CBS Inc.

views updated May 23 2018

CBS Inc.

51 West 52nd Street
New York, New York 10019
U.S.A.
(212) 975-4321

Public Company
Incorporated: 1927 as United Independent Broadcasters, Inc.
Sales: $2.78 billion
Employees: 6,500
Stock Index: New York Pacific

CBS, the world’s second-oldest broadcasting network, has a strong tradition of innovative programming and technological contributions. The company’s reputation was built on the pioneering work done by CBS’s news division and on the stable of celebrities the company acquired over the years. In recent decades, however, the network has de-emphasized news, and programming has suffered from cost-cutting measures and attempts to lure less-mature viewers.

In the late 1920s, Arthur Judson, the impresario of the Philadelphia and New York Philharmonic orchestras, approached the Radio Corporation of America’s National Broadcasting Company (NBC), then the only radio broadcaster in the United States, with an idea to promote classical music by broadcasting orchestra performances. NBC declined. Undaunted, in 1927 Judson founded his own broadcasting company, which he called United Independent Broadcasters, Inc., or UIB.

Lacking the strong capital base NBC had in its parent, RCA, UIB struggled to stay afloat for several months. That summer, however, Judson found a rich partner in Columbia Phonograph, a leader in the phonograph record business. For $163,000 Columbia Phonograph bought UIB’s operating rights. The new company was named the Columbia Phonograph Broadcasting System.

Columbia Phonograph sold UIB’s operating rights back to the broadcasting company in 1928 however, apparently because the phonograph company was frustrated by a lack of advertiser loyalty. The broadcasting company’s name was then shortened to the Columbia Broadcasting System (CBS) and its finances were greatly enhanced that year when William Paley invested $400,000 in its stock.

Paley was the son of a Russian immigrant who owned a cigar company. It was assumed that Paley would take over his father’s business, but he was drawn to the broadcasting business. Quite early in its history CBS began to earn a reputation as the network with class—a reputation often attributed to Paley’s influence.

At the time of Paley’s CBS stock purchase, the company consisted of only 16 affiliated radio stations and possessed no stations of it own. Paley, who was quickly elected president of the company, tripled earnings in his first year. This success was accomplished by offering prospective affiliates the network’s entire unsponsored schedule at no cost, in contrast to NBC, which charged affiliates for all programs. In return for free programs, affiliates gave CBS airtime for sponsored broadcasts, allowing CBS to assure contracted sponsors that airtime would be available. Within a decade, CBS added almost 100 stations to its network. Since the number of affiliates a network has determines the number of people it can reach, which in turn determines what a sponsor is charged, CBS was soon on firm financial footing. By 1930, CBS had 300 employees and total sales of $7.2 million.

Although CBS fared well, NBC continued to dominate the entertainment-oriented broadcasting industry. Paley therefore decided to explore the potential for network news. Paley viewed news and public affairs as a quick way for CBS to gain respectability. In 1930 he hired Ed Klauber to establish a news and public affairs section and in 1933 the Columbia News Service, the first radio network news operation, was formed. By 1935 CBS had become the largest radio network in the United States.

In 1938 Edward R. Murrow began his career at CBS as head of the network’s European division. The first international radio news broadcast was established later that year with Murrow reporting from Vienna, William L. Shirer reporting from London, and others reporting from Paris, Berlin, and Rome. With these broadcasts CBS began the practice of preempting regular programming. These interruptions were planned for prime listening time—8:55 to 9:00 p.m. — and were intended to give the network a “statesmanlike” image.

CBS entered the record business in 1938 with the purchase of the American Record Corporation. Later called the Columbia Recording Corporation, it soon became an industry powerhouse.

By the beginning of World War II CBS employed more than 2,000 people, had annual sales of some $36 million, and had more than 100 affiliate stations throughout the United States. In 1940 the world’s first experimental color-television broadcast was made from a CBS transmitter atop the Chrysler Building in New York City and received in the CBS Building at 485 Madison Avenue. And in 1941 CBS began weekly broadcasts of black-and-white television programs. That year the government also ordered NBC to divest itself of one of its two networks, which eventually gave rise to the American Broadcasting Company (ABC).

