1977-1985: The Amway Way?


Mr. and Mrs. Benjamin D. Gilbert of Stamford, Connecticut, were part of the group that purchased Mutual from 3M in 1966. Mr. Gilbert was an investor who was involved in widely divergent businesses, such as oil exploration, perfume manufacturing and pollution control systems. Mrs. Gilbert was a granddaughter of John D. Rockefeller. After Gilbert replaced John Fraim as chairman of Mutual's parent company in 1971, he and his wife quietly bought out most of the other Mutual shareholders. In September 1977, the Gilberts sold the network - for a reported $18 million.

The new owner was the Amway Corporation, the manufacturer and distributor of household and personal care products, perhaps best known in broadcasting up to that point for its longtime sponsorship of ABC's Paul Harvey programs. Amway set up a new subsidiary, Amway Communications, Inc., to oversee Mutual's operations.

Amway's president and co-founder, Richard DeVos, said Amway intended to keep running Mutual "pretty much as it has been," anticipating no major personnel changes. "We don't have any plans to change anything," he added. In a 1978 interview with Broadcasting, DeVos explained that Mutual had "gone through a long dry spell where they were always trying to catch up with themselves." Now, with Amway's backing, Mutual was ready to start "a variety of programming for different audiences and different affiliates." The mandate now was to "turn them loose and let them go."

In November, Mutual announced plans to abandon its leased long-distance telephone lines - and its annual $2.25 million AT&T bill - and begin sending programs to stations via satellite. The plan called for Mutual to provide (at its expense) a satellite dish for each affiliate, which would allow the network to provide at least three programs simultaneously. The first dishes were installed in the fall of 1980; in September 1981, affiliates began receiving network broadcasts from Western Union's Westar I (although Mutual had begun transmitting daily programs between New York and Los Angeles via Westar in March 1975). Mutual was the first of the four traditional commercial networks to convert to satellite broadcasting (ABC, CBS and NBC wouldn't make the switch until 1983).

Mutual's operations by then exceeded most of the other networks'. There was plenty of news, to be sure: three five-minute newscasts each hour; along with two fifteen-minute showcases: "The World This Morning," and "The World Today." But Mutual continued its heavy emphasis on sports: 37 "Wide Weekend of Sports" broadcasts, Notre Dame Football, NCAA and NBA basketball, as well as NFL Football. There was also a wide array of short programs ("Mini-Features," as Mutual called them), ranging from news analysis and commentary ("One Man's Opinion," "St. John's Journal") to household tips ("Elmer Dapron's Grocery List"), even to the stars ("Astrology Today" with Sydney Omarr). On weekends, "Reporter's Roundup" had passed its 25th year as the successor to "Meet the Press."

There was still one problem area, though: late night.

Mutual was having no more success with the "Long John Nebel-Candy Jones Show" than it had with Herb Jepko. Few stations were carrying it, and there were even fewer advertisers. What's more, there were conflicts: WMCA, Nebel and Jones - Nebel's wife - balked (as Jepko did) at Mutual's request to take the show on the road, most likely due to Nebel, who had been in poor health for several years. But as 1977 ended, the trio announced they were cutting ties with Mutual. So again, the network was looking. Ed Little's first idea was to have the all-night show include five different hosts in five different cities. But instead, he turned to a 44-year-old broadcaster who had bounced around the airwaves for almost twenty years, mostly in Miami (where he was hosting an evening interview show on WIOD). When Mutual called, he was skeptical about the network's ability to stage a national, late night talk show - especially with two strikes on its count. But, as he later wrote, ". . . if it didn't work, I could always go back to Miami or to another city . . . I just didn't have that much to lose."

"The Larry King Show" - first aired January 30, 1978 from WIOD (it would move to Arlington that spring) - provided just the spark Mutual was looking for. Entertaining and unpredictable due to a wide range of guests, King's insatiable curiosity and a nightly two-and-a-half hour open phone segment, it quickly expanded from its original 28-station lineup.

The talk included debate on issues such as abortion, religion, science and politics; the guests ranged from Sophia Loren to Watergate participant John Ehrlichman (who had a daily commentary series on Mutual) to Frank Sinatra to adult film actress Marilyn Chambers. But King's zany side came out, too; in the beginning, King would periodically skewer talk-show psychics (whom King abhorred) with predictions from the planet "Fringus," which was 31 days ahead of Earth and could predict the future. "He loved punching holes in Mutual's pretentiousness," The Wall Street Journal wrote. One night, he invented the "Mutual Orchestra," made up of 92 drunken incompetents. Listeners played along: one night, when King announced the Orchestra had disappeared, the switchboard lit up; one woman called from Michigan, saying she spotted the musicians jammed into a canoe, petting a huge rabbit (a reference to an incident involving then-President Jimmy Carter).

