Capital Cities/ABC Inc.

Capital Cities/ABC Inc.
Formerly
  • Capital Cities Communications
  • (1946–1959)
  • Capital Cities Broadcasting
  • (1959–1985)
Public
Industry radio broadcasting, television broadcasting, publishing, recording
Fate Acquired and re-branded by The Walt Disney Company
Successor Disney–ABC Television Group
Founded April 5, 1946 (1946-04-05) (as Hudson Valley Broadcasting Company)
Defunct January 5, 1996 (1996-01-05)
Headquarters Albany, New York
Key people
  • Hyman Rosenblum (co-founder)
  • Lowell Thomas (co-founder)
  • Frank Smith (co-founder)
  • Thomas Murphy (chairman/CEO)
  • Daniel J. Burke (president)

Capital Cities/ABC Inc., founded as Capital Cities Communications, and sometimes referred to as CapCities, was an American media company. It purchased the much larger American Broadcasting Company in 1985, becoming Capital Cities/ABC Inc.. It was eventually acquired by The Walt Disney Company and re-branded itself as Disney–ABC Television Group in 1996.

History

Capital Cities/ABC Inc. origins trace back in 1946, when Hyman Rosenblum (1911–1996), a local Albany businessman, and several investors, including future Congressman Leo William O'Brien, decided to form a radio station. Rosenblum was also instrumental in help co-founding Hudson Valley Community College in Troy several years later. The company was incorporated as Hudson Valley Broadcasting Company on April 5, 1946.[1] when the 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 the late fall of 1954, a group of New York City-based investors, led by legendary radio broadcaster and author Lowell Thomas, bought majority control of Hudson Valley Broadcasting from Rosenblum and associates. Thomas' manager/investing partner, Frank Smith became the President of the company.

The Capital Cities era

In 1956, WROW-TV moved from channel 41 to channel 10 and became WCDA. In 1957, Hudson Valley Broadcasting merged with Durham Broadcasting Enterprises, the owners of WTVD television in Durham, North Carolina.[2] The new company took the name Capital Cities Television Corporation in November 1957,[1] as both WROW/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.[3] In December 1959, the company's name was changed to Capital Cities Broadcasting.[1]

During the 1960s, Capital Cities' holdings grew with the separate 1961 purchases of WPAT-AM-FM in Paterson, New Jersey, and WKBW radio and WKBW-TV in Buffalo, New York;[4] 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 another capital region), in 1964.[5] CapCities entered the Los Angeles market in 1966 with its purchase of KPOL (later KZLA and now the present-day KMPC) and KPOL-FM (later KZLA-FM and now KXOS).[6] 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.[7] Poole's own Poole Broadcasting firm 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.[8][9][10]

In 1968, Capital Cities entered the publishing business by acquiring Fairchild Publications, publisher of several magazines including Women's Wear Daily.[11] The following year the firm purchased its first newspaper, The Oakland Press of Pontiac, Michigan.

The following year, the company made another big purchase—acquiring WFIL-AM-FM-TV in Philadelphia, WNHC-AM-FM-TV in New Haven, Connecticut (in another capital region), and KFRE-AM-FM-TV in Fresno, California from Triangle Publications.[12][13] 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 acquisitions of WPVI and WTNH gave them seven VHF stations, two stations over the FCC limit at the time, and WTEN and WSAZ-TV were respectively spun off by CapCities to Poole Broadcasting and Lee Enterprises not long after the Triangle purchase was finalized.[14][15][16] WSAZ radio in Huntington was divested to Stoner Broadcasting (it is now WRVC), also as a result of the Triangle deal.[17] To reflect the diversity of their holdings, the company changed its name to Capital Cities Communications on May 4, 1973.[1]

In 1974, Capital Cities bought WBAP and KSCS-FM in Fort Worth, Texas, along with its purchase of the Fort Worth Star-Telegram.[18] The firm also increased its newspaper and publishing holdings during the middle-1970s. In 1974, Capital Cities acquired the Oregon-based Jackson Newspapers chain, which included the Albany Democrat-Herald, the Ashland Daily Tidings, and several other local newspapers and magazines. The Kansas City (Missouri) Star was acquired in 1977, and the following year CapCities bought Times Leader of Wilkes-Barre, Pennsylvania.