After the war CBS embarked on a raid of NBC stars. Though CBS continued to expand, NBC was still the industry leader. Under Paley’s direction, CBS lured stars away from NBC by devising a plan in which the stars could be taxed as companies rather than as individuals, greatly reducing their taxes. Jack Benny was the first major star to leave NBC for CBS; soon Edgar Bergen and Charlie McCarthy, Amos ’n Andy, Red Skelton, and George Burns and Grade Allen followed. Within a year CBS took the lead from NBC in programming, advertising revenues, and profits—a lead it maintained as the two networks expanded into television.

In 1946 CBS submitted its color-television broadcasting system to the Federal Communications Commission (FCC) for approval. CBS was confident that its color system would be approved, even though existing black-and-white sets could not receive CBS’s color CBS broadcasts, because there were fewer than 25,000 TV sets in the United States. The FCC, however, did not approve the system, calling it “premature.” In the meantime, RCA had developed a color system that was compatible with existing television sets. The CBS system produced a better picture, however, and in 1950, when both CBS and RCA submitted their systems to the FCC for approval, only the CBS system was approved. But RCA appealed the decision, preventing CBS from marketing its system and gaining time to improve the quality of its own system. In 1953 the FCC reversed and ruled in favor of the RCA system since more than 12 million black-and-white TV sets had been sold by that time, making compatibility a more important issue.

During the 1950s censorship became an issue in the broadcasting industry. The networks have always been sensitive to censorship pressure because the FCC can revoke a station’s license if it does not serve the “public interest responsibly”. In addition, advertisers may refuse to sponsor a program which they find offensive, and network affiliates can pressure the network into discontinuing a controversial program. Censorship surfaced at all the networks during the early 1950s as Senator Joseph McCarthy’s anticommunist campaign pressured networks and sponsors to blacklist certain actors and writers who were suspected of having left-wing associations. Though CBS was considered the most liberal of the networks, it required 2,500 employees to sign a “loyalty oath” which stated that they “neither belonged to nor sympathized with” any communist organization. In 1954 two CBS News commentators began to expose McCarthy’s unethical behavior on the television show “See It Now.” These broadcasts helped to discredit the communist paranoia, but proved so controversial themselves that CBS eventually canceled the program.

By this time there were 32 million television sets in the United States, and television had become the biggest advertising medium in the world. The period was marred, however, by a 1956 TV quiz scandal in which CBS’s “$64,000 Question” was shown to be rigged.

In late 1950s Paley hired James Aubrey as president of CBS. Aubrey, who purportedly thought that television programming had become too “highbrow,” introduced such shows as “The Beverly Hillbillies,” “Mr. Ed,” and “The Munsters.” These shows were extremely popular; in his first two years with CBS, Aubrey doubled the network’s profits.

During the early 1960s, CBS embarked on a diverse acquisitions campaign. Before 1964 CBS had made only two acquisitions in its history, but from that year on, the company made acquisitions almost every year. In 1964 the network purchased an 80% interest in the New York Yankees baseball team, which it sold ten years later. Acquisitions in the fields of musical instruments, book publishing, and children’s toys were made throughout the 1960s.

By the end of the decade CBS had 22,000 employees and net profits of over $64 million. The network’s most notable programming innovation of the decade came in 1968 with the debut of “60 Minutes,” a television news magazine. The 1970s were a period of innovative primetime programming. In 1971 “All In The Family” debuted on CBS and in 1972 both “M*A*S*H” and “The Waltons” debuted. But it was a decade of managerial turmoil.

In 1971 Charles T. Ireland became the president of CBS. He was replaced a year later by Arthur Taylor, who held the position for four years. Taylor was relieved of his duties when the network placed second in the Nielsen ratings for the first time in 21 years, and was replaced by John D. Backe, who had been president of the CBS publishing division since 1973.

Meanwhile, in 1976 CBS relieved reporter Daniel Schorr of all duties after he leaked a secret House Intelligence Committee report on the Central Intelligence Agency to the Village Voice. He resigned from CBS several months later. And in April, 1979 in a case involving CBS and two employees—correspondent Mike Wallace and producer Barry Lando—the Supreme Court ruled that journalists accused of libel may be forced to answer questions about their “state of mind” or about conversations with colleagues during the editorial process. The ruling was a victory for former Lieutenant Colonel Anthony E. Herbert, who contended that he was libeled in a “60 Minutes” broadcast that aired in 1973.

