Interview Date: Saturday November 20, 1990
Interview Location: New York, NY
Interviewer: Robert Allen
Collection: Penn State Collection
Note: Audio Only
Ralph M. Baruch, the founder, first president and chief executive officer of Viacom passed away on March 3, 2016. He was 92. Baruch transformed Viacom from a small cable and syndication company into a communications and entertainment giant and was inducted into The Cable Hall of Fame in 2006 for his contributions to the industry.
Ralph Baruch, Who Shaped Viacom’s Rise, Dies — New York Times
ALLEN: Good Morning. Today is the 20th day of November, 1990 and we are in the office of Ralph Baruch in New York City. We are going to be talking about his life and his life in the cable industry. And first of all, on behalf of the National Cable Television Center and Museum, thank you very much for allowing this interview to be set up and for being so patient with the problems that I had getting here today.
BARUCH: That's life in the big city, I suppose.
ALLEN: What we would like to do is to start at the beginning; where you were born, something about your parents, their names and any siblings you may have-- the early years of your life.
BARUCH: All right. I was born in 1923 in Frankfurt, Germany, at the height of the inflation. And I found myself later in life playing with million, ten million, hundred million and billion mark currency which I found in an urn on top of the fireplace in my parents' house. The year of 1923 was the year my grandfather died. My childhood was spent in Germany.
ALLEN: In Frankfurt?
BARUCH: In Frankfurt. My father was an attorney who was born in Alsace Lorraine and Dad spoke--he was very proud of that--nine languages plus Latin and Greek, which most people don't consider languages anymore. My mother was a German--of German origin--and came from Munich. Her maiden name was Gunzenhauser. Her mother's name was Shulein. The Shuleins came from Munich. Apparently, my great-grandfather became an orphan at an early age and began carting beer for the brewery to make a living. In his early '30s, he became a general manager and eventually owned the Lowenbrau brewery in Munich.
ALLEN: This is the grandfather on your mother's side?
BARUCH: On my mother's side. On my father's side, they all came from the Rhine. I just visited with an aunt of mine, my father's sister, who on September 29, 1990, celebrated her 107th birthday. She brought out a picture of my great grandfather, Jacob Baruch, who apparently had eleven children. So my grandfather was one of eleven. He died in 1923-- the year I was born.
Apparently, my father was a very fervent Jew when it came to defending his beliefs. He was not a very religious Jew, but a rabbi who apparently had not known my grandfather, said the prayers over the grave when he died. My mother was highly pregnant, and my father told me the story of him being very sad because his father had just died. The rabbi who spoke didn't know him and said, "In the '60s he went to defend his country, and again in 1870 the war between Prussia and France, and that's where he caught the germ of the illness that takes him away from us today," which was fifty-three years later. My father said despite being so sad, he had to nudge his mother, and they both had to laugh despite this very sad occasion.
I had an older brother, who was two and half years older than I was. In my early youth, I began to understand--or not understand, really--why my brother was taken on trips, etc., while I was sort of fawned off with the nanny to the country where she came from. One year, when I was very young, I got scarlet fever--which in Europe at that time was a very dangerous disease--while my parents were away at the seashore in Belgium. And this aunt of mine, who I saw recently again, took me in and I nearly died, as I am told. I remember vaguely that I was playing in a basin with very hot water because they put some toy fish in there. On doctors orders I had to keep my hands in the water because my kidneys weren't functioning well anymore, and they had made punctures to get the water out of my limbs. My teeth were also affected, and eventually they became very brown in the front. That's why I had them capped later because they looked awful--they looked very bad. But my brother was really the favored child. When I went to school and came home one day from kindergarten, I guess it was, or first grade, and I said to my parents, "Today we really let her have it." They said, "What do you mean?" I said, "All the boys got together and we beat up our teacher." There must have been twenty or twenty-five of us who ganged up on her. So I was not a very obedient child, I guess.
ALLEN: Is this why, as you alluded to earlier, that you weren't taken on the trips?
BARUCH: No. I think later on in life I came to understand why my father favored my brother. He was the one that got most of the education, etc., in life. And one has to live with that and I've lived with it fairly well. But, as I look back on it, even my father, later on when he was dying, asked my wife-- the woman who is my wife now, "Has he forgiven me?" She assured him that I had.
So we grew up in Frankfurt and had a very good life. I had a nanny, and we had a cook, and we lived very well.
ALLEN: What kind of law did your father practice?
BARUCH: Mostly international law in The Hague, and before the International Court of Law which was established in The Hague, because his languages came in handy there. Of course he spoke fluent French.
ALLEN: How did it come about that he spoke so many languages?
BARUCH: Well, he was born in Alsace Lorraine so French was one of his natural languages, as was German, of course. And he always had an aptitude to learn languages. He studied in Heidelberg for two years and Oxford for two years. In Heidelberg he laid the foundation, I guess, of what was later going to trouble him a great deal with the Germans and enamored him with the French, which I will get into a little later on. But, in early life, we traveled along the Rhine many times and he pointed out, (a) where the students had too much to drink or (b) where he fought duels. He told me that as a young man in Heidelberg before the first World War he fought seventeen saber duels and three pistol duels for only one reason: anti-Semitism. In those days, a Jewish student in pre-World War I Germany could not attend just any university. He had to belong to a fraternity and the Jewish fraternity was the only one that would accept him. They had a very distinguishing little cap and a ribbon, and of course everybody knew that that was a Jewish fraternity. So the other students would insult them and he said the only way to answer them was to hit them, whereupon they would seek to maintain their honor. The only way to maintain their honor was to have a saber duel. Later on, when he died, my wife was astonished to see all the scars on his body and on his head from all these adventures.
But I also was shown the graves of some of my ancestors, which my father traced back quite a ways, which I'll get into in a moment. I was taken to Worms, Germany, where I saw some of the graves of ancestors of my grandmother, my father's mother, whose name was Maas. I remember graves dating back to the early 18th century in the cemetery in Worms. That made quite an impression on me as a child. Anyhow, so we lived fairly well and ...
ALLEN: What was school like in Germany in the late 1920s?
BARUCH: My school was the Von Trapp School, which no longer exists, I'm told. It was a good school; later on we learned well. We worked very hard, and discipline was fairly stringent. In those days, corporal punishment was not prohibited. But around 1931-32, the anti-Semitism began. I remember that in 1932--I must have been nine years old--I was on the way home from school when I was attacked by about eight or ten Hitler Youth. I was really beaten up and I got a knife scar right below my knee--it's still there today-- where they beat me up. As a young child, you don't understand what's going on. But my dad, again, tried to explain this to me, but it was very difficult for me to understand.
In 1933, Hitler came to power. Now, that got my father into trouble because in 1932, he was a Social Democrat by conviction, and every time the Social Democrats had some case or other where they needed a lawyer and didn't want to pay anybody, they called him and said, "Bernie, you got to do me a favor. You got to take this case." So he took the case. In this case in 1932, the defendant was in court in the brown Nazi uniform, which was illegal; it was not lawful. He began to insult my father anti-Semitically, with the proper gestures, and my dad looked at the judge and the judge laughed. So my father, in typical fashion, went over and hit this fellow in uniform. The fellow sued him and it was thrown out of court in every instance. But when Hitler came to power in 1933, they arrested him within a couple of days. I remember the Gestapo coming to my home on a Sunday afternoon--or no it was Sunday morning--and arresting him. They put him into what they called "protective custody," which meant that they arrested him for his own protection because they claimed that they were concerned about what people might do to Jewish intellectuals in Germany. At the same time, I was forced about a week or two before that to leave school and go to a strictly Jewish school.
ALLEN: What impact did all of this have on your brother who was still in school?
BARUCH: Well he had to go to the same school that I went to, a Jewish school. Already, Jewish children were no longer allowed to go to an all-around school. We went to this Jewish school and it was very strange for us, quite unusual. My father, in protective custody, was pretty badly beaten up. They knocked some of his teeth out, and really went after him--he was fairly well-known in the town. When they were through beating him up, he was thrown into a very large cell with some of his compatriots and colleagues--lawyers, doctors--who were friends of his. He was very active in the opera and other things. Those were the kinds of people we had as friends at the house on New Year's Eve and other occasions. There was a Professor Sinzheimer, I remember, who was quite a scholar and he asked my dad, "How will all this end?" Dad said, "It can only end in one way and that's war." They were all terribly astonished. Don't forget it had only been fifteen years or so- -fourteen years--since the last war was over with. This had been such a devastating war that my father was drafted into--he hated the Germans--but he lived in Germany as a matter of convenience. He really didn't like them, but he was drafted into the German army because he came from Alsace Lorraine, which was then German. He was wounded three times, finally made a judge in the military court, which was very unusual for any Jew to become an officer in the first World War.
The first of April 1933, was the first day that the Jewish shops in Frankfurt had an SS man in a brown uniform planted in front of every Jewish shop. They discouraged anyone from going in. They had painted "Jew" in big white letters on all the windows of every Jewish shop. That was the first boycott of any Jewish business. That was the day they tried my father in court. The charge was attempted murder. I remember the band going around the courthouse and anybody who had ever lost a case against him anywhere was there saying, "We're going to get you this time," etc. They gave him three years in jail for attempted murder. That was the sentence.
ALLEN: And the attempted murder was the incident in court...
BARUCH: Yes, when he struck this fellow because he insulted him. My dad, who was familiar with the procedure, appealed the conviction--in those days you could still appeal, I guess--but they wouldn't let him out of jail. He, knowing some of the people in the jail from previous experience, bribed his way out. He got home early in the morning and he and my brother left Frankfurt in a car owned by a Doctor Carow, who was a very, very close friend. He got some money--my mother had gotten some money out of the bank--and the money was put into the tires of the car that he drove to Saarbrucken, which was then neutral. The Saarland, by the Treaty of Versailles, was considered neutral territory. I was awakened by my mother and my nanny--I was then, I guess nine, I had not turned ten yet--and told that we were going on a trip. My mother and I took the train, not to attract attention that a whole family was leaving. We arrived in Saarbrucken where we stayed at the house of a friend for a while. Then we went to Strasbourg and eventually we ended up in Paris. By this time, we had exhausted a lot of our funds, because you could only get so much out of the bank. We went to the French Committees which dealt with refugees. We were put up in the Hotel E'Correll--Rue E'Correll--which is one of the streets in Momacht, which have stairs on them. It was a fairly miserable life for me. I had just come from a very nice, comfortable life, I remember that, to a country where I didn't speak the language, to a certain amount of poverty, I might even say.
We were given coupons to pay for food in restaurants. I remember going to one of these restaurants with this coupon, and we really couldn't afford much lemonade, which was sort of a carbonated lemon-type drink. You couldn't drink the water in Paris, so we had to get some lemonade. They served some lamb with white beans. I didn't like white beans, but my brother ate them. You had to eat them very quickly because otherwise the fat would coagulate and the whole thing would be inedible. I stuffed myself and my pockets with bread--I remember that very well. The food was awful.
Then it began to get warmer since we arrived in Paris in June of '33 and my dad tried to reestablish his credibility. Pending that, it had gotten warmer and I remember very well that we were so hot in that hotel room--my brother and I--that we slept on sort of a fire escape. I remember a scene at night, the Sac O'Couer being lit up-- you could see it from our hotel. The area was not a great area, looking back on it now. But when you're ten you don't realize that so much.
ALLEN: Were there a lot of German refugees in Paris at that time?
BARUCH: There were some. Not too many. It was the beginning of the refugee flow. Some said, "You were lucky you got out early." I said, "Not that lucky--we went through enough." Well, the first item on the agenda was for my brother and me to learn French. So in June we were both put into a French boarding school, which was an absolute disaster. My brother spoke French a little, I suppose--he was two and half years older, as I mentioned. I didn't speak any. For me I just sat there not knowing what was going on. Then, of course, I was picked on again because I didn't speak the language. So I was taken out of that school and my father decided that I should learn how to speak French. He found a tutor in the Quartiletown (the Latin Quarter). I was told that every morning from 8:30 until 3:30 in the afternoon I was going to study French. The intent was to have me go to school with a new school year starting in October in France. I dutifully went to that very nice young woman in the Latin Quarter every day taking the subway, which in those days was not very dangerous. It was right near the Baroque St. Michel. I had a sandwich for lunch and came back at 3:30 and she gave me two or three hours of homework. Then my father insisted that I should also continue my piano lessons which I really revolted at and objected violently and refused.
ALLEN: Music was not your favorite thing at that point?
BARUCH: At that point, no. I had taken piano lessons and I suppose I had a pretty good ear because the piano teacher came back to my parents and said, "He's a very talented student. He learns very quickly to play the pieces and he plays them by ear after two or three times playing the music. Unfortunately, what he plays by ear sounds very nice, but has absolutely no relationship to what's printed in the music." And so I was admonished ...
ALLEN: You were going to be a composer rather than a performer.
BARUCH: I suppose so. But I was trying to play what was up on the music--it was boring to read that music. It's interesting that last March in my sixty-seventh year--sixty-sixth year I guess--I started taking piano lessons again.
So anyhow, I studied French that summer. Then we moved to a furnished apartment in Passe, which wasn't too bad. At least it was an apartment and it wasn't too far from the school. I was asked to look at schools and we finally decided I should go to the lycee. That was one of the reasons we moved to Passy. I was enrolled in the Lycee Jean St. Salle, which is on Rue La Pointe??? in Paris. I must say that was a very good experience for me. I had some difficulty in the beginning with my language, but when you're ten--I had just in August become ten--it's very easy and one learns the language fairly quickly, especially if you have a fairly good ear. You learn very well. I must say that the first years were somewhat more difficult, but I must also say that I'm appalled at American education comparing it to the French education I received because it was so well-rounded. It was an all- encompassing education going from what we called geography--which they now call political science--to arithmetic to algebra to geometry to languages. I did not take a foreign language until later because I had been struggling with my French.
We went to school Monday through Wednesday, Thursday we had off, and we went Friday and half a day on Saturday. Every Saturday around 11:30 our French teacher played us some music and explained some of the music and the background of these composers on records. There was an old gentleman named Weile--and it's strange that I still remember the name-- because I became quite fond of him.
In the meantime my dad set himself up in a law office on the Avenue L'Operod Number 10. I recently went back to look at the building and I guess it still has the old-fashioned water pump driven elevator that was there at that time. He established a partnership with a Mr. Lang. We began to resume a halfway normal life. In Germany, we had adopted a student. We did this every year-- adopt a poor student who we would support through his University studies. One of them had moved to Paris also. We saw him a lot. While I can't remember his name, I remember that I was absolutely distraught because a couple of years after we arrived there he died of leukemia. He was a very young man. My aunt's husband (my father's sister's husband) also died while we were there and that distressed me very much as a young man.
My mother became active again teaching refugees French. We resumed a fairly normal life. We built up new friends, and in school I acquired or made some friends that stayed with me for quite some time. One was a fellow named Jack Alfreicht, who was a refugee as well. His father was the producer in Germany of the Three Penny Opera and had also produced the Three Penny Opera in Paris. My dad represented quite a few film producers in his legal practice and had some, as I mentioned, as his clients. He also knew Kurt Weile well. That's how I met Jack (whose original name was Wolfgang but he changed it to Jack) and a fellow named Herschfield and a fellow named Jonas and the four of us were fairly good friends.
ALLEN: Did many of your family follow you out of Germany?
BARUCH: No, my father's sister--my aunt--stayed there for a while and took in my grandmother. Her son was an American citizen. She had been married before--this was her second marriage. Her first husband died and then her second husband died while we were in Paris. She had a son who was her second husband's son (when she got remarried) and his name was Richard Kirshbaum, and he stayed an American citizen while his father, my aunt's husband, became a naturalized German and lived in Germany. My aunt also had a daughter from her first marriage, who still lives today with her here in New York. My cousin is 82 as I said and my aunt is 107. So, they stayed there and in 1936 my cousin and his stepmother decided that they should go to America since he was an American. Why should they stay in Germany where they really were not wanted? So my grandmother, given the choice of going to America or staying with us, came to Paris. After my father left very hurriedly, as previously outlined, the Nazis gave my grandmother, who was then in her seventies, a very hard time. The Gestapo called her down and questioned her several times. Why is she living with an American? What happened to the spy here, (my father)?, etc. After a while that became too much of a burden and we decided that she would come and live with us.
ALLEN: Was it difficult for her to leave ...
BARUCH: No. Since her son was in Paris it was easier for her to get out but she could only take the equivalent of ten marks, which was nothing. That bought a nice meal at that time. That's all the money she could take with her; some personal items, some jewelry, but nothing else. My father's library was very extensive. That was one of his great pleasures. He had a lot of first editions. Editions of the Corpus Juris Civilis, the first edition of the Civil Code, and some other things. I remember them sitting there on very large shelves in our home. They were stored by a friend of my dad's in Germany and eventually shipped to us because they were books and what could they object to books? Then they were sent to someone else and then taken over by my dad. The china and some other things we left to my nanny who would play a part in my later life. Her name was Regine. She got some of our china; anything she wanted she could pick from what was left because we couldn't bring it over to France. In the meantime, we moved to a larger apartment and my grandmother, of course, stayed with us then. My life became pretty well settled. I started going out quite a bit. We played sports. A normal youth's life.
ALLEN: The French were more receptive to the Jews?
ALLEN: Your father stopped fighting duels ...
BARUCH: Oh, yes. First of all, that was illegal in France, which it was in Germany, too. He became older, a little more settled I suppose. The French, yes, the French were more receptive toward the Jews and refugees. Although, the French had a history of anti-Semitism, as you know, going back to the Dreyfus affair, but in those days I didn't notice it. My dad may have, but if so it wasn't brought out. To go to school we bought bicycles and had a marvelous time taking bicycle tours and other things.
In 1934 or 1935--I was then 11 or 12--my dad decided maybe I should join the Boy Scouts. So I joined the French-Jewish Boy Scouts and I was taken on trips and it was very nice. My adventures there were quite interesting. We camped in the south of France at one time. I remember sitting on a rock, looking at the water and the waves of the Mediterranean and being very, very homesick (I was an 11 or 12 year old) as one is apt to be. We slept in tents, of course, three or four of us. I remember it being very cold and all we had was a little tarpaulin under our sleeping blankets (there were no sleeping bags or anything and no cots, of course). We had to take turns getting up in the morning and making coffee. I remember taking my turn one morning and it was pouring rain and there was a little type of roof over the fire, which I was supposed to get started. I couldn't get the darn fire started and no matter what I did the fire wouldn't start. Finally, I took a half or a pound of butter and when I had a little bit of a flame I threw it on the fire and of course set the trees on fire. That didn't go over very well.
ALLEN: Cost you some demerits in scouting?
BARUCH: I suppose so. They didn't get that upset. I guess I wasn't a conformist then and never have been one. These bicycles trips we went on were a lot of fun. My brother developed a fantastic knowledge of mathematics--and I might even say was a mathematical genius. We used to play games and people gave him five or six-figure numbers, two of them, and say, "Multiply one by the other." He would think a little bit and then gave them the results. Being not that well-versed in math, this impressed me enormously. But he was also a very strange brother. He used to sit at dinner time and his eyes went sort of out in the distance and he was dreaming. The French had a contest every year for high school students in math and I know he won the top prize in his high school--our lycee--which is not quite the equivalent of high school; it goes further than high school. He then placed very highly in both the regional and national contest to the point where the French came to him and said, "Look, we want you eventually to go either to the Ecole Polytechnic, which is a very special university where all the civil officers, etc., go or to our Sancerre which is the military school. We will make sure you get in."
Then in early '36, on the way home from school, my brother's bike went in front of a car and brushed the car hood. He fell off the bike between the sidewalk and the gutter. He broke the neck of his femur. I was in school still when it happened and the next day or two days later I was taken to visit my brother in the Hospital Boucicaut. I remember coming in to this enormous ward (there were no private rooms to speak of, French medicine was not the most advanced in those days) and hearing my brother scream at the top of his lungs. They had apparently set the leg and he had a cast practically up to his neck, his upper chest. But something was digging in his back, something in his cast. So a day or two later they had to remove that and reset it. He stayed in the hospital for quite a while. They took X-rays some time later and found out that the leg had not been set properly. So they operated on him and put a pin into his leg and shortly thereafter he came home. We slept together in a room, and he was sort of hobbling around on his crutches. One night he called out--and I remember that very well because I was a young man at that time--not yet 13 or may have just become 13--and I turned the light on and he had vomited blood all over the place. Of course, everything was mobilized and back to the hospital ... No, not back to the hospital yet. He stayed home and I remember they rigged up a blood transfusion with my father giving blood while the blood was being pumped into my brother. I've never seen anything like it. It was all done at our house. He didn't feel well, he never felt well. To make a long story short, he was put back in the hospital and about eight and half or nine months after the accident he died of a general infection. He died shortly after his 16th birthday. He was born in '20, I was born in '23-- two and half years difference.
While he was back in the hospital I was in England attending a Boy Scout camp. We toured--five or six of us--the Isle of White in England. That was quite an experience, too, because I was the youngest--I was 12 or 13 (it was July or August)--and all the other fellows were 16 and 17. They decided to walk and I sort of followed way behind and had blisters on my feet. We didn't eat very well and they ran out of money. I remember being on the Isle of White late one night and we had just eaten some raw eggs (punched holes on each side) and we were looking for a place to pitch our tent. We couldn't find any spot that was even so finally we found one and dutifully dug our trenches in case it rained so that we wouldn't get too wet. This I remember very well. It had just become daylight and there was a man standing in the middle of our tent in a black suit, black tie and a derby and he had a big long mustache. He was screaming in English (which I didn't understand a word of) and shaking our tent and screaming his head off because apparently we had planted ourselves on the green of a golf course and had dug these trenches.
ALLEN: Scouting wasn't quite then what it is today!
BARUCH: No. You have never seen people fold a tent up so fast and get out of there as quickly as we could.
My brother died in September. My mother's birthday was September 17 and my father's birthday was September 30 and my brother was buried on my aunt's birthday, September 29. I'm standing at this grave, throwing dirt on this wooden casket, and that's something that stays with you, I guess, as a child or young man. I had just become 13 in August and I didn't know what to get my father for his birthday because he was obviously ... To lose a child must be one of the worst experiences anyone goes through ever. We had it happen to a friend of ours who lost a daughter at 23 and it's now ten years later and they're still not over it. I guess you never get over these things. I'm here as a 13 year old when my brother died and getting ready to buy my father a birthday present. I didn't have that much money so I went to a photographer--we really didn't have very many good pictures of my brother-- and I took a passport picture and I said, "Can you enlarge it?" He says, "Oh, that's very complicated, we have to make a negative ..." and he explained all this to me and in those days that was very expensive. Then I got him a frame and presented it to him for his birthday. I got a reaction which to this day I cannot understand--he ran after me to beat me up. The reasons why are beyond me.
End of Tape 1, Side A
BARUCH: So we continued our life and it became difficult for me living with my parents who had just lost a child. But being young, I didn't really understand the impact of my brother's death except I knew that my Bar Mitzvah, which was customary in Jewish circles, was postponed. My brother had had a lovely ceremony, and it was made a big occasion. It's funny how one still resents that decades later. Mine was postponed for a year, until I was 14, because my dad said we were in mourning. And then it was done very, very modestly. I remember very well that I was absolutely astonished when I was sent to take Hebrew lessons with a Rabbi. My dad, never having been crazy about Rabbis, brought me to this Rabbi of a reformed synagogue (Rue Copernique, I guess it was, in Paris). I took lessons and I remember they were on a Saturday morning when Jews aren't to travel and shouldn't do anything. The Rabbi opened the door and stood in the open door with a cigarette in his mouth, smoking, and that I found very unusual.
