When CBS shareholders convene in Los Angeles this Wednesday for the corporation's annual meeting, they will hear chairman William S. Paley proclaim a new chapter in the history of the company he has nurtured and commanded virtually since its inception 50 years ago as a loosely strung network of 16 radio stations.
Paley, while keeping his chairmanship, will announce that he is stepping aside as the chief executive officer of CBS, an office he has held since 1928 when he bought the then-fledgling network for $400,000 which he raised by selling shares in his father's successful cigar manufacturing business.
Today CBS, Inc., has grown into a $2 billion conglomerate encompassing not only an extremely powerful and profitable broadcasting network that Paley likes to brag is the world's largest advertising medium -- a claim now strongly under challenge by surging rival ABC -- but which also includes extensive interests in publishing, records, magazines, toys and musical instruments.
As chief executive of CBS, Paley, now 75, has for nearly half a century made not only the day-to-day business decisions for the corporation but has also had a reputation as the intuitive showman and guiding genius behind CBS' success as a mass entertainment medium. And he is credited as well with pioneering and fostering the development of broadcast journalism through the highly regarded CBS news organization.
This combination of business and showbiz acumen is regarded as perhaps unique within the industry where he is one of the first and last of the giants, a kind of Godfather of broadcasting, and a man of undisputed power, style and influence.
Broadcasting magazine last year called him the person "who through a lifetime's absorption in programming has unquestionably exerted a greater influence on what Americans see and hear over the air than any other individual past or present."
His critics over the years, meanwhile, have charged him with a high-handed arbitrariness when it comes to professional and personal relationships, and say his leadership is characterized by an icy, if englightened, despotism.
Because the very powerful rarely relinquish power voluntarily, there has been considerable speculation since last October when Paley first announced his intention to give up his chief executive's title -- on the same day that then president and heir apparent Arthur Taylor was peremptorily forced to resign due to reported personality firctions with the chairman -- over how much control Paley actually intends to give up.
In a recent wide-ranging interview, an extremely fit and keen Paley said he indeed would go ahead with his announced plans and will tell the shareholders that, as expected, current CBS president John D. Backe will be his choice to succeed him as the daily boss of CBS when the board of directors meet in early May.
When asked what such a shift would mean, Paley resorted to a prepared statement:
"In a general way, after I give up being chief executive officer, I'll be on hand to make my experience in both the private and public sectors available to the corporation, and this will apply particularly in such areas as policy questions, acquisitions, planning and creative activity.
"And I'm looking forward to a pleasant and constructive relationship but without the day-by-day pressure and responsibility that I have borne so happily for these many years."
Does that mean he no longer will be involved in the network programming decisions that have preoccupied and absorbed him for so many years?
"Well, I say I will be available for consultation and for advice and guidance in most areas," Paley snapped back, "and the one I mention as being of particular interest -- creative activities."
He insisted, however, that Backe, formerly the head of the CBS/Publishing Group and someone with no previous experience in broadcasting, would be the undisputed chief executive officer of CBS, and said the process of shifting power to Backe has been going on since last October and "I'm getting used to it. He's more or less acting as chief executive officer now."
In Paley's sumptuous office atop the CBS building are a superb Picasso cubist work, a stark expressionist painting by Franz Klein and an Andre Derain that art connoisseur Paley commissioned the artist to finish for him. During the interview there, the urbane chairman -- whose father and mother both emigrated from Russia at the turn of the century to escape czarist persecution -- said he was "happy about the change and was "pretty well used to it."
"I don't think there's going to be any traumatic experience that I have to suddenly face up to some day in May," he said, and indicated he had no qualms about relinquishing power.
"No, I've had it for a long, long time, and I'll have no difficulty in having that pass on to somebody else, particularly somebody in whom I have such a high degree of confidence" as Backe, Paley said.
Backe confirmed that much of the transfer of power already has taken place. He said it would be "more of a transition in the eyes of the public than in point of fact." He said he would keep Paley "informed" about what went on within the company and "I will seek out his advice because I would be a fool not to, but come May, there will be only one chief executive."
Others both inside and outside CBS are not so sure that chairman Paley, even without the chief executive's title, won't continue as a brooding omnipresence who has the final say as to what happens in the company.
Dennis Leibowitz, broadcast analyst with E. F. Hutton, said he had "a considerable mount of skepticism" about how real the transition of power will be. "There is no way to prove it or disprove it, but especially after what happened to Mr. Taylor, no one I think believes that Mr. Paley could not still make unilateral, spur-of-the-moment decisions just because of the change in titles.
"I think he still will have the ultimate authority."
One highly placed insider at the company said Paley has kept everyone there guessing about the degree of control he will hand over when he steps aside.
"I haven't a clue," he said. "He hasn't told any of us."
The company official said that the description of Paley by many outside the company as the ultimate arbiter of programming at CBS was really wide of the mark anyway and that the transfer of power, if actual, would not have the impact that many anticipate.
"There are some people who want to mythologize Bill Paley as some rare programming genius out of another day, and predict that things will fall apart when he leaves." But, according to this official, "that's far from the truth."
