Editing Mutual Broadcasting System (section)

=== 1950s: New ownership ===
==== General Tire asserts control, then sells ====
[[File:QueenForADay.gif|thumb|left|325px|alt=Headshot of a mustachioed man above advertising copy that leads off with "Hey! Guess What!"|On the radio in the morning, on TV in the afternoon—audiences couldn't get enough of ''[[Queen for a Day]]''. At the end of each episode, host [[Jack Bailey (actor)|Jack Bailey]] would proclaim, "We wish we could make every lady in America a queen for every single day!"<ref>Cassidy (2005), p. 20.</ref>]]
Toward the end of 1950, the executors of the estate of Thomas S. Lee (the son of Don Lee, who had died in 1934) liquidated the estate's broadcasting interests. The Don Lee Broadcasting System and its shares in Mutual were sold to General Tire for $12.3&nbsp;million (equivalent to ${{Format price|{{Inflation|US|12320000|1950}}|}} in {{Inflation/year|US}}), which already had a sizable stake in Mutual via the Yankee Network.<ref name="LosAng19501218p64">{{Cite news |date=December 18, 1950 |title=Executive, 35, in Don Lee's Top Role |page=10-Section III |newspaper=Los Angeles Times |agency=Associated Press |location=Los Angeles, California |url=https://www.newspapers.com/clip/118815198/executive-35-in-don-lees-top-role/ |access-date=February 17, 2023 |via=Newspapers.com |archive-date=February 17, 2023 |archive-url=https://web.archive.org/web/20230217043559/https://www.newspapers.com/clip/118815198/executive-35-in-don-lees-top-role/ |url-status=live }}</ref><ref name="LosAng19501228p4">{{Cite news |date=December 28, 1950 |title=Sale of Don Lee System Approved: Cash Payment of $12,320,000 Involved in FCC Decision |page=4-Section I |newspaper=Los Angeles Times |agency=United Press |location=Los Angeles, California |url=https://www.newspapers.com/clip/118816290/sale-of-don-lee-system-approved/ |access-date=February 17, 2023 |via=Newspapers.com |archive-date=February 17, 2023 |archive-url=https://web.archive.org/web/20230217043600/https://www.newspapers.com/clip/118816290/sale-of-don-lee-system-approved/ |url-status=live }}</ref>{{efn|A scholarly journal article claims that the Don Lee purchase brought with it a "19 percent interest in the Mutual Broadcasting System," which would be down from the 25 percent of the 1940 restructuring. However, the reliability of this source is questionable, as it incorrectly claims in the same paragraph that the "East Coast-based Yankee Network ... was also acquired at this time" by General Tire.<ref>{{harvp|Crane|1980}}.</ref> As detailed above, General Tire in fact acquired Yankee in 1943.}} The sale prompted a challenge by [[Edwin W. Pauley]], who led a failed bid for the group, claiming it violated Mutual bylaws stating no group could hold more than 25&nbsp;percent of network stock.<ref name="LosAng19501219p23">{{Cite news |date=December 19, 1950 |title=Pauley Protest Made on Sale of Don Lee Stock |page=23-Part I |newspaper=Los Angeles Times |location=Los Angeles, California |url=https://www.newspapers.com/clip/118815045/pauley-protest-made-on-sale-of-don-lee/ |access-date=February 17, 2023 |via=Newspapers.com |archive-date=February 17, 2023 |archive-url=https://web.archive.org/web/20230217043607/https://www.newspapers.com/clip/118815045/pauley-protest-made-on-sale-of-don-lee/ |url-status=live }}</ref><ref name="LosAng19501220p22">{{Cite news |date=December 20, 1950 |title=Arguments on Don Lee Radio Sale Requested |page=22-Section I |newspaper=Los Angeles Times |location=Los Angeles, California |url=https://www.newspapers.com/clip/118816151/arguments-on-don-lee-radio-sale/ |access-date=February 17, 2023 |via=Newspapers.com |archive-date=February 17, 2023 |archive-url=https://web.archive.org/web/20230217043600/https://www.newspapers.com/clip/118816151/arguments-on-don-lee-radio-sale/ |url-status=live }}</ref> General Tire retained KHJ, KFRC and KGB, divesting the other stations.<ref name="LosAng19501228p4" /> At the same time, Mutual acquired the television broadcast rights to the World Series and All-Star Game for the next six years. Mutual was likely re-indulging in TV network dreams or was simply taking advantage of a long-standing business relationship; in either case, Mutual sold the broadcast rights to NBC in time for the following season's games at an enormous profit.<ref name="M&D">{{harvp|Marshall|1998|p=384}}; {{harvp|Day|2004|pp=230–231}}.</ref>{{efn|{{harvp|Marshall|1998}} and {{harvp|Day|2004}} describe the details of the original deal very differently, agreeing only that it was for six years at $1 million a year. Marshall says that a contract was signed on December 26, 1950, between baseball's major leagues, in the person of Commissioner [[Happy Chandler]], on one side and Mutual and the [[Global Gillette|Gillette Safety Razor Company]] on the other for the television rights. Day says baseball's contract was solely with Gillette, that it was for both radio and television rights, and that Gillette "[l]ess than a year after acquiring the broadcast rights ... transferred" them to Mutual. They also characterize the original contract rather differently. Marshall calls it "one of the outstanding achievements of the Chandler commissionership." Day credits Chandler with "deftly avoid[ing] a financial crisis," but agrees with the prevailing opinion of the players that Chandler "vastly underestimated the value" of the rights. The fact, which Day provides, that Mutual sold the package to NBC for $4 million a year lends support to his position.{{r|M&D}}}}