In 1977, the company filed a lawsuit against the Canadian Radio-television and Telecommunications Commission over the simultaneous substitution rules (more can be found here).

Returning to broadcasting, WBIE-FM (now WKHX-FM) in Marietta, Georgia (near Atlanta, another capital city), was bought in 1981.[19] WROW radio in Albany, the company's first station, and its FM counterpart (which is now WYJB) were sold in 1983,[20] and in 1984 the company made its last pre-ABC-merger purchases with independent station WFTS-TV in Tampa, Florida[21] and KLAC radio in Los Angeles (concurrent with the sale of KZLA).[22]

Capital Cities/ABC

On March 19, 1985, Capital Cities announced that it would purchase ABC for $3.5 billion, which shocked the media industry, as ABC was some four times bigger than Capital Cities was at the time. Berkshire Hathaway chairman Warren Buffett helped to finance the deal in exchange for a 25 percent share in the combined company.[23][24] The deal was, at the time, the largest non-oil merger in world business history.[25] However, this record would be surpassed by year's end by the merger of General Electric and RCA (the latter company then being the parent company of rival network NBC).[26]

The newly merged company, known as Capital Cities/ABC[1] (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.[27] Of the former Capital Cities television stations, the new company opted to keep the outlets in Houston, Durham, and Fresno. WFTS and ABC's WXYZ-TV in Detroit were divested as a pair to the E.W. Scripps Company (then known as Scripps-Howard Broadcasting). WTNH and WKBW-TV were sold separately to minority-owned companies;[28] WKBW-TV would eventually be acquired by E.W. Scripps by 2014. WTNH would have been sold in any event due to a significant city-grade signal overlap with ABC flagship WABC-TV in New York City. 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), and would not even consider granting a waiver for a city-grade overlap.

Capital Cities/ABC originally planned to retain WPVI-TV in Philadelphia, but FCC rules could have forced a sale of that station as well due to a large signal overlap with WABC-TV. Citing CBS' ownership of television stations in New York City (WCBS-TV) and Philadelphia (at the time WCAU-TV) under grandfathered status, Capital Cities/ABC requested, and received a permanent waiver from the FCC allowing it to keep WPVI. Had the request been denied, WXYZ-TV would have been retained instead.[29][30][31]

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 (Park Communications was the buyer), WKBW (Price Communications, the new owner, changed its call letters to WWKB, which was necessitated due to an FCC regulation in effect then that forbade TV and radio stations in the same city, but with different owners from sharing the same call letters) and KLAC and KZLA-FM (to Malrite Communications), and ABC's WRIF-FM in Detroit (to a minority-owned concern), among others.[32]

The merger was completed on January 3, 1986. The new company retained ABC's radio and television combinations in New York City (WABC-AM-TV and WPLJ), Los Angeles (KABC-AM-TV and KLOS), Chicago (WLS-AM-FM-TV), and San Francisco (KGO-AM-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; Fairchild Publications; the Fort Worth Star-Telegram and the Kansas City Star; and other broadcasting and publishing properties.[11]

In May 1991, Capital Cities/ABC's Farm Progress Cos. closed its purchase of Harcourt Brace Jovanovich Inc.'s 12-magazine farm publishing group.[33] In February 1993, the company formed a TV production joint venture with Brillstein-Grey Entertainment to tap into their managed talent and to take advantage of relaxed production regulations.[34][35] In July, CC/ABC purchased a majority ownership in DIC Entertainment.[36] Later in July, CC/ABC reorganized into 4 groups, ABC TV Network Group, CC/ABC Publishing Group, the CC/ABC Broadcast Group, and a newly formed CC/ABC Multimedia Group overseeing the network, magazines & newspapers, stations and new technology & miscellaneous operations respectively. Network Group president Bob Iger was also promoted to executive president of CC/ABC.[37]

CC/ABC in December 1994 agreed to a $200 million seven-year TV production joint venture with the new DreamWorks SKG studio.[38]

Capital Cities/ABC merged with The Walt Disney Company on January 5, 1996,[39] and assumed The Walt Disney Company name and headquarters in California on that same day. Michael Eisner also retained his position as Disney's CEO. A subsidiary operating the combined company's television operations, ABC, Inc., was established on September 19, 1996.

