A Very Costly “Killed Series”

By John Pierron BJ57

The University of Missouri School of Journalism is celebrating its Centennial September 10-12, 2008, and has asked journalism graduates to provide books, news stories or anecdotes from their careers. Nearly all of the articles submitted are likely to be from broadcast or published news stories. This account, an “anecdote” by John Pierron (BJ 1957), is an exception. It is a summary of a television news series in Philadelphia more than 40 years ago that was killed by a New York lawyer, and what happened thereafter.

The subject of the series itself, and the reason it was killed, though unrelated to each other, are described in this “non-story”, the story that never got on the air. Fortunately, it triggered related stories that kept me on the case of the Philadelphia Boy Wonder Jerry Wolman.

Let me say at the outset the cancellation of the series soured me on the news business. It was not difficult for me to “resign” from it a few years later. At the same time, I never have lost my love for journalism itself.

I have written this “anecdote” on a journalism career mostly as a 2008 story to reflect the developments through the years and concluding with today’s news, some of which is anything but pretty.

The station I worked for was then known as KYW-TV, Philadelphia; the “name” was changed to CBS3 in recent years, and within the past year, the station has received far more than its share of notoriety due to the firing of both of the station’s top/star anchors. I bet that hasn’t happened in your town!

Alycia Lane and Larry Mendte were co-anchors at 6 p.m. and 11 p.m. Monday through Friday on Channel 3, Philadelphia. Lane was discharged January 1 of this year, and Mendte was fired June 23. Unbelievable.

Alycia Lane was fired after getting her name in the gossip pages of Philadelphia and New York newspapers too often. The final straw came last December after she was arrested in New York City after Saturday midnight, charged with hitting a New York police officer in a bizarre car stop.

Her co-anchor, Larry Mendte, lost his job after the FBI started investigating allegations that, for about two years, he had snooped on the e-mails of Alycia Lane, and fed gossip about her to the media. Yep, he was spying on his co-anchor: more than 500 e-mails just this year since she was fired! Hundreds more in the two years prior. He was charged in mid-July with a felony: intentionally accessing a protected computer without authorization to obtain information. He pleaded guilty in August. Sentencing is scheduled for November, 2008.

I’m not making this up. That’s the CBS3 infamously of today. It is not the kind of news you expect from the original Eyewitness News newsroom.

My anecdote from the 1960′s in some of its ramifications never made it into print. You are reading about it here for the first time, and be forewarned: it does not have the explosiveness of Alycia and Larry.

But it cost you and your friends and neighbors a lot more money, especially if you live in or near a “major league” city.

THE ANECDOTE:

One of the many things you learn at the University of Missouri School of Journalism is word usage. You are taught that the word “very” in nearly all instances is unnecessary, a kind of redundancy, at least in news stories. If you are tired, it says little if any more if you say you are “very” tired. If you are happy, you are happy. It does not say much more to say you are very happy. And so on. Those are quick illustrations describing word usages in a news story.

It is this Mizzou journalism graduate’s clear declaration that if something is VERY costly, it must be VERY extraordinary. Thus, this story about a VERY COSTLY series prepared in the 1960′s is very exceptional and very unique. The actual cost is incalculable. We will just have to agree we are talking megabucks.

Said another way: the result of the cancellation of the series by a New York lawyer cost the taxpayers of the United States many millions of dollars.

The reason the series was spiked was not revealed (to this reporter) until 15 months later. It was bizarre. I will explain that later.

The events described below started in 1963. Jerry Wolman, a Shenandoah, Pennsylvania, one-time grocer, bought the Philadelphia Eagles for $5,505,000. At age 37, he was the youngest owner in the National Football League. In Philadelphia, he soon was known as “The Boy Wonder” as he also was expanding his vistas in the field of construction. He was a fun guy to meet and know, and he was very popular in his new city.

In the mid-1960′s, he was in partnership with co-owners Ed Snider, Bill Putnam and Joe Scott as they put together plans for a franchise in the National Hockey League, which became the Philadelphia Flyers. The team needed an arena to play in. Philadelphia had nothing.

