"Instead of divorce lawyers profiting from our mistakes, we thought we'd profit from them."
--Lucille Ball

When the creators of such mega-hits as "Friends," "Seinfeld" and "ER" cash their hefty syndication residual checks, they should take a moment to pay homage to Desi Arnaz and Lucille Ball-two of the savviest and most innovative entrepreneurs ever to grace the star-studded streets of Tinseltown. In addition to laying the groundwork for the multibillion-dollar television syndication industry, they introduced many of the production techniques that would become standard television practice and almost single-handedly made Hollywood the television capital of the world.

The couple met in 1940 on the set of the RKO Studios musical "Too Many Girls." It was a classic case of love at first sight, and they married later that same year. But the first decade of their lives together would prove to be rocky. While Ball made pictures in Hollywood and gained fame as the star of the radio show "My Favorite Husband," Arnaz spent much of his time on the road touring with his band.

Arnaz's notorious womanizing, along with his excessive drinking, prompted Ball to file for divorce in 1944. But a passionate reconciliation led her to reconsider, and the lovers vowed to find more opportunities to work together. Their big chance came in 1950, when CBS approached Ball about moving "My Favorite Husband" to the fledgling medium of television. Seeing it as a chance to finally work with her real-life spouse, Ball asked the network to cast Arnaz in the role of her husband.

The network executives were reluctant, fearing viewers would have difficulty accepting the Cuban Arnaz as the husband of the all-American redhead. To prove that they could make the sitcom work, Arnaz and Ball formed Desilu Productions (the very first independent television production company) and used $5,000 of their own money to produce the pilot for "I Love Lucy." In doing so, Arnaz and Ball made themselves their own bosses, providing their product to CBS rather than working directly for the network or a sponsor, which was then the common practice in television.

This wasn't the only show biz convention the duo would shatter. In the early days of television, most production was done in New York, mainly because the Hollywood studios considered television to be a threat to their film empires. So, quite naturally, CBS expected Arnaz and Ball to move to New York. But the couple insisted on staying in Hollywood.

Again CBS protested, claiming that live production in Los Angeles was impractical. Because of the time difference between the coasts, the network would be forced to air blurry kinescopes in the East, where most television-viewing homes were located. Arnaz and Ball offered a simple solution: produce the show on film and dispense with kinescopes altogether. CBS wasn't exactly thrilled with this suggestion. Using film would double production costs. To offset the added cost, Arnaz and Ball agreed to cut their joint weekly salary from $5,000 to $4,000 on the condition that Desilu retained all rights to the show. CBS agreed, and in one fell swoop Arnaz and Ball invented reruns, paved the way for syndication, and pulled off what would become one of the most lucrative deals in television history.

"I Love Lucy" debuted in October 1951 and quickly became one of the top-rated shows on television. The show made production in Hollywood so acceptable that by 1961 virtually every major prime-time television show was filmed on the West Coast.

While Ball busied herself with the joys of motherhood (she gave birth to the couple's second child, Desi Jr., in 1953), Arnaz expanded the Desilu empire, producing an impressive roster of hits, including "The Ann Sothern Show," "The Untouchables" and "Sheriff of Cochise." As the growing company needed more space, Arnaz and Ball turned to the gold mine of "I Love Lucy" reruns they owned and sold the syndication rights to the first 180 episodes back to CBS for $5 million (approximately $19.5 million by today's standards).

Armed with the expansion capital they needed, the couple bought RKO Studios (Ball's former employer) in 1957. The 14-acre movie lot soon became home to such hits as "The Dick Van Dyke Show," "The Andy Griffith Show" and "My Three Sons," making Desilu a successful independent production house.

But even this tremendous success wasn't enough to keep the star-crossed sweethearts together. The demands of running a corporation while still playing his role on "I Love Lucy" began to take their toll on Arnaz and the marriage. Arnaz's drinking became more excessive, and the couple would often break into violent arguments on the set of the show. So after 20 years together, Arnaz and Ball finally divorced in 1960.

By 1961, Ball had remarried and was starring in "The Lucy Show"Â-with ex-husband Arnaz directing. But it proved to be too much for Arnaz to handle, and in 1962, he asked Lucy to buy him out of Desilu. She paid him $2.5 million for his shares and became the first woman CEO of a major television and movie production company.

It was not the best time for such a first, however. Desilu's revenue was down and movie studios were beginning to produce their own television shows, squeezing independent production companies out of business. Realizing she could not turn the company around on her own, Ball hired CBS executive Oskar Katz to be her executive vice president. At the time, the only show Desilu had in production was Lucy's. Katz believed the key to turning the company around was getting Desilu back into the business of production, so he produced "Star Trek" and "Mission Impossible." Based on the popularity of these now classic shows, Ball had succeeded in making Desilu profitable again by 1967. Her goal accomplished, she sold her shares of Desilu to Paramount Studios for $17 million.

By the time of their deaths in 1986 and 1989 respectively, Arnaz and Ball were firmly enshrined in the Television Hall of Fame, not merely for their talent as comedians, but for their groundbreaking contributions to the art and business of television production.

Fantastic Firsts
	Desilu Productions purchased the equipment used to film "I Love Lucy" with money from CBS but structured the deal so Desilu owned the equipment and "rented" it back to the studio for each episode. This ingenious arrangement, first introduced by Desi Arnaz, would later become a standard practice in the television industry.
	Arnaz was the first television producer to film with three cameras instead of one, so he could shoot angles and close-ups simultaneously. Sitcoms are still shot this way to this day.

Birth of a Rerun
In the early days of television, shows were performed in New York and broadcast live to viewers on the East Coast. For viewers in other time zones to see the shows, they were recorded from a special television picture tube called a kinescope and rebroadcast at later times. These "kinescopes," as the recordings were called, were less clear than live broadcasts, and their quality tended to degrade as they were rebroadcast.
By insisting that "I Love Lucy" be recorded on film, which could be easily stored and broadcast over and over again without any degradation of picture quality, Desi Arnaz initiated the industry practice of airing reruns, which made summer hiatuses possible and opened up a new market for the sale of film rights.

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