Cox Enterprises, Inc. Business Information, Profile, and History

Company Perspectives:

At the Cox companies, we encourage employee creativity, inclusion and calculated risk taking. We're dedicated to customers' and audiences' needs. We seize new business opportunities when the time is right. And, we do what's right for our communities, through sponsorships, donations, and volunteer activities. For some corporations, these concepts make good PR "sound bites." But at the Cox companies, they're the values that guide us in every decision we make.

History of Cox Enterprises, Inc.

Cox Enterprises, Inc. is a media conglomerate composed of four core companies: Cox Communications, Inc.; Cox Newspapers, Inc.; Cox Broadcasting, Inc.; and Manheim Auctions, Inc. Cox Communications, one of the largest cable systems in the country with 6.3 million subscribers in 20 states, is a publicly traded firm majority-owned by Cox Enterprises. Cox Newspapers publishes 17 daily and 25 weekly newspapers in Colorado, Florida, Georgia, Ohio, North Carolina, and Texas. Cox Broadcasting operates 15 television stations. Cox Radio, 62 percent owned by Cox Enterprises, owns more than 80 radio stations. Manheim Auctions is the largest wholesale automobile auction company in the world with 115 auction facilities worldwide. Until incorporated as a single entity in 1968, Cox Enterprises operated as an assortment of media businesses owned by the Cox family. A dizzying series of acquisitions, mergers, divestments, public offerings, rearrangements of operations, and new ventures in the 1980s and 1990s led Cox Enterprises to its position as a leading media conglomerate in the 21st century.

Cox Family Empire Beginning with Ohio Newspapers in the Late 19th Century

In 1898, James M. Cox bought the Dayton Evening News--now the Dayton Daily News--in Dayton, Ohio, for $26,000 that he had raised from several friends. Cox, a native of rural Ohio, had been a schoolteacher; a reporter for the Middletown Signal in Middletown, Ohio, and for the Cincinnati Enquirer, in Cincinnati, Ohio; and a Washington, D.C.-based secretary to Ohio Congressman Paul J. Sorg. Cox quickly became an influential newspaper publisher; in 1905 he bought the Springfield Press-Republic, also in Ohio, changed its name to the Springfield Daily News, and established a newspaper chain, which he called the News League of Ohio. He also entered politics; he represented Ohio's third district in Congress from 1909 to 1913 and was elected governor of Ohio in 1913. Cox was defeated when he ran for reelection in 1915, but won in 1917 and 1919, making him the state's first three-term governor. In 1920 he was the Democratic Party's presidential candidate, with future-president Franklin D. Roosevelt as his running mate. He lost the election to Warren G. Harding.

After the defeat and his completion of his gubernatorial term in 1921, Cox returned to public life only once, when Roosevelt, by then president, appointed him a delegate to the 1933 World Monetary and Economic Conference in London. Instead, Cox focused on his media business. In 1923 he acquired the Miami Metropolis, in Florida, changing its name to the Miami Daily News, and the Canton News, in Canton, Ohio. In 1930 he sold the Canton paper and bought the Springfield Sun, in Ohio. He entered broadcasting in 1934, establishing Dayton's first radio station, WHIO.

In 1939 Cox acquired the Atlanta Journal, in Georgia, and its AM radio station, WSB. The newspaper had been founded in 1883 and had gone through several owners; the radio station, which began broadcasting in 1922, was the South's first. As with other newspapers he had acquired, Cox wanted the Atlanta paper to maintain its own style and personality.

In 1948 Cox entered the new medium of television with WSB-TV in Atlanta; the company also set up WSB-FM as a companion to the original AM radio station. In 1949 the company acquired a second Dayton, Ohio, newspaper, the Journal Herald, and put WHIO-TV and WHIO-FM radio on the air in that city. In 1950 Cox acquired the Atlanta Constitution. The Atlanta Journal and the Atlanta Constitution began a combined Sunday edition while publishing separately during the week.

