of the company.
Let me explain this in more detail, because you might wonder why we in the management group didn’t mount a strong effort to repel the takeover. The answer is simple though sad. Once the Bass and Lindner groups started bidding, everyone tended to lose sight of underlying values and became absorbed in over-bidding the other guy. When the Bass group started to acquire stock the price was around $50. When it became publicly known that they were buying, the stock price rose to around $62 a share. It was at that point that the Lindner group moved into the picture. As the price of our stock moved above $100 a share, I sat down with our senior management group and told them to determine what price a management-led group could afford to pay without risking over-paying and putting our limited personal resources at risk. They came back a few days later and told me that we could probably go as high as $120 per share but to offer anything above that would be foolhardy. Unfortunately, the bidding war took the price past $120 per share quickly and never looked back! When the final price reached $157 per share, we in the management group were squarely up against a legal doctrine—“fiduciary duty.” We owed our shareholders a legal duty to accept what we believed to be the best price available, even if it meant losing control of the company. So, reluctantly we supported the sale of the company. Though we had deep regrets (and still do) that it had come to this, it is even clearer in retrospect that we did the only thing we could have possibly done.
Thus, in 1988, the Lindner group acquired the Taft Broadcasting Company.
The Company and Its People
MY YEARS AT Taft Broadcasting comprised the largest segment of my professional career. We had a phenomenal group of people in the company, at all levels, and we had a great time. As has been true whatever I have done and wherever I have been, I have been privileged to work with good people. As I point out repeatedly, no one has success without a strong “supporting cast.” This has been true for me in each of my “careers.” It was certainly true at Taft Broadcasting Company where, over a period of more than twenty years, I had a great group of executives, male and female, supporting me. It would be unfair for me to single out particular individuals because there were so many of them, and I don’t know how I would ever pick and choose those to mention. I must, however, make two exceptions and mention Dudley Taft and George Castrucci. Dudley, the son of the founder of Taft Broadcasting Company, was a young lawyer with the Washington, D.C., firm of Koteen & Burt when his father was killed in November of 1967. Dudley later joined Taft Broadcasting Company and worked his way through a variety of roles, and we named him president of the company, my number-two guy. From the beginning, Dudley and I were friends and worked well together. But what is interesting and, I think, unique is Dudley’s attitude as a member of the executive team. He could easily have felt entitled to run the company, and he could just as easily have taken advantage of the fact that his name was “on the door.” He could have resented me for sitting in “his father’s chair.” He never did this and simply let his ability and his personality speak for themselves. He was an enormous asset to me and a credit to his father and his family. Our relationship was briefly strained during the Bass/Lindner battle for control of our company. Dudley, quite understandably, made a bid of his own for the company, but it was soon over-bid in the heat of the battle. I respected and admired his position, and I think he understood mine. We remain good friends and always will.
George Castrucci was Taft’s chief financial officer for many years and succeeded me as CEO. He provided me with sound financial and business counsel and was particularly highly regarded by our financial advisors and security analysts.
The friendships and respect generated among our people have led us to have a biannual reunion of the senior management group in Cincinnati. It is always well attended and a continuing reminder to all of us of the great years we enjoyed together. I think one of the nicest things anyone ever said to me was when a Cincinnati friend said, “Do you realize that everyone in town wants to work for your company!” This may have been a bit exaggerated but I loved it.
Hanna-Barbera
Unquestionably the most “famous” part of Taft Broadcasting was Hanna-Barbera. In 1965, while I was still practicing law and representing Taft Broadcasting Company, the company had the opportunity to acquire Hanna-Barbera Productions. Taft owned the maximum number of broadcast properties then permitted by the Federal Communications Commission and determined that a primary area for expansion would be companies producing content for broadcast. Hanna-Barbera was seeking to be acquired, and it seemed a perfect fit for us. I made several trips to Los Angeles with Hub Taft and our investment bankers to negotiate and complete the acquisition.
I was in seventh heaven when we decided to buy Hanna-Barbera. I loved animation and I loved Hanna-Barbera, and here I was meeting with the great men themselves to negotiate the acquisition. Bill Hanna and Joe Barbera were represented by their agent, Jess Morgan, who became one of my very good friends and later served on the Taft Broadcasting board. Most of the meetings were held in a bungalow at the Beverly Hills Hotel. This in itself was culture shock to this small-town Ohio boy. With lush grounds, opulent accommodations, the world-famous Polo Lounge, and a constant stream of celebrities, it was very hard to keep my mind on matters legal!
The hardest time I had keeping my “legal bearing” came when I went to the Beverly Hills Hotel for one of our negotiating sessions, this time to meet with one of the senior partners in the large investment banking firm that represented Hanna-Barbera. He had asked me to meet him at his bungalow at the hotel. I appeared at the scheduled hour at the door and rang the bell. The door opened, and I was met by a stunningly beautiful woman in an equally stunning dressing gown. I quickly said that I must be in the wrong place, but she assured me that this was the right place and that the gentleman I was to meet was expecting me. I went in and heard a shout from the bedroom, “Charlie, come on in.” When I went in the bedroom he was also in his dressing gown and was sitting up in bed eating breakfast. I suggested that it might be better if I came back later but he insisted that we could go right ahead with our negotiations. I obviously couldn’t walk out, so I sat in an easy chair in the bedroom, opened my briefcase, and we began to talk. My concentration was further shaken when the young lady lay alongside him on the bed and listened intently to our conversation. This was a scene that could have been part of a Hollywood movie starring Clark Gable and Carole Lombard! (With me being played by somebody like Percy Kilbride.) Here were these two handsome people lying on the bed in the elegant bungalow with this young lawyer in his three-button Brooks Brothers suit sitting primly in the chair with his briefcase and papers on his lap. It was, without doubt, the strangest negotiating environment that I ever found myself in before or since. But, we made the deal! Hanna-Barbera became part of Taft Broadcasting, and I began a life-long friendship with Bill Hanna and Joe Barbera, two of the most talented and engaging men I have ever known. Hundreds (probably thousands) of books and articles have been written about Bill and Joe and Hanna-Barbera, and it is not necessary—or indeed possible—for me to add significantly to this material. However, because we were such close friends I think a few stories will give you a better glimpse of these remarkable men.
First of all, they were successful and famous even before Hanna-Barbera was formed. They were cartoonists at the MGM Studios where they created the classic Tom and Jerry cartoon, which won a number of Academy Awards. Though it is now hard to imagine, MGM decided in 1957 to close its animation studio, apparently not seeing a strong future in animation. So, Bill and Joe were out of work at a critical point in their lives. They managed to scrape together enough money to open their own studio. They had a bit of money themselves, and the rest came from Harry Cohn, the legendary head of Columbia Pictures, and a well-known Hollywood director George Sidney. As always, Harry Cohn was a shrewd bargainer, and, in return for his investment, Hanna-Barbera agreed to distribute its product through Screen Gems, Columbia Pictures’ distribution arm. This deal lasted for many years and was very lucrative for Screen Gems. At the same time, they did an outstanding job of handling the Hanna-Barbera product.
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