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The Rich Legacy of Leonard Goldenson Lives On

May 19, 2003  •  Post A Comment

Barbara Walters has called the late Leonard Goldenson, founder of the modern American Broadcasting Company, “The quiet giant of broadcasting.” In some ways, perhaps too quiet. Despite significant accomplishments in television, business and philanthropy, he has taken a back seat in the history of media to David Sarnoff, founder of NBC, and William S. Paley, the force behind the rise of CBS.
Part of it was his personality. Mr. Goldenson was a Harvard-trained lawyer who wielded his considerable influence behind the scenes. He didn’t love the limelight as much as Mr. Sarnoff or Mr. Paley, and he traveled a much longer and more difficult road to success. Although founded in the 1950s, ABC didn’t have as wide coverage or as high ratings as CBS and NBC until the 1970s.
Part of it was bad luck. Even when he published his autobiography Beating the Odds in 1991, circumstances conspired against him. His book was published during the Gulf War, which made it very hard to get publicity. And there was a behind-the-scenes conspiracy.
The publisher was Scribner’s, owned by bombastic British publisher Robert Maxwell. He held a grudge dating back to the early 1970s, when Mr. Goldenson refused to sell him ABC’s holdings in News Corp. as part of Mr. Maxwell’s plan to defeat his archrival Rupert Murdoch. As a result, Beating The Odds was published without photos, the press run was limited and promotional support nonexistent. Only when he died six months after publication did Mr. Maxwell’s unsavory business practices come to light, too late to help Mr. Goldenson.
What no one could take away was the monumental nature of Mr. Goldenson’s achievements. He was a risk taker who broke a 1950s movie industry boycott and brought Hollywood showmanship to TV. His investment in The Walt Disney Co. made Disneyland possible. He oversaw a revolution in sports broadcasting, including reinventing the Olympics as TV entertainment. Under his watch the concept of movies for TV sprang to life, along with the first miniseries. He created one of the first entertainment conglomerates, operating movie theaters and publishing interests as well as broadcasting. And he had the vision to enter new media, carving out a significant role in cable TV long before NBC or CBS, despite resistance from his nervous affiliated stations.
Mr. Goldenson discussed his motivation for getting into cable in his book. At his urging, ABC had formed a venture with the Shubert Organization, a major producer of live theater, as an investment and to get TV rights to top plays. When Mr. Goldenson realized plays on video weren’t right for the network he turned to cable as a platform for reaching a more targeted audience. That led to an investment in what became the Arts & Entertainment Network and many other cable properties over the years.
His most noted charitable involvement also came out of personal experience. His oldest daughter was afflicted with a devastating disease, and when he sought help, little was available. Mr. Goldenson and his wife, Isabelle, founded the United Cerebral Palsy Association in 1946, and he served as president for five years. He passed on that heritage of giving back to the community to his surviving daughters, Loreen Arbus and Maxine Goldenson, who are also successful Hollywood producers.
What is less visible about Mr. Goldenson is that his successes were accomplished while he remained loyal to friends and employees, operating with the highest ethical standards and without forgetting that broadcasting is not just another business, it is a public trust.
That weighed especially heavily on his mind when he concluded the time had come to sell ABC in the early 1980s. It wasn’t just his age, although that was a factor, or the fact media properties were fetching historically high prices. He understood the broadcast landscape had changed.
Until Ronald Reagan became president, the FCC had required broadcasters to show moral fitness, that there was no conflict of interest and that a sale would not be anti-competitive. With rapid deregulation, for the first time it was possible to acquire a TV station simply to flip it for a profit. The concept that broadcasters were allowed to use public airwaves in return for serving the public interest was replaced by an interest primarily in the bottom line.
That is not to say that Mr. Goldenson didn’t care about profits. Long before it was fashionable, he worried about the interests of his stockholders as well. He had no choice. Unlike Mr. Sarnoff and Mr. Paley, he held only a small amount of stock in ABC and had to fight takeover attempts throughout his career.
When he finally did sell in 1986 for $3.5 billion, Mr. Goldenson handpicked his successors, choosing the kind of broadcasters he admired. He even helped structure the transaction, bringing in Warren Buffett long before he was well known, because he was a long-term investor.
“A network is a powerful medium of communication, and so infinitely attractive to all sorts of demagogues,” he wrote in his autobiography. “A network is also a public trust. I could not allow our company to fall into the wrong hands.”
As long as ABC was run by Mr. Goldenson it was always in the right hands. While today’s managers work to keep ABC in the top ranks of broadcasting, it would not be possible without the legacy that Leonard Harry Goldenson left behind.