James Cox died in 1957 at age 87. His son, James M. Cox, Jr., succeeded him as the leader of the family businesses and oversaw continued expansion. The family acquired AM and FM radio stations and a television station, all operating under the call letters WSOC, in Charlotte, North Carolina, in 1959.

Entry into Cable TV in the Early 1960s

The Coxes were among the first major broadcasters to enter cable television, acquiring a cable system in Lewistown, Pennsylvania, in 1962. In 1963 they acquired KTVU-TV in the San Francisco-Oakland, California, area and radio stations WIOD-AM and WAIA-FM in Miami. In 1964 the Cox family established Cox Broadcasting Corporation to run the radio and television operations. The broadcasting concern had its shares publicly traded on the New York Stock Exchange, but the family retained substantial ownership. The same year, broadcasting and cable operations expanded with the purchase of WPXI-TV in Pittsburgh, Pennsylvania, and cable systems in Washington, Oregon, and California.

In 1966 Cox Broadcasting added a business- and technical-publishing division; in 1967 it went into motion picture production. Its Bing Crosby Productions unit eventually made movies such as Ben, Walking Tall, and The Reincarnation of Peter Proud. In 1968 all the various Cox-owned newspapers were organized into Cox Enterprises, Inc., which remained a private company. The same year, Cox Broadcasting set up Cox Cable Communications, Inc. as a publicly traded, partially owned subsidiary.

Another 1968 event was the company's entry into the automobile auction business, with the broadcasting group's purchase of auction facilities in Manheim, Pennsylvania; Bordentown, New Jersey; and Fredericksburg, Virginia. New and used car dealers traditionally have used auto auctions to buy and sell from each other. During the 1980s, banks with repossessed cars, car rental agencies, and fleet operators began to use auction facilities for sales.

In 1969 the newspaper group added three Florida daily papers: the Palm Beach Daily News, the Palm Beach Evening Times, and the Palm Beach Post. The broadcasting group's operations expanded that year with the purchase of Tele-Systems, a California cable operation, and of auto auctions in Kansas City, Missouri, and Lakeland, Florida. An auction facility in High Point, North Carolina, was added in 1970; a cable system in Santa Barbara, California, and an auto auction in Pittsburgh came on in 1971.

Acquiring TeleRep in 1972

The following year brought the acquisition of TeleRep, a national television-advertising-sales representation firm, which sells time on client stations to national advertisers. The firm eventually added a programming arm, Television Program Enterprises, to produce and sell syndicated programming, including Entertainment Tonight, Star Search, and Lifestyles of the Rich and Famous. An auto auction facility in Milwaukee, Wisconsin, also came into the company lineup in 1972.

The presidential election of 1972 brought a break in James Cox, Jr.'s, association with the Democratic Party. Cox, who had attended the 1912 Democratic convention with his father, decided in 1972 to endorse President Richard M. Nixon for reelection over Senator George McGovern, and ordered all Cox Enterprises newspapers to do the same--the only time Cox ever became involved in the newspapers' editorial policies. Two editors resigned as a result. Eventually, the family allied itself with the Democrats again; Anne Cox Chambers, one of James Cox, Jr.'s, two sisters, was an early supporter of Georgia Governor Jimmy Carter and served as ambassador to Belgium when Carter became president. In the mid-1970s the Coxes' Atlanta newspapers switched from an anti-Carter to a pro-Carter stance, but management said the switch was not related to Chambers's support of Carter.

Also in 1972, Cox Cable announced plans to merge with American Television and Communications Corporation, but the Justice Department sued to block the deal. The suit led the companies to call off the transaction early in 1973; both contended the merger would not violate federal antitrust law, but noted the litigation could delay the deal by several months. Later in 1973, Cox Cable set a merger with LVO Cable Inc., but subsequently called it off because of market conditions. Another major event of 1973 was Cox Broadcasting's purchase of KFI-AM, Los Angeles.