Early in 1952, General Tire purchased General Teleradio from R.H. Macy and Company. With the deal, General Tire acquired the WOR radio and TV stations and the rights to the General Teleradio brand, under which the company merged its broadcasting interests as a new division (Bamberger had previously sold its TV station in the nation's capital, WOIC, to CBS and the ''[[Washington Post]]'').<ref>"Radio-TV Merger Approved By F.C.C.; Deal Covers Macy's Transfer of WOR Interests to General Tire's Don Lee System", ''New York Times,'' January 18, 1952; "Earnings Fall 5% for Macy System; Television's High Cost for Subsidiary, General Teleradio, Cuts Consolidated Net," ''New York Times'', October 11, 1950; Howard (1979), pp. 150–52.</ref> Most importantly, WOR's founding shares in Mutual, when added to the Yankee and Don Lee holdings, gave General Tire majority control of the network.<ref>"General Tire Gets Control of M. B. S.; Shareholders at Meeting Vote 2-for-1 Stock Split—Company Buys More TV Stations," ''New York Times'', April 2, 1952.</ref> General Tire head [[Thomas F. O'Neil]], who had already taken over as president of the Don Lee stations,<ref name="LosAng19501218p64" /> became president of Mutual in an executive shakeup.<ref name="Broad19520428p23">{{Cite magazine |date=April 28, 1952 |title=O'Neil MBS President: White Resigns, Fineshriber Director |url=https://worldradiohistory.com/Archive-BC/BC-1952/BC-1952-04-28.pdf |magazine=Broadcasting-Telecasting |volume=42 |issue=17 |pages=23, 34 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131030856/https://worldradiohistory.com/Archive-BC/BC-1952/BC-1952-04-28.pdf |url-status=live }}</ref>

While Mutual did have a short-lived TV network,{{efn|5-station network that operated for 11 months, as mentioned above in [[Mutual Broadcasting System#Mutual's involvement in television|Mutual's involvement in television]]}} it held rights to one of the most profitable shows in the medium: an early adaptation of ''Queen for a Day'' on General Teleradio/Don Lee's [[KCAL-TV|KHJ-TV]] boasted an audience triple that of the city's six other television stations combined.<ref name="Cassidy 2005, p. 41">{{Harvp|Cassidy|2005|p=41}}.</ref> It was also the largest U.S. radio network in affiliate numbers, by far—it had around 560, almost three times as many as its most powerful competitors, CBS (194) and NBC (191).<ref>{{harvp|Cox|2015|p=178}}; see also pp. 127–128, for the 1950 and 1960 figures for the four major networks.</ref>{{efn|In August 1951, the low-powered, baseball-oriented [[Liberty Broadcasting System]] (LBS) had 431 affiliates.<ref>{{harvp|Garay|1992|p=32}}.</ref>}} Still, the radio industry started to feel effects of major advertisers abandoning radio for television, with commercial rates being cut among all four networks, Mutual included.<ref name="Broad19570715p31">{{Cite magazine |date=July 15, 1957 |title=MBS may pull the plug this week |url=https://worldradiohistory.com/Archive-BC/BC-1957/1957-07-15-BC.pdf |magazine=Broadcasting-Telecasting |volume=53 |issue=3 |pages=31–32 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131032933/https://worldradiohistory.com/Archive-BC/BC-1957/1957-07-15-BC.pdf |url-status=live }}</ref> O'Neil proposed a [[barter]]-style restructuring at a July 1953 affiliates' conference in [[Cape Cod|Cape Cod, Massachusetts]], called "The Cape Cod Plan": the network would provide five hours of sponsored programming daily and 14 hours of additional programming weekly that affiliates could sell commercial time for.<ref name="Broad19530706p27">{{Cite magazine |date=July 6, 1953 |title=Mutual maps drastic moves to bolster sales, ratings |url=https://worldradiohistory.com/Archive-BC/BC-1953/BC-1953-07-06.pdf |magazine=Broadcasting-Telecasting |volume=45 |issue=1 |page=27 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131024641/https://worldradiohistory.com/Archive-BC/BC-1953/BC-1953-07-06.pdf |url-status=live }}</ref> The "Cape Cod Plan" eventually met with resistance from the affiliates, some of which saw it as an attempt by Mutual to make money at their expense; by the time of the next affiliates' conference in January 1954, O'Neil called the barter plan "dead".<ref>{{Cite magazine |date=January 25, 1954 |title=Mutual, affiliates meeting routine; program payment plan not revived |url=https://worldradiohistory.com/Archive-BC/BC-1954/1954-01-25-BC.pdf |magazine=Broadcasting-Telecasting |volume=46 |issue=4 |page=74 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131023816/https://worldradiohistory.com/Archive-BC/BC-1954/1954-01-25-BC.pdf |url-status=live }}</ref>

