The King World Story, Retold
In 2004, TelevisionWeek took a look at King World, the family company that Roger King and his brother, Michael, helped build into a syndication force. That article is reprinted below.
``Wheel of Fortune,'' ``Oprah Winfrey'' and ``Jeopardy!''
Were this an answer on the ``Jeopardy!'' game board, the question would be simple: ``What are the top three programs in the Nielsen syndication ratings since 1986?''
That length of time on top is an extraordinary achievement for television, no question, but even more amazing is that one company-King World-distributes all three shows. In fact, as it celebrates its 40th anniversary, King World, now a unit of CBS Television, distributes five of the top 10 syndicated series, including ``Dr. Phil'' and the off-network sitcom ``Everybody Loves Raymond,'' with ``Inside Edition'' just a notch away at No. 11.
Roger King, the man who remains at the helm of what one might call ``the little company that could-and did,'' is himself a legend, and is being honored with the TelevisionWeek Syndication Executive Lifetime Achievement Award. In his domain, the CEO of CBS Enterprises and King World Productions has few peers.
``Officially, Roger reports to me,'' said Leslie Moonves, chairman and CEO of CBS, ``but I'm not sure there's anything I can tell him about syndication.
``If you had one property to put on the field, he's the guy you want out there,'' Mr. Moonves added. ``I don't know how he does it. He knows how to leverage one show to sell another like no one can.''
Mr. King is said to have a photographic memory for the numbers of every station he ever approached and every station to which he ever sold a show. If there is a station executive who has not been impressed by Mr. King's abilities, he has not stepped forward.
Mr. King, who might boast that he is aptly named, is in fact rather self-effacing about the success of the company he built with his brother Michael.
``We started with one property,'' he said. ``I knew I knew the television business. It worked out.''
That one property was the right to distribute ``The Little Rascals,'' the series of shorts produced by the Hal Roach Studios from the silent era until 1938. The man who in 1964 thought those old black and white one-reelers still had some value was Charles King, father of Roger and his five siblings.
``Our father did not have a strategic plan,'' said Michael King, who was CEO when King World was independent and is now a consultant to the company.
``He always liked `The Rascals' and thought the product had some life left in it,'' Michael King said. ``Trouble was he had no money.''
As Michael King tells the story, his father flew to Los Angeles to make a deal with Clinton Films, which then controlled the Roach properties. Clinton said it wanted $300,000 for the rights. He told the Clinton executives he had no money. They yelled at him for wasting their time. When calm returned, the King family patriarch talked them into giving him one day to raise the money.
At the time, Charles King had $6 in his pocket.
He flew back to New York and walked in to WPIX-TV without an appointment, calling on the station executives with whom he had built prior relationships. He left their offices with a three-year licensing deal for $50,000.
Mr. King used the $50,000 as a down payment on the deal with Clinton Films. King World Productions had begun.
The company remained solvent, but when Charles King died and his sons Robert, Roger and Michael took over the business in 1972, King World was practically an unknown entity, operating not from a major hub, but from offices in Summit, N.J., in the outer suburbs of New York. Its only asset was ``The Little Rascals,'' and the company grossed only $150 per week. Michael King had to park cars on weekends to supplement his income.
Things began to pick up a few years later, when Dick Colbert hired the brothers as subdistributors on the Barry & Enright game shows ``Tic Tac Dough'' and ``The Joker's Wild.''
Michael King credited Mr. Colbert for being a valuable mentor, but said the Kings' relationship with Barry & Enright was not initially a particularly lucrative one.
``Part of our deal was we had to pay our own expenses, so we were not getting rich,'' he said.
The Kings wanted to acquire or develop their own shows. One of their first attempts at producing a series, ``Soap World,'' a daily 1982 talk show about daytime dramas, tanked badly. King World was at a crossroads, and Robert left Roger and Michael to start his own company, The Program Source.
Roger and Michael King decided to go after a game show for the access time period, which was then dominated by Goodson-Todman's ``Family Feud.''
``Merv Griffin was really the only game show producer left without a distributor,'' Michael King said. ``We went to see him about `Wheel of Fortune,' which had had a daytime run on the networks.''
The Kings had no real money with which to entice Mr. Griffin, but in December 1982, borrowing from their father's playbook, they convinced him to accept only a $50,000 advance, the same amount Charles had used to snag ``The Rascals.''
Mr. Griffin also agreed to pursue an unusual sales strategy. When King World set out to sell ``Wheel'' to stations, it not only demanded no barter time as part of the licensing agreement but decided to bypass the top markets of New York, Los Angeles and Chicago and let the show grow. ``Wheel'' premiered in September 1983 with 59 stations and a 43 percent market reach.
But it took on ``Family Feud'' and won. By September 1984, ``Wheel'' was the No. 1 syndicated game show, appearing in 181 markets, including the top three. With the launch of ``Jeopardy!'' the same month, King World had given stations ``the one-hour block that was needed to program prime-time access,'' Michael King said.
The shows also made Wall Street take notice. King World's net income grew 418.5 percent in the fiscal year ending Aug. 31, 1984, and in December of that year it made an initial public stock offering at $10 per share, trading over the counter. Investors responded. By October 1985, even after a two-for-one split, the stock was at $20 per share.
King World had the bankroll to expand.
``The daytime talk show was then dominated by Phil Donahue,'' Michael King said. ``We wanted someone different. Oprah Winfrey was doing a great job hosting `AM Chicago,' and it goes without saying that she looked different.''