James Cox, Jr., died in 1974 at the age of 71. His sister Barbara Cox Anthony's husband, Garner Anthony, took over the primary direction of the family companies, and the expansion continued.

Cox Broadcasting added an auto auction in Orlando, Florida, in 1974, and one in Fresno, California, in 1975. Also in 1975, it bought a cable television system in Myrtle Beach, South Carolina. Cox Enterprises acquired four Texas newspapers in 1976--the Austin American-Statesman, the Waco Tribune-Herald, the Port Arthur News, and the Lufkin Daily News. The same year, Cox Broadcasting added KOST-FM, Los Angeles, and acquired a cable system in Pensacola, Florida. It also acquired an auto-auction facility in Anaheim, California, and built one in Atlanta.

In 1977 the Cox Cable subsidiary was merged back into Cox Broadcasting; over the next three years, the broadcasting group added 26 cable television franchises, including one in Omaha, Nebraska, and another in New Orleans, Louisiana. Also in 1977, the broadcasting operation acquired WLIF-FM, Baltimore, Maryland, and Cox Enterprises bought the Mesa Tribune in Arizona.

The broadcasting company acquired WZGO-FM in Philadelphia, Pennsylvania, in 1979; the newspaper group acquired Texas's Longview Morning Journal and the Longview Daily News in 1978 and the Daily Sentinel, of Grand Junction, Colorado, in 1979. Also in 1979, Cox Broadcasting discontinued motion picture production, but continued to market its inventory, in favor of concentrating on its broadcasting and cable television businesses.

The major event of 1979, however, was the Cox family's negotiation of a sale of Cox Broadcasting to General Electric Company (GE), in what would have been the biggest broadcasting merger in history. The Coxes wanted to sell the broadcast concern apparently because they feared the Federal Communications Commission (FCC) eventually would force a breakup of their newspaper and broadcast operations in the cities where they had both--Atlanta, Dayton, and Miami. GE's extensive broadcast holdings, however, resulted in a barrage of complaints to the FCC about concentration of ownership; the delays resulting from these complaints postponed the sale and paved the way for price renegotiations, which led to the deal's collapse early in 1980. The Coxes were asking $637 million; GE's final offer was $570 million.

Both Cox companies went through more changes and expansion in the early 1980s. WSB-TV changed its network affiliation to ABC in 1980, after having been an NBC affiliate for more than 30 years. Cox Enterprises bought the Tempe Daily News in Arizona in 1980; Cox Broadcasting bought a Boston auto auction in 1981, and KDNL-TV, St. Louis, Missouri, in 1982.

The broadcasting concern sold its business- and technical-publishing arm to Hearst Corporation in 1980; the aim, as with the end of film production, was to concentrate on the broadcasting and cable businesses. The auto auctions, although unrelated to these businesses, were retained because of their growth and profitability.

In 1982 Cox Broadcasting changed its name to Cox Communications, Inc. to better reflect its positions in both broadcasting and cable. The year 1983 was an acquisitive one. Cox Communications acquired auto auctions in Phoenix, Arizona, and in Toronto, Ontario, and a cable franchise in Staten Island, New York. The company also agreed to swap WLIF-FM in Baltimore for a Chicago FM station, WXFM, whose call letters subsequently were changed to WCKG; to buy a Detroit television station, WKBD, after divesting itself of a cable system in St. Clair Shores, Michigan; and to buy 90 percent of CyberTel, a radio common carrier system in St. Louis. These transactions were completed the following year. Also in 1983, Cox Enterprises bought the Chandler Arizonan, followed by the acquisition of another Arizona newspaper, the Yuma Daily Sun, in 1984. Cox Communications bought another auto auction, in Houston, Texas, in 1984.

1985 Merger of Cox Enterprises and Cox Communications

In 1985 Cox Enterprises purchased Cox Communications for $75 a share. Cox Enterprises had owned or controlled 40.2 percent of the communications company's 28.2 million outstanding shares. The combined corporation became the nation's 13th largest media company; before the merger, Cox Communications ranked 19th and Cox Enterprises 21st.

