Thomas Murphy, media executive who engineered ABC takeover, dies at 96

A Harvard Business School graduate with a low-key personality and methodical approach to business, Mr. Murphy helped reshape the national broadcasting and entertainment landscape in the late 20th century, growing Capital Cities from a floundering television station in Albany, N.Y., into a Wall Street darling that controlled dozens of radio, television and publishing properties.

Judging by stock price alone, his leadership was phenomenally successful. Between 1957, when Capital Cities went public, and 1995, when Mr. Murphy arranged the merger with Disney for $19 billion, shareholders saw their investment increase in value 2,000 times. But beyond his efforts to improve the bottom line, he was also admired for building a corporate culture that emphasized ethical behavior and for philanthropic work that included leading the humanitarian group Save the Children for seven years as board chairman.

“Tom Murphy was unrivaled in our industry, not just for his business achievements, but for his impeccable ethics, his unwavering kindness and his boundless generosity,” former ABC president and Disney chief executive Bob Iger said in a statement. “He was a deeply principled man, setting and demanding high standards, always living up to them, and never compromising ethics in the service of business.”

Mr. Murphy had a long history of aggressive takeovers before his company bought ABC, setting what was then a record for the biggest corporate acquisition outside the oil industry. Yet even with his track record, the purchase came as a shock to analysts and investors, since ABC was about four times larger than Capital Cities. One writer likened the purchase to a minnow swallowing a whale.

Wall Street cheered the transaction, in part because of the lean management style at Capital Cities — Mr. Murphy had no legal department or personnel office and his secretary ran public relations — and because of the involvement of his friend Warren Buffett, the “Oracle of Omaha” who helped finance the deal and soon joined the board.

According to “Buffett: The Making of an American Capitalist” by Roger Lowenstein, Mr. Murphy started negotiating the deal in late 1984, when he visited the office of ABC chief Leonard Goldenson. “Leonard,” he said, “I don’t want you to throw me out of the 39th floor, but I have an idea.”

Instead of tossing him onto the streets of Manhattan, Goldenson approved of the proposed acquisition, trusting Mr. Murphy to keep ABC intact at a time when the network was running third in the ratings and attracting the attention of potential buyers who, like Mr. Murphy, believed they could streamline the network and restore it to dominance.

The deal was strengthened after Buffett agreed to be the “900-pound gorilla” of the deal, as he put it, investing more than half a billion dollars in the company and refusing to sell his stake after the merger, as part of an effort to prevent Capital Cities and ABC from being snatched up by other conglomerates.

In part, the investment was a symbol that Buffett trusted Mr. Murphy, whom he had once bonded with over racquetball and a steak dinner. “He has none of those complexities of character that screw other people up and make for irrational behavior,” Buffett said in a 1987 interview with the New York Times. Indeed, in a statement Wednesday, he said Mr. Murphy “taught me more about running a business than any other person.”

Mr. Murphy went on to lead Capital Cities and ABC as chairman and chief executive, aided by his longtime lieutenant Daniel Burke, whom he described as an equal partner in the company. Both men employed a hands-off approach, emphasizing cost controls while trying to empower managers at a sprawling company that included the fledgling cable channel ESPN and publications such as the Kansas City Star, Fort Worth Star Telegram and Women’s Wear Daily. “How many fewer people do you need to do your job,” they would ask, “and what projects can you postpone?”

Some ABC journalists feared their managerial approach would devastate programs such as “World News Tonight,” “Nightline” and “20/20.” But Mr. Murphy was generally praised for his stewardship of the news division. After the company was sold, journalist Cokie Roberts called him a “world-class boss” and by all accounts, he avoided interfering in editorial decisions.

Mr. Murphy retired as chief executive in 1990, when he turned 65, but returned to the job in 1994 after Burke retired as his successor. A year later, he negotiated with Disney chief executive Michael Eisner to create what was then considered the most powerful entertainment company in the world, uniting Capital Cities and ABC properties with Disney assets that included theme parks, movie and television studios, and a stable of legendary cartoon characters.

The deal was reported to be the second-largest corporate takeover in history, after the 1989 buyout of RJR Nabisco for $25 billion, and came during a period of growing consolidation in the entertainment business, as new federal regulations freed the networks to own a financial interest in shows they broadcast. Just one day after the sale was announced, Westinghouse Electric said it had agreed to buy CBS for $5.4 billion.

By all accounts, the Disney deal was arranged quickly following an impromptu conversation with Eisner, Buffett and Mr. Murphy at a media conference in Sun Valley, Idaho. It was a career capstone for Mr. Murphy, who later served on the board of Disney and of Buffett’s holding company, Berkshire Hathaway, while heading into retirement.

“I’m very happy we made the deal. Unfortunately, I’m going to be unemployed,” he joked in a 1995 interview with Broadcasting & Cable, a trade publication. “You know what my plan is? I’m going to become a character actor at Disney.”

Thomas Sawyer Murphy was born in Brooklyn on May 31, 1925. His father, a lawyer, was active in Democratic politics and became a justice of the state Supreme Court. His mother was a homemaker whose optimism and devout Catholicism were strong influences on a young Tom Murphy, who later had his corporate headquarters in a building opposite St. Patrick’s Cathedral in Manhattan.

Mr. Murphy served in the Navy during World War II and graduated from Cornell University with a mechanical engineering degree in 1945. Four years later, he received his MBA from Harvard.

After jobs as an industrial oil salesman and ad agency executive, he landed at Lever Brothers as a brand manager, only to leave in 1954 to become a station manager at Hudson Valley Broadcasting, the Albany business that became Capital Cities.

The media company was initially owned by an investment group that included globe-trotting radio broadcaster Lowell Thomas and lost money for its first few years, leading Mr. Murphy to develop an appreciation for cost controls. He became president and then chairman in the 1960s, after spearheading many early acquisitions by the company.

“I always had on my desk a sheet of the people I would like to make deals with,” he recalled. “I went and saw them all. That is how we built the company.”

Mr. Murphy was later appointed to the boards of IBM, Johnson & Johnson and Texaco, and he was president and chairman of the Madison Square Boys & Girls Club in New York City. He was also a board trustee for five decades and chairman for seven of those years of what is now Langone Health at New York University.

In 1955, he married Suzanne Crosby, who had worked in Washington as a secretary to the charismatic Catholic leader Fulton Sheen, often described as the first televangelist. She died in 2009. Survivors include four children, Emilie Murphy of Rye, Thomas Murphy Jr. of Greenwich, Conn., Kathleen Murphy of Boulder, Col., Mary Conlin of Los Angeles and nine grandchildren.

During his years at the head of Capital Cities and ABC, Mr. Murphy gave an annual talk about corporate philosophy, in effect distilling his own approach to business, including his belief that a company had an obligation to its audience, not just its shareholders.

“The way I was brought up in the business, the first thing we discussed when we went to the office every day was whether what we were doing was living up to our responsibilities as a broadcaster to our community,” he told Broadcasting & Cable. “And then, after you figured out that you were doing everything you should in that area, you paid attention about what you could do to knock the brains out of the competition, which is what most people do most of the time.”