Kluge lent his New York apartment to Ronald and Nancy Reagan for a weekend during Reagan's 1980 campaign for the presidency. He rarely gives interviews.
He decided on a buy-out of Metromedia's public shareholders last year after grumbling that Wall Street securities analysts had contributed to a sharp drop in the price of its stock by questioning Metromedia's TV-advertising prospects and its venture into the mobile telephone business.
Analysts were not alone in questioning some of his moves. In articles two years ago in Barron's magazine, well-known accounting professor Abraham J. Briloff criticized Metromedia's accounting practices, including a tax-shelter scheme based on the sale and lease-back of advertising billboards.
Briloff described that deal as "an inspired application of old tax rules." Metromedia stock dropped $100 per share to $390 in the first two days after publication of the Briloff article.
Observers of the mobile telephone industry say that Kluge has rushed into that business with characteristic fervor. He spent more than $400 million in the last three years to set up operations and purchase licenses that have given Metromedia one of the largest--if not the largest--share of that market.
Among other areas, the company and joint ventures in which it participates are licensed to operate in the Baltimore-Washington area, New York, Boston and Miami, said Lee Greathouse, editor of Cellular Radio News in Arlington, Va. But in the industry "the feeling is widespread that they're overextended. It takes two years, or often three, to really see the return on your investment," he said.