Other 1985 events were the acquisition of a Texas newspaper, the Orange Leader, and an Orlando, Florida, TV station, WFTV; and a swap of a cable television system in Avon Park, Florida, for one owned by Storer Communications in Fortuna, California. In 1987 Cox Enterprises sold its Philadelphia radio station to Malrite Communications Group and sold its Datext unit to Lotus Development Corporation. It had established Datext, which packaged financial information on compact discs, in 1984. It also sold CyberTel to a St. Louis investor.

At the end of 1987 the company had another change in top leadership, as Garner Anthony stepped down from the post of chairman and chief executive officer of Cox Enterprises and was succeeded by his stepson, James C. Kennedy. Into the late 1990s, sisters Barbara Cox Anthony and Anne Cox Chambers remained active in the company, chairing the Dayton and Atlanta newspapers, respectively.

By 1988 Cox Enterprises' Miami News, like many afternoon newspapers, was suffering declining readership and advertising. Cox sought a buyer for the paper; there were discussions with a group of Chicago investors. A sale, however, could not be worked out, and Cox closed the paper at year-end. In 1989 Cox sold its St. Louis television station to Better Communications, but expanded in other areas. It acquired an equity stake in Blockbuster Entertainment Corporation and became a franchisee of Blockbuster Video stores. Other acquisitions included Trader Publications, a publisher of advertising-only magazines; The Clipper, Inc., a publisher of coupon magazines; The Stuffit Company, a direct mailer of coupons and custom mailings; Main Street Advertising USA, a direct mail advertising company; Cox In-Store Advertising, formerly Buckler Broadcast Group, a point-of-purchase advertising business; and an interest in IP Services, Inc., a software company. It also entered into a joint venture with Picture Classified Network (PCN) to expand coverage and distribution of PCN's Gold Book automobile price guide. Also in 1989, Cox's cable group topped the 1.5 million customer mark.

By the early 1990s, Cox Enterprises consisted of four main operating companies: Cox Newspapers, Cox Cable Communications, Cox Broadcasting (television and radio stations, TeleRep, and Television Program Enterprises), and Manheim Auctions (the auto auctions business). In 1990 Cox sold two of its Texas newspapers, the Port Arthur News and Orange Leader, to American Publishing Company; Cox officials said they wanted to concentrate on the company's other Texas papers. The same year, Cox acquired two radio stations, WSUN-AM of Tampa, Florida, and KKWM-FM, later KLRX-FM of Dallas. Revenues for Cox Enterprises topped the $2 billion mark for the first time that year.

In March 1991 the Justice Department sued Cox Enterprises for $3.67 million for failing, in 1986, to seek federal approval before buying a $101 million stake in Knight-Ridder, another communications company. The Justice Department asserted that Cox violated a law requiring individuals and groups to seek federal approval before buying large amounts of stock in another company. A lawyer for Cox Enterprises stated that Cox believed its purchase was not subject to the law because the shares were bought for investment purposes. Also in March, Manheim Auctions acquired GE auto auctions, adding 20 auctions to Manheim's 26, and making Manheim the world's largest auto auction company.

In April 1991 Trader Publications was merged with Landmark Target Media of Norfolk, Virginia, and Cox held 50 percent of the resulting company. In May the company announced it would sell its Blockbuster stores. In September, Cox added to its direct marketing operations--which were collectively known as Cox Target Media, Inc., part of Cox Newspapers--with the acquisition of Val-Pak Direct Marketing Systems, Inc. of Largo, Florida. Val-Pak was the leading U.S. cooperative direct mailer and specialized in sending several business ads in one envelope to targeted households.

