New York, New York 10019
Telephone: (212) 315-4000
Fax: (212) 582-9255
Sales: $683.9 million (1998)
Stock Exchanges: New York
Ticker Symbol: KWP
NAIC: 51211 Motion Picture & Video Production; 51212 Motion Picture & Video Distribution
King World's shows have been delivering viewers to television stations and advertisers with unprecedented success for over 15 years. Clearly, we will continue to seek distribution opportunities both domestically and abroad. But going forward, we will expand our business by producing or co-producing more new shows and entering new programming genres. In doing so, we will position ourselves to claim an increasingly larger share of the programming pie.
King World Productions, Inc. is the world's leading syndicator of first-run television programming. The success of the game shows "Wheel of Fortune" and "Jeopardy!" and of "The Oprah Winfrey Show" catapulted King World to a position of power in the television industry in the 1980s, altering the traditional relationship between television stations and syndicators; in the late 1990s these three shows were the top three syndicated daily shows. The company also found success through the newsmagazine program called "Inside Edition," and a revival of the game show "Hollywood Squares." King World also markets "The Roseanne Show" and "The Martin Short Show." The syndication giant, which increasingly became involved in production in the 1990s, was in the process of being acquired by CBS Corporation in late 1999.
"The Little Rascals" Beginnings
Charles King, the founder of King World Productions, began as a syndicator of radio programs in the 1930s, and was associated with such celebrities as Rudy Vallee and Gloria Swanson. Beset by financial troubles and seeing the money-making potential in television, King redirected his skills into the new medium, working for other distribution companies until 1964, the year he created King World. The first show distributed by King World was "The Little Rascals," a black-and-white slapstick comedy series featuring the characters Alfalfa, Buckwheat, and Spanky. As a syndicator, King bought distribution rights on the reruns and leased them to television stations, keeping one-third of the licensing fees.
When Charles King died in 1973, his company was experiencing difficulties due to the steadily decreasing demand for black-and-white programming, among other reasons. King's children took on the responsibility of reviving King World, with Michael King as president and CEO, Roger King as chairman of the board, and Robert, Diana, Richard, and Karen King in other executive positions. As chief operating officer, Stuart A. Hersch was the only member of the King World board who was not a part of the King family. Through an agreement with Colbert Television Sales, the Kings began selling the game shows "The Joker's Wild" and "Tic-Tac-Dough." They enjoyed moderate success with these, but also sought a show that could challenge industry leaders "Family Feud" and "Entertainment Tonight."
While research into demographics and audience preferences is utilized by virtually all enterprises related to radio and television, King World has been able to capitalize on its research extremely effectively. The company has its own team of researchers and frequently commissions data from outside agencies. This aspect of King World is seen as a pivotal element in its success.
Struck Gold in the 1980s with "Wheel of Fortune" and "Jeopardy!"
Extensive research into the television ratings published by Nielsen and Arbitron indicated that "Wheel of Fortune," which was running on NBC during the day, had potential for high ratings in the evenings despite the fact that three previous attempts to syndicate it had failed. Based on the children's game "hangman," the game show was created by Merv Griffin. With Pat Sajak acting as host, the show enjoyed a small but loyal following. In 1982 King World struck a deal with Griffin to syndicate the game show. Under the agreement, King World distributed the show to stations for cash and barter, that is, air time to sell to advertisers. King World's Camelot Entertainment was formed to sell the commercial time, initially 30 seconds per episode. For the first season, King World could find stations to carry the game show in a few large cities including Detroit, Providence, Buffalo, and Columbus, but not New York, Los Angeles, or Chicago. Strong ratings, however, came quickly, and the program was soon showing in all the major markets.
