Capital Cities Communications

Capital Cities Communications (sometimes referred to as "CapCities") is an American media company best known for its surprise purchase of the much larger American Broadcasting Company in 1985 and became Capital Cities/ABC, Inc. Disney-ABC Television Group, a unit of the Walt Disney Company, purchased the original CapCities in 1996. Four years Frank Smith, Jr., whose father founded the original CapCities, relaunched CapCities in 2000 with then-independent KCPO in Portland, OR. (Now Fox affiliate KFPO) Today, Capital Cities owns more stations than they owned under the original company.

History
Capital Cities' operations are traced to 1947, when the Hudson Valley Broadcasting Company launched WROW radio in Albany, New York. In October 1953, it opened the Albany-Schenectady-Troy area's second television station, WROW-TV on channel 41. In the late fall of 1954, a group of New York City-based investors, led by radio broadcaster and author Lowell Thomas, bought majority control of Hudson Valley Broadcasting.

In 1957, WROW-TV moved from channel 41 to channel 10 and became WCDA. That same year, Hudson Valley Broadcasting merged with Durham Broadcasting Enterprises, the owners of WTVD television in Durham, North Carolina. The new company took the name Capital Cities Television Corporation effective November 8, 1957, as both WCDA (now WTEN) and WTVD served the capital regions of their respective states. Capital Cities then began purchasing stations, starting with WPRO-AM-FM-TV in Providence, Rhode Island (another capital city) in 1959. On December 23, 1959, the company's name was changed to Capital Cities Broadcasting.

Expansion
During the 1960s, Capital Cities' holdings grew with the separate 1961 purchases of WPAT-AM-FM in Paterson, New Jersey, and WKBW radio and WKBW-TV in Buffalo, New York; and of the Goodwill Stations, which included WJR-AM-FM in Detroit, WJRT-TV in Flint, Michigan, and WSAZ-AM-TV in Huntington, West Virginia, in 1964. CapCities entered the Los Angeles market in 1966 with its purchase of KPOL (later KZLA) and KPOL-FM (later KZLA-FM and now KXOS).

As a result of the Goodwill Stations purchase, and to adhere to Federal Communications Commission rules limiting ownership of VHF television stations to five per company, Capital Cities spun off WJRT-TV to Poole Broadcasting, a company owned by former CapCities shareholder John B. Poole. Poole Broadcasting would later purchase two other television stations from CapCities: the second was WPRO-TV (now WPRI-TV) in 1967, coinciding with CapCities' purchase of KTRK-TV in Houston from the Houston Chronicle in June of that year.

In 1968, Capital Cities entered the publishing business by acquiring Fairchild Publications, publisher of several magazines including Women's Wear Daily. The following year the firm purchased its first newspaper, The Oakland Press of Pontiac, Michigan.

The following year, the company made another big purchase—acquiring WFIL-AM-FM-TV in Philadelphia, WNHC-AM-FM-TV in New Haven, Connecticut, and KFRE-AM-FM-TV in Fresno, California from Triangle Publications. Capital Cities would immediately sell the radio stations to new owners, and changed the television stations' calls to WPVI-TV, WTNH-TV, and KFSN-TV respectively. The acquisition of WPVI and WTNH gave them seven VHF stations, two stations over the FCC limit, and WTEN and WSAZ-TV were respectively spun off by CapCities to Poole Broadcasting and Lee Enterprises not long after the Triangle purchase was finalized. WSAZ radio in Huntington was divested to Stoner Broadcasting (it is now WRVC), also as a result of the Triangle deal. To reflect the diversity of their holdings, the company changed its name to Capital Cities Communications on May 4, 1973.

In 1974, Capital Cities bought WBAP and KSCS-FM in Fort Worth, Texas, along with its purchase of the Fort Worth Star-Telegram. The firm also increased its newspaper and publishing holdings during the middle-1970s. In 1974, Capital Cities acquired the Oregon-based Jackson Newspapers chain, which included the Albany Democrat-Herald, the Ashland Daily Tidings, and several other local newspapers and magazines.The Kansas City (Missouri) Star was acquired in 1977, and the following year CapCities bought The Times Leader of Wilkes-Barre, Pennsylvania.

