Belo: From Newspapers to New Media

Chapter 4. THE DARK DAYS OF DALLAS (1956–1964)

Chapter 4 THEDARKDAYSOFDALLAS 1956–1964 After the economic downturns of the mid-1950s, Belo’s financial position began to rise again in the late 1950s, and the directors sought ways to maximize that growth. In 1957, the Dallas Morning News instituted its first major change in the circulation department in thirty years, when it shifted from using employee district managers to a system that many newspapers were turning to at the time, the use of independent contractors.The purpose was to continue the paper’s “all-out campaign ” for circulation dominance over the Dallas Times Herald within Dallas County.The Times Herald, as the afternoon newspaper, had led in that category for years, while the News had held dominance in its statewide circulation over all newspapers inTexas.That arrangement had been fairly well accepted by both Dallas newspapers,and the relationship between the two papers was cordial, even while it was highly competitive . But the competition for circulation numbers to support higher advertising rates was heating up, and changes were made to promote more aggressive circulation sales. In that same year, the News took a shocking blow in its relationship with the cross-town newspaper,when its longtime managing editor,Felix McKnight, resigned to become vice president and editor of the Dallas Times Herald. Years later, after the Times Herald went out of business, McKnight said of his leaving the News,“It was without doubt the biggest, most troubling decision I’ve ever made in my life. I was perfectly happy, and I thoroughly respected the institution and certainly its people. . . .” But “out of the blue” came an offer from the Times Herald by way of a third party, a prominent local businessman. A longstanding unwritten agreement between the two papers declared that neither would attempt to hire away the other’s key personnel.By sending their offer by way of a third party, the Times Herald hoped to avoid hard feelings with the owners of the News. The Times Herald offered McKnight a substantial advancement in his career, along with membership on its board of directors , and options to buy stock in the company. McKnight figured that such ownership opportunities, all of which Ted Dealey had dangled in front of him over his career at the News,were not going to be made available to him anytime soon, considering how many others were in line ahead of him. McKnight moved out of his office the night he delivered his resignation toTed, in what he described as a “pretty tearful four-hour session.”1 Jack B. Krueger, who had been at the News for thirteen years and was assistant managing editor,was named managing editor to replace McKnight. Another blow landed hard on Belo’s financial position in 1957 when the National Broadcasting Company did not renew its affiliation with WFAA-TV.Until then,the station had contracts with both NBC and the American Broadcasting Company for programs, which was not an unusual arrangement at the time.The aim of the station management had been to end its split network affiliation and to contract with NBC fulltime . Losing NBC completely was doubly troubling for that reason, and it meant that WFAA had to act quickly to develop its relationship with ABC instead, spending “huge sums of money” to promote ABC programs and to buy or produce additional programming to fill empty programming hours. In late 1958, furthering Belo’s effort to improve its financial position, the directors passed a resolution that “A. H. Belo Corporation voluntarily adopt the terms and provisions of theTexas Business CorporationAct, passed at the regular session of the Fifty-Fourth Legislature of the State of Texas,” in order to enable the company to reorganize its capital structure eliminating the preferred stock, which had been issued when the company was organized in 1926.The target date for the reorganization was April 1, 1959, at which point all of the preferred stock was to be redeemed at $103 per share, plus the quarterly accrued dividend of $1.25 98 The Dark Days of Dallas per share.Ultimately,the company redeemed $925,000 of preferred stock outstanding and paid $124,297 to stockholders in dividends. In early 1959,Ted addressed all of his newspaper department heads, requesting that they revisit their budget projections for the first six months of 1959 and that they apply the business principles he had posted around the building:“Dollars Saved Are Dollars...