Thursday, January 25, 2018
King News by Moses Koenigsberg: Chapter 16 Part 1
King News by Moses KoenigsbergPublished by F.A. Stokes Company, 1941
Genius Rides the Lone Wolf (part 1)link to previous installment link to next installment
If W. R. Hearst had a Kismet—if Fate pressed upon him a gift from Pandora’s box—it was to “shuffle the cards.” He played no game for stakes. But he was an inveterate dealer of solitaire, at the most unexpected times and places. And he continued the deal throughout his waking hours. The pasteboards displaced by whatever came to hand, he ruffled his deck of chain newspapers, magazines, motion pictures, interiors of medieval castles, Gobelin tapestries, silver antiques, gold mines and other items interspersed between what grew into his major collections of $30,000,000 in curios and $40,000,000 in real estate.
Reshuffling of the cards at solitaire before the deck was exhausted betrayed the same impatience with which Hearst repeatedly shifted a policy of business operation sometimes before the current method had been fully installed. His handling of his syndicates and news services had typified the practice. Consolidation and segregation shifted back and forth over the years. In March, 1911, a series of memoranda from Hearst were pieced together by Farrelly and their gist put into this form:
My idea now ... is to sell things separately and get more money. The syndicate ought to be divided up into a morning news service, an afternoon news service and morning feature service, an afternoon feature service and a Sunday service; and then we can sell any one of these five things, or we can sell two, three or four or five of them, provided the amount paid for them is sufficient. ... I think I will divide the services in the morning field and the evening field at least and put separate people in charge of each service and let them see how much each responsible manager can get out of his particular lines of articles. I have found this to work very well with the newspapers and it might be entirely beneficial with the news services.
Before Farrelly had acknowledged these directions, Hearst wired him, “Why not give Koenigsberg the evening service and you keep the morning service?” Then, still without a reply from Farrelly, he ordered the incorporation of National News Association. To that organization was assigned the distribution of all Hearst features and telegraphic matter prepared for release to afternoon newspapers. Under Hearst’s instructions, Farrelly formally tendered to me all the books and affairs of National News Association. I persuaded him to delay the transfer.
The set-up was utterly unattractive to me. It meant a traffic in elements originating with and under the control of other Hearst lieutenants. To manage such a unit would be to violate the resolution that prompted my resignation as publisher of the Boston American—the decision never again to assume managerial responsibility to anyone except the owner. Moreover, the new project was unfeasible. It would start with a deficit much more likely to distend than diminish.
A stratagem enabled me to evade this undesirable assignment. The ruse was based on Hearst’s yearning for new links in his newspaper chain—a passion so absorbing that it frequently diverted him from other purposes. I notified him that opportunities to acquire two different dailies were maturing concurrently. Both engaged his lively attention. One was the Omaha Bee, owned by Victor Rosewater and his brother, Charles. The other was the Louisville Herald, a knot in the string of John C. Shaffer publications.
W. J. Langdon, chief auditor of the New York American, was detailed to assist me in Louisville. Harmon Campbell, head of the auditing department of the Chicago Examiner, helped me in Omaha. They supplied material enough to keep Hearst’s interest engaged for a couple of months. Finally, I advised against the purchase of either property. Prospects for the acquisition of other newspapers were meanwhile developed. In Hearst’s engrossment with these negotiations, the program to saddle me with National News Association was forgotten. It is noteworthy that Hearst did buy the Omaha Bee sixteen years later—to his great regret.
It was decreed that International News Service—Feature Department be placed under my management in conjunction with Newspaper Feature Service and King Features Syndicate. Bradford Merrill was instructed to work out the arrangement. Following Carvalho’s resignation, Merrill’s letterheads bore the legend, “Office of the general manager of the Hearst newspapers.” This designation was recognized by all except Arthur Brisbane. He ignored it. But friction was not visible to the naked eye because Brisbane confined his working duties to the evening papers, which Merrill skillfully sidestepped.