One of the most peculiar aspects of the "Wheel of Fortune" story was the flurry of media attention given to Vanna White, a former model who joined Pat Sajak to turn the letters on the game board. Although White hardly said a word during the show, her popularity skyrocketed, with her face appearing on magazine covers and her autobiography becoming a bestseller. While the Vanna White sensation might have seemed arbitrary, it was largely orchestrated by King World. The company produced thousands of promotional spots featuring White, each customized to the local station running "Wheel of Fortune." She was flown to cities across the United States to make public appearances, waving from parade floats and judging look-a-like contests. According to an article in Marketing and Media Decisions, "The syndicator has meticulously and shrewdly marketed her, making her into a business and an insurance policy for the continued success of the show."
"Wheel of Fortune" eventually became the most successful television program in syndication history. "Jeopardy!," the second most successful show, followed in September 1984. Another Merv Griffin production, "Jeopardy!" was a revival of a popular 1960s quiz show in which contestants give "questions" to "answers" in a variety of categories. Alex Trebek hosted the new edition. Although it wobbled during its first season, as soon as researchers at King World discovered that the contestant buzzer was annoying audiences, they were able to rectify the situation, and "Jeopardy!" soared in the ratings.
In October 1984, King World Productions went public. At this point, Robert King left the company, selling his piece of it for $1.7 million. With the two most successful syndicated shows on the air, the company could afford to negotiate with television stations from a position of power. The company pressed for three- and four-year contracts with the stations, and if they were refused, they would take the shows directly to the stations' competitors. King World balanced these aggressive tactics, however, by offering customized market research, including a ratings analysis of each station in the market, demographic statistics, and recommendations for scheduling, earning the company a reputation as a supportive partner. Furthermore, King World financed and produced commercials to promote its programming. In general, this sort of assistance facilitated the cooperation of the stations, but at least one station, WCPX in Orlando, Florida, bristled under King World's negotiating style, and in 1985 they filed suit, claiming the syndicator demanded that they carry other King World programming if they wanted "Wheel of Fortune." A federal judge threw out the suit, citing insufficient evidence.
According to a 1985 article in Forbes, the boom in the television syndication industry, which King World was well positioned to take advantage of, was the result of two factors: the rise of independent stations as opposed to networks, and the shorter lifespan of the average network series, which meant fewer shows fit for syndication. At the same time, television syndication was considered by some a risky proposition, with some commentators seeing its rapid growth as a temporary phenomenon. King World needed an unending string of hits in order to continue expanding. Although its first two ventures were undeniably major victories, the chances of accurately predicting audience preference every time, even with the aid of a research staff, were next to impossible.
King World's first disaster was a show called "Headline Chasers" starring veteran game show host Wink Martindale, who first came in contact with King World when it was distributing his "Tic-Tac-Dough." Combining the missing letter aspect of "Wheel of Fortune" with a test of contestants' knowledge of current events, the game show was produced by Merv Griffin, whom Martindale contacted at the suggestion of Michael King. Unlike "Wheel of Fortune" and "Jeopardy!," "Headline Chasers" debuted on network television as a King World production without previous exposure. The company gave the show a long time to get off the ground, but it never did.
Launching "The Oprah Winfrey Show": 1986
In the daytime talk show ratings, the "Donahue" show, starring silver-haired host Phil Donahue and distributed by Multimedia, had held the number one position for 12 years until King World decided to find a personality to challenge Donahue. This type of telecast, like soap operas, is primarily aimed at female viewers. The Kings selected Oprah Winfrey as their challenger. Winfrey had recently moved from Baltimore to Chicago to host "A.M. Chicago" on that city's WLS-TV, and she played a supporting role in the 1986 movie The Color Purple, directed by Steven Spielberg. On the eve of the National Association of Television Program Executives conference, where the Kings would be pitching "The Oprah Winfrey Show" to television stations, she received the nomination for an Academy Award for Best Supporting Actress. In September 1986, "Oprah" debuted nationally.
With Winfrey's charisma, born of sincerity and commonsense wisdom, the show overtook "Donahue" in its first year. As Winfrey's popularity grew, she formed her own company--Harpo Productions, Inc.&mdashø produce the talk show starting in 1988. "Oprah" was also a hit with the critics, winning Emmy Awards for Outstanding Talk Show in 1987, 1988, and 1989.