In 1955, General Tire expanded its media holdings by acquiring [[RKO Pictures]] from [[Howard Hughes]], renaming General Teleradio as RKO Teleradio Pictures.<ref name="Broad19570715p31" /> The next year, a Canadian subsidiary of RKO purchased a governing interest in Mutual shareholder, Western Ontario Broadcasting, owner of [[CKLW]] in [[Windsor, Ontario]], which served the [[Detroit]] market. When the deal closed, two of Western Ontario Broadcasting's directors were U.S. citizens.<ref name="Broad19560409p111">{{Cite magazine |date=April 9, 1956 |title=CKLW-AM-TV shares purchased by RKO |url=https://worldradiohistory.com/Archive-BC/BC-1956/1956-04-09-BC.pdf |magazine=Broadcasting-Telecasting |volume=50 |issue=15 |page=111 |access-date=February 14, 2023 |via=World Radio History |archive-date=June 29, 2021 |archive-url=https://web.archive.org/web/20210629112909/https://worldradiohistory.com/Archive-BC/BC-1956/1956-04-09-BC.pdf |url-status=live }}</ref> RKO Teleradio Pictures also purchased [[Washington, D.C.]] station [[WWRC|WGMS-AM]]-[[WTOP-FM|FM]] in April 1956, with WGMS joining Mutual.<ref name="Broad19560409p35">{{Cite magazine |date=April 9, 1956 |title=Brisk buying surge swaps four stations, $7.7 million |url=https://worldradiohistory.com/Archive-BC/BC-1956/1956-04-09-BC.pdf |magazine=Broadcasting-Telecasting |volume=50 |issue=15 |pages=35–36 |access-date=February 14, 2023 |via=World Radio History |archive-date=June 29, 2021 |archive-url=https://web.archive.org/web/20210629112909/https://worldradiohistory.com/Archive-BC/BC-1956/1956-04-09-BC.pdf |url-status=live }}</ref> Closing the movie studio a year and a half later, the broadcasting division was renamed RKO Teleradio in 1957, and again to [[RKO General]] in 1958.<ref>{{cite web |title=Thumbnail History of RKO Radio Pictures |url=http://home.earthlink.net/~hdtv/History/RKOGeneral/RKOPictures.html |website=home.earthlink.net |access-date=August 27, 2018 |archive-url=https://web.archive.org/web/20050912042450/http://home.earthlink.net/~hdtv/History/RKOGeneral/RKOPictures.html |archive-date=September 12, 2005}}</ref> The "Mutual Dealer Plan", another attempt to revamp the network's operations containing elements of the barter-style "Cape Cod Plan", was unveiled to affiliates at an April 1956 conference to favorable reception.<ref name="Broad19560423p104">{{Cite magazine |date=April 23, 1956 |title=MBS unveils sales plan in Chicago |url=https://worldradiohistory.com/Archive-BC/BC-1956/1956-04-23-BC.pdf |magazine=Broadcasting-Telecasting |volume=50 |issue=17 |pages=104, 107 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131023803/https://worldradiohistory.com/Archive-BC/BC-1956/1956-04-23-BC.pdf |url-status=live }}</ref> The plan, however, could not prevent two remaining minority shareholders in Mutual from leaving: United Broadcasting's WHK switched to NBC in July,<ref name="Broad19560730p58">{{Cite magazine |date=July 30, 1956 |title=WHK succeeds KYW as NBC affiliate |url=https://worldradiohistory.com/Archive-BC/BC-1956/1956-07-30-BC.pdf |magazine=Broadcasting-Telecasting |volume=51 |issue=5 |page=58 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131025951/https://worldradiohistory.com/Archive-BC/BC-1956/1956-07-30-BC.pdf |url-status=live }}</ref> while founding station WGN became an [[Independent station (North America)|independent]] on August 31, 1956, with ABC/''[[Prairie Farmer]]''-owned [[WLS (AM)|WLS]] becoming Mutual's Chicago affiliate.<ref name="Broad19560507p88">{{Cite magazine |date=May 7, 1956 |title=Mutual Seeks Station After WGN Bows Out |url=https://worldradiohistory.com/Archive-BC/BC-1956/1956-05-07-BC.pdf |magazine=Broadcasting-Telecasting |volume=50 |issue=19 |page=88 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131023906/https://worldradiohistory.com/Archive-BC/BC-1956/1956-05-07-BC.pdf |url-status=live }}</ref><ref name="Broad19560730p60">{{Cite magazine |date=July 30, 1956 |title=Mutual Shows for Chicago To Be Carried by ABC's WLS |url=https://worldradiohistory.com/Archive-BC/BC-1956/1956-07-30-BC.pdf |magazine=Broadcasting-Telecasting |volume=51 |issue=5 |page=60 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131025951/https://worldradiohistory.com/Archive-BC/BC-1956/1956-07-30-BC.pdf |url-status=live }}</ref>