ALLEN: What kind of a student were you?
BARUCH: Oh, I was in the top, I would say 5 or 10 percent of my class. I was never number one. I didn't want to be number one. But the lycee also was very strict. Except in French. I did become number one or number two in French, strangely enough. We had a math teacher that was very, very good. His name was LeBetre. But he was crazy. He was a communist. He gave everybody nicknames and since Baruch Spinoza was a very well-known philosopher he called me Spinoza. He had nicknames for everybody.
I remember this math teacher who sat us in the order of our achievement in class. If you were number one you sat in the front in the first seat and if you were the last, if you were 28th, you sat in the last seat in the last row. He didn't like to deal with the ones who were beyond ten or so. He sat them in the back and once in a while he'd turn to the back and say, "You down there! What's your name?" He couldn't even remember their names. "Do you know this? Get up! Do you know the answer? Of course not. Sit down and go back to sleep." He didn't want to deal with them. When we had exams--and they were always very voluminous examinations of fifteen to twenty pages--we were given this three or four times a year. The one who was number one had to copy it once, and the one who was the second had to copy it twice, and whoever was 28th had to copy it twenty-eight times. This was besides your regular work. Was he a Math teacher? No, he was an English teacher. I'm sorry. I'm mixed up. I forgot the "S" on the third person singular in English, you know, I take, he takes, I forgot the "s." I had to copy 2,000 times, "The third person of the singular in English takes an "s." I've never forgotten it. So I was pretty good. I was second, or third or fourth in English--always in that area, except in art. In art I was usually last. I was accepted by my art teacher except once I was next to last and the son- of-a-gun sent my report card home with the notation, "He's making progress."
We had a lot of incidents in school, particularly in primary school. Once, I remember going home from school for lunch and I found a beret on the ground. Well, I was late and it was pouring, and I went home and my mother gave me lunch. My dad once in a while came home but he had lunch and then had a nap or read in his library, which I will describe later, when we moved to a house. On the way back from home to school, I had a problem. In Paris, where they had trees there were usually gratings around the trees. But they had removed one and I tried to avoid somebody, slipped on the mud and fell right into the mud. I didn't know what to do, and I had this beret in my pocket. I went home and changed because I was covered with mud. I was late for school and the teacher said, "Where is the beret you picked up?" She had apparently observed me picking up a beret. I said, "I'm sorry, I left it at home." She said, "You didn't leave it home!" She accused me of being a thief in front of the entire class. When I came home I was dissolved. My father came home and asked, "What happened?" He, being a lawyer who had also done a lot of criminal cases, was incensed. He took me to school the next morning and we saw the principal with the long beard and, to make a long story short, that teacher had to apologize to me because I brought the beret back. Why would I steal a beret when I could buy one or tell my parents I needed a beret and they would buy it for me? She had to apologize in front of the whole class. Well to say that I was not the teacher's pet in that class is making an understatement. She gave me a very difficult time, but eventually I quit her too.
ALLEN: In France, what age group would encompass primary school?
BARUCH: I suppose the first four years are considered the primary, so until I was about ten or eleven I was the primary. Then I went to secondary school. I remember there being a little kiosk in the middle of the schoolyard and you could buy refreshments or whatever you wanted to buy. I remember the kids fighting and beating each other up to get first up front to this. But school was very intense and I thought, very, very good. I advanced quite quickly.
ALLEN: But you were ten when you came from ...
BARUCH: Yes. So until I was about 12. I really don't recall the exact division. In 1936, the year my brother died, the reports my dad got from Germany were very disturbing. He had kept some relationships. In 1938 or 1939, he told me that in 1936 he went to one of the ministries (whether it was the Navy, I don't recall) and he said he had information that the Germans were manufacturing airplanes which could be converted to bombers within twenty-four hours. The Versailles Treaty prohibited that very distinctly. On top of which, the Germans had gone back into the Rhineland in 1936 and nobody made a move. In 1937, I guess, there were the first problems with Czechoslovakia. I remember going to school (I was 14 or 15) reading Le Monde and other newspapers and being looked at on the subway because I was a young kid. But I was always interested in politics. With my background, I always was particularly interested in the developments.
I went to the theater a lot with friends. At that point, motion pictures. I remember when the Disney picture premiered in Paris. We went to that. When I was 15, my grandmother's brother was in England and his name was Maas. I was asked by my dad to get some culture and some refinement in England. So I was shipped off to England to my grandmother's brother, who was an older man with a housekeeper. He was an importer of coffee. He later died of an infection in his nose. Again, there being no antibiotics-- same problem with my brother--and he died. Before he died I was sent to him to get some culture. He said to his housekeeper, "Will you please have someone unpack his clothes? Did you bring your smoking jacket... your tuxedo?" I said, "I don't have any, Uncle." This was terrible. He said, "You don't have any! Call the tailor. Have him measured for one right away!" So I was measured for a tuxedo, and then he says, "Do you carve?" I said, "Do I what?" He says, "Well, do you carve? Meals and meat and so on!" I said, "No. Either my dad or somebody in the kitchen does that." "Well," he said, "when we go out in my clubs the youngest at the table has to carve, that's a tradition. And you're going to be the youngest." So I had to learn to carve everything. Turkey, what have you. I found that absolutely distasteful and boring, the whole thing.
ALLEN: It was culture, though?
BARUCH: It was culture, though. Absolutely. At least what they considered culture.
ALLEN: At this point you spoke French, German and English?
BARUCH: I spoke some English. I had learned English in school. I must tell you that with foreign language instruction in Europe you end up speaking the language. I find, except with one of my children who studied in Europe, when my children took a foreign language they, and most of their compatriots, do not speak the language! They can write some. But speaking is zero. And to me, I can't understand that. At this point, yes, I did speak some English.
Well, my trip didn't last too long, it was about a month or so and I came back and my dad was quite pleased. I held my knife and fork in the proper way now, etc., and to him that was very important. If I held my hand too far down on the blade with the knife or even touched the blade side of the knife, he would say, "If you want to eat like a pig go and eat with the help in the kitchen." We by then lived in a house in Neuilly and my life was very nice.
When I was 15, however, the Czechoslovakian problem came up and finally Munich occurred. I was appalled, because I went to one of my friend's house, and peace had been declared by Dalladier and Chamberlain. Chamberlain came back to England and said, "Peace in our time," and waved the agreement with Hitler and Dalladier and Mussolini, etc. At my friend's house they were celebrating. I had read the papers and I was absolutely astonished because here we were disposing of Czechoslovakia, and Czechoslovakia wasn't even there at the signing of the agreement! I said, "What are you celebrating?!" I remembered going to his house and seeing dozens of bottles of champagne in the bathtub with ice. And they were really celebrating, a big party. And I said, "What are you celebrating?! This is the beginning of the end! It's outrageous! We've just sold out a country!" I was laughed at.
Between '38 and '39 I remember my dad being visited by a Mr. Cerf. It was a very mysterious conversation as I remember. Whenever I walked into the room all of a sudden everything became quiet. By then I had, at 16, thought of going to the Sorbonne.
ALLEN: That would be the equivalent of ...
BARUCH: ... of the University. The second year of the University, really. I was a little bit ahead of myself. Even though my dad said, "While we had the student, this one's going to be the merchant. He's going to go into some trade." Well, as I learned later Mr. Cerf was a member of the D'Airzen Bureau, the counter-espionage. They were interested in my dad because, obviously, he spoke German as a German. He had a scar on his head, and he looked somewhat German. They wanted him to get involved as a volunteer.
ALLEN: To go back into Germany?
BARUCH: Yes. And he didn't want to at that point. Well, in 1939, the war broke out when Hitler invaded Poland after he had annexed Czechoslovakia anyway and did not keep that agreement. My dad told me, "I'm going to help them. I volunteered to go into Germany to recruit spies." No pay, of course. I found that absolutely foolish. I mean, here was a man in his fifties volunteering to go behind the lines on a false passport through Switzerland to help the French, whom I began to question their patriotism. I felt the French, if it really came to it, didn't want to fight. That whoever they were most comfortable with, that's where they wanted to live. Anti-Semitism was also rampant. So, anyway, there's dad and now I'm 16 and a special law was passed that those 16 or older could drive. So I immediately took my driver's test and insisted that I must have a car. In that, I was fairly American then already. They bought me a car.
ALLEN: What kind of a car?
BARUCH: I got a Hispano Suiza, a sports car which I enjoyed and my girlfriends enjoyed, too. Maybe I was a little bit precocious, but I'm not going to get into that detail of my life, I don't think that's appropriate.
ALLEN: Was it French built?
BARUCH: Yes, it was a sports car which is treasured now. But I'll just give you one illustration. A year before that some friends of mine, a little bit older, decided they were going to go to a house of ill repute, which were very elegant in those days in France. And being too young, I was thrown out. But I remember the place very, very well and I had to wait on the street until their task was completed. A friend of mine took us to Annecy, where his mother, a fairly well-known actress, had a country place on the lake in the French Alps. I became very enamored with her and it was a lovely summer I spent there. I was a very young man. I had a lovely time, just a grand time.
I remember New Year's Eve, 1939, the four of us... no, at that point there was just three of us. I don't know what happened to Herschfielder. There was Jonas and Alfriecht and I. We decided we were going to get dressed up and go out. Now bear in mind, it's war time. Blackout in Paris. Everybody is at war, but it's not really a war: nothing is happening. Except my father's going to Germany, back and forth. So New Year's Eve we decided we're going to get all dressed up in our tuxedos and we're going to have dinner in the Latin Quarter in a Chinese restaurant and we'll see what happens after that. In the Chinese restaurant we met a man, also in a tuxedo, who we started talking to. He was playing music in one of the most well-known night clubs in Paris. We decided at ten or ten-thirty we'd go there. Well, I'll make a long story short. At two or whatever time in the morning--by that time we'd had quite a bit to drink--we are walking up and down the Boulevard St. Michel in the Latin Quarter, singing German (in German) drinking songs. That was not something to be recommended in Paris during the war. But, everybody was laughing--nobody took us too seriously. We were young men. Then dad came back once, and he was very unhappy and finally I got out of him that a couple of his people were caught with his name.
ALLEN: Did that end his career as a spy?
BARUCH: No. He went right on. He just changed his name, I guess. In a moment you'll hear why. If I go into too much detail just tell me. Now, I guess life just went on. Some rationing began. In September, I think it was, war broke out September 1st. The 2nd or 3rd of September we had our first air raid.
ALLEN: This was 1930 ...
BARUCH: ... nine. We dutifully we went to our basement. And of course, nothing happened. A few minutes later the all-clear sounded, so up we go again. This happened a couple of more times. After a while you don't even go to the basement anymore. Some rationing began, not too serious. The French didn't take the whole war too seriously. They thought they were very secure behind the Maginot Line. Everybody has written about that. So I'm not going to get into that detail. On May 10, 1940, my dad is in Germany again and the Germans invade Holland and Belgium. My dad comes back through Switzerland. Later on in May the news did not sound good to me. I'm now nearly 17. I would have been 17 in August of 1940. You hear stories about spies getting caught, and their families getting caught and executed with an axe. The Germans were particularly cruel in that area. They made them lie down face up watching the axe come down. I mean, the stories you heard were horrible. I must tell you, I was scared to death. My dad, a complete and absolute optimist, said France will not lose that war, etc. etc. In late May, the government left Paris and went to Bordeaux. Still he wouldn't leave. And I said, "Hey! We've got to go. Especially you because you're endangering all of us. But you're in danger, too." He was not very practical. This was a very difficult concept to bring across to him because he was a little bit of a tyrant and he knew it very well. He knew everything very well. So when he said, "We won't lose the war," that meant we're not going to lose that war.
ALLEN: And you at 17 didn't know better.
BARUCH: Well, I knew something was going on that wasn't very favorable.
ALLEN: At least in his view you didn't.
BARUCH: That's right. And I can't remember the exact date but it was now either late May or early June of 1940 and I will never, never forget it. All of a sudden (it was a nice day), it began to rain ashes. That story has never been told anywhere that I've read and I've read quite a bit about it. I mean little pieces of ash coming down in enormous quantities!
ALLEN: Out of a clear sky?
BARUCH: Yes! And I said, "What is that? Are the Germans throwing something at us here, what's going on?" I remember listening to the radio that night and they claimed that the Germans had attempted to cross the Seine much further northwest of Paris. They never told us whether they did or not. But in the meantime, Dunkirk had occurred, and they were very busy with that. I put two and two together in my mind, and the next morning I told my dad, "Dad, I bet you these were smoke screens that they had put up to cross the Seine and had drifted back to Paris. For some reason, they came down all over the place." I said, "I don't know what you're going to do, but in a day or two if this goes on I'm leaving." Well, he hesitated more. It is now maybe June 4th or 5th. I can research the exact date. But when you're that young you don't keep a diary. I wish I had now, of course. Well, finally I said, "I don't know about you. I'm going." Stupidly enough, we had not gotten gasoline.
By that time you couldn't get gas anywhere in Paris. I went to the Gare de Lion. That's the railroad station serving the South area. I couldn't count, but there were, in my estimation, tens of thousands of people if not hundreds of thousands lined up trying to get out of Paris. I knew we weren't going to get out. I was desperate. I didn't know how we were going to do this. We had my grandmother. She was 82 by now. I remember going to a friend's house--I had seen something there. In one of his yards, he had a pushcart. There was nobody around, there was kind of a concierge gatekeeper type person. I said, "Can I buy this?" He said, "Ah, you can have it."
I remember taking that pushcart to our house and on the way people approached me asking, "Will you sell the pushcart?" I began to realize, this is becoming a commodity, a valuable thing. To make a long story short, we loaded the pushcart with a couple of suitcases and put in some silver, jewelry, money--that's the one thing we did have. I told my dad earlier, "Go to the bank, get some money," because I remembered the experience from Germany. I had no desire to be that poor again. We sat my grandmother on the pushcart. She protested: "That's ridiculous! I'm not going to sit on a pushcart!" I pulled the pushcart and my father pushed a little bit and my mother followed along and that's how we left Paris.
ALLEN: How big a vehicle was this?
BARUCH: Oh, it wasn't very big. It had small wheels which were about four or five feet in diameter. There was room for two suitcases and a couple of other little things. It wasn't very big. And we went out to Park du Versailles. Don't ask me why, but I began to remember that the subway had just been extended going south. And I said, "Hey! Maybe I can get this thing on the subway." It was an elevated line and sure enough, somehow, we got it onto this subway going south and caught a train which took us about twenty or twenty-five miles south. That would have taken us a couple of days! I suppose, looking back on it, that may have saved our lives. We got off and we walked.
ALLEN: Was that the end of the line?
BARUCH: That was the end of the line.
ALLEN: Was that as crowded as the other rail facility?
BARUCH: Yes. It is hard to describe. Cars which crawled along. Horse-drawn vehicles. Baby carriages loaded with baggage. Pushcarts. All kinds of vehicles. Bicycles were loaded up. I mean, thousands and thousands of people. This is where I got my first introduction to the French peasants. They were selling water on the side of the road. Drinking water. Which you can get, you know, in their houses. But they were selling it. Not offering it. Selling it. And the first night I found a barn with straw and said, "We're going to spend the night here." And slowly, I could tell, I sort of became the leader. My father was crushed because this whole thing of guessing wrong, doing wrong, getting his family into this kind of predicament. I guess, looking back, he felt some kind of guilt. We had a little bit of food with us. The next morning I went to the farmer and I said, "Can I have some hot milk or something for my grandmother and some bread?" And he sold us these things at outrageous prices.
We resumed our march until we got to a place called Dourdan. There was a railroad station. My father and I went to the railroad station. Now, you might think these are weird stories but they are not made up. I remember us standing on this railroad station with a little platform on each side of the tracks. The tracks were a little elevated and there was a bridge a little further down so they were still a little bit elevated. But there were two men in raincoats--identical raincoats--signaling each other by hand. I couldn't understand what they were doing. But fifteen minutes later German bombers appeared and began to bomb. I ran back to where we had left the pushcart, my mother and my grandmother. My father followed as much as he could. I pushed my grandmother under a truck, because I figured at least they wouldn't hit her with the bullets directly. She's protesting, "What are you doing?" She doesn't know what is going on. She's protesting! Loudly! We go back to the station when the bombing was over and it was a mess. People hurt, killed, shot. It was terrible.
We went back to the station and heard that a train of refugees from Belgium is coming down. We unload the pushcart, which was taking a terrible chance, and we go to the station. Sure enough, one of those cattle cars--you know where they put cattle in--comes in and stops and we just get on it. It's full of Belgian refugees. We had a little food but not much. And this train starts to move.
ALLEN: You were able to take all of your possessions?
BARUCH: Whatever we had, yes. But they had set aside a little corner, and had made a little sheet, that was their toilet. They punched a hole in the floor, I guess, or something. But I remember we were on this all day, the afternoon, and all night. During the night my grandmother must have had a stroke or something--one does not forget this--and started talking in German. She was German, I mean, after all. I've got to tell you, we were scared they were going to lynch us. We went through burning towns and ended up south of Tours. Three of these trains, with maybe a 1,000 or 1,500 people on each train, pulled up and the engines were disconnected and off they went. They left three of these trains in an open field.
ALLEN: How far south of Paris were you at that time?
BARUCH: At that time it must have been about a hundred miles, maybe a little more. I could measure where Tours is. Well, I remember people making coffee and heating pots and dumping handkerchiefs full of coffee into this water. I said, "I don't want to be part of this." I spied a bunch of soldiers down the road a half a mile.
ALLEN: French soldiers?
BARUCH: French soldiers. I said, "Let's go over there, dad." Fortunately for us, my dad could identify his role with the D'Airzen Bureau. He had his I.D. with him. He explained to these soldiers that his family was endangered and why we had to get south. They said, "Well, we're taking off in an hour. We're transporting airplane engines," which were on these trucks with the propellers on them. "We're taking them south." We got loaded onto this, my grandmother sat next to one of the drivers, my mother and father on each side. There was a little room where the engines were. They put me on top. That's how we left this place. We thought we were very, very lucky. It was hot. It was very, very hot. Every time we stopped the soldier would hand me a little wine to drink. I was on this propeller which moved a little bit. I nearly fell off a couple of times. I got sleepy because I wasn't used to that much wine. But I didn't fall off. We got to Orleans. I don't remember where we slept in Orleans, maybe we didn't sleep there at all. There was no way of getting out of Orleans.
ALLEN: How much farther had you progressed?
BARUCH: About another hundred miles. And again, the place was full of refugees. I saw a bus with a driver. "Where are you going?" "Going south," he said. I asked, "Will you take us?" "No, I'm not going to take anybody," was his answer. So my dad convinced him to sell the bus. We bought a bus and about ten or fifteen of us got on this bus and we went South to Bordeaux, which was quite a distance.
ALLEN: The bus was full of fuel, I gather?
BARUCH: I gather. I take it yeah, because we got there. Well, we're in Bordeaux now, where the government is. Things are getting worse. We read the papers now, and things are getting much worse in France. No place to stay. So we slept in the railroad station two nights, on the floor, with an 82 year old woman. Finally, the third night, we got a room somewhere...a furnished room. All of us piled into this room when the Germans bombed Bordeaux. It was fierce bombing. They really tried to intimidate the government to surrender. The next day, we took a train to Bayonne, which is on the Spanish border, figuring we could get into Spain. The Spanish border was closed. My dad went to the Prefectude du Police, the police station. They told him that an armistice was about to be signed which would turn over control of a strip of the coast to the Germans. They would not occupy all of France. So if we went further inland, we'd get out of the German area.
We hired a car and went inland. At three o'clock in the morning we were awakened--the Germans were coming. We hadn't gone far enough inland. Again, they were on our heels. We were running away. We got inside the Pyrenees to a place called Accous. Two days later, in Acous, we were given a house. The Basque people were wonderful to us. They distributed unoccupied houses, etc., and we got one with an attached outhouse. You know, it wasn't out there, it was attached to the house practically. I got dysentery.
ALLEN: You got dysentery?
BARUCH: Dysentery. It was terrible. It was cold at night because it was in the mountains. We had to stay there until I recovered. I hated fish as a child already. When my mother tried to feed me fish, I wouldn't eat it. The mere smell of fish made me ill, fish stores, etc. Once when I was very young, they tried to talk me into eating fish by telling me it was chicken. I wouldn't touch chicken for years. But that was my first experience, after I started eating something.
A soldier--there were soldiers all over the place and they weren't going anywhere; they weren't reporting to their units, they were just hanging around--had gone fishing and brought a trout home and gave me a trout. It was the first solid food I'd eaten in days, and I ate that and slowly recovered. Then the question was, do we go to Lyon, do we go to Marseilles, where do we go? Well, we went to Lyon.
ALLEN: Before you go on, what happened to the bus?
BARUCH: It was left in Bordeaux. I have no idea. We couldn't sell the bus, you couldn't do anything with it. We just left it.
ALLEN: Just disappeared?
BARUCH: Just disappeared. Well, we took the train to Lyon and in Montpellier my father had to be taken off the train with enormous gallstone pains or whatever pains they were. We had to stay in a hotel for a couple of days and we resumed our trip. We ended up in Lyon. Well, Lyon was full of German soldiers. Why, I don't know. But it was crawling with Germans. We had no intentions of staying there so we took the train to Marseilles and found a furnished apartment in an outlying area of Marseilles. We wired my aunt-- my father's sister, whose son was an American in New York--that we were in Marseilles because we were sure they were concerned with what happened to us. It was a walk up apartment, which meant my grandmother was caught there. She couldn't walk five flights very often. But we were lucky to have it.
The food shortages began. I stood in line for, I don't know how many hours, to get a bar of chocolate. Coffee was ersatz. Replacement coffee was awful. But we learned that my aunt had gone to an organization, which was then called the Emergency Rescue Committee. They had convinced Mrs. Roosevelt to convince the State Department to give out 500 visitor visas to endangered intellectuals who were caught in France.
ALLEN: Before we get into that, do you have an idea how long you traveled from the time you left Paris to the time you reached Marseilles?
BARUCH: Oh yes, we left Paris about the 6th or 7th of June, approximately three days ahead of the Germans and we arrived in Marseilles in late September.
ALLEN: So it was a two and half month journey?
BARUCH: Yes. Maybe the middle of September. About a couple of months, a little more. We went to the American Consulate to inquire about visas. First my dad and I. We took the trolley and it's way out of town. It was gorgeous: a little park, and the gates, of course, and there was a road leading up to a villa way up on top of the hill. They were also very, very nice. Well, apparently, we obtained four of these visas through my aunt. You know how it is when you're a refugee, you sort of get together with refugees in the cafes. What do you have to do? You have nothing to do.
My grandmother insisted I should go to work because I'm 17 years old and it's no life for a 17 year old to be bumming around not doing anything. Well, fortunately my father said, "Look, he's not going to work here, that's ridiculous." But, when we got those four visas, we were assured we were going to get them, the other refugees said, "You're only going to be visitors, they're going to throw you out. Who knows what awaits you in America, etc., and how are you going to get there?" I wasn't one of those. I convinced my dad that I'd rather be in America not knowing what happens to me, because they're not going to ship us back, rather than be here and be caught by the Germans and get my head cut off. He agreed. There was a family named Brumberger who we knew from Paris, would you believe it or not, they took the train and went back.
ALLEN: Did you ever find out what happened to them?