Merrill relayed to me Hearst’s request that I take over the syndication of all his newspaper features. My first response was a question. What would happen to the outgoing manager? More than twenty years of observation had left me with an abundant wariness about superseding a Hearst executive. Merrill assured me that a satisfactory place would be provided for Johnson. It would be entirely apart from the syndicates. That, I told Merrill, was one of two conditions prerequisite to consideration of the proffered job. The other proviso was complete independence from anyone save Hearst himself. “That’s exactly what Mr. Hearst wants,” he answered.
Within a week word came from Hearst advising that Johnson be retained in the syndicate. The message was delivered by Julian Gerard. Brother of J. W. Gerard, who was recalled as United States Ambassador to Berlin at the outbreak of hostilities with Germany, Julian was one of the most likable lambs ever jostled in the Hearst fold. He sat at the desk that Carvalho had vacated. He never found the sitting comfortable. His chat with me resulted in this letter:
April 30 1918
Dear Mr. Hearst:
It has been my understanding that you desired to consolidate the operations of your syndicate enterprises, first, to reduce expenses and, second, to increase revenues.
Except as to the retention of those artists and writers whose work you reserve for the exclusive use of your own papers, I have assumed that the syndicate management would have a free hand to effect economies and to expand sales. Mr. Gerard apprises me of your desire to appoint an expensive sales manager.
Such an appointment would preclude the programme of economy I have worked out. It also would impair seriously my freedom of action in prosecuting my own selling plans and would thus impede my efforts to increase revenue.
Mr. Gerard has mentioned the name of a man who has been in control of one of your syndicates. I submit that his appointment to an important position in the consolidated syndicate might hamper revisions of selling methods.
If Mr. Gerard understands correctly your wishes in this matter, I must assume that you have altered your intention to charge me with responsibility for your syndicate operations. If, however, Mr. Gerard has misapprehended your desire in this respect, I am prepared immediately to take personal charge of all your syndicates.
Faithfully, M. Koenigsberg
Hearst received this memorandum in Chicago. He telegraphed his financial manager, Joseph A. Moore, one of my close friends, to “bring Koenigsberg into line.” But the understanding with Merrill having been broken, there was no valid reason to alter my resolution at Moore’s urging. Hearst’s insistence on what was to me a most unwelcome condition had made the proffered job unattractive. If he had revised his decision to detach Johnson from the syndicate, why make any change? Why not keep Johnson on as general manager?
Moore, after transmitting this advice, blamed me for putting him “in bad with the chief.” On a plea of friendship, he persuaded me to accompany him west for another talk with Hearst. It has been impossible to find anything but self-reproach for the weakness of capitulating under their joint suasion. But this humiliation was poulticed by amusement over the sequel.
Johnson never officiated as sales manager. A month was to ensue before his induction into the position. It was agreed that he take that time for a vacation. He had been gone three days when a snarl in the syndicate’s records made it necessary to summon him to the office for a conference. It was not an amiable session. Johnson chose to be bitterly contumacious. At the end of an hour we reached an abrupt impasse. Johnson had raised a couple of points about which it might be prudent to consult counsel. Interrupting the argument for that purpose, I telephoned from an adjacent room to Louis B. Eppstein. He was attorney for King Features Syndicate. He was also one of my cronies.
My first query was: “What, if any, liability devolves on a corporation when its general manager uses violence to eject a subordinate from its headquarters?” The choking sound that delayed Eppstein’s reply might have been either a gasp of sympathy or a healthy snicker. “If the man is annoying you and he refuses to leave peaceably,” Eppstein said with the unctuous tone of a patient instructor in etiquette, “you may employ such force as is necessary to expel him from the premises.”
Johnson relieved me of the need for pursuing this advice. On the way to the elevator, he shouted, “I resign as of May first.” That was the date fixed for the end of his vacation. During the next ten years, Johnson was my competitor as manager successively of the World Color Printing Company of St. Louis, the New York Tribune syndicate and Editors’ Feature Service. Afterward, he became publisher of the Tucson Citizen. Then he sought me out to extend assurances of his friendliness.
