Multimedia, Inc. History

Address:

305 S. Main St.
Greenville, South Carolina 29601
U.S.A.

Telephone: (803) 298-4373
Fax: (803) 298-4424

Public Company
Incorporated: 1968
Employees: 3,500
Sales: $634.5 million
Stock Exchanges: NASDAQ
SICs: 2711 Newspapers; 4833 Television Broadcasting Stations; 4832 Radio Broadcasting Stations; 2741 Miscellaneous Publishing; 2721 Periodicals; 4899 Communications Services, Not Elsewhere Classified

Company History:

One of the most profitable media communications companies in the United States, Multimedia, Inc. grew rapidly by acquiring an assortment of daily and non-daily newspapers, radio stations, and network-affiliated television stations, then established itself as a leading cable television operator in the 1980s. In the course of assembling its network of media properties, Multimedia developed an entertainment production company that owned the production and syndication rights for several of the country's most popular talk show hosts, including Phil Donahue, Sally Jessy Raphael, Jerry Springer, and Rush Limbaugh. By the 1990s, the company had organized all of its media assets into four subsidiary companies constituting the four operating divisions of Multimedia: Multimedia Newspaper Company, Multimedia Broadcasting Company, Multimedia Cablevision Company, and Multimedia Entertainment, Inc. In addition to these business groups, each generating roughly 25 percent of the company's total revenues, Multimedia also owned a residential security alarm service and a cable television advertising business.

Multimedia was formed on the first day of 1968, when three small southern U.S. companies merged. The Greenville News-Piedmont Company, owner of two Greenville, South Carolina, newspapers founded in the early 1800s--the Greenville News and The Piedmont--was the driving force behind the merger that combined a subsidiary company purchased in 1954 and the Southern Broadcasting Corporation. The subsidiary company, the Asheville Citizen-Times Publishing Company, owned the two daily newspapers and radio station WWNC in Asheville, North Carolina, while the Southern Broadcasting Corporation owned and operated radio and television properties in South Carolina, Georgia, and Tennessee. When these three companies merged to form Multimedia, the resulting combination already represented a strong media communications company, with newspaper, radio, and television properties scattered throughout four states. Multimedia, however, would quickly become a much larger concern, its creation serving merely as a prelude to further growth.

Leadership of the newly created company was drawn from each of the three companies, with Roger C. Peace, the president and publisher of Greenville News-Piedmont Company, selected as Multimedia's first chairperson, and Robert A. Jolley, Sr., whose family owned a substantial percentage of Southern Broadcasting Corporation's stock, serving as the company's vice-chairperson. Guided by these two men and other representatives of the merged companies, Multimedia began acquiring additional newspaper, radio, and television properties to strengthen the company's market position in regions where it already maintained a presence and into new markets to widen the geographic scope of its operations. The first two acquisitions, the Montgomery Advertiser and Alabama Journal, were completed in early 1969, adding another state to Multimedia's area of operations and bringing two more daily newspapers to a company that owned six such publications, seven radio stations, and three television stations by the end of the decade.

In 1971, Multimedia became a publicly traded company, then began acquiring newspaper, television, and radio companies in earnest the following year, when it purchased television station WSJS for $7.5 million. Located in Winston Salem, North Carolina, the National Broadcasting Corporation (NBC) affiliate, which later became WXII, served the largest television market between Washington D.C. and Atlanta.

The following year, Multimedia purchased Leaf-Chronicle Co., Inc., publisher of the Leaf-Chronicle, the daily newspaper of Clarksville, Tennessee, providing Multimedia with a publishing base of operations that eventually would oversee the production of 13 daily and non-daily publications. Next, the company strengthened its broadcasting division considerably by purchasing four radio stations. Three of these were AM stations--WAKY in Louisville, KEEL in Shreveport, and KAAY in Little Rock--bringing the number of AM stations operated by Multimedia to seven, the maximum number one company could own according to Federal Communications Commission restrictions. The other station, KMBQ-FM, located in Shreveport, completed the purchase from LIN Broadcasting Corp. for a total of approximately $8.5 million.

Spread across eight southern states, Multimedia's properties included 11 radio stations, four television stations, and seven newspapers by the end of 1975. Moreover, an acquisition completed the following year would extend the company's presence beyond the southern United States, launch a new business division for the company, and rank as one of the most important moves of its history. The impetus for this acquisition, completed in the spring of 1976, was largely attributable to a new employee, Walter E. Bartlett, who joined Multimedia earlier that year to head the company's broadcast division. Shortly after his arrival, Bartlett convinced the company's chairperson, Wilson C. Wearn, one of the original Multimedia board members in 1968, that the company should enter the television programming market. Wearn agreed, and Multimedia purchased WLWT, a Cincinnati, Ohio-based NBC affiliate, for $16.3 million.

The acquisition of WLWT represented a signal move for the company. The television station served a market considerably larger than any of Multimedia's previous purchases and had made television history as the first NBC affiliate outside New York and the first television station in Ohio. However, its local live programming and original production capabilities, for which the station had earned recognition from the broadcast industry, were the qualities that set its acquisition apart from any of the company's other properties. In acquiring WLWT, Multimedia also gained the production and syndication rights for several television programs, including the highly profitable Phil Donahue Show.

By obtaining the rights to the talk show hosted by Phil Donahue just before the program became a tremendous national success (eventually broadcast in roughly 200 television markets throughout the country), Multimedia secured a position in the rapidly growing market for program production and syndication. Program production and syndication would eventually become the focus of the company's Multimedia Entertainment, Inc. subsidiary. In 1976, however, the company maintained three operating divisions: newspaper, radio and television, and the recently added program production and syndication segment, initially named Multimedia Program Productions.