Structure at Disney acquisition

Former Capital Cities-owned stations

Stations are listed alphabetically by state and city of license.

Notes:
1. Two boldface asterisks appearing following a station's call letters (**) indicate a station that was built and signed-on by a predecessor company of Capital Cities;
 2. This list does not include WTVG in Toledo, Ohio. That station was purchased by Capital Cities/ABC in 1995, and was completed just before Disney's acquisition of the combined group was finalized. In addition, WJRT-TV was reacquired in the same deal. However, in November 2010, Disney/ABC reached an agreement to sell the two stations back to previous owner SJL Broadcasting, which was completed on April 1, 2011.

Television stations

City of License / Market Station Channel
TV (RF)		 Years Owned Current Ownership Status
Fresno, California KFSN-TV 30 (30) 1971–1985 ABC owned-and-operated (O&O)
New Haven - Hartford, CT WTNH-TV 8 (10) 1971–1985 ABC affiliate owned by Nexstar Media Group
Tampa - St. Petersburg WFTS-TV 28 (29) 1984–1985 ABC affiliate owned by E. W. Scripps Company
Flint - Saginaw - Bay City, MI WJRT-TV 12 (12) 1964 ABC affiliate owned by Gray Television
Albany - Schenectady - Troy, N.Y. WROW-TV/WCDA/WTEN ** 10 (26) 1954–1971 ABC affiliate owned by Nexstar Media Group
Buffalo, New York WKBW-TV 7 (38) 1961–1985 ABC affiliate owned by E. W. Scripps Company
Durham - Raleigh - Fayetteville WTVD ** 11 (11) 1957–1985 ABC owned-and-operated (O&O)
Philadelphia WPVI-TV 6 (6) 1971–1985 ABC owned-and-operated (O&O)
Providence, R.I. - New Bedford, MA WPRO-TV 12 (13) 1959–1967 CBS affiliate, WPRI-TV, owned by Nexstar Media Group
Houston KTRK-TV 13 (13) 1967–1985 ABC owned-and-operated (O&O)
Huntington - Charleston, W.V. WSAZ-TV 3 (23) 1964–1971 NBC affiliate owned by Gray Television

Radio stations

AM Stations FM Stations
City of License/Market Station Years owned Current ownership status
Los Angeles KPOL/KZLA–1540
(now KMPC)		 1966–1984 owned by P&Y Broadcasting Licensee, LLC
KLAC–570 1984–1985 owned by iHeartMedia
KPOL-FM/KZLA-FM–93.9
(now KXOS)		 1966–1985 owned by 93.9 Holdings
Atlanta - Marietta, GA WKHX–590
(now WDWD)		 1985 owned by Salem Media Group
WKHX-FM–101.5 1981–1985 owned by Cumulus Media
Detroit WJR–760 1964–1985 owned by Cumulus Media
WJR-FM/WHYT–96.3
(now WDVD)		 1964–1985 owned by Cumulus Media
Paterson, N.J. - New York City WPAT–930 1961–1985 owned by Multicultural Broadcasting
WPAT-FM–93.1 1961–1985 owned by Spanish Broadcasting System
Albany - Schenectady - Troy, N.Y. WROW–590 1947–1983 owned by Pamal Broadcasting
WROW-FM–95.5 **
(now WYJB)		 1959–1983 owned by Pamal Broadcasting
Buffalo, New York WKBW–1520
(now WWKB)		 1961–1985 owned by Entercom Communications
Providence - Warwick, R.I. WPRO–630 1959–1985 owned by Cumulus Media
WPRO-FM–92.3 1959–1985 owned by Cumulus Media
Fort Worth - Dallas WBAP–820 1974–1985 owned by Cumulus Media
KSCS–96.3 1974–1985 owned by Cumulus Media
Huntington, W.V. - Ashland, KY WSAZ–930
(now WRVC)		 1964–1970 owned by Fifth Avenue Broadcasting Company
NOTE: All stations currently under ownership of Cumulus Media were previously owned by Citadel Broadcasting before Cumulus acquired the company on September 16, 2011. Most of these same stations were owned by the Walt Disney Company until Citadel's purchase of ABC Radio Networks and these stations on June 12, 2007 (except for WPRO-AM-FM, which were sold by Capital Cities/ABC in 1993 and acquired by Citadel in 1997).

