So, alone in his darkened room, Hughes had to face the end of his all-night movies and watch “Sunrise Semester” presage a new dawn on his TV screen. It was a daily agony.
Just as the perfect television set had eluded him, so now Hughes had come to recognize that owning a TV station was not the answer either. What did it profit him if he couldn’t even get the movies he wanted and had to suffer “Sunrise Semester” as well? The quest must begin anew.
Locked in a struggle to control television itself—and thus to control his world—Hughes would have to reach still higher. He would need to buy an entire TV network.
“Do you realize I am going to be faced with making a $200,000,000 decision today?”
It was 6:30 Sunday morning, June 30, 1968. Howard Hughes squinted uneasily at the long string of zeros he had just scrawled on his yellow legal pad. He had not slept all weekend long, bedeviled by second thoughts and obsessed with last-minute details. The magnitude of the impending deal daunted even him.
Hughes was about to buy ABC.
No one had ever owned more than a small fraction of a major television network, but Hughes was determined to get a controlling interest. And to take it by surprise. He had been plotting the move for more than a year. ABC, then foundering in third place, far behind both CBS and NBC in the ratings and desperately short of cash, seemed the perfect target.
This time it was not late-night movies that interested the billionaire, but raw political power.
“I want to know confidentially and most accurately just how significant a position in the formulation of U.S. public opinion would be afforded us by the acquisition of ABC,” he wrote to Maheu. “Anyway, my attitude is very simple. My objective is the ABC News Service and what can be done with it.”
The ABC “Evening News” with Howard Hughes. Behind the scenes, of course. Even as he sought Maheu’s reassurance, the billionaire had no real doubts that one-man control of a national television network—albeit the weakest of the three—could give him tremendous clout.
“Maybe you remember that the Los Angeles Daily News, when it was still being published, was the most important news media by far, from the political standpoint, in the entire Sou. Calif, region,” wrote Hughes, spelling out his strategy. “This despite the fact that the Times, Examiner, and the Herald were all far larger and better newspapers.
“The reason for this was explained very carefully to me. I was told it was because the News took a position pro or con on every political issue on the horizon and every candidate seeking office. The other, more conscientious newspapers usually refrained from taking a really strong position in any matter, merely because they did not want to be accused of being partial.
“Now, it seems logical to me, based upon the very wide public ownership of the two big networks, and the very small holdings of any one stockholder, that it would be almost impossible to obtain any really reliable assurance of strong support from either NBC or CBS. So, although ABC may be the weakest of the 3, if a really strong position could be achieved, permitting a predictable candidate attitude, this network might very likely turn out to be the balance of power.”
The balance of power. With growing excitement, Hughes watched the price of ABC stock, saw it plummet, waited until it reached a record low. Then he pounced.
On Monday, July 1, 1968, just before the opening bell of the New York Stock Exchange sounded, Hughes announced his takeover bid, catching both ABC and Wall Street by surprise. That was vital. This was not to be a friendly business transaction but a sudden raid to seize control.
Hughes gave ABC stockholders two weeks to sell him two million shares at a price well above the market. If they did, he would own 43 percent of the network, more than enough to be in full command.
Stunned, ABC’s board of directors met in a council of war, determined to block Hughes’s bid. It was like wrestling with a phantom. They knew virtually nothing about the recluse or his intentions, except that he had not been seen for more than a decade. That, they decided, was their trump card. They would force Hughes to appear in public.
“WILL HUGHES RISK PRIVACY TO WIN ABC?” newspaper headlines asked. It seemed he would have no choice.
Ordinarily, anyone seeking to buy even a single television station—let alone an entire network—was required to make a personal appearance before the Federal Communications Commission. Hughes, however, had managed to obtain a license for KLAS while remaining hidden. Now he intended to do the same with ABC.
His attorneys insisted that would be impossible, but the billionaire disdained such advice. “This is no decision which a lawyer can make merely by looking in a book,” he told Maheu. “It depends upon political strength and ability at your command now, since I am very sure this will be settled long before the new administration comes in.
“I have to take a business risk of large amount, and I can only make the decision so to do based upon my appraisal of your ability to accomplish a certain result with the FCC.”
Fortunately, 1968 was an election year, and Hughes figured that he would soon have more than money to offer the candidates then running for president. With their help, he would have ABC.
“I dont see how I dare launch into [this] campaign unless I have some assurance of the FCC’s support, without my personal appearance,” he explained. “Now, I see only one way such support might be assumed, and that is in case one of the candidates or the white house on behalf of its favorite candidate wants the support of ABC. If such a trade could be made, it seems to me that we have the tools with which to make it. In other words, our present position plus white house or Humphries’ full support would spell certain FCC approval in my book, and with that assurance, I would go full blast ahead. Now,” he cautioned Maheu, “you really have to be careful how you approach this bag of hot potatoes.”
Even Maheu was uncertain, however, that the plan was feasible. “The primary and election will have come and passed before we would be in a position to use ABC to our advantage,” he replied. “There are other ways of making the candidates thoroughly devoted to us.”
And, Maheu reassured Hughes, there were other ways of handling the FCC. “We still have time to condition the individual members of the board and at all levels below,” he explained, promising that Washington’s well-connected lawyer Edward Morgan would do the job. “Morgan happens to be an expert in the area of conditioning and will spend his time on this most important detail.”
But while Morgan was conditioning the FCC, ABC moved on a new front. A week after the takeover bid had been announced, on July 9, the network filed suit in New York, seeking a federal-court injunction to block Hughes.
Ever since the TWA crisis, lawsuits had terrorized the recluse. He had surrendered control of his beloved airline rather than appear in court, and now he feared that the nightmare—“I was like a rat in a trap”—was about to engulf him again.
At four the next morning, a shaken Hughes roused his thousand-dollar-a-week Hollywood attorney, Greg Bautzer, to have a Mormon aide read him a memo over the telephone.
“I hate to awaken you,” Hughes had written, “but I dont like the way this thing is turning out at all. Up to now there has been no real issue about my being personally called at all. But at the hearing today or tomorrow, ABC will demand my appearance. This will bring into sharp focus all the old rumors of my death, disability, etc., etc. And thereafter if, for any reason, the deal fails to materialize, people will say that the reason was my unwillingness to appear.