by UPT's board of directors. However, the transaction had to be approved by the FCC because of the presence of television networks and the recent separation between Paramount and UPT. Insofar as Paramount Pictures was already a shareholder in the DuMont Television Network, the FCC conducted a series of hearings to ensure whether Paramount was truly separated from United Paramount Theatres and whether it was violating antitrust laws.