Evening star., 1953-01-06
FEC Takes Argument
For ABC-Paramount
Merger Under Study
By William A. MiIIen

W VVuIOUU ~ NttIISU
The Federal Communications
Commission today had under ad-
visement arguments over whether
the American BroadcaSting Co.
should be permitted to merge
with other interests.
The full commission listened
yesterday to nearly 71a hours of
oral argument by counsel. rep
reSenting a wide variety of
views.
In bringing the case to a close,
Frederick Ford, chief of the
hearing division, Broadcast
Bureau Of the FEC, declared it
is not opposed to ABC acquiring
new capital. He said his bureau
favorS competition in 5he broad
casting field but objects to the
marriage of movie and television
interests.
The merger of United Para
mount Theaters, Inc, and ABC
has been the subject of lengthy
hearing, topped by Yesterdays
closing arguments, to strengthen
the broadcaster's financial posi-
tion and buttress competition.
Examiner Urges Merger.
Examiner Leo Resnick, who
conducted the hearings, has rec
commended that the commission
authorize the merger.
Duke M. Patrick of the Wash
ington law firm of Hogan g.
Harrison, representing United
Paramount Theaters, Inc. told
the commission he does not
think the movies and home tele-
vision are competitive. He de-
clared the evidence shows that
good theaters are now doing as
well as they ever did. But the
marginal theaters are not, and
a number Of them have closed
their doors, he said.
He said Paramount does a
$50 million film rental business
and would not directly compete
with televiSion broadcasting. He
said United Paramount does not
plan a movie TV business.
In urging the commission to
approve the merger, Mr.. Patrick
pointed out that the hearing ex-
aminer had done a thorough
and conscientious job and his
findings should be adopted. He
recalled there were 10000 pages
Of oral testimony, some $50 ex-
hibits and SO hearing days were
consumed in the lengthy pro-
ceeding.
Even though we started in
to cut our own throats. we
couldn't do a clean job of it,"
said Mr.. Patrick, in meeting ar
guments objecting to the tele-
vision-movie merger.
Sees No Restriction.
He pointed out his firm has
more than $25 million in assets
and said the experienced busi-
nessmen who operate it would
not restrict television, theaters,
entertainment or property in
any one phase at the expense
of the others. He said this
would be corporate suicide.
Mr.. Patrick said there Is no
ban in the Clayton Act or any
other antitrust legislation to
this merger. He said it would be
in the public interest to approve
the merger.
The directors of the proposed
new merged company would
represent Government, banking,
manufacturing, merchandising
and entertainment, Mr.. Patrick
informed the commission.
James McKenna, representing
ABC, recalled that, in 1943, the
commission had set up ABC as a
competitive company. But it has
not been able to attain its full
measure, he said. He declared
ABC needs resources over and
above what a single company
can produce.
He said the network business
Is dominated by the National
Broadcasting Co. and the Colum-
bia Broadcasting System.
Survival Cited.
He said ABC is the only radio
network that has come in and
survived competition in the last
several years. He said NBC and
CHS have perpetuated their
dominance because of their ex-
tensive financial resources, and
were able to attract sponsors.
Mr.. McKenna pointed out that
CHS and NBC are branches of
vast corporate enterprises He
said the Radio Corporation Of
America with its valuable pat
entS, manufacturing plants, per-
sonnel and high engineering ad-
vantage, is back Of NBC.
CHS. he said. manufactures
records and is interested in radio
and television equipment, as we'll
as movies for television and eIec-
tronics. The Mutual Broadcast
ing System, he said, is owned
by companies with far-f1ung in
terests, including making rockets
for the Army and Navy.
The Dumont Co.. he said. de-
rives only Is per cent of its in
come from the television and
broadcasting business directly
and is interested in manufac-
turing electronic devices.
But ABC is dependent solely
on income from it's own stations
and network and needs funds to
place it in a strategic competi-