The success of "Wheel of Fortune," "Jeopardy!," and "Oprah" meant tremendous growth for King World. Revenues climbed from $81 million in 1985 to $476 million in 1991, a year when the three major networks lost a grand total of nearly $500 million. King World International was formed to distribute programming around the globe; as of 1992, 26 countries broadcast versions of "Wheel of Fortune." With three shows in the top ten syndicated programs, King World began to take chances when introducing new shows. According to analyst Paul Marsh, quoted in Broadcasting magazine in December 1992: "When King World starts a new show it's not like they need to make a lot of capital expenditures or add sales staff.... Effectively they get a free swing at the plate every time."
After "Oprah," King World went down swinging with nearly every new program. "Nightlife," a 1986 talk show hosted by standup comedian David Brenner and produced by Motown, did little to dent the ratings of Johnny Carson's "Tonight Show." Industry insiders cited this as a notoriously difficult time slot on the schedule due to the loyalty of Carson's following. The same year, King World brought out the daytime magazine "True Confessions" and the "Rock & Roll Evenings News," neither of which lasted into the next season. "The Laugh Machine," produced by George Schlatter, debuted in 1987 and also yielded disappointing ratings. In March of that year, Roger King was arrested for possession of cocaine, and in September, Stuart A. Hersch resigned from the company. Stephen W. Palley was named to take over the position as chief operating officer.
"Inside Edition" Debuted in 1989
In December 1988, King World purchased the television station WIVB, Buffalo's CBS affiliate, from Howard Publications, Inc., for $100 million. The station had been losing money, and this trend continued after King World acquired it. In 1991 WIVB lost $7.8 million, and the company took action to restructure the debt. In January 1989, King World introduced "Inside Edition," the first show that the company produced on its own. During this time, the news magazine programs that were appearing on every channel were seen as a new breed in the genre: investigative reporting with less bite than the established CBS program "60 Minutes," presented in a more lively, upbeat style. "Inside Edition," then hosted by Bill O'Reilly, did little at first to distinguish itself from the more popular "Hard Copy" or "A Current Affair," but King World tinkered with the format, and the show began to climb in the ratings.
Of all of King World's failed programming, perhaps the most devastating loss was "Candid Camera," a remake of Allen Funt's classic show starring Dom DeLuise, which debuted in 1991. Based on the statistics, the syndicator had high expectations for its performance in the ratings. When plans for the show were announced, King World stock shot up into the mid-30s; when the program failed, the price fell down into the mid-20s.
King World continued to introduce new shows, relying on extensive market research to determine what might succeed. King World's first foray into children's programming was in 1992, with the animated "Wild West C.O.W.-Boys of Moo Mesa," from the creators of the Teenage Mutant Ninja Turtles. In September 1993, the company debuted "The Les Brown Show," a talk show featuring the popular motivational speaker, and the news magazine "American Journal," a spinoff of "Inside Edition" anchored by Nancy Glass (the former lasted only one season, while the latter was canceled following the 1997--98 season).
In March 1994 King World announced an agreement with Winfrey to distribute her show through the 1999-2000 season, an agreement that made her a major King World shareholder. A few months later the company announced that it had reached agreements with television stations and broadcasters renewing "The Oprah Winfrey Show" through the 1999-2000 season and "Wheel of Fortune" and "Jeopardy!" through the 1998--99 season. These agreements would generate up to $1.9 billion in fees, with King World receiving 43 percent of the total.
King World sold WIVB in 1995. The following year, "Inside Edition," by this time being hosted by Deborah Norville, won the prestigious George Polk Award, becoming the first non-network program to be so honored. "Oprah" continued to be honored with awards as well, including 32 Emmy Awards by 1998, having been named Outstanding Talk Show in 1991 and 1992, and in 1994 through 1997. The mid-1990s were also notable for two takeovers of King World that failed to materialize. The company was an attractive target because of its abundance of cash&mdashout $500 million in mid-1995--and absence of debt. Ted Turner, chairman of Turner Broadcasting System Inc., developed a bid to acquire King World but then abandoned it in August 1995 when he encountered opposition from his board. In July 1996 New World Communications Group Inc. was on the verge of acquiring King World but this deal too was scuttled when News Corp. reached an agreement to acquire the 80 percent of New World it did not already own.
