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May 31, 1967

American Manufacturers Mutual Insurance Co., American Motorists Insurance Co., Federal Mutual Insurance Co., and Lumbermens Mutual Casualty Co., Plaintiffs
American Broadcasting-Paramount Theatres, Inc., Defendant

Tenney, J.

The opinion of the court was delivered by: TENNEY


Plaintiffs, widely known as the Kemper Insurance Companies (hereinafter collectively referred to as "Kemper"), instituted this action against the defendant, American Broadcasting-Paramount Theatres, Inc. (hereinafter referred to as "ABC"): to obtain an adjudication that a contract between Kemper and ABC, dated August 15, 1962, for the sponsorship of the program "Evening Report" over the ABC network is illegal and unenforceable under Section 1 of the Sherman Anti-Trust Act, 26 Stat. 209 (1890), as amended, 15 U.S.C. § 1 (1964); to obtain a permanent injunction staying ABC from prosecuting an action in the New York State Court to recover damages for Kemper's cancellation of the contract (28 U.S.C. § 2283 (1964); and for an award of treble damages (38 Stat. 731 (1914), 15 U.S.C. § 15 (1964)), and such other relief as may be appropriate.

 On June 20, 1963, ABC moved, under Rule 12(b) of the Federal Rules of Civil Procedure, to dismiss Kemper's complaint, and, in the alternative, under Rule 12(f), to strike therefrom the allegations pertaining: to ABC's control over the broadcast time of its affiliates; to ABC's State Court suit; and to Kemper's request for a permanent injunction against said suit.

 On August 14, 1963, this Court (per Cooper, J.) denied ABC's motions to dismiss and to strike. American Mfrs. Mut. Ins. Co. v. American Broadcasting-Paramount Theatres, Inc., 221 F. Supp. 848 (S.D.N.Y. 1963). *fn1" Thereafter, on August 26, 1963, ABC answered the complaint. Subsequent to that time, extensive discovery has been pursued by both parties in the form of interrogatories, depositions and documentary evidence submitted herewith.

 On September 4, 1964, the case at bar was assigned to me for all purposes by then Chief Judge Ryan pursuant to Rule 2 of the General Rules of this district. No jury demand has been made.

 The matter is presently before this Court on a motion by Kemper for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, on the grounds that the pleadings and papers filed in support of such motion demonstrate that there is no genuine issue as to any material fact, and that plaintiff is entitled to judgment as a matter of law. Defendant ABC, while alleging in opposition to Kemper's motion that there are triable issues of fact, has itself cross-moved for summary judgment. *fn2" Certain facts would appear not to be disputed, and will be set forth hereinafter.

 In 1962, the year during which the contract at issue was negotiated and consummated, there were approximately 556 TV stations in this country and practically the entire gross income of the TV industry, which totaled one and one-half billion dollars in that year, was derived from the sale to advertisers of the broadcast time of these stations.

 There are three major networks in the United States, of which ABC is one, having operated its network for almost fifteen years, and in 1962-63 ABC had approximately 260 stations affiliated with it. In addition to its affiliates, ABC is itself owner and licensee of five TV stations. *fn3" In 1962, ABC's gross income from the sale of TV and radio time and programs, less discounts, rebates and commissions to advertising agencies, totaled $174,523,295.00. In that same year, the three networks (NBC, CBS and ABC), plus their fifteen owned and operated stations, reported total revenues of $754.2 million, accounting for 50.7 per cent of the industry total, and profits of $111.4 million, representing 35.8 per cent of the industry total. In 1962, 73 per cent of the total broadcasting revenues of TV stations in this country were derived from the sale of broadcast time, and the balance from the sale of talent and program materials. Of the sales of broadcast time, 40 per cent were network sales, 41 per cent were national spot sales, and 19 per cent were sales to local advertisers.

 Programs are produced by the TV stations, by independent producers, or by a network. Where the program is not a network program, the station is free to sell the broadcast time on that program directly to advertisers, such direct sales being made in either the national, regional, or local markets. *fn4" In the national and regional markets, each station is represented by an agency in the principal TV centers of the country, specifically, New York and Chicago. These agencies are known as national spot representatives, and sales of broadcast time made directly by a TV station to national or regional advertisers are known as "national spot sales". Whenever an advertiser buys on the national spot market, he buys time on such stations as he desires to deal with, for the advertiser is dealing directly with the individual station through its national spot representative. *fn5" Sales to local advertisers made directly by a TV station are known as sales on the "local market" and in 1962 totaled $242.5 million.

