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.
“Now, Greg, the minute this slant is put on things I am very likely to be sued for the losses that will no doubt be incurred by those individuals who bought stock when it was at its peak (in loyal support of their confidence in me) and then will be forced to take a loss if the deal fails to go thru.
“You see, normally, it would be held that any such losses would be simply the risk of the speculator. But here we have a man who, in the public’s concept, could win this fight if he would just try, but he is too content to lean back on his billion dollar ass and enjoy life (at least most people think I do).”
As the sleepy lawyer listened long-distance, the aide continued to recite to him the miseries of the frightened financier:
“If I suffer a massive loss of face after two years of improving publicity. If I wind up sued by individuals who invested with me in my gamble. If my reputation as a successful businessman-financier-industrialist is shot to hell … if this is the result of my ABC attempt, you may be sure that it will have been one of the saddest mistakes I have ever made, and I have made quite a few.”
Hughes was so terrified by the lawsuit that he was ready to abandon his network ambitions, if only ABC would promise to drop the litigation.
“Now, Greg, needless to say, this would be an awful disappointment to me. However, I did not muddle my way through 10 years of the TWA lawsuit only to wind up in another one that could easily last another 10 years.
“I dont like litigation, and there is no prize worth incurring more litigation for it.”
Only an impassioned plea by Maheu, later that morning, persuaded Hughes to stay in the fight until at least the case was actually presented. “You have the image of being the only person to take on a Congressional Committee,” he wrote, recalling Hughes’s 1947 “Spruce Goose” hearing triumph, “of a rugged individualist, who is fearless and does not walk away from any battles.”
That afternoon in court, it was a case of courage rewarded. The judge refused to grant ABC an injunction, two days later declined to order Hughes to testify, and then, in an unusual Saturday hearing just two days before the tender offer was due to expire, issued a final order backing the recluse’s right to buy the network.
But there was no joy in the penthouse. For while the court battle proceeded, a new and unexpected adversary arose to bedevil the rugged individualist. And, once more, he cringed from battle.
From Washington came word that the Justice Department was concerned about the possible antitrust implications of the Hughes-ABC deal. His empire already included substantial cable television holdings, sold a wide range of electronics equipment, manufactured communications satellites, and, of course, there was also KLAS.
“It is beginning to look as if the name of the game is ‘Justice Dept. Anti-Trust Pressure,’ ” Hughes fumed. “Without this factor, I think I know fairly well what to do. However, I dont care for the Justice Dept. questionaire. If the ABC affair is not only going to cost me what everyone seems to think is a fair price, but, in addition, is going to cost me submission to this program of harrassment from the Justice Dept., I am afraid I must bow out.”
Yet even as he prepared to throw in the towel, Hughes was also deploying a growing platoon of lawyers, fixers, and bagmen. He considered engaging former Supreme Court Justice Arthur Goldberg to handle future legal conflicts in New York and, to deal with the antitrust threat, summoned from Austin, Texas, the president’s own attorney—Johnson intimate Jake Jacobsen, a former White House adviser later to gain notoriety in the Watergate milk-fund scandal.
Now back in fighting trim, Hughes decided there was, perhaps, a solution after all to the “Justice Dept. vendetta.” It was the kind of solution that had worked many times in the past.
“Bob,” he wrote, “I think it is imperative that we make an alliance with Humphries, the White House, Nixon, or McCarthy and agree to supply all-out unlimited support in return for taking this Justice Dept. off my back but now!”
As he swung into the final days of his two-week crusade, Hughes devised a new array of stratagems to meet the stubborn obstacles that threatened to deprive him of his television network. One moment he proposed friendly negotiations with ABC president Leonard Goldenson, the next he threatened to dump all the stock he acquired and force a market collapse.
At one point he considered selling his ABC shares to rival Texas financier James J. Ling, if only as a ploy to convince network management he was the lesser of two evils:
“It seems to me the only hope lies in the remote possibility of persuading Goldenson that he really wont gain anything if he forces me, through threats of personal appearances, etc., to sell out to a Ling or somebody equally tough.
“In fact, if I were Goldenson, I would a damn sight rather cope with yours truly, who wants no part of the glamour that goes with the job—in fact does not really want the job at all—only wants a quiet working arrangement. I would a damned sight rather cope with a Hughes where I could always have a certain advantage in Hughes’ desire not to be forced into public, than I would to cope with a Ling, or a dozen other younger, healthier, more active men who dont shun the spotlite at all—maybe even like it.”
But with ABC still unexpectedly intransigent, the Justice threat unresolved, the FCC outcome uncertain, and yet another day in court ahead, Hughes wavered. Several times he decided to abandon the quest and plotted his extrication quite as feverishly as he had planned his coup. Then he would take heart all over again and scrawl new orders on his legal pad.
