Capital Cities Communications

:"Capital Cities redirects here. For the article about the seat of a government, see Capital."

Capital Cities Communications (sometimes referred to as "CapCities") was an American media company best known for its surprise purchase of the much larger American Broadcasting Company in 1985.

History

Capital Cities' origins are traced to 1947, when the Hudson Valley Broadcasting Company received a license for WROW radio in Albany, New York. In October 1953 it opened the Albany-Schenectady-Troy area's second television station, WROW-TV on channel 41. In 1954, a group of New York City-based investors, lead by legendary broadcaster Lowell Thomas and his manager/business partner Frank Smith, bought control of Hudson Valley Broadcasting which Smith was named President of the company.

In 1957, WROW-TV moved from channel 41 to channel 10 and became WCDA. That same year, Hudson Valley Broadcasting merged with Durham Broadcasting Enterprises, the owners of WTVD television in Durham, North Carolina. The new company took the name Capital Cities Television Corporation, as both WCDA (now WTEN) and WTVD served the capital regions of their respective states. Capital Cities then began purchasing stations, starting with WPRO-AM-FM-TV in Providence, Rhode Island (another capital city) in 1959. In 1960, the company's name changed to Capital Cities Broadcasting to reflect their increasing profolio of its radio station holdings. Smith became the company's first Chairman that same year.

Expansion

During the 1960s, Capital Cities' holdings grew with the separate 1961 purchases of WPAT-AM-FM in Paterson, New Jersey, and WKBW-AM-TV in Buffalo, New York; and of the Goodwill Stations, which included WJR-AM-FM in Detroit, WJRT-TV in Flint, Michigan, and WSAZ-AM-TV in Huntington, West Virginia, in 1964. CapCities entered the Los Angeles market in 1966 with its purchase of KPOL and KPOL-FM (later KZLA-FM and now KMVN-FM). ["Capital Cities Corp. agrees to purchase station KPOL." "The New York Times, Mar. 5, 1966, pg. 51.]

In late winter of 1966, Founding Chairman Frank Smith, died unexpectedly and was replaced by Thomas S. Murphy as Chairman/CEO of Capital Cities. Murphy was a Product Manager for Lever Brothers Company in New York, when he was brought into the company by Smith in 1954 to run the flagship Albany Stations as its first Station Manager. Murphy then rose quickly thru the ranks of Capital Cities becoming Vice-President in 1960 and President in 1964 respectively.

As a result of the Goodwill Stations purchase, and to adhere to Federal Communications Commission rules limiting ownership of VHF television stations to five per company, Capital Cities spun-off WJRT-TV to Poole Broadcasting, a company owned by former CapCities shareholder John B. Poole. Poole Broadcasting would later purchase two other television stations from CapCities: the second was WPRO-TV (now WPRI-TV) in 1967, coinciding with CapCities' purchase of KTRK-TV in Houston from the "Houston Chronicle" in June of that year. In 1968, Capital Cities enter the publishing business by acquiring Fairchild Publications, publisher of several magazines including "Womens Wear Daily". The company closed out the decade in 1969 with the sale of its flagship station WTEN to Poole Broadcasting.

In 1970, Capital Cities sold WSAZ radio in Huntington was divested to Stoner Broadcasting (it is now WRVC). The following year, the company made another big purchase, acquiring WFIL-AM-FM-TV in Philadelphia, WNHC-AM-FM-TV in New Haven, Connecticut, and KFRE-AM-FM-TV in Fresno, California from Triangle Publications. Capital Cities would immediately sell the radio stations to new owners, and changed the television stations' calls to WPVI-TV, WTNH-TV, and KFSN-TV respectively. The company also adopted the "Action News" format, previously started by Triangle, and still seen today at WPVI and KFSN. The acquisition of WPVI and WTNH gave them six VHF stations, one station over the FCC limit, and WSAZ-TV was spun-off by CapCities to Lee Enterprises not long after the Triangle purchase was finalized. To reflect the diversity of their holdings, the company changed its name to Capital Cities Communications in 1973. Fact|date=June 2008

