September 9, 1926…RCA Creates NBC: A History Lesson

In the beginning, there was David Sarnoff. By 1919, Sarnoff was the commercial manager of American Marconi in New York. That same year, British Marconi had made an offer to General Electric to buy the worldwide rights to their Alexanderson Alternator technology which was vital for transatlantic communication.

The prospect of a foreign company controlling international communications set off alarm bells in Washington and the government approached GE with a counter offer. If GE would place the Alternator in a new subsidiary company, they would be allowed to operate the international wireless circuits for both government and commercial traffic.

To sweeten the deal, the Navy agreed to turn over all the wireless patents it received through their wartime research. Who could refuse? The new GE subsidiary company was named the Radio Corporation of America and at the helm was Owen Young as Chairman, Ernst Alexanderson as Chief Engineer and David Sarnoff as General Manager.

Within months, AT&T, Westinghouse and a big customer of international wireless services, United Fruit Company bought up all the RCA shares. By 1921, things had gotten interesting on another front…radio stations. 28 sprang up that year including the Westinghouse owned WJZ in New Jersey.

With the July 2, 1921 World Heavyweight Championship fight between America’s Jack Dempsey and France’s George Carpentier looming, the nation was anxious for a speedy way to know the details and outcome. David Sarnoff decided RCA should broadcast the fight on WJZ. It was a radio first; a publicity coup for RCA and Westinghouse, and sold lots of radios!

With Westinghouse in a good mood, Sarnoff convinced them to allow RCA to take over WJZ, and later that month, RCA built and installed a powerful new transmitter for their first station atop Aeolian Hall in New York. By the end of 1922, 430 more radio station licenses had been granted and Sarnoff was paying attention, but had a different train of thought.

To him, it seemed the bigger opportunity was not in owning local stations, but in creating a national network. In a memo to Chairman Owen Young, Sarnoff said that RCA should provide “a national broadcasting company” that would entertain a nation with high quality programs of news, sports and music. The plans for The National Broadcasting Company were in place now, but it would take a few more years.

Part of RCA’s original corporate mandate was to issue and collect licensing fees from those manufacturing wireless radio equipment. That meant everyone; including one of RCA’s major shareholders… AT&T. Even though they would be rewarded by their stock ownership, AT&T began to chafe at the bit and in early 1923, began manufacturing receivers without paying the license fees to RCA. On top of that, they had also refused to allow RCA to lease phone lines to begin a network for WJZ. RCA’s only alternative was to use telegraph lines which had very poor voice quality. In the summer of ’24, there were some anti-Semitic remarks aimed at Sarnoff by AT&T head Walter Gilbert, and things got pretty heated, but that actually worked to RCA’s advantage.

After that embarrassing flap, AT&T’s management began to discuss getting out of the radio business, and in July of 1926, AT&T agreed to sell WEAF to RCA. The sale came with the stipulation that from then on, they would rent AT&T lines, which is what Sarnoff wanted all along.

The Beginning of NBC, September 9, 1926…NBC Was Incorporated By RCA The incorporation process was the first step on a long and profitable road for RCA’s new broadcast division.

The nation’s first major broadcasting network came to life on November 15, 1926, with a gala four-hour radio program originating from the ballroom of the original Waldorf-Astoria Hotel at 5th Avenue and 34th Street, which is now the Empire State Building’s location.
After NBC was created, their two stations became the centers of their two semi-independent networks…NBC Blue, based on WJZ, and NBC Red, based on WEAF, each with its respective links to stations in other cities. RCA became the network’s sole owner January 1, 1930, when former partners General Electric and Westinghouse were bought out.

Many believe that NBC created the first radio network but that is not exactly the case. RCA’s old partner AT&T had the first radio network and their first network radio broadcast was January 4, 1923 between WEAF in NYC and WNAC in Boston. -Bobby Ellerbee

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