 As stated above, networks also produce programs which are made available to the TV stations. In April of 1961, ABC announced its intention to produce a new nightly news program entitled "Evening Report", which it offered for clearance (acceptance) on a five-nights-a-week basis only. Prior to the fall of 1961, "Evening Report" was broadcast without any network sponsor.

 By August of 1961 there was a "going lineup" of 95 stations which had cleared the program for broadcast beginning in September 1961, of which stations approximately 90 per cent were primary affiliates having their major network alliance with ABC, the balance or secondary affiliates being for the most part stations which had a primary affiliation with another network. *fn6" The primary affiliates of ABC cleared the "Evening Report" program series in accordance with the terms of ABC's standard form of affiliation agreement, under which such primary stations were given first call on ABC network programming in their areas, and, accordingly, were first offered the ABC programs or program series for clearance. Under the affiliation agreements, certain time was "optioned" to ABC by the affiliates. "Evening Report", however was not broadcast during the option time hours set forth in the agreements and thus each affiliate had the right to accept or reject the program. Upon the affiliates' clearing the program, the entire commercial time connected with that program became subject to ABC's use and control. When the program or program series with a network sponsor was first offered to an affiliate for clearance, the station could not accept the program and reject the sponsor provided by ABC. Also, if at the time of the initial clearance of a program series, ABC had secured sponsorship for only a part of the commercial time, the primary affiliate would nevertheless have had to accept the entire program series, including the unsponsored portion for which the station received no payment. The station was to carry the entire program series in accordance with the affiliation agreement, including portions unsold to a network sponsor, subject to release by ABC to the affiliate of all or part of the unsold time. The affiliates could not make any commercial use of this time by direct sale to advertisers unless the network permitted it by releasing the time to them. In 1962, ABC did release such unsold portions of program series to the affiliates for direct sale by them, but only with the proviso that such time was subject to recapture by the network upon three weeks' notice. This release of the commercial time which the network had been unable to sell allowed the station to sell that time directly to local advertisers or on the national "spot market" without compensation to the network.

 Thus, the clearance of a program or program series by an affiliate meant that it had to carry the entire program or series, including portions where there was no network sponsor. And although the affiliate was not compensated by the network for the commercial time for which there was no network sponsor, the affiliate could not sell that time directly to advertisers unless it were released by the network. Finally, even when released, any sales would have to be subject to the network's right to recapture the time and oust the advertiser to whom the station had made its direct sale.

 The affiliates which had cleared the "Evening Report" series were compensated by those segments of the series actually sponsored by a network advertiser. The method of compensating ABC's primary affiliates for the use of this time was based on a formula whereby ABC first fixed a network hourly station rate for each affiliate, which was the rate set forth in ABC's published rate card. Each month an average unit hourly rate was computed by dividing the total dollar value of all network programs carried during that period at such rate, by the number of unit hours carried. This average hourly rate was then multiplied by the number of unit hours in excess of 22, so as to afford ABC 22 unit free hours of time, and the affiliates were paid as compensation 30 per cent of this total figure. The effect of this arrangement was that the rate of compensation to an affiliate increased as the number of hours of network programming per month in excess of 22 unit hours increased. With respect to its secondary affiliates, no 22 hours of "free time" was supplied to ABC, and, instead, those stations received a straight 30 per cent of the total amount billed to the advertiser at network station rates.

