The communications empire that made its move on American Broadcasting Cos. yesterday began 30 years ago in a former home for retired nuns in Albany, N.Y., where the ex-chapel was converted into a UHF television studio and the unpainted balcony served as the broadcast site for an AM radio station
Today, Capital Cities Communications, run by a lean management operation of about a dozen people in New York, is a media empire led quietly and with methodical precision by its chairman, Thomas S. Murphy.
Murphy and his team, many of whom have been with him for years, some for decades, built from those shaky beginnings in upstate New York a company that reported net revenue for 1984 of $949.7 million and net earnings of $135.2 million. The company owns 12 radio stations, seven television stations and 10 newspapers.
It also has more than 30 trade publications under its corporate umbrella. Fairchild Publications, which puts out Women's Wear Daily, reports to "Cap Cities," as does Institutional Investor, recently purchased for what some estimate to be around $70 million.
"The general reputation in this business is that they are a very well-managed operation, highly profitable," said Elie Abel, chairman of the communications department at Stanford University. "Tom Murphy is a very superior business executive."
Murphy, who has shied away from most publicity in the past, is little known among the millions who read the words and view the television screens that his company controls. But among financiers and top executives of news publications, he is known as the quiet pro who moves cautiously on his acquisitions, taking care not to let the thrill of the auction or the ego gratification that comes with owning a big-name publication shake his financial assessments.
"He doesn't let anything else get in the way. He doesn't do anything beyond what he knows he can do within the limits of his own competence," says one associate.
"They also know how to cut costs," he says.
One way that the company has made efforts to streamline, according to officials of The Newspaper Guild, is to tackle unions.
"I think Cap Cities has exceeded our worst fears. They have placed themselves first among equals in the [newspaper] chains we have to deal with," said Richard Ramsey, executive secretary of the contracts committee for The Guild.
But, several people who have been associated with Capital Communications said that the company's economic strength has been its ability to decentralize -- to give each of its companies its full lead -- so long as the balance sheets don't forbode trouble.
"They hire people they think will do the job and then they leave them alone to do it," said one associate of Murphy. "But they really leave them alone."
As a result, Murphy and company President Daniel B. Burke can operate their minuscule corporate office in New York where there are no personnel, corporate program or legal departments.
When a call comes in for public relations, it goes to Ruth Fitzgerald, Murphy's secretary of 30 years.
Likewise, the television stations and newspapers run lean, even though the stations are either first or second in all markets, and the newspapers have mostly improved -- two of them, The Kansas City Times and Star and The Fort Worth Star-Telegram, winning Pulitzer Prizes in the last few years.
Station WPVI, an ABC affiliate owned by Capital Cities in Philadelphia, is a prime example. The station is considered not only the most successful affiliate of ABC, it is the most successful affiliate in the top 20 markets for all networks.
"It's been a happy-talk station for 10 years and they do the news as well as anybody," said Lee Winfrey, television columnist for The Philadelphia Inquirer. "But it ain't Tom Brokaw."
Art Moore, a spokesman for the station, said yesterday that WPVI has 200 employes, while its Philadelphia rivals employ 300 or more people each.
Competitors, however, said the station is cautious, using tried-and-true techniques for garnering viewers, such as "lots of fires and crime stories." But even critics suggest that the key to the station's success -- and the reason for success for the company's other operations -- is a stable management team that is content and well paid.
Many industry observers have said that Murphy and his team made their one bad move in 1977 when they purchased The Wilkes-Barre Times Leader. Within six months, the paper was on strike and still is. The guild, which lost in a contest with Capital Cities a few years earlier at The Oakland Press in Pontiac, Mich., decided to put out a competing newspaper in the strongly blue-collar area of Wilkes-Barre.
"The Citizens' Voice," the guild paper, has a certified circulation of more than 47,000, while the Capital Cities paper claims about 46,000.
Murphy says he would give ABC officials the same freedom that his other executives enjoy.
Murphy told a reporter recently: "We were blind-sided in Wilkes-Barre," and he denied that his company either wants to break unions or to squeeze companies so hard financially that quality suffers.
Those who know Murphy's style and Capital Cities' thrifty tendencies say that if the deal is completed, ABC may see some changes in its lavish operations. Some industry observers said the ranks of middle management may be thinned out; others said that network limos may be replaced with humble cabs.
For the record, however, Murphy says he would give ABC officials the same freedom that his other executives enjoy.
"It [the merger] will have no impact whatever on the news departments," Murphy said yesterday.
You can check with our own news people and our own publishing people . . . that we just don't interfere in any way with our editorial people. You can't get good editorial people when you do that."