In 1979 CBS finally began to divest itself of some of its diverse holdings, selling at least one business every year for the next few years. A year later CBS regained dominance in the prime-time TV ratings, a position held by ABC since 1976. However, one week after CBS took this lead President Backe was forced to resign. He was replaced by Thomas H. Wyman, who had been a vice president at Pillsbury.

CBS went to court again in 1982 after it aired the documentary “The Uncounted Enemy: A Vietnam Deception,” which began a long-running battle with retired army General William Westmoreland, who filed a $120 million libel suit against the network. This fight ended several years later when Westmoreland withdrew his suit on a promise from CBS that the network would publicly attempt to restore his character.

By the early 1980s CBS operations fell into six main divisions: the broadcast group, which was concerned with programming and production of shows for the network, theaters, home video, and cable TV; the records group; the publishing group; the toys division; the technology center, which was responsible for research and development of new technologies; and various corporate joint ventures, including CBS/FOX Company, a joint venture with Twentieth Century Fox to manufacture and distribute videocassettes and videodiscs. In 1986 CBS sold its book-publishing business to Harcourt Brace Jovanovich, Inc. for $500 million, and that same year the company sold all of its toy businesses.

In 1983 CBS, Columbia Pictures, and Home Box Office joined forces to form Tri-Star Pictures, a motion picture production and distribution company. By 1984 Tri-Star had released 17 full-length motion pictures, nine of its own production. But in 1985 CBS sold its interest in Tri-Star Pictures. Another experiment was Trintex, a commercial electronic service that allowed people access to news, weather, and sports information; financial and educational data; and home shopping and banking from a personal computer terminal. This service, initiated in 1984, was the combined effort of CBS, IBM, and Sears, Roebuck. Yet again, CBS withdrew from the venture, in 1986.

In 1985 Ted Turner, owner of Turner Broadcasting System, announced his intention to take over CBS. In order to prevent this CBS swallowed a $954.8 million poison pill by purchasing 21% of its own outstanding stock.

In September, 1986 Larry Tisch replaced Tom Wyman as CEO of CBS. Tisch was the chairman of Loew’s Corporation, which owned about 25% of CBS stock at the time. Following a power struggle between Tisch and Wyman, who had remained as president, William S. Paley returned as chairman of the board and Wyman was forced to resign.

Although Tisch was originally to serve only as interim CEO, within four months it was clear that the job was his. He immediately began cutting costs at the network. Tisch cut $30 million from the news division budget, tried to reduce programming costs, cut hundreds of jobs, and sold a number of CBS publishing concerns. He also sold CBS Records to the Sony Corporation in 1987 for $2 billion, even though the subsidiary, which boasted top stars like Michael Jackson and Bruce Springsteen, had been a perennial money-maker for the company.

Tisch was roundly criticized for selling the number-one record company in the industry when the music business appeared to be healthy, and for trying to cut television-programming costs at a time when cable TV and other pay services were seducing viewers by offering a broader and higher-quality selection. CBS’s prime-time hits were getting old; in 1987 the network came in last in the Nielsen ratings. To make matters worse, CBS viewers tended to be older than the heavy-spending audience advertisers look for.

In 1988 Tisch, under fire from the CBS board and from affiliate stations for lacking any long-term strategy, appointed 38-year-old Kim LeMasters to head the network’s entertainment division. LeMasters’ task was to find new programming that would appeal to younger audiences.

CBS continues the struggle to turn around its ratings slump. But it remains to be seen whether the network can win back large audiences, or whether it can remain independent in this era of mergers in the entertainment industry.