 In April of 1961, after the "Evening Report" program series became available, ABC prepared, in accordance with its regular practice, offering sheets regarding the program. The offering sheet of April 27, 1961 offered the program series in one-quarter hour segments for each of 5 days in each week and for periods of 13 or 26 weeks. The approximate gross was set at $34,500.00, based on rate card time charges, as to which "Special Discounts" were allowed, depending on the number of segments purchased. This was only an approximation, presumably based on a network of 110 stations, the figure used in the offering sheet to project estimated audience and efficiency. The discounted figure represented the time charge, to which was added a program charge of $5,750.00 ($5,000 plus 15 per cent commission) and a networking charge of $500.00. In other words, the approximate cost to the sponsor was obtained by subtracting the discount from the approximate gross and adding to that figure the program charge and the networking charge. Thus, it offered "Evening Report" at a 35 per cent discount from gross rate card time charges for the purchase of two (2) one-quarter hour segments over 26 weeks, plus program and network charges, or $28,675.00 per segment, and at a 30 per cent discount plus program and network charges for the purchase of one (1) one-quarter hour segment over the same period, or $30,400.00 per segment.

 The offering sheet of August 21, 1961 offered similar discounts and program and network charges. However, gross rate card time charges were based on the rate card charges of 95 cleared stations (identified in the offering sheet) which amounted to $27,926.00 plus a contingency allowance for additional stations and rate increases of $4,074.00 or a total gross rate charge of $32,000.00. Thus, it offered the program series for $27,050.00 per segment for two (2) one-quarter hour segments and for $28,650.00 per segment for one (1) one-quarter hour segment over the 26-week period.

 However, it would appear that it was ABC's practice to negotiate with advertisers a final price at a further discount from the offering sheet prices, and that television network prices are negotiated prices. There was also testimony that it was ABC's practice to offer time to individual customers at less than the figure in the offering sheet and then negotiate from that figure to a lower final selling price.

 The offering sheet of October 3, 1961 offered similar discounts and network charges but the program price was increased to $6,210.00. The gross rate card time charges were based on the rate card charges of 100 stations of $29,141.00 plus a contingency allowance for additional stations and rate increases of $859.00 or a total gross rate charge of $30,000.00. It offered the program series for $26,210.00 per segment for two (2) one-quarter hour segments and for $27,710.00 per segment for one (1) one-quarter hour segment over the 26-week period. The special discounts offered were the same as in the prior offerings.

 The final offering sheet relevant to the present controversy was issued by ABC on June 13, 1962, approximately two months before the contract between ABC and Kemper was executed. This document lists a lineup of 100 cleared stations and a total price per segment of $36,250, consisting of an approximate gross time charge of $30,000 plus the program price of $5,750 and network charge of $500. However, no provision was made for any special discounts; the offering sheet merely stated that the gross time charges were "subject to discounts as provided by ABC's then current rate card." The offering sheet listed sponsorship by "American Tobacco, Kemper, Plywood, Schick and Squibb."

 The contract executed on August 15, 1962 was the product of a lengthy series of negotiations between Kemper's advertising agency, Clinton E. Frank, Inc. (hereinafter referred to as the "Frank Agency") and ABC. Much with respect to these negotiations is not disputed or is documentary in nature. It is Kemper's claim that in the course of negotiations ABC conditioned the sale of sponsorship of "Evening Report" to Kemper upon Kemper's purchase of time to broadcast "Evening Report" over 35 of ABC's affiliated stations serving market areas in which Kemper did not wish to advertise, advancing the legal theory that ABC's actions constituted an unreasonable restraint of trade within the meaning of Section 1 of the Sherman Anti-Trust Act. In the light of such claim, it is helpful to examine these negotiations from their inception until their culmination in the execution on August 15, 1962 of the agreement between ABC and Kemper whereby the latter agreed to sponsor "Evening Report" one night per week over a 26-week period, beginning October 17, 1962.