In 1974, Capital Cities bought WBAP and KSCS-FM in Fort Worth, Texas, along with its purchase of the "Fort Worth Star-Telegram". In the mid-1970s, Capital Cities acquired Jackson Newspapers from the heirs of Glenn L. Jackson, arguably Oregon's most prominent citizen of the 20th century who was both a business executive and served in numerous state government positions. Jackson Newspapers included the Albany Democrat-Herald, the Ashland Daily Tidings, and several other local newspapers, as well as Van Dahl Publications, which published the international Stamp Collector newspaper and later also The Stamp Wholesaler magazine. (They were later sold to Krause Publications and still later separately discontinued.) The "Kansas City" (Missouri) "Star" was acquired in 1977. In 1978, Capital Cities bought The Times Leader, where the unionized staff almost immediately went on strike, leading Capital Cities Chairman Murphy to say that he would consider selling any part of the corporation except The Times Leader. WBIE-FM (now WKHX-FM) in Marietta, Georgia, was bought in 1981, and in 1984 the company made its last pre-ABC-merger purchase with independent television station WFTS in Tampa, Florida.

Purchase of ABC

Capital Cities' announced $3.5 billion purchase of ABC on March 18, 1985, stunned the media industry, as ABC was some four times bigger than Capital Cities was at the time. Berkshire Hathaway chairman Warren Buffett helped financed the deal in return for a 25 percent stake in the combined company. [Kleinfield, N.R. "ABC is being sold for $3.5 billion; 1st network sale." "The New York Times", March 19, 1985.]

The newly merged company, known as Capital Cities/ABC, Inc. (or CapCities/ABC), was forced to sell off some stations due to FCC ownership rules. Between them, ABC and CapCities owned more television stations than FCC rules allowed at the time. Also, the two companies owned several radio stations in the same markets. ["FCC approval of Capcities/ABC deal likely." "Broadcasting", March 25, 1985.]

Of the former Capital Cities television stations, the new company opted to keep the ones in Philadelphia, Houston, Durham, and Fresno. WFTS and ABC's owned-and-operated station in Detroit, WXYZ-TV, were divested as a pair to the E.W. Scripps Company. WTNH and WKBW-TV were sold separately to minority-owned companies. The new company had originally planned to keep WPVI, but FCC rules could have forced a sale of that station because its signal overlapped with that of ABC's New York City flagship station. At the time, the FCC normally did not allow companies to own two television stations with common coverage areas (known commonly as the "one-to-a-market" rule). Citing CBS' then ownership of television stations in New York and Philadelphia under grandfathered status, Capital Cities/ABC requested, and received, a permanent waiver from the FCC allowing them to keep WPVI. If the request were disallowed, WXYZ would have been retained. [Stevenson, Richard W. "ABC, Capital Cities to sell stations." "The New York Times", May 14, 1985.] ["Approval sought for ABC merger." Associated Press, July 2, 1985.] [Fabrikant, Geraldine. "TV station winners reported." "The New York Times", July 26, 1985.]

WPVI and KTRK had long been ABC affiliates (in fact, two of ABC's strongest affiliates), while WTVD and KFSN, longtime CBS affiliates, respectively switched to ABC in August and September 1985.

On the radio side, new owners were found for CapCities' WPAT stations (Roy H. Park Communications was the buyer), WKBW (Price Communications, the new owner, changed its call letters to WWKB) and KPOL and KZLA-FM, and ABC's WRIF-FM in Detroit, among others.

The purchase was completed on January 3, 1986. The new company retained ABC's radio and television combinations in New York City (WABC, WPLJ, and WABC-TV), Los Angeles (KABC, KLOS, and KABC-TV), Chicago (WLS, WLS-FM, and WLS-TV), and San Francisco (KGO and KGO-TV), along with WMAL and WRQX-FM in Washington, D.C.; CapCities' aforementioned television outlets and the Detroit, Providence, Marietta, and Fort Worth radio stations, the "Fort Worth Star-Telegram" and the "Kansas City Star"; and other broadcasting and publishing properties.

The Walt Disney Company bought Capital Cities/ABC in February 1996, and changed the corporate name back to ABC.

Former Capital Cities-owned stations

Television stations

References