The new owners were led by Loren Berry and John Fraim. Berry is considered the "founder" of the Yellow Pages and was one of the richest men in Ohio, while Fraim (Berry's son-in-law) was the vice-president of L.M. Berry & Co., headquartered in Dayton. It was Fraim's idea to make a bid for Mutual; Berry set up a meeting with 3M principals through 3M Chairman William McKnight, Berry's longtime winter neighbor in Florida.
In all, there were 19 Mutual stockholders. They were wealthy businessmen, predominantly conservative, whose interests ran a broad spectrum of agricultural and industrial holdings.
At the time of the sale, 3M President Bert Cross called the new owners "as concerned as we have been with stability and security for the network and its people."
Cross may have spoke too soon.
Under the new setup, Fraim became chairman of the new parent company, the Mutual Broadcasting Corporation (MBC). He set up shop at the Waldorf-Astoria Hotel in New York. And he wasted no time in showing who was boss.
Within three months, Robert F. Hurleigh was out as the network's president. His ousting was so sudden that Hurleigh - who planned to move to New York to work with the new owners - couldn't hold up the sale of his Washington, DC home. The official explanation for Hurleigh's exit was "personal reasons" (he had suffered a heart attack that summer). For the man most responsible for saving Mutual in 1959, it was a sad, abrupt end to Hurleigh's 22-year career at the network.
But Fraim had already picked Hurleigh's replacement.
His name was Matthew Culligan, but almost anyone who had met him more than once called him "Joe." Three weeks before Hurleigh's removal, Fraim and Berry approached Culligan - one of the 19 stockholders - about the president's job. A former NBC Radio vice president, Culligan is credited with bringing it to profitability in the late '50s, mainly by eliminating virtually all programming except for "News on the Hour" and "Monitor." His plans for Mutual were equally aggressive.
They included expanding the network's newscasts and play-by-play sports coverage, dropping all programs carried by less than 60 percent of the affiliates, the introduction of a new commentary series (like NBC's "Emphasis," which Culligan created), and improving Mutual's clearances in New York City. He also proposed a weekend service similar to NBC's "Monitor," going so far as to hire Pat Weaver (who created "Monitor") as a consultant.
But Culligan ran headlong into the realities of 1960s radio networking, and its inability for major program expansion. What Culligan achieved was an extra 30 seconds of news at the top of the hour, followed by an extra minute of commercials. He also picked up the Notre Dame football broadcasts after they were dropped by ABC Radio in 1967, a move that resulted in a net profit of $135,000.
In addition, Mutual briefly considered branching out into video in 1967. (For more details, click here.)
A flamboyant executive, Culligan ran headlong with Fraim's hard-nosed managing style. Relations between the two strained quickly, as Culligan pressed for his bosses to buy stations in major markets to improve the network's clearances, along with action in other areas where Fraim was not yet ready to move.
So in late June 1968 - less than two years after Bob Hurleigh was shown the door, Joe Culligan was suddenly dropped as Mutual's president. As in Hurleigh's case, it was equally surprising: Culligan got the news on his fiftieth birthday.
Officially, Culligan was kicked upstairs. Already a member of MBC's Board of Directors, he was named the corporation's "Senior Vice President," but his duties were not spelled out (MBC had no other vice presidents). Less than two months later, Culligan resigned and sold his Mutual stock (reportedly between 10 and 15 percent).
The new president was former ABC Radio head Robert Pauley, who had been courted to replace Hurleigh in 1966, but turned Fraim down. This time, though, he said yes - but once he reported for work, Pauley acted like a bull in a china shop, quickly infuriating not only affiliates - but his boss as well.
It was Pauley who dropped Chicago affiliate WCFL in favor of lower-powered, lower-rated WNUS. On his last day as president, Culligan negotiated a new contract with 'CFL, but Pauley was unhappy with their clearance rate, and dropped them - less than two months later. It was Pauley who expressed interest in disbanding the 25-member Mutual Affiliates Advisory Committee (MAAC), an idea that did not endear him to the stations - or to Fraim, who quickly turned it down.
It was also Pauley who initiated a full-frontal assault on ABC Radio. In 1968, ABC replaced its traditional, full-service network with four separate networks, each with their own affiliates, programs, and target audiences (ABC got around the FCC's network ownership policy by scheduling the networks consecutively through each hour, so they didn't compete directly). To some, it was a bold way of shaking network radio out of the creative and financial doldrums.
But to Mutual (and to Pauley), it was a plan to put them out of business. Now, ABC could have up to four affiliates in each market, not just one - and Mutual accused ABC of targeting its affiliates to switch over. Indeed, in the first ten months of ABC's new setup, Mutual lost 25 affiliates to ABC. So in late 1968, Mutual petitioned the FCC to immediately end ABC's plan, charging ABC with violating antitrust laws. "ABC apparently hopes to destroy MBS and then pick up its affiliates and its billings," Mutual charged.
