Tuesday, June 20, 2006
Jerry Perenchio-Multi Billionaire- Great Instincts, Iron Will,
Very Low Profile
The ANNOTICO Report
Jerry Perenchio was born into an Italian immigrant
family of
Perenchio's Career included Band Booker, Flight Instructor,Talent Agency Owner,
Fight Promoter, Small Studio Owner, Media Mogul, and is now worth $ 3 Billion.
Under Perenchio's guidance, Univision has become a
juggernaut that generates nearly $2 billion a year in revenue from its TV and
radio stations, two TV networks, a cable channel and a music division with four
record labels.
Its flagship is now the nation's fifth-largest TV network and regularly
delivers three times the young-adult audience of MTV. More men watch prime-time
telenovelas than ESPN.
His 20 "Rules of the Road" are worth considering, as are his Perenchio-isms.
A HOLLYWOOD PLAYER WHO OWNS THE GAME
A. Jerrold Perenchio has made billions with great
instincts, an iron will and a very low profile.
Now he's selling Univision -- his way.
By Meg James
Times Staff Writer
June 20, 2006
During five decades as one of
In 1971, the man whose friends call him Jerry did something no other boxing
promoter had done: He guaranteed a $5-million purse to get two heavyweight champions
into the ring. Then, he made the Muhammad Ali-Joe Frazier fight available on
closed-circuit TV not just to cover the costs but also to reap a couple of
million dollars' profit.
In 1981, when he was a business partner with TV producer Norman Lear, he
negotiated a deal to buy a second-tier movie studio, Avco
Embassy Picture Corp., for $25 million. Four years later, just as the
home-video business was taking off, boosting the value of film libraries, Perenchio and Lear sold the studio to Coca-Cola Co. for
$485 million.
Now, the mercurial 75-ye! ar-old is poised for his biggest payday yet. After running
Univision Communications Inc. for 14 years, Perenchio
has put the Spanish-language media behemoth on the block.
With bids due today, Wall Street analysts say the company, whose television
ratings among younger viewers often rival those of ABC, CBS and NBC, could
fetch as much as $13 billion. Perenchio, whose
initial investment was a mere $33 million, stands to make about $1.3 billion.
"For a long time, I thought he was lucky," said singer Andy Williams,
who is Perenchio's best friend. "But how could
somebody sustain a lucky streak for so long? Finally, I realized that he wasn't
lucky. He was just smart."
Ask those who know Perenchio to sum him up, and they
all describe him as prescient. Whether booking bands in the 1950s, launching
Elton John's career in the U.S. in the 1970s, co-producing blockbuster films
like "Blade Runner" and "Driving Miss Daisy" in the 1980s
or buying (in 1985) and then qui! ckly
flipping at a huge profit the Loews theater chain, Perenchio
has made a fortune sensing trends.
"Jerry has always been ahead of everyone else," said Warner Bros.
President Alan Horn, who moved to
Perenchio has something else, too, that he believes
is key to staying on top: a set of 20 tenets, typed in
all capital letters on a single page. Known to everyone at Univision as
"The Rules of the Road," they have been Perenchio's
compass and have helped make him one of the most powerful forces in
Forbes magazine estimates his net worth at $2.9 billion.
Tough negotiator, inflexible tyrant, brilliant marketer, control freak,
financial wizard, blunt-talking s.o.b. Perenchio has
been called all these things and more. His response? Determined silence.
T! he rules prohibit talking on the record.
Stay clear of the press. No interviews, no panels, no speeches, no comments.
Stay out of the spotlight it fades
your suit.
Last month, at the television industry's annual presentations of its new shows
for Madison Avenue, hundreds of advertisers jammed into a Lincoln Center theater
to hear Univision's pitch: This year, the more than 43 million Latinos who live
in the United States will spend some $760 billion, a parade of executives
proclaimed, and Univision can deliver those viewers better than any other
network.
The only awkward moment came when Ray Rodriguez, Univision's president, gave a
shout-out from the stage to his boss. Typically, such a gesture is
choreographed with a roving spotlight, which settles on the honoree, who basks
in the attention.
Not Perenchio. At the mention of his name, the crowd
shifted as row after row of advertisers turned around, craning their necks for
a glimpse. Peren! chio didn't even wave, leaving some to wonder whether
he was actually in the room.