BARUCH: We inquired and we believe they were arrested and shipped off to the extermination camps. Finally one day, we're ready to get these visas, and now it's the transporting of my grandmother that's the problem. We get to the consulate gates and we see this big, long row of people. "How are we going to get there?" We started walking. I said, "Look, take your time and if necessary I'll carry you up." "No, you will not carry me!" A very proud lady, not very tall. With that, an American limousine pulls up, sees the old lady, you know, struggling. It was the American consul. He says, "Can I give the ladies a ride, at least?" He has enough room for the ladies. And my mother and my grandmother were given a ride to the consulate. Which impressed me, as a young man, enormously. I mean, here we were, we were nobodies. Who was this man giving us a ride in his big car? We got the visa, and the question was how do we get out? Through Spain and Portugal, that was the only way to get out. We had no passports. Who knew how we were going to go anywhere?
ALLEN: I think we'll have to stop there, we're just about out of tape.
End of Tape 1, Side B
BARUCH: We obtained from the American government what they call identification papers, a very imposing- looking document with all the visas stamped on the back. The one thing we could not apply for was a French exit visa because that was the Vichy government and they were keeping very close track of who was applying and who they wanted to be able to leave. We went back to the International Rescue Committee and they gave us some advice as to how we ought to do this. A fellow named Darien Fry was very helpful in that area. So we set out in a rented a car and went part of the way and then we found a guide in a place in the mountains. He said that we would assemble around ten or eleven o'clock that night.
ALLEN: These are the mountains between Spain and France?
BARUCH: The Pyrenees. Yes. We met him at ten o'clock and he guided us and finally I had to carry my grandmother because she was 82 years old. We got over the border and then went down the mountain, a big hill. We approached a little village called Figueras in Spain. This was on the Spanish border. We avoided the French border because we did not have an exit visa, which was none of the Spain's business. All they needed was the Spanish visa but for not having it we were promptly arrested and put in jail. My father, through a device, trying to pay for a phone call to get transportation, bribed his way and our way out. We immediately got into a taxi and went to the nearest railroad station. We took a train to Barcelona, and then to Madrid, and then took a night train from Madrid to Lisbon where we had relatives.
ALLEN: You had been able to put together enough financial resources to be able to cover all of these travel expenses?
BARUCH: That's right. The only thing we had was money. We arrived in Lisbon where my dad had some relatives because that's where my family originally had come from in the 15th century. Mr. Azancort, who is a lawyer, and his wife, greeted us in their home and for the first time in many weeks--I remember that very well--I had white bread and butter ...
ALLEN: Do you remember the date that you arrived in Lisbon?
BARUCH: It must have been late September, 1940. We got into a little pension, where we were made more than welcome. We visited our relatives in LoPorto. Their name was Baroshbasto, a bastardized name of mine. We met with them and I met their daughter. She was the same age as I was, a very attractive person. So they brought their daughter down, and I didn't speak a word of Portuguese and she didn't speak a word of English but we got along very, very well.
We booked passage on a Greek ship to come to New York in October, and that was just about the time the Germans invaded Greece. So that ship went back to Greece. Then we spent more time in Lisbon, which was very, very nice. Finally, through some help from a lawyer--a cousin of my dad's who represented the United States' Lines, among others of his clients--we got passage on a Portuguese ship called the Nyssa, which was meant to carry maybe 200 to 300 passengers. We bought an inside cabin for four: my mother, my grandmother, my father and I. We paid, in 1940, $450 each. They had emptied out the cargo holds and put down cots to get on more passengers. There were over 1,100 people on this boat. It took us ten and a half days to cross. I don't think I ate very much because most of the food was horrible, terrible. Three days out of New York the automatic steering broke and they had to steer the boat by hand to New York. But we docked in Hoboken and were met by my aunt and her son. This was my aunt who had gotten us help in getting the visas.
We were put up in a place called Congress House. The American Jewish Congress had taken up some brownstones in the west '60s and was sort of a commune. Every day somebody had to do the cooking, somebody the cleaning, etc. We stayed there for a while. By that time our money was pretty well gone. I don't know what we spent, but we spent a great deal of money. We were able to share an apartment at 601 West 178th with another family. He had been a cattle dealer in Europe. They were a terrible family. My father and I and my family really suffered.
My grandmother stayed with my aunt, and we had this little apartment. I applied for permission to work. In those days visitors did apply for permission to work before they went to work--that doesn't seem to be customary any more. The permission was granted. In the meantime my dad developed an ulcer from all these problems. He was put in the hospital. My mother developed a heart condition from which she died a very few years later, in her late forties. Dad was put in the Mount Sinai Hospital. I got permission to work and found a job in a shoe factory as a shipping clerk. I was paid thirty-five cents an hour, and sustained my two parents on that. But in order to make a little more money, I got myself a job on weekends at the Apollo Theater here on 42nd Street as an usher. For those two days, I got $2.67 total. So, on the sixteen, seventeen dollars, we tried to make due. Then dad, when he got out of the hospital, got himself a job with the War Department. My mother worked in a garment factory. So the three of us lived ...
ALLEN: How long did you stay in this apartment?
BARUCH: Oh, about two months. Then we got a furnished apartment on West 93rd Street. I met a doctor's daughter who had heard about us from our nanny. The nanny I had eventually worked for that doctor in Germany, cleaning his office. We became very, very close--young kids falling in love, I guess. By then I had graduated to a different shoe factory in Brooklyn, where I was the only non-Sicilian working in that factory. Which wasn't easy, either.
ALLEN: How old were you at this time?
BARUCH: At that time I was 19.
ALLEN: And your English?
BARUCH: Improved. I didn't speak it too well when I got here, but obviously I had to make due and I had to learn. So one day we decided that since both of our parents knew each other and there was no way they were going to let us get married, we went to a different state, got married and went back and said, "Look at the big news! We're married!" Well, all hell broke loose. We took a little furnished room somewhere. Then, as kids go, she became pregnant. We couldn't find an apartment --the war had broken out. I had tried to enlist because I felt very strongly that I ought to do something. I was rejected twice because I have a punctured ear drum from a serious ear condition when I was very, very young. In those days, there were no antibiotics or anything. So the whole inside of my ear is apparently a problem. Then she became pregnant. Our child was born seven weeks prematurely.
ALLEN: And when was this?
BARUCH: This was 1944. Again, we couldn't stay where we were and we couldn't find an apartment so we moved in with my in-laws. My father-in-law was a doctor, and he had his practice on West End Avenue in the same apartment. We were told we had to keep our child quiet. It was very difficult. Well, finally we found an apartment on Morningside Drive, near Columbia University. It wasn't a great area, but it wasn't too bad. But to help things we took in a boarder. A gentleman from South Africa, I remember that. We did some homework pasting feathers on a ribbon. I don't know what they were used for.
At that time I had become a recording engineer. I had always wanted to get into communications so a friend of mine who had worked at NBC had become a recording engineer and he gave me a book to read. From that book, I learned enough to get myself a job at Bost Records. They were at that time on West 57th Street, I think it was 29 West 57th, and from there I graduated to another job at Empire Broadcasting which is also in recording, basically. They called themselves broadcasting but they weren't in broadcasting. They really took advantage of us in that place.
Local 1212 of the ICW approached the place to find out if we wanted to join the union. I was one--I must admit--of the leaders to get the union in there. I also was assigned a lot of studio work because I have a fairly good ear and mixing mics and so on was, to me, quite natural. Among other things, I recorded Jan August, a pianist who came in. He was hired by a fellow named Gwirtz, Irving Gwirtz, at scale, to do a recording. I remember very well we sat until three or four in the morning doing one side "Bob-A-Loo" and the other side "Mis-A-Loo" which later sold millions of records and this poor pianist only got scale. Diamond Records, Mr. Gwirtz, made a lot of money.
ALLEN: What was your citizenship status at this time?
BARUCH: That's a very good point. We had applied for naturalization, but since we were visitors you could only apply for naturalization if you were a resident. So the United States' government, during the war, arranged for us to take a one day trip to Montreal. That way we were given immigration visas. Then we applied for citizenship, and having been married to an American citizen, I was granted citizenship about '46, '47, or '48. Which, for me, was a great deal of pride. I was very happy when I got my citizenship papers.
Then, having been a recording engineer for a while, when the Union came in our salary position improved considerably. But, obviously, the company did not take too kindly towards what we had done.
I was working the night shift once from four to midnight when I got a call at about eleven-thirty from WMCA in New York. One of the people wanted me to record something from 12:30 to 1 a.m. I told him, unfortunately, we close at midnight, and he said, "Look. I'll pay anything you want for this. Just make sure you get it." I said, "All right, but you're going to be charged overtime." I made out my work sheet and circled in big letters, "Overtime - 12 to 1 a.m." The next day he came in to pick up his recording. These were acetate recordings in those days. There was no tape or anything. He left an envelope for me. At the same time, in order to make a little money, I was writing articles for a technical magazine and asked for permission to do that. I got verbal permission to do that and never thought of getting it in writing.
I remember very well interviewing Peter Goldmark because it was rumored he was coming up with the LP record, which Frank Stanton told me a very cute story later on about. But, I interviewed Peter Goldmark and I was very impressed and wrote up the story.
Well, this gentleman picked up his record the next day and left an envelope with ten dollars in it as a tip. The next day I was called into the office by the owner and he said, "You have been bribed and you have written articles without our permission." I said, "That's absolutely outrageous!" Because I had gotten the permission of the chief engineer. Fred Deyager was his name. And number two, I did not get bribed, I was left a tip which was quite customary in those days. The company must have billed this man for my time, because I had circled this in very big letters on my work sheet. He says, "Well, I'm sorry. I will not accept that. We want you to resign." I said, "I have no reason to resign. I will not resign." The next morning I got a registered letter firing me. I went to the Union but since this being a very small shop, the business manager, Charles Korain, said, "Well, you know, this is really not worth fighting about. Why don't you get yourself another job?" I was absolutely outraged. I said that was not the end of it, I was going before the board. I went before the board and their decision was the same. I took it to an open membership meeting and I was shouted down with, "Aww, shut up! Sit down!" from the back of the room and I couldn't speak. I lost that job.
ALLEN: And lost some of your enthusiasm about unions.
BARUCH: You're not kidding. Later on in life, that memory stayed with me as I will mention to you later. So, they sent me a withdrawal card. I sent that withdrawal card back and I said if I should ever need that union to get a job that'll be a hot day in July. Finally, I ended up getting a job with an organization called ASCAP, which was a music licensing organization licensing radio stations in those days. It was privately owned by a couple named Heinecke, and the Heineckes ran a very tight shop. I was hired to sell their transcription library to radio stations, and later on, became a trouble- shooter for stations that the field force could not convince to sign an ASCAP license.
ALLEN: What kind of a time frame are we talking about at this point?
BARUCH: We're now talking 1940 ... the end of '47. I was quite successful in selling their transcription library and also licensing stations. I remember very well that we had a problem licensing the Westinghouse radio stations. I was called in. I was 25 years old in 1948--it may have been a little bit later but that's about the timeframe. I was told to go down to Washington, D.C., to see Mr. Walter Benoit. He was a gentleman in his sixties who was head of Westinghouse Broadcasting. They owned quite a few radio stations throughout the country (some large ones). I was to try to negotiate a license. I must admit I was scared to death, but I didn't let on.
I met Mr. Benoit and we sat down and negotiated all morning with considerable noise at times. Then he said, "Well, it's time for lunch." I said, "When would you like me to come back?" And he said, "What do you mean?" I said, "Well, you just said, you know, it's lunchtime." He said, "Well, you're a very nice fellow, let's have lunch. The fact that we disagree on this is not a personal thing." I learned a very good lesson with this. That you don't have to translate business differences to a personal level. So, we spent a very pleasant lunch and went back after lunch and yelled at each other again. But I ended up signing up these stations.
Then I was sent out to the NAB convention. I think it was the '48 convention in Chicago. I paid my own expenses, out of a per diem kind of thing. I had to drive to Chicago in my little '49 Chevrolet. Must have been '48, '49. I know it was a '49 Chevrolet so it must have been '49, maybe even '50. When I finished the convention, I found a note, saying, would I please go to some place in Indiana? I went to Indiana, I found another note saying, would I please go to Steubenville, Ohio? To make a long story short, they kept me on the road for seven weeks.
ALLEN: Without ever allowing you to come home?
BARUCH: Without ever allowing me to come home. They had a field force that was doing this, but they were paid differently. I had to pay my own car out of all this. I felt quite pressed. I had, by then, two children. I know that I went back and Mrs. Heineke was not in the office. She was in her summer home in the Catskills. I drove up there to see her, asked to see her, and I explained my problem to her. She said, "Well, I think the best thing for you to do is to resign." And I said, "I agree with you completely." She thought I was bluffing. When I answered that, she realized she was going to lose a good person. She said, "Well, let's sit down and let's talk about it." At that point, I knew that I had won my case but I wasn't going to work for these people long term. Also, they are an organization that is not very well-liked in the industry. I heard all the time, "What's a nice fellow like you doing working for an organization like that?" So, I decided to look for a different job. I really didn't know what to do. I read about the AAAA.
ALLEN: Did you resign? Or did you look for another job?
BARUCH: No. I stayed on, I looked for a job. I had heard about the four A's, The American Association of Advertising Agencies giving an aptitude test. I took this aptitude test. I think it cost $300 in those days, it was a whole day's test. The results came out and said basically I should be in marketing, in sales. I always thought I ought to be a producer or director, you know, that's very glamorous. As a matter of fact I and a fellow that had been at NBC while I was in the recording business did a pilot for a radio soap opera about a soldier coming home. It didn't go anywhere.
One day, I was walking on Broadway in the nineties, and walked by a television store, an appliance store. They were also selling television sets and there was a set in the window with this big glass front which enlarged the picture. I saw about fifteen, twenty or thirty people--I don't know how many, but it was pretty jammed--watching wrestling. I came back three or four hours later, walked by that store, and there were about ten people standing there watching a test pattern! I said to myself, "My God! This must be some business if people watch test patterns!" I mean it stays the same--they stood there watching that stupid test pattern! To them, this was a fascination. And I said that's a business maybe I should look into.
Through a friend of mine, I was told that Channel 5, the DuMont Television Network, may be looking for a salesman. So I saw Mr. Bashan, Jack Bashan, (a lovely man), who said, "Yes, we're looking for salespeople. We have, locally for example, a hundred spots for sale. We have four salesmen now, we're trying to find a fifth one. If you sell twenty of these spots, here's your commission." I think it was something like 1 percent, and the spots were selling for $500, that means you'd make $100 commission a week. "And you'd do very well and we'd pay your salary so you should do extremely well."
ALLEN: Let me see, you said they sold for $500 and 1 percent commission?
BARUCH: No. The spots were selling for $500 and I would get 1 percent commission. That's $5.00 a spot.
ALLEN: And twenty of them would be $100.
BARUCH: A hundred dollars. Well, I was hired for seventy-five dollars a week selling spots. But I thought this is an industry with a future and I should be in it. I met the general sales manager of the network, a fellow named Theodore Bergman, Ted Bergman. I still keep in touch with Ted, he's in California. I went out and tried to sell. Well, what I didn't know is that there was such a thing as ratings, and Channel 5 didn't have any. They were an independent station. Their transmitter wasn't even on the Empire State Building at the time. If you walked down Madison Avenue to 53rd Street, at 515 Madison Avenue, you'll see an antenna sticking up and that was their transmitter. So the signal wasn't very good, the programming wasn't very good. I had a very tough winter of 1950.
ALLEN: What were they programming at that time?
BARUCH: Oh, in the morning they were programming talk shows, shopping shows. They had some good network programming: "Rocking King," "Cavalcade of Stars" with Jackie Gleason as a matter of fact. Coca-Cola had a Sheriff Dickson on at six o'clock. We had "Magic Cottage," a children's show, and of course at seven o'clock, the big DuMont Network piece de resistance was Monday through Friday, "Captain Video," which Ted Bergman had sold to General Foods. It was really a great experience in many ways.
The only problem was there was one salesman, Larry Wynn, who had the big agencies assigned to him. These were (as I recall) J. Walter Thompson, BBD&O, Hewitt Ogilvy, it was called at that time; every major agency was held by this guy. He couldn't afford to leave his desk because the phone would ring with inquiries or spot buys. When a spot became available, you had to notify sales management. Either Jack Bashan or Ted Bergman would come into this big room on the second floor, which we occupied, right above the marquee on 53rd Street and announce, "This and this spot is available." Larry Wynn would act as if he were on the phone and would say, "Sold!" You know, raising his hand. And everybody knew he knew when it was canceled and he had gone to another client and already sold it. So the best spots never became available to anybody. I made my feelings known. If I go into too much detail, tell me.
The only agency that was halfway decent was Benton & Bowles. I got a call from Mary McKenna when I was supervising time buyers. She said, "Best Foods is looking for a program on Sunday afternoons. We want to put all kinds of products in." I eventually made the sale to her of Sunday Matinee. We hired Rex Marshall as an announcer and we put on movies. There's a lot of stories connected with that; I'll spare you all the details. But that was my first big sale.
Then Larry Wynn was made sales manager and some of the agencies became available, which helped a little bit. On the other hand, he hired Janet Tyler, his lady friend, and she became the weather girl. He was pushing those sales very hard, or those of that weather show--for obvious reasons. Also, you must remember, in those days DuMont owned the only television station in Pittsburgh, WDTV. Mary McKenna from Benton & Bowles said, "Ralph, I know that I have to buy spots in either New York or Washington to work on something, in order to clear the Red Buttons Show into Pittsburgh. The client needs the Pittsburgh market." I said, "Mary, I don't want anything to do with the fact that you have to buy something in New York in order to get your show cleared in Pittsburgh." She said, "Well, who do I talk to?" I said, "You talk to the sales manager, Larry Wynn." Well I was called into the sales office one day and I was told, "I'm going to give you an order. Benton and Bowles (General Foods) ordered the weather girl show, five days a week, fifty-two weeks firm." We all know how that sale came about. But I was happy to make the commission.
One day I get a phone call from Mary McKenna asking whether Janet Tyler will do live commercials for that show. I asked Larry Wynn, who was sitting there, "Larry, will Janet do live commercials?" He says, "Who is it?" I said, "Mary McKenna." He says, "Oh sure." I said to Mary, "Yes, Mary, she'll do live commercials." Mary said, "What's the charge? I said, "What's the charge, Larry?" Larry said, "Who is it?" I said, "Remember, General Foods." "Oh," he says, "no charge." I said, "Mary, no charge." She said, "Thank you!"
Several weeks went by, and I get a call from Tom McDermott, who was head of Benton & Bowles--later on he went to RCA--recently died. He asked me, "Who is this broad, Janet Tyler?" I said, "Why do you ask?" He said, "Well, she keeps calling me, she wants more money!" I said, "You mean talent is calling the agency? Let me handle it, Tom." So I went to Larry Wynn. I said what is this? Well, he said, "Yes, she really needs more money." I said, "But remember we had this talk?" Well by then, DuMont had hired someone to run the owned stations, a fellow named Dick Jones that came from Storer Broadcasting. Dick drank too much. He probably got into trouble at Storer, I do not know the circumstances, but anyway we were asked to appear at Benton & Bowles. I remember the meeting--it was Dick Jones, Larry Wynn, and I. They had Mr. Holbre, who was then handling the General Foods account. The Account Executive, the Account Time Buying Supervisor, Mary McKenna, and her Time Buyer and so on. She asked me to relay what had happened buying this show. I relayed it, and fortunately Dick Jones got up and said, "Look, there's no reason for this meeting." He turned to Larry Wynn and says, "I don't want any more of those meetings." But it was a strange time to work in this shop.
I remember one time I sat down with Ted Steele, who was the account executive or account supervisor for a beer out of Cleveland, Carling Beer, and with Ted Bergman who was my boss at that time. I said, "I have an idea to sell ten second spots where we have on the bottom of the slide the latest news headline and the weather forecast." "Oh," he says, "I think that's a marvelous idea. How would you handle it?" I said, "Well, we'll have a recording of the Carling jingle: "Hey Mabel, Black Label," that was their beer. "We'll play that with the weather and the news, and somebody will read it." "Oh," he says, "how will you do it?" I said "We'll have a Tel-op machine," that's a card you type on it, "and we'll project it." "Oh," he says, "that's great." I said, "But you have to buy seventy spots a week fifty-two weeks firm." He said, "Well, let me see what I can do." He went to Cleveland and came back and said, "I can't get you seventy spots a week but I can get you fifty, thirty-nine weeks firm." That was the biggest ten second campaign ever sold in the city of New York. I was delighted. I went up to the program department and saw a fellow named Les Aries, who later became manager of a television station in Buffalo, and Al Hollander in the program department, and I outlined my sale. And I see strange faces. I said, "What's the matter?" He said, "How are you going to do it?" I said, "We'll have a Tel-op machine." Well, it turns out DuMont, the flagship station WABD Channel 5 in New York, didn't have a Tel-op machine. I wasn't going to lose that sale so I didn't know what to do. I finally got some advice and I marched up and down Madison Avenue and found the Vari Type company, and they had a miniature typewriter. I found that if you type the headlines with a miniature typewriter on a piece of red cellophane, and you stuck that over a slide, it worked. And that's how I made my sale.
Another time, there was a fellow named John Cusera who was Supervising Time Buyer, Supervising Media Buyer, at the BBD&O company. The BBD&O company had Philip Morris cigarettes, sponsoring the Yankees on Channel 5. I knew that Channel 5 was doing something that was not in the agency's interests. I really had a tough time, and I didn't know what to do. I was loyal to DuMont, on the other hand, they were really not doing the right thing. So I took my courage in two hands and I called Mr. Cusera. You called him Mr. Cusera. I said, "Mr. Cusera, I want to come and see you. I have a problem." I outlined my problem to him, and I said, "You know, if this gets out, I'm fired. On the other hand, it's not right." And he says, "I've had this a few times. Let me tell you something: nobody will ever know about it. Thank you and I appreciate it." But from then on in, any time the BBD&O Agency had a campaign I got at least my fair share of the billing, and he never disclosed anything; a fine gentleman. I got to know a lot of very, very nice people.
ALLEN: How long were you with DuMont?
BARUCH: I was with DuMont for four years. I met some marvelous people there; they had quite a staff. Many of them moved on to bigger and better things down the line, but they were pioneers really. Ted Bergman and many others went on to big jobs in the industry. In 1953--three and a half years after I started with DuMont--the Los Angeles Times, a fellow named Peter Robeck came to me and said the Los Angeles Times had the television station KTTV in Los Angeles and they need programming. They're going to buy rights and produce, and they're going to sell the product, and wouldn't I like to work for them? He seduced me into joining them. We did extremely well.
ALLEN: Did that mean moving to Los Angeles?
BARUCH: Nope. I was in the New York office. And we did so well that the two partners in the business, Norman Chandler was one, and I can't remember the name of the other fellow except that I was out to his house once in Los Angeles. They manufactured small diesel engines and were making lots of money. He was an alcoholic--that was well known. One time we had a party at his house and he insulted me anti-Semitically. I did not take kindly to that and told him off. But they carted him off and brought him home or to another place, I don't know, they took him away. At the same time, while we were so successful the two partners started having problems with each other. Obviously the Los Angeles Times was a very dignified operation. I met Mr. Chandler in the Los Angeles Times penthouse where he gave a little reception at one time for all of us. But they sold the company to a fellow named George Bagnol. One day I see Mr. Bagnol coming in, I'm talking about late 1953, early 1954 ...
ALLEN: So you were with the Los Angeles Times. How long?
BARUCH: It was called Consolidated Television Film Sales. I was there about eight months when they sold the company. I saw this fellow coming in wearing checkered pants with an open shirt and a big chain with a medallion on it. I took one look at this guy and I knew I was not going to work for him. But he didn't know what to do. He said he needed somebody in New York. And I said, "Well, I'm not going to do it full time for you." Well, we agreed on a consulting deal.