Principal Subsidiaries

Aspenfair Music Inc.; Cadisco Inc.; CBS/Australia Pty. Limited; CBS Broadcast International of Canada Limited; CBS Columbia C.A. (Venezuela); CBS/Columbia Inernacional, S.A. (Mexico); CBS Dischi S.p.A. (Italy); CBS Discos del Peru S.A.; CBS Epic (Thailand) Limited (60%); CBS FMX Stereo Inc.; CBS/FOX Company (50%); CBS United Kingdom Limited; CBS Urban Renewal Corporation; CJG Productions, Inc.; Columbia Television, Inc.; Discos CBS Industria e Comercio Ltda. (Brazil); Discos CBS International de Puerto Rico Inc.; Discos CBS S.A.I.C.F. (Argentina); Discos CBS, S.A. (Colombia); Filmvision Inc.; Houston Motion Picture Entertainment, Inc.; Mainstream Communications Corp. (50%); Vista Marketing Inc.; Winter-land Concessions Company (50%).

CBS Inc.

views updated May 23 2018

CBS Inc.

51 West 52nd Street
New York, New York 10019
U.S.A.
(212) 975-4321
Fax: (212) 975-7534

Public Company
Incorporated: 1927 as United Independent Broadcasters, Inc.
Sales: $3.04 billion
Employees: 6,160
Stock Exchanges: New York Pacific

CBS, the world’s second-oldest broadcasting network, has a strong tradition of innovative programming and technological contributions. The company’s reputation was built on the pioneering work of its news division and on the stable of celebrities the company has acquired over the years. In the latter part of the twentieth century, however, the network has de-emphasized news, and programming has suffered from cost-cutting measures and attempts to lure younger viewers.

In the late 1920s Arthur Judson, the impresario of the Philadelphia and New York Philharmonic orchestras, approached the Radio Corporation of the National Broadcasting Company (NBC), then the only radio broadcaster in the United States, with an idea to promote classical music by airing orchestra performances; NBC declined. Undaunted, Judson founded his own broadcasting company, which he named United Independent Broadcasters, Inc. (UIB), in 1927.

Lacking the strong capital base NBC was afforded by its parent, RCA, UIB struggled to stay afloat for several months. In the summer of 1927, however, Judson found a rich partner in Columbia Phonograph, a leader in the phonograph record business. Columbia Phonograph bought UIB’s operating rights for $163,000; the new company was named the Columbia Phonograph Broadcasting System.

Columbia Phonograph sold UIB’s operating rights back to the broadcasting company in 1928, however, apparently because the phonograph company was frustrated by a lack of advertiser loyalty. The broadcasting company’s name was then shortened to the Columbia Broadcasting System (CBS), and its finances were greatly enhanced that year when William Paley—the son of a Russian cigar company owner who eventually helped CBS earn its reputation as a classy network—invested $400,000 in the company’s stock.

At the time of Paley’s CBS stock purchase, the company consisted of only 16 affiliated radio stations and possessed no stations of it own. Paley, who was quickly elected president of the company, tripled earnings in his first year. This success was accomplished by offering to prospective affiliates the network’s entire unsponsored schedule at no cost, in contrast to NBC, which charged affiliates for all programs. In return for free programs, affiliates gave CBS airtime for sponsored broadcasts, allowing the network to assure contracted sponsors that airtime would be available. Within a decade, CBS added nearly 100 stations to its network. Since the number of affiliates a network possesses determines the number of people it can reach, which in turn determines what a sponsor is charged, CBS was soon on firm financial ground. By 1930 CBS had 300 employees and total sales of $7.2 million.

Though CBS fared well, NBC continued to dominate the entertainment-oriented broadcasting industry. Paley, viewing news and public affairs as a quick way for CBS to gain respectability, decided to explore the potential for establishing its own network news. In 1930 he hired Ed Klauber to institute a news and public affairs section, and in 1933 the Columbia News Service, the first radio network news operation, was formed. By 1935 CBS had become the largest radio network in the United States.

In 1938 Edward R. Murrow began his career at CBS as head of the network’s European division. The first international radio news broadcast was initiated later that year with Murrow in Vienna, Austria, William L. Shirer in London, and others reporting from Paris, Berlin, and Rome. With these newsbreaks, CBS began the practice of preempting regular programming. Interruptions were planned for prime listening time—8:55 to 9:00 p.m.—and were intended to give the network a “statesmanlike” image.

CBS entered the recording business in 1938 with the purchase of the American Record Corporation. Later called the Columbia Recording Corporation, it soon became an industry powerhouse.