Perenchio is serious about keeping a low profile.
It's not modesty that motivates him. It's control.
In a rare interview in 1981, Perenchio told a Times reporter: "I really don't want my name in the
goddamn paper. I really don't mean to be rude. I just don't want to give out
interviews. I just hate them. Inevitably, I ended up hurting some people or
leaving some names out, or getting quoted out of context."
Similarly, he won't pose for photographs, and Univision won't release any. (The
only recent photo available is on the website of his third and current wife,
Margaret, an artist,The shot
of him in a blue sweater and white sneakers is the basis for a painting she
calls "Weekend in
Perenchio holds his employees to the same standard,
punishing those who violate the rules. In 1995, when Rodriguez was interviewed
about Univision by a trade magazine, Perenchio! fined him $25,000.
Just a year earlier, another top executive, Carlos Barba,
had paid a much stiffer penalty. Barba, who had
worked for Perenchio for years, was fired after he
was the subject of a glowing profile in the New York Times.
"Jerry was like my father, my mentor, my brother. But it was like he
pulled a gun and shot me," Barba said from
Miami, where he now markets slot machines that feature the likenesses of such
fading celebrities as Tito Puente and K.C. and the Sunshine Band. "It was
a business decision without any human consideration."
Rely on your instincts and common sense. If you go against them you generally
regret it.
The idea was brilliant in its simplicity. Pit an aging trash-talking male
tennis pro against a younger, female champion. Market it as a "
It was 1973 when Perenchio masterminded the on-court
clash between Billie Jean King and Bobby Rigg! s. The
event became a cultural milestone. It also was a moneymaking machine.
"He said, 'We have to market this as a confrontation between male
chauvinism and women's liberation,' " Horn recalled.
"He has that vision thing."
It would be difficult to find a more Zelig-like
character than Perenchio. Whether it's sports,
entertainment, politics or philanthropy, he has had a hand in many of the major
events of the last half-century.
By some estimates, he has given away about $50 million, benefiting UCLA and
Walt Disney Concert Hall, among other nonprofits. And records show that, since
1998, he and his wife have contributed an additional $18 million to politicians
Republicans and Democrats and their causes.
"Jerry is the walking embodiment of the history of
Perenchio and his wife are the largest landholders in
Nancy Reagan is his next-door neighbor. Former L.A. Mayor Richard J. Riordan is
a friend, as is tenor Placido Domingo.
His poker buddies include CBS Corp. Chief Executive Leslie Moonves,
DreamWorks Animation SKG Inc. CEO Jeffrey Katzenberg, Bob Daly (a former Warner
Bros. studio chief and Dodger chairman), producer Larry Gordon, retired music
executive Mo Ostin and actor Dustin Hoffman.
"There are these Perenchio-isms," Grazer
said. "He'll say things like, 'Look, you guys are in a tough spot. It's
going to be rough but you've just got to strap your balls on.' "
Cisneros agreed.
"Jerry always told us: 'Aim for the center of the bull's-eye. Don't look
for the general proximity. Aim for the center, and you will likely hit your
target,' " Cisneros recalled. "Even though
he might want something really bad, he was very
disciplined. He would take a pass rather than do a deal that wasn't
right."
Perenchio's patient pursuit of Univision illustrates
that point. He first became interested in 1986, when the Federal Communications
Commission threatened to revoke the licenses of the stations that formed the
Spanish International Network, which was controlled by Emilio Azcarraga Milmo of
Perenchio didn't speak Spanish (and still doesn't).
But with opportunity knocking, he tried to buy Azcarraga's
five stations north of the border, then balked when bankers were brought in to
round up other bidders. Perenchio, an associate said,
does not participate in auctions.
Instead, Hallmark Cards Inc. bought the stations and network for $550 million,
renaming it Univision. But quickly, Hallmark found itself drowning in debt.
Azcarraga saw a chance to get back what he'd lost. He
teamed with Venezuelan media magnate Gustavo Cisneros, but as foreign citizens,
they needed a
In 1992, they bought Univision from Hallmark for $550 million.