In the late 1970s, cable television represented only a modestly sized market. Consumers had subscribed to cable television as a means to improve television reception, but this, the only attribute of cable service, had limited appeal, attracting a relatively small number of subscribers who typically lived in rural areas where television reception was poor. During this time, however, increasing numbers of cable subscribers were interested in the greater variety of television programming cable operators were providing, and Multimedia's management began looking for a way to enter the market. Such a way was found in 1979, when Multimedia purchased the Kansas State Network and Air Capital Cablevision, which together served more than 30,000 cable subscribers in Kansas and Oklahoma. Multimedia Cablevision Company was formed to guide the company's interests in cable television, adding the fourth principal subsidiary to the Multimedia organization and concluding a decade of prodigious growth.

Growth also occurred in the company's more traditional segments of business, as Multimedia bolstered its newspaper and broadcast divisions. Two FM radio stations were purchased--KEZQ in Little Rock and WEZW in Milwaukee--while eight newspapers were purchased, located in Arkansas, Florida, Virginia, West Virginia, and Ohio. With these additional newspapers, Multimedia owned 13 daily newspapers and 23 non-daily newspapers by the end of the decade, publications that complemented Multimedia's 13 radio stations and five television stations located in many of the same markets.

Entering the 1980s, the company recorded exponential growth in the number of its cable television subscribers, increasing Multimedia Cablevision Co.'s roster of customers to 66,000 by the end of its first year of business, then gaining an additional 60,000 subscribers when it was awarded franchises in four suburban Chicago communities in 1980. The following year, Multimedia purchased a 20 percent stake in North Carolina-based Tar River Communications Inc., and later acquired the remainder of the cable operator's assets, giving the company 18 cable franchises and 50,000 subscribers. In 1982, Multimedia began offering home security alarm service in Witchita, Kansas, drawing on its financial and managerial expertise in providing cable television service. The company also traded two of its television stations, WXII in Winston Salem, North Carolina, and WFBC in Greenville, South Carolina, for KSDK in St. Louis, the 18th largest television market in the country. The acquisition of KSDK provided the testing ground for a new talk show developed by the company's Program Productions division, renamed Multimedia Entertainment, Inc. in 1983. Called the Sally Jessy Raphael Show, the new program was debuted in St. Louis and remained there for two years until it was syndicated nationally, becoming as successful as the company's Donahue program.

By the time Sally Jessy Raphael became a nationally distributed program, the growth and success Multimedia had achieved in the past 17 years had attracted the attention of potential buyers, leading to several hostile takeover attempts. In a bid to quell further takeover attempts, Bartlett, by this time Multimedia's chief executive officer, initiated a dramatic recapitalization of the company in 1985 that increased its debt tenfold. The recapitalization forced Multimedia to assiduously monitor its spending habits and greatly improve the efficiency of it operations to overcome the company's $576 million of negative net worth. Coming when it did, roughly five years before a national recession that would force other media communications companies to effect similar cost-cutting procedures, the constraints engendered by the recapitalization significantly improved Multimedia's position for the future, particularly during the recessive early 1990s.

During those debilitative years, Multimedia demonstrated its ability to post encouraging profits while other media communications companies, including Capital Cities/ABC, the Washington Post Company, and the Tribune Company, floundered under the effects of the harsh economic climate. From 1985 to 1993, the company's annual revenues nearly doubled, reaching $634.5 million. However, its earnings demonstrated the most impressive leap, particularly during the recessive early 1990s, when earnings soared from $45 million in 1990 to $99.8 million by 1993. This increase was largely due to the success and profitability of the company's entertainment division. In 1991, Multimedia Entertainment introduced a new daytime talk show, Jerry Springer, which by the following year was broadcast in 100 U.S. markets, covering 76 percent of the nation. Sally Jessy Raphael and Donahue by this time were broadcast in nearly 200 U.S. markets and aired in 14 foreign markets. In 1992, the company introduced its first late-night talk show, Rush Limbaugh, which was soon broadcast in 98 percent of the country.

Complementing these successes were equally strong performances exhibited by Multimedia's cable television business, which, by 1993, served over 411,000 subscribers in Kansas, Oklahoma, Illinois, Indiana, and North Carolina. Multimedia Broadcasting Company, the subsidiary comprised of Multimedia's radio and television properties, now included five television stations, three of which were located in the 30 largest markets by population in the United States, and seven radio stations. Multimedia's newspaper assets included 12 daily and 49 non-daily newspapers, with the majority of the company's newspaper revenues derived from three daily newspapers in Asheville, Greenville, and Montgomery, Alabama.

Each of these four business segments contributed roughly a quarter of Multimedia's aggregate revenue as the company entered the mid-1990s. Planning for the future, the company was expected to rely heavily on the expansion of its entertainment and cable television businesses to fuel its growth. A step in this direction was taken in 1994 when Multimedia announced plans to invest $150 million in upgrading the coaxial cable utilized by its cable television business to fiber-optic cable, which would enable the company to increase the number of television channels offered through its cable service from 40 to as many 110. Intending to spend roughly $90 million between 1994 and 1996 to begin the conversion process, Multimedia appeared poised to strengthen its cable television business and to maintain its position as one of the strongest media communications companies in the 1990s.

Principal Subsidiaries: Multimedia Newspaper Company; Multimedia Boradcasting Company; Multimedia Entertainment Company; Multimedia Cablevision Company; Multimedia Security Service.

Multimedia, Inc. History

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