Thomas S. Murphy, media executive who arranged ABC takeover, dies at 96
His death was announced in a statement from the Walt Disney Co., which did not cite a cause.
A graduate of Harvard Business School with a low-key personality and methodical approach to business, Mr. Murphy helped reshape the nation’s broadcasting and entertainment landscape in the late 20th century, transforming capitals from a station of troubled television in Albany, NY, to a wall-to-wall street darling that controlled dozens of television, radio and publishing properties.
Judging by the stock price alone, his leadership has been phenomenally successful. Between 1957 – when Capital Cities went public – and 1995, when Mr. Murphy arranged the merger with Disney for $19 billion, shareholders saw their investment increase 2,000 times. But beyond his efforts to improve results, he was also admired for building a corporate culture that emphasized ethical behavior and for his philanthropic work which included leading the humanitarian group Save the Children. for seven years as Chairman of the Board.
“Tom Murphy was unrivaled in our industry, not just for his business accomplishments, but for his impeccable ethics, unwavering kindness and boundless generosity,” former ABC Chairman and Disney CEO Bob Iger said. in a press release. “He was a man of deep principles, setting and demanding high standards, always living up to them and never compromising on business ethics.”
Mr. Murphy had a long history of aggressive acquisitions before his company bought ABC, setting what was then a record for the largest corporate acquisition outside the oil industry. Even with its track record, the purchase came as a shock to analysts and investors: ABC was about four times larger than Capital Cities.
One writer compared the purchase to a minnow swallowing a whale.
Wall Street applauded the deal, in part because of Capital Cities’ lean management style — Mr. Murphy had no legal department or personnel office, and his secretary handled public relations — and because of the involvement of his friend Warren Buffett, the “oracle of Omaha”, who helped fund the deal and soon joined the board.
According to Roger Lowenstein’s book “Buffett: The Making of an American Capitalist,” Mr. Murphy began negotiating the deal in late 1984, when he visited the office of ABC chief Leonard H. Goldenson. “Leonard, he said, I don’t want you to throw me off the 39th floor, but I have an idea.
Instead of throwing it on the streets of Manhattan, Goldenson approved the proposed acquisition, trusting Mr. Murphy to keep ABC intact at a time when the network was sitting at No. 3 in the rankings and attracting the attention of potential buyers. who, like Mr. Murphy, thought they could streamline the network and restore it to dominance. The deal was bolstered after Buffett agreed to be the ‘900-pound gorilla’ of the deal, as he put it, investing more than half a billion dollars in the business and refusing to sell its stake after the merger, as part of an effort to prevent Capital Cities/ABC from being taken over by other conglomerates.
In part, the investment was a symbol of Buffett’s trust in Mr. Murphy, whom he once bonded over racquetball and steak dinner. “He has none of those character complexities that screw up other people and lead to irrational behavior,” Buffett said in a 1987 interview with The New York Times. Indeed, in a statement on Wednesday, he said Mr Murphy “taught me more about running a business than anyone else.”
Mr. Murphy then led Capital Cities/ABC as chairman and CEO, aided by his longtime lieutenant Daniel B. Burke, whom he described as an equal partner in the venture. The pair took a hands-off approach, emphasizing cost-control measures while trying to hold managers of a sprawling business that included fledgling cable channel ESPN and publications such as the Kansas City Star to account. , Fort Worth Star-Telegram and Women’s Wear Daily.
“How many fewer people do you need to do your job,” they asked, “and what projects can you postpone?
Some ABC reporters feared their managerial approach would devastate programs like “World News Tonight,” “Nightline” and “20/20.” But Mr. Murphy has generally been praised for his management of the network’s news division – after the company was sold, reporter Cokie Roberts called him a “world-class boss” – and, in the opinion of all, avoided interfering in editorial decisions.
Mr Murphy retired as chief executive in 1990, when he turned 65, but returned to work in 1994 after Burke retired as his successor. A year later, he negotiated with Disney CEO Michael D. Eisner to create what was then considered the most powerful entertainment company in the world, uniting Capital Cities/ABC properties with Disney assets. which included theme parks, film and television studios, and a stable of legendary cartoon characters.
The deal was reported as the second-largest corporate takeover in history, following the 1989 takeover of RJR Nabisco for $25 billion, and came during a period of growing consolidation in the entertainment industry. , as new federal regulations have freed up the networks to own a financier. interest in the programs they broadcast. Just a day after the announcement of the sale, the Westinghouse Electric Corp. announced that it had agreed to buy CBS for $5.4 billion.
By all accounts, the deal with Disney was done quickly following an impromptu conversation with Eisner, Buffett and Mr. Murphy at a press conference in Sun Valley, Idaho. It was a cornerstone in the career of Mr. Murphy, who later served on the board of Disney and Buffett’s holding company, Berkshire Hathaway, while retiring.
“I am very happy that we closed the deal. Unfortunately, I’m going to be unemployed,” he joked in a 1995 interview with Broadcasting & Cable, a trade publication. “You know what my plan is? I’m going to be a character actor at Disney.
Thomas Sawyer Murphy was born in Brooklyn on May 31, 1925. His father, a lawyer, was active in Democratic politics and became a state Supreme Court justice. His mother was a housewife whose optimism and devout Catholicism exerted a strong influence on a young Tom Murphy, who later had his headquarters in a building across from St. Patrick’s Cathedral in Manhattan.
Mr. Murphy served in the Navy during World War II and earned a degree in mechanical engineering from Cornell University in 1945. Four years later, he earned his MBA from Harvard.
After jobs as an industrial oil salesman and advertising agency executive, he landed at Lever Brothers as a brand manager, only to leave in 1954 to become station manager at Hudson Valley Broadcasting, the Albany company. which became Capital Cities.
The media company was initially owned by an investment group that included globetrotting broadcaster Lowell Thomas and lost money during its early years, leading Mr Murphy to develop an appreciation for cost control. He became chairman and then chairman in the mid-1960s, having spearheaded several of the company’s early acquisitions.
“I always had on my desk a sheet of people I would like to do business with,” he recalls. “I went to see them all. That’s how we built the business.
Mr. Murphy was later appointed to the boards of IBM, Johnson & Johnson and Texaco, and served as chairman and president of the Madison Square Boys & Girls Club in New York. He also served as a trustee on the board of trustees for five decades of what is now NYU Langone Health, which he led for seven years as president.
In 1955 he married Suzanne Crosby, who had worked in Washington as secretary to charismatic Catholic leader Fulton J. Sheen, often described as the first televangelist. She died in 2009. Survivors include four children, Emilie Murphy of Rye, Thomas S. Murphy Jr. of Greenwich, Conn., Kathleen Murphy of Boulder, Col., Mary Conlin of Los Angeles; and nine grandchildren.
During his years as head of Capital Cities/ABC, Mr. Murphy gave an annual lecture on business philosophy, effectively distilling his own approach to business – including his belief that business had an obligation to its public, not just its shareholders. .
“The way I was raised in the business, the first thing we discussed when we went into the office every day was whether what we were doing lived up to our responsibilities as a broadcaster to our community,” he told Broadcasting & Cable. “And then, after realizing that you were doing everything you had to in this area, you paid attention to what you could do to weed out the brains of the competition, which is what most people do most of the time.”