New Worlds, One Brave: The Way It Was, 27 January

1927---A concert violinist turned talent agent, Arthur Judson, and his partner George Coats launch United Independent Broadcasters, Inc. Within less than two years it will become William S. Paley’s Columbia Broadcasting System (CBS)---and the story will prove anything but simple. We bring you now to invaluable radio historian Elizabeth McLeod.

. . . [T]he more you look at [Judson's and Coats's] activities during this period, the more you have to wonder how they managed to stay out of jail, let alone how they managed to stay in business.

Judson was originally less interested in starting a radio network than in finding a new outlet for his roster of musical artists.* His first venture in this direction was the Judson Radio Program Corporation, formed in 1926. His idea was to act as a middleman between sponsors and networks -- an independent packager of radio programming, using talent under contract to the company. He approached David Sarnoff with this idea in the fall of 1926, but was shown the door almost immediately---the better for Sarnoff to help himself to the idea, and use it as the basis for the NBC Artists Bureau.

Judson and his associate Coats then decided to try to start a network of their own, and they had everything they needed to do it except money, radio stations, and any knowledge of the broadcasting business. So they went right ahead and had certificates printed for stock shares in United Independent Broadcasters and divided them up among themselves -- and then without the slightest idea of how to start a radio network, Coats hit the road to find affiliates. The idea was that UIB would pay each affiliate a flat rate of $500 for a guarantee of ten hours per week of broadcast time---and most stations of this era being shoestring operations, most of them jumped at the chance---even though the network didn't exist anywhere but on paper. With nothing but promises, Coats signed up a dozen affiliates---but still didn't have any way to deliver on the promises.

The big problem was raising the money to lease the network lines from AT&T---and this was where Coats got lucky. In the spring of 1927, Coats managed to convince the president of the Columbia Phonograph Corporation to buy $163,000 worth of time on the new network---and pay cash up front for it. The idea was that Columbia Phonograph would then resell this time, in ten-hour units to other clients. The Columbia Phonograph Broadcasting Company was set up as a paper corporation to handle this work---with its stock divided up among a number of additional investors, none of whom had anything to do with Judson, Coats, or UIB. The only link between the two corporations was the contract for Columbia to buy the time from UIB.

Columbia handed over the money with no guarantee that Coats and Judson would ever get the network off the ground, but they were able---perhaps with a bit of political arm twisting---to get AT&T to lease the necessary lines. Meanwhile, Coats and Judson finally realized they knew nothing about broadcasting, and sold Major J. Andrew White 200 shares of stock in UIB in order to get access to his expertise. However, even White was unable to do anything meaningful in the way of lining up clients because of the clumsy arrangement with Columbia---no sponsor wanted to share sponsorship credit with another company for its programs. It was perhaps because of this that "Phonograph" was apparently not used on air.

When the new network finally signed on, there were three corporations involved---Judson Radio Program Corporation, which assembled the programming; United Independent Broadcasters, which arranged for the network lines; and, Columbia Phonograph Broadcasting Company, which fronted the cash and made its contract talent available for broadcasting. None of these three corporations had any control over the others, and all were most concerned with their own interests. Columbia Phonograph lost $100,000 on the project over the first month of the project, sold no sponsors whatsoever, and dropped out. That cut off the cash flow before the network was a month old. They did, however, leave their name behind---figuring any advertising is good advertising---and also retained the block of time they had bought, to be used for their own "Columbia Phonograph Hour," at that time the only sponsored program on the chain.

It was here that George "Kingfish" Coats saved the network. With a mountain of debt, no source of income, no future prospects, and no assets other than a pile of essentially worthless stock certificates, Coats sold a Philadelphia millionaire named J. H. Louchheim an interest in the company and got him to agree to put up the money to keep it running. Loucheim then pooled his shares with a minority interest Coats had sold to the Levy brothers---owners of WCAU---and took a controlling interest in UIB, with Judson and Coats retaining most of the rest of the stock, as well as control of the Judson Radio Program Corporation, which had a five-year contract to produce programs for the network. A few sponsors signed on---very few---but the losses continued to mount.

Over the next eight months, Louchheim flushed a fortune into UIB, and lost it all---although he got plenty of additional stock certificates to show for his investment. Finally, in September of 1928, Loucheim---by this time ready to kill Coats on sight---jumped at the chance to dump the whole soggy mess into the lap of a snappy-dressing 27-year-old millionaire whose family's company---Congress Cigar Co.---was one of the few Columbia sponsors. William Paley then convinced his father and several of his uncles to join him in the venture---and took a three month leave of absence from the cigar business to see if the new purchase was worth anything.

One of the first things the new owner did was clean up the messy corporate structure. The Columbia Broadcasting Company was dissolved, but its name was kept---and on 1/3/29, United Independent Broadcasters officially changed its name to Columbia Broadcasting System Inc. Judson and Coats retained Judson Radio Program Corporation, along with their minority interest in the new CBS---but from here on, Paley was in control. The network lost over $380,000 thru the end of 1928, but it would never have another losing year.

---Elizabeth McLeod, "CBS: In the Beginning," 20 September 2002.

1956---Thirty-nine years to the day that CBS's UIB predecessor was founded formally, the first of a two-part adaptation of Aldous Huxley's futuristic tale of benign tyranny, Brave New World---with Huxley himself as the narrator---launches The CBS Radio Workshop.

The series will live for two years but it will earn respect as one of the most ingenious programs in radio history, regardless of the fact that it arrives as classic network radio is, so to say, rounding third and heading for home.

CHANNEL SURFING . . .

1948: HIT AND RUN---An insider about to expose the commission's involvement in a liquor smuggling racket he wants to leave is run down and killed by a potentially stolen taxicab---the moment he crosses the street from the Daily Sentinel offices, after exposing the racket to Britt Reid (Jack McCarthy) and Lenore Case (Lee Allman), on tonight's episode of The Green Hornet. (ABC.) Also starring Raymond Hayashi (as Kato), Gil Shea (as Mike Axford).

1950: WELLMAN'S NOSE AND THE CHARTER DAY CEREMONIES---The professor and Victoria (real-life husband and wife Ronald Colman and Benita Hume) can't just shake off the mishap of board of governors chairman Wellman's broken nose as a dinner guest: he's the key man for Ivy's Charter Day ceremonies the day after. Meanwhile, Victoria can't just shake off a magazine reporter assigned to the festivities who can't help reminiscing to her about what her film-days visit to the troops on Anzio meant to them, on tonight's edition of The Halls of Ivy. (NBC.) Also starring: Herbert Butterfield, Gloria Gordon, Willard Waterman.

1950: JUNIOR IS IN LOVE---Riley (William Bendix) and Peg (Paula Winslow) learn the hard way that it wasn't Junior (Scott Beckett) in his bed early every night this week. The evidence they misinterpret includes a bracelet he inadvertently left among the bric-a-brac he used to fake his sleeping form, but they also misinterpret the manner in which he acquired it---and why---on tonight's edition of The Life of Riley. (NBC.) Also starring: Sharon Douglas, Conrad Binyon.