Wall Street is breaking up that old gang of mine


The Simesite anniversary and the recent postings there sent me into a reverie about the transformations that have changed practically every aspect of show business in the last few decades. For most of those monitoring Simesite, of course, the biggest earthquake was the purchase of Variety itself almost twenty years ago. The new owners utterly discarded the colorful and sometimes wacky culture of Variety – presumably to their great satisfaction, although to the discomfort of many of those who were devoted to that culture – and the ensuing upheaval came at a time when show business journalism itself was rapidly changing.

One easy illustration: When I left the fulltime employ of Variety in 1980, it still was the routine each Tuesday near noontime, just when we were getting ready to put the weekly to bed for Wednesday publication, that the estimable Bob Knight via telephone assembled television ratings data for the previous week and punched out a story not only about the ratings but about their meaning for different program genres and for the competitive standings of the networks. Each week Bob’s wrapup was avidly devoured by network executives and advertising agency buyers. This is when there were still only three television networks and – if you can believe this from the perspective of 2006 – the rule of thumb was that a series had to have a rating of 18 and a share of 30 to be assured of renewal. Those ratings are rarely approached today by the most popular shows.

The biggest change, however, is that even The New York Times runs daily ratings stories now, and in many respects covers all aspects of show business with approximately the zeal of a trade journal. The Times is not alone. Publications of all persuasions are celebrity-stunned and besotted with every febrile stab at entertainment on East Coast or West. I wouldn’t be surprised if Quantum Mechanics Monthly carried a column about how Mr. Pitt and Ms. Jolie are studying physics and planning to open a quark factory in Cambodia.

While the media horde gorges itself on enough Hollywood bites to cause an elephant to suffer gout, they are circumspect by comparison with the Internet, where people I’ve never heard of become famous for a Warhol nanosecond simply by appearing nude, preferably having sex, and without granting permission to be displayed. As René Descartes used to say, “Is this a great country or what?”

All that attention to show business, of course, has long since mesmerized Wall Street. The miracle is that Variety hasn’t been sold and re-sold a dozen times in the last twenty years. Even the Hollywood Reporter has been bought by a consortium of hedge funds, which should not be confused with hedgehogs. Hedgehogs are relatively benevolent, albeit prickly.

Alll my bootless mutterings about the decline and fall of the old and the rise and triumph of the new stirred me to recall a circumstance that fits old and new together and has a Brothers Grimm kind of Wall Street humor to it.

Tell me, what legendary entertainment empire is now owned by the smallest, least profitable division it possessed thirty-five or so years ago?

Give up?

Well, the answer is CBS Inc. Permit me to explain, relying on memory and five minutes worth of research on the Internet.

All government decisions religiously obey The Law of Unintended Consequences, and possibly no ruling by the Federal Communications Commission has more altered broadcasting than what was loosely known as the Primetime Access Rule, which was issued in Washington in the early 1970s.

The most staggering effect of that rule was to open up a half-hour slot at the beginning of primetime for non-network programming – quiz shows and fluff, as it turned out, although the result was to fund a whole new generation of production companies.

But the FCC also required networks to divest themselves of divisions selling programs abroad, and CBS had a tiny operation called CBS International, run by a vice-president named Ralph Baruch. (He was a vice-president because those were still the days before janitors were named President of the Sanitary Division so they could meet as equals with toilet paper vendors.)

Ralph managed to put together the finances that enabled him to split off CBS International and rename it Viacom. He might have had some difficulty getting established, but Viacom soon was selling “I Love Lucy” and other stalwart series overseas, and Viacom began producing half-hour syndicated shows for that FCC-ordained half-hour slot at seven-thirty. CBS, meanwhile, was flourishing – until dark clouds began to collect around Black Rock as the reign of Paley the Magnificent began to wane.

Real or not, the threat by Ted Turner to effect a hostile takeover of CBS forced Paley to bring in Lawrence Tisch as president and CEO in 1986. Paley lived until 1990, but Tisch was in the saddle, and he was widely feared and hated within CBS. The oldtimers accused him of eviscerating CBS News and degrading the CBS tradition of quality. Five years post-Tisch, CBS was sold to Westinghouse Electric.

The same year that Paley yielded to Tisch, 1986, Sumner Redstone’s National Amusements bought Viacom. I had interviewed Redstone a couple of years earlier in his Boston office. It was one of my least successful interviews, as he wasn’t interested in talking and I had been authoritatively told by other contacts in the field that he was about to retire because, in part, of his dreadful experiences in a fire not long before. National Amusements was basically a theatrical chain, and Redstone had been chairman of the National Association of Theater Owners, but his string had about run out.

So, okay, I’m no good at reading goat entrails.

That wily Redstone fellow has been going strong for many years since, and after gobbling up Viacom in 1986 and moving it to the forefront of his empire, in 2000 he acquired CBS itself.

Thus was the mighty Tiffany Network swallowed by the most insignificant of its mini-divisions, CBS International, otherwise known as Viacom.

Redstone recently split CBS and Viacom into two separate empires. Perhaps now a consortium of private equity groups will buy both CBS and Viacom and sell CBS to Variety and Viacom to the Hollywood Reporter, after which Variety and the Reporter will merge and go public, and then come up with the staggeringly original idea of jointly putting out a daily in Hollywood and a weekly in New York.

You never know.