By the beginning of World War II, CBS employed more than 2,000 people, had annual sales of nearly $36 million, and boasted more than 100 affiliate stations throughout the United States. In 1940 the world’s first experimental color television broadcast was made from a CBS transmitter atop the Chrysler Building in New York City and was received in the CBS Building at 485 Madison Avenue. The following year marked the beginning of CBS’s weekly broadcasts of black-and-white television programs. Also in 1941, the government ordered NBC to divest itself of one of its two networks, which eventually gave rise to the American Broadcasting Company (ABC).

Though CBS continued to expand after World War II, NBC was still the industry leader. Under Paley’s direction, CBS lured stars away from NBC by devising a plan in which the celebrities could be taxed as companies rather than as individuals, greatly reducing the amount of income they were required to turn over to the government. Jack Benny was the first major star to leave NBC for CBS; soon Edgar Bergen and Charlie McCarthy, Amos ‘n Andy, Red Skelton, and George Burns and Gracie Allen followed. Within a year CBS took the lead from NBC in programming, advertising revenues, and profits—a lead it maintained as the two networks further expanded into television.

In 1946 CBS submitted its color television broadcasting system to the Federal Communications Commission (FCC) for approval. CBS was confident that its color system would be approved, even though existing black-and-white sets could not receive CBS’s color broadcasts. The FCC did not approve the system, calling it “premature.” In the meantime, RCA had developed a color system that was compatible with existing television sets. The CBS method produced a better picture, however, and in 1950, when both CBS and RCA submitted their systems to the FCC for approval, only the CBS system was approved. But RCA appealed the decision, preventing CBS from marketing its system and gaining time to improve the quality of its own technique. In 1953 the FCC reversed and ruled in favor of RCA.

During the 1950s censorship became an issue in the broadcasting industry. The networks had always been sensitive to censorship pressure: the FCC was given authority to revoke a station’s license if it did not serve the “public interest responsibly.” In addition, advertisers were given permission to refuse to sponsor a program that they deemed offensive, and network affiliates could pressure the network into discontinuing a controversial program.

Censorship surfaced at all the networks during the early 1950s as U.S. Senator Joseph McCarthy’s anticommunist campaign pressured networks and sponsors to blacklist certain actors and writers who were suspected of having leftwing associations. Though CBS was considered the most liberal of the networks, it required 2,500 employees to sign a “loyalty oath,” which stated that they “neither belonged to nor sympathized with” any communist organization. In 1954 two CBS News commentators began to expose McCarthy’s unethical behavior on the television show See It Now. The program helped to discredit communist paranoia, but proved so controversial that CBS eventually canceled it.

By this time there were 32 million television sets in the United States, and television had become the biggest advertising medium in the world. The period was marred, however, by a 1956 TV quiz show scandal in which CBS’s $64,000 Question was shown to be rigged.

In the late 1950s, Paley hired James Aubrey as president of CBS. Aubrey, who purportedly thought that television programming had become too “highbrow,” introduced such shows as The Beverly Hillbillies, Mr. Ed, and The Munsters. These series were extremely popular; in his first two years with CBS, Aubrey doubled the network’s profits.

During the early 1960s, CBS embarked on a diverse acquisitions campaign. Before 1964 CBS had made only two acquisitions in its history, but from that year on the company made acquisitions almost every year. In 1964 the network purchased an 80 percent interest in the New York Yankees baseball team, which it sold ten years later. Acquisitions in the fields of musical instruments, book publishing, and children’s toys were made throughout the 1960s.

By the end of the decade, CBS had 22,000 employees and net profits of more than $64 million. The network’s most notable programming innovation of the decade came in 1968 with the debut of 60 Minutes, a television news magazine. The 1970s were a period of successful prime-time programming. In 1971 All in the Family debuted on CBS, and in 1972 both M*A*S*H and The Waltons were televised for the first time.

The 1970s, however, were also years of managerial turmoil. In 1971 Charles T. Ireland became the president of CBS but was replaced a year later by Arthur Taylor, who held the position for four years. Taylor was relieved of his duties when the network placed second in the Nielsen ratings for the first time in 21 years. John D. Backe, who had been president of the CBS publishing division since 1973, was chosen as Taylor’s replacement.