Azcarraga was already
Although he was just a one-third partner, Perenchio's
Typically hands-on, Perenchio helped draft the
partnership agreement, which laid the groundwork for Univision to become the
dominant Spanish-language network in the
That pact also set the stage for a tumultuous relationship among the partners,
and is one of the reasons that Perenchio is selling
Univision today.
Take options, never give them.
Univision's corporate suites, in a
That's how even some longti! me
employees refer to him: Mr. Perenchio. It's polite,
if old-fashioned. And so is the unwritten dress code: Top women executives are
discouraged from wearing pants or perfume, according to one former executive.
These days, Perenchio cuts a grandfatherly figure
(he's got six grandchildren) with his white hair and cardigan sweaters. The top executives who make up his loyal inner circle are intensely
protective of their boss, whom they describe as generous but demanding.
"He has a reputation for being a very tough fellow in the world of
business, and he is," Warner Bros.' Horn said. "He's not afraid to
say no, not afraid to take an unpopular position."
When he took over Univision, for example, he made sure the partnership
agreement ensured the company's profitability by getting Azcarraga,
who died in 1997, and Gustavo Cisneros, chief of Venezuelan media conglomerate Venevision, to provide their programming exclusively to
Univision in the
That ! gives Univision an
edge over its competitors because it can cherry-pick Televisa
and Venevision's best shows. The agreement
effectively blocks Televisa from joining forces with
anyone else in the
Azcarraga's son, Emilio Azcarraga
Jean, now runs Televisa. He has long felt that Perenchio took advantage of his father, locking him into an
ironclad contract before Univision's revenue began to skyrocket. After all, Televisa's telenovelas have
driven Univision's huge ratings; the shows are hugely popular among the
two-thirds of U.S. Latinos who are natives of
Televisa, which owns about 11% of Univision, supplies
programming that brings in about 40% of Univision's revenue. But Televisa receives only 9% of Univision's net ad revenue.
In 1996, Perenchio further cemented his control when
Univision became a public company. Though he owns nearly 11% of the company's
stock, Pe! renchio
received special shares that gave him more than 60% of the shareholder votes
and let him pick a majority of the board of directors.
But with little more than a decade left to run on the programming pact, Perenchio knows he must sell sooner rather than later.
Potential buyers will need time to make a return on their investment before Televisa can begin shopping its shows to competitors such
as Telemundo.
The man known for spot-on timing knows it's time to act.
Always, always take the high road. Be tough but fair and never lose your sense
of humor.
Perenchio was born into a family of
In the late 1940s, Perenchio attended the Black-Foxe
Military Institute, a boarding school in
While a business major at UCLA, he formed a company that booked bands and
catered parties. After graduation, he joined the Air Force and became a flight
instructor.
In 1958, he was hired by Lew Wasserman's Music Corp.
of
In 1962, however, the U.S. Justice Department used antitrust laws to force the
breakup of MCA, which had just acquired a studio and then had to divest itself
of the talent agency. Perenchio, then a 31-year-old
father of three, launched his own firm, siphoning off some of MCA's marquee
clients, including Henry Mancini, Johnny Mathis and Williams.
Friends say Wasserman's continuing influence on Perenchio
cannot be overestimated.
Howard Rose remembers going to see Perenchio about a job
in 1968. Perenchio asked what salary he wanted.
"Whatever's fair," Rose said, hoping to impress his prospective
employer.
Perenchio offered $65 a week $1 less than minimum wage. Rose took the
job, and he soon got a raise. "He was more than fair. I've been connected
to him, one way or another, ever since," Rose said, recalling that years
later, he asked why Perenchio had low-balled him.
"Usually, when you overpay you don't get results," Perenchio answered. Besides, he added, $65 a week was
"what I got when I started at MCA."
When you suit up each day it's to play in Yankee Stadium or Dodger Stadium.
Think big.
By the late 1960s, Perenchio owned one of
Perenchio then tasted even greater success. In 1969,
he played! the middleman in his first big deal,
finding the buyer for
Two years later, Rose called to relay a message: For $5 million, a
Perenchio turned to Jack Kent Cooke, then owner of
the Los Angeles Lakers, for the money. Then he set out to cover the
"bet," tacking a big map of the
"Jerry's philosophy was to sell it just as we sold concert attractions,"
Rose recalled. "He put $1 million on the state of
Perenchio branded the
Not only did they raise enough to cover the fee, but Perenchio
and his partners also made about $2 million in profit, a lofty sum in those
days.