PCS, Rysher, and Times Mirror: Highlights of the Mid-1990s

In 1991 Cox began testing cable-based personal communications services (PCS), leading to the first PCS call over cable lines in 1992. As a leader in the development of PCS--which functioned as a phone, pager, answering machine, and voice mail system, while also delivering crisper sound and more security than analog cellular phone technology--Cox was one of three companies awarded a pioneer's preference license from the FCC. Initially, this designation was to lead to free PCS licenses for Cox. But the federal government revised the rules surrounding PCS in 1994, and by early 1995 Cox had purchased two licenses, at only a 15 percent pioneer's discount, one covering southern California and the other for Omaha, Nebraska. In 1996 Cox launched PCS phone service in San Diego.

In 1994 Cox entered into an alliance that formed the Sprint Telecommunications Venture, renamed Sprint Spectrum LP in 1995. The alliance partners were Sprint Corp., with 40 percent of the venture; Tele-Communications Inc., 30 percent; and Cox and Comcast Corp., 15 percent each. In the early 1995 FCC auction of PCS licenses, Sprint Spectrum was the biggest winner, gaining the rights to wireless licenses in 31 major U.S. markets, covering a population of 156 million.

Cox Broadcasting, meanwhile, acquired Rysher Entertainment, a distributor of syndicated television shows, in March 1993, and later that year merged Television Program Enterprises into it. Rysher subsequently evolved into a network television and film production company, developing Nash Bridges for CBS, the television movie Rasputin for HBO, and the motion pictures Primal Fear, Evening Star, and Big Night, all in 1996 alone.

The heightened merger activity in the media industries in the 1990s led Cox to conclude that it had to grow to survive. Kennedy, in fact, set an ambitious goal for Cox Enterprises: to double its 1993 revenues of $2.68 billion within the next five years. The cable operations of Cox Cable Communications were the first major area targeted for expansion. In December 1993 Southwestern Bell Corp., one of the Baby Bells, announced that it would invest $1.6 billion for a 40 percent stake in a joint venture with Cox that would own Cox Cable. Through this cash infusion, Cox Cable planned to quickly increase its base from 1.7 million subscribers, which made it the nation's sixth largest cable system, to at least 4 million, which would vault it into the number three slot. The deal collapsed, however, when the FCC announced new cable regulations in early 1994 calling for a rollback in cable rates. The rollback altered the value that Southwestern Bell put on its investment in Cox Cable, and led to its backing out of the merger in April 1994.

A successful deal was consummated just months later, however, when Cox purchased the cable operations of Times Mirror Company for $2.3 billion in cash and stock. The deal closed in February 1995, increasing Cox Cable's base from 1.9 to 3.2 million customers and moving it into fifth place among cable operators. With the completion of the acquisition, Cox Cable became a publicly traded company under the name Cox Communications, Inc., with Cox Enterprises holding a 75 percent stake. Cox Communications then began selling and trading cable systems that were not strategically clustered in order to take advantage of economies of scale and achieve operational efficiencies.

By 1996, revenues for Cox Enterprises had reached an astonishing $4.59 billion, a 21 percent increase over 1995 and up 70 percent since 1993, when Kennedy set the goal of doubling revenue in five years. Various activities during 1996 set the stage for the company to meet this ambitious goal ahead of schedule. TeleRep, by this time the nation's leading television sales rep firm, jumped into the Internet field with the formation of Cox Interactive Sales to sell online advertising. Cox Communications launched the Cox@Home Network in Orange County, California, which provided high-speed Internet service via a cable modem. Cox Enterprises formed Cox Interactive Media, Inc. to produce and manage interactive Web products, targeting the local markets where the company already operated newspapers, television and radio stations, and cable systems. Manheim Auctions added an additional 11 auction locations, including nine gained through the acquisition of Gateway Auto Auction of Granite City, Illinois. Manheim also entered the U.K. auto auction market through a joint venture called Independent Car Auctions Holdings Limited.

