Free Movies Every Night

For years Hollywood's movie companies have presented a united front against television by refusing to sell their backlog of old films for re-release on TV. Last week came the first big break. The man who made it was Thomas F. O'Neil, 40, son of Akron's General Tire & Rubber Co. President William O'Neil and boss of the company's General Teleradio subsidiary.

In eight years as head of the entertainment end of his father's business, young Tom O'Neil had put together a $35 million chain of five wholly owned TV stations, and a 569-radio-station network, stretching from New England to the West Coast. Now, for $25 million more, borrowed from the Chase Manhattan Bank, he bought Howard Hughes's RKO Radio Pictures Inc.,* its moviemaking facilities, distribution system, and a library of some 700 films, including such popular favorites as Gunga Din, Citizen Kane, Stage Door, Little Women, Lost Patrol, The Informer. In addition, RKO has two new films not yet released: Jet Pilot and The Conqueror, both starring No. 1 box-office attraction John Wayne.

Radio-TVman O'Neil also got what was once one of Hollywood's busiest studios and is now one of its sickest. Millionaire Hughes had chopped the studio's 2,000-man payroll to 300, lost his distribution contracts for Walt Disney and Sam Goldwyn films, made fewer pictures (not a foot of RKO film has been shot this year). He haggled steadily for six days and nights with O'Neil over the sale.

At one point, the two men piled into Hughes's Convair and took off for Las Vegas. As the plane droned over the desert, Hughes and O'Neil dickered in the cockpit, while two lawyers dozed in the seats behind them. At one point Hughes casually turned the piloting over to O'Neil (although he had never flown a plane), came back after a while and said, "Well, Tom, you're a great pilot."

Later when the deal was finally sewn up, O'Neil was flown back to General Tire's Akron headquarters to get the board's approval, finally stumbled into bed, groaning: "I haven't had any sleep for 36 hours. He's a very clever man, a very clever man." Hughes's estimated profit: about $6,500,000.

"He Makes Money." But the profit to Hughes may be small compared to what O'Neil hopes to make on the deal. On past performance, he may be just what RKO needs. A burly (6 ft. 4 1/2 in., 215 Ibs.) ex-Holy Cross ('37) football end, O'Neil first learned his way around his father's tire company after college, did a four-year stint in the Navy, part of it skippering an LST in the Pacific. When he got back in 1945, he went to work for General Tire in earnest. Three years before, his father had bought New England's 25-radio station Yankee Network for $1,340,000 to broaden General Tire's tax base and to advertise General Tire's products. In 1946, young Tom took over the network and quickly expanded. He pushed into TV, began broadcasting on his first station (Boston's WNAC-TV) in 1948, from there started building up General Tire's other big radio-TV interest: the Mutual Network, of which General Tire owned 20%.

Mutual's other owners (each with 20%) were the West Coast Don Lee network, the Chicago Tribune, Macy's department store, and a group of smaller investors.

In 1950, Tom O'Neil swung a $12 million deal for the Don Lee network with its 45 Western radio stations. A year later, he got control of Manhattan's WOR and WOR-TV by buying out Macy's interest, and later got control of Mutual. At the same time, General Tire had been merging all its radio-TV holdings, which became General Teleradio in 1952, with Tom O'Neil as president of the new company. Says his father: "That Tom, he makes money."

"Million-Dollar Movie." Tom quickly showed his father how to make a pocketful on TV. Realizing that General Tele-radio did not have the capital to put on splashy shows like NBC and CBS, O'Neil decided to give his audiences good movies instead. For an average $40,000 apiece, he bought 30 old pictures from the Bank of America (which it had got through foreclosure), including Miracle of the Bells and Arch of Triumph. O'Neil called his programs "Million Dollar Movie," and ran what amounted to a movie house on Mutual's New York station WOR-TV, showing each film as often as three times daily. The response surprised even O'Neil; so many people tuned in on the show in the course of a week that it got a top cumulative-audience rating in the New York area.

O'Neil followed his New York experiment by renting his movies to 95 other TV stations. Local stations found that they could make more money than with big network shows from NBC and CBS.

They had more opportunity for "spot" commercials, could sell time on local rates, did not have to split fees with the networks. So far, General Teleradio's 30 rental films have grossed $2,100,000 for Mutual, more than $600,000 profit on the overall deal. O'Neil thinks this is just a beginning. With RKO's fully equipped studio he can make still more films, both for TV and movie theaters, can either produce and distribute the pictures himself or hook up with independent producers who need space and outlets for their films --a three-way payoff.

* In the 1950 dissolution and reorganization of Radio-Keith-Orpheum, Hughes relinquished all interest in RKO theaters, kept control of the newly formed RKO Pictures Corp. and its subsidiaries, RKO Radio Pictures and RKO-Pathe. Though O'Neil gains RKO Radio Pictures, Hughes (with 1,262,000 shares) and Floyd Odium (with 1,250,000) still control the former parent company.

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