Bonneville International Corporation Business Information, Profile, and History

Company Perspectives:

Bonneville International Corporation is a values-driven company composed of values-driven people making a difference through mass communications. We make a difference by serving and improving individuals, families, communities, and society through quality entertainment, information, news, and values-oriented products. We make a difference by satisfying our customers' communications needs through superior programming, creative marketing, advanced technology, and skillful use of our resources. We make a difference by providing professional and personal growth opportunities for our colleagues, by enhancing positive feelings of self-worth, and by exerting positive leadership in the communications industry. Central to the achievement of our mission are these core values: integrity, excellence, service, profitability, leadership, and sensitivity.

History of Bonneville International Corporation

Bonneville International Corporation operates Salt Lake City's KSL-TV and also KCSG-TV in St. George, Utah, in addition to 15 radio stations in Salt Lake City, Chicago, San Francisco, Los Angeles, and Washington, D.C. The company is a subsidiary of Deseret Management Corporation, a holding company owned by the Church of Jesus Christ of Latter-day Saints (LDS). Bonneville's own subsidiary Bonneville Communications produces award-winning spots promoting family values and the LDS church. Those "Homefront" ads shown worldwide on many commercial stations and many other Bonneville productions have received numerous professional awards. Bonneville also produces music and entertainment specials, educational programs, and television movies. Through satellite technology, Bonneville broadcasts church and Brigham Young University sports programs to audiences in many nations.

Origins

Although radio was invented by Marconi around the turn of the century, commercial radio stations were not started until the Roaring Twenties. In 1922 the LDS church started one of the nation's first radio stations when church President Heber J. Grant spoke on station KZN from a tin shack on top of Salt Lake City's Deseret News Building. The church-owned newspaper had responded to the federal government's encouragement of newspapers to enter the new broadcasting industry.

In 1923 KZN began a tradition carried on by its radio and television successors when it broadcast part of the LDS General Conference held in the Tabernacle in historic Temple Square. The following year KZN was split off into a separate firm from the Deseret News, and in 1925 KZN became KSL to remind listeners that it was based in Salt Lake City.

Another landmark occurred on July 15, 1929, when KSL first broadcast a performance of the Mormon Tabernacle Choir. That weekly event became "the longest-lasting continuous regular program in broadcast history, celebrating 65 years of continuous broadcasts in July of 1994," according to Dr. Rodney H. Brady.

During the Great Depression, KSL in 1932 became one of the first 50,000-watt clear channel AM stations in the United States and also became part of the Columbia Broadcasting Network, later renamed the CBS Network. President Franklin D. Roosevelt made radio history in the 1930s by using his "radio chats" to encourage Americans to stay optimistic in the midst of troubled times.

Americans bought more radios as the number of stations proliferated in the 1920s and 1930s. In 1929 just over ten million households owned at least one radio; that number jumped to 27.5 million in 1939 as radio became a major source of information and entertainment.

In 1946 KSL started Utah's first FM radio station, and three years later KSL Television began broadcasting in black and white. TV in the 1950s featured family-oriented programs, such as Father Knows Best and The Ed Sullivan Show.

Bonneville International: The Arch L. Madsen Era

In 1961 LDS Church President David O. McKay recruited Arch L. Madsen to leave Washington, D.C., for Salt Lake City and become KSL's general manager. Madsen's leadership and years of experience in the broadcast industry helped KSL purchase Seattle-based KIRO television and radio stations in January 1964, which led to the organization of Bonneville International Corporation five months later.

In the 1960s broadcast companies were restricted to owning no more than seven stations of each kind--AM radio, FM radio, and television. Under those regulations, Bonneville decided to expand into selected major markets. In 1966 Bonneville made its first acquisition--an FM radio station later named WMXV that broadcast from New York City's Empire State Building. In 1969 Bonneville purchased KBIG-FM, a major station located on Sunset Boulevard in Los Angeles. Under Arch Madsen, Bonneville also acquired Kansas City's KMBZ-AM and KLTH-FM in the 1960s.

Also in the 1960s Bonneville was one of the first independent broadcast companies to start its own news section in the nation's capital when it organized its Washington News Bureau. Using the latest electronic devices, the bureau provided Bonneville's radio and TV stations with the latest reports about politics and government.

Bonneville continued in the 1960s to increase Mormons' access to their church headquarters by starting to broadcast LDS General Conferences on nationwide television and using satellite technology to broadcast General Conferences to other nations.

In January 1972 Bonneville began distributing its first "Homefront" spots designed to build family solidarity and to increase awareness of the LDS church. The first campaign, "Your Children Need More of You," featured ten different radio and three TV spots shown on 1,297 radio and 141 TV stations.

The success of these spots was shown in a 1985 Opinion Research Corporation survey that found 54 percent of Americans, when aided, could recall an LDS advertising message. The next highest was 18 percent who could recall a Catholic ad message.

In 1975 Bonneville organized Bonneville Communications, a full-service advertising and creative services firm to handle U.S. and international broadcasts of General Conferences and Mormon Tabernacle Choir performances.