Jerry Wolman proposed building a hockey arena in South Philadelphia. Working with Philadelphia City Council and Mayor James H. J. Tate, he proposed spending $8 million to build it. Key to the plan was to build on city-owned land. Yes, the City was allowing Wolman to build a private facility on city land. So terms had to be arranged. City Council bragged that the Boy Wonder was using his own money to build the arena! The taxpayers can avoid the obligation!! Isn’t that wonderful? That became the typical City Council answer when there was any question about the arena deal.

City administration financial people, working with Wolman and lawyers, put together a 50-year lease that was the sweetest sweetheart Wolman could have hoped for. The cost was $15,000 per year, or $1,250 monthly for 50 years. In addition, he was given a high share of the parking fees on the basis that he needed guaranteed income to pay for his lease. But Wolman had to pay no real estate taxes. You would have to be crazy to think it was not a great deal for Wolman. No real estate taxes. Most of the parking revenues. And a lease he probably could pay off annually with profits from one rock concert each year.

This (City Hall) reporter sought to question all the sweetness. One of my first stops was to see Harry Ferleger, Executive Director of the Philadelphia Civic Center. As they say, FULL DISCLOSURE: in the 1970′s, for eight years I was the Civic Center’s Executive Director after Harry Ferleger. How I got there indirectly stems from this anecdote caper but is not parcel to this story.

Harry Ferleger was glad to see me. He said he had to be careful with what he said, but Mayor Tate knew of his opinions and concerns, and he was authorized if not encouraged to speak more or less as a concerned city official. He told me he had reviewed the arena planning (this was before the facility got the name “Spectrum”). What it revealed was that, thanks to City Council, the taxpayers were on the eve of giving Jerry Wolman a license to print money. He knew the Civic Center would lose the Philadelphia 76ers as a tenant, and that was OK, he thought. But he pointed out that basketball revenues that had been coming into the city coffers for many years would now be going to Wolman. The future of the arena business was to be rock and other concerts, and Wolman would be getting that (moolah), too. Not the Civic Center and the city’s tax coffers.

Also, he said, the Ice Follies and Ice Capades and the circus road shows surely would want to move to the larger, new arena. Should the city’s taxpayers underwrite this, seeing these revenues go elsewhere? It was more money destined for Wolman’s deepening pockets.

Subsequently, Harry Ferleger stood outside Convention Hall (part of the Civic Center complex) and spoke to me in a fairly lengthy filmed TV news interview, which became the main theme of the five-part series I wrote and edited. He would not tell me on film what he had offered in his office: the City Council hearing on the arena lease, which took a mere one hour in Council chambers (without public hearing for taxpayers), was a sham, a joke. City Council did not call him for testimony (Ferleger thought it was on purpose), and the comments offered by the learned Council members were either extremely naive (unlikely) or wink-wink let’s-get-this-done-in-a-hurry.

Of course, he couldn’t describe the Council hearing for what it was if he wanted to keep his job.

Working with our News Director Al Primo, we prepared five scripts, complete with film for each night’s series segment. The series declared that City Council had given Wolman a “lucrative” lease for the new arena. I said this in the first sentence of my copy.

Said in brief, the key to the whole issue was the mathematics. Rock shows had just started to become popular, and Harry Ferleger wanted to see the City and its taxpayers get the revenues to be achieved, not Jerry Wolman.

Al Primo told our station General Manager, Fred E. Walker, we had a hot series ready for air. Fred was totally in support of the series, but thought the word “lucrative” could get us sued. He arranged for the three of us to go the offices (a few blocks away) of Dechert Price & Rhoads, the station’s legal counsel. The head of the law firm of more than 200 lawyers and the firm’s chief Vice President in charge of financial law greeted us, and we sat down to discuss what we had. I was told to read out loud each of the five reports. Where there was a sound-on-film interview, they accepted my ad lib comments as to what the spokesman said. The key concern was that word “lucrative”.

The financial officer said it was his opinion that the overwhelming evidence of both the mathematics of the bookings and the obviously sweet “lucrative” lease clearly demonstated the series represented “fair comment and criticism” under the laws of libel.

He said the series did not even hint of libel and needed to be broadcast to the people of Philadelphia. I sat there, shall we say, very, very happy and I am pleased to say Fred Walker and Al Primo walked back with me to the station similarly elated. We knew we had a big story.

