Capital Cities

“It says a contemporary analog for Capital Cities can be found in Transdime, a little known publicly traded aerospace components manufacturer. Like Capital Cities, the company focuses on very specific types of business with exceptional economic characteristics.…”

“Under Burke's oversight, the staff that oversaw ABC's TV station group dropped from 60 to eight people. The margin gap was closed in just two years. So in two years, they brought ABC's margins from 30% to over 50.”

“CBS's market capitalization was 16 times the size of Capital Cities. But by the time Murphy sold his company to Disney 30 years later, Capital Cities was three times as valuable as CBS.”

“He did not delegate acquisition decisions and never used investment bankers”

“Phil Meek took this message to heart and ran the entire publishing operation. So at this time they had six daily newspapers, several magazines, and a bunch of weekly like shoppers, these things you see in in like grocery stores. And he ran his headquarters wit…”

“Well, if you had invested a dollar with Tom Murphy as he became CEO in 1966, that dollar would have been worth 204 dollars by the time he sold the company to Disney.”

“They hired Bob Iger at 37, and before that, he had spent his entire career in broadcast sports, and they hired him to assume responsibility for ABC Entertainment.”

“The formula that allowed Murphy to overtake Paley was deceptively simple. Number one, focus on industries with attractive economic characteristics. Number two, selectively use leverage to buy occasional large properties. Number three, improve operations. Numbe…”

“Burke was responsible for daily management of operations and Murphy for acquisitions and capital allocation. As Burke told me, our relationship was built on a foundation of mutual respect. I had an appetite for and a willingness to do things that Murphy was no…”

“He spent over 1.8 billion On share buybacks. That investment alone generated a excellent return for shareholders. 22.4% over 19 years.”

“During the extended bear market of the mid-nineteen-seventies to early-nineteen-eighties, Murphy became an aggressive purchaser of his own shares. He eventually bought close, bought back close to 50% of his outstanding shares, most of it at single-digit price-…”

“Headquarters staff was anorexic. No vice presidents in functional areas like marketing, strategic planning, or human resources, no corporate counsel, and no public relations department either.”

“These acquisitions each represented 25% or more of the company's market cap at the time they were made.”

“Occasionally scaling down and intensifying gives you the big advantage.”