In Business This Week: HEADLINER: BOB MAGNESS
TCI: WHO'LL VOTE THE CHAIRMAN'S STAKE?
The death of a company's founder often creates uncertainty. When Bob Magness, chairman of cable-television giant Tele-Communications, died of cancer on Nov. 17, he owned 7% of TCI and had rights to vote 26% of its shares. Magness, a onetime Texas rancher and cottonseed salesman, launched his cable company in 1956 by stringing wire for 700 customers in Memphis, Tex.
TCI long has been tightly controlled by Magness and CEO John Malone, who has rights to vote 17.7% of its stock. An additional 7% of the voting stock is held by Kearns-Tribune, publisher of Salt Lake Tribune, which got its shares back in 1958.
What will happen to Magness' stake is unclear. A TCI spokeswoman says there is no trust arrangement for Malone to vote the shares. Kearns-Tribune has an arrangement to buy any shares that become available, but Kearns President Dominic Welch says his company has no plans to purchase Magness' stake. Most of the shares will likely pass to Magness' wife, Sharon. Her plans are of intense interest to Malone and Wall Street alike.EDITED BY THANE PETERSON By Ron GroverReturn to top
ORANGE COUNTY AFTERMATH
CALLING IT "GAMBLING WITH public funds," a Los Angeles superior court judge on Nov. 19 sentenced ex-Orange County (Calif.) Treasurer Robert Citron to a year in jail and a $100,000 fine for his role in the largest municipal bankruptcy in U.S. history. Citron had pleaded guilty to six counts of securities fraud and mismanagement in conjunction with trading losses that pushed the county into bankruptcy in December, 1994. Citron said he relied on bad advice from investment bankers, whom county lawyers are suing for $3 billion. Separately, the Securities & Exchange Commission sued CS First Boston and two of its former bankers on Nov. 20, alleging fraud in the sale of $110 million worth of 1994 Orange County bonds.EDITED BY THANE PETERSONReturn to top
AT BANKAMERICA, STOCK FOR ALL
IN ONE OF THE MOST FAR-reaching programs of its kind, BankAmerica on Nov. 19 announced a stock-option plan that will allow more than 85,000 of its employees to buy 50 to 90 shares of its stock every six months. The company hopes that its program, which covers even most hourly and part-time workers, will boost employees' sense of ownership in the bank and thus improve BankAmerica's overall performance.EDITED BY THANE PETERSONReturn to top
WANNA BUY A STAKE IN SONY?
AT A HOLLYWOOD PRESS CONfab on Nov. 19, Sony President Nobuyuki Idei let everyone know how much he enjoyed Sony Pictures' new Barbra Streisand film, The Mirror Has Two Faces. Sony hopes the flick is a hit, because Idei also revealed that he plans to sell a stake in the studio to the public. Idei won't say when or how much of the studio he plans to sell, but he says Sony has hired CS First Boston. Sony has "no intention" of selling the studio entirely, Idei stresses.EDITED BY THANE PETERSONReturn to top
WHEN CEO GEORGE FISHER left Motorola for Eastman Kodak in late 1993, legendary former CEO Robert Galvin quietly investigated whether the Motorola board would agree to name his son, Christopher, as Fisher's successor. Directors said no. But on Nov. 14, the board gave Chris Galvin, 46, the job, saying he now has the breadth of experience to do it well. Effective Jan. 1, Galvin will replace CEO Gary Tooker, who becomes chairman of the board. Galvin takes over as challenges to Motorola are mounting. It has been stung by the downturn in semiconductors, which forced it to cut 270 jobs last month. And its share of the worldwide cellular-phone market has slid to about 35%, down 15 points in three years. Result: Motorola is trading at about $55, 19% off this year's high.EDITED BY THANE PETERSONReturn to top