A few days later, we were on the eve of station promotionals to “plug” the series when Al called me into his office.

“We have to go back to Dechert Price and Rhoads,” he said. He said Fred Walker had received a call from the Group W (station owner) corporate office in New York, which was sending a lawyer to Philadelphia to review the series. The reason?? Al Primo had no clue, nor, I later found out, did Fred Walker, although he apparently had phoned New York, the Group W corporate office, to crow a bit about how we had a story that should stop City Council from a major taxpayers gift to the Boy Wonder.

Nevertheless the series was “on hold” and of course so were the news promotions.

In a day or so, back we were in that same law firm conference room, and this time a (six feet four inches tall) unfriendly, unsmiling Group W lawyer walked in, shook hands all around. He asked that I read the series as I had a few days before.

You had to be there. It was most bizarre. As soon as I started and passed the word “lucrative”, the New Yorker shook his head, but did not interrupt. Everybody froze, though. I saw that. As I continued, the head-shaking continued at periodic points, and I could see the financial officer trying to get a facial read from his law partner, the head of the firm.

When I finished, the New York lawyer quickly declared that the series was generally faulty and probably libelous, and it could not be aired. The Philadelphia lawyers wanted better clarifications, but the New Yorker was abrupt and offputting, and before we realized it, he was getting up with his briefcase and heading for the door. Decision made.

After the New Yorker left to return to the Big Apple, the financial officer felt compelled to tell us he thought the New York lawyer was crazy.

The three of us from the station walked back in a daze, trying to figure it all out. We could come up with no explanation. We all felt we were had, for some reason.

Turns out, we were. And so were the taxpayers of Philadelphia, and subsequently the taxpayers in cities and towns all over the United States.

This year, I contacted Fred Walker and Al Primo for comments about the 1960′s arena series. FULL DISCLOSURE AGAIN: Earlier this summer, neither could remember the series and the trips to Dechert, Price and Rhoads. I did not understand this but I accepted it, of course. (In early September, after reading a copy of this anecdote, Al Primo sent an e-mail saying that now he did, in fact, recall the saga. For a while, the writer here was questioning the writer’s own level of senility.)

After the series kill, our “non-story” got around. The whisper campaign assured that the rumor was spread: Channel 3 killed a series that basically said the arena deal was a colossal nightmare and probably precedent-setting. I know I told one particular influential figure who did not keep the story quiet. But it never went public until the Philadelphia Inquirer reported on the lease, and yes, described it with that very word: “lucrative”.

Ironically, this was in connection with my Jerry Wolman scoop.

While the arena was under construction (it opened in the Fall of 1967) or soon thereafter, Jerry Wolman suffered a devastating setback on his major construction project in Chicago, the 100-story skyscraper John Hancock Building. He was prime contractor. The ground sank at the site. It cost him $20 million and started him on the road to bankruptcy.

I found this out, and told the News Director. However, I had just one source, and this source only could speculate that it would have negative implications for the Eagles, the arena and the new hockey team . And the News Director was scared. He feared we would be sued for libel, and KYW-TV would end up paying for the John Hancock Building. I realized the vulnerability, of course. And besides, Jerry Wolman already had reached icon status with his Philadelphia Eagles and it was impossible to know how deep his financial troubles extended.

It took nine months to get my scoop on the air. And I still was first with the story.

I had kept in touch with the Jerry Wolman news in the intervening months, so my source tipped me that Wolman, a Jewish man, was about to do the seemingly unthinkable: he was heading to Kuwait to seek a 43-million-dollar loan. From Arabs!!!! My story did not need to include this tidbit, and didn’t. It was blockbuster without the Mideast problem needlessly overshadowing it.

Because our newsroom knew all about Jerry Wolman’s problems for months, it no longer was a belabored decision to LEAD with the story on the 11 p.m. newscast one Friday night. I know Vince Leonard, newscaster, enjoyed the thrill of delivering the opening line, saying that Philadelphia Eagles owner Jerry Wolman is “on his way” TO TRY TO SAVE HIS FINANCIAL EMPIRE. Then he turned it over to me and I was able to give the total story “live” on camera in by then typical Eyewitness News coverage. In those days Channel 3 news was way ahead of the opposition and enjoyed a much larger audience and therefore higher ratings.