On Sept. 8, 1986 ``The Oprah Winfrey Show'' went national. She soon toppled Phil Donahue from his comfortable top spot and widened her lead over all competition. Oprah Winfrey was and is a national phenomenon.
And King World became the undisputed czar of television syndication.
Through the '90s, it remained so. There were additional successes, such as the magazine show ``Inside Edition,'' which launched in 1990. There were also some flops-an attempt at late-night with ``Nightlife with David Brenner'' (1986) and the talk show ``The Roseanne Show'' (1998) are perhaps most notable. The latter is said to have put more than a few gray hairs on the Kings' heads.
The story of how King World turned a nice profit on ``Roseanne'' by refusing to let stations out of their two-year contracts despite the show's horrible ratings off the bat is practically legendary in the world of TV syndication. The tale, confirmed by two inside sources, is particularly telling in that those stations, despite taking financial baths on the deal, happily continue to do business with Mr. King on other properties.
Even with failure, success never wandered. Toward the end of the decade the Kings found they were sitting on a mountain of cash-said to be $800 million-and really nowhere to go.
``We had picked all the low-hanging fruit,'' Michael King said. ``The business had changed. We had invested in some TV stations, but we didn't want to go further because the ceiling had been lifted and the groups were gobbling up the mom-and-pops. We didn't really have the shows to go global-we'd just sell them the formats to our game shows. Even more than that the conglomerates had taken over. With the end of the financial interest rules they could produce the shows and sell them to their own stations. Many of our shows were on ABC stations, and Disney/Buena Vista now owned ABC.''
King World retained investment banker Allen & Co. and Frank Biondi, former Universal Studios chair, to advise on potential sales, mergers and acquisitions. CBS arose as the most likely suitor.
``When the networks were allowed back in domestic syndication we had started Eyemark, but it was difficult to make its mark,'' said Fred Reynolds, chief financial officer of CBS at the time and currently president of the Viacom Station Group.
``We had started putting `Everybody Loves Raymond' out for off-network, and we knew we would have other off-networks coming down the pike,'' Mr. Reynolds said. ``No one did a greater job selling than the Kings. It seemed the right fit.''
CBS was not deterred by the fact that most of King World's top series were playing on ABC and NBC stations and that Roger King was insistent that he would not change that status when renewals came up.
``We're living in the age of vertical integration,'' Mr. Moonves said. ``It all rings up on the same cash register. But with Roger it was more than that. He thought he had a moral and ethical obligation to go to those stations first for renewals. We knew that when we made the deal.''
In the midst of negotiations for the merger of CBS and King World, Viacom acquired CBS. That deal completed, King World became part of CBS in 1999 in a deal worth more than $3 billion in stock. At the time of the deal King World had net profits of about $200 million, almost as much as CBS itself.
Michael King decided to step aside and become a consultant at the time of the merger.
``What was I to do?'' he said. ``My job had been dealing with Wall Street, and that was eliminated.''
Roger King remained and took the new division into the next century blazing.
Today ``Wheel of Fortune'' and ``Jeopardy!'' are seen by 16.4 million and 12.6 million viewers daily, respectively. Both are renewed through the 2007-08 season in virtually 100 percent of the country.
``We're at the point now changing is not needed to sustain our shows,'' said Harry Friedman, who for five years has been the executive producer of both ``Wheel'' and ``Jeopardy!'' ``We polish and we tweak. For example, with `Wheel' our computer-controlled system allows us to tape the show nonstop in real-time 30 minutes. That keeps the energy going.''
``Oprah'' is also renewed through the 2007-08 season. In 2000, Dr. Phil McGraw, a psychologist with a candid, confrontational approach to family crisis management, began making appearances on Ms. Winfrey's show. In September 2002, Ms. Winfrey's Harpo Productions joined with Paramount Domestic Television and King World to introduce Mr. McGraw's solo effort, ``Dr. Phil,'' which sold in record time and is now the second-ranked talk show on daytime TV and is renewed through 2005-06.
A year ago King World brought in Henry Winkler and Michael Levitt as new executive producers of ``Hollywood Squares,'' a revival of the classic game show relaunched in 1998 with Whoopi Goldberg in the center square. Though the show has been plagued by rocky ratings, Mr. Winkler and Mr. Levitt have worked hard to minimize the damage. Renewal prospects for the revitalized ``Squares'' are uncertain.
``We kept the host and the nine squares,'' Mr. Winkler said. ``Other than that we changed everything, including the lighting. We now have a show that is bursting with energy and is produced in 21/2 hours less time [per shooting day].''
``Inside Edition'' is renewed through the 2007-08 season, and ``Bob Vila's Home Again'' remains a strong show with a 93 percent market reach.
Last fall King World launched a new talk show, ``Living It Up! With Ali & Jack.'' While the strip has sputtered somewhat in the ratings, it was sold with two-year deals, and Roger King noted recently that he still has high hopes for its eventual success.
King World is also handling the off-network sales of CBS's red-hot ``CSI'' and its offshoot ``CSI: Miami.'' The former was sold to cable on Spike TV, and begins weekend broadcast syndication in 2004 in more than 96 percent of the country. ``CSI: Miami'' makes its off-network debut on A&E this fall.
Roger King said the company will not be offering any new shows at this NATPE, but there will be others in the future.
``King World is owned by CBS, but really it's still a family company in a lot of ways,'' Mr. King said. ``I try to keep that flavor.''
And what of ``The Little Rascals,'' the property that began it all? Its current license agreement with American Movie Classics ends Jan. 31. The company says it is pursuing further sales.
-Lee Alan Hill, Special to Television Week