Meanwhile, in 1976 CBS relieved reporter Daniel Schorr of all duties after he leaked a secret House Intelligence Committee report on the Central Intelligence Agency (CIA) to the Village Voice. He resigned from CBS several months later. And in April of 1979, in a case involving CBS and two employees—correspondent Mike Wallace and producer Barry Lando—the U.S. Supreme Court ruled that journalists accused of libel may be forced to answer questions about their “state of mind” or about conversations with colleagues during the editorial process. The decision was a victory for former Lieutenant Colonel Anthony E. Herbert, who contended that he was libeled in a 60 Minnies broadcast that aired in 1973.

In 1979 CBS finally began to divest itself of some of its diverse holdings, selling at least one business every year for the next few years. The following year CBS regained dominance in the prime-time TV ratings, a position held by ABC since 1976. One week after CBS took the lead, however. President Backe was forced to resign. He was replaced by Thomas H. Wyman, who had been a vice-president at Pillsbury.

CBS went to court again in 1982 after it aired the documentary The Uncounted Enemy: A Vietnam Deception. The case was the beginning of a long-running battle between CBS and retired U.S. Army General William Westmoreland, who filed a $120 million libel suit against the network. The dispute ended several years later when Westmoreland withdrew his charges on a promise from CBS that the network would publicly attempt to restore his character.

By the early 1980s CBS operations had been divided into six main categories: the broadcast group, which was concerned with programming and production of shows for the network, theaters, home video, and cable TV; the records group; the publishing group; the toys division; the technology center, which was responsible for research and development of new technologies; and various corporate joint ventures, including CBS/FOX Company, a collaboration with Twentieth Century-Fox to manufacture and distribute videocassettes and videodiscs. In 1986 CBS sold its book-publishing business to Harcourt Brace Jovanovich, Inc., for $500 million, and that same year the company sold all of its toy businesses.

In 1983 CBS, Columbia Pictures, and Home Box Office (HBO) joined forces to form Tri-Star Pictures, a motion picture production and distribution company. By 1984 Tri-Star had released 17 full-length films, nine of which it also produced, and in 1985 CBS sold its interest in the company. Another experiment was Trintex, a commercial electronic service that allowed people access to news, weather, and sports information; financial and educational data; and home shopping and banking from a personal computer terminal. Initiated in 1984, Trintex—a project from which CBS withdrew in 1986—was the combined effort of CBS, IBM, and Sears, Roebuck & Co.

In 1985 Ted Turner, owner of Turner Broadcasting System (TBS), announced his intentions to take over CBS. In order to prevent this, CBS swallowed a $954.8 million poison pill by purchasing 21 percent of its own outstanding stock.

In September of 1986 Larry Tisch replaced Tom Wyman as chief executive officer of CBS. Tisch had previously served as the chairman of Loew’s Corporation, which owned nearly 25 percent of CBS stock at the time. Following a power struggle between Tisch and Wyman, who continued to serve as president of CBS, William S. Paley returned as chairman of the board and Wyman was forced to resign.

Although Tisch was originally to serve only as interim chief executive officer, within four months it was clear that the job was his. He immediately began cutting costs at the network. Trimming $30 million from the news division budget, Tisch tried to reduce programming costs, cut hundreds of jobs, and sold a number of CBS publishing concerns. He also sold CBS Records to the Sony Corporation in 1987 for $2 billion, even though the subsidiary, which boasted such top stars as Michael Jackson and Bruce Springsteen, had been a perennial money-maker for the company.

Tisch was soundly criticized for selling the number one record company in the industry at a time when the music business appeared to be healthy, and for trying to cut television programming costs when cable TV and other pay services were seducing viewers with a broader and higher quality selection. CBS’s prime-time hits were getting old; in 1987 the network came in last in the Nielsen ratings. To make matters worse, CBS viewers tended to be older than the audience advertisers were trying to reach.

In 1988 Tisch, under fire from the CBS board and affiliate stations for lacking any long-term strategy, appointed 38-year-old Kim LeMasters to head the network’s entertainment division. LeMasters’ task was to find new programming that would appeal to younger audiences.