The Wolman story really had come out of the blue, so to speak, as far as the public was concerned. Shortly after I finished, I had a phone call from a Philadelphia Inquirer reporter (City Hall guy the same as I) who desperately wanted help on matching the story. He said his editor was screaming at him for not having it, as though it was some halls-of-City Hall story. I told him it took me nine months to get to tonight, and while I understood his comments, he should not be the least bit ashamed at being scooped, as it was a very long and sometimes frustrating saga. However he did it, he put together a fairly accurate front-page story in the Sunday Inquirer.

This reporter, Don McDonough, in writing follow-up stories years later, having heard my sad tale about the killing of the series, used that word “lucrative” (in print) in including reference to the arena lease more than once.

In November, 1967, with the new arena just opening, Wolman called a news conference to confirm that he was in a financial squeeze. He blamed a tight money market. That never was my understanding.

Now that Jerry Wolman no longer was hands-off insofar as any negative publicity was concerned, the arena lease came in for public review. A lawsuit was filed in United States District Court in effect contending that the taxpayers of Philadelphia had been defrauded. In 1971, U. S. District Judge A. Leon Higginbotham ruled. It might have been one of the first “modern” examples of a judge legislating from the bench. The basic charge was that the Spectrum paid no real estate taxes. But the Judge ruled the arena was situated on city ground that was used for a “public” purpose. Therefore, the City Council lease was legal and proper. The sins were in the terms of the lease.

Some lawyers considered the ruling a stretch. Nonetheless the federal court declared in loud language that a private entity, frankly, could receive sweetheart deals in the creation of public assembly facilities. It really started the ball rolling.

For much of the past 40 years, since Jerry Wolman, taxpayers have opened up their wallets to pay bills for wealthy sports team owners. Philadelphia was first, and Judge Higginbotham served as the legal enabler in a stretch of what public purpose should accrue to the pockets of a private citizen (i.e., Jerry Wolman). People defending Wolman back there in the 1960′s pointed out that Wolman’s own $8 million would pay for the arena. But remember he did not have to pay for the land (valued at perhaps $6 million) and he got that lucrative lease. That word has been a buzz word ever since, especially by those opposing taxpayer financing of public assembly facilities and sports franchises. Example: in a New York Times article on the subject published July 27, 1996, writer Leslie Wayne wrote:

EVEN AS MULTIMILLION-DOLLAR SPORTS PALACES ARE BEING PROPOSED FOR ASSORTED BEARS, BENGALS, HAWKS, VIKINGS AND OTHER PROFESSIONAL TEAMS, A LOT OF PEOPLE IN WASHINGTON WOULD LIKE TO CLAMP DOWN ON LUCRATIVE PUBLIC SUBSIDIES THAT THEY CONTEND DO MUCH MORE TO HELP ALREADY-WEALTHY PROFESSIONAL SPORTS TEAM OWNERS THAN THE COMMUNITIES THAT SUPPORT THE TEAMS.

The article said the controversy over stadium financing dated back to the 1986 Federal Tax Reform Act, which was thought to have eliminated the public subsidies by forcing team owners to finance stadiums with taxable, rather than tax-free, dollars. The effort, however, backfired.

The National Taxpayers Union has written extensively about the “spending spree”. It said that although a casual observer might believe the flood of tax dollars poured into new stadiums sprang from some public mandate, appearances are deceiving. When asked, taxpayers generally oppose spending tax dollars to build stadiums. This margin of disapproval probably would be even higher were it not for extreme pressure from public figures, and the media-fueled belief that bad publicity associated with losing a sports franchise will harm their city’s image.

The Taxpayers Union declares that those who favor stadium subsidies cite a variety of economic and emotional arguments to influence taxpayers. Many of these are disingenuous or are based on inadequate data and the misinterpretation of economic principles. It is safe to say that regardless of what stadium backers claim, taxpayers are not getting the most for their money. So said the taxpayers union.

So the upshot in 1967: Jerry Wolman no longer could afford his first love, the Philadelphia Eagles. I made a half-dozen trips to United States District Court in Baltimore to attend the hearings of the Bankruptcy Referee (starting in April, 1968) that climaxed with Wolman being forced to sell the team to Leonard Tose for $16.1 million, at the time a record price for a professional sports team.