 It is not disputed that on January 25, 1962, Buckingham W. Gunn, Senior Vice President and Director of Broadcasting Services of the Frank Agency, had a meeting at ABC's offices in New York with Edgar Scherick, who at that time was ABC's Vice President in charge of network sales. Mr. Scherick offered sponsorship of "Evening Report" to Kemper at a package price of $22,000 per one-quarter hour segment for two segments per week over a 26-week period. Apparently no commitment was made at this meeting other than Gunn's statement that he would report the offer to Kemper. On February 8, 1962, John Beebe, a TV account executive in ABC's Chicago office, wrote Gunn "that probably ABC would be willing to go along with a special package price of roughly $20,000 a program or $100,000 a week . . . on the assumption that Kemper Insurance could use 2 1/2 minutes a day 5 days a week." Mr. Beebe again wrote Mr. Gunn on March 23, 1962, referring to the $22,000 per segment price quoted by Mr. Scherick and stating: "As I pointed out to you yesterday, rate card per quarter-hour comes in at $36,250. At the special package price offered to you this would be $66,000 a week for 13 weeks, for a total cost of $858,000 for the 13 weeks beginning in October." *fn7" On the same day, William C. Gillogly, the head of ABC's Chicago office, sent a memorandum to Mr. Scherick in New York, confirming an earlier telephone conversation on that date and reminding him that he had quoted to Gunn the $22,000 price per quarter-hour segment for two segments a week over a 26-week period. "This is roughly 50% plus discount on time. Buck is actually going with this figure, but you are going to recheck whether its okay." Mr. Scherick's reply, by wire dated March 26, 1962, stated: "Quote to Gunn Kemper Insurance for Early News okay." Thereafter, on March 28, 1962, Mr. Beebe wrote Mr. Gunn enclosing "all of the available material we have here on our EARLY NEWS." One of the enclosures may have been a list of stations carrying "Evening Report" as of February 1962, in which 99 stations were listed. In any event, it is not disputed that Mr. Gunn had received such a list by the early part of April 1962. There is testimony to the effect that when Mr. Gunn received the list of stations he instructed his secretary, Miss Flannery, to "check Mr. De Mark and give him the list of these stations" (Gunn Deposition of Nov. 1, 1963 at 40) and that a copy was sent to Mr. De Mark on April 16, 1962. Mr. De Mark had been Advertising Manager of Kemper since 1960. There is further testimony that upon seeing the list of stations, Mr. De Mark indicated to Mr. Gunn over the telephone that there were at least 20 stations which would not be suitable, *fn8" that Mr. Gunn's secretary, Miss Flannery, got on the telephone with Mr. De Mark and marked down on a copy of the February line-up those stations which Kemper did not want. In any event, on or before the following day, April 17, 1962, Mr. Gunn prepared a brochure dated that date, entitled "1962 Television Recommendation for Kemper Insurance Group, ABC-TV Evening Report," referred to herein as the "Silver Report". It is stated on page 2 of this report:

At this precise moment the ABC EVENING REPORT can be bought in a number of ways. Squibb, who has sponsored 3 segments a week this year, will probably return in the fall. (American Tobacco, Block Drug, and Schick are other interested advertisers.) According to ABC-TV's rate card, a one-segment-a-week sponsor pays a higher rate-per-segment than a two-a-week sponsor, who in turn pays a higher rate than a three-a-week sponsor, and so on. The rate card per quarter-hour segment calls for $36,250 per segment, time and program, commissionable. However, when the agency went to New York to discuss programming for Kemper with the network's chief executives, we were able to get a special reduced per-segment price of $22,000, time and program, commissionable. This represents a discount of approximately 40 percent.

 Four sponsorship plans were outlined on the same page: (a) two 1/4 hour segments per week over a 26-week period at $22,000 per segment; (b) two segments one week, one segment the next week, over a 26-week period at $22,000 per segment; (c) one segment a week over a 26-week period for an estimated $25,000 per segment; and (d) one segment a week over a 13-week period for an estimated $27,500 per segment (to combine with All-Star Golf, also sponsored by Kemper). The Frank Agency recommended (b), namely, the purchase of sponsorship "for 26 weeks on the rotation of two segments one week, one segment the next" at $22,000 per segment. Attached to the Silver Report was a new list for the coming fall, identifying 99 stations that had already cleared, and an additional 28 stations desired by Kemper which had not cleared. Of these 28 stations, 15 were listed as "pending" and 13 as "non-clear". As stated at page 3 of the Report, "It is to be hoped that sponsorship by Kemper and a continuing effort by ABC and the agency will move the 'pending' stations to the 'cleared' list by fall and perhaps, altho [sic] it is doubtful, some of the 'non-clear' stations as well." Although no mention of unwanted stations is contained in the Report itself, on the list of stations attached thereto 20 stations are marked with asterisks as being "markets Kemper does not want", presumably based on the telephone conversation between Mr. De Mark, Mr. Gunn and Miss Flannery on the prior day. There is testimony to the effect that on April 17, 1962, a meeting occurred at the Kemper offices between Messrs. Gillogly and Beebe of ABC and Messrs. De Mark and Gunn of Kemper, and Mr. Norris C. Flanagin, one of the senior executives of Kemper. Prior to going over to Mr. Flanagin's office, Mr. Gunn, together with another Frank agent, Mr. Bowman Kreer, first met with Messrs. Gillogly and Beebe, at which time Mr. Gillogly read the "Silver Report". There is some conflict as to just what occurred at this meeting, although it seems clear that all parties were aware that Kemper did not want all of the then-going lineup of 99 stations. The Kemper representatives argue the proposition was an all-or-nothing one. ABC states, however, that Mr. Gillogly received the definite impression from Mr. De Mark that Kemper would proceed on the basis of the $22,000 package price and the lineup upon which said package price was based, and that Mr. De Mark was going to take the matter up with Mr. James S. Kemper, Sr., who was then out of the City. In any event, on the following day, April 18, 1962, Mr. De Mark sent a memorandum to Mr. Kemper in Palm Springs. This memorandum refers to the fact that Kemper and ABC had been negotiating with respect to "Evening Report" and it states, in part:

In view of the fact that there are a number of important markets which are not now carrying the show and because of the 5:30 time period for the show in Chicago, we are recommending that we order the show on the basis of two times one week and one time the next week on an alternating week basis for a 26 week period contingent upon the following:
include a list of stations that "must" carry the show and a change of time in Chicago.
reserve the right to cut back to a one time per week basis at a cost of $24,000 per program with the cost of the additional stations to be added at the same pro-rated discount price.

 It is significant that no statement was made by Mr. De Mark in his memorandum to Mr. Kemper regarding stations which Kemper did not want. On April 23, 1962, De Mark and Kemper discussed over the telephone Mr. De Mark's recommendation in his memorandum of April 18th, and Mr. Kemper approved the recommendation for sponsorship of Evening Report. Thereafter, on April 25, Mr. Gillogly telegraphed Mr. Slocum Chapin, his superior at ABC in New York, confirming that they had a "verbal order from Clinton Frank on behalf of Kemper Insurance for 39 quarter hours over 26 weeks of the Evening Report starting in October" and to "expect written order shortly." There is some conflict in the testimony as to who informed Mr. Gillogly of the "verbal order". Mr. Gillogly says it was Mr. Gunn, but the latter denies it. However, on the same date as Mr. Gillogly's telegram, Mr. Kemper wrote Mr. James C. Hagerty, a Vice President of ABC, stating that Kemper had "several problems, one of which is the time your show is on in Chicago; another the fact that your people have not been able to clear with a number of markets important to us, for example, Charlotte, North Carolina, and Rochester, New York." Again, no problem as to unwanted stations is mentioned. This letter would appear to have been written in response to the specific statement by Mr. De Mark in his memorandum of April 18th, that "if you approve our giving an order to ABC on the basis as outlined above, we would most appreciate your writing Mr. Hagerty calling attention to our problem with specific reference to the poor time the show is carried in Chicago . . . ."

 A meeting was called at the Frank Agency for April 27th, for the purpose of resolving any remaining problems and preparing a draft order letter. Mr. Gillogly attended for ABC, together with Mr. Arne Nordmark, Sales Service Manager for ABC in Chicago, and Mr. De Mark, Mr. Gunn and Mr. Trude represented Kemper. Mr. Gillogly testified that Mr. Trude of the Frank Agency agreed to the ABC lineup at this meeting, although he also testified that up to the end of April 1962 he could not say that anyone had told him that Kemper had agreed to sponsor the "Evening Report" on any specified list of stations. According to Mr. Gillogly, "basically, they were agreeable to taking the ABC lineup, but what was really vital and critical to them was the additional fifteen markets which they felt they should have in order to make it an optimum advertising basis and cover as many of their key offices in the country in terms of doing business." Gillogly Deposition of Nov. 1, 1963, at 77. It was agreed at the meeting that although Kemper would order 39 segments of "Evening Report" over a 26-week period, it would have the right to reduce its order to one segment per week over the same period if within thirty days after the contract ABC could not clear all of the Kemper key markets. The price in the latter event for the 26 segments was to be $24,000 per segment rather than $22,000 for the 39 segments. However, once again there is disagreement as to the basic lineup exclusive of the additional stations desired by Kemper. ABC contends that the basic lineup for which the $22,000 and $24,000 figures were set was the then-going lineup, that Kemper agreed to pay a maximum of $3,000 for 15 of the 28 additional stations desired by Kemper, and that ABC agreed to furnish the other 13 at no charge.