"It's kind of like a Potemkin village around here," he commented, alluding to the string of villages that a Russian general had built to impress the Empress Catherine the Great but which turned out to be only facades, and comparing these with Paley's supposed programming powers.
"To say he can unilaterally outvote anyone is wrong," he continued. "He's been more modest. He almost never puts himself on the line where he can be tested.Mr. Paley has been one of the people who attends programming meetings, but the process is to hammer out a consensus."
Others at CBS indicated that the health of Paley's wife of 30 years, the aristocratic Barbara "Babe" Paley, who has been seriously ill for the last several years, would have some bearing on how active Paley remains in company affairs on a daily basis. If Mrs. Paley is well enough to travel, she and Paley probably will spend considerable time abroad, one source indicated.
"But if he doesn't have anything else to do, he will be in the office every day," according to the source. "And if he comes to work, you can bet he won't just be shuffling papers."
Paley himself disclaimed an autocrat's powers so far as CBS programming is concerned.
"I've been up to my ears in programming since the early days of radio," he noted. "I had some ability to anticipate what would be successful and what would not be. I think I've had a good conscience and a great deal of pride in wanting to do things better than anyone else and to get the critical acclaim for doing important, high-quality things. And it's been a way of life with me for many years.
"But this company hasn't been run on the basis of William S. Paley saying 'boom, boom, boom, well do this, that and the other thing.' I developed a form which I call the decision by consensus. Everyone who had an interest in programming had his say."
Whatever the system or the knack, the results were good enough to keep CBS No. 1 in the prime time television ratings for 20 consecutive years, until the current season which found CBS in an unaccustomed third place at the start. Since November, it has struggled back to what its executives term a "solid" No. 2 behind ABC.
Why after 20 years did CBS lose its touch?
Paley claimed it was because the network, perhaps flushed with repeated successes, "became too complacent" and did not set aside enough product in its inventory which it could plug in for those shows with weak ratings.
"We suddenly found ourselves in the position where we couldn't make changes very rapidly," he noted.
For the season which begins this fall, CBS has embarked on a massive development program which it hopes will provide it with the series and specials to challenge ABC again for the top spot.
"It's not going to be overnight," Paley cautioned, but predicted that CBS "will show a big improvement this fall. And we're of course ambitious to be back in the No. 1 position."
The CBS chairman is now an enthusiast of limited series, although his network was the last of the three to get involved with them extensively, and he is full of praise for the ABC blockbuster miniseries "Roots," which he terms "a very important experiment."
Paley said that television as a result of this season "will be more flexible than it has ever been before" in its programming, with more miniseries and specials. "In other words, the doors have been thrown wide open for anything that can be accommodated on television."
He refused to discuss the specifics of the dismissal of Arthur Taylor -- whom he praised as a person with "leadership qualities" and "a man of wonderful character" only months before his ouster -- other than to say that the CBS board "thought somebody else was better qualified to be my successor."
One of the most severe criticisms leveled at Paley over the years came in an article last year by David Halberstam, who wrote: "Of the two very powerful drives working on Bill Paley --CBS stock and profit ever upward, and the sense of excellence and responsibility to the public -- the second thrust had clearly diminished over the years."
"Absolutely untrue," retorted Paley. "No, the profit motive has not driven me hard at all."
All through his career, he has stressed the dual nature of broadcasting as a medium of mass entertainment that tries to reach the largest possible audience and, at the same time, as an instructional and informational tool with more specialized appeal, and he said he would stand on his record in providing both functions.
Paley's first contact with broadcasting came in 1927 when he was a vice president of his father Samuels Congress Cigar Co., and committed the company to a $50-a-week advertising contract with a 225-watt Philadelphia radio station, WCAU, while his father was on vacation.
Though Paley was criticized for taking this flier, sales of the company's La Palina cigars began to soar, giving him his first inkling of the potential of radio as a sales medium and his first whiff of the glamor and excitement of broadcasting.
The Philadelphia station was part of United Independent Broadcasters, soon to become CBS, which was trying to challenge the more powerful red and blue networks of David Sarnoff's National Broadcasting Co. Paley bought CBS in 1928 from acquaintances at a point where the network appeared on the verge of extinction.
But a hook-up with Hollywood studios kept CBS solvent, and in the early 1930s Paley discovered the ability of radio to create national celebrities, with his renowned eye and ear for talent introducing Bing Crosby, Kate Smith and a host of other celebrities to the public. CBS in the 1930s also launched the first regular broadcast news operation, soon to be highlighted by Edward R. Murrow.
For years, CBS remained the runt network, outgunned by NBC. But in the 1940s, Paley pulled two coups. First he wrested control over programming away from the advertising agencies and sponsors and created the present network structure. Then, in 1948, he lured a galaxy of stars such as Jack Benny and Amos and Andy from NBC through some fancy capital gains deals, and for the first time catapulted CBS into the top spot in the ratings, a position it was largely able to maintain as the television age was being born.
Today Paley says he still is stunned by the power and immediacy of television, particularly its ability to bring news events into homes instantaneously. "It's just amazing to me, and I've been in it all my life."