Then through somebody else named Charles Wick, who was an agent for Francis Langford and others, he called me and he says, "I've got a television show: "Fabian of Scotland Yard." It's an English show. I don't know what to do with that show, what would I do with it?" I said, "Well, I can help you but I can't do it full time." After all, I was looking for a job. I said, "But I'll do it half time for you." So I did the two consulting jobs and was paid by both, (fairly well, as a matter of fact). I was making a $1,000 a day, and in those days that was a fortune. But I was also looking for a job.
Well, I must tell you that Charlie Wick went on to bigger things and our paths crossed down the line much later. He eventually became head of the United States Information Agency under the Reagan Administration. He asked me to become head of his Video Communications Committee, private industry committee. But I didn't know it then. In April of 1954 I was interviewed for a job with CBS films by a fellow named Bill Edwards. He hired me with a guarantee of $200 a week, calling on television stations selling programming in eastern Pennsylvania and part of New England. Well, what I didn't know was that Bill, who was a very nice guy, was, at one time a Methodist minister. There was a revolt at Channel 2 in Los Angeles where six to eight people came into his boss' office and said, "Either he goes or we all go collectively." So he was shipped out to New York to become head of CBS films. I left the Los Angeles Times and the successive company Bagnol to join CBS. I was very happy to have joined CBS. I was indoctrinated by some of the other salesmen to what the expense accounts are like, and so on. I became fairly successful.
ALLEN: What were some of the products that you had in the line-up.
BARUCH: Oh, we had Gene Autry. Later on we had Annie Oakley and the Range Rider. There wasn't anything great. A couple of Art Linkletter shows, "Art Linkletter and the Kids," I think it was called, and some concerts. It wasn't much. I called on a station in Scranton, Pennsylvania, UHF. There were reports in the files of my predecessor saying there is no market here. Well, it turns out that he hadn't visited that market in two years. And eventually I was sold out in Scranton and did very well.
A few years later after I was fairly successful, I was asked to become Eastern Sales Manager. It actually was Eastern Sales Supervisor, they called it. I shared that job with a fellow named Jim Victory. The head of the organization, Leslie Harris, who was really a very nice man but a blowhard, would come to us from McCann Ericson, resigned. Bill Edwards eventually resigned. I got on the phone and I called a fellow named Tom Moore, who was our representative on the West Coast and was very successful because there was no network interconnection, and he sold "Annie Oakley" to Carnation. He was doing extremely well. I said, "Tom, you've got to come East because if you don't take over that job somebody else will. I hear, Norman Walt, who was sales manager of Channel 2 may come over." Norm was a very difficult man. He said to me, "Ralph," in his Southern accent, "I don't want to come East. I'm very happy here." Well, he eventually took the job.
End of Tape 2, Side A
BARUCH: Sam Diggs became head of the operation of CBS Films. Sam let Mr. Harris go and started taking over. The first thing he did was produce a show called "Robert Herridge Theater," which was quite an egghead type of production on tape. But Sam thought that with his success of "Sunrise Semester" at Channel 2 in conjunction with New York University, which had a lot of attention, he was going to carry that over into the film business. We tried to advise him against it, but he did it.
In the meantime, I also sold "Whirlybirds" to Continental Oil. "Whirlybirds" had originally been a Desi-Lu pilot for CBS. The CBS Television Network didn't know what to do with it and gave it to us to see what we could do with it. Well, I had my contacts: Benton & Bowles, Chuck Shugart, and Jack Philips who were the supervisor and executive, respectively, on the account. I showed them the show and I told them about some of the promotions that we could do and some of the merchandizing that could be tied in. Tom Moore had become sales manager (coming in from Los Angeles). So they took the show down to Houston to the client to show it to him. The day after they left, Tom Moore got a call from a CBS network that they wanted the show back. It was Thanksgiving weekend, and he said, "Well, I can't give it back to you because Benton and Bowles has taken it down to their client in Houston. They are the agency for Continental Oil and they're submitting it to their client." "Well, if that deal falls through we're going to get the show back." Well, they came back with an order for about sixty or eighty markets for "Whirlybirds." So CBS did not get the show back but what we didn't tell management was that it was only alternate weeks and that we had to fill in the alternate weeks which of course we did. I did very, very well. I bought a house in Queens. In the meantime ...
ALLEN: At this point you had two children?
BARUCH: At that point I had three children.
ALLEN: Three children. And their ages were ...
BARUCH: That was, let's see, 1957, so one was born in '44 the other one was born in '48 and the next was born in '51. So, I had a few of these accounts. Then we did a show that Tom wanted to do about the Civil War, which was an adventure series called "The Gray Ghost." We sold that fairly successfully. We had sold the reruns of "Navy Log" which was our production. But in the meantime, a fellow came on the scene named Robert Lewine to do network pilots. It was now 1959, and my fourth child was born in 1958. Bob Lewine was making network pilots and I said, "Bob, I would like to have a cup of coffee with you at Schrafts," across the street from 45 Madison Avenue. We had a cup of coffee, and he was complaining about the frustration of making network pilots. I said, "Didn't you think about this when you took the job?" He said, "What do you mean?" I said, "Bob, you can't win. Let me illustrate. You make a network pilot. You have to show it to CBS first. Mike Dann and Jim Albright look at it and they'll either hate it and say it's a piece of junk, or they'll like it. If they like it, you're in even more trouble because now they'll say, 'Why didn't we make that, why did it have to be that little subsidiary that made it?' So if they like it, they'll put it on the air. If they put it on the air they're not going to give you very good time spots because it wasn't their show; but if by some miracle the show succeeds they'll hate you even more. On the other hand, if they don't like it, you go to another network, NBC or ABC. Well, they know darn well CBS has looked at it, so they either don't like it--in which case Albright and Dann still laugh at you--or they'll put it on. Now the decision tree again folds in two areas. It flops, and then you look stupid and Albright and Dann look brilliant because they didn't want it. But, much worse, let's suppose it succeeds, and beats the pants off the CBS network! They'll hate you up and down the entire building! So you can't win this!" He says, "Oh my God, I never thought about it." And six months later, he had left to go to CBS programming on the West Coast. A lovely person, incidentally.
I was made head of International, and the very first thing I was asked to do was go out with Bill Lodge and his wife to Australia because new stations were coming on the air and I wanted to see what CBS should be doing.
ALLEN: How big was International at the time you were made head?
BARUCH: It was an absolute mess! We had a fellow in France, Jean-Paul Blangeau representing us who had sold "The Whistler," one of our productions, to theatrical exhibitors, which of course we didn't have the rights to do. Our man in Central America was in jail. In Canada, we had Spence-Caldwell representing us who was just about to start a network. In Australia, we were only doing business with Frank Packer and the Channel 9 stations. We had never sold any show to anyone else. There was no competition, really. And in Japan, we had an agent that was collecting an outlandish fee, the Sakhia Company.
ALLEN: What made it attractive for you to leave CBS Films to go to International?
BARUCH: Well, I didn't really leave CBS Films. It was the International branch of CBS Films.
ALLEN: So leave domestic to go to International?
BARUCH: Right. Well, Sam Days got me in there and beat me over the head time and time again. That was the pattern at CBS. You were made an executive of some kind. While you made very good money--in those days I was making fifty to sixty thousand dollars a year--he offered me a much lower salary to be head of International, director of international sales. But if there's enough pressure exercised, and you had quite a few other benefits, if you want to make a career at CBS that was the pattern.
I must also tell you an anecdote. Six months after I joined CBS, while we talk about salaries and other things, I got a call from my former boss at the Los Angeles Times, Peter Roebeck. He wanted to know if I would please meet with him and Tom O'Neil, head of RKO, in Mr. O'Neil's apartment at the Lombardi Hotel. We met on a Sunday afternoon, and Mr. O'Neil wanted me to join them because he's going to start a syndication operation and they're going to buy the Bank of America pictures, as they were called, to syndicate them in the county. And at that time, I was making maybe ten, twelve thousand dollars a year. But there was something about CBS; they were the Tiffany. We all felt that we were very proud to work there.
O'Neil ended up, at the end of this Sunday afternoon, offering me three times what I was making at CBS and couldn't understand why I would not accept it. I tried to explain to him that one does not leave CBS after six months. Your reputation is at stake. I wasn't going to be a drifter. I had been working for DuMont, and then the Los Angeles Times for very brief periods, and I wanted a solid career. So, in 1959 I became head of International. I was sent out with Bill Lodge and his wife, Billie, to see what was going on.
ALLEN: Who was Bill Lodge?
BARUCH: Bill Lodge, at that time, was a Vice-President of Affiliate Relations and Engineering. A very tough, bright individual. He had had some problems with his wife that I wasn't aware of, but he was a very pleasant travelling companion. He and I disagreed on what CBS should be doing. I maintained that CBS should buy television stations to the extent allowed by the law in Australia, and he didn't think that the smaller stations were anything worthwhile. I had offered our news and public affairs shows to Frank Packer; to the Australian Broadcasting Commission; and to the Channel 7 group, Henderson's operations. We had only done business with Frank Packer. I had asked for a reaction and Frank said, "Let me talk to you about it at some point," and gave me his reaction. The ABC--Australian Broadcasting Commission--the government network, sent me a wire back agreeing to the terms I wanted and Henderson didn't answer at all. So, I sold them to ABC before I went to Australia and Packer raised holy hell.
Our first call was on Frank Packer. Bill and I went in to see Frank Packer and he keeps us waiting a while. He walks in, and says, "Well," (he didn't say hello or anything) "have I got it or haven't I?" I said, "Have you got what?" He says, "The news and public affairs package." I said, "No, you haven't." He said, "Well, there's nothing else to talk about." I said, "Okay," and I took my hat and my coat. Bill Lodge stood there, mouth open. He couldn't understand what was going on here; I mean after all, we traveled all this distance and in those days that was a tough flight.
We took one of the first jets. They had been in operation a week. You used to travel to San Francisco, Honolulu, Fiji, Sidney. It was like a twenty-five, twenty-six hour trip if you went all the way through. I said, "Well, you just said there's nothing else to talk about so I'm leaving." He grabbed my sleeve and he said, "Sit down!" We got very angry at each other. Well, Bill couldn't understand that.
Then we visited with Charles Moses who was head of the ABC. His lunches were very well known. We drank and drank and drank to the point where after lunch, Mr. Moses--later on to be called Sir Charles Moses--was on all fours looking for a bottle of wine he had hidden somewhere and he couldn't remember where. Well we got back to the hotel about 4:00 or 4:30 and I went straight to bed. Bill went back to the states with his wife. I felt I should really explore Australia. I went to Tasmania to see a new station which was being built there by Eric McCray and I also went to Perth. I was the first American television company representative to ever visit Perth. Jim Cruthers, now Sir James Cruthers, showed me where TVW was going to be built, etc. I built a very good relationship with the Australians. I arrived back in September.
On October 9th of that year, I had to go to a cocktail party given by some Japanese television people. I got a phone call from my oldest daughter that, "Mommy is very sick, you better get home right away." I got home about 7:30, and my wife was in absolute agony. I finally found out she was pregnant which I didn't know about. She was in the early stages, but being a doctor's daughter and having studied pre-med herself, she didn't think she needed a doctor. I called her doctor, her gynecologist, and she was put into Cue Gardens Hospital at 9 o'clock. She apparently had an ectopic pregnancy which had burst open; peritonitis had set in. To make a long story short, I put her in the hospital at 9:00 p.m.; at 3:30, 4:00 in the morning she had died. This, I think was the beginning of some of the worst years of my life. I was left with a one year old, an eight year old, an eleven year old and a fifteen year old. Overnight, I was a widower.
ALLEN: Your wife was in her late thirties at that time?
BARUCH: Early thirties. She was thirty-four. She was born in '25, and died before her thirty-fifth birthday. We had a nurse for the little one for a while. I convinced the nurse to stay on and we had a cleaning lady and I extended her hours. I started looking around for a housekeeper and found one in Switzerland. I brought her over she sort of ran the house because I had to travel a great deal since I was head of International. I practically went broke because I had to hire help for weekends and everything. It was a mess.
But I developed the International organization. In Canada, I told Spence Caldwell he couldn't stay distributing our shows because he was going to have a network and there was a conflict of interest. How could we sell to the CBC if he started the CTV network? He didn't like it at all. He said that one of his people, Ken Page, could represent us. I met with Ken on a lake in New Hampshire in a boat so that he couldn't run away. I made a deal with him for distribution. Ken said, "Well, I like the three year deal but I would like one more season." I gave him three and a half years which really was four seasons.
In Central America and Latin America we had all of our shows in South America sold to a fellow named Gore Mestray. Gore was a partner of CBS in television stations in Argentina, Venezuela and in Peru. He had made a sweetheart of a deal with CBS, which was very advantageous to him and very disadvantageous to us, but I was again ordered to make the deal. I tried to improve the deal and he went to my boss, my bosses boss, Merle Jones, who was head of CBS Stations Division at that time, and said he could live with that deal. The reason he signed the deal, even though he went to Harvard and so on, was because his English wasn't good enough to understand really what he had signed. I had to change the deal. So I cleaned up the operation.
In Europe, we set up our own representation. We had to do it out of Zurich, Switzerland, because all of CBS International's business was funneled through Switzerland for tax reasons. In Australia, we opened an office and, in 1961, I hired a fellow named Bill Wells. In Japan I hired the head of the Sakhia Company's television section, Mr. Koryaki Takahashi, to be head of CBS Japan, as we called it. I felt Mr. Takahashi, who was well-suited for this and had been a classmate of the Emperor's, and was an older gentleman. In Japan it is very essential to have that kind of representation.
Finally, I went to my boss and said, "I cannot run this operation any more. When I'm in New York, I can't travel and when I'm in New York I must work sixteen, eighteen hours a day. I can't continue doing this." I finally hired, as one of my assistants, Willard Block, who was one of our junior salesmen. I had asked him to find me somebody because his wife was in personnel work. One day he was home describing this job to his wife and she said, "Well, who have you found?" He says, "I haven't found anybody for Ralph." And she said, "I think you ought to apply for the job." Which he did. Then of course I gave him a very hard time but I eventually hired him. At least I had somebody else to travel.
The first time he went to Japan, he called me from Japan and he said, "I have a very awkward situation. I've been here four weeks and today, the Tokyo Broadcasting System," which was our closest affiliate, "said that the answer to our proposal is 'No.'" He asked me, "What should I do?" I said, "Well, you have to tell the Japanese that you're prepared to stay another month to get this worked out." He started screaming, "I've been here four weeks!" I said, "Look, the Japanese know our psyche. They know we want to go home. I didn't ask you to stay. I said you should tell them you're prepared to stay. Because CBS' answer to that is 'Unacceptable.'" And he said, "What the hell does that mean?" I said, "Just tell them their answer is unacceptable to CBS and you're prepared to stay another month to get it worked out." He told them that the next day. Three days later the deal was signed and wrapped up and delivered. But you have to know your foreign clients very well.
ALLEN: How did you develop this sensitivity to the different cultures?
BARUCH: Going there, knowing a little about it. I, of course, lived in Europe for a while. Why I was made head of International I never knew except that I spoke one or two languages and they thought that was a good thing for me to do. It was really very, very difficult.
ALLEN: Who were your major competitors from the U.S. in the international market?
BARUCH: Well, obviously the studios: MCA, 20th Century Fox, and of course NBC, and to some extent ABC. But neither NBC nor ABC were as strong because they didn't have as much product. I had many meetings with the CBS network people about product. The edict finally came down from Jim Albright that if they didn't get distribution rights to a program, the program didn't go on the air. And so, every show that went on CBS we got distribution rights. As recently as last Friday, Bob Daly, who used to be head of Business Affairs, confirmed this. He said, "We just took the rights," because the producer had no place else to go.
ALLEN: Was this both domestic and international rights?
BARUCH: Yes. Then, of course, the monkey business started between divisions where the network division overcharged me because they made a profit on everything--prints, reels, advertising. I guess that was customary. But we got the rights to every show.
Then Frank Packer formed a cartel in Australia. I heard that he had a signed agreement that assigned programs to each of the three participants in television in Australia. Together they decided what prices they were going to pay. I also heard that possibly a fourth station was going to go on the air. With the advice of our office, I sneaked in through New Zealand because every day Frank Packer got a manifest of all the passengers that were coming in on Pan Am and on Quantas from America. So I sneaked in from New Zealand. I flew straight through practically and I was picked up at the airport at seven o'clock. Bill Wells told me we had nothing on until noon. At noon we met with Len Major who was representing a fourth station that was going to go on the air, financed by a Reg Anset, of Anset ANA Airlines out of Melbourne. We met from noon until 1 a.m.
The next morning, we left on a seven-thirty flight to Melbourne. I was warned ahead of time if Reg Anset puts a cigarette box on the table don't talk anymore because that's the recording device. He doesn't smoke. We met with Reg Anset and he wanted to buy every new show we had and every show that was on. Well, I didn't want to put all of our eggs in one basket again so I sold him some new shows and then he said, "Well, I'll pay you X dollars for the renewal of Gunsmoke." I said, "Well, I have to give Frank Packer the opportunity to renew that show because he now has it on the air."
Bill and I started thinking about how do we tell Packer I'm in town? Well we had heard that his head of programs, Bruce Gingel, who now runs morning television in England, was at the Chevron Hilton Hotel--that's where I stayed. So I planted myself on a bench right in front of the elevator. I knew he had to come out and he did. He saw me and was completely taken back and said, "What are you doing here?" I acted very surprised that he saw me there. Well, I finally called Packer, and I said, "Frank, I would like you to renew "Gunsmoke" at this and this price." And he used an obscenity and hung up on me. So I sold the renewal of "Gunsmoke" to Reg Anset and I told Packer that "Gunsmoke" was no longer available. Finally, I think a light came on and I was asked by Rupert Henderson, Packer's competitor but part of the cartel, to have lunch with him. I was so terribly upset about everything that was going on because they do business in Australia like the robber barons did business in this country a hundred years ago.
I was in Packer's office once when they had a strike at the newspaper. He called his two sons in, both of them enormous--and Frank was amateur boxing heavyweight champion of Australia at one time, and couldn't hear too well because his hearing was boxed up--and told them, "Go down there and beat the pickets up." Which they promptly did. And of course the competing newspaper took pictures of that, published it on page one, "Publisher's Sons in Brawl."
While all this was going on I called New York and before I did I looked outside my room and here's a fellow at the end of the corridor at one o'clock in the morning with something attached to my wall! I called downstairs and I said, "There's a man sitting there!" Of course, the night manager must have been paid off because he says, "Well, is he bothering you?" I said, "No, but I find that unusual." "Well, I'm sorry sir, there's nothing I can do about it." I had to call New York so I turned on the television--there was no sound, there was a rushing noise--I put the blanket over my head and that's how I called New York. I mean, it was unbelievable! We were followed.
Merle Jones said, "I just got a telegram from Frank Packer complaining about the pricing you want to charge for "Gunsmoke" which, compared to England, is much higher, etc. What should I answer?" I said, "Why don't you just answer: Our representative is in Australia. Why don't you talk to him?" Well, he didn't want to do that and gave him a long explanation. To make a long story short, apparently it got out and Rupert Henderson said, "Let's have lunch." I went to Epping, where his headquarters were, and Mr. Henderson, who in those days was in his seventies, had a very crackly voice. He said, "Look, Mr. Baruch, I can remember very well what you've said. You've accomplished what you wanted. Can I give you some advice?" And he gave me the advice, "Why don't you just go home." I thought that was very good advice and I went home. Eventually the cartel dissolved.
In the meantime, we had problems in Europe and I had Michael Burke there. In the beginning when I became head of International, Mike and I did not get along very well. I went to England and he, knowing I was coming, went out of town. He was going to show me. He put me in a dump of hotel with a light bulb hanging down and a bathroom two doors down the hall. But Michael was asked to come back to New York to head up an Acquisition and Diversification Program. I appointed Bob Mayo. Bob's wife couldn't take Europe--she was there three or four years. She was a real provincial American. She claimed she couldn't find shoes in Europe, and my wife told her, "Why don't you have them made in Italy? You go to Italy all the time." I mean this was a dream job for anybody. Well, they left.
I had promised Ken Page when I set up our own operation there that I would give him a first crack at Europe. I moved him over. We had moved our office in the meantime to Zug, Switzerland, which was a different canton, for tax reasons again. So I moved Ken to Switzerland. He came back to me a year later and said, "Pat, his wife, cannot live in Switzerland." I rearranged our entire legal shenanigans and moved him to London to head up all of Europe.
One day we're sitting there going through our budget and Willard Block hands me--after he got his profit sharing--a copy of the letter he had sent to me (I didn't get the original yet) resigning. He had hired Howard Carshan, who was CBS News in Europe, to be his assistant. We all had dinner together and I thought I had convinced him to stay. We had dinner at Prinier's. I remember that because we found a mouse or a rat running along one of the wall sconces. Columbia Pictures, one of the people I had worked with, Larry Hillford, had offered Ken a job and apparently they talked again during the night because the next morning, Ken says, "Look, I've thought about this, what we said last night, but we shook hands. I'm not sure I want to take this job." I said, "You're entirely right." I turned to Howard Carshan and I said, "Congratulations, you're the new head of CBS Europe."
In 1963, I was remarried to a lovely lady that I met while looking for a nursery school for my youngest child. She had no children to play with in the area and I thought she ought to play with some young children. I visited all these schools, and all these directors of these schools gave me this nonsense about the psychological development of the child being very important.
ALLEN: At this point you were living in Queens?
BARUCH: Yes. I was living in Queens. Actually, it was Holliswood, which was part of the Queens borough. We had a lovely, English Tudor house, three stories high--an enormous place--it was lovely. But I now had to find a school and they gave me this nonsense about the psychological development of the child. All I wanted was for her to play with some children her own age. I went to this school and talked to the director. I started with, "What about the psychological development?", just to draw them out. The director said, "Oh, that's nonsense. All you want is to have her play with some children of her own age." I thought, anyone that honest one ought to marry.
ALLEN: (Laughter) Did you consult her about it?
BARUCH: Oh yes. I consulted her. She was so taken aback when she saw me she couldn't remember the names of half the people in her school and everybody was introduced as Mr. or Mrs. Smith--which I found a little bit unusual.
My father was still alive. My mother had died and he remarried, much later, to a lovely lady. But there was a problem because Jean was Episcopalian.
ALLEN: Jean was ...
BARUCH: The lady I eventually married. Of course, I am Jewish--not very religious but more tradition oriented. I think if I had married a non-Jew, none of my family would have ever talked to me again. Not that I cared, and my children would have used that--especially under these circumstances, as a tool--it would have created a lot of problems. Well, I went on a trip--I remember that very well--in '62. We made the trip around the world with our representative, Bill Wells and we ended up in Singapore. Now, this is quite a few years ago. We gave a dinner for the people from Radio Singapore and then the next day they said, "We must show you our Singapore."
