Monday, May 12, 2014

Great American Fortunes - Walter Annenberg: King of Communication

PHOTO: The Annenberg Foundation
German-born Moses Annenberg owned several tabloids devoted to horse racing and the theater. He also owned a wire service catering to horse racing; it was Bell Telephone's fifth-largest customer.

Moses lived on a 2,000-acre ranch in the Black Hills of Wyoming with his wife, seven daughters and son, Walter. After attending the Wharton School for a year, Walter joined his father’s business. Together they acquired the Miami Tribune, Radio Guide, and several pulp magazines. But in 1936 they made their biggest acquisition, the Philadelphia Inquirer for $15 million—in cash!

Six months later, the IRS indicted Moses and Walter for tax-evasion. Moses agreed to pay $9 million, plead guilty, and go to prison if the IRS would drop the charges against Walter. The IRS agreed. Moses went to prison to serve a three-year sentence.

Walter took the reins of the publishing empire, paid the taxes and renamed the company Triangle Publications. He kept his father's office untouched, but Moses never returned; he died a month after his release from prison.

Annenberg inherited millions from his father and turned it into billions. He had a good sense for media communication. With no magazines catering to young women, he started Seventeen magazine in 1944 and named one of his sisters as editor.

A year later he acquired WFIL AM & FM and, in 1947, formed WFIL-TV Channel 6 in Philadelphia; it became one of the most profitable TV stations in the country. Triangle acquired other TV operations in Pennsylvania, New York, Connecticut and California. There were several local TV magazines: TV Digest in Philadelphia, TV Forecast in Chicago, and TV Guides in New York and Washington, D.C. Annenberg acquired them for $3 million and, in April 1953, combined them into a new magazine, TV Guide. TV Guide, was a peculiar magazine, small enough to fit in one's pocket and bearing a price of 15 cents. Pundits scoffed, wondering how a tiny magazine that provided the same information already available in dailies around the country would succeed, but by 1977 it had the largest circulation of any American magazine, 20 million weekly, while generating $1 million in profits—weekly!

Staunchly conservative, Annenberg joined President Nixon's "Kitchen Cabinet" and became a close friend of Ronald Reagan. Yet he vehemently opposed Sen. Joseph McCarthy. Nixon named Annenberg America's ambassador to the Court of St. James in 1969.

Annenberg sold TV Guide and the rest of his Triangle Publications to Rupert Murdoch's News Corp. for $3 billion in 1988.

Annenberg was a great philanthropist. One educator said he “was to public education what Andrew Carnegie was to libraries.” Annenberg funded the Annenberg School for Communications at USC, Temple and the University of Pennsylvania. He also gave $25 million to Harvard, $100 million to Peddie, $150 million to the Corporation for Public Broadcasting, $50 million to the United Negro College Fund, and $500 million for public school improvement throughout the United States. He died in 2002, bequeathing his $1 billion art collection to New York's Metropolitan Museum of Art.

© 2008 by Daniel Alef

For more information about Wall Street and New York's Financial District, join a Wall Street Walks guided walking tour!