By Sunday, July 14, with only hours left before he would have to accept or reject the stock due the next day, Hughes remained mercurial. As Mormons working double-time scurried between typewriter and telephone, the billionaire sent a blizzard of contradictory memos from his penthouse command post, now resigned to defeat, then ready to “collar” the president of the United States. Yes, he would send either top Washington lawyer Tom Finney, a partner in Clark Clifford’s firm, or better yet Larry O’Brien, right into the Oval Office.
“It seems to me, Bob, there is a comparatively easy way to get an immediate answer to the network decision,” he wrote with renewed confidence. “I think such an answer should be obtainable by Mr. O’Brien or Mr. Finney marching in and collaring Johnson or Humphries and saying: ‘Look, my friend, my client Mr. Hughes has initiated the machinery to acquire control of ABC. He has ridden out the first very controversial weeks and is in pretty good shape. He had no idea that there would be as much resistance from Mr. Goldenson. He thought that his interest in ABC would be greeted with cordiallity.…
“ ‘Mr. Hughes wants to spend his remaining years in productive accomplishment, not in protracted conflict,’ ” the script continued. “ ‘His only interest is to build the network up until it becomes an asset to this country—an asset of which the country can be justly proud. Mr. Hughes’ only concern is that the FCC, being under intense influence and constant harrassment by ABC, will simply feel they have t
o be more thorough and more formal than they would be inclined to be if they were left alone.’ ”
And now the hook. How could it fail?
“Then I think O’Brien or Finney should work the conversation around to where he (our man) can gracefully say: ‘What do you think Mr. Hughes should do? I think he would like your counsel.’
“Now, I dont know Humphries, but I can assure you Mr. Johnson would have picked up the ball long before the conversation ever got to this point.
“It seems to me,” he concluded, “that such a meeting would certainly give us an indication of which way the wind blows across the White House lawn.”
It would have been an interesting meeting, indeed. Because Lyndon Johnson, almost as obsessed with television as Hughes himself, with a three-set console in both his office and his bedroom, had come to decide that the TV networks were Communist-controlled. And he had been monitoring the Hughes-ABC deal closely, although avoiding any direct involvement due to his own controversial broadcast interests.
But Hughes, who had had dealings with the president before, never did learn the direction of the wind on the White House lawn. Maheu discouraged the plan. “We must remember,” he argued, “that whatever the Pres. recommends—then we are bound forever. He is not, though, because his advice must be ‘off the record.’ He’ll have an implied obligation but we must remember that he has had a lot of experience in the technique of ‘sliding’ away from implied obligations.”
Hughes was not immediately convinced. What was there to lose?
“If we are going to cancel out tomorrow, I urge we put it right in Johnson’s lap and offer him the opportunity to determine what we do. If we could get a real green light signal from Johnson, I simply dont think the FCC would hold us up in defiance of his wishes, and I doubt very much that Goldenson would pursue the issue in court if it became evident that we had the approval of the Whitehouse.”
Still, Hughes’s remote-control unit balked. Late Sunday evening, Maheu replied with the pessimism of a man who dealt with life’s daily realities: “I know that you don’t like to hear anything you don’t want to hear. As you know, I was selling positive thinking before Peale ever thought of writing a book. But even affirmative thinking must have some foundation in the realm of realism. If you are prepared to tell me that, at a given point, you will make an appearance, I’ll guarantee you that we’ll deliver ABC to you on a silver platter.”
Of course, that was the one thing Hughes could not bring himself to do.
As the three P.M. Monday deadline came near, it hardly seemed to matter. By midday less than 150,000 of the two million shares of ABC stock Hughes was seeking had been tendered.
The network’s final court appeal, heard earlier that day, seemed beside the point. Then, at one P.M., a three-judge panel once more backed Hughes in his bid to buy ABC. And in the next two hours almost a million and a half shares flooded in to the billionaire’s brokers.
When all the paper had been counted, Howard Hughes had 1.6 million shares, more than a third of all the outstanding stock in ABC. It was easily enough to control the network, and it would now be no problem to get more. A naked hermit, eager to mold mass opinion and manipulate national policy, had just been offered the most powerful position in broadcast history.
What made it all the more incredible was that Maheu, on Hughes’s instructions, had been busily working behind the scenes to make sure that the two million shares Hughes was legally bound to buy would not be tendered. To the last, Hughes wanted to preserve his option to drop the deal.
Indeed, Maheu had gone so far in his efforts as to risk imprisonment. “Hell, Howard,” he later boasted, “if some of the things which I did in order to extricate us from the ABC matter ever surfaced, I would be spending the rest of my life in jail.”
But now Hughes was not at all certain he wanted to bail out. Everything was going his way. The stock had been tendered, the courts had backed him, and the FCC also seemed ready to approve his takeover. None of the commissioners even guessed at his true condition, or his true motives. All were ready to okay the acquisition. There was only one catch: Hughes would have to appear in person to claim the license.