 On April 20, 1962, a week before the meeting just referred to, a representative of ABC's sales service department in New York sent to Miss Mary Alice Crisafulli, a "time-buyer" employed by the Frank Agency in Chicago, a copy of the current ABC network rate card. On the basis of this rate card, she made certain computations bearing a notation that they were prepared on April 27th, possibly for use at the meeting on that date. These computations reflected the time cost net of the then lineup of 99 stations at $15,750.00, from which was deducted the 32 stations which Kemper did not want, for which the time cost net was figured at $2,871.23 (computed at a 47 1/2 per cent discount, the same as that granted on the then-lineup when the $22,000 figure was quoted) and to which was added the net time cost of 15 stations then pending and which Kemper desired figured at $3,166.00 (again at the same discount) plus 5 "must" stations (similarly discounted) at $1,218.00, and 8 additional non-cleared stations (similarly discounted) at $1,204.88 or a total for the "then wanted" stations of $18,467.65. To this, Miss Crisafulli added gross programming charges of $5,882.50 (applying a 17.65 per cent commission rate rather than the 15 per cent rate) and gross networking charges of $500.00 for a total of $24,850.15 per segment on the basis of a Kemper selected 95 station lineup. While these computations were never submitted to ABC and cannot be considered as an offer by Kemper, nevertheless they are extremely significant in considering Kemper's offering letter of May 4, 1962, and the ensuing negotiations. *fn9" Also, assuming there had been no prior firm verbal order on the part of Kemper, they are evidence of the fluctuating nature of negotiations at that time.

 On or about May 4, 1962, Mr. Trude, on behalf of the Frank Agency, delivered to Mr. Beebe the heretofore mentioned order letter which, if it did not deviate from, at least expanded substantially on, any agreements reached one week prior thereto on April 27th. The letter ordered "Evening Report" for 39 segments over a 26-week period for broadcast over a specific lineup of 95 stations, only 67 of which were among the 99 stations that had then cleared the program; the remaining 28 were the additional stations that Kemper wanted ABC to clear. The price per segment was not one lump sum, for it consisted of a $5,000 program charge, a $500 networking charge, and total time charges for the 95 stations listed in the attached ordered station lineup in an amount not to exceed $18,750 for a total of $24,250.00 (or for the 39 segments $945,750). The total time charge was to be reduced by the "package rate" of any station not clearing or carrying the program. The order letter referred to 41 "key markets" (12 of which were locations of Kemper branch offices) of which 29 had cleared the program as of that date and stated that "this order is contingent upon the clearance of these markets unless our client elects otherwise." However, it was also stated that if ABC could not clear all of the Kemper key markets by June 1, 1962, the order would revert to an order for one segment per week over a 26-week period and in this event, although the program and networking charges would remain the same, the maximum time charges were to be $20,750 for a total of $26,250. In addition, Kemper was to have the right to cancel its sponsorship after the first 13 weeks upon 45 days' written notice.

 It is the contention of ABC that Kemper had agreed at the April 27th meeting to pay a flat package price of $22,000 per segment for 39 segments over the then-going lineup of stations clearing the program plus a maximum of $3,000 time charges for the additional stations that Kemper wanted cleared, or a total of $25,000 per segment; and that what Kemper did in its May 4th order letter was to substitute 28 additional stations that it wanted cleared in place of 32 stations on the cleared then-going lineup, for which it agreed to pay $24,250 per segment for 39 segments even though the time charges for the 28 additional stations were over twice as high as the time charges for the 32 unwanted stations. *fn10" The day following the receipt of the letter of May 4th, Mr. Nordmark of ABC compared the lineup Kemper had ordered with the ABC going lineup of the February listing and saw at once that the order excluded many of the stations on ABC's going lineup, although he already knew that Kemper was not interested in all the ABC lineup. According to Mr. Nordmark, he told Mr. Trude

"that the lineup attached to the letter was not the lineup that was offered as part of the package deal offered by Mr. Scherick to Mr. Gunn in New York and that [he] did not know if the proposal would be accepted by ABC in New York because it differed from the original agreement. However, [he] stated that [he] would nevertheless forward it to New York." Nordmark Affidavit of June 3, 1965, at 3.

