William S. Paley, 89, Dies; Built an Empire Called CBS : Broadcasting: He was a dominant force in radio and TV, even at an age when most men had long retired.

William S. Paley, the cigar-maker’s son who took an infant network of 16 radio stations in 1928 and parented it into a billion-dollar news and entertainment empire called CBS, died late Friday. He was 89.

The autocratic founder and board chairman of the Columbia Broadcasting System had been ill with pneumonia. He died at his Manhattan home from a probable heart attack at 8 p.m. PDT, said CBS spokeswoman Ann Morfogen.

Paley’s six-decade legacy which he perpetuated until shortly before his death, included the World War II radio reports of Edward R. Murrow from London; the wildly popular “I Love Lucy” series in the embryonic black-and-white days of television; his celebrated “raids” of top entertainers from NBC in the 1950s, the sociologic bellwether “All in the Family,” and the highly praised and rated “60 Minutes”--the last a spinoff from a news division that was long considered the Tiffany of broadcast journalism.

“Bill Paley was an imposing leader who wove his boundless energy and taste into the very fabric of the company he created,” Laurence Tisch, CBS Inc. president and chief executive officer, said late Friday in a statement released by CBS. “He was a man of profound grace and intellect, as well as one of the most astute businessmen of our time.”

CBS News anchor Dan Rather said Paley, who remained active as CBS chairman until stricken by illness several weeks ago, was a “man committed to excellence . . . he remained passionately interested in the news up to the time of his death.”

Newsman Daniel Schorr, who worked for CBS from 1953 to 1976, said Paley was “one of the great giants in the broadcasting field” who nurtured an atmosphere in which news could be covered without regard to ratings or cost.

“Broadcast journalism, as it exists today, would not be here if it had not been for Paley,” said Fred Friendly, who worked for Paley for 16 years and served as president of CBS News from 1964 to 1966.

In “The Powers That Be,” author David Halberstam wrote: “He (Paley) was in any real sense the father of modern broadcasting. . . . He more than the other early figures of broadcasting was fascinated by entertainment and programming; it was devotion to every detail in programming which made him so important in American life, for he helped determine what the nation first heard and then saw in its home every night.”

Paley’s “programming genius” will be sorely missed by the industry, former CBS President Frank Stanton told The Times by telephone late Friday from New York. “Broadcasting needs him desperately today.”

A dapper, urbane man born in Chicago to a wealthy Russian immigrant who manufacturered cigars, Paley was a dominant force and personality in broadcasting for all his adult life, even into an age when most men had long ago sought the quiet time of retirement.

He was power-brokering as recently as 1987--after returning to active corporate duty in a top-level shake-up of CBS, Inc.--when he and then-new CBS Inc. President Tisch made a surprise appearance at a press conference to unveil a new prime-time schedule.

Paley’s appearance seemed intended to show that he was back in the game at age 86. His hearing may have been diminished by time but not his interest in reviving CBS’ faltering image. The network had fallen behind NBC in the ratings race and Paley was determined to restore pre-eminence.

The company also was suffering a malaise in morale following two years of layoffs, retrenchments and criticism from within and outside the network.

The layoffs and cuts included a 215-person, $30-million reduction in March, 1987, at CBS News. But it was Tisch, who had ordered reductions in the news team originally assembled by the fabled Murrow, who became the focal point of that criticism while Paley emerged relatively unscathed.

The cutbacks must have been particularly painful for the CBS founder.

What Paley had built from a handful of small radio stations in the 1920s had become heavily diversified by the late 1970s. At its peak in 1980, CBS employed 36,000 people worldwide. But then began the cutbacks in the face of an uncertain economy; a 1985 unsuccessful but expensive (for CBS) takeover attempt by cable-TV entrepreneur Ted Turner and a new era of competition for all three networks from cable TV, videocassettes and independent stations.

Paley tried to set CBS back onto its primary path of broadcasting. The network sold off its toy, book, motion picture, music publishing and magazine interests, and more recently its records division, which Sony Corp. agreed to buy for $2 billion.

The overall result was a reduction in CBS employment to 7,000, a spokeswoman said.

In addition to being a television network serving more than 200 stations, CBS owns 18 radio stations and four television outlets, including flagship WCBS-TV in New York and KCBS-TV in Los Angeles.

The immigrant’s son never doubted it all would happen.

Unlike the rags-to riches-stories of many of his colleagues in the early days of the airwaves, Paley had a privileged youth, attending high school at a military academy, then successively entering the University of Chicago and the Wharton School of Finance and Commerce at the University of Pennsylvania.

In an interview with the New York Times, Paley once reflected on that background: “At a very early age I took it for granted that I would be rich and successful,” he said, “so I was prepared for it and I wasn’t in the least embarrassed by it.”

After graduation from college in 1922, Paley worked in his father’s Congress Cigar Co. But he grew interested in the possibilities of the infant radio industry and in 1928 his father, after selling the cigar business, paid $400,000 to buy a frail and financially strained network of 16 radio stations called United Independent Broadcasters that Paley renamed the Columbia Broadcasting System.

Through the next several decades CBS pioneered fundamental concepts in radio journalism that guided the industry’s growth. Paley had a knack for hiring talented executives whose judgment shaped broadcast journalism as we know it today. In 1930, he hired a former editor of the New York Times, Edward Klauber, to run the network’s news and public affairs division. Over the years Klauber established standards of objectivity and independence from sponsors’ views that redirected radio news from a flamboyant Walter Winchell style to one that was serious and intelligent. Fifty years later Klauber is still regarded as the architect of modern-day network news.