By this point, Mutual was foundering. Even with the "Mutual Dealer Plan" and staff cutbacks, the network suffered a loss of $400,000 (equivalent to ${{Format price|{{Inflation|US|400000|1957}}|}} in {{Inflation/year|US}}) in 1956.<ref name="Broad19570715p31" /> In early July 1957, advertisers were notified the network could end operations at the end of the month, one of three options General Tire was considering for Mutual.<ref name="Broad19570715p31" /> Another option—spinning off Mutual while retaining the stations that had given it control—was ultimately taken, as a group led by Dr. [[Armand Hammer]] bought the network later in the month.<ref>{{Cite news |last=Shepard |first=Richard F. |date=July 17, 1957 |title=Sale of Mutual Expected Today; Radio Network Is Going to Group From West Coast |page=41 |work=The New York Times |url=https://www.nytimes.com/1957/07/17/archives/sale-of-mutual-expected-today-radio-network-is-going-to-group-from.html |access-date=February 13, 2023 |archive-date=February 14, 2023 |archive-url=https://web.archive.org/web/20230214001803/https://www.nytimes.com/1957/07/17/archives/sale-of-mutual-expected-today-radio-network-is-going-to-group-from.html |url-status=live }}</ref> Limited sponsorship packages were also introduced, in which an advertiser could back a show for an abbreviated period rather than an entire season, but there was no reversing the trend of television usurping radio.<ref name="Broad19590309p35">{{Cite magazine |date=March 9, 1959 |title=Time of trial for radio networks: Mutual takes worst buffeting but others have their troubles, too |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-09-BC.pdf |magazine=Broadcasting |volume=56 |issue=10 |pages=35, 38, 40, 42 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131030013/https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-09-BC.pdf |url-status=live }}</ref> The radio networks were left with the bills for an increasing number of [[sustaining program]]s, which had no sponsors.<ref>See {{harvp|Bareiss|Leigh|1998|pp=379–382}}; in particular, p. 381, for the development of limited sponsorship.</ref> The loss of mainstay advertisers was accompanied by what historian Ronald Garay describes as the "mass desertion of network radio talent, management and technicians for television&nbsp;.... [and] these people were taking with them the programming that had popularized the radio networks."<ref>{{harvp|Garay|1992|p=64}}.</ref>

==== Turmoil, propaganda allegations, and bankruptcy ====
[[File:Hal Roach Jr. circa 1950.jpg|thumb|Hal Roach Jr.]]
The network soon changed hands again: in September 1958, it was acquired by the Scranton Lace Company for $2&nbsp;million (equivalent to ${{Format price|{{Inflation|US|2000000|1958}}|}} in {{Inflation/year|US}}).<ref>{{Cite news |date=September 12, 1958 |title=Mutual Network Brings 2 Million; Radio System Is Purchased by Scranton Corporation in Move for Expansion |page=50 |work=The New York Times |url=https://www.nytimes.com/1958/09/12/archives/mutual-network-brings-2-million-radio-system-is-purchased-by.html |access-date=February 13, 2023 |archive-date=February 14, 2023 |archive-url=https://web.archive.org/web/20230214001802/https://www.nytimes.com/1958/09/12/archives/mutual-network-brings-2-million-radio-system-is-purchased-by.html |url-status=live }}</ref> Scranton was under the control of the F. L. Jacobs Company, whose chairman, [[Alexander Guterma]], envisioned a media empire uniting Mutual with another purchase that year, [[Hal Roach Studios]].<ref name="Broad19580915p27">{{Cite magazine |date=September 15, 1958 |title=New giant growing in radio-TV? |url=https://worldradiohistory.com/Archive-BC/BC-1958/1958-09-15-BC.pdf |magazine=Broadcasting |volume=55 |issue=11 |pages=27–28 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131024143/https://worldradiohistory.com/Archive-BC/BC-1958/1958-09-15-BC.pdf |url-status=live }}</ref> Guterma's tenure as Mutual president was brief: he resigned on February 13, 1959, amid increasing financial shortfalls, overdue payments to affiliates, unpaid phone bills with [[AT&T]], and an ongoing investigation by the [[U.S. Securities and Exchange Commission]] (SEC).<ref name="Broad19590309p36">{{Cite magazine |date=March 9, 1959 |title=SOS from Mutual as courts and creditors close in |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-09-BC.pdf |magazine=Broadcasting |volume=56 |issue=10 |page=36 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131030013/https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-09-BC.pdf |url-status=live }}</ref> [[Hal Roach Jr.]] took over as president,<ref name="IndPrT19590322p4">{{cite news |date=March 22, 1959 |title=Roach Jr. Loses His Film Post |page=4 |work=Independent Press-Telegram |agency=United Press International |location=New York |url=https://www.newspapers.com/clip/56955043/hal-roach-jr-loses-film-post/ |via=Newspapers.com |access-date=February 14, 2023 |archive-date=February 14, 2023 |archive-url=https://web.archive.org/web/20230214001801/https://www.newspapers.com/clip/56955043/hal-roach-jr-loses-film-post/ |url-status=live }}</ref> but the SEC labeled him "a Guterma puppet" due to how he assumed Guterma's shares and questioned his ability to run the network.