We had lunch in one of their restaurants in a little room where they set a platter of noodles right on the table and everybody picked up the noodles with their hand. The next morning, Bill Wells says, "Ralph, I don't feel well and I'm going to see a doctor." I said, "Well, I can't, I have an appointment at the Embassy--I've got to go." I went, I couldn't eat lunch. I came back to the hotel and I remember crawling to the phone and saying, "Bill, I feel terrible--please help me, please help me!" That's the last thing I remember. Bill came into my room and found me lying on the floor bleeding from the rear end--very sick. He called a doctor and the next morning I woke up and I saw this man sitting next to my bed. He said, "Well, we had quite a time with you." I said, "What happened?" He said, "You had close to 106 degree temperature. We had eight or ten blankets on you and the whole bed was shaking. I suspect you contracted a form of typhoid, paratyphoid. Your associate told us about your dinner. There is a carrier somewhere in that area and I can't find him." Well, I was very sick but I wasn't going to go in a hospital because on the way in from the airport, we looked at the hospital-- for some reason, I don't know why--I said, "Bill, remind me not to get sick here." Because it looked awful. All I wanted to do is get home.
Well, I got a telegram from CBS, would I please visit with the head of Call Israel, who was the communications head in Israel, and also visit with a person in the prime minister's office. CBS wanted very badly to do a consulting agreement with Israel on the setting up of television. Well, we dragged our way to Hong Kong, where I recovered a little bit, and from then on in I only drank beer because beer has to be boiled. We ended up in Beirut, visiting this station. You couldn't go from Beirut to Israel, so we had to go to Cypress. I wasn't feeling very well in Cypress. By the time I got back to Tel Aviv I was sick and I called a doctor. He was a German-Jewish refugee and I'll never forget it. I felt awful, nauseous, and everything was turning. I remember this man sitting there and telling me, "What you need is some chicken soup." That was about the last thing I needed or wanted.
I dragged myself into Jerusalem to see this gentleman in the Prime Minister's office. I didn't feel well and he kept me waiting an hour. He finally comes in, very brusque, "Well, what do you want?" I gave him my card. "CBS. Well, what do you want?" And I said, "Well, I want to find out the status of television." And he launched a tirade against television, and the country, and CBS. I didn't know what hit me. I said, "Look. I can walk out the same door I just came in. I was asked to do this," etc. Well, I read the next day in the Jerusalem Post that the gentleman, whose name was Teddy Kolich, who is now mayor of Jerusalem and has been for many years, had just gone through a debate in the Parliament, the Knesset, about television in Israel and was voted down overwhelmingly. With this defeat sticking in his crow, he comes into the office and here's this smart cookie from New York wanting to know about television in Israel.
Well, I went on to Frankfurt and I got sick in Frankfurt again, and I finally get a flight back to New York.
ALLEN: Did you get to do any deal with Israel?
BARUCH: No. CBS did eventually, yes. Joe Stern and others worked on it. If we told them to do it black they did it white and if we told them to do it white they did it black. I had a lot of problems there, which I'll get into later.
But, I flew back into New York and I was so sick. The plane ahead of us at Kennedy crashes and we're diverted to Philadelphia. Of course, Philadelphia in those days, didn't have customs or anything. Nobody was ready for this flight coming in from overseas. So finally, they unload all the bags and I find one of my bags was torn, I have more problems. Finally, they put us back on the plane, the plane goes to the runway, it was fogged in. We come back and we're put on a bus. In the meantime, my wife-to-be knows I'm landing, she hears a plane has just crashed, everything is cut off. She can't get to the airport, she doesn't know what's going on. Well, finally she finds I'm not on that plane, I was on the plane behind it, and we're going to be brought in by bus. She said I got off that bus looking like a ghost. She took me to her apartment and called her doctor. I couldn't go home. He helps me with some belladonna and I finally go home. I had some suits made in Hong Kong which was stupid because I'd lost about twelve or fourteen pounds with this sickness. Anyway, that stayed with me for about ten years. Every time at Thanksgiving, around Thanksgiving time, I got pretty sick.
At the same time she tells me, "Well, you know, I've become Jewish." I said, "You have?" She says, "Yes!" I said, "Where?" "Oh, Temple Emmanuel." I said, "Temple Emmanuel!? That's reformed. That's not really being Jewish!" She didn't know the difference between reformed, conservative, orthodox--she knew nothing about any of this. She said, "Well, what do I do?" I said, "Well, I'll tell you what. I know the head of the Board of Rabbis, Rabbi Moskowitz. Why don't you go there?" Well, he took her in for some lessons. He came back and said, "She doesn't need any lessons. I will marry you." And with that I announced to the family and the others we're going to get married. On June 9, 1963, we were married.
ALLEN: At that time, your youngest child was what age?
BARUCH: My youngest was ... let's see, '63 ... she was born in '58, so she was five.
ALLEN: And your wife's experience with children up until that time had been in the nursery school?
BARUCH: Nursery school and her major in college was childhood psychology. So, she was pretty adept at this. She's done a very good job.
CBS thought they'd be very nice to me and they were. On our honeymoon, among other things, we went first to Paris and then I was asked to attend the EBU General Assembly--the European Broadcasting Union General Assembly--in Stockholm. The Europeans, when they have these conventions, treat themselves very, very well. We were a non-voting member--we were an associate member--and couldn't vote. There was a big dinner in the Stockholm town hall with maybe 600 to 800 people sitting at very long tables. They served reindeer, and the head of Yugoslav television, Mr. Yapichek, told her how to scull.
The next day we had a meeting and the same gentleman got up and suggested that the associate members dues be increased by 200 percent. Next to me sits Sir Charles Moses, the head of the Australian Broadcasting Commission, and his face got all red because he is also an associate member. I said, "Charlie, who goes first, you or me?" He said, "Let me go first." And he went first. Then I chimed in and I said, "You know, I don't understand this because it's going to hit the Americans particularly and why should we pay 200 percent more and not have the right to vote?" He said, "Why would the Americans pay so much? Because you have the money." And I said, "You know, that reminds me many, many years ago we had a bank robber named Willie Sutton. He was asked once, 'Why do you rob banks?' He said, 'I rob banks because that's where the money is!'" Well, they voted for this and we were stuck. But it also gave me an idea of how influential the BBC was really in Europe. When they set the date for the next meeting, he couldn't make it and three times they asked him to change it and finally they did--just because one person couldn't make it. We got back, and really had a marvelous trip.
Then the following year--and this happened three times--we took a trip to Europe and Sam Diggs called me back every time from my vacation. The last time he did that he called me back and he said that now I must come back because we want to make a pitch because CBS had just formed a motion picture division to make movies. I must make a presentation. I said, "Sam! I'm in London! You know we have no business being in distribution. We know nothing about movie distribution!" "I want you back here, and please, tonight." I said, "Tonight! Are you kidding? It's eleven o'clock here and I'm here with three children. We have planned a seven week trip to Europe!" Well, two days later we're all on the plane and I said, "What about the cost?" He said, "I'll take care of everything." We're on the plane, kids crying, the whole thing.
I sat on my rear end for a month making my pitch to CBS people who were taking over the motion picture area. Jim Victory had to make a pitch for domestic distribution, which was nonsense, and they'd already made a deal somewhere else. I met with a guy, and I said, "What we ought to do is sell the rights to each country." I knew this wasn't going to work. Then I submitted my expense account for that trip and they didn't take care of everything, which was not typical--they never did that, but he refused to pay for this. And on top of that I got stuck with a lot of money for this trip.
ALLEN: I think we're going to need to stop right here and change tapes.
BARUCH: Okay, when do you want to have lunch?
End of Tape 2, Side B
ALLEN: This is December 19, 1990, and this is Side A of Tape 3 with Ralph Baruch.
BARUCH: Business was booming. It was successful. In 1964, two of our children were going to school in the city.
ALLEN: How did the motion picture, the feature film thing, resolve? We didn't resolve that.
BARUCH: Oh. I'm sorry. Yes. We never got the distribution. They made a deal with General Cinema, I guess they were called, or somebody else. Anyway, they said that we must give up the name CBS Films because they're going to call themselves CBS Films. So I said, "That's going to be a very expensive undertaking." I know this comes back to the intercompany monkey business. We had to change all of our copyrights worldwide, change our stationery worldwide, and all the other things, thousands of things that have to be done. It must have cost a couple of million dollars for these changes. A few weeks later, a fellow named Gordon Stoolberg, who headed up the film operation, decided he can't use CBS Films because he didn't want to be connected with CBS so they called it "Cinema Center Films." So the entire exercise was a waste but by then we had called ourselves "CBS Enterprises," and so we stayed with that.
In 1964, we moved into the city, sold the house, and with the proceeds bought an apartment on Gracie Square in the city, where I've lived ever since. Business was very good and progressed. I enlarged; hired Larry Hillford, in addition to Willard Block, to help in the international executive area. Generally, I had a good life. Except that we heard rumblings in the mid-'60s about the Federal Communications Commission, particularly one person, making it a crusade to get the networks out of the syndication business. A fellow named Ashbrook Bryant had been very active and really wanted to get that done.
In 1967, Sam Diggs left CBS Films to be the number two person at CBS Radio. I was named Vice-President and General Manager of CBS Enterprises. Which meant I had domestic and international under my responsibility. Again, developing very nicely and doing well.
ALLEN: Was CBS Enterprises involved in any other business at that time?
BARUCH: Yes. We had merchandising and licensing of all CBS shows. We had a division called "Tarrytoons," which was making cartoons. As a matter of fact, when CBS thought of building their own building, Black Rock, we at "Tarrytoons" had a parking lot in New Rochelle and on these premises they built a small replica of the building to see what the facing would look like. Well, in 1968, Frank Stanton asked me to make some recommendations about what should happen if CBS had to get out of the syndication business. What would I recommend they do with that business? Basically, my conclusions were either sell it, spin it off, or close it. My idea of a spin-off was completely different in terms of what they later did. And I just went on with my business. But I had to keep things together because people were very insecure already.
In 1969, things began to get a little more serious about the FCC. They came out with a ruling that the networks cannot be in cable and should not be in syndicating. I had several run-ins with the people concerned at CBS and their outside lawyers. Particularly, Tim Dyke, of the Cutler firm in Washington, and Sally Katsan, an associate of his, and Judge Rifkin, who I believe was a judge who was associated with the firm. I got thrown out of a meeting because I argued too strongly.
CBS was so strong that they got 50 percent ownership in programs, which they weren't even distributing. I said, "You know, you'll never get any money out of this." Because the motion picture companies short-changed them all the time. "Why don't you give that up and tell the FCC, 'We will no longer take any position in programs which we don't distribute.'" I went to see a General Counsel of CBS who pointedly told me he had only one client and that was the CBS Television Network. That made it very clear to me.
Well, I knew the handwriting was on the wall, and in the summer of 1970-- about June or July of 1970--I got a call from Frank Stanton, would I please come and see him again? Frank and I had established a good relationship. I had organized, in the years proceeding, an international meeting where we brought everybody in from all over the country and asked him to speak. Frank had a habit when he spoke or he showed tapes or films that he had everything in duplicate. Well, this was the last function at the Savoy Plaza Hotel which was at 375 Park Avenue where Bristol Meyers has its building now. But that was the last function in that hotel. They had a microphone. I remember Frank Stanton grabbing the microphone and with that, a bunch of smoke went up in the air and I said, "Oh my God! I'd electrocuted him!" I didn't electrocute him, but we didn't have any sound.
Another time, I had a big sales meeting at the Bergenstauf in Switzerland, and Merle Jones came. Merle, in those days, had all his hair. I don't know if you've ever met Merle. He was a little bit like you, a gray haired gentleman, a little slimmer. He could have acted as a model for a business executive. Six foot two, very smart, somewhat provincial. I took a trip around the world with him. He and his wife. If you want me to tell you about that later I will, but it was unbelievable. But, Merle came and we said we're all going for a swim. He said, "Well, I didn't bring a swimsuit." These are the kinds of stories that evolved around this industry and this business; in those days CBS was a lot of fun! We said, "So, we'll get you one." It must have been a little big because he jumped in the pool and promptly lost his trunks. He's fishing around, which is very difficult, trying to put a pair of trunks back on himself before he gets out of the pool. He's a very conservative person. Well, he finally got it on, and we said, "Well, we'll have dinner tonight. We'll all meet in the bar at six o'clock." We all got there a little bit early because we knew. He comes in, looks at the bar, and his face turned ashen. Because the entire back end of the bar was a glass wall overlooking the bottom of the pool.
We played a lot of games. When we moved into the new building, all of the art had to be approved by the art committee. Willard Block had some antique maps of Japan. He heard somebody wouldn't approve the maps. I called Lou Dorfsman, who was head of art, and I said, "Lou, please do me a favor. Look at the maps and please approve them." He looked at the maps, and he says, "We'll have them reframed. They're gorgeous. But the framing is terrible." I said, "Okay, now give me a piece of your stationery." I wrote, for Lou Dorfsman, a letter to Willard who was in Japan telling him why we couldn't accept those maps. I said they're really old maps, and this is a brand new, forward-looking building. If you got yourself some up-to-date maps we'll be very happy to approve them. Well, Willard thought that letter had something fishy about it. He had worked in the OSS during the war. He came back to New York and found out it was a phony. He didn't say anything. He goes to my boss and says, "I have a four page letter here I want to send to Frank Stanton." Everybody was in on the joke except Frank Stanton. My boss says, "You can't do that." He went to Merle Jones, my boss's boss, and said, "I want to send this letter to Frank Stanton." Merle, who had half glasses, looked over his head, and said, "You don't want to do that." He said, "Of course not. But I have good reason to believe you're in on the plot." Merle raised both his hands, and said, "Okay, I give up. What do you want me to do?" He says, "I want you to call Ralph's boss and say you just got this letter from Stanton, for comments, would you please comment?" Which he did. I got mad. But they wouldn't let me off the hook for three days. These are the kind of games we played.
Every morning I came in, my desk was pushed back and I couldn't get around it so I pushed it forward three inches and every morning I came in it was pushed back. Frank Stanton had hired a lady to take care of all the plants, a Japanese lady, and when I moved into the office somebody had sent me a plant with a congratulations on it, you know, a note. And one day I said, "Would you mind giving that other plant some water, too?" She said, "That's not CBS' plant." This is the kind of thing that was going on.
ALLEN: At this point, was Enterprises involved in cable at all?
BARUCH: No. Not at all. We were part of the same division, which was the stations division, headed by Merle Jones, who also had responsibility for cable.
ALLEN: But you were pretty well oblivious to the cable business.
BARUCH: I wasn't oblivious to it, we tried to do some business with cable.
ALLEN: With any success?
BARUCH: No. And, as a matter of fact, when the FCC came out with their ruling that any system over 3,500 subscribers had to do local programming, we had a local program concept. CBS owned some cable systems which we had bought from a fellow named Homer Bergram in the State of Washington where John Goddard came from. He said, "Well, go out and talk to Homer and see if you can sell it." We went out to Seattle and we met with Homer, and Homer said he'll be happy to get these systems. What I didn't know is they had an incentive program whereby he got more stock if it became more profitable. But he said, "I won't pay for it." So if I gave it to him free, he'd be happy to put it on. Which I didn't think it was a very good business to be in.
ALLEN: It's hard to recover production costs.
BARUCH: That's right. It's very difficult. Anyway, so I'm submitting my plan and two years later, in the middle of 1970, Frank Stanton asked me to come in, and he greets me with the words, "I've spent many a sleepless night on the reports you've prepared." Well, when you have a lot of dealings with somebody, for a minute, I couldn't remember what he was talking about. He has a mind like a computer, still today. Finally, it dawned on me. He says, "We are going to spin off cable and your business into a new company." I said, "I see. And who will head up this company?" was my question. He says, "Clark George. Do you know Clark?" I admitted, yes, that I knew Clark whose nickname at CBS was Chief Crazy Horse. He says, "Jack Schneider is going to be in charge of the whole spin off." Jack was Executive Vice-President. We want you to head up all the program sales side and so on, the same thing I was doing. I asked him a few questions, particularly about the movies from the Cinema Center Films area, where we going to get those, etc. He lied a little bit. I asked a few more questions and he lied a little bit more and told me some other nice things and then I said, "Well, I'd like to think about it." I started getting up. He said, "Where are you going?" I said, "Well, I just said, I'd like to think about it." He pointed to my chair and he says, "Please, take all the time you need." And he says, "I'd like to bring in Clark George." I said, "Sure." He brought in Clark George and we chatted a little bit, and on the way out I said to Clark, "Well, I guess we ought to get together." He says, "Oh! Absolutely not! We should not be seen together for the next few months." And I found that quite strange.
Well, it was announced that this was going to be spun off and that Merle Jones was going to be the chairman and Clark George was going to be president and CEO, and I was going to head up the Enterprise division as president of that division, and that Richard Forson, who had been associate general counsel for CBS, was going to head up the cable business. Jim Lehy, who was assistant controller, was going to be the chief financial officer. And Paul Sternback, who was the lawyer for CBS Radio in the law department at CBS, was going to be general counsel. We owned a majority of a cable system in San Francisco together with Gene Iacopi and his father. CBS was going to do a forced merger--because they owned the majority of those shares--into a new subsidiary, which would dilute Mr. Iacopi, and he wouldn't get that much money for it. Well, Mr. Iacopi and his lawyers, very smart, objected to the spin off saying this is not really a spin off because CBS people still own the shares. A lot of the CBS directors will have shares. The chairman is a person who is with CBS--yes he's retired but he has a deferred compensation plan, a pension plan--this is still a part of CBS!
In the meantime, Chief Crazy Horse submitted our first budgets for the year 1971 and I submitted my budget. I'm also a director of this new company- to-be, and a lot of other people that Stanton knows were going to be directors (I'll get into that in a moment). Clark George used to come into the office in the morning at 6:30, 7:00. I used to come in at 8:00, 8:15 and I'd have eight, ten slips under the door. "RNB do this. Signed CDG." "Have you thought about that?" A clipping. "Have you read this?" Of course I had! His door would be closed for three or four days, you wouldn't see him. Then, his wife had to have back surgery--spinal surgery--and he said that's no time for a husband to be around. He went on a safari to visit all of our cable systems on the west coast. I told my wife, "Why don't you visit Judy in the hospital?" She went to see Judy and Judy complained about her life with Clark. Jean said, "They never go anywhere. He gets up at four-thirty, five o'clock in the morning, sure, to be in the office early, so they have to go to bed and they never do anything." I said, "Jean, don't ... I mean, stay away from that." Jean comes in the office and he sees her, opens the door, sees her, closes the door again. A few minutes later comes out with a typed buck slip, hands it to her and closes the door. It said: "To Jean Baruch, From Clark George. Thank you for being so kind to Judy when she was in the hospital." I mean, a real strange character. Well, December 31, 1970, arrives and the FCC, at the Iacopis' request, an hour before the spin-off refused to make the spin-off effective until this is all cleared up. Clark George literally punched a hole in the wall. It was a plaster wall, but punched a hole with his fist. Life became very difficult with Clark George, and finally, one day, I get a call from Stanton--would I please come in? He says Clark George has resigned. There sits Forsling. There sits Sternback. There sits Lehy and myself. He says, "What do I do?" "Well," I said, "I guess it's up to you." I believe it was February 28, 1971.
In the meantime, I want to come back to that budget problem. Everybody submitted their budget. I submitted mine. My earnings were up a little bit. But the earnings of the rest of the group were way down. We would have our earnings, a pro forma basis, for the company would have gone way, way down. I said, "Well, better luck next time, next year." Which was a sort of CBS tradition. You did the best you could. I said, "Wait a minute!" He said, "What's the matter?" I said, "Wait a minute! You can't accept that!" He says, "What do you mean? What should I ... " I said, "You have to tell other divisions, including mine, to raise the earnings so that we can come out. You know we're going to have shareholders, they're going to question this, we're a brand new company!" He hired somebody from CBS Spot Sales to be in charge of advertising and PR, and he had a plan whereby he was going to a buy a one page ad at spin-off time in the top fifty newspapers in the country. I said to Clark, "Do you know what that costs? We're going to be a $20 million company! With 43,000 shareholders!" Because of the spin-off, for every seven shares of CBS you got one share of Viacom, as it was then called. He says, "I don't care, we've got to do this." Who would have cared in Chicago about this spin-off?
Well, February 28, he resigns. In the meantime, Merle Jones had to get off the board, furious. He was going to sue the FCC. The whole thing had to be cleaned up. So they established a trust of all the CBS directors' shares, and all the senior executives, and Stanton picks for the Board, Jeeb Halloby, from Pan Am, on whose Board Frank Stanton served; George Herrar, of the Rockefeller Foundation, President of the Rockefeller Foundation, on whose board Frank Stanton served; a fellow named Richard Shawl? (Dick had come in to be interviewed as CFO of CBS and had made such an impression on them that they thought he'd make a good board member); Jack White, of the Cooper Union, on whose board Frank Stanton served and he was very interested in the Cooper Union. We picked Berly Pattee, one of our lawyers, this new company's lawyers in San Francisco, a marvelous man and this was basically the Board of Directors. Plus Jim Lehy. When the changes were made Jim Lehy had to get off the board. I stayed on, Forsling stayed on, and Clark George stayed on. Then Clark George resigned. We get together in Stanton's office and I said, "Well, it's more or less up to you now. Who do you want to appoint it? It should be one of us." He says, "Well, that's what they tell me." I said, "I guess the ball's in your court."
CBS always did things on weekends, things of that nature. We reconvened, I think it was Sunday, March 1st, or February 28th, it was just about that time, Sunday at noon in his office. He extends his hand and says, "Congratulations, Ralph, you're going to be the next CEO of Viacom." We didn't have a name yet "... of the company." I want Dick Forsling, who was head of the cable division, to be Chairman. I said, "Frank, that isn't going to work. The Chairman of the Board cannot be the head of a division." He says, "You make it work." We had offices at 375 Park. We'd already moved out of CBS. One of the first things I found in the office of Clark George, which I now was occupying, was that he had already installed in his private men's room, Italian tile and put carpeting over it. He had ordered furniture from Knoll associates worth $60,000. Which, in those days, was a lot of money. One of the first things I did, I called Knoll and said, "It's all canceled." After long negotiations I accepted one piece, namely this desk, from Knoll, and I've kept my desk. I fired the head of PR and Advertising because I wasn't going to buy fifty one-page ads. But I then got into the spin-off. I was forced in December to sign the distribution agreement that CBS had drafted. Clark George had refused to sign it. It was a mess, because we didn't get tax credits ... I mean, in a way CBS did not treat us very well.
Then we had our first shareholders meeting. We had to have a shareholders' meeting. I'd never run a shareholders' meeting. So I asked the General Counsel, "Who is our outside law firm?" And he said, "Well, it's a new firm, founded by Bill Green, who had been the lawyer for CBS." I met with him and was not very impressed. It was a three man law firm. Well, we were getting ready for the annual meeting. I didn't want to make too many changes. The lawyers say, "Look, you're going to have a lot of people there but don't worry because the proxies are in your back pocket. You hold the proxies. So the nicer you can be the better impression you will make." We had a meeting with analysts when Clark George was there and it was a disaster. Clark refused to answer most of the questions, and it was a disaster. We had a lot of PR problems. Well, we're getting ready for the shareholders meeting at the Hilton Hotel and just as I'm about to walk in, this lawyer comes out and he's got a paisley tie, the handkerchief hanging you know, like this, over his pocket--weird looking. He says to me, "The Gilberts are here. If they start giving you problems rule them out of order." A complete reversal of what he told me previously--be nice. Well, I decided I wasn't going to do that. I called the meeting to order and Evelyn Davis was there. Evelyn had called me a few days before and said, "I publish books on how to conduct annual meetings, and my books are x dollars apiece, and how many do I put you down for? With it you get a photo of me in shorts which you can show to your secretary but not to your wife." I was warned about her. She said, "How many do I put you down for?" I said, "None." She said, "Nine?" I said, "No. Not nine. None. Zero. Zilch. None." She says, "I think you'll regret this after the meeting." I call the meeting to order and the first thing she says, "Mr. Chairman!" I said, "You're out of order, Miss Davis!" I knew her already because she had come to CBS annual meetings.
