Clear pursuit of Cash flows over earnings maximization - ignoring quarterly results to a large degree; It ran all the way from running their companies to how much they paid for acquisition to their personal life style
Common theme also seems to be aversion towards communication with the Street, using advisors to chase a deal and preferred decentralized organization structure - Capital allocation decisions at the top, running the organization left to lieutenants below
Singularly focused on profitability in conjunction with cash flow over size; In fact, most of the outsiders shrank their book sizes by divesting non-core operations through spin-offs, slump sales etc - anything unprofitable just kill it
Dan Burket at Capital Cities - CBS to begin with was 16 times more valuable compared to Dan Burket; 30 years later Capital Cities became 3 times more valuable compared to CBS - Much like Amara Raja and Exide in the Indian context, Insurance is an unnecessary diversification with no synergies for some one in branded auto comps
Capital Cities was a roll out model i.e. acquire few large stations, turn them around by controlling costs and improving programming and moving onto the next acquisition - only difference, they used far lower debt and longer time between two acquisitions - May be ENIL can adopt the same strategy in radio broadcasting
Dan and Murphy were first timers - They did not have prior broadcasting experience:); Murphy was the CEO and therefore the capital allocation guy, while Dan was in-charge of daily operations
Murphy repurchased 50% of the outstanding stock mid 70s to early 80s (Reagan era) - most of it at single digit P/E - beat that 7 to 8 years of repurchases! Why can't Infy do the same absent major M&A?
"Burke and Murphy wasted little time in implementing Capital Cities’ lean, decentralized approach—immediately cutting unnecessary perks, such as the executive elevator and the private dining room, and moving quickly to eliminate redundant positions, laying off fifteen hundred employees in the first several months after the transaction closed. They also consolidated offices and sold off unnecessary real estate, collecting $175 million for the headquarters building in midtown Manhattan. As Bob Zelnick of ABC News said, “After the mid-80s, we stopped flying first class."
Murphy generated an IRR of 20% over 30 years ~230 times your original money invested in 1966 - S&P did 10.1% CAGR over the same period
on HR
Decentralization is the cornerstone of our philosophy. Our goal is to hire the best people we can and give them the responsibility and authority they need to perform their jobs. All decisions are made at the local level. . . . We expect our managers . . . to be forever cost conscious and to recognize and exploit sales potential.
Common theme also seems to be aversion towards communication with the Street, using advisors to chase a deal and preferred decentralized organization structure - Capital allocation decisions at the top, running the organization left to lieutenants below
Singularly focused on profitability in conjunction with cash flow over size; In fact, most of the outsiders shrank their book sizes by divesting non-core operations through spin-offs, slump sales etc - anything unprofitable just kill it
Dan Burket at Capital Cities - CBS to begin with was 16 times more valuable compared to Dan Burket; 30 years later Capital Cities became 3 times more valuable compared to CBS - Much like Amara Raja and Exide in the Indian context, Insurance is an unnecessary diversification with no synergies for some one in branded auto comps
Capital Cities was a roll out model i.e. acquire few large stations, turn them around by controlling costs and improving programming and moving onto the next acquisition - only difference, they used far lower debt and longer time between two acquisitions - May be ENIL can adopt the same strategy in radio broadcasting
Dan and Murphy were first timers - They did not have prior broadcasting experience:); Murphy was the CEO and therefore the capital allocation guy, while Dan was in-charge of daily operations
Murphy repurchased 50% of the outstanding stock mid 70s to early 80s (Reagan era) - most of it at single digit P/E - beat that 7 to 8 years of repurchases! Why can't Infy do the same absent major M&A?
"Burke and Murphy wasted little time in implementing Capital Cities’ lean, decentralized approach—immediately cutting unnecessary perks, such as the executive elevator and the private dining room, and moving quickly to eliminate redundant positions, laying off fifteen hundred employees in the first several months after the transaction closed. They also consolidated offices and sold off unnecessary real estate, collecting $175 million for the headquarters building in midtown Manhattan. As Bob Zelnick of ABC News said, “After the mid-80s, we stopped flying first class."
Murphy generated an IRR of 20% over 30 years ~230 times your original money invested in 1966 - S&P did 10.1% CAGR over the same period
on HR
Decentralization is the cornerstone of our philosophy. Our goal is to hire the best people we can and give them the responsibility and authority they need to perform their jobs. All decisions are made at the local level. . . . We expect our managers . . . to be forever cost conscious and to recognize and exploit sales potential.
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