One constant on all Mutual programs was an unmistakable, unavoidable sound: a two-tone burst before and after each program, as well as in and out of each commercial break. Called "Mutualert" tones, they could be aligned with a station's automation system to join or leave the network. Introduced in Summer of 1974, The volume and speed of the tones varied throughout the years. To some, they were annoying, but for others, they were an endearing - if quirky - touch that set Mutual apart from the other networks.

Mutual took another important leap forward in April 1978, entering new territory - station ownership - with the purchase of WCFL in Chicago for $12 million. Two years later, it paid $14 million for WHN New York.

By the time the network's programming was first sent via satellite, Mutual's renaissance period was well under way. It was credited in large part to Martin Rubenstein, a former ABC News vice president and general manager who came to the network in March 1978 as executive vice president of administration. Amway then formed a management committee to run the network, made of Rubenstein, Ed Little, Gary Worth and Amway v.p. Dr. B.R. Schaafsma. Little, perhaps rightly, saw this as a dilution of his power, and quit by the end of 1978. The committee, now a troika, continued until November 1979, when Amway named Rubenstein Mutual's president. (Worth, who resigned in the shakeup, later called the committee setup "an intelligent plan" to ease him and Little out.)

Rubenstein wasn't the only ABC staffer who came aboard: former ABC Radio execs Tom O'Brien and Michael Penzell both joined in 1979 as v.p.'s of news and sales, respectively. (Perhaps reminiscent of the Kobak-Carlin-Swezey exodus from the Blue to Mutual 35 years earlier.)

Rubenstein nurtured the "Larry King Show," and helped turn it into a "must" stop for authors and newsmakers. By November 1979, it was carried by 159 stations, with an audience of about two million. But it wasn't profitable yet: even with a price of only $200 for a 30-second spot, the network still couldn't sell out all its available commercial time; meanwhile, 30 seconds on Mutual's morning drive-time newscasts commanded up to $1700.

Rubenstein also aggressively pursued the conversion to satellite broadcasting (funded by a $10 million Amway infusion), and expanded Mutual's programming to capitalize on the enhanced sound quality, adding "The Dick Clark National Music Survey," "Mutual Radio Theater" (which had been "Sears Radio Theater" on CBS) and broadcasts of the National Symphony Orchestra (although stations without satellite dishes received the shows on vinyl). There was also the potpourri of other programming: the usual mix of news and public affairs shows, rock and classical concerts, and sports that ran the gamut from the NFL and Notre Dame football to the NBA to U.S. Open Tennis. By 1983, Mutual had four regional networks covering the Atlanta Falcons, Houston Oilers, Kansas City Chiefs and Pittsburgh Steelers, and introduced Sunday NFL doubleheaders that fall.

Variety considered Mutual's program schedule the radio equivalent of a trip through Macy's. Rubenstein took a pragmatic view of Mutual's expanding program inventory, one reminiscent of Mutual's earliest days: "We're a bottom line organization. If a sponsor is there, we'll go ahead with a new show."

Satellites also opened up a world of non-broadcast opportunities to make money, and Mutual pursued that angle as well. The network took on uplink duties for AP Radio in 1983, inked a five-year contract with Bonneville Satellite Corporation, and leased out what satellite time it wasn't using to a variety of interests, including the National Kidney Foundation, and a small program syndicator out of California named Westwood One.

But the stations proved to be a cash drain. Rubenstein later said, "We should never have gone into (WCFL). We'll never see our investment." Indeed, by late 1984 WCFL had been sold (for $4 million less than they paid for it), and plans were being made to sell WHN.

Throughout it all, the parent company - Amway - and its owners (Rich DeVos and Jay Van Andel) were tolerant, although uninterested, parents. In a 1984 interview with Broadcasting magazine celebrating Mutual's 50th anniversary, DeVos confessed of Amway's disappointment. "We had grandiose ideas of what we thought could happen," DeVos said, "and as time goes on we found you can't make things happen exactly the way you'd like to have them happen . . . We own a network, but we aren't into that industry personally." Was Mutual a factor to Amway's bottom line? DeVos was blunt: "It's certainly not a contribution." He called owning Mutual "a learning experience."