Bonneville under Arch Madsen in the 1970s acquired San Francisco's KOIT-FM and later KOIT-AM. In 1978 it acquired Dallas-based KZPS-FM and later KZPS-AM.

Bonneville's expansion in the 1960s and 1970s led to its relocation in the early 1980s to the Broadcast House, a key component of downtown Salt Lake City's Triad Center. Three Saudi Arabian brothers named Adnan, Essam, and Asil Khashoggi, who had made fortunes as arms dealers, decided to invest in Salt Lake City when they created a Utah subsidiary called Triad Utah. Despite the Khashoggis being investigated by the U.S. Securities and Exchange Commission, their playboy reputations, and the reservations of some Bonneville board members, the LDS church cooperated by selling six key acres to Triad to construct the new building. "Bonneville's Broadcast House became the first, most visible part of the Triad package," wrote Robert Gottlieb and Peter Wiley in their 1984 book America's Saints.

Bonneville International's President Arch Madsen retired in 1985 after reaching the company's mandatory retirement age of 72. In a 1989 Deseret News article, Madsen said that because of Bonneville's numerous awards, "I don't want to brag, but I built the company and it's built a very good reputation.... We purchased (the radio and television stations) for a song compared to their present value."

Bonneville Under Dr. Rodney Brady in the Late 20th Century

Bonneville's Board Chairman Gordon B. Hinckley, first counselor in the LDS Church's First Presidency, in 1985 asked Dr. Rodney H. Brady to replace Madsen as Bonneville International's president. Although he had no broadcasting experience, Brady accepted the offer to build on the foundation set by Arch Madsen.

A Utah native, Brady had received B.S. and M.B.A. degrees from the University of Utah before earning a doctorate in business administration from the Harvard Business School. He then spent three years as an Air Force officer, followed by serving as vice-president of Management Systems Corporation and in the mid-1960s as a vice-president of Hughes Tool Company's Aircraft Division. Beginning in 1970, Brady was the assistant secretary for administration and management at the U.S. Department of Health, Education, and Welfare. Next, he became an executive vice-president and board member of Bergen Brunswig Corporation, and in 1978 was chosen as the president of Weber State College in Ogden, Utah.

Brady in the late 1980s maintained Bonneville's standards. For example, in 1988 the company rejected a new fall TV show called Dirty Dancing offered by CBS to its affiliates "because it lacked values and quality," according to a 1989 Deseret News article. Brady was pleased when CBS canceled the show after just a few weeks into the new season.

"We're not happy with the quality of network programming, but it's important to be affiliated with the networks," said Brady, who realized that some network programs were fine and that Bonneville's presence might "bring others up to higher ground in programming."

In 1988 the LDS church and several other Protestant, Catholic, and Jewish churches sponsored the creation of the new Vision Interfaith Satellite Network (VISN), a cable television channel operated by the nonprofit National Interfaith Cable Coalition. Although not a member of the coalition, the LDS church provided various programs for its allocated time periods. "VISN initially provides the Church an opportunity to disseminate to millions of viewers--both members and nonmembers--many of the programs the Church has produced over the years," said Richard P. Lindsay, the LDS church's managing director of public communications in the November 1988 Ensign, a church magazine. "It will help those of other faiths understand our strong moral and family values." Unlike some other religious channels, VISN did not include direct proselytizing, money requests, or criticism of other churches.

Brady also faced financial challenges as the entire broadcast industry in the 1980s no longer enjoyed double-digit growth due to competition from cable television, independent producers, more radio stations, and the growing number of Americans watching rented movies on their VCRs. CBS, ABC, and NBC remained important, but consumers gained a diversity of new options for media entertainment and education.

In response, Brady made many changes at Bonneville International to keep the firm profitable. "The company's other values come before profitability, but profitability is necessary to achieve the other values," said Brady. Some employees were disappointed when some fellow workers lost their jobs, but in 1988 Brady reported that Bonneville enjoyed its most profitable year without divulging details of the private company.

In 1989 Bonneville International owned and operated two TV stations: Salt Lake City's KSL-TV Channel 5, a 36,000-watt station with 22 percent market share; and Seattle's KIRO-TV Channel 7, a 316,000-watt station with 20.4 percent market share. By the mid-1990s Bonneville also ran 15 radio stations, including Salt Lake City's KSL-AM; KIRO-AM and KIRO-FM in Seattle; San Francisco's KOIT-AM and KOIT-FM; KBIG-FM in Los Angeles; Kansas City's KMBZ-AM, KLTH-FM, KCMO-AM, and KCMO-FM; Chicago's WTMX-FM; KPSN-FM and KIDR-AM in Phoenix; KZPS-FM in Dallas; and New York City's WMXV-FM.

By the mid-1990s Bonneville subsidiary Bonneville Communications had earned about 400 awards, including 15 Clios for advertising excellence, three Emmys, and a Bronze Lion from the Cannes Film Festival. Bonneville Communications used what it called "Heart Sell" emotional advertising to promote the LDS church and also other clients, including Foot Locker, Kinney Shoe Corporation, Wilson's Leather, B. Dalton Booksellers, The Salvation Army, Charter Medical Corporation, and The American Cancer Society. A company publication in the mid-1990s stated, "As one of the pioneers of high-quality public service advertising, Bonneville Communications clears more free air time for its clients than any other agency in the world."