One time she came in, dressed in a football uniform, with a helmet and the uniform had on the front of it, "Give 'em hell!" She gave Paley a terrible time until Paley finally told her, "Miss Davis, instead of having it on your sweater, why don't you just go there?" In those days Paley was very good, you know. Well, I wouldn't let her interrupt until I got some of the things done. She said, [Pounding], "I want to ask my questions now!" I said, "Well, the time has not come for questions, yet!" "Well, I want to ask them now because I have to go to another meeting of Time Inc. That's much more important than your meetings." I said, "All right, Miss Davis, I'll give you three questions, I'll answer them, and then you'll leave. Do we have a deal?" She said, "We have a deal." I said, "What's your first question?" She said, "My first questions is, why do you hold your meetings on the same day as Time Incorporated? Because their meetings are much more important. Second question. . ." I can't remember what it was, and the third question. I said, "Miss Davis, in answer to your questions: the first question, not to the shareholders of this corporation; the second question is no; and the third question is yes. I've answered your questions, thanks very much, and I hope to see you next year." Everybody roars, and she leaves with her tail between her legs.
ALLEN: When did the spin-off actually take place? It had been blocked December 31st, and when did it take place?
BARUCH: Very good question. I was called into the legal department, Bob Evans, with Stanton and we discussed the spin-off. Bob Stanton said, "Well, how long do you think the spin-off ought to take?" Evans says, "Hmm ... I think two or three days." I have, unfortunately, a very expressive face when I don't agree with somebody and Stanton turned to me and he says, "You don't agree, Ralph?" I said, "No. Not at all." He said, "Well how long do you think it ought to take?" I said, "Well, at the most?" "Yes, at the most." I said, "Two hours." He says, "Why is that?" I said, "With the problem we have in San Francisco, if you drag it out any longer, they'll get an injunction from the courts. It'll never take place." Bob says, "Impossible!" I said, "Well, then you won't spin off. I mean, it's as simple as that. Or it will be delayed a couple of years. Which is all right with me." Stanton says, "It's not all right with me! We're gonna spin this thing off!" I went to see Schneider, and I said, "Jack, I've got to ask you a question: are you spinning off the Canadian cable systems with it?" He says, "Don't you get greedy, Baruch!" I said, "Hey, I'm just asking. I didn't know--I really didn't know." He starts giving me a very hard time.
Clark George was a patsy and he did everything they wanted him to do to the point where I'm walking down Park Avenue coming back from lunch once and I said to Merle Jones, at that time chairman, I said, "Merle, this distribution agreement is very unfavorable to the new company." He said, "Ralph, when the baby is born, the mother's life is the most important." I said, "Yeah, but what happens if in the process the baby dies?" "Ralph, when the baby is born, the life of the mother is the most important. Was that message clear?" Of course it was. Well, the distribution agreement was filed with the Commission and we still had that San Francisco problem. I'm now trying to negotiate how we get this done quickly. We filed with the FCC all the necessary papers because up to that time they had ignored the FCC completely. Jack Schneider felt, the hell with them.
ALLEN: Was this March? April?
BARUCH: This was May. We're getting ready to spin-off and we set a date of June 4. In order to effectuate the spin-off quickly, particularly under the circumstances of the spin-off, which were very difficult--CBS had insisted that, at the time of spin-off, the microwave licenses (which connected some of our cable systems to the head ends) had to be turned in because they were in CBS' name. And I said, "Come on, you can transfer these!" They said, "No, not without approval." So, we had to turn in the licenses. We were a Delaware corporation. Some of our cable systems were incorporated in California, which means Sacramento, and there was the Jersey City problem because CBS decided they were going to mail the shares in New Jersey to avoid the transfer tax in New York. So June 4th arrives, and the FCC delays its vote from 10 a.m. to 1 p.m. The reason for that was they wanted to check the court in San Francisco, was there any impediment to the spin-off? They call and the court clerk, fortunately, said, "No, no problem. No impediment."
I have four phones on my desk. One connected to Harry Plotkin, our Washington counsel who is at the FCC in a phone booth; one to Delaware, to corporate, one in Sacramento, and one to Jersey City to Ron Lightstone, one of our two lawyers-- to mail the shares and dump them in the mailbox. I got the word, the FCC just voted, go ahead on the spin-off. I was just waiting for an injunction from the courts. I get on the phone and I tell Sacramento, "Go ahead and file. You can file." I tell Delaware, "Please go ahead." Where's Harry? "Harry, I'm here. I'm here, Ralph." I said, "Harry, please turn in the licenses." "Well, we really ... " "Harry! Turn in the licenses! Turn 'em in!" To make a long story short, it's all done--the shares were put in the mailbox. Once it is in the mailbox, it's done. Twenty minutes after I told Ron Lightstone to put them in the mail, the court in San Francisco issues an injunction. It was moot. The spin-off had been done. You can't put scrambled eggs back together again.
ALLEN: Now when you said that the FCC called the clerk, you said, "Unfortunately, he said no."
BARUCH: No. Fortunately. Fortunately, he said, "No impediment." He made a mistake, probably. Well, one of the first things I had to do in addition to the things I described, before the shareholders meeting, is go out to California and try to make Mr. Iacopi happy. Because whatever we would do, from then on forward, he would file some lawsuit or other. I felt CBS was very unfair to him in terms of what they offered to buy him out. I had lunch with Mr. Iacopi, Sr., at the Clift Hotel in San Francisco and I said, "Look. Let's leave aside what happened before, this is a new game." We made a deal. Right there. His lawyer wasn't there. There was just the two of us. I offered him a fair price, and he accepted it. I had a good relationship with his son, who ran the systems later on, and worked for us for a while as a matter of fact. Then we had the shareholders meeting, and we had this very complicated trust which was set up by the FCC.
Our first annual report had been mailed out to all the shareholders, and I practically printed them on toilet paper. I didn't have any money. We had gotten a loan from CBS for $6 million, and that was our capitalization. That was all the money we had. No charts, no photos, nothing. I said, "Well, the vote is approximately so and so. One of the Gilberts said, "Hey, wait a minute. I think we're entitled to an exact vote." I explained about the voting trust, which had to vote in exactly the same proportion to the rest of the shareholders, so it really didn't make that much difference. If you have a 90/10 vote in favor of whatever it was, the trust also had to vote 90/10, so it didn't really matter. But he felt he was entitled to an exact count, fine, but he had to wait until the lawyers and the accountants got through with it. So, I said, "Okay. That'll take time." He says, "Why don't you tell us about your International operation?" I loved to talk about International. He says, "I have one suggestion, Mr. Baruch." "Yes, what is that, Mr. Gilbert?" "You should have your phone number on your annual report." I said, "You know something, that is a very good suggestion, which I'm certainly going to pass on to our people, thank you." It was a love-in. There was no problem.
ALLEN: Why did you anticipate the Gilberts were going to give you trouble?
BARUCH: Because usually the Gilberts give trouble to corporations and CEOs. I never had a problem at annual meetings, never. You treat them fairly decently, you don't dismiss anybody, and you have a little humor in your discussion--it works very well.
ALLEN: Who are the Gilberts?
BARUCH: The Gilberts own shares in a lot of companies. They live on Park Avenue, and they have a corporation that holds shares in a lot of companies, to be the gadflies, really.
ALLEN: How did you come up with the name "Viacom?"
BARUCH: Well, that's an interesting story. Later, Stanton and I sat together and said, after the spin-off was done, after June--it was before June actually-- what are we going to call this company? We said, well you do business via communications, via this, via that ... finally he wanted to call it "Viacom." Because, in a graphic way, you have a "v," then you have the middle "i," and the inverted "v" which is the "a" and then "com." Communications. At a CBS shareholders' meeting, Paley was asked, "Mr. Paley, does Viacom stand for Visual/Audio Communications?" He didn't know. So he said, "Of course it does!" But it was too close to "Viet Cong." Some of our people objected, so anyway we called it "Viacom."
Now I had a problem with the law firm. I felt a three-man law firm wasn't for Viacom. I called Paul in, and I said, "Paul. We've got to have a bigger law firm." "No, we're fine." He refused. Finally it came down to the fact that if I wanted a different law firm I'd have to fire him. I said, "I'm very sorry, but I'm going to have to do that." I interviewed some lawyers. I wanted to hire the number two or three lawyer at IBM but he didn't think the company was big enough, and finally ran across a fellow named Terry Elks, who was at a privately-owned $400 million paper company, and hired him as General Counsel. Ron Lightstone also was here. I told him he was too young yet. We only had him and one other lawyer. I mean Terry Elks and Lightstone, those were our two lawyers. Then we interviewed law firms and finally settled on Hughes, Hubbard, and Reed.
Several weeks after the choice had been made, I'm in Chicago and I get a call. We had been asked to come down to the Justice Department because the Justice Department is about to file suit against us on anti-trust charges. I said, "We're only a few months old? What's the anti-trust problem?" So our lawyers get down there, and the Justice Department filed suit against ABC, CBS, NBC and Viacom on anti-trust charges with syndication rights and all of these things, even though the FCC had just come out with their rule. When our lawyers said, "Why Viacom?," the Justice Department said, "Well, you're part of CBS!" Our lawyers said, "Hey! Another agency of the United States government just insisted on a complete and absolute cutoff! We're not part ... " "You're part of CBS," they said. So we were saddled with an anti-trust lawsuit.
We had just announced a big merger with Communications Properties, Inc. (CPI), which was bigger than we were in terms of cable subscribers. No, I'm sorry, it was Columbia Cable. Bob Rosencrans. They got scared to death! You know, who wants to merge with a company that has an anti-trust suit from the U.S. government? So I went to CBS and I said, "Look, we've got this merger pending. Could we please get a letter of indemnification from you?" Bob Evans, my good friend, said, "Absolutely not. I'll give you a letter that we will pay, proportionally some of the expenses." I said, "That's not the point! We were part of CBS, you got ..." No, he wouldn't indemnify us. So that merger fell by the wayside. Unfortunately. It would have been a good merger. We finally settled and I personally went down, with our Gerry Shapiro of Hughes Hubbard & Reed, to talk with Bernie Hollander of the Justice Department, along with my lawyer Terry Elks, and their lawyers about consigning a consent decree. The consent decree they submitted to us, was that in five or seven years we would give up all these rights to all these shows, because CBS had gotten them illegally. Which would have put us practically out of business. They had never negotiated with a CEO. No CEO had ever dared come down and talk with them directly about settling something. We must have spent eight, ten hours, and what we finally settled for was a consent decree that, if it is determined later on that CBS got these rights illegally, that we would remit whatever portions of the revenues CBS was entitled to, to whoever the Justice Department would designate. That couldn't hurt us. And we settled it. We had spent a million dollars on legal fees, etc., but we settled the law suit.
ALLEN: So you were out of that law suit?
BARUCH: We were out of that litigation.
ALLEN: Which continued on against CBS, ABC, and NBC for a couple of more years.
BARUCH: And they eventually signed a consent decree, which just expired November 1990. Last Friday, December 14, at a panel that I spoke on at the FCC before all the commissioners, Steve Weiswasser, of ABC, maintained the networks never misbehaved. I reminded him that after the FCC came out with their rules, getting the network out of any syndication and international rights, all the networks signed a consent decree with the Justice Department. I said, "So much for your not misbehaving."
End of Tape 3, Side A
ALLEN: The consent decree had been agreed upon ...
BARUCH: Shortly thereafter, I attended our first National Cable Television Association (NCTA) convention.
ALLEN: Let's put a year on this, now, if we can.
BARUCH: I believe it was 1972. They put us into the Holiday Inn, fifteen or so miles from the convention center.
ALLEN: Which was where?
BARUCH: I believe it was Anaheim.
ALLEN: Okay. Before Anaheim had all the hotels they do now.
BARUCH: Oh, they had a lot of them. When I asked them why we were so far away since we were a fairly important part of the organization, they said, "Well, you're part of CBS. You're broadcasters. Yeah, you spun off. But you're basically broadcasters." On top of that, Clay Whitehead had just tried to impose the consent, not a consent, but a compromise on the cable industry to broadcasters by the OTP, Office of Telecommunications Policy (which he headed). I went down to the NCTA to see the Chairman, John Gwynn, who was with Cox. It was the day of the board meeting and I had asked to see him early and I remember there was an accident on the Grand Central Parkway; I sweated bullets because I thought I wasn't going to make that meeting on time but I did. I outlined our company's opposition to this compromise which had in distant signal, all kinds of things included in it. While I was talking to him, he was writing something. He paid absolutely no attention to what I was saying. We concluded that this organization was really not serving us the way we should be served and we resigned from the NCTA as a company. I shortly thereafter, held our first long-range planning meeting which we had regularly.
ALLEN: Let me ask, how big was the cable portion of Viacom at this time compared to the other two that you were?
BARUCH: The profits all came out of the Enterprise's side, the program distribution and production side. Very few profits, if any, came out of cable--none I don't think. The revenues were about sixty on the Enterprise side, forty on cable. But no profits in cable.
ALLEN: All your cable systems were on the West Coast?
BARUCH: Yes, basically West Coast. That's correct. We inherited from CBS about 30,000 subscribers. Then we built them up to 55,000. We had our first long range planning meeting at the Sterling Forest Conference Center in a little cottage--there were four of us. We charted the revenue outlook in the next five years with the cost side of running cable. It was obvious that within the next two to three years the two were going to cross and costs were going to outpace revenues, which would have been an insupportable condition. The question was, what do we do? Well, it seemed to us that the only thing on the horizon was pay television. All of us felt very strongly, that we ought to try to develop a pay-per-view mode because that would be the way to go. If we came out first with pay-per-view, subscription pay would come later. But if subscription came first, it would be very difficult to develop pay-per- view. We also decided that in order to get around the very severe restrictions which the FCC had imposed upon pay television, both over the air and cable, restricting the age of the movies that could be put on cable, or over the air for pay television and various other restrictions, in order to get rid of those we really have to get the industry behind us. We went back several months later to the NCTA and said that we would like to rejoin. They made approaches to us to come back. But the only way we would rejoin is (1) to have a seat on the board, and (2) that I personally would become head of the pay television committee.
ALLEN: Was this a permanent seat you were asking for?
BARUCH: No. No. Just a seat on the board. I remember discussing this with Alfred Stern and with David Foster, who was then President of the NCTA. Al said to me, "Well, we can't guarantee you a board seat!" I said, "Well, hey, that's not my problem. That's your problem. I've told you, you want us, that's the condition under which we'll come back." Sure enough, the miracle happened, and I was elected to the board and I was asked to chair the pay television committee. I discussed it with our people and with the NCTA and I asked for some help. The NCTA hired Bob Johnson (who now heads up Black Entertainment Television) to help in this endeavor. For the next several, two or three years, that was what our efforts went into. In the meantime, we had then acquired a cable system in Cleveland ...
ALLEN: When you say "our efforts," you're talking about Viacom?
BARUCH: Viacom's efforts, that's right. And we had acquired a cable system in Cleveland, and eventually bought a small system from a fellow named Peter Gilbert in Suffolk County, Long Island, in the Smithtown area. The next step was to convince Peter, who was continuing to manage the system, that we ought to try an experiment with a pay-per-view system. I believe it was the first pay-per-view system that was ever developed. I had heard of a subsidiary of Columbia Pictures called Transworld, which had developed a computer system whereby you could dial in to a computer and get a release of your home for a particular movie. At the same time, the computer would spit out the bill and the details of that subscriber. But we didn't have any room in the office out in Suffolk to do that, so we got a trailer and put all of that up-- as an experiment.
ALLEN: Why had they developed the system, what were they proposing to do with it?
BARUCH: Similar purposes. They felt pay-per-view was the way to go. We did experiment with children's programming for fifty cents, with movies--"The Poseidon Adventure," I remember was one of the foremost attractions--and 60 percent of the homes we offered this to bought viewership of "The Poseidon Adventure" at, I believe it was, three dollars per day.
ALLEN: When was this?
BARUCH: Nineteen seventy-five, '76.
ALLEN: Did they have to pay anything to get the equipment into their homes?
BARUCH: No. It was a test in a limited number of homes. But we charged them three dollars for the movie. That was an amazing revelation to us. In the meantime, all the testimony and the filings of the Commission were made and I guess I incurred a lot of ill-will on the part of a lot of the FCC people because I was strongly advocating repeal of these rules. I also lobbied very hard, which some people did not like at all, particularly at the Commission. I remember seeing Senator Baker of Tennessee, who eventually was instrumental in appointing Ben Hooks to the Commission. There was a fellow who didn't want me to see Senator Baker but I eventually did see him and explained the problem to him of pay television and what it was up against under these FCC rules. He was outraged. Eventually, the committee, and the NCTA caused a company to file a law suit against the FCC and the rules.
ALLEN: Was the NCTA behind you all the way through this?
BARUCH: All the way.
BARUCH: I don't think that some of the members really understood the long-term implications of this. But yes, they were all the way behind us except at a lot of meetings when I came into the board meeting and I said, "Look, I need another $50,000 for this." I remember one lady in particular saying, "Ralph, this is," she was from the south, she said, "this pay television is not for us little people. That's just for you big boys." Well, it wasn't that at all and it has proven that it is a very, very lucrative business for the cable operators. But I couldn't convince everybody of that. But in principle they were behind me.
The Paul Weis firm was hired on one side and our Washington law firm was hired on the Washington side to sue the FCC on several grounds. One of the finest briefs that's ever been prepared was prepared by the Paul Weis firm. And eventually, we won this lawsuit. The FCC appealed to the Supreme Court and the Supreme Court refused to hear the case, so we had won. All the restrictions went off. I believe there's still some resentment of my days of advocating this very strongly. That's when pay television first began its rise.
At Viacom, I decided that we must go into competition with HBO which began to make its mark known. I had met Chuck Dolan, and I thought already that the industry grossly underestimated Chuck and his ability, his vision. He owned a piece of Manhattan Cable, which Time took on and eventually Time bought him out under circumstances that I'm not familiar with but I'm not sure there was any love lost between the two. But I remember sitting in the mid '70s with Chuck at lunch in the Canadian Club when he outlined his vision of pay television, which I basically agreed with. As it turns out, he is one of the visionaries of the business.
ALLEN: Now you were talking pay-per-view and he was talking subscription?
BARUCH: Yes. But, HBO came out first and started to distribute its signal through Eastern Microwave up towards Albany and that area on a subscription television basis. We began about a year later to compete with something called ShowTime. The first customer we got was Times Mirror and I will never forget their help in getting this started. We provided programming on cassettes, on 3/4 inch cassettes--which was a tough way to distribute. Then HBO, in I believe '76, went on the satellite. Unbeknownst to me, Jeffrey Reese, who then headed up our ShowTime operation, together with Jules Heimowitz, made a recommendation to his boss Larry Hillford that we ought to be on the satellite. And as I said, unbeknownst to me Larry informed Jeffrey that we couldn't afford it. So HBO launched Columbia Cable, in Florida. It was the first one to demonstrate the satellite capability. I must tell you that I believe Gerry Levin, of Time Inc., his vision and his pioneering and his ability to plan this operation--must go down in history as one of the greatest contributions to the cable television industry. I think he is a brilliant visionary and planner.
A few months after that, in '76, Larry Hillford informed Jeffrey Reese that he had no money to go on satellite. I questioned, "Why aren't we on the satellite?" To my absolute amazement I heard this decision being made without my participation. We immediately started out to try to find transponders which in those days wasn't easy. To get ready to go on the satellite you had to have a whole terminal system to put the things on tape, the films on tape. We finally went out to New Jersey where RCA had its uplink, right near the Playboy Hotel. We went on the satellite about a year later. That year, I believe, cost ShowTime 40 to 50 percent of the market, from which deficiency we were never able to recover. Well, we're now on the satellite. . .
ALLEN: You're on the satellite with subscription?
BARUCH: With subscription.
ALLEN: Did you expand the pay-per-view at all?
BARUCH: No, because you can't do everything at once. Our resources were limited and unfortunately we were forced into this position by HBO. I thought it was very unfortunate, as it is proven now, it is one of the more unfortunate decisions that was ever made. But so be it.
I'm now sitting there with all of ShowTime. Just about then we bought our first television station, a UHF in Hartford, Connecticut, for $16 million. Everybody said, "Baruch is crazy. He overpaid like mad." Obviously, I hope I didn't because some time ago, Viacom, as it is now known, put the station on the market or explored the market and was asking $150 to $160 million for it. So we did all right. But we bought that station, which was in very good shape from an audience point of view. The news was terrible. We hired a fellow named Paul Hughes and he was put in as General Manager of this station. The first time I visited the station, part of the news went on in color and part in black and white and I asked the General Manager, who'd been there twenty-five years, "What happened?" He said, "Oh, probably something wrong with the projector." Well that gave you a pretty good idea of what concerns he had. A couple years later we won the Emmy for the best regional news broadcast in the area, competing with the Boston station. That made me very proud. We then expanded our cable systems as well. We expanded in Seattle. In Seattle we inherited 28 percent of a cable system which was shared with TelePrompTer. TelePrompTer had half of the city, we had the other half. The other seventy ...
ALLEN: When you say inherited ... ?
BARUCH: From CBS.
ALLEN: From CBS. Okay.
BARUCH: One of the goals was to buy the others out because the other 72 percent were shared equally (24 percent each) by the three television stations in the market. Every time I wanted to make a move like bring in Canadian signals which would have given us a raise in terms of subscriber fees, these three television stations vetoed that because that would have diluted their audience. So a good friend of mine, Ansel Paine, who ran KING and some of the Bullet family interests in that area, and I got together and finally he prevailed on his board, which I was on, to sell these systems to us. So we now owned 100. We expanded in other areas. We applied for franchises, most of which we did not get but we did get the city of Nashville and some others. So, we bought others, we bought Dayton, Ohio and we expanded that. We expanded the Cleveland market. So we're becoming a factor, a substantial factor-- we were the fifth, sixth largest cable--multiple-system operator in the country.
ALLEN: Was the syndication, or Enterprise, still carrying Viacom?
BARUCH: No, at that point we were making some profits from cable. In the meantime, however, in '76, the investment bankers we had hired, Lehman--after a great deal of screening, came up one day and called me while I was in Washington and said they would like a meeting. That meeting was held on a Monday, and you should remember the investment bankers were privy to all of our financials, all of our plans, all of our thinking, etc. Peter Solomon, who later became deputy mayor, was the partner on our account. On the fateful day, Peter came into this office and brought somebody else along and introduced him: Bill Michaels, of Storer. And another gentleman. We sat down and I said, "Well, what can I do for you?" He said, "Well, wouldn't it be nice if our two companies merged?" I was completely taken aback. I said, "Why?" He says, "Well, we have these big television stations and you have these wonderful television programs and the two would really fit together." I said, "Are you implying that we would make sweetheart deals? We couldn't do that! We have a fiduciary duty to get the maximum income from the product we sell for the outside producers!" I said, "But wait a minute now, let me ask this. I know who you are, Bill, and I know you Peter, you're my partner, and who is this gentleman?" "Well, he's with Lehman, too." I said, "Oh, that's good. Then he represents me." "No, no. He represents Storer." I was taken a little bit aback, and Peter noticed, and he said, "Oh, Ralph! Don't worry--different partner." I said, "Well, I'm sorry fellows but this meeting has come to an end."