Financial results

Annual financial statements of Capital Cities/ABC
(1994 and 1995 in millions of U.S. dollars, other years in thousands)
Year Revenues Net income
TV/Radio Press Total TV/Radio Press Total
1983[41] 302,785459,510762,295124,696104,034228,730
1984[41] 348,106591,616939,722144,182133,179277,361
1985[41] 378,297642,5831,020,880150,970138,512289,482
1986[41] 3,153,619[CA 1]970,7554,124,374474,535158,999602,678
1987[41] 3,433,7491,006,5974,440,346632,910146,717745,990
1988[41] 3,749,5571,023,8964,773,453722,171129,720816,029
1989[41] 3,899,8981,057,4054,957,394836,149130,444922,512
1990[41] 4,283,6331,101,9695,385,602830,457132,371923,215
1991[41] 4,329,7431,052,2465,381,989669,708122,905761,233
1992[41][42] 4,265,5611,078,5665,344,127619,317136,389755,706
1993[41] 4,663,2151,010,4385,673,653778,077125,647903,724
1994[43] 5,2771,102.16,379.71,1271551,239
1995[44] 5,727.51,151.16,878.51,164.81391,238.8
Since 1996, ABC's financial results are included in those of Disney Media Networks.
  1. ↑ Following the acquisition of ABC

