Citizen Hughes - Michael Drosnin [76]
“The reason for this was explained very carefully to me. I was told it was because the News took a position pro or con on every political issue on the horizon and every candidate seeking office. The other, more conscientious newspapers usually refrained from taking a really strong position in any matter, merely because they did not want to be accused of being partial.
“Now, it seems logical to me, based upon the very wide public ownership of the two big networks, and the very small holdings of any one stockholder, that it would be almost impossible to obtain any really reliable assurance of strong support from either NBC or CBS. So, although ABC may be the weakest of the 3, if a really strong position could be achieved, permitting a predictable candidate attitude, this network might very likely turn out to be the balance of power.”
The balance of power. With growing excitement, Hughes watched the price of ABC stock, saw it plummet, waited until it reached a record low. Then he pounced.
On Monday, July 1, 1968, just before the opening bell of the New York Stock Exchange sounded, Hughes announced his takeover bid, catching both ABC and Wall Street by surprise. That was vital. This was not to be a friendly business transaction but a sudden raid to seize control.
Hughes gave ABC stockholders two weeks to sell him two million shares at a price well above the market. If they did, he would own 43 percent of the network, more than enough to be in full command.
Stunned, ABC’s board of directors met in a council of war, determined to block Hughes’s bid. It was like wrestling with a phantom. They knew virtually nothing about the recluse or his intentions, except that he had not been seen for more than a decade. That, they decided, was their trump card. They would force Hughes to appear in public.
“WILL HUGHES RISK PRIVACY TO WIN ABC?” newspaper headlines asked. It seemed he would have no choice.
Ordinarily, anyone seeking to buy even a single television station—let alone an entire network—was required to make a personal appearance before the Federal Communications Commission. Hughes, however, had managed to obtain a license for KLAS while remaining hidden. Now he intended to do the same with ABC.
His attorneys insisted that would be impossible, but the billionaire disdained such advice. “This is no decision which a lawyer can make merely by looking in a book,” he told Maheu. “It depends upon political strength and ability at your command now, since I am very sure this will be settled long before the new administration comes in.
“I have to take a business risk of large amount, and I can only make the decision so to do based upon my appraisal of your ability to accomplish a certain result with the FCC.”
Fortunately, 1968 was an election year, and Hughes figured that he would soon have more than money to offer the candidates then running for president. With their help, he would have ABC.
“I dont see how I dare launch into [this] campaign unless I have some assurance of the FCC’s support, without my personal appearance,” he explained. “Now, I see only one way such support might be assumed, and that is in case one of the candidates or the white house on behalf of its favorite candidate wants the support of ABC. If such a trade could be made, it seems to me that we have the tools with which to make it. In other words, our present position plus white house or Humphries’ full support would spell certain FCC approval in my book, and with that assurance, I would go full blast ahead. Now,” he cautioned Maheu, “you really have to be careful how you approach this bag of hot potatoes.”
Even Maheu was uncertain, however, that the plan was feasible. “The primary and election will have come and passed before we would be in a position to use ABC to our advantage,” he replied. “There are other ways of making the candidates thoroughly devoted to us.”
And, Maheu reassured Hughes, there were other ways of handling the FCC. “We still have time to condition the individual members of the board and at all levels below,