Evening star., 1951-05-24
Paramount Theaters
To Merge With Abe
In SIS Million Deal
BY the Associated Press

NEW YORK, May 24.-The
planned merger of the American
Broadcasting Co. with United
Paramount Theaters, Inc, Nation
wide movie theater chain. would
mark the first entry into net
work television Of a major branch
Of the film industry.
The merger agreement, an
nounced yesterday. will be
achieved by an exchange of stock.
The combine is expected to boost
considerably the theater chains
efforts to use more television in
movie theaters, to stimulate film
attendance.
It also would give ABC's radio
and television network new re-
sources in finances and potential
talent. However, it does not as
sure ABC-TV a supply of new
movies. as United Paramount does
not produce films but operates
about 900 motion picture houses.
Merger Subject to Approval.
The merger agreement still is
subject to ratification by the
boards of directors and stock
holders Of the two companies and
approval of the Federal Communi-
cations Commission, which regu-
lates radio and television.
The merged company is to be
known as American Broadeasting-
Paramount Theaters, Inc.
In effect, it amounts TO purchase
of ABC by United Paramount. 1t
will be accomplished by giving
ABC stockholders about $25 mil
lion in stock of the merged COM
pany.
The American Broadcasting Co.
will become a division of the
merged company, with Robert
Kintner, ABC president, becoming
president of the division. Leonard
H. Goldenson, president Of United
Paramount. will be president Of
the merged firm.
Paramount to Sell Station.
The present United Paramount
board Of 13 plus five ABC direc-
tors, including Owen D. Young and
Board Chairman Robert j. Noble,
who owns a So per cent majority
of ABC stock. will form the board
of American Broadcasting-Para
mount Theaters, Inc. Mr.. Noble
will become chairman of the
Finance Committee.
The merged company will retain
ABC's radio and television stations
in five cities, including video sta
ton WENR-TV in Chicago, as well
as the video and radio network
program services to affiliated sta
tions. United Paramount's tele-
vision station WBKB In Chicago
will be sold to the Columbia
Broadcasting System, from which
1t already receives network service.
The merger agreement came
swiftly after a resumption Of
negotiations by the two COM
panies. Earlier discussions had
collapsed II days ago.
ABC Set Up in 1912.
1t climaxed two and one-half
years of intermittent efforts by
various companies to buy ABC,
which Mr.. Noble acquired in 1912
for So million when the National
Broadcasting Co. was required by
the FEC to dispose of one of the
radio networks it then was oper-
ating.
ABC stockholders are to re-
celve, for each share they now
hold, $3.50 worth of common
stock and $7.2O in preferred stock
Or $14.70 in all.
In reports last December 81
United Paramount listed 3,261;287I
shares Of common stock outstand-
ing and assets of $106,731 900,
while ABC listed 1889 900 shares
and assets of $26,491 900.
United Paramount is one of two
firms formed from Paramount
Pictures, Inc. in 1949 under a
Federal Antitrust consent decree
requiring separation of the orig
inal company's theater operating
interests from film production
and distribution.
Kenneth H. Berkeley, manager
OF WMAL-TV, said in Washing
ton today that the merger requires
no change in the ownership of that
station. The Washington ABC out
let is owned by The Evening Star
Broadcasting Co., a concern which
is corporately independent of the
network.
Neither ABC nor Paramount
owns stations in Washington, Mr..
Berkeley added.
In a joint statement, on the
merger Mr.. Noble and Mr.. Gold
enson said:
by this merger we believe the
new company will serve the public
interest more effectively through
strengthened resources in the radio
and television field. ABC, which
has made remarkable progress in
the last eight years, building up
ward from a small radio network
of $12 million of business annually,
to one of the three leading radio