As they're walking out Bill Michaels reaches into his pocket and hands me a letter which basically said that his company has obtained the financing from the banks and that he is willing to offer us fifteen dollars a share for the Viacom stock. Our stock was then traded at about ten and a half. A bear hug, as they call it. I got a call that afternoon, from Bill Michaels and he said, "Ralph, we're gonna have to go public with this." I said, "Why is that?" He said, "Well, a lot of shares are being traded." I said, "Do I understand that you leaked this?" "Oh! No, no, no, no! Absolutely not!" The next day they announced it and over 10 percent of our shares were traded that day. Which is enormous. We had, at that time, a little bit over three million shares outstanding, that's all we had. But we were without investment bankers. We tried to hire Goldman Sachs, but Goldman had a problem. So we hired Kidder-Peabody, and the fellow that was assigned to this job was Martin Siegel. That name may have become familiar to you, he was subsequently indicted and convicted. But Marty did a very fine job in defending us on the street. We told them to go and get lost. And they walked away. In the meantime, now, our stock was at about fourteen. Incidentally, they came back several months later and tried to make it twenty dollars a share and then we publicized that offer and our stock went up again.
So we're back at '76, '77. I felt that Terry Elks, who was our General Counsel, was very good at both administrative and financial matters, and I gave him responsibility for all of our financial dealings for the company. I put Larry Hillford in charge of all of our operations. So I had two executive vice presidents, one in charge of administration and one in charge of operations. I feel it is the duty of any chief executive to seek succession, to make sure that succession is in place if I get hit by a truck or whatever.
One day, right after the Storer takeover attempt, Larry Hillford came into my office and said that he would like to resign at the end of this week. Since he was also a director of the company right after the Storer takeover, I felt that was most uncalled for. I read the riot act to this young man. He wouldn't tell me where he was going. Later on, under pressure, he disclosed that he was going to go to Columbus, Ohio, to run QUBE for Warners. He and a fellow named David Horowitz had shared a house. David was at Warners, and I guess David seduced him into that job. He gave me two more weeks on the job and after a few days I said, "Larry, you might as well go, you know, you're heart isn't in it." I was now left with Terry Elks. There are a lot of people I brought along and with the help of some division presidents, Ken Goreman and others--Ken was our CFO at one time, I brought him along and then we hired, eventually, Gordon Belt, who became my CFO. We expanded our business considerably, but we were still in trouble with ShowTime. So, I needed a bigger subscriber base because we were losing a great deal of money with ShowTime. So I approached each of the networks, because they could have gone into that business. But didn't. I was rebuffed. I finally contacted Rus Carp of TelePrompTer, and Rus had 300,000 HBO subscribers and we had 300,000 ShowTime subscribers. I eventually ended up selling half of ShowTime to TelePrompTer for $6 million, and I got a doubling of our base, from 300,000 to 600,000 subs. At the same time, HBO lost 300,000 subscribers.
ALLEN: How many did they have at that time?
BARUCH: They must have had about a million and a half.
ALLEN: So 300,000 was a good loss, a 20 percent loss?
BARUCH: Oh yes. Maybe they may have had less, but in that general area. Well yes, that was a substantial loss to them at that time. Rus was not an easy fellow to work with, but his heart was in the right place and he also had Bill Bresnan working with him. I always like to work with Bill, I think Bill is a fine, dedicated cable operator.
I cannot go in exact time sequence, I have to cut back and forth because I have to explain ShowTime first. Everything was fine with ShowTime and TelePrompTer. We had our management meetings, and of course Burt Stanyer became head of marketing. We had some problems, but basically they could be solved. Different philosophies at times, but so be it. Then TelePrompTer, Jack Kent Cooke, sold TelePrompTer to Westinghouse. All of a sudden the whole philosophy changed. Westinghouse was a fairly conservative operation, they didn't like "R" movies, and I felt the audience wanted "R" movies. They became very difficult to live with. I have the greatest respect in the world for Dan Ritchie who ran Westinghouse Broadcasting and cable, but on the other hand he also was somewhat square. I mean, he will be the first one to admit that. We wanted to buy it back. He wouldn't sell. As I mentioned previously, Charlie Wick, when he was head of USIA, asked me to become head of the Telecommunications Committee of the USIA and he gave a big luncheon for all the people of the various committees of the USIA and I knew Mr. Danforth, who was CEO of Westinghouse, was going to be there. We had a little luncheon buffet, and I managed to sort of go in behind him. It was very modest, paper plates, you know, it was nothing very elaborate. But I said, "I understand we have something in common." "Oh," he says, "What is that?" I said, "ShowTime." "Oh," he says, "that little thing." I said, "Well, what may be a little thing for you is a very big thing for us." "Yeah," he says, "I don't like the movies they have on." I said, "What do you mean, the 'R' movies?" He said, "Yes." I said, "As a matter of fact, you know the audience wants that." I had myself well-prepared, I figured that would come out. "As a matter of fact, my position is we have to have a lot more 'R' movies, a lot of them!" To make a long story short, several weeks later we were able to buy back the 50 percent of ShowTime from Westinghouse for over $60 million.
ALLEN: How many years was that from when you sold the 50 percent?
BARUCH: Three years.
ALLEN: Six to sixty million in three years?
BARUCH: Yes sir! I remember it very well, we had sold the half ShowTime when I-- those were my sailing days and the people negotiating kept me informed over the radio--was on board my little boat. I remember docking at Block Island because that was an open line and I didn't want to discuss it on an open line. I remember I was standing in an open air phone booth, phone operations, and talking to New York giving them, you know, "Yes, no, yes, no, yes, no, can't do that, yes we should do this," etc.
ALLEN: Were you calling the program shots on ShowTime?
BARUCH: No. I was calling basically, the sale to TelePrompTer.
ALLEN: But I mean as far as, who was making the decision?
BARUCH: Jeffrey Reese and George Heimowitz.
ALLEN: They were part of Viacom?
BARUCH: Viacom. Sure, we owned 100 percent of ShowTime and then 50 percent. But it was still Jeffrey Reese who was running it and George Heimowitz.
ALLEN: So Westinghouse didn't have a voice in the running of the shows?
BARUCH: No, we had a joint management committee. But we, you know, agreed to agree on most items. But we were the managers--that was part of the deal.
ALLEN: In the three years that Westinghouse was in this, what happened to your subscriber base? How did it expand?
BARUCH: Oh, it grew. It grew enormously. It grew by several million. But HBO had the jump on us and grew much faster. We never recovered from that original mistake.
ALLEN: But it helps to explain the ten times over in what you paid?
BARUCH: Oh yeah, but also by then the restrictions were off by the FCC and this was a business that was in the limelight.
BARUCH: I remember negotiating with Dan Ritchie on the phone. In the meantime we had to sell our boat because Jean, my wife, was injured in a rough sailing day--she tore all the ligaments in her arm. We bought a house in Duchess County. It was a very hot day, I remember on a Saturday or a Sunday, being on the phone I would say six hours a day with Dan directly--Dan Ritchie. He demanded not only the over $60 million, but if we were to resell any part of ShowTime, and we were to get proportionally more than what he was getting, we would have to share that. I finally agreed, we made a deal. As I said, eventually we made a deal with Warners, which I don't want to get to in great detail, and sold them half of ShowTime and he maintained that we got more than the sixty million and we disagreed. He eventually sued us. But even though he sued us, and this goes back to my SECAC/ Westinghouse Broadcasting days, even though we had a disagreement, a business disagreement, there was a great deal of respect (at least on my side, and I'm sure on his side, too) for the people involved, myself Dan Ritchie. So we sold back to Warners.
Now to go back into our main business. We got into network production. We also had to change management at ShowTime eventually and Jeffrey Reese resigned and came back to us with an idea for the Cable Health Network, together with Dr. Art Ulene. We all thought that was a very good thing to do, except it was really too specialized. So the Cable Health Network eventually became Lifetime, and we sold a third to Hearst and a third to ABC. Now we were looking for a CEO, and we looked at everybody. I had gotten to know, through the IRTS--the International Radio Television Society--Tom Birch a little bit. I was quite impressed with him. The Board didn't want to talk to him. Well, finally I persuaded them they ought to at least talk to him, and they eventually hired Tom Birch to head that up. So we had two networks. In the Radio/Television area, we eventually convinced the fellow named Egmont Sonderlien, who owned a television station in Albany, New York, and some radio stations, to sell. It took us two years to negotiate this deal with him. He was an individual and he had problems with his estate, and so on. Egmont eventually sold us the television station in Albany and the radio stations for about $30 million. Well, again, that was a marvelous acquisition. It was good for him because he got stock, preferred stock, and it was a good decision for us because that television station today must be worth $60 million. We got some radio stations. A radio station in New York, WLTW today as it is called, the number two or three radio station in New York - which also must be worth an equal amount. KIKK in Houston, which is worth about the same, so it was really a very good acquisition. We had to make an awful lot of changes, but we did it. And it worked out very, very well.
We subsequently acquired a television station in Rochester, a television station which we acquired for stock from a lady that wanted our stock in Shreveport, Louisiana. So we did very, very well. The Albany station had been an NBC affiliate and became an ABC affiliate shortly before we bought it. Then ABC canceled and we became a CBS affiliate. Shortly after we took it over CBS canceled their affiliation, and gave it to WRGB Schenectady--which was one of the first (if not the first) television stations on the air in the country. So we expanded this to the point where we had five television stations, eight radio stations. We had MGS which was distributing commercials to advertising agencies. We had ShowTime, Lifetime, we were very heavily in distribution (production and distribution) worldwide. So we were quite a diversified organization.
ALLEN: You still had a large number of cable systems?
BARUCH: Oh, they were growing, very rapidly.
ALLEN: You were acquiring new franchises as well as buying existing?
BARUCH: We were buying existing mostly. The franchising we attempted, except for a few markets, was not very successful because we felt (and that was my decision and the operating people) that we did not want to promise cities and towns the sky and the moon and the stars and then deliver a half and then try later on to compromise. Maybe that was not the right policy at the time, but I felt it would have been deceiving our franchisers.
ALLEN: How many cable systems did Viacom own at any one time?
BARUCH: At any one time we were up to a million three hundred thousand cable subscribers.
ALLEN: How long did you stay on the NCTA board?
BARUCH: I stayed on the NCTA board for about six to seven years and then I felt that, you know, there should be a turnover in that. I asked some of our people to get on the board and John Goddard, head of our cable division, eventually became chairman of the NCTA for a term.
ALLEN: Did you hold any positions other than the chair of the pay committee?
BARUCH: I was on the executive committee. In 1977 I was asked whether I would be willing to head up a committee called the public policy and planning committee to try and revise the Cable Act. I got a lot of executives on my committee and headed up that committee for seven years. Eventually, the Cable Act was rewritten and passed while Tom Wheeler was president. In the background, Jim Mooney worked very, very hard. Tom was more the public relations, the front person, and Jim Mooney was the behind-the- scenes person on the legislative side. I'm very pleased that the industry recognized this and the other contributions I made, through the presentation of this replica of the Act, and also with a lot of awards and other things which I consider secondary. In 1984 when the Act was passed, I told the industry, "If you're going to get greedy, you will come to regret it."
ALLEN: Tell us some of the key industry people who were working with you on that public policy committee.
BARUCH: Well, there was Bud Hostetter, there was Gus Hauser, there was Ben and the people from CPI, there were people like TelePrompTer was represented, all the major companies--I tried to get a consensus. We had some opposition in the final stages. Len Tow and Chuck Dolan opposed this Act. But in the end I thought it was very, very beneficial to the industry.
ALLEN: What were the principle features of the Act?
BARUCH: Deregulation of rates. A definition of what is competition. The lack of abilities on the part of the cities to impose their will on any cable system. It was a whole series of deregulation but most important was the deregulation beginning in January of 1986 of the rates.
It has always been my position that a CEO's responsibility is succession. In 1981, after many bumpy roads for some board members ... for example, at the time of the Storer takeover and subsequent takeover talk, there was a great deal of nervousness on the part of some of our people overseas when you don't know what's going on. As early as the spin-off I had asked Clark George, our first CEO, to put some people under contract. He thought that was absolutely ridiculous. But we did do it at the time. But at the time of the Storer takeover and other things there was a certain amount of uncertainty. I feel if the top doesn't move, all the people underneath can't grow because they have no place to go. If the top stays static, where do they go? I too felt uncertain at times and I went to my board at the time of the Storer takeover and I said that I would like a contract. One of the board members suggested that I get a contract but that it be based on competence. In other words, any time the board felt I was not competent to run the company, the contract was no longer valid. They were surprised when I told them that was no contract and I wouldn't accept that. There was also, I think, a feeling that a couple of board members would have liked my job. I don't think I'm paranoid.
I had a run in with Mr. Halaby, whose daughter is now the Queen of Jordan. Mr. Halaby attended very few board meetings and one day said that he wanted to know all about what went on in the company. That was in the middle '70s. Berlie Pattee said, "Look, if you came to board meetings you'd know what's going on. Ralph and everybody else explain it very ..." Well, he insisted he wanted that presentation. So, I arranged for every division to make a presentation at the next board meeting. Well, people get very nervous about these things like appearing before a board and making a presentation about their business. We spent an awful lot of time and money preparing for this. Comes time for the board meeting when we make these presentations. Everybody was there except Halaby. Well, the board members were furious. Apparently, he was held up in Tokyo.
So my people made the presentation and we had dinner that night and the next morning he came to the meeting having caught the red eye from California on his way back. He said, "Now Ralph, will bring you me up to date as to what happened yesterday?" I remember some of the directors said, "The hell with that! We spent all day here yesterday, there is no way we're going to go through this." At the end of the meeting, I was told, "Look, we've got to get rid of him." I said, "Well, then you do it." And they said, "No, you do it." So I called Halaby and he says, "Yes, I want to see you, too."
End of Tape 3, Side B
BARUCH: So Halaby asked me to meet him in the Copter Club at the Pan Am Building for breakfast one morning. I walked in and of course it was closed. A gentleman--a waiter or somebody like that--was walking around in a white jacket opened it up and I'm sitting in this enormous place all by myself. He kept me waiting forty-five minutes, came in and said he wants to get off this board. He, I presume, saw the handwriting on the wall having had that experience at the board meeting. So we agreed that he ought to get off. A little bit later on, my good friend, and I still miss him terribly, Berlie Pattee died of cancer and I had to find another board member. We asked an attorney in Washington, Harry Plotkin to come in and be a board member. Harry was a marvelous board member as a lawyer and a very fine communications lawyer. He was also somewhat the conscience of the board, and when we did something crazy he always stopped us.
Much earlier, we had Richard Forsling to head the cable division and the chairman also was a board member, obviously. I'm lying in bed one night in my very early days at Viacom, and I get a phone call. It's one of the directors asking me to come down to the University Club where they were all sitting having drinks. I put my pants on and went down there. They said they wanted Forsling off the board because Forsling had made a presentation to the board that he was going to invest $350 to $500 million in the cable business and when they asked him where would he get that from he said, "From banks," which was really impossible because we didn't have the assets to justify such an enormous debt. They were very unhappy with all the spin-off problems we went through. I fought against that taking place, but they insisted. They asked me to do it. If I had been CEO a lot longer I wouldn't have done it. I had to tell Forsling that he was off the board and he was going to make a presentation to the board objecting to that. I advised him against it, but he did it. Still he was asked to resign. We paid him a year and he became head of CableCom, Tom O'Neil's cable systems. So we had a lot of turmoil on this little board, but things now in the early '80s were in good shape.
ALLEN: Was the turmoil that you were going through pretty typical of the industry at that time?
BARUCH: Yeah, I suppose so, but we had a little more than that because we had problems with CBS on the issue of distribution. CBS really did not act very friendly towards us. Also, I was advocating very hard for cable and cable was not the friend to broadcasting. I suppose that didn't make me too many friends at CBS either, nor at any other networks or broadcasting operations, for that matter. Here we were selling programs to these broadcasters! They weren't crazy about it, trying to feed us so that we could get more into cable and compete harder with them. So it was a dichotomy but it was being resolved.
In the process, we sold Tarrytoons or closed it, eventually closed it. I've always wondered what happened to all the thousands and thousands of cells of Mighty Mouse and so on, which today would become immensely valuable and I have no idea what happened to them.
I also wanted to expand ShowTime at certain points in time. I tried to make a deal, with the movie companies trying to get them in. I approached all the networks--that didn't succeed and there were all kinds of cross-currents there.
ALLEN: Was the partnership of Warner and ShowTime fairly successful?
BARUCH: Yes. We did all right. We sold ShowTime and the Movie Channel together. But eventually, the Movie Channel tried to do a leveraged buyout with David Horowitz, the fellow I mentioned before, from Warner's trying to lead that leveraged buy out. We were successful in convincing Warner, which owned 80 percent of the Movie Channel, that we ought to buy the whole thing back. And we bought back 50 percent of ShowTime, 100 percent of the Movie Channel, 100 percent of MTV, 100 percent of VH1 and Nickelodeon. We bought that back for $590 million.
ALLEN: All of that from Warner?
BARUCH: From Warner. For $590 million. A lot of eyebrows raised.
ALLEN: This was the second time you had bought ShowTime?
BARUCH: Yes, the third time ShowTime was sold and so on. In retrospect, I think it was a very smart move. A very good decision which really put Viacom into the forefront of the cable programming network business. Incidentally, it seems to me that neither broadcasters, networks--until ABC went out and got into ESPN and A&E--nor NBC, nor CBS ever had the courage to do what we did as a company. And get into the network program business on cable. They were offered ShowTime on several occasions, they didn't take advantage of the offer. I offered it again, personally, I went to see Goldenson and Pierce, who were very enthused about doing a deal with the movie companies which never happened for reasons which I really don't want to get into too deeply. NBC tried to some extent with RCA but it was sort of half-hearted, but CBS ignored us completely.
I had a meeting with Tom Wyman at one point where I told him that since he didn't react at all, that we were going to try and make a deal with a network other than CBS even though I was advocating very strongly to do it with CBS. He was very upset. I said, "Even if you were to do it today, since I haven't heard from anybody below you--I'm not sure this would be supported." I will never understand the question he put to me, he said, "Are you saying I'm a poor CEO?" I said, "I'm not saying anything of the kind, I'm just giving you the facts as I perceive them." He said, "Well, this meeting has come to an end." I said, "Well, maybe one day we'll do business on something else." He said, "Absolutely not," and threw me out. My comment was, "I've been thrown out of better places." Which was most unfortunate because I think CBS had a marvelous opportunity, so did RCA, and they didn't pick it up.
But now we were an $800 - $900 million company, approaching a billion dollars in sales. We had close to 4,000 employees, and I was also pleased by the way the businesses were going in many ways. For example, in cable, when we did our first long-range planning meeting in California, we had about eight or ten of us and the big question we had to solve was whether we're going to put converters into San Francisco because that was such an enormous expense.
Oh, incidentally, we're all men, no women. No blacks. The last management meeting we had, there were about 400 people. Now these were middle and upper management, these were not lower management. I would say 40 to 45 percent were women, I would say 15 percent were minorities and the company was going the right way. Everything was just falling right into place, a great deal of enthusiasm. I saw what had happened at CBS when Bill Paley refused to turn over his CEO's job to anybody for a long time. Then those that he picked he eventually fired which stagnated the company and I only wish that Stanton had become CEO and Paley's successor--I think CBS would have taken a different turn. But seeing what had happened to the people that I really admired a great deal for the seventeen years of my tenure there, I said to myself, "This would never happen in our company."
When I was 58, I told my board that at 60, having done it for so many years, I didn't want to be CEO any more. I would stay on as chairman, a member of the office of the chief executive, but I didn't want to be chief executive any more. I don't think they were very happy with that, because the company was going so well. But they asked me, "Who?" and I said, "Well, I think Terry Elks is the right person to succeed." I'm not sure there was unanimous applause at this, but usually the CEO recommends his successor and usually the board goes along with that. Elks and I had developed the kind of relationship that I thought was just great--straightforward. I was in this office, he was in the office next to mine here. We visited, I don't know how many times a day in each other's office, put our feet up, and discussed everything. Including children. Including problems which each of us had. He had a problem getting one of his children into the London School of Economics and asked me for help. I called a friend of mine who used to be the head of the BBC and he got in. Even though he applied late. I mean, this is the kind of relationship. Even wives got together on occasion socially, and so on. A straightforward relationship. I turned sixty in 1983. A year before that I had made him president, recommended that he be made president, which took place. In 1983 he was appointed president and CEO.
ALLEN: This is '83?
BARUCH: '83. I was named chairman. I had been chairman, and a member of the office of the chief executive. For the first couple of years the situation remained exactly that. Nothing had really changed except the end decision was his to make.
ALLEN: Was that a difficult transition for the two of you to make?
BARUCH: I think it was more difficult for me, because I was used to making these end decisions. You have to restrain yourself from making these decisions, leaving it to the person who is ultimately responsible to make the decision. I also became somewhat concerned, at times, the way he treated some of our board members. I've never discussed that with the board, and this is the first time I've really talked about it, but we had gotten Leo Churn onto our board. Leo was a well-known economist who was getting on in years a little bit. Once in a he while asked a question, which was not the kind of question to ask. If he did while I was chairman, or CEO, I would answer him as nicely as I could. Terry, on the other hand, began to sometimes laugh at his questions and became somewhat ruder. That distressed me. Because these were people of good will. They didn't get paid a great deal for being directors of this company. I think it's more of a burden but it's a company that was interesting to them: it was in the limelight, it was well-known and the stock was doing extremely well. But that began to bother me.
But the first two years or so--I can't recall the exact months-- everything went fine. Then all of a sudden it was like an iron curtain coming down. There was meetings being held in our boardroom, and I said, "What's the meeting?" and I was told, "Don't worry about it, just some small financial thing, nothing serious." I saw investment bankers in there and lawyers. Also at the time JNB Realty in Chicago bought some of our shares. Carl Ikan bought some of our shares. I was told and the board was told, JNB Realty wanted to make a deal with us to develop the cable business in a separate entity with them. They would contribute something to the partnership and we would contribute our cable
But from what I had understood the contribution of JNB Realty was not equal to what we were contributing and apparently Terry Elks became somewhat arrogant and threw them out. JNB Realty, in a huff, sold their shares to Carl Ikan. So now here's, as I recall it, Carl Ikan with 18 percent of our stock. With the advice of Joel Flom, our attorney of Scadden Arps, we said unless you buy him out you'll never get rid of him. We bought out his shares at market price. He got some other things with it, but the shares were bought at market price. But what had happened is--and this took several months--the company "was in play." And this was very distressing. But I think it could have been overcome if we had taken a very firm stand. We want our independence. A lot of companies have survived this kind of thing. And we are now owners again of all the shares, and there were no big pieces out there. When a fellow named Sumner Redstone came in and said he's interested in buying in. Don't hold me to the exact sequence, but all this happened within a couple of months.
ALLEN: Mid '80s?
BARUCH: Well, we're now in '86. '85, '86. And one day Elks comes in to see me and says, "We want to do a leveraged buy out." Before I became chairman and relinquished the office of CEO, I had gotten the company to agree on giving me a consulting agreement post my employment past sixty-five, or in '88. Whereby I would stay a consultant for a period of time with certain benefits. So in '87, Elks came in and said that he wants to do a leveraged buy out. He said, "We should do a leveraged buy out." I said, "I think I agree with you," because--and these were long conversations-- we know the company better than anybody. We know what we could cut, where we can cut costs, etc. Well, what developed, is that when he said "we," that didn't include me. I was appalled at this and began to really put the law down. Very subtly it was indicated to me that unless I supported this I would have a great problem with my agreement. Now, I don't have the resources to carry a lawsuit on for ten years, a corporation usually does. I still felt that I should have been part of this, and I told him so. In the end, he sat right in that chair that was right there, and he said, "Ralph, you've got to realize you're dead meat." At that comment, that is really, I've got to tell you, the crudest, rudest comment I have ever heard from anybody. People ask me today, "Have you read 'Barbarians at the Gate,' the RJR Nabisco takeover story?" I said, "No, I've experienced it."