I interviewed both of them (TV sound-on-film) together on the federal courthouse steps a half-hour after the Referee issued his peculiar ruling.

This is perhaps the only somewhat amusing aspect of this whole story, although Jerry Wolman would not agree. What the Referee did that day when Leonard Tose was introduced to the Philadelphia TV audience (yes, we were the only station covering the hearing, so it was an easy exclusive) was presented in the form of a suggestion from the bench.

The Referee said he would approve Wolman retaining the Eagles if Tose would agree to loan him the money which he (Tose) would borrow from the huge First Pennsylvania Bank. I could tell Tose did not like it, but he was powerless to say so in my interview. He came across as Wolman’s best buddy, although Leonard Tose wanted the Eagles late that afternoon as much as Wolman wanted to keep them.

The next morning, I got a call from John Bunting, Chairman and President of First Pennsylvania Bank. He had watched my interview the prior evening and asked me to clarify what I had reported for his legal and financial officers. Imagine that! John Bunting’s office was just a two-block walk from the station and I got there at 10:30 a.m. There were eight people in the room (sorry, ladies, this was the 1960′s; they were all men).

John Bunting started: “Now, John, we appreciate your coming over here to explain your story. I think I heard you clearly, but some of these men didn’t have you on. What you said is that the Federal Referee suggested that we should loan the money to Tose (he paused, I nodded) and he will loan it to Wolman???”

Right. The bankers all shook their heads not unlike that New York lawyer.

Right there, I had my last Jerry Wolman story. He would lose the Eagles.

Some days later, I saw him and asked him about the reporting on his financial difficulties. When he returned from the Middle East without that loan, was he told who reported on his threatened bankruptcy? He said he knew I was the reporter. What I wanted him to know, though: it took me nine months to get the story on the air!

“I’m sorry to hear that,” he said, with his usual big and winning smile. I was dumbfounded. Why? I asked. And I still don’t know exactly how to understand his answer, no financial wizard I. He said: “You would have saved me alotta money if you reported it when you first knew it.”

Jerry Wolman never got to enjoy his arena. Because he could not afford it, the arena had to be operated under the protection of federal bankruptcy court. Ed Snider, who had been a Vice President of the Eagles and Wolman’s partner, took over the operation of both the arena and the Flyers.

Suffice it to say that Snider became a super mogul and a very, very (emphasis intentional, and School of Journalism guidelines roundly considered) wealthy man. The newly-named Spectrum made great history for Philadelphia sports and entertainment over the years. Snider got all the plums that Jerry Wolman might have enjoyed if that Chicago ground was not so squishy.

A key reason Snider escaped greater scrutiny over the lucrative lease was quick in coming after the Spectrum opened. At a matinee of the Ice Capades in February, 1968 (four months after the opening), as spectators waiting for the show to start watched in amazement, high winds ripped away a 50-by-100 foot section of the Spectrum roof and sent it crashing to the ground outside. This added to the overall arena financial woes, and Snider quickly became a sympathetic figure, shrouding the friendly lease terms.

More than 20 years ago, the Philadelphia Inquirer provided keen perspective into Edward Malcolm Snider.

“I had decided to bring a National Hockey League franchise into Philadelphia”, Snider said. “And to do that, the Spectrum had to be built. We would build the arena with private funds, and the city would get extra revenue without spending a dime. Everyone thought it was a fabulous deal at the time.”

Not everyone, Ed.

“So we started the construction, and Wolman and I ended our partnership. I got the Flyers, he got the Spectrum. When the Spectrum went bankrupt, I stepped in and paid off the debts 100 cents on the dollar.”

In that same era, the President of the Philadelphia Phillies at the time, William Y. Giles, said: “Ed Snider has to rank as one of the most successful and imaginative sports entrepreneurs ever. With the exception of the O’Malley family and the Dodgers, I cannot think of anyone else who has made a lot of money on a sports franchise. Most people make their money somewhere else, then buy a team.”

Another stretch.

