In the 1920s, Arthur L. Judson was a well-known manager of musical artists. After a meeting with RCA chief David Sarnoff, he thought he had a verbal agreement to provide musical talent for the new National Broadcasting Company, but he soon discovered that Sarnoff had instead set up his own cbs artist’s bureau. Furious over the humiliation of being out-maneuvered, Judson resolved to start his own radio network, to be called the United Independent Broadcasters. The Columbia Phonograph Company agreed to provide an infusion of cash, and it became the Columbia Phonograph Broadcasting System.
The network debuted from the studios of WOR in New York on September 18, 1927 on 16 stations with a live orchestra broadcast. After its inaugural broadcast, Columbia provided ten hours of programming per week to the stations - mostly serious music and opera. But the expenses were huge while advertisers were scarce, and so the new network was immediately in financial peril. After only a few weeks of operations, Columbia Phonograph pulled out and the paychecks for the network’s twelve employees stopped. Desperate for a solution, Judson offered to sell controlling interest in the network to Isaac and Leon Levy, owners of WCAU in Philadelphia. The Levys brought in additional investors, including Sam Paley, owner of the Congress Cigar Company. In turn, they offered to sell part of the network to Paley’s 26-year-old son William S. Paley if he would run it.
Paley shortened the name to the Columbia Broadcasting System, made crucial changes to the affiliate agreements, and signed dozens of new stations and important major advertisers, tripling the revenue in just a few months. He changed the programming emphasis from high-brow music to more mainstream tastes, signing the Paul Whiteman Band and a young singer named Bing Crosby. Vaudeville entertainers and comedians began appearing on the Columbia Network, including Jack Benny, Burns and Allen, and Fred Allen. Announcer Ted Husing was sent out to broadcast sporting events. He bought New York’s WABC (now WCBS) and moved the studios out of WOR. And he signed a ten-year lease for five floors of studio and office space in a new building at 485 Madison Avenue, close to the major New York ad agencies. By 1931, at the bottom of the depression, Columbia had 400 employees, 79 affiliates and showed a net profit of $2.3 million.