In 1973, Perenchio teamed up with TV producers Norman
Lear and Bud Yorkin at Tandem Productions. Lear had
the landmark TV sitcoms "All in the Family" and "Sanford and
Son" and was preparing to launch "Maude."
"Neither one of us were businesspeople," Lear said. "Guys like
us were writers for hire. We didn't control the downstream [revenue]; we didn't
even know what that was. Jerry made it a business."
Two years later, with $50,000, Lear and Perenchio
formed T.A.T. Communications, which produced "The Jeffersons,"
"One Day at a Time" and later, "The Facts of Life" and
"Who's the Boss?" Perenchio sold the shows
to the networks and resold them in syndication, reaping millions.
Before meeting Perenc! hio, Lear said, he believed that entertainment people
were on either the creative side or the business side. Perenchio
showed him something new, he said: "the creative nature of the business
side."
Never lose sight of what business you're in. Stick to your "last."
When Perenchio gives to charity, he's usually quiet
about it. Daly, the former Dodgers executive, said, "He's not the kind of
person who puts his name on buildings."
But when it comes to Univision, Perenchio wants his
company to get its due.
Under him, Univision has become a juggernaut that generates nearly $2 billion a
year in revenue from its TV and radio stations, two TV networks, a cable
channel and a music division with four record labels.
Its flagship is now the nation's fifth-largest TV network and regularly
delivers three times the young-adult audience of MTV. More men watch prime-time
telenovelas than ESPN.
No wonder so many people, including Microsof! t founder Bill Gates, are eager to buy a piece.
Two groups of investors are expected to enter bids today. One consists of Azcarraga's Televisa and Venevision and the private equity firms Kohlberg Kravis Roberts & Co., Bain Capital, Blackstone Group,
Carlyle Group and Gates' investment arm, Cascade Investments.
The other group consists of Haim Saban,
who scored big on the "Mighty Morphin' Power
Rangers" cartoons, and the investment firms
Thomas H. Lee Partners, Texas Pacific Group, Providence Equity Partners and
Madison Dearborn Partners.
If the sale goes through, friends say, they are not sure what Perenchio will do next.
"I wish I knew," DreamWorks' Katzenberg said, "because I would
bet on it."
*
(INFOBOX BELOW)
Perenchio's Rules of the Road
1. Stay clear of the press. No interviews, no panels, no speeches, no comments.
Stay out of the spotlight it fades
your suit.
2. No nepotism, no hiring of friends.
!
3. Never rehire anyone.
4. Hire people smarter and better than you. Delegate
responsibilities to them. Doing so will make your job easier.
5. You've got to know your territory. Cold!
6. Do your homework. Be prepared.
7. Teamwork.
8. Take options, never give them.
9. Rely on your instincts and common sense. If you go against them you
generally regret it.
10. No surprises. We don't give them. We don't want to get them.
11. Never lose sight of what business you're in. Stick to your
"last."
12. When you suit up each day it's to play in Yankee Stadium or Dodger Stadium.
Think big.
13. If you have a problem, don't delay. Face up to it immediately and solve it.
14. Loose lips sink ships!
15. Supreme self-confidence, never arrogance.
16. A true leader is accessible no
job too big, no job too small.
17. Communication is our business. You can reach any of your associates
anytime, any! where, anyplace.
18. If you make a mistake, admit it. Just don't make too many.
19. Don't be a "customer's person" (man or woman).
20. Always, always take the high road. Be tough but fair and never lose your
sense of humor.
Source: Univision
*
(INFOBOX BELOW)
Univision
Founded: 1961, with a TV station in San Antonio
Headquarters:
Chief executive: A. Jerrold Perenchio
Employees: 4,219 (as of Dec. 31, 2005)
TV networks: Univision (fifth-largest in the U.S.), TeleFutura,
Galavision
Business units: Television (70% of revenue), radio (18%), music (11%) and
Internet (1%)
Holdings: 62 TV stations, 69 radio stations and four record labels
Source: Univision
http://www.latimes.com/entertainment/
news/la-fi-perenchio20jun20,0,3244955
.story?coll=la-home-headlines
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