Texas millionaire Joe L. Allbritton resigned yesterday as publisher of The Washington Star, saying he had achieved his main goal of "saving" the newspaper from its previous financial slide.
The 53-year-old banker recently sold The Star to the Time Inc. publishing empire for approximately $28 million. But Allbritton said at the time that he planned to stay on as The Star's publisher and chief executive officer for at least five years.
Yesterday, Allbritton attributed his resignation to Federal Communications Commission regulations and his lawyers' advice.
According to prevailing legal interpretations, current FCC rules would have required Allbritton to step aside as Star publisher by next January if he wanted to retain ownership of WJLA-TV (Channel 7), a valuable station whose call letters are Allbritton's own initials. Some brokers estimated WJLA-TV's value yesterday as $65 million to $70 million.
Allbritton's successor at The Star was not announced. Donald M. Wilson, vice president of Time Inc. for corporate and public affairs, said that a new publisher would be named later and that in the meantime, James R. Shepley, president of Time Inc., would be "in charge" at The Star, Shepley is The Star's board chairman. Shepley himself, when asked who would replace Allbritton, replied, "That's a good question."
Time Inc. named its first key management official at The Star last week, bringing in George W. Hoyt as Star general manager. Hoyt had headed a suburban Chicago newspaper chain owned by Time Inc. In addition, The Star has begun to show Time's imprint by publishing occasional news and feature articles prepared by Time Inc. writers based in the United States and abroad.
At a 45-minute news conference yesterday morning, Allbritton described his own efforts to keep The Star afloat as evidence that an individual businessman "can still play an important and, I suppose, a heroic role" in private enterprise. "The republic's capital is now safe with two newspapers, two good newspapers," he said.
Allbritton, who has gained a widespread reputation as a financial wizard, took his first steps to assume ownership of The Star in 1974 at a time when the newspaper's losses were reported to be about $1 million a month. The Star, which was founded in 1852, had been controlled for more than a century by members of the Noyes, Kauffman and Adams families.
In his four years at The Star, Allbritton trimmed the newspapers's losses substantially, reporting operating profits in recent months, and apparently made a financial killing for himself. He previously was estimated to have cleared at least $70 million by selectively selling off the newspaper's broadcast stations. Yesterday Allbritton appeared to confirm these estimates by acknowledging that it "probably" would be correct to say he had doubled the $65 million he says he invested in The Star.
His overall profits on his Star ventures cannot be gauged precisely, as Allbritton himself noted yesterday, because of his continued ownership of WJLA-TV. The television station's value remains a matter of speculation. Allbritton had planned to swap WJLA-TV for an Oklahoma City television station in a long-term deal estimated to bring him more than $94 million. In March, however, Allbritton called off the pending WJLA-TV trade.
In addition to his sale of The Star to Time Inc., Allbritton sold radio stations WMAL-AM and WRQX-FM to the American Broadcasting Co. for $16 million, one of the highest prices ever paid for radio properties.
Yesterday Allbritton said he was anxious to buy additional television and radio stations. Although he said he had no current plan to sell WJLA-TV, he appeared to leave the possibility open.
The immediate cause of Allbritton's announcment yesterday was said to be an FCC deadline today for WLJA-TV to file an application for a three-year renewal of its broadcast license. Allbritton's position as Star publisher apparently could have provided grounds for a challenge against renewing the license.
The FCC regulations cited by Allbritton are intended to bring about more diversified ownership of communications media. These rules are the subject of a court challenge, now pending before the U.S. Supreme Court.
Allbritton said at his hurriedly scheduled news conference that he had not made his decision to resign as Star publisher until Tuesday, although there had been widespread speculation he would step down soon. He noted - and Time Inc. officials confirmed - that he never had received a slary from Time Inc."Thatwas my choice, not theirs," Allbritton said.