{{r|Broad19590309p36}} A week after resigning, the SEC indicted Guterma on federal securities fraud charges,{{r|Time19590914}} which led Roach to be removed as president of the film studio, though he retained his position as Mutual president.{{r|IndPrT19590322p4}} The SEC also ordered [[stock trading]] for the F. L. Jacobs Company suspended.<ref name="Broad19840910p43">{{Cite magazine |date=September 10, 1984 |title=After 53 years the feeling's still Mutual |url=https://worldradiohistory.com/Archive-BC/BC-1984/BC-1984-09-10.pdf |magazine=Broadcasting |volume=107 |issue=11 |pages=43, 46, 51, 54, 58 |access-date=February 15, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131024228/https://worldradiohistory.com/Archive-BC/BC-1984/BC-1984-09-10.pdf |url-status=live }}</ref>

Scranton was under pressure to sell Mutual. The March 9, 1959, issue of ''[[Broadcasting & Cable|Broadcasting]]'' magazine stated Mutual had a deficit of $1.05&nbsp;million (equivalent to ${{Format price|{{Inflation|US|1050000|1959}}|}} in {{Inflation/year|US}}) and was losing up to $100,000 a month. AT&T threatened to cut off Mutual's telephone service within 24 hours if all outstanding charges were not paid, which would sever the network from its affiliates.{{r|Broad19590309p36}} An attempt to sell the network to [[Max Factor]] collapsed after the cosmetics manufacturer could not find a way to create a [[tax advantage]] from the existing financial losses.<ref name="Broad19590302p9">{{Cite magazine |date=March 2, 1959 |title=At Deadline: Mutual on the block |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-02-BC.pdf |magazine=Broadcasting |volume=56 |issue=9 |page=9 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131032142/https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-02-BC.pdf |url-status=live }}</ref>{{r|Broad19590309p36}} When AT&T made another threat to disconnect phone service, network news director Robert F. Hurleigh engineered a last-minute deal with businessman Malcolm Smith, whose transaction to buy the network included $1&nbsp;million of advertising time and payment of the outstanding AT&T phone bill, which totaled over $400,000.<ref name="Broad19590316p118">{{Cite magazine |date=March 16, 1959 |title=Mutual keeps walking tightrope: Intermountain stations depart as Smith group keeps up talks |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-16-BC.pdf |magazine=Broadcasting |volume=56 |issue=11 |pages=118–119 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131023904/https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-16-BC.pdf |url-status=live }}</ref> The deal, however, failed to stop [[KWDZ|KALL]] in [[Salt Lake City]] and its 41-station regional "Intermountain Network" from switching to ABC.<ref name="Broad19590330p27">{{Cite magazine |date=March 30, 1959 |title=Rescue squad takes over at MBS: Creditors okay deferments of old debts to keep network going |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-30-BC.pdf |magazine=Broadcasting |volume=56 |issue=13 |pages=27, 30 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131025849/https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-30-BC.pdf |url-status=live }}</ref> The Don Lee Network folded on April 26, with all 20 affiliates switching from Mutual to ABC and ABC purchasing Don Lee's remaining programming.<ref name="Broad19590330p30">{{Cite magazine |date=March 30, 1959 |title=Don Lee to quit; ABC gets 20 affiliations |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-30-BC.pdf |magazine=Broadcasting |volume=56 |issue=13 |page=30 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131025849/https://worldradiohistory.com/Archive-BC/BC-1959/1959-03-30-BC.pdf |url-status=live }}</ref> Yankee Network lead station [[WRKO|WNAC]] severed ties with Mutual in August to become independent, but Mutual was allowed to affiliate with the other Yankee stations individually.<ref name="Broad19590511p58">{{cite magazine |date=May 11, 1959 |title=Mutual and Yankee plan August divorce |volume=56 |page=58 |magazine=Broadcasting |issue=19 |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-05-11-BC.pdf |access-date=February 25, 2020 |via=World Radio History |archive-date=October 21, 2020 |archive-url=https://web.archive.org/web/20201021224054/https://worldradiohistory.com/Archive-BC/BC-1959/1959-05-11-BC.pdf |url-status=live }}</ref>

{{Quote box
| quote = Mutual apparently refuses to believe that we have disaffiliated. We are sympathetic to their problem, but we have definitely affiliated with ABC Radio.