Wrote Halberstam, “That he (Klauber) was brought into the network and given so remarkably free a hand was a mark of Paley’s interest and commitment; Klauber educated Paley on the importance of news, but only because Paley wanted to be educated. (It was) Paley’s belief that this was the right thing to do.”

The devotion to excellence in news gave CBS a lead in public affairs, a lead lengthened considerably by the dominance during the next several decades of Murrow, widely regarded as the most prestigious broadcast journalist ever. Murrow’s reports from Europe during World War II transfixed a nation pinned to its radios to hear his vivid accounts of that conflict’s agony.

While Paley spearheaded CBS’ efforts to build up a lead in news--in part because his archrival, the much larger National Broadcasting Co., was weak in that area--he also demonstrated superb judgment in selecting entertainment. Paley put Bing Crosby on the air to compete with NBC’s hit show, “Amos ‘n Andy.” He also signed Kate Smith because “she was so good,” and his network sponsored such old favorites as “Lux Radio Theater,” “Columbia Workshop,” George Burns and Gracie Allen, Eddie Cantor and a passel of popular soap operas, including “The Romance of Helen Trent” and “Joyce Jordon, Girl Intern.”

As television came to dominate the broadcasting world, CBS surpassed NBC in size and became No. 1 in programming. During the 1950s, in a series of moves that became known as the “Paley Raids,” he lured Jack Benny, Red Skelton, Edgar Bergen, Fred Waring, Al Jolson, Groucho Marx and Frank Sinatra to his network from NBC. CBS aired such classics as “Studio One,” “Omnibus,” “The $64,000 Question,” “I Love Lucy,” “The Ed Sullivan Show,” “I’ve Got a Secret” and the “General Electric Theater.”

In his autobiography “As It Happened,” Paley wrote: “In 1955, CBS became by far the leading network in popularity. It would remain No. 1 in the audience ratings for 21 years--an incredible record that no one foresaw, guessed or could have believed back in the beginning.”

Emphasis on public affairs continued concurrently and reached a climax in 1954 with a Murrow broadcast of “See It Now” that was critical of Sen. Joseph R. McCarthy’s witch-hunting tactics. The program caused a storm of protest, and Murrow later said he believed it caused Paley to end the hard-hitting series.

Critics of the industry also blamed Paley in the ensuing decades for what they perceived as a lack of support for interpretation and commentary of controversial news events, such as U.S. involvement in the war in Vietnam. However, he could point to the network’s nightly news anchored by Walter Cronkite and the popular “60 Minutes” series as flagships of the CBS news division.

Gradually Paley withdrew from news operations to involve himself with the entertainment side, where a higher notch in the Nielsen ratings would translate into millions more in profits. In his autobiography Paley wrote that he considered network broadcasting as “primarily a mass medium. To survive,” he wrote, “CBS had to give the majority of the people the kind of programs it wanted.” Thus the network aired programs criticized for vacuity--”Edge of Night,” “The Beverly Hillbillies” and “The Incredible Hulk.”

Gracious, charming and intensely private, Paley lived lavishly, with homes in New York City and on Long Island. He frequented the finest restaurants and surrounded himself with original works by such artists as Giacometti, Picasso and Rouault. He was chairman of the board of New York’s Museum of Modern Art.

Paley set up the William S. Paley Foundation to support the Museum of Broadcasting in New York that he founded, and Paley Park, a small pocket of greenery on East 53rd Street built in memory of his father. He also endowed the Paley Art Center, a children’s museum of Jerusalem.

An attractive man with a wide smile, Paley enjoyed the company of beautiful women. His first marriage, in 1932 to Dorothy Hart Hearst, former wife of John Randolph Hearst, ended in divorce in 1947. Five days later Paley married Barbara (Babe) Cushing Mortimer, daughter of a Boston surgeon, Dr. Harvey Cushing, and sister of Mrs. Vincent Astor and Mrs. John Hay Whitney. Babe Paley, regularly voted the best-dressed woman in the world by the New York Dress Institute, died of cancer in 1978 at 63.

Paley had two children by his first marriage, Jeffrey and Hilary Byers, both of New York City, and two children by Babe, William of Washington and Kate of New York.

Along the way Paley acquired a reputation as a perfectionist who appeared unable to settle on a successor and to gracefully relinquish control. In 1976, when Paley was 75, he ousted Arthur K. Taylor as president and replaced him with John D. Backe.

He ousted Backe in 1980 and continued to serve as board chairman until 1983 when he moved aside--temporarily as events proved--to take the vague, newly created title of Founder Chairman, yielding the chairman’s job to Thomas H. Wyman who had replaced Backe.

Then, in a board-room revolt that stunned the corporate world, Paley and Tisch, the latter CBS’ major shareholder, took part in the headline-making Sept. 10, 1986 ouster of Wyman.

Wyman left with a lucrative severance package of $4.3 million and a payment of $400,000 a year for life.

Tisch became the president of CBS Inc. and Paley once again became CBS board chairman.

It was typical of the ever-unpredictable Paley.

In May of that year, when CBS was still recovering from its fight with Ted Turner, a reporter had heard new rumors of the top-level changes at CBS that were to come.

He asked a senior CBS executive if Paley himself might not be readying a last hurrah.

The answer proved exquisitely unprophetic.

“No,” insisted the executive, requesting anonymity. “Paley’s health isn’t too good. He’s out of it. He’s not an active player.”