It was the one thing he would not, could not do. Informed Monday night that the FCC would definitely demand his appearance, Hughes immediately capitulated. Ready to pay $200 million, he would not emerge from his blacked-out bedroom.
“I am just not up to that,” he explained.
Shortly after noon on July 16, 1968, a formal statement was issued. Hughes rejected the stock. And his bid to take over ABC—to have a network of his own—seemed to disappear as suddenly and mysteriously as it had been announced.
Hughes, however, had not abandoned his plans to control television. If he could not get one of the three existing networks without giving up his privacy, then he would create a new fourth network—a Hughes Network—and “chase ABC right out of business.”
“My desire for a voice—for media—has not changed in the least,” he emphasized from his ninth-floor retreat. “It seems to me that thru the alternatives of building a compact, wholly owned 4th Network, or a vast united complex of CATV systems, I might achieve the channel to the public at a lower price and with less bruises along the road.”
The idea was not new. It had been in the back of his mind for years and had even come up several times while the ABC deal was still in progress. In one moment of despair, he had considered settling for a state-wide network in Nevada.
“I am absolutely sure my plans to acquire ABC will not bear fruit, so I am more anxious than ever to build the strongest network here in Nevada that anybody ever conceived. I will be very content with a really strong network in Nevada. I will be very unhappy if this blows up in addition to ABC.”
But having come so close to a national outlet, Hughes could not now be content with a local system.
So he schemed to take over a major independent, like Storer or Metromedia, to string together every available cable TV station in the country, and to use the money that might have gone to ABC stockholders to make his new system a national contender.
Not long after walking away from ABC, Hughes actually did acquire a sports network, which he planned to augment with communications satellites his own company manufactured.
But soon he was finding the Hughes Sports Network as unsatisfactory as KLAS: “The broadcast looks like color television when it was first introduced twelve years ago. When something carries my name, as this network does, I dont propose to stand by and see these results.”
And neither HSN nor any fledgling network offered the immediate power he craved: “Let’s be realistic and admit that no such alternate could possibly be built up to the point of effectiveness in time to carry any weight in the forthcoming political contests—either primary or final.”
The 1968 elections came and went, and still Hughes had no national “voice,” no “channel to the public,” certainly no “balance of power.”
Maheu’s report that the new president was interested in his plans—“Nixon, through his friend [Rebozo], has suggested the creation of a 4th Network as a means of elevating the standard of all TV broadcasting”—briefly buoyed the billionaire’s spirits.
In the end, however, Hughes decided that a fourth network was not the answer.
“I dont say a fourth network cannot be built up,” he explained. “I just say it wont happen without the back breaking, heart breaking kind of effort that went into the creation of the other networks. Even with the best of luck, it will take years for any fourth network to advance to the point where it could equal ABC.”
Now, after nine months of toying with alternatives, Hughes was ready to return to his first love.
“I have finally decided to go on ABC,” Hughes exulted in late March of 1969. It was, of course, a secret enthusiasm. “Now, if this is permitted to leak out, even a tiny bit, it will bounce the market up and I will have to cancel out. So I beg you to be careful whom we trust.”
> Secret or not, Hughes could hardly contain himself. It was technological ecstasy. With a passion he could feel for nothing human, Hughes now coveted the network he had so recently rejected.
“Bob,” he wrote, “what appeals to me about ABC is its tremendous mechanical machine. There is an ABC outlet in almost every city in the US that has a CBS or NBC station.
“This tremendous giant of mechanical and technical perfection is just lying there going to waste. Being used daily for the transmission of the biggest pile of pure undiluted horse-shit that was ever assembled on one role of tape.
“Bob, ABC can only go one way, and that is up.
“I promise you that a 7 year old child could do a better job of running it than is being done today. That is what intrigues me—this huge slumbering giant of technical perfection that needs only to be waked up to come to life.”
Lost for a moment in his dreams of arousing this genie, Hughes did not lose sight of the mission he had in mind for the “slumbering giant.”
“Dont forget that every Whitehouse or congressional press conference will, by custom, require the issuance of an invitation to the ABC News correspondent in co-equal position,” he concluded. “And also a co-equal position in reporting every election from now on—not after you build a network up, but right now.”
The White House. Congress. Every election. A network of his own. Right now. With renewed and growing excitement, Hughes again began to plot his takeover of ABC.
This time, he would not try to seize control. That would only mean another round of trouble, new court fights, further demands for his appearance before the FCC. All of it unnecessary. With the right approach, Hughes was certain he could arrange a friendly business deal—“a completely non-hostile take-over with Goldenson’s complete consent.”
And if ABC, still in dire financial straits, would go along quietly, so might the FCC. There was a new administration. Nixon wanted an “elevating” Hughes network, and now he could have one. Besides, some of the commissioners were afraid that without an immediate infusion of capital, ABC, which had already been forced to cut back its programming, might actually go under.
Citizen Hughes Page 18