 Mr. Beebe testified that he pointed out to Mr. Gunn that the proposal differed from the one that had been made to Kemper primarily because it was based on a lineup of stations different from the one upon which ABC's offer had been made, and that he told Mr. Gunn that at the package price quoted he did not see how stations could be eliminated but if they were eliminated, "it would cost" and that "we would have to renegotiate it." He further stated that he told Mr. Trude that Kemper bought the program on a package-price basis and that Kemper could not eliminate stations and pay the same package price. Mr. Gillogly testified that the May 4th letter was completely contrary to the agreement that they had reached at the meeting of April 27th, and that he directed Mr. Nordmark to so inform Mr. Trude and, in the meantime, to send the order letter to ABC in New York. Mr. Nordmark, in addition to talking to Trude and Gillogly, talked to Donald Flynn, an attorney at ABC in New York, and following such conversation made notes on his copy of the order letter of May 4th. The first two pages of the lineup specified by Kemper and attached to the order letter (together with the last 3 stations listed on page 3 of the said lineup) list 67 of the 99 stations then clearing "Evening Report" and the third page includes 28 additional stations that had not cleared the program but that Kemper wanted to order. Mr. Nordmark wrote this notation on the first page of the attached lineup. "No! to Pg. 1 & 2 of lineup - Then going lineup will negotiate on non Kemper markets." In the order letter itself, opposite the provision for an "ordered station lineup" of the 95 stations specified by Kemper, is Nordmark's notation "no - see attached lineup for comment" and where Kemper's order letter, at page 2, specified the gross time charges of $18,750 for the "ordered station lineup" Nordmark wrote "O.K. - But based on 99 stations on our lineup plus Kemper 15 pending markets. See attached lineup." After making these notations (and others not relevant hereto) on the order letter, Nordmark forwarded the letter to ABC in New York. Nordmark further stated that he conferred by telephone with Mr. Henry Hede, Vice President and Administrative Sales Manager, and other ABC representatives in New York to advise that Kemper had requested a specific list of stations rather than all stations carrying the program. Mr. Hede then spoke to Mr. Scherick and was told by him that his (Scherick's) original proposal was based on the sale of the ABC going lineup, and that if Kemper insisted on its ordered lineup it would have to revert to rate-card rate. However, even assuming that it was not a basis for further negotiation, there is dispute as to what the cost per segment would have been had Kemper reverted to ABC rate-card charges for the 67 wanted stations, particularly since these stations were, for the most part, included in stations already in ABC's going lineup, and it is not clear whether the rate-card price was to apply to stations in the going lineup as well as those not presently a part of it. Kemper argues that the 67 wanted stations, based on ABC's rate card, would have totaled $30,490 per segment, to which should be added the program charge and commission of $5,750 and network charge of $500 or a total of $36,740 which would be reduced to $35,521 on a 26-program basis or $34,215 on a 39-program basis. Kemper further argues that the 15 pending stations, offered as part of the package deal at $3,000, would cost $6,000 at the rate-card rate (not conceded to be true) and that if the 15 stations were added to the 67, at rate-card rates, each program would cost $42,470, which, after dollar value discount on time charges, would total $41,290 per program for 26 programs and $40,960 per program for a series of 39.