Mutual's fears may have been well-founded; its financial condition was indeed shaky. In a filing with the FCC, Mutual claimed a profit of only 99-thousand dollars in fiscal year 1968, and a half-million dollar loss the year before that. What's more, 3M - Mutual's previous owner - still played a financial role: to help Fraim and Co. get started when they bought the network in 1966, 3M signed a three-year, $2.5 million advertising contract with MBS. By the time of the FCC petition, most of that money had been paid.
But while conceding MBS' complaints carried some weight and that ABC's operations should be more tightly controlled, the FCC denied the petition in May 1969, as well as a similar complaint MBS filed the next month. Pauley's petition - which seemed to smack of revenge (he either resigned or was fired as ABC Radio's president the week before the four-network setup was announced) - was said to have attracted something less than Fraim's warm-hearted support.
The topper, however, may have been Pauley's reported attempt to quietly round up a group of investors to buy Mutual, without Fraim's knowledge. Had the plan succeeded, Pauley would have become a part owner of Mutual.
A power struggle eventually ensued: while other Mutual executives enjoyed a direct line to Fraim, Pauley was frozen out and unable to get things done the way he wanted. Perhaps it was put best by one of his associates: "Having Bob Pauley as Mutual president was like putting an airplane engine into a Volkswagen. Something had to give."
What finally gave - to no one's surprise - was Pauley. He was "terminated" in mid-October 1969. (In a 2004 interview, Pauley called taking the Mutual job a "desperation deal," a fairly meaningless job he could handle from home.)
There are three ironies to Pauley's stewardship:
1) He refused to succeed Hurleigh in 1966 partly because Mutual owned no stations. Upon his exit in 1969, Mutual still owned no stations.
2) Just as he seemed to want revenge against ABC while at Mutual, so too did he seem to want to get back at Mutual after he left. (For more information, click here.)
3) Pauley's replacement was the chairman of the affiliates committee he wanted to disband.
Sixty-six-year-old Victor Diehm, president and general manager of WAZL-AM-FM Hazleton, PA, had been MAAC chairman since 1954, and one of those with a direct line to Fraim. With his ascension to Mutual's top spot, calm returned to the executive suite. "I have been assured of complete control," Diehm said.
What Diehm controlled was a network sending programming to 580 affiliates: five-minute newscasts each half-hour from 6 a.m. through 11:30 p.m., several sportscasts throughout the day from Van Patrick and Bill Stern (until his death in 1971), as well as "The World Today," a 25-minute recap. There was also commentary, including moderate Whitney Bolton from 9:05 - 9:15 a.m. (until his death in November 1969), Fulton Lewis III, who inherited his late father's 7 p.m. quarter-hour, and liberal George Hamilton Combs from 7:15 to 7:30 p.m. "We have always broadcast a wide range of opinion on Mutual," said MBS programming and operations director Charles King (who took over Bolton's commentary upon his death), "though we are thought of as 'conservative' by some observers, primarily, I think, because we carried Fulton Lewis jr. for so many years."
But the challenges continued, not only for Mutual but for all of network radio. In 1969, Mutual had 54 advertisers representing 79 products - down from the 71 advertisers and 111 products it had in 1968. "We're all trying to keep our heads above water," Diehm told the Hollywood Radio and TV Society at a lunch meeting with other network heads. "We're sticking with a policy of news and news actualities, but tomorrow we might be doing a song and dance."
Eventually, the sales picture improved: in June 1970, Diehm told the MBC board that the network would turn its first profitable quarter in years. The network was sold out for July, resulting in a six-figure profit, and continued profitability in August and September.
Diehm's firm hand was only strengthened when Fraim resigned as MBC chairman in early 1971, when President Richard Nixon appointed him board chairman of the "People to People" program; Fraim sold his interest in Mutual to Benjamin Gilbert, who became MBC chairman.
1971 turned out to be a tough year for most of the radio networks: ABC still hadn't turned a profit on its four-network concept (it would, however, in 1972); NBC entertained offers for its entire radio group, which would have likely meant a new owner for its network (one interested party included Robert F. Hurleigh). Only CBS seemed to be riding the wave, even taking out ads in major magazines to tout its ratings success - and remind advertisers what a bargain network radio was.
In any event, by 1972, Mutual was playing catch-up. It turned to a man who was very familiar with playing catch.
Some information on this page came from various issues of Broadcasting and Variety.
Text copyright © 2009 Kenneth I. Johannessen.
No challenges to logo, sound or image copyrights are either inferred or implied.
To go to "1972 - 1977: Coming to Life," click here.
To return to the Mutual Tribute Site home page, click here.
To return to Kenneth Johannessen's home page, click here.