Friday, November 27, 2009

Messy divorce threatened to open up Hearst Corp.

Fortune magazine has a story on how the messy divorce of one of William Randolph Hearst's 15 grandchildren threatened to open up to public scrutiny the intensely private Hearst Corp., owner of the Chronicle. But legal proceedings ended earlier this year with a settlement that allowed the wife of John Randolph "Bunky" Hearst, 71, to keep $10 million and a couple of houses.
    Fifty-eight years after his death, William Randolph Hearst's blueprint for keeping his company alive and in his family's hands still works. Since Hearst's death, the company's professional managers have increased the company's value by about 2,500% while paying out multimillion-dollar disbursements. 
    The company's mainstream titles like Food Network Magazine are thriving, while competitors including Condé Nast Publications and Time Inc. (Fortune's parent), are shuttering titles. 
    Hearst is rumored to have a $1 billion war chest of cash earmarked for acquisitions. What's more, the infighting that marked the Bancroft family's last days as the owners of Dow Jones couldn't have happened at Hearst, as the family doesn't have enough votes to, say, quibble over a sale. 
    "It's a clever structure," says Charles M. Elson, chair of the University of Delaware's Weinberg Center for Corporate Governance. "Hearst gave his descendants a voice but not control." 
    The trust, however, will eventually come to an end, and the company will be divided up when the last of William Randolph Hearst's grandchildren passes away. As of now, any Hearst descendant (currently there are about 65) who outlives Bunky and nine of his cousins stands to inherit about $150 million.

1 comment:

Anonymous said...

Imagine if poor old Bunky had been forced to work for a living?