Bonneville's "Homefront" ads, started in the early 1970s, had by 1994 been shown on over 5,000 radio and 800 television stations on NBC, CBS, ABC, CBC, and several cable channels in the United States and Canada, plus over 6,550 radio and 1,300 TV stations in Latin America, Australia, Spain, New Zealand, Italy, Portugal, Russia, and the Czech Republic. A 1994 Bonneville fact sheet stated that "Homefront is the longest running, most broadcast, highest awarded public service campaign in the world."

Those spots, some of which introduced listeners or viewers to The Book of Mormon, played a role in the church's worldwide missionary program. A 1993 Church Missionary Department survey of 13,000 new converts found that 57 percent had seen Homefront ads, and 69 percent of those who had seen the ads said they had helped in their decision to join the church.

The Late 1990s

In 1995 Bonneville sold KIRO-TV in Seattle to A.H. Belo Corporation of Dallas for $162.5 million. By the end of 1998 Bonneville no longer had any TV or radio stations in Kansas City, Phoenix, Dallas, Seattle, or New York. Bonneville's sale of at least 14 radio stations and purchase of several others resulted from the 1996 Telecommunications Act that allowed firms to increase their ownership in one market from two AM and two FM stations to a total of eight stations. Bonneville's President Bruce Reese, who replaced Rodney Brady in June 1996, in 1997 reported that the firm's strategy was to concentrate its radio stations in major markets preferred by large advertisers.

In 1998 Bonneville International in Salt Lake City continued to operate KSL-TV (which had switched network affiliation from CBS to NBC), KSL-AM, Bonneville Communications, Bonneville LDS Radio Network, Bonneville Satellite, Bonneville Worldwide Entertainment, and Video West Productions. Bonneville also operated WNND-FM, WTMX-FM, and WLUP-FM in Chicago; KOIT-FM, KOIT-AM, KDFC-FM, and KZOZ-FM in San Francisco; KZLA-FM in Los Angeles; and KCSG-TV in St. George, Utah. Bonneville in Washington, D.C., continued to operate its News Bureau and also owned three radio stations: WGMS-FM, WTOP-FM, and WTOP-AM. In addition, Bonneville operated three stations in nearby Arlington, Virginia: WWVZ-FM, WWZZ-FM (formerly WXTR-FM), and WXTR-AM.

In late 1998 a new entity called DTV Utah announced its plans to build a $7 million tower near Salt Lake City to broadcast digital signals. KSL-TV managed this operation, but it was supported by seven other TV stations in the area: KTVX, KUTV, KUED, KBYU, KULC, KUWB, and KJZZ. This move, part of the nationwide transition from analog to digital technology, was stimulated by the Federal Communications Commission's requirement that all commercial TV stations must broadcast digital signals by May 1, 2002 and all television broadcasts must be digital by 2006.

In May 1999 the Deseret Management Corporation announced the creation of its new subsidiary called World Media Inc. to coordinate the electronic and Internet activities of Bonneville International and other Deseret Management companies, along with those of Brigham Young University and other LDS-owned organizations. Rodney Brady served as the president and chief executive officer of the new firm.

Bonneville International's development reflected the expansion of Mormonism from a primarily Intermountain West church before World War II to a widespread national and international religion in the second half of the 20th century. For example, from 1980 to 1990 church membership in the United States grew from 3.2 million to 4.2 million, an increase of 30 percent, compared to the overall U.S. population increase in the same decade of ten percent. In 1990, eight states had at least 100,000 Mormons. The church's growth continued in the 1990s, with its worldwide membership reaching about ten million by the end of the decade.

The bottom line was that Bonneville International played an important part of the worldwide growth of Mormon influence, along with Zion's Security Corporation, Deseret Book Company, and Beneficial Life Insurance, all part of the Deseret Management Corporation.

To expand its international capabilities, Bonneville in 1996 signed its first agreement with Loral Orion Network Systems, a subsidiary of New York-based Loral Space & Communications. The 1996 deal allowed the church to use Loral Orion's first satellite, Orion 1, to broadcast its programs to European cities. In 1998 Bonneville signed a second contract that granted the firm rights to use Orion 2, scheduled to be launched in the summer of 1999, to broadcast to Latin America. The Bonneville-Loral Orion agreements were quite significant, especially in light of Loral's plans to launch satellites that eventually would reach 85 percent of the world's population.

Unlike religions that rejected much modern technology due to an either-or perspective, the LDS church and Bonneville International embraced many of the latest discoveries. Bonneville integrated faith and finances, reason and revelation, and computers and community values in a way that served both church members and commercial clients while impressing broadcast professionals. Combining Bonneville International's high-tech capabilities and professional business management with its core values based on religious ideals proved to be a successful method of running a corporation.

Principal Subsidiaries: Bonneville Worldwide Entertainment; Bonneville Communications; Video West Productions; Bonneville LDS Radio Network; Bonneville Satellite; Bonneville Washington News Bureau; World Media Inc.