American Broadcasting Co. has agreed to buy a controlling interest in Chilton Co., a major magazine and book publisher, in a move certain to intensify anguish among some government policymakers about increasing ownership concentration in the communications business.
The broadcasting giant, which entered the publishing field with several acquisitions in 1977, signed an agreement on Friday with Glenmede Trust Co. of Philadelphia, providing for the purchase at $86 a share of about 45 percent of Chilton common stock.
ABC said further that Chilton directors have agreed to sell their shares -- another 4 percent -- and the broadcasting firm plans a cash tender offer at $86 for all remaining shares.
The purchase offer is a considerable premium over the price of Chilton stock, traded last week before the ABC bid. Chilton stock rose $15 a share in the over-the-counter market Friday to $82 bid.
Although the Chilton-ABC deal represents a "friendly" takeover -- one approved by the Chilton directors -- it comes at a time when there is increased concern about media industry consolidation or takeovers of communications firms by other corporations.
McGraw-Hill Inc., publisher of Business Week and owner of the Standard & Poor's rating service, is engaged in a bitter struggle to fend off a $40-pershare takeover bid by American Express Co., a firm not now engaged in significant communications enterprises.
In addition, the Federal Trade Commission staff is considering what recommendations to make about media concentration following a two-day symposium on the issue here last December. There have been about 300book publisher mergers in recent years, and 10 mass-market paperback firms now control most of that market.
Chilton, based in Radnor, Pa., publishes Iron Age and Commercial Car Journal magazines among other publications and is engaged in book publishing, director publication, research and direct mail marketing.
ABC already has subsidiaries that publish Modern Photography, Prairie Farmer, High Fidelity and other periodicals as well as the Schwann record catalogues.
The Authors Guild, a national society of 5,000 authors, is expected to oppose the ABC-Chilton deal as it has the proposed McGraw-Hill-American Express combination.
In letters sent Feb. 6 to the Justice Department Antitrust Division and the FTC, the guild said Amexco's potential acquisition of McGraw-Hill would violate the Clayton Act, Jeopardize the "First Amendment marketplace of ideas, accelerate the conglomeration of textbook publishing, and stimulate the takeover of other major independent, publicly held publishing firms."
Speaking to the FTC symposium in December, write and Authors Guild President John Brooks said he had watched publishing consolidation over the past 20 years "with dismay." The "most distressing" development, he added, was that "the business of publishing books is falling under the control of businessmen with no prior interest in books."
Brooks said a new "conglomerate publishing style" has led to "furious competition among a few giants for successful sellers" and that many books that deserve to be published are being ignored More and more big books by famous authors are being published, but fewer writers are being heard in a "degradation of the publishing process," he argued.
Townsend Hoopes, president of the industry trade group, the Association of American Publishers, took sharp issue with the authors, as did Harper & Row President Winthrop Knowlton, at the FTC session.
Authors Guild arguments present "a distorted picture of reality," said Hoopes, who cited figures showing 1,352 publishing establishments in 1978 compared with 410 in the Depression and 1,200 in 1972.
Despite mergers and failures, the number of publishing firms is growing at an annual rate of more than 2 percent, while the number of new books published has increased from 15,000 in 1960 to 42,000 last year, Hoopes added.
He said that four largest book publishers actually lost 2 percent of their market share in 1954-1972 period (to 16 percent) while the 20 largest publishers gained 5 percent to 52 percent of the overall industry.
Added Knowlton, whose firm is the 10th largest publisher: "Last year we sold 22 million books, which sounds like a lot until one realizes that the industry sold over 1.5 billion books and that our overall share of that figure amounted to only 1.5 percent."