| author = Lynn Meyer
| source = president of the Intermountain Network/[[KWDZ|KALL]], on their March 1959 disaffiliation from Mutual{{r|Broad19590330p27}}
| width = 250px
| salign = right
}}

The troubles with Mutual worsened. While on a [[press junket]] to [[Ciudad Trujillo]] in May 1959, Hurleigh received confirmation that [[Dominican Republic]] dictator [[Rafael Trujillo]] secretly provided money to Guterma, Roach and Scranton Corp. vice president Garland Culpepper. Guterma accepted up to $750,000 from Trujillo, and in turn, Mutual newscasts were to have up to 425 minutes of [[Puffery|puff pieces]] favorable to Trujillo's regime broadcast per month.{{r|Time19590914}} One story read by [[Walter Winchell]] regarded plans by Hal Roach Studios to film future movies in the country, while another story about [[Fidel Castro|Castro]] allies planning attacks against the Trujillo regime was read by Fulton Lewis Jr.; assorted "news releases" were also sent intended for newscasts but never broadcast.<ref>{{Cite magazine |date=September 7, 1959 |title=Grand jury indicts Guterma trio: Charged with selling MBS as Dominican propaganda vehicle |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-09-07-BC.pdf |magazine=Broadcasting |volume=57 |issue=10 |pages=68–70, 75–76 |access-date=February 16, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131023853/https://worldradiohistory.com/Archive-BC/BC-1959/1959-09-07-BC.pdf |url-status=live }}</ref> Outraged over the arrangement, Hurleigh went to the [[United States Department of Justice|U.S. Justice Department]], which also received a complaint from a Trujillo lawyer after Guterma failed to give the money back. By September, Guterma was indicted for failing to register as a [[foreign agent]], with Roach and Culpepper as defendants.<ref name="Time19590914">{{Cite magazine |date=September 14, 1959 |title=High Finance: The Price of Publicity |url=https://time.com/vault/issue/1959-09-14/page/96/ |magazine=Time |volume=LXXIV |issue=11 |page=94 |access-date=February 9, 2023 |archive-date=February 10, 2023 |archive-url=https://web.archive.org/web/20230210033718/https://time.com/vault/issue/1959-09-14/page/96/ |url-status=live }}</ref><ref>{{harvp|Ward|2005|pp=152–155}}.</ref> Guterma, who pleaded [[Nolo contendere|no contest]] to the charge, was sentenced to federal prison for stock fraud, but it was never proven that he actually fulfilled his part of the deal and arranged for slanted coverage.<ref name="Broad19840910p43" /> Nonetheless, the incident, combined with the network's precarious financial position, led to a reported 130 stations ending their Mutual affiliations.<ref>{{Harvp|Cox|2002|p=127}}.</ref><ref>{{harvp|Jaker|Sulek|Kanze|1998|p=155}}.</ref>

In the wake of the Trujillo scandal and affiliate defections, Smith sold Mutual to Hurleigh for $1 on July 1, 1959, which was followed by a voluntary [[Chapter 11, Title 11, United States Code|Chapter 11 bankruptcy]] filing. Businessman Albert G. McCarthy took over operations, arranging to settle the network's over $3&nbsp;million in debts (equivalent to ${{Format price|{{Inflation|US|3000000|1959}}|}} in {{Inflation/year|US}}) while seeking an owner interested in running it on an ongoing basis.<ref>{{Unbulleted list citebundle|{{Cite news |last=Adams |first=Val |date=July 2, 1959 |title=Mutual Network 3 Million in Debt; Files Petition in U.S. Court Seeking Settlement While Continuing in Control |page=53 |work=The New York Times |url=https://www.nytimes.com/1959/07/02/archives/mutual-network-3-million-in-debt-files-petition-in-us-court-seeking.html |access-date=February 13, 2023 |archive-date=February 14, 2023 |archive-url=https://web.archive.org/web/20230214001759/https://www.nytimes.com/1959/07/02/archives/mutual-network-3-million-in-debt-files-petition-in-us-court-seeking.html |url-status=live }}|{{Cite news |last=Adams |first=Val |date=July 5, 1959 |title=News of TV and Radio; Garry Moore To Use 'Candid Camera' As Sporadic Feature in Fall -- Items |page=6-Section ART |work=The New York Times |url=https://www.nytimes.com/1959/07/05/archives/news-of-tv-and-radio-garry-moore-to-use-candid-camera-as-sporadic.html |access-date=February 13, 2023 |archive-date=February 14, 2023 |archive-url=https://web.archive.org/web/20230214001801/https://www.nytimes.com/1959/07/05/archives/news-of-tv-and-radio-garry-moore-to-use-candid-camera-as-sporadic.html |url-status=live }}}}</ref> WOR signed a new contract with Mutual despite previously indicating the station would drop the network,<ref name="Broad19590727p50">{{cite magazine |date=July 27, 1959 |title=WOR New York keeps its Mutual affiliation |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-07-27-BC.pdf |magazine=Broadcasting |volume=57 |issue=4 |page=50 |access-date=February 13, 2023 |via=World Radio History |archive-date=November 8, 2021 |archive-url=https://web.archive.org/web/20211108151449/https://worldradiohistory.com/Archive-BC/BC-1959/1959-07-27-BC.pdf |url-status=live }}</ref> becoming the lone RKO Teleradio station to renew ties as WGMS, KFRC, KHJ and [[WHBQ (AM)|WHBQ]] joined WNAC in independence.