We were getting up to leave when Hearst said to me, “I understand you stage boxing bouts at your office every afternoon at five o’clock. Why haven’t you invited me?”
The fact that Hearst had learned of the scuffle with Johnson was more disconcerting than his banter. He found a keen relish in my confusion. He was too much amused to listen to my explanation. No other reference passed between us concerning the defeat of a program to which he had given considerable of his own time, beside the recurrent attention of his general manager, Bradford Merrill, his business manager, Julian Gerard, and his financial manager, Joseph A. Moore, to say nothing of the waste of my energies. And it is my guess that Hearst got more fun than vexation out of the episode.
Assuming management of the consolidated syndicates meant straddling the divide along which the Hearst organization writhed in internal conflict. On the one hand was the agency responsible for the acquisition and development of features for the whole chain of morning, afternoon and Sunday publications. On the other hand were the newspapers fuming over arbitrary assessments for copyrighted materials in the selection of which they had no voice. Some of them suspected that the rates were disproportionate. Their suspicions were well grounded. Hearst, himself, fixed the levies. They were not based on the value of the service delivered. They were scaled according to ability to pay. This was in harmony with the policy of an institution in which logic gave way to expedience.
Under such a regimen, friction was unavoidable. Its persistence was the subject of an elaborate analysis by Bradford Merrill eight years after the syndicates were placed under my management. Copies were transmitted to all the publishers and editors in the Hearst organization. They were accompanied by an identical note from H. O. Hunter, secretary to W. R. Hearst, under date of July 12, 1927. Hunter relayed a sharp comment from his chief. It pointed out Mr. Hearst’s feeling that his “newspaper folk” did not appreciate what they were getting. Merrill translated his report into an institutional lecture, which he delivered, with variations, as a “get-together” exhortation at several meetings of Hearst executives.
“The feeling prevalent among our editors that our features cost our papers more than the features they buy from outside syndicates,” he said, on one occasion, “has no basis in truth. Lists have been supplied showing the estimated value—the assessment—for every item furnished to each of our newspapers. Comparison with what they pay to outside syndicates is therefore easy. Every editor should be instructed to make this comparison. The proof will be before him that our own most conspicuously displayed and most popular features cost our papers from 60 to 70 percent of the price that they are actually paying to outside syndicates for less valuable features.
“Competition among the syndicates is intense and destructive. Very few are making any profit. Changes of managers are of almost daily occurrence in consequence. [E. H.] Harriman’s daughter [Mrs. Rumsey] has already sunk $300,000 in backing the [W. H.] Johnson syndicate, still losing money and hopeless. The management of our syndicate is the only one in the United States that has not been changed in the last eight years.
“The gross income of our combined syndicate services has increased nearly threefold. While the Hearst papers formerly paid more than half the whole operating cost, now they pay only $2,100,000 out of a gross revenue of approximately $6,000,000.”
It is pertinent here to recall that in the year prior to my assumption of control, International News Service—Feature Department suffered a loss of approximately $79,000. On May 17, 1918, it was separately incorporated as International Feature Service, Inc. It came under my management as of July 1, 1918. There were no deficits after that date.
A highly practical consideration led to the premiership of King Features Syndicate in the Hearst syndicate line-up. Its name was less objectionable to a large number of prospective clients than the title of International Feature Service. The word “International” was a Hearst label. It stirred antipathies engendered by apprehension. As told earlier in these pages, scores of publishers lived in dread of an invasion of their fields by the Hearst colossus. That fear was kept alive by a definite threat. It was a clause, inserted at Hearst’s insistence, in every contract under which features were supplied to any community with more than 75,000 population. It provided that “this agreement may be canceled on six months’ notice in the event that W. R. Hearst decides to acquire or establish a newspaper in the city above mentioned.”