References

  1. 1 2 3 4 5 ABC, INC. Selected Entity Name: CAPITAL CITIES COMMUNICATIONS, INC. Entity Information. NYS Department of State: Division of Corporations.
  2. ↑ "This week's receipts: $26 million." Broadcasting - Telecasting, April 8, 1957, pp. 31-32.
  3. ↑ "Providence stations sold" (PDF). Broadcasting. December 22, 1958. p. 9.
  4. ↑ "FCC okays $30 million in station sales" (PDF). Broadcasting. August 7, 1961. p. 90.
  5. ↑ "Another group gets bigger" (PDF). Broadcasting. March 2, 1964. p. 64.
  6. ↑ "Capital Cities Corp. agrees to purchase station KPOL." The New York Times, March 5, 1966, pg. 51.
  7. ↑ "Big sales get FCC approval." Broadcasting, August 3, 1964, pp. 52-53.
  8. ↑ "Capital Cities buys KTRK-TV in Houston" (PDF). Broadcasting. November 21, 1966. p. 9.
  9. ↑ "Poole buying WPRO-TV for $16.5 million" (PDF). Broadcasting. February 27, 1967. p. 9.
  10. ↑ "Capital Cities buy-sale OK'd" (PDF). Broadcasting. June 19, 1967. p. 58.
  11. 1 2 Godfrey, Donald G.; Leigh, Frederic A. (January 1, 1998). Historical Dictionary of American Radio. Greenwood Publishing Group. p. 62. ISBN 0313296367. Retrieved April 13, 2015.
  12. ↑ "Capcities buys 9 Triangle outlets" (PDF). Broadcasting. February 16, 1970. p. 9.
  13. ↑ "Last-minute clearance for Capcities." Broadcasting, March 1, 1971, pp. 19-20.
  14. ↑ "Another spin-off by Capcities: WSAZ-TV goes next, to Lee Enterprises for $18 million" (PDF). Broadcasting. April 13, 1970. p. 46.
  15. ↑ "Another spin-off by Capcities: WTEN(TV) goes to Poole Broadcasting for $19 million" (PDF). Broadcasting. April 27, 1970. p. 36.
  16. ↑ "Part of Capcities package comes in" (PDF). Broadcasting. July 13, 1970. p. 36.
  17. ↑ "Capcities sells its AM in Huntington, W. Va" (PDF). Broadcasting. May 25, 1970. p. 50.
  18. ↑ "Fort Worth media deal hits $100 million mark" (PDF). Broadcasting. January 8, 1973. p. 10.
  19. ↑ Changing Hands."] Broadcasting, June 8, 1981, pg. 91.
  20. ↑ "Changing Hands." Broadcasting, December 5, 1983, pg. 72.
  21. ↑ "Changing Hands." Broadcasting, April 23, 1984, pg. 150.
  22. ↑ "Changing Hands." Broadcasting, August 20, 1984, pp. 65-66.
  23. ↑ Kleinfield, N.R. "ABC is being sold for $3.5 billion; 1st network sale." The New York Times, March 19, 1985.
  24. ↑ "Capcities + ABC." Broadcasting, March 25, 1985, pp. 31-32.
  25. ↑ Lowry, Brian (December 28, 1999). "Leonard Goldenson, ABC Network Pioneer, Dies at 94". Los Angeles Times. Retrieved May 5, 2018. In 1985, after 32 years running ABC, he [Leonard Goldenson] agreed to sell the network to Capital Cities for $3.5 billion, at that time the biggest non-oil merger in history.
  26. ↑ "General Electric Co., in the largest non-oil merger in..." United Press International. December 11, 1985. Retrieved May 5, 2018.
  27. ↑ "FCC approval of CapCities/ABC deal likely." Broadcasting, March 25, 1985, pg. 33.
  28. ↑ "ABC/CCC sells four TV's for $485 million; Detroit, Tampa to Scripps Howard." Broadcasting, July 29, 1985, pg. 30.
  29. ↑ Stevenson, Richard W. "ABC, Capital Cities to sell stations." The New York Times, May 14, 1985.
  30. ↑ "Approval sought for ABC merger." Associated Press, July 2, 1985.
  31. ↑ Fabrikant, Geraldine. "TV station winners reported." The New York Times, July 26, 1985.
  32. ↑ "Breaking up and breaking records." Broadcasting, August 12, 1985, pg. 29.
  33. ↑ Strother, Susan G. (May 8, 1991). "Hbj Sells Off 12 Magazines In Farm Group". Orlando Sentinel. Retrieved May 11, 2015.
  34. ↑ Lippman, John. Cap Cities/ABC Forms Joint Venture With Brillstein-Grey. February 3, 1994. Los Angeles Times.
  35. ↑ BILL Carter, Bill. ABC in Unusual Venture With Talent Firm. February 3, 1994. The New York Times.
  36. ↑ Lowry, Brian (July 26, 1993). "DIC Ent. formed for kids TV fare". Variety. Retrieved 2009-08-15.
  37. ↑ Lowry, Brian (July 27, 1993). "ABC ups Iger, regroups divisions". Variety. Retrieved May 19, 2015.
  38. ↑ McClellan, Steve. (December 5, 1994). "ABC makes high-profile production leap." Broadcasting & Cable. 1994. HighBeam Research. Accessed on December 27, 2013.
  39. ↑ Geraldine Fabrikant. "THE MEDIA BUSINESS;Disney and ABC Shareholders Solidly Approve Merger Deal". The New York Times. Retrieved July 8, 2013.
  40. ↑ "FACT SHEET: THE WALT DISNEY COMPANY". Press Release. The Walt Disney Company. Retrieved 7 March 2013.
  41. 1 2 3 4 5 6 7 8 9 10 11 "Annual report, Section 13 and 15(d), not S-K Item 405 Acc-no: 0000950130-94-000530 Size: 406 KB". Securities and Exchange Commission.
  42. ↑ Hagstrom 1994–1997, p. 131.
  43. ↑ Annual report [Section 13 and 15(d), not S-K Item 405 Acc-no: 0000950130-95-000586 Size: 327 KB
  44. ↑ Current report, items 1, 5, and 7 Acc-no: 0000950157-96-000044 Size: 16 KB
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