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Unity May Yet Break Out in Fractious Media Clan

Business: Hoiles family, with the Orange County Register as its flagship, sees a generational shift.

September 16, 2002|SCOTT MARTELLE and MARC BALLON | TIMES STAFF WRITERS

COLORADO SPRINGS, Colo. — Harry Hoiles took the news like a knife to the back.

Hoiles had gone to Florida in 1982 for a newspaper publishers' conference just weeks after the death of his older brother Clarence, head of the family-owned Freedom media company. Harry, by all accounts a quiet and gentle man, was expecting to succeed him like a prince in a house of royalty.

Instead, Harry's younger sister and her husband took him aside and said the family planned to look elsewhere for a new chief executive. They weren't about to entrust mild-mannered Harry with the family's golden goose: Freedom Communications, publisher of the Orange County Register and a string of smaller newspapers and broadcast outlets.

"It ruined him," recalled Harry W. Hoth, a longtime friend who runs a Colorado-based broadcasting company. "It just completely devastated and confused him."

But it also ignited him.

Harry Hoiles, who was in the second generation of ownership, shared the family's staunch libertarian views rejecting government regulation of business. But he swallowed those principles to file a lawsuit seeking the breakup and sale of Freedom.

The legal challenge failed, but it drew the very private Hoiles clan into a very public feud, bitterly fragmenting the family even as its members remained bound to one another through their joint ownership of Freedom.

"After the lawsuit was filed, the birthday cards stopped coming, the invitations to weddings stopped coming," recalled Harry's son Tim, who retold his father's account of the 1982 meeting. (The father died in 1998.)

The 20-year rupture has not healed. The bad blood bubbled anew this summer as Tim Hoiles--now the third generation--renewed a quest to cash out his family's 8.6% stake in Freedom Communications, now the nation's 12th-largest media company. In many ways, the Hoiles saga is a sequel to the stories of other notable American newspaper families, from the Binghams of Louisville to the Chandlers of Los Angeles. In each case, publishing empires founded by early 20th century entrepreneurs fell out of family hands as the later generations fragmented.

But in August, the Hoiles story veered from the script as members of the family's fourth generation of ownership persuaded their elders to give them time to put together a buyout package that would give them control of the company, one of the nation's highest-profile proponents of libertarian philosophy.

Only a few of the fourth-generation members have ever worked for Freedom. And only one--Raymond C.H. Bryan, 32--serves on Freedom's board of directors.

But "the fourth generation is a very united group," said Francois de Visscher, a Connecticut-based family business consultant working with the Hoiles descendants. "They are very attached to the family business, very attached to the family heritage and what Freedom stands for."

And while the fourth generation has inherited a stake in the company, de Visscher said, its members did not inherit the feud that embroiled the second and third generations.

"They want to stay together as an investor group," he said. "They feel the investment is sound financially, but there are other reasons for holding onto it. In today's investment world, what opportunities do you have to be an owner of a company that's been in the family for generations?"

Privacy Is Paramount

Despite making a fortune selling news, the Hoiles family remains intensely jealous of its privacy. None of the fourth-generation members and only one of the third--Tim Hoiles--would consent to an interview about the family legacy and future.

But a partial family history can be gleaned from court records and other documents, as well as interviews with old friends of Raymond C. Hoiles--"R.C.," the first-generation patriarch--along with Harry Hoiles and former Freedom executives.

It is the tale of a family dynasty struggling to define itself against the weight of its success, and of its past.

One of the few notable newspaper families to have successfully handled the generational transition now confronting the Hoiles clan is the Sulzbergers, publishers of the New York Times, Boston Globe and other mostly Eastern U.S. papers.

The reason: The family carefully mapped out a plan for succession by grooming an heir-apparent in each succeeding generation, said Larry Pryor, an assistant professor of journalism at USC's Annenberg School for Communication.

That standard bearer can "stand tall in the face of the onslaught of those who want to cash out" and "build bridges" to dissidents to keep the company intact, he said. The Hoiles family had no such plan, trusting that the loyalty of blood would overcome any disputes.

"The fact that they don't have a Sulzberger that can rise to the occasion just makes it that much more difficult and unlikely that they'll keep it together," Pryor said.

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