Perhaps the most significant event of 1996 came on the heels of the 1996 Telecommunications Act, which loosened federal regulations regarding ownership of radio and television stations. This act led to additional media mergers, and Cox Broadcasting positioned itself for growth by completing an initial public offering of its radio station group, which became known as Cox Radio Inc. Cox Broadcasting retained a 70 percent stake in the new company. With the $120 million generated through the offering, Cox Radio was able to more than double the number of stations it owned in a short span. By mid-1997, Cox Radio owned 49 stations, making it the ninth largest radio group in the country.

Striding into the 21st Century

As Cox Enterprises celebrated its centennial in 1998 and prepared for its next 100 years of business, the company held sway as one of the most powerful media conglomerates in the world. Kennedy's salubrious touch garnered much of the credit for the company's vitality at the end of the decade. During the company's anniversary year, he met his five-year goal of doubling the size of the company, and ended the 1990s presiding over a $6.1 billion empire.

The end of the 1990s marked the end of robust economic times and the beginning of a recession. Kennedy showed his leadership skill by anticipating the downturn and the resulting decline in advertising spending by taking action before the damaging economic conditions could take their toll on Cox Enterprises. Kennedy consolidated the company's flagship newspapers, merging the Atlanta Constitution, a morning paper, with the Atlanta Journal, an evening paper, in November 2001. The combination emerged 35 percent more profitable than during the previous recession a decade earlier. Kennedy also cut overhead, but he did not retreat from opportunities for growth. The company launched AutoTrader.com, destined to become the largest online marketplace for used cars, in 1999 and continued to fund the business's development as economic conditions worsened. His commitment paid off when AutoTrader.com became a profitable venture in 2002, a year that also saw the Web property record a 75 percent increase in revenue to roughly $100 million.

Cox Enterprises emerged from the recession essentially unscathed. Revenues swelled to more than $10 billion in 2003, representing a massive increase from the $1.8 billion generated when Kennedy took over in 1988. In 2004, Kennedy made a startling announcement, declaring his intention to purchase the 38 percent of Cox Communications that Cox Enterprises did not already own and return the company to private ownership. Kennedy felt the financial community was not recognizing the strides the company had made. In his mind, the success of the company's advances in cable television distribution, telephone service, high-speed Internet service, and other broadband service were undervalued. In August 2004, he announced a $7.9 billion plan to purchase Cox Communications stock. As Kennedy worked to complete the transaction, Cox Enterprises prepared for the future, its position as a mighty media force unlikely to weaken in the years ahead.

Principal Subsidiaries: Cox Communications, Inc. (62%); Cox Newspapers, Inc.; Cox Target Media, Inc.; Longstreet Press; Trader Publishing Co. (50%); Cox Broadcasting, Inc.; Cox Radio, Inc. (62%); Manheim Auctions, Inc.; Independent Car Auctions Holdings Limited (U.K.); AutoTrader.com L.L.C.; Cox Interactive Media.

Principal Competitors: Gannett Co., Inc.; Knight-Ridder, Inc.; Tribune Company.

Chronology

• Key Dates:
• 1898: James M. Cox pays $26,000 for the Dayton Evening News.
• 1934: The formation of WHIO in Dayton marks the company's entry into broadcasting.
• 1948: The company establishes the first television station and the first FM radio station in the southern United States.
• 1964: Cox Broadcasting Corporation, consisting of radio and television properties, debuts as a publicly traded company.
• 1968: Cox Enterprises, Inc. is formed to control all of the Cox family's newspapers.
• 1982: Cox Broadcasting becomes Cox Communications, Inc.
• 1985: Cox Communications is merged into Cox Enterprises.
• 1988: James C. Kennedy is named chairman and chief executive officer of Cox Enterprises.
• 1996: Cox Radio, Inc. becomes a publicly traded company, the same year Cox Interactive media is formed.
• 1999: Autotrader.com is launched.
• 2004: Kennedy announces a plan to buy $8 billion worth of Cox Communications' stock to take the company private.