 Subsequent to the receipt of Kemper's order letter of May 4, 1962, Mr. Irish, in charge of processing orders for ABC, on May 8th directed the Sales Service Department to order up immediately the 99 stations then broadcasting "Evening Report" for sponsorship by Kemper. Miss Stamatis, Manager of night time television sales service, prepared a Facilities Order, dated May 10th, which ordered "the then going ABC lineup" for Kemper sponsorship beginning October 15, 1962. On May 11th, telegrams were sent to the 32 stations which Kemper had indicated in its May 4th order letter that it did not want, "recapturing" the commercial time for 3 segments of 1/4 hour in each two-week period for 26 weeks beginning October 15, 1962. The 28 stations which were ordered in addition to the going lineup, not having previously cleared the program series, were not yet subject to any recapture conditions, and ABC by telegram dated May 11, 1962, invited them, rather than directed them, to carry the program. Under the offer, of course, the stations were free to reject the entire order but not to accept the program and reject Kemper as sponsor. The Facilities Order and the telegrams of May 11, 1962 were in conformity with ABC's letter of May 10, 1962 (hereinafter referred to), replying to Kemper's order letter of May 4, 1962, and, according to ABC, also in conformity with the agreement reached at the meeting of April 27, 1962.

 ABC's letter of May 10, 1962 acknowledged receipt of Kemper's letter of May 4, 1962 and confirmed ABC's "firm order therein . . . of . . . the KEMPER INSURANCE COMPANIES, for sponsorship of ABC EVENING REPORT . . . ." Such sponsorship was to be of 39 one-quarter hours over a 26-week period commencing with the week of October 15, 1962. The letter stated that Kemper's "station line-up" would "consist of the then going lineup of ABC basic affiliated stations carrying the program as of each telecast of which you are a sponsor." The time charges were to be a flat $15,750.00 per segment for a 39-segment program, or if Kemper reduced its sponsorship to one segment per week for 26 weeks because of ABC's inability to clear all of the 41 Kemper key markets, the time charges were to be $17,750.00 per segment. In each case the program charge of $5,750 and network charge of $500 were to be added. In addition, ABC agreed to order on Kemper's behalf 15 additional stations, specifically identified with their individual time charges (apparently substantially below rate card) at $3,000, plus 13 other stations for which Kemper was not required to pay any additional time charges. With respect to the additional 15 stations Kemper was required to pay only for those actually clearing the program. Accordingly, the maximum total price per segment for sponsorship of 39 segments under the May 10th letter was $24,250 or for 26 segments it was $26,250 per segment. These totals are the same as those set forth in Kemper's order letter of May 4th.

 There is testimony that following receipt of ABC's letter of May 10, 1962, Mr. Nordmark went to ABC's offices in New York on May 14th or 15th, and spoke to Mr. Hede, Jr., and various other ABC personnel. It is Kemper's position that Mr. Nordmark was advised by Mr. Gillogly that Kemper could have the lineup attached to their letter of May 4th only if they paid the full rate-card rate. This is disputed by ABC which asserts that it never made the decision that Kemper would have to pay the rate-card time charges, and nothing less, if it wanted to sponsor the program over its lineup of stations carrying the program or that Kemper could have its own lineup only if it paid the rate-card rates. There is no evidence that during the period in question ABC had any policy or practice that any discount would not be available to a sponsor unless certain stations were ordered as a group, or that certain stations would not be available or the sponsor entitled to a discount unless the sponsor ordered a minimum number of stations. *fn11"

 Thereafter, on May 18th, a meeting was called at the office of the Frank Agency to go over the differences between the Kemper order letter of May 4th and the ABC reply of May 10th. ABC was represented by Nordmark and Beebe, Kemper by De Mark and his assistant, Bruce Robertson, and the Frank Agency by Gunn and Trude. Mr. Nordmark, on behalf of ABC, claims that he told the representatives of the Frank Agency at that meeting "that if Kemper did not want certain markets on the then-going lineup it could either select its own stations and pay the rate card time charges for each station or it could go back to New York and renegotiate the deal with Mr. Scherick" and "that Kemper could not have both the package price quoted by Mr. Scherick and a lineup of stations that differed from the lineup which was part of the package price." Nordmark Affidavit of June 3, 1965, at 4. Mr. Nordmark further claims that he told Mr. Trude that if Kemper did not order some of the stations on the then-going lineup its commercials would have to be "blacked out" over said stations, which would cost Kemper more money. Mr. Beebe, on behalf of ABC, testified that he told De Mark, Trude and Gunn at this meeting that it was difficult to eliminate markets, that ABC would ...

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