In early 1997 King World announced that it was no longer for sale, and was embarking on a program to boost its stock price, which had languished in the mid-1990s because of the potential takeovers and because of concern over the company's overreliance on revenues from its three top properties. The company said it would buy back five million shares of stock (representing 13 percent of outstanding shares) over time, and paid its first ever dividend to shareholders, a special $2-per-share payout which cost the company $74.8 million in cash. In September 1997, amid speculation that she would leave television to revive her film career, Winfrey struck a deal with King World in which she would continue to host "The Oprah Winfrey Show" through the 1999-2000 season, receiving in return a $130 million cash advance against her earnings from the show as well as options that would enable her to purchase as much as five percent of King World's stock. That King World would agree to this astounding compensation package showed how highly the company valued "Oprah," a talk show that had managed to maintain its high ratings even with its focus on more serious topics--not to mention its on-air book club. It had done so despite the increasing competition from numerous upstart talk shows, many of which trafficked in either fluff or sleaze.
Broadening Programming, Pursuit by CBS: Late 1990s
Also in 1997 King World formed a new division, King World Kids, to develop children's programming; an animated show called "Doodlezoo" was in the formative stages in the late 1990s. The company also stepped up its development of new adult programs, including "The Roseanne Show" and "Hollywood Squares." The former debuted in September 1998, with comedian Roseanne serving as host of the one-hour daily talk show. The former was a revival of a popular game show of the past, and featured comedian Whoopi Goldberg in the "center square" (in addition to her role as one of the executive producers), along with a steady stream of guests from the world of entertainment. "Hollywood Squares" became a ratings hit while "Roseanne" struggled, but both shows survived to see a second season. Scheduled for launch in September 1999 was "The Martin Short Show," a one-hour talk/variety program starring multitalented Martin Short. During this period, King World also began developing network dramatic series, the first of which was "Murder Inc.," a coproduction with NBC Studios sold to NBC in the fall of 1998.
In September 1998, Winfrey and King World agreed to extend "Oprah" for two more seasons, through 2001--02. The company paid an even higher price to retain the talk show, shelling out a $150 million advance for a two-year term. "Oprah" was simply too important for King World to lose, as it generated 42 percent of the company's overall revenues during fiscal 1998. King World in December 1998 announced that it signed renewals for "Wheel of Fortune" and "Jeopardy!" through 2003--04.
In April 1999 CBS Corporation said that it would acquire King World for $2.5 billion in stock, a deal that was initially scheduled to be consummated late in that year. CBS eyed King World's syndication business as a way to diversify beyond network programming; it also planned to use the $1 billion in cash that King World had amassed to buy additional radio or television stations. For King World, the deal would allow it to continue to operate as a freestanding unit but one with access to a steady source of capital and to CBS's group of 14 owned stations, representing 32 percent of the United States and a ready platform for King World syndicated shows. During the period in which the takeover was pending, King World announced that Michael King would step down as CEO of the company in September 2000, continuing in an advisory capacity after that date. Until that time, Michael and Roger King would share the chief executive title. In early September 1999, Viacom Inc. reached an agreement to acquire CBS, a deal that delayed the completion of CBS's acquisition of King World.
Principal Subsidiaries: American Journal Inc.; King World Media Sales Inc.; Four Crowns Inc.; Inside Edition Inc.; K.W.M., Inc.; King World Corporation; King World Direct Inc.; King World FSC Corporation (Virgin Islands); King World/GSN Inc.; King World/LR Inc.; King World Merchandising, Inc.; King World Studios West Inc.; Topper Productions Inc.
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