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Shrewd William Paley knew he had a diamond, but he did not know whether it was as big as the Ritz or just an ordinary diamond. He took three months off from the cigar business to find out. He tightened the contracts so that Columbia had an option on certain hours of its affiliates. In addition to cash, he gave the affiliates Columbia's sustaining programs free (National Broadcasting Co. charges for its unsponsored programs). He gathered 22 more stations into his network. Then he refused an offer of $1,500,000 by Paramount Publix Corp. for his company. He was out of cigars for good. Nine months after he had bought Columbia he sold Paramount Publix a half interest for $5,000,000. Paramount Publix paid $500,000 in cash and 58,000 shares of its stock, then worth $65, with an agreement to repurchase the stock at $85 March i, 1932. Last week Paramount Publix stock was quoted at $9 per share. Columbia, meanwhile, had sold 10,000 shares, leaving 48,000 shares for Paramount to repurchase. Four million dollars was a large debt last week for Paramount which, like all cinema companies, had been sweating financial blood. But a half-interest in Columbia was worth more than four millions to William Paley. He offered to buy Paramount's half-interest for $5,200,000. Paramount hastened to accept, bought back its 48,000 shares, had more than $1,000,000 left over. Bill Paley had his whole diamond, now grown to Ritzian proportions. He put it in his pocket, sailed for Nassau and a rest.
That Columbia Broadcasting System was worth more than ten million last week nobody seemed to doubt. At first competitive bidders but finally fellow stock-holders with President Paley were Brown Brothers, Harriman & Co., Lehman Corp., Field, Glore & Co. and Herbert Bayard Swope. Columbia's gross business in 1931 was $11,000,000. It owns five stations outright, has 91 affiliates, is the world's largest radio broadcasting system.
Jazz has made radio broadcasting, and young William Samuel Paley has kept step with the jazz age. Long ago he set himself up in the world like a Fitzgerald hero. Two years ago he moved into a three-story penthouse on svelte Park Avenue, from which he could look down on a building called the Ritz Tower. The apartment was decorated by Theatrical Designer Lee Simonson. It had a dressing room with racks for 100 shirts, 100 neckties, a fancy barroom reached by an aluminum staircase. His modernistic bedroom held a big bed equipped with push buttons for books, chromatic lights, music from one of his eight radios. Bill Paley lived there a while, then moved into a conventional bedroom. He was too active, too aggressive to enjoy lying in fancy beds. But he has a radio in his Hispano-Suiza, always keeps one going at home.