Capital Cities/ABC Inc.

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 and local advertising executive Harry L. Goldman decided to form a radio station. Rosenblum was also instrumental in help co-founding Hudson Valley Community College in Troy several years later, when he was on the Board of Trustees from 1953 to 1957 and then became the boards secretary in 1957 which he held that position until his death in 1996. 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 famous 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.

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 (serving the Charleston 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 KLLI).[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]

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's broadcasting division (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-TV. If the waiver request were denied, WXYZ-TV would have been retained.

WPVI-TV and KTRK-TV had long been ABC affiliates (in fact, two of ABC's strongest affiliates), while WTVD and KFSN-TV, 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.[29]

The merger was completed on January 3, 1986. The new company retained ABC's radio and television combinations in New York City (WABC, WABC-TV and WPLJ), Los Angeles (KABC, KABC-TV and KLOS), 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; 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.[30] In 1992, Capital Cities/ABC sold Word Inc.'s music and book publishing to Thomas Nelson.[31] In February 1993, the company formed a television production joint venture with Brillstein-Grey Entertainment to tap into their managed talent and to take advantage of relaxed production regulations.[32][33] In July, CC/ABC purchased a majority ownership in animation studio DIC Animation City, forming a joint venture called DIC Entertainment L.P.[34] 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.[35]

In 1994, CC/ABC agreed to a $200 million seven-year television production joint venture with the original DreamWorks live-action studio.[36]

Capital Cities/ABC was acquired by The Walt Disney Company in 1995.[37] A Disney subsidiary operating the combined company's television operations, ABC, Inc., was established on September 19, 1996.

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).