I went to see my own lawyer and my lawyer told me that I shouldn't do anything because this was very awkward because I was an insider, etc., etc. I could not disclose it. And he, upon questioning, said that he would not tell the board about it till he felt ready. Absolutely, I was stunned. He hired investment bankers plus Mike Milken at Drexel Burnham to help in doing this leveraged buy out. The way it developed, he didn't tell the board for weeks and months. When I asked one of his people that was going to be part of that group, Ken Gorman who was his number two person, "Why don't they give me 1 percent?" That's all I had required. It was close to 15 percent available for insiders. There was plenty left for everybody. He said, "Ralph, I wouldn't push that too hard." That was the answer I got. Well, some of our board members were informed on a Friday in Washington. Then he came back here and some of our board members heard about it here in New York. Some of them asked, "What's with Ralph?" and he said, "Ralph's not part of this." Bear in mind, it's my board! So, we had a dinner at the Leaurant??? Restaurant upstairs in the private room and he told some of the other board members and the lawyers were there. Again, I got questions, "Why aren't you in this, Ralph?" I said, "Well, he didn't want me. He kept me out." "That's outrageous!" etc. At one of our subsequent board meetings, very shortly thereafter, he submitted the draft agreement for signature. The board went bananas. For all of these reasons which I've cited. The outside board members appointed themselves a committee of outside directors. Allen Johnson became the chairman and he hired Goldman Sachs, the one investment banker Elks asked them not to hire. Goldman Sachs proceeded to an auction. I believe, I have to check the numbers exactly, that Elks offered $39.50 per share. Now bear in mind that the stock had been split twice. Redstone had come in, expressed an interest in the company, and apparently Elks offered him 25 percent for sale. Sumner said, "Why should I buy 25 percent of a privately owned company-- a minority interest in a privately owned company? I have no recourse at all. That's the worst of all worlds." And he's right. Goldman Sachs got a lot of people's interest including Redstone.
In 1987, Elks raised the offer a number of times and finally Redstone offered fifty-five and a half dollars per share and the company was sold. I met Redstone briefly, and I heard that subsequently in one of the meetings with Elks prior to the sale, Elks indicated, not too kindly, that Redstone who called the company "Vy-a-com" was wrong, that the company around here was called "Vee-a-com." When Sumner bought the company, Elks assigned a tiny little office down this hall to him. He forbade any financial person, anyone else to talk directly to Redstone, except through him. No financial material was to be made available, written material, except after review. I saw Redstone in his office a couple of times, and I said, "Sumner, why do you put up with this? It's your company? Throw me out of this office. Throw him out! You can occupy any office you want. You own 85 percent of this company, you can sign any memorandum, 'Owner.'" Which is not a bad position to be in. He paid over $3.5 billion for the company.
Well, we had a company picnic in July of '87 and I agreed with Sumner that since he lived in the Carlisle Hotel at 76th and Madison and I'm at 74th and Park, I would drive him out to the picnic. My wife had to use my car, so I rented a little car. I don't believe in big cars, drivers, all that routine. We all travel coach; I don't believe in first class and all these amenities. I try to save money for the shareholders. Maybe that's an outmoded position today, in most companies, but that was my philosophy--it still is. So I rented a little car and I was going to drive him out, and apparently, Elks asked me not to drive out with him. I go to this company picnic and I see Elks talking to him, to Redstone, for the entire time. I drove Redstone back. We're sitting in the car, and he says, "Well, who do you recommend as a CEO?" I felt I had to say, "You got one." He says, "I can't live with him. Who do you recommend?" I gave him two names and one of them was Frank Biondi. And we drive back, and he says, "I want you to work for me." Well, that didn't work out because I had a consulting agreement anyway and I don't think if there's a CEO that the former CEO ought to look over the new CEO's shoulder. That's very awkward, especially with new ownership. So, they all went on a long range planning meeting, again to which I was not asked. That followed the trend because a lot of the other meetings Elks had held I wasn't asked to any more. He had cut me out. Which is all right-- that's his decision to make.
ALLEN: Who's the "he" you're referring to?
BARUCH: Elks. So Elks, Redstone and a few others are up somewhere in Cape Cod at a long range planning meeting, and Redstone announces he's hired Frank Biondi as CEO. That terminated the meeting, they all came back. Elks left then, I do not know the exact circumstances--I don't think he is very much liked in this company. I am fulfilling my contract as a consultant. I still help them. I'm trying to help the cable industry.
Five years ago, or six years ago, I went to my first ACE Awards show. Never mind that it was not black tie, a lot of the participants didn't wear a tie at all never mind it being black. I was appalled. I was a founder of the International Council of the Television Academy, which gives out international Emmys every year. I was very successful. I was appalled at this. I talked to Mooney, and I said, "This is outrageous! This does not do the industry justice. This is really a second rate affair." He says, "Well, why don't you do something?" He asked me if I would reorganize it. So five years ago this January we had our first black tie ACE Award at the Wilshire Theater-- or the Beverly Theater, whatever, the small theater right next to the Beverly Wilshire Hotel--we had our first black tie event. There were about 600 people and then we had a dinner for about 300-400 at the Beverly Wilshire. We stayed with that for a while, and we had, I don't know, about eighty entries. Well, this January, for the third year, we were going to have it at the Wilturn Theater, where there's an audience capacity of 2,000. We have the dinner in the tent for 1,300 people, all black tie--no questions asked, even. We will have a non-televised event at the Beverly Wilshire Hotel with six hundred, also black tie. And now, we have done the industry justice. The programming that we've developed is good. I think we're being recognized.
I accepted a recommendation which was made that we ought to have the ACE Awards carried on a number of cable networks, and this year again, it's been carried on eight cable networks. We have Bristol Myers for one quarter sponsorship, we have Honda for one quarter ... so it's sold out, or just about sold out already. And this does the industry justice, I think. So I will continue my efforts on behalf of the industry.
Six months ago Jim Mooney approached me about a new product for the cable industry which I can't disclose yet, but which will be announced soon. I agreed to undertake this project. But I can't do everything, and so I've resigned as of the next ACE Awards as Chairman of the Cable Academy. That will be announced shortly that John Hendricks, who is Chairman and President of the Discovery Channel, will be my successor. So I'm very involved with the cable industry. I'm very concerned about the cable industry, but I intend to serve it for hopefully quite a few more years because I think it is an industry that has done a great deal for the world of communications.
The same philosophy drives me to do many things in the public service sector, so to speak. I helped launch a foundation for a friend of mine who lost his daughter through leukemia. I served as chairman, I'm sorry, as president, of the IRTS--the International Radio Television Society-- reluctantly, but I did. And subsequently, as president of the International Radio Foundation which was broke. I helped them get back on their feet financially and then said, "Okay fellows, now you're in good shape, I'm leaving you in good shape." I don't believe in staying on and staying on and staying on until you know, they ask you to leave. Which should happen. But most people stay on and nobody asks them to leave.
ALLEN: It's always difficult to determine when you've been where you're going.
BARUCH: That's right, absolutely.
ALLEN: Many of us won't accept that we've arrived at that spot in our interest.
BARUCH: Exactly. And that your usefulness, at some point, has come to an end. The IRTF, I was helpful in organizing a dinner, where we got Cronkite-- reuniting for the first time--Cronkite, Chancellor and Brinkley. And they didn't talk about the business, they talked about the world situation. John Brademus, the President of NYU, was the moderator. For the first time in the history of the organization we sold ten thousand dollar tables. Because how often can these people hear these kinds of stars talk about the world? We netted over $400,000 at this dinner. It was an interesting dinner. But once they got on their feet I said, "Okay, that's it. Now you organize the next one. You go from here." It was always my ambition, I love classical music, to be active in that field, and I was fortunate--I joined the board of Carnegie Hall. I'm now chairman of their centennial. Next May, they will hold their one hundredth birthday of Carnegie Hall where Tchaikovsky was the first conductor. It's going to be a marvelous event.
ALLEN: Will you play the piano yourself there?
BARUCH: No. We will have ... We have more names that want to perform, that we really don't want. But the concert will start at four o'clock in the afternoon on a Sunday, black tie of course, until six or so. Then at six we will have a dinner at the Waldorf and then back at the Hall at nine o'clock for another concert. I mean the stars are incredible that will be lined up. It's everybody in classical and semi-classical music. Then a champagne reception--if you can last that long-- afterwards. We hope to make a million or more dollars from that event.
I joined the board of Lennox Hill Hospital, and was made head of their development. That's where I have a board meeting today, as a matter of fact. Helping them in that area. Paley asked me to co-chair the New York campaign for the new Museum of Broadcasting, which will probably be renamed the Museum of Television and Radio shortly. So I'm involved in that. I want to write a book because, hopefully, when you ask an American today, "Where do you come from?" they have a vague idea but they don't really pursue the genealogy too much. I would hope that in a 100-150 years somebody can read this and know where our family came from. And how good this country has been to me and my family. That's my way of paying back a little bit, but that should go into a book and I have a lot of anecdotes and so on. I don't care if it never sells, that isn't the point. But it should be recorded somewhere, for future generations. I took a picture of my 107 year old aunt the other day, because, you know, somebody ought to look at that some years down the line and say, "You know, that was one of our family people."
ALLEN: It's an interesting point to maybe switch the tenor of the discussion to the future, because it would be very interesting to get your perceptions of where cable is going, what some of the dangers are, and what some of the opportunities are. Back in the time that you were working on the legislation, you delivered a speech in Houston that was kind of a caution about deregulation. That deregulation carries with it some responsibilities. Do you feel that the industry has lived up to the responsibilities that the deregulation has presented to them?
BARUCH: Partly. I found my speech. I gave another speech at the Kaitz dinner. I believe it was '87, November of '87 or October. And my subject was "Character and Greed." I think to some extent the cable industry is falling into the same American pattern that has been established over the last few years of greed. The deal becomes more important than the people and the businesses, particularly on the part of the investment we are living through today. Because they were the ones that instigated the heavy debt pattern, which got the banks involved. These same banks are now having problems delivering payments on their debt, or getting paid back on the debt that has been incurred. But I think to some extent the cable industry, too, has fALLEN: into that problem. I believe some buyers of cable systems bought at the top dollar no matter what. Buying at the top prices could not be justified economically except through the raising of rates. They raised their rates to a point which drew the attention of both legislators and regulators. I think the greed factor became more apparent in our industry than it should have.
I believe that we have not done the job, on the other hand, of convincing or showing the American public how much programming we offer to this nation. Sports, news, music--whatever it may be. Culture, Arts & Entertainment, for example. And other categories of information entertainment have been delivered in unknown quantities prior to cable. People say, "I never watch it." And yet when you ask them, did you see this or did you see that, most of the time they do and they have seen it.
Even HBO, ShowTime, and the pay channels have not really done their job in selling their services to the American public. I felt very strongly that in some areas of programming, the cable industry should have resisted with all its might the propagation of programs like "Midnight Blue," and programs of this nature. I told our cable people many times that if any of these organizations, particularly in San Francisco where it's rampant, wanted to get on our cable systems we would refuse to put them on. And if they wanted to get on they can sue us. Very frankly, I would love to defend such a lawsuit. If we lost the lawsuit, I already made up my mind that every time that program would go on, there would be a slide preceding it saying that the following program is brought to you by the courts, so and so and so and so, Judge so and so presiding. Because I don't think we, as an industry, should take the blame of the public access lease channel programming which has taken place. I believe that to hide behind this issue on the part of the cable industry is wrong. I think Senator Gore and his wife are absolutely wrong that communications have no conscience and no principles as to what they put on. I disagree violently with that position. So, that's where we are today.
I think ... Well, let me go back. Many years ago, I began to get terribly concerned about the impact telephone companies could be making in terms of the cable industry. I asked to attend a telephone committee meeting of the NCTA. It was one of the most disappointing meetings I've ever attended. The only high level person who was there was Gene Schneider. All the others were lower level, lower middle management people, addressing themselves mostly to technical issues. I was then, as I am now, concerned about the impact the telephone companies could have on the cable industry. It will undoubtedly start with computer interconnections, with the dissemination of the printed information, classified ads, possibly if the newspaper industry lets them, and other such materials. But if the telephone companies, which in the past have put their whole weight behind lobbying, are successful, this industry is in mortal danger. Maybe not mortal, but certainly in terrible danger.
At the time of the passage of the Cable Act they had hundreds of lobbyists in Washington, fighting for the inclusion of telephone companies being able to do classified advertising, and opposing anything the cable industry wanted. Now, if you put everything together--the ability of the telephone company through fiber optics to deliver (which incidentally, the cable industry has also) to deliver a high fidelity, high definition television signal onto a screen which I'm sure the Japanese will develop, that will be flat. And it will be very large. Then, pay cable and pay cable per view will really come to the fore. In order to do that, we're going to need some telephone interconnection to fulfill the demand.
Some years ago, I visited this very tiny exhibit, as big as my bathroom here, of AT&T at an NCTA convention. I walked in with Frank Byers, who was then head of science and technology here. I said to the AT&T men, "You've got something we need." He says, "We have some what?" I said, "Yes. We want to do pay-per-view on demand. And you have the telephone interconnections. If we could establish a satellite system whereby the telephone user could dial up his request and it could be connected to Cable Data, where we do most of our billing from in California by satellite, clear the credit, we could release pay per view to our viewers." From that developed a pay-per-view system in the Milwaukee area, where today you can, via AT&T, choose pay-per-view.
End of Tape 4, Side A
BARUCH: What other industry has the ability to enter nearly 60 percent of all U.S. television homes and can play such a valued part in information entertainment cable? There is none other. If you look at newspapers, if you look at anything else except broadcasting there isn't any. Cable cannot fall into the same hole that broadcasting dug for itself by doing long range planning which consists of trying to decide where they're going to have lunch tomorrow. I think the cable industry has to be more aware of the resources required to change the public's perception of cable and to do it's long range planning. I think fiber optics can eventually play a vital part in the cable industry's future because of the ability to carry a multiplicity of high definition signals. This, combined with compression as we go down the line, I think could be a marvelous development to provide a large numbers of channels to homes, which would contain entertainment information. For example, would it not be appropriate to have a movie starting every fifteen minutes so that whenever you want to watch it you can watch it? The only way you can do that is with a wide number of channels. I really do believe we have many, many opportunities open to us in the future. I just caution the industry. I participated in the founding of CCI, which was a vehicle to change the public opinion on cable.
ALLEN What does CCI stand for?
BARUCH: Cable Communications ... something.
BARUCH: Yeah, something like that. But it was devised by Tom Wheeler as a public relations campaign. I remember sitting at Ben Benson's restaurant with Dan Ritchie, Tom Wheeler and others, trying to convince me of the necessity to change the perception of the public. I agreed with it and I was the first to say so. At that time, pornography was the big issue. Well, when we try to raise some funds within the industry, most of the cable systems said, "Well, it has to come out of the marketing function." The marketing function? All they want is subscribers. And they said, "Well, it can't be a public relations campaign. It has to be a subscriber acquisition campaign." So we spent $16 million on a public advertising campaign for subscribers! That wasn't what was needed. It wasn't a public relations campaign. I am really, and I expressed my concerns, I am really concerned that the industry in its stinginess will reach into levels of budgeting where money is available but for different purposes and will try to mold those expenditures to the purposes for which it was originally intended. I think it's a very serious problem.
ALLEN: Is this being fomented by the large MSOs? Or because there is still a large part of the cable industry owned by small operators?
BARUCH: I think the industry is owned less and less by the smaller operators. I think more and more the larger ones have the say in what is or isn't being done. But it is fomented also by the younger generation, who are falling into the-- who may fall, I'm not saying they are--into the mold of the gimme, greed today, rather than look at, where is this industry going to be five or ten years hence.
ALLEN: The quarterly dividends instead of the long range future.
BARUCH: That's right. That's right. They're so pressed now with debt and payments and interest that the financial concerns override a great many other concerns and they look at the short term rather than the longer term payoff.
ALLEN: Do you see the telephone company coming in and really over building a cable system using fiber optics?
BARUCH: The first thing that they have to do is to be able to provide video signals, which they now cannot.
BARUCH: Legally. I have a feeling that the White House, and to some extent the Congress, would go along with the phone companies being able to do that. Once they do that, there is no question in my mind that eventually, and not too far down the line, they will provide video to the home. The only problem that they seem to have now, at least in my opinion, is that they have plant in place which is copper and if they replace that on a more aggressive schedule they have enormous write-offs. That I think they can't absorb right now, or in the very near future.
ALLEN: So one of the things that the cable industry has going for it is the telephone companies just simply can't over build them economically fast enough to make an impact?
BARUCH: But if they were allowed to do so, I think they would find a way to do it, financially, yes. The battle has to be fought in the legislature and in the regulation of our industry.
ALLEN: To keep the telephone company out of the industry.
BARUCH: Out. That's right. That would be replacing a non-monopoly with a monopoly, and I find that extremely dangerous to our communications industry.
ALLEN: What makes the local cable company a non-monopoly?
BARUCH: First of all, no licenses, no franchises are exclusive. It would seem to me that somebody would come in, in a good area and say, "I'm gonna do better service, and I'm gonna overbuild."
ALLEN: Do you know of an instance?
BARUCH: A few instances, I don't know specifically where, but it's been done a few times. Also, when you compete, for the sake of discussion, with a number of television signals which provide over-the-air broadcasting, and you still compete with VCR and all the other video providers, how can that be a monopoly? A monopoly is usually something you can't do without-- electricity, gas, telephone. I believe telephone today, you cannot do without. You can do without cable.
ALLEN: There are some people who probably would put cable in with the others.
BARUCH: I know that.
ALLEN: But they would call it a public service rather than a monopoly.
BARUCH: Yeah. The point is that I would call television networks an oligopoly. There can only be a few; that's the fault of the FCC with their frequency allocation. But cable, it seems to me, is again in a position where you can do very well without cable. To me, I couldn't do without electricity, I couldn't do without gas, water, and so on. I have to have that.
ALLEN: What would you like to see the leaders in the cable industry do in the next five years to improve their position?
BARUCH: Well the first thing they have to do is enhance their image. Their image with our legislators, our image with our regulators, and the image with the public. That's one thing this company, Viacom, tries to do, is to provide good service. When we found out years and years ago we couldn't answer the phones within a thirty or twenty second time period, we automated and we got computers and all the other things. When our service people couldn't answer the questions, we got on-line computer systems. We must improve our image with all of these three constituencies. We must accelerate our development and research in new forms of video distribution--by that I mean compression, high definition, and other areas. We must be aware of the economic problem of the average home and provide a reasonable service, a good service, I mean a very good service, at reasonable cost-- which is not always the case. Those are the main items that this industry should address in the next five years.
ALLEN: Do you see the cable industry getting into providing services other than communication, other than programming? Fire protection, police, intrusion, some of those kind of two-way signaling things that could be done over fiber optics.
BARUCH: No. There is something called the telephone, which does this very nicely. Somebody calls it the electric telephone. That does that very well. Why should ...
ALLEN: So there isn't another business there?
BARUCH: Well, why? What is the incentive for cable to do this--security? Today I have a system in the country where if anybody breaks in it rings automatically. There's a signal being sent to the police, the sheriff's office that somebody has broken into my home. Same thing with fire-- "There's a fire at the Baruch home," and it starts giving the address.
ALLEN: Those are telephone communications.
ALLEN: So there's kind of a split in assignments between the telephone and the cable industry.
BARUCH: Yes. Yes. But private industry, now. Cable still has to wire the home if it has security, and then it has to provide a circuit to go back to the same people I can reach by phone. I find that superfluous.
ALLEN: Do you have any thoughts as to how many channels a cable system can effectively offer to a community.
BARUCH: Well, this would depend on the services they provide. If they're getting to the pay-per-view, where one movie can be seen starting every fifteen minutes over a two hour period when the first channel becomes available again, that alone would occupy eight channels. So if you multiply that by four movies every day, you have thirty-two channels occupied right there. I would think between 150 and 200 channels would be the norm down the line.
ALLEN: Some of them might be blank at some times, they would be needed only part of the time for activities.
BARUCH: Yes. Yes. I think in the area of sports there is a definite danger which the networks have fallen victims to, or fallen into a trap, of outbidding anybody for any sporting event that they feel is worthwhile. Regardless of whether they lose money or not. The best way not to pick up an event is if you feel you lose money. Let somebody else lose the money. Why should CBS have to pay these enormous sums for baseball if they're going to lose that much money on it? I mean, a hundred thousand dollars an inning is what I heard it's coming to. If you lose a hundred thousand, if you lose millions of dollars, why do it at all? Let somebody else. And sooner or later the prices would come down, I believe. But if that is not going to take place then you will find the old bugaboo of the broadcasters happening, namely siphoning of the World Series, the Super Bowl, to pay. I don't think the Congress would stand for that in a minute.
ALLEN: Boxing has gone that way, but that's the only sport that has.
BARUCH: But boxing was on over-the-air television years ago. You and I both remember the Gillette fights. And the other fights which took place. When I was at DuMont, every Monday night we had a fight from Eastern Parkway Arena, which was called the "House of the Upsets." Where Rocky Graziano had his debut, etc. Over-the-air broadcasting gave up boxing, we shouldn't forget that. They wanted no more part of it. And if they want to get back into it they could certainly get back into it. And yes, the fees and the amounts being paid are enormous. My point is, why pay these fees? Let somebody else have the event. Put something else on. CBS got the highest ratings in years with "Lonesome Dove." Not with boxing. Not with football. Not with baseball, but with the "Lonesome Dove," a traditional television program. When the programming is good, people will watch. Stanton said to me once, "The audience never cares how it is delivered. All they care about is what's on." And he was so right.
ALLEN: Who have been some of the most influential people that you've dealt with in the cable business in the years?
BARUCH: In cable?
ALLEN: Uh huh.
BARUCH: Hmm. Well ...
ALLEN: People that really shaped the industry.
BARUCH: I'd have to give that a lot of thought. I can't offhand ... I think Irving Kahn. For good or for bad. Irving Kahn. I think the combination of Tom Wheeler and Jim Mooney. I think people like Amos Hostetter ...
ALLEN: Why don't you just talk just a little short paragraph about why each one of those have been that influential.
BARUCH: Well, Irving got caught in a controversy and he was probably one of the few that was caught in something that was more prevalent, from what I understand, in the industry.
ALLEN: Did it help clean up the industry?
BARUCH: Oh yeah. I think by the time that happened the industry already was cleaning up its act. Quite a bit. I think Tom Wheeler and Jim Mooney because they passed the Cable Act, or helped pass the Cable Act. I think Amos Hostetter who introduced a great deal of wisdom and statesmanship into an industry. I think there are quite a few, but I'd like to submit a list to you at some future date. Because there are so many--the cable industry does not have yet, the outstanding statesmen that other industries over a period of decades have been able to establish.
ALLEN: Your contact was primarily New York and ...
ALLEN: ... and California, and you haven't spent a lot of time out in the areas ...
BARUCH: No, I visited a lot of our cable systems but didn't spend any long periods of time.
ALLEN: Is there anything else you'd like to add to this story?
BARUCH: No, no, no. That's it, I think.
ALLEN: Well, without taking any more time let me express the appreciation of the Cable Television Center and Museum for your time and the amount of effort that you've
put into this. We'll say goodbye for now.
BARUCH: Thank you.
End of Tape 4, Side B