{{r|Broad19590511p58}} At the same time, WOR started to identify as "WOR-AM-[[WEPN-FM|FM]], owned by RKO General," eschewing on-air mentions of Mutual after listeners mistakenly thought WOR was ''also'' in bankruptcy; concurrently, Mutual changed their station cue to "the Network of Independent Stations".<ref name="Broad19590720p9">{{cite magazine |date=July 20, 1959 |title=At Deadline: Cue: station 'break' |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-07-20-BC.pdf |magazine=Broadcasting |volume=57 |issue=3 |page=9 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131032503/https://worldradiohistory.com/Archive-BC/BC-1959/1959-07-20-BC.pdf |url-status=live }}</ref> A three-part reorganization plan resolving all debts was approved in [[United States bankruptcy court|bankruptcy court]] on December 23, 1959, allowing Mutual to emerge from Chapter 11; a network spokesperson commented, "this means we start out with a clean slate; we are now divorced from any previous managements."<ref name="Broad19591228p9">{{cite magazine |date=July 20, 1959 |title=At Deadline: MBS reorganization approved by referee |url=https://worldradiohistory.com/Archive-BC/BC-1959/1959-12-28-BC.pdf |magazine=Broadcasting |volume=57 |issue=26 |pages=9–10 |access-date=February 13, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131025239/https://worldradiohistory.com/Archive-BC/BC-1959/1959-12-28-BC.pdf |url-status=live }}</ref>

==== The Korean War and original drama's decline ====
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Before the Guterma fiasco, the network had maintained its reputation for running a strong and respected news organization. As the conflict on the Korean peninsula began to escalate in mid-1950, Mutual began airing two special nightly reports on the situation, featuring the commentary of Major [[George Fielding Eliot]], military analyst for CBS during World War II. Six correspondents, more than NBC or ABC, were working for Mutual in Korea by August 1950.<ref>Bliss (1991), pp. 258–59.</ref> On occasion, Mutual's commentary programs made the news: On March 11, 1954, Fulton Lewis Jr. featured [[Joseph McCarthy|Senator Joseph McCarthy]] as his guest, two days after the senator's ethics had been called into question on the CBS TV show ''[[See It Now]]'', hosted by [[Edward R. Murrow]]. In his radio interview, McCarthy dismissed Murrow as "the extreme left-wing, bleeding-heart element of television."<ref>Doherty (2003), p. 184.</ref> In 1957, Mutual refused to air an episode of [[Clarence Manion]]'s ''Manion Forum'' featuring Herbert V. Kohler Sr. due to controversy over the [[Kohler strikes]].<ref>{{Cite book| publisher = University of Pennsylvania Press| isbn = 978-0-8122-9307-4| last = Hemmer| first = Nicole| title = Messengers of the Right: Conservative Media and the Transformation of American Politics| location = Philadelphia, UNITED STATES| date = 2016}}</ref>

Mutual began the 1950s by entering the realm of adult [[science fiction]] with ''[[2000 Plus]]'' on March 15, 1950, almost a month before NBC premiered the similarly themed ''[[Dimension X (radio program)|Dimension X]]''.<ref>{{Harvp|Dunning|1998|p=687}}.</ref> The network picked up adventure series ''[[Challenge of the Yukon]]'' from ABC Radio, which originated at Mutual cofounder WXYZ in 1938 (but after the station left the network). Renamed ''Sergeant Preston of the Yukon'', this show launched on Mutual on July 10, 1951.<ref name="Harmon-p18-25">{{Harvp|Harmon|2011|pages=18–25}}.</ref> A partnership with Metro-Goldwyn-Mayer at the end of 1951 had the film studio supply up to six hours of programming per week starting in 1952 with ''[[The MGM Theater of the Air]]'' as its centerpiece,<ref>{{Cite magazine |date=December 10, 1951 |title=MBS Promotion Centers On MGM Shows |url=https://worldradiohistory.com/Archive-BC/BC-1951/BC-1951-12-10.pdf |magazine=Broadcasting |volume=41 |issue=24 |page=30 |access-date=December 27, 2014 |via=World Radio History |archive-date=March 8, 2021 |archive-url=https://web.archive.org/web/20210308032048/https://worldradiohistory.com/Archive-BC/BC-1951/BC-1951-12-10.pdf |url-status=live }}</ref> but the programs lasted for only one year.<ref>{{Harvp|Dunning|1998|p=458}}.</ref> Another established drama, [[Phillips Lord|Phillips H. Lord]]'s ''[[Counterspy (radio series)|Counterspy]]'', moved to Mutual in 1953 after a prior run on ABC.<ref>{{Harvp|Dunning|1998|p=181}}.</ref> The network's other new offerings in 1953 were a further sign of the times—[[Electrical transcription|transcription]] reruns of ''[[Coke Time with Eddie Fisher]]'' (utilizing soundtracks from Fisher's NBC-TV show) and an audio simulcast of CBS-TV's ''[[Perry Como]] [[Chesterfield (cigarette)|Chesterfield]] Show''.<ref name="Broad19530706p27" /> ''The Shadow''{{'}}s long run finally ended in December 1954,<ref>{{Harvp|Harmon|2011|pages=149–168}}.</ref> followed by ''Sergeant Preston'' in June 1955.<ref name="Harmon-p18-25" /> ''[[Gang Busters]]'', another Lord serial that ran on ABC, CBS, and NBC throughout the 1940s and early 1950s, moved to Mutual in October 1955.