CLOSEUP: JOHN KLUGE continued Kluge feels that by 1969 Metromedia could have revenues totaling $153 million

but he decided to look for an opportunity in a special kind push and a program of continual reinvestment, I could see of company. how it could make a great deal of difference." "I was interested in going into a publicly-held company, The difference Kluge made, of course, was spectacular. not necessarily in broadcasting," he recalls, "because I Bennet Korn, who was to continue under the new rule to wanted to put many years of experience in marketing, in handle the company's broadcast properties, remembers the sales, in administration and my background in finance to- first time that he met John Kluge. He, along with Richard gether to some use for a much larger arena." D. Buckley, then president of Metropolitan Broadcasting Says Al Johnson, "John was fully developed in 1947 to (now majority stockholder in the Buckley-Jaeger radio clo what he did. He only needed time. I never saw a man stations) and John V. B. Sullivan, then and now genera! come to a career so well prepared." and sales manager of WNEW-AM-FM, were invited to the The company Kluge began dickering with in 1958 and Kluge home in Washington. joined in 1959, seemed made for him. It had started its "From his home," Korn recalls, "I knew he had taste and existence as the DuMont Television Network, the broadcast warmth. I felt relaxed and happy that the man could com- division of Allen B. DuMont Laboratories Inc., in 1948. municate and I looked forward with great expectations to As a network in competition with ABC, CBS, and NBC it the change." never rose to any consistent level of prominence artistically Dick Geismar had an even more revealing first meeting or financially. In September 1955 it was set up as a sepa- (the first other than a hurried handshake and a hello) . A rate corporation known as DuMont Broadcasting Corp., few weeks after being installed as chairman of the board when the parent management, not having much of a feel- in the spring of 1959, Kluge asked Geismar to meet him at ing for the broadcast business, decided to spin broadcasting 7 a.m. in a restaurant in Pennsylvania Station. He had just operations off from manufacturing activities. A two-for-five come in from Washington and wanted to assure Geismar, stock distribution took place with shares in the new com- who was thinking of quitting, that his future was with the pany spun off to those stockholders who held DuMont company. Labs stock. Geismar quickly found out, too, that Kluge was going Paramount Pictures owned stock in DuMont Labs and to launch an all-out acquisition program, preferably in big as a result of the spin-off got about 21% of the stock in markets. What changed Kluge from essentially a small mar- DuMont Broadcasting. In addition, thanks to a one-for- ket radio station operator into a basically big market TV broadcaster? Says Geismar: "John's feelings were that in three righto s offeringo: made in 1957 when DuMont Broad- casting bought WNEW radio, Paramount got more stock in media there -ivas going to be, insofar as national adver- the company. tisers were concerned, heavier and heavier concentration of their efforts in the major markets. That the major facili- WNEW WAS THE STAR ties, which continue to deliver audiences, would feel the The purchase of WNEW was the one good thing that had effects least on the negative side and most directly on the happened to the company up until that time. Comments positive side. He also felt that even though he was buying Metromedia's Dick Geismar, who lived through the com- into a company that had two independent stations, that pany's complete metamorphosis: "When DuMont Broad- independent TV would at some time in the not too distant casting was set up it •ivas a company with two stations which future become quite profitable in major markets and that were losing money [WTTG Washington, D. C., and WNEW-TV there was a latent profit potential here that hadn't yet been —then WABD-TV—New York], which had just lost their net- tapped and the time to buy things was when nobody else work affiliation, had no cash and had a $500,000 bank loan wanted them." for working capital—no cash, no profitable operations and Under Kluge's administration, Metromedia Inc.—the nothing but headaches." company changed its name once again, this time on March The company changed its name to Metropolitan Broad- 28, 1961, as a prelude to diversification—has hardly taken a casting in 1958, the year it bought WHK Cleveland, because faltering step in five years. Today its stock sells for about it was felt DuMont was an unfortunate name as far as agency $30 a share on the New York Stock Exchange (the com- people were concerned. pany made the switch from an over-the-counter stock to When Kluge bought into the company in 1958 its stock the Big Board on June 22, 1962), its highest price in the was selling for about $8 a common share. Kluge and his pre-Kluge days being 13. associates—most of them from the Baltimore-Washington Kluge predicts that Metremedia's gross revenues, which area, including David Finkelstein, Mark Evans and H. H. totaled $69,733,339 in 1963, will shoot up to $90 million Thompson (Kluge's brother-in-law) —paid about $11 a share in 1964. He also expects net earnings for calendar 1964 to and got what amounted to 24% of Paramount's stock in the rise by 10 to 13% over 1963's net income of $3,966,340. He company. further predicts that whereas 1962 produced $53 million in To the untrained eye it looked like the last company any- revenues, it would not be wrong to preface a 1 to the 53 body would want to buy into. By that time it was more five years from now. And he adds, "$153 million is not a than $3 million in debt to the banks and only WNEW radio, figure I'm particularly happy with." of its four entities, was profitable. But Kluge thought the Kluge is paid a salary of $125,000 a year bv Metromedia timing was just right. "TV stations were continually rais- Inc. as part of a contract that has eight-and-a-half more years ing rates and becoming more and more of an umbrella for to run. But there should be a long way to go before Kluge independent operations," he says today. "With profits that retires. Now a springy 50 years of age, blessed with an in- could be generated from other areas by just a little more gratiating grin that must have put the lock on many a sales