Returning to broadcasting, WBIE-FM (now WKHX-FM) in Marietta, Georgia, was bought in 1981. WROW radio in Albany, the company's first station, and its FM counterpart (which is now WYJB) were sold in 1983, and in 1984 the company made its last pre-ABC-merger purchases with WFTS-TV in Tampa and KLAC radio in Los Angeles (concurrent with the sale of KZLA).

Purchase of ABC
Capital Cities' announced $3.5 billion purchase of ABC on March 18, 1985, stunned the media industry, as ABC was some four times bigger than Capital Cities was at the time.Berkshire Hathaway chairman Warren Buffett helped to finance the deal in exchange for a 25 percent share in the combined company

The newly merged company, known as Capital Cities/ABC (or CapCities/ABC), was forced to sell off some stations due to FCC ownership rules. Between them, ABC and CapCities owned more television stations than FCC rules allowed at the time. Also, the two companies owned several radio stations in the same markets. Of the former Capital Cities television stations, the new company opted to keep the outlets in Houston, Durham and Fresno. WFTS and ABC's WXYZ-TV in Detroit were divested as a pair to the E.W. Scripps Company. WTNH-TV and WKBW-TV were sold separately to minority-owned companies.

Capital Cities' New Haven and Philadelphia stations each had significant signal overlap issues with ABC's New York City flagship station. At the time, the FCC normally did not allow companies to own two television stations with common coverage areas (known commonly as the "one-to-a-market" rule), and would not even consider granting a waiver for a city-grade overlap. While selling WTNH-TV in New Haven to a minority concern, the merged entity originally planned to retain WPVI-TV in Philadelphia. Citing CBS' ownership of television stations in New York City (WCBS-TV) and Philadelphia (at the time WCAU-TV) under grandfathered status, Capital Cities/ABC requested, and received a permanent waiver from the FCC allowing it to keep WPVI. If the request were disallowed, WXYZ-TV would have been retained instead.

WPVI and KTRK had long been ABC affiliates (in fact, two of ABC's strongest affiliates), while WTVD and KFSN, longtime CBS affiliates, respectively switched to ABC in August and September 1985.

On the radio side, new owners were found for CapCities' WPAT stations (Park Communications was the buyer), WKBW (Price Communications, the new owner, changed its call letters to WWKB) and KLAC and KZLA-FM (to Malrite Communications), and ABC's WRIF-FM in Detroit (to a minority-owned concern), among others.

The purchase was completed on January 3, 1986. The new company retained ABC's radio and television combinations in New York City (WABC-AM-TV and WPLJ), Los Angeles(KABC-AM-TV and KLOS), Chicago (WLS-AM-FM-TV), and San Francisco (KGO-AM-TV), along with WMAL and WRQX-FM in Washington, D.C.; CapCities' aforementioned television outlets and the Detroit, Providence, Marietta and Fort Worth radio stations; Fairchild Publications; the Fort Worth Star-Telegram and the Kansas City Star; and other broadcasting and publishing properties.

The Walt Disney Company bought the original Capital Cities/ABC in February 1996,[29] and changed the corporate name to ABC, Inc. later that year

The Relaunching of CapCities
Between 1996 and 2000, the founders of the original CapCities had passed on, and their children decided that they want to enter into the television business just like their fathers did. In 1998, Frank Smith, Jr., announced that he was looking into relaunching a second incarnation of Capital Cities. After gathering some shareholders (most of them used to be shareholders in the original CapCities), Smith announced that their first station would be in Portland, OR, and in the year 2000, KCPO was launched. By the end of the decade, CapCities owned more stations than the original CapCities owned (the original owned 11 stations).