By then, there were signs that Amway was paying more attention: five months earlier, Rubenstein, O'Brien and another top aide were let go. Some said the three were forced out to help meet new financial goals (24 Mutual employees had recently been laid off). Others said Amway was lightening the ship to make Mutual more attractive to a potential buyer (indeed, Rubenstein's firing intrigued former Mutual president Ed Little so much that he rounded up a group of investors to buy Mutual and its two stations, to no avail).

DeVos told Broadcasting the change was a "straight management decision." "We just decided it was time for a change of pace . . . We said: 'We've got to have some people to do some things differently now.'" But DeVos expressed a desire to increase Amway's presence at the network, which DeVos said Rubenstien didn't want. "There was no identification of Amway at (Mutual) . . . Marty wanted to run it his way."

Mutual was in no hurry to find a replacement. Senior Vice-President Jack Clements was put in charge of the network and given the title of executive vice-president, but within a few months Amway enlisted a search firm to find a new president - but told them to "coast" in its hunt, meaning there was no urgency in the matter. Clements was told he had an equal shot at the top job with any candidate the search came up with. But Clements had the inside track on the position, and DeVos seemed optimistic: "We'll be able to forge a new partnership, working together . . . I think it's a matter of the man, Clements, who was in favor of that."

Clements was an eleven-year Mutual veteran for whom the new duties seemed to fit like an old shoe. "In 1950 or '51," he told Broadcasting, "I was sitting in a little radio station in South Carolina as an announcer . . . and I used to open up the pot on the network, and along would come 'The Shadow,' and along would come Fulton Lewis jr. and Gabriel Heatter and all those good things. And in my wildest dream it never occurred to me that I might one day be running this network."

His charge from Amway was to "make this company all that it ought to be." His first order of business was to bring in painters and carpenters to Mutual's Arlington headquarters for a long overdue refurbishing. "I want the staff to know that we are on a winning tack. That we are a good company. And I want them to know that we care about them."

Clements must have done something right: a year later (1985), Amway gave him the president's job. Clements told Radio & Records magazine that the credit wasn't his, but rather the staff's: "I let them do what they do best, because they are actually what has brought us to where we are."

As for O'Brien, he did not leave quietly. In a statement to the Associated Press, O'Brien said, "I could not continue to run the Mutual news department because (Amway) wouldn't give me the money I needed. They expected me to cover the political conventions with mirrors. It just became obvious that the Amway Corporation would not permit us to seriously cover the news."

O'Brien was replaced by a big name: former NBC correspondent and Presidential press secretary Ron Nessen. "This is really the perfect job for me," he told Broadcasting. "I love to come to the office every day. I love to read the wires, read the logs, make decisions, get involved in the coverage." Nessen immersed himself in the news department. "I think it's important to get into everything," he told Broadcasting. I believe in rolling up my sleeves . . . and helping to produce the programs. I think you show people what you expect of them. And the best way to do it is by example. I believe in this creative process that comes from just talking and exchanging ideas."

Mutual rewarded Nessen by featuring him in a print ad that he tried to talk the network out of running, saying, "Our news department is those 54 people. I wanted them to be featured in that ad."

The new ad campaign proclaimed, "Mutual's on a Roll." And it was: ratings were up 5.2%, and sales for 1985 were up 10% from the previous year. New programs were added: "America in the Morning," a 25-minute early morning show hosted by Jim Bohannon, debuted September 17, 1984 and quickly signed up 200 stations to air it (it would soon expand to an hour); Bohannon also began a five-hour Saturday night talk show, replacing repeats of "The Larry King Show."

The network was also working to improve its affiliate lineup and broaden its base: in 1984, one-quarter of its affiliates were FM stations; in 1985, that had increased to one-third. Clements said the move to FM's was to bring in more 18-34 year-olds to strengthen the younger end of the 25-54 demo that Mutual targeted. Programs like the "National Lampoon Show" was among the things Mutual was doing to attract more youth-oriented stations. The daytimer picture also changed, going from one-third of its affiliate list to one-quarter. But Clements didn't discount the value of daytimers, saying, "There are markets that daytimers service very well, and there are markets we can only serve with a daytimer . . . our ownership believes that a network should serve the entire United States."

The moves were seen by some as a sign that Amway had put thoughts of a sale aside. The results were giving Amway a reason to, as DeVos told Broadcasting in 1984, "be in the business long term."

"We're interested in having Mutual become a major force," DeVos added, "So we're going to stay with it."

But they would soon change their minds about that.


Some information on this page came from various issues of Billboard, Broadcasting, and Radio & Records magazines; The Seattle Times, The Wall Street Journal and Variety.

Text copyright © 2009 Kenneth I. Johannessen.

No challenges to logo, sound or image copyrights are either inferred or implied.


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