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BONNEVILLE INTERNATIONAL: COMPANY STRESSES VALUES, PACKS A LOT OF CLOUT

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A few months before the 1988 fall television season, executives of Bonneville International Corp. viewed the CBS pilot for "Dirty Dancing" and didn't like what they saw.

The show's title and steamy dance routines prompted the church-owned broadcasting company to tell network bosses that "Dirty Dancing" wouldn't last "because it lacked values and quality," and Bonneville's stations wouldn't air the program if it did succeed."CBS limped along with the show and then canceled it" just a few weeks into the season, Bonneville's president and chief executive Rodney Brady says, with an air of satisfaction.

It's rare for an affiliate station to go against the network, but when you have the clout of Bonneville International, you can afford to take a stand.

After all, what network would yank affiliation with a company with 14 commercial radio and television stations in some of the most populous markets in the country (see chart). Salt Lake City, where Bonneville is headquartered and owns a television and radio station, is the corporation's smallest market.

Complementing Bonneville's broadcasting empire are an advertising agency, a news bureau, production companies, a broadcast music service, data transmission services and a partnership with a satellite telecommunications concern.

Last week Bonneville International, owned by The Church of Jesus Christ of Latter-day Saints, celebrated 25 years of acquiring stations, pioneering new technology and encouraging "quality" progamming.

"There is no other (broadcasting) property quite like it anywhere else in the country," Bonneville Chairman Gordon B. Hinckley, first counselor in the LDS Church's First Presidency, told a recent gathering of local government and business leaders attending an anniversary luncheon sponsored by Bonneville.

"To have these stations in these key markets is a tremendous and remarkable thing."

It started in September 1964, when the LDS Church placed its few television and radio properties in Salt Lake City, Seattle and New York under a newly formed holding company, Bonneville International. Arch L. Madsen, then president of KSL, was picked to lead Bonneville.

A recognized pioneer in the electronic media industry, Madsen has been synonymous with Bonneville over the years. Almost single-handedly Madsen accomplished what seemed an impossible task - putting a church-owned communications concern at the top of the commercial broadcasting business.

Under Madsen, Bonneville's strategy was to acquire "dogs and failures" in large markets and build them into key players.

"I don't want to brag, but I built the company and it's built a very good reputation," Madsen said, noting the numerous awards Bonneville's news, production and advertising operations have won.

"We purchased (the radio and television stations) for a song compared to their present value today."

Madsen wasn't finished with his dreams for Bonneville in 1985, but he had reached the company's mandatory retirement age of 72 and the board replaced him with former Weber State College president and financial wizard Brady.

Following in the footsteps of a visionary like Madsen would be intimidating for anyone, let alone a man with no experience in broadcasting. "Arch Madsen is truly a man of vision and there are few as capable at seeing the future as Arch," Brady said. He notes Madsen's acquisition of FM radio stations in the 1960s, when no one wanted them, and his aggressive entry into satellite transmission in the late 1970s.

At the same time, many would say few are as capable as Brady when it comes to turning a company around financially. A Utah native, Brady spent much of his professional life outside of the state compiling an impressive list of credentials - including a doctorate in finance from Harvard and assistant secretary for administration and management for the U.S. Department of Health, Education and Welfare, among other things.

He helped turn a major pharmaceutical firm, Bergen-Brunswig Corp., from a diversified conglomerate swimming in red ink into a lean distributor with $5 billion in sales today. A major stockholder in Bergen-Brunswig, Brady could do what he wanted with his life so he returned to Utah as president of Weber State.

In his eighth year at Weber, he received a call from Bonneville chairman Hinckley with an offer to succeed Madsen. Brady said it was a combination of who asked him and the influence and impact of Bonneville that convinced him to accept.

While Bonneville International resisted pressure to change its standards on entertainment programming, it couldn't avoid the financial turmoil that overcame the entire industry in the 1980s. During the high growth era of previous decades, Bonneville and other broadcasters operated in an environment where double digit growth in market share was the norm. But when independents, cable networks, home video cassette players and a growing number of radio stations started picking off viewers and advertising dollars, the industry began to pay more attention to the bottom line and how to remain competitive.

Under Brady, Bonneville has restructured, divested, reformatted, hired and fired to narrow the business down to what it does best: broadcasting. The changes have upset and demoralized many employees - particularly in the news and production sides - as they see fellow workers leave and other changes take place.

But Brady has gone through the process before and is confident that if Bonneville and its holdings produce a "reasonable rate of return" the rest will fall into place.

"The company's other values come before profitability, but profitability is necessary to achieve the other values" and the company's overall mission, he said.

Those other values - integrity, excellence, service, leadership and sensitivity - are designed to accomplish the corporate mission of community service, personnel development, quality programming and turning a profit. The values and mission are posted in offices companywide and every manager and employee has been given a card spelling out the values and corporate mission.

The plan appears to be making progress. Bonneville does not disclose its financial performance, but Brady said 1988 was the company's most profitable year ever.

While station and division managers continue to settle into the new administrative style and emphasis, Bonneville continues to face the challenge of promoting "quality" commercial programming in an industry bent on attracting viewers with sleaze and violence.

"We're not happy with the quality of network programming, but it's important to be affiliated with the networks," Brady said, noting some of the "good" programming produced by networks and the exposure and status of network affiliation.

That's not to say Bonneville has thrown in the towel or compromised in its lopsided fight to "bring others up to higher ground in programming."

Brady said high quality programming is Bonneville's key to future success as the industry becomes increasingly fragmented and competitive with advances in technology.

"Despite the number of alternatives available, we believe the future of broadcasting is quality programming carried through the dominant medium," he said.

In addition to keeping its ground with the networks, the corporation is well-represented on the policy boards of the National Association of Broadcasters. Managers are directed to place resources from cost savings into public service programs. And Bonneville plans to step up its own efforts at producing television programming for the local and national market.