Norman J. Pattiz achieved one of the great entrepreneurial successes in the Southern California entertainment business and then watched it nearly go down the tubes.
The rise and fall and survival of Pattiz has taken place without the attention it might have gotten in the television or movie business. But Pattiz made his fortune in that other entertainment medium, radio.
As Pattiz is fond of pointing out, Los Angeles is the nation's largest radio market. "In many ways, this is a company town for the movie and TV business. Radio is the Rodney Dangerfield of the entertainment business. . . . When you tell people that radio is a $12.5-billion industry . . . and you point out that's more than domestic box-office receipts and it's more than domestic record sales, it kind of puts it in perspective. . . . People spend as much time listening to the radio as watching television."
Today, the company Pattiz founded, Westwood One, whose core business is national radio programming, has returned to health and its stock price is rising. But it has done so primarily because Pattiz gave up management of the company and, as far as Wall Street is concerned, got out of the way.
Pattiz, 53, remains chairman of the board, but in a much diminished role. Slice by slice, he's selling off his stake in the company, down now to about 3%.
In another age, there might have been something tragic about Pattiz's fall from grace as one of the highly regarded entrepreneurs of the 1980s.
But this is the entertainment business. Feel no sadness for Pattiz. He has a comfortable contract that provides him with perks and, with bonuses, more than $1 million a year.
From his loft offices at the Westwood One headquarters in Culver City, Pattiz still makes the broadcast deals with rock bands. He has struck up an acquaintanceship with the president of the United States. And he continues to cut a wide swath of exuberant living, much as he did when he was a lightning rod for Wall Street critics who said his overspending was killing the company.
He tools around town in his Aston Martin, weekends on his 60-foot Tempest, "a big go-fast boat" that can take him and his wife, Mary, to Catalina in an hour, and goes to every Lakers game he can. Pattiz and his wife spent more than $100,000 last month in the Jackie Onassis auction, purchasing a 19th-century desk and a publisher's manuscript of "Profiles in Courage."
Pattiz's office is decorated with pictures of him with his friends: Magic Johnson on the night Johnson returned to basketball in his latest comeback, "Don and Melanie" (Johnson and Griffith), Yoko Ono ("an old friend"), Ted Turner and Jane Fonda, Ted Kennedy ("the first politico I got to know well") and Bill Clinton, a politico Pattiz has gotten to know more recently.
In short, Pattiz, the middle-class kid who grew up in Mar Vista, is just delighted with where life has taken him.
"It's a miracle," Pattiz said. "I never expected this . . . and if I can do it, lots and lots of other people can."
He has made something more than $100 million from Westwood One and says he is devoting himself to philanthropic causes, including an effort to create a national academic center for radio, perhaps at UCLA. (Pattiz is scouring the L.A. radio band in search of a broadcast license for UCLA.)
In 1975, Pattiz had the notion that you could package programming for radio stations and make a good business of it by selling some of the commercial slots nationally. The company distributed programs such as Casey Kasem's countdown shows and "The Dr. Demento Show." (Today, the company continues to distribute Kasem's programs, as well as those of personalities Don Imus, G. Gordon Liddy and Larry King.)
Thanks in large to Pattiz's considerable skills as a salesman and programmer, he grew the company at a remarkable rate. After it went public in 1984 at close to $5 a share, it became a darling of Wall Street, rising into the $30-a-share range in 1987. Part of Pattiz's strategy was to acquire competitors in the programming business, and along the way he took control of the Mutual Broadcasting System and NBC Radio Networks. Westwood One became the country's largest supplier of radio programming.
Like many entrepreneurs, Pattiz had more success when he was growing the company pell-mell than he did running it when it got big. The company lost its way when Pattiz began acquiring radio stations and other businesses that were outside the core programming business.
In 1988 the company hit a wall, announcing its first-ever quarterly loss. A recession hit national radio advertising at the same time the company had deeply leveraged itself to make acquisitions.
Pattiz became a target of Wall Street critics who challenged the company's strategy and questioned its accounting practices. The stock dropped to less than $2 a share, and for several years the view spread that the company might not survive.