That stipulation—never enforced—became an empty gesture that cost Hearst millions of dollars during the ten years of my administration. This huge fortune could have been added to the syndicate income without a penny of increased expense. It would have been readily forthcoming under long-term commitments. Many publishers were eager to obtain, at handsome rates, the advantages that would be embraced in a five or a ten year deal with the Hearst organization. They would be fulfilling a twofold desideratum. First, they would be buying insurance against the menace of a hazardous competition. Second, they would be enabled to stabilize their feature budgets.
This disposition was strikingly illustrated by the largest newspaper syndicate contract ever executed. It was the only case in which Hearst consented to omission of his six months’ cancelation clause. It covered an initial period of ten years, beginning in 1922. A minimum consideration of $1,940,200 was provided— a $50,000 cash bonus, plus weekly payments of $3,635. The contracting parties were King Features Syndicate and the Pittsburgh Press. Oliver S. Hershman was the owner of the Pittsburgh Press. He took no part in the transaction. He was represented throughout the negotiations with me by Harry M. Bitner, his managing editor. Shortly thereafter, Bitner signed another indenture at my desk. It enrolled him in the Hearst personnel, to the top of which he rose some years later as general manager of the newspaper organization.
The syndicate crops that Hearst forbade me to reap would have brought enough at least to temper if not to avert altogether the lean days upon which he afterward fell. Several sources of income persistently rejected at my hands have since yielded large sums regularly. One, by no means the most extensive, may be described as by-product. It consists of royalties for commercial uses of copyrighted characters and their titles. Hearst spurned the idea. “That’s chickadee stuff,” he said. “Please don’t let it take up any of your time.” A department to handle this business was set up by a succeeding management. It grossed $400,000 in one year. If that be “chickadee stuff,” it’s rather high priced.
Hearst steadfastly opposed personal capitalization “on the outside” of popularity achieved through newspaper features. He felt “the sideline might block the mainline” of attention of the artist or writer. It did grow into the chief source of income of one of the most conspicuous members of the Hearst staff, Walter Winchell. That was after my retirement from the organization. Winchell was never on my payroll. His emoluments for broadcasting greatly exceeded his newspaper salary.
The syndication of Winchell’s column turns a revealing light on the potency exercised by features among publishers. Eagerness to acquire a circulation-maker may brush aside constraints of business caution. Winched boasted of such an instance. It was the provision in his syndicate contract ostensibly holding him harmless from judgments for libel. Of course, such a stipulation would be unenforceable. It would be adjudged against public policy. But, as a formal condition attending the publication of his articles, it furnished an illuminating commentary on a significant phase of journalism.
“Bugs” Baer had written at least two paragraphs of exactly the same purport, but the crispness of Rogers’ line caught my imagination. The next day at the Friars Club, of which we were fellow members, I proposed to Rogers that he supply a batch of witticisms for syndication as a daily newspaper feature. The idea startled him. He was not sure of its feasibility. We discussed the thought at several subsequent meetings. At last, on the pretext of ironing out some remaining details in his own mind, he asked for time to make a decision. We clasped hands on his pledge to notify me as soon as he was ready to start his career as a journalist.
When Rogers’ comments began to appear in the New York Times, my annoyance was too great to be suppressed. I took him to task. It is one of my abiding regrets that our difference was not composed before he passed away. Will never gave the reason for breaking his promise. The truth reached me through a mutual friend. Rogers had been persuaded that it would “be better to range as a lone wolf than to run with a pack.” That was the argument with which the McNaught Syndicate won his adherence.
In the New York Times Rogers was the only humorous columnist. In the Hearst papers he would have been one of many— a minstrel in an olio, surrounded by such favorites as “Bugs” Baer, “K. C. B.” (Kenneth C. Beaton), J. P. Medbury, Ted Cook, W. F. Kirk, Harry Hershfield, George E. Phair and J. J. Mundy. It didn’t matter whether he might outclass any or all of them. He would still belong to a chorus. Will Rogers preferred the role of a prima donna without a supporting cast.
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