<ref>{{Harvp|Dunning|1998|p=276}}.</ref> In November 1957, the final episodes of ''Counterspy'' and ''Gang Busters'' aired, ending the network's last two remaining half-hour original dramatic shows.<ref>{{Harvp|Dunning|1998|pp=181, 276}}.</ref> Mutual had forsworn the genre and would not broadcast a new dramatic series until 1973 with the short-lived [[Rod Serling]] vehicle ''[[The Zero Hour (U.S. radio series)|The Zero Hour]]''.{{efn|For more on ''The Zero Hour'', see:<ref>{{cite web|url=http://www.rod-serling.com/zerohour.html|title=The Zero Hour—1974|access-date=March 1, 2010|publisher=Submitted for Your Perusal: The Rod Serling Sound Collection|archive-date=January 17, 2010|archive-url=https://web.archive.org/web/20100117175115/http://www.rod-serling.com/zerohour.html}}</ref>}}

In 1955, the famous comedy team [[Bob and Ray]] came over from NBC for a five-day-a-week afternoon show.<ref>{{cite encyclopedia|author=Griffith, Benjamin|url=http://findarticles.com/p/articles/mi_g1epc/is_bio/ai_2419200115/|archive-url=https://archive.today/20120717012342/http://findarticles.com/p/articles/mi_g1epc/is_bio/ai_2419200115/|archive-date=July 17, 2012|title=Bob and Ray|date=January 29, 2002 |access-date=March 1, 2010|encyclopedia=St. James Encyclopedia of Pop Culture |publisher=BNET (CBS Interactive)}}</ref> Kate Smith returned in January 1958 for her final radio series, which ran until August.{{r|Dunning-1998}} In June 1958, just a few months before the Scranton takeover, the network had launched a nightly 25-minute newscast, ''The World Today'', hosted by [[Westbrook Van Voorhis]], famous as the voice of ''[[The March of Time]]''. Sports began to occupy an increasing portion of Mutual's schedule: the network began regularly airing a Major League Baseball ''Game of the Day,'' every day except Sunday. This expansion into daily sports programming would run well into the 1960s.{{efn|Radio historian Ronald Garay says Mutual launched its Game of the Day in 1949.<ref>{{harvp|Garay|1992|p=50}}.</ref> Sports historians Jerry Gorman et al. say it was 1950.<ref>{{harvp|Gorman|Calhoun|Rozin|1994|pp=91, 105}}.</ref> Garay indicates that the concept was picked up from the [[Liberty Broadcasting System]], founded in 1947. Yet the [[National Baseball Hall of Fame]] lists among famed broadcaster [[France Laux]]'s credits "Mutual Game of the Day (1939–41, '44)."<ref>{{Cite web |date=2005 |title=2005 Ford C. Frick Award Finalists |url=http://www.baseballhalloffame.org/library/2005_frick_finalists.htm  |archive-url=https://web.archive.org/web/20060509095657/http://www.baseballhalloffame.org/library/2005_frick_finalists.htm |archive-date=May 9, 2006 |access-date=February 13, 2023 |website=National Baseball Hall of Fame and Museum}}</ref>}} While baseball's World Series and All-Star Game would go to rival NBC in 1957, Mutual secured national radio rights to [[Notre Dame Fighting Irish football]] in 1954.<ref name="Billbo19540807p14">{{Cite magazine |date=August 7, 1954 |title=Mutual to Air All Notre Dame Tilts |url=https://worldradiohistory.com/Archive-All-Music/Billboard/50s/1954/Billboard%201954-08-07.pdf |magazine=Billboard |volume=66 |issue=32 |page=14 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131080723/https://worldradiohistory.com/Archive-All-Music/Billboard/50s/1954/Billboard%201954-08-07.pdf |url-status=live }}</ref><ref name="Broad19560423p104" /> The rights would switch between networks over the following decade before Mutual became the exclusive broadcaster in 1968,<ref name="Broad19680115p42">{{Cite magazine |date=January 15, 1968 |title=Mutual goes Notre Dame |url=https://worldradiohistory.com/Archive-BC/BC-1968/1968-01-15-BC.pdf |magazine=Broadcasting |volume=74 |issue=3 |page=42 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131030849/https://worldradiohistory.com/Archive-BC/BC-1968/1968-01-15-BC.pdf |url-status=live }}</ref> which would remain a cornerstone for the rest of the network's existence.<ref name="Broad19880815p44">{{Cite magazine |last1=Fitzpatrick |first1=Scott |last2=Stump |first2=Matt |last3=Brown |first3=Rich |date=August 15, 1988 |title=Football rights pass $600 million |url=https://worldradiohistory.com/Archive-BC/BC-1988/BC-1988-08-15.pdf |magazine=Broadcasting |volume=115 |issue=7 |pages=44–45, 47–48 |access-date=February 14, 2023 |via=World Radio History |archive-date=January 31, 2023 |archive-url=https://web.archive.org/web/20230131030244/https://worldradiohistory.com/Archive-BC/BC-1988/BC-1988-08-15.pdf |url-status=live }}</ref><ref name="ND19990913">{{cite web |date=September 13, 1999 |title=Irish Looks To Continue Ten-Game Home Win Streak |url=http://www.und.com/sports/m-footbl/spec-rel/091399aab.html  |archive-url=https://web.archive.org/web/20120503100824/http://www.und.com/sports/m-footbl/spec-rel/091399aab.html |archive-date=May 3, 2012 |access-date=March 1, 2010 |website=Notre Dame Fighting Irish, The Official Athletic Site |publisher=CBS Interactive}} This source refers to "Mutual/Westwood One" months after Mutual's dissolution had taken place.</ref>