CBS entered the 1990s absent Paley, who died in 1990. The company soon experienced a pleasant jump in the ratings but was still coping with slumping revenues. In 1990 CBS, like other companies dependent on advertising, saw its income drop precipitously as the country remained stuck in a recession, and prospects for an economic recovery seemed bleak as a war in the Persian Gulf threatened to erupt. Also contributing to the poor fiscal performance that year were the huge hits CBS took on major sports contracts, particularly on professional baseball: the company was forced to swallow $171.2 million in losses.

CBS enjoyed a moral, if not financial, surge in 1991, as the broadcaster’s ratings—last among the networks for the previous four years— jumped to number one, the most dramatic recovery in television history. CBS boasted five of the top ten programs, including the number one 60 Minutes, which became the only show ever to rank first in three separate decades. Although executives from other networks claimed that special events, such as coverage of the World Series and the 1992 Winter Olympics, accounted for the coveted ratings trophy, CBS pointed out that it had beat the competition in regularly scheduled programming and had consistently lead NBC and ABC in the weekly ratings races. Industry observers credited this victory to a better stock of shows on CBS as well as an aggressive self-promotional and marketing campaign that outpaced those of the rival networks. Even controversy played to CBS’s favor. When U.S. Vice-President Dan Quayle accused the show Murphy Brown, the third-highest rated show on TV, of irresponsibly celebrating unwed mothers and the break-up of the traditional American family, CBS executives believed the political storm would only lead to greater viewer and advertiser interest.

But financial woes overshadowed these successes. Despite reducing its dividend, cutting $100 million in operating costs, and scaling back personnel by approximately six percent—the budgetary ax fell on the company’s flagship news division particularly hard—CBS saw revenue fall eight percent and suffered a loss. Although the networks collectively did their worst business in 20 years, as total ad spending in the country declined for the first time in 30 years, 1991-92 was considered a banner period for television. American viewers were riveted by the Persian Gulf War, the confirmation hearings of Supreme Court Justice Clarence Thomas, and the dissolution of the Soviet Union.

But CBS was not able to coast on these spectacles. As in 1990, the company racked up huge losses in its sports divisions, proving to some observers what had always been suspected: the network had grossly overpaid for its baseball and football contracts, which were to expire after their respective 1993 seasons. Despite projections of losses for its coverage of the 1992 Winter Olympics, CBS proudly revealed that it had broken even on the Games.

It is unclear whether CBS and the other networks will be able to win the war against the cable industry, which offers far more program diversity to viewers and reaps benefits from subscription and advertising revenue. But CBS, having streamlined its operations and completely absorbed extant and projected sports-related losses, has positioned itself well to take advantage of a rebounding economy.

Principal Subsidiaries

Aspenfair Music Inc.; Bala Cynwyd Associates (50%); Beverlyfax Music, Inc.; Cadisco Inc.; CBS/Australia Pty. Limited; CBS Broadcast International of Canada Ltd. (Canada); CBS Broadcast Services Ltd. (England); CBS Columbia C.A. (Venezuela); CBS Gramophone Records & Tapes Ltd. (India; 40%); CBS/MTM Company (50%); CBS/Columbia Inernacional, S.A. (Mexico); CBS Dischi SpA (Italy); CBS Urban Renewal Corp.; CBS News Special Projects Inc.; CBS Discos del Peru S.A.; CBS Epic Ltd. (Thailand; 60%); CBS FMX Stereo Inc.; CBS/FOX Company (50%); Galatea Productions, Inc.; CBS United Kingdom Limited; CBS Urban Renewal Corporation; CJG Productions, Inc.; Columbia Television, Inc.; CBS Overseas Inc.; Granite Holdings Inc.; Discos CBS Industria e Comercio Ltda. (Brazil); Discos CBS International de Puerto Rico Inc.; Discos CBS S.A.I.C.F. (Argentina); Discos CBS. S.A. (Colombia); Filmvision Inc.; Houston Motion Picture Entertainment, Inc.; Mainstream Communications Corp. (50%); Vista Marketing Inc.: Winter-land Concessions Company (50%); Katy Film Productions, Inc.; Meadowlands Pkwy Assoc. (50%).