In “Ballpark Boondoggle”, a summary of the public funding of arenas and stadiums by the National Taxpayer Union, the largesse given to sports franchise owners is described at length. The article points out that not all businesses can get away with what sports franchises do. If Wal-Mart and Home Depot depended on taxpayer subsidies to meet payroll, they would not be in existence very long. Taxpayers would rebel at this type of corporate welfare and Wall Street would devalue the company’s stock.

“Professional sports franchises are different,” says the National Taxpayer Union. “Because they are closely identified with the cities where they play and are frequently mentioned in the media, sports teams hold a special place in the fabric of many American cities.”

The origin of largesse for the owners and operators of sports and public assembly facilities clearly originated in the City Council of Philadelphia in the mid 1960′s.

City Council did not want Harry Ferleger to testify. The impact of this has been multiplied into millions and millions of taxpayer dollars. City and other public financial people (at the state and federal levels) do not want to conduct serious and accurate analyses of how much public money has been wasted (funneled into the deep pockets of wealthy sports franchise owners) due to the tremendous public relations and taxpayer backlash that would occur.

The taxpayers are left with having a good (or bad) cry.

Actually, the Spectrum will not be able to fulfill all of its obligations over 50 years, the lease term. This year, it was announced that the now-named Wachovia Spectrum, “the city’s oldest major professional sports venue”, will be demolished next spring to make way for a proposed hotel, retail and entertainment complex.

“This has been one of the hardest decisions I’ve ever had to make,” Snider said. “The Spectrum is my baby.”

Need we mention that the new project, known as “Philly Live!”, will be built on city-owned land?

So, what was that New York lawyer up to? Why was the Eyewitness News arena series killed, and killed so abruptly, without even the suggestion of a re-write, perhaps?

Fifteen months after the lawyer went back to Group W headquarters in New York, I came to work one morning and was told that “MacDonald” wanted to see me.

MacDonald was Kenneth T. MacDonald, KYW-TV Vice President and General Manager, who had replaced Fred Walker.

The newsroom was abuzz about why Pierron, a reporter, was being called into the big (and new) boss’ office. Most unusual.

I went from the Eyewitness News newsroom on the second floor to the executive offices on the third floor, somewhat fearful, but telling myself that I soon would know the why.

He obviously knew his summons was unusual. “Come in, John. No problem!!” he assured me.

He explained that the station, the previous evening, had hosted its annual sales staff – clients’ cocktail party. Advertising and broadcast executives from New York and Washington came to Philadelphia to rub elbows and mutually thank each other for the high Channel 3 ratings.

I do not remember whom MacDonald referenced. He did identify the fellow from the Group W offices in New York.

“John, he asked me: WHAT EVER BECAME OF THAT REPORTER WHO HAD YOUR ARENA SERIES?” said Ken MacDonald.

He was unfamiliar with the whole saga, and wanted me to add the final details.

What Kenneth T. MacDonald told me, though, rather turned my stomach.

He asked the New York broadcast executive to explain. Remember this was at the annual Channel 3 sales department cocktail party.

The New Yorker said that it more or less had been an amusing story around the Group W headquarters that the lawyer had been instructed to go down to Philadelphia, and kill the series, whatever the hell it was. He was told not to bother to come back to New York if he didn’t.

Ken MacDonald was all ears. (And it was nice of him to think I should know about it, more than a year later.)

The New Yorker said there were five executives at the Westinghouse Electric Corporation in Pittsburgh who were working confidentially to combine to buy the Philadelphia Eagles.

The Pittsburgh men were acting as private citizens, and knew Jerry Wolman was having money troubles. The team could not be purchased by a corporation, but some of its officers could do so on their own.

The Jerry Wolman financial situation presumably was a known quantity in both New York and Pittsburgh. Looking back, this was not difficult to believe, as former Philadelphia Mayor Richardson Dilworth was representing Wolman in seeking big loans from New York banks (which they did not obtain).

MacDonald said the Pittsburgh executives feared that any news series about Jerry Wolman would spoil their secret efforts to own an NFL franchise.

Said bluntly: electric company executives engaged in private activity for their own personal gain had tampered with a news story in the company’s broadcast division.

My bosses obviously wanted to keep their jobs, so the sequel to the series also went unreported. Until now.