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THE LOUISVILLE TIMES AND THE BINGHAMS – LOSING THE LEGACY

Source : Family Wars – Grant Gordon & Nigel Nicholson

The story of the Binghams of Louisville’s newspaper dynasty throws a spotlight on family dynamics, and how the circumstances of the children’s formative years can have a large impact on the development of the family business.

In this multi-generation family, the founder’s successors enjoyed comfortable upbringings. The parents strove to promote family togetherness and harmony by involving all the family offspring in the business, but the entry of the fourth generation into the business led to highly disruptive tensions.

Robert Worth Bingham was the founder of the Louisville Times dynasty. He believed that a newspaper should be in the hands of one proprietor, and he chose to pass the business to the youngest of his three sons, (George) Barry Bingham Sr. In effect he cut off his two eldest offspring from the business, providing them with an annual income of $15,000 until their deaths.

Barry’s busy life at the family newspaper meant he had limited amounts of time to spend with his children. Mary, who had joined the family business, emerged with growing self-confidence to become a towering influence at the office, helping to shape the direction of the newspapers. Barry always looked to his wife when it came to big calls and she put the iron in his soul to help him make tougher decisions than he otherwise might have done.

FORMATIVE YEARS

Barry left it to Mary to do the children’s upbringing, who was firm and attentive to discipline. Fighting to win their parents’ affection, the five Bingham children divided into factions: the older boys Worth and Barry Jr formed an alliance, while the two younger children, Eleanor and Jonathan, formed another. Sallie, the middle child, was left to fend for herself. However, she was the smartest of the children, and earned her parents’ approval with her sharp intelligence.

While Worth enjoyed the independence and athletic possibilities that boarding school afforded, Barry Jr, who had reading difficulties, was enrolled into a remedial programme. A sensitive soul, Barry Jr missed the comfortable security of home, and his longing to be with his father became acute. Sallie meanwhile was securely ensconced within the family, but she was deeply reclusive, keeping to herself, staying in her room reading and writing. With her literary bent and aptitude, Sallie was her father’s chief source of plea- sure and pride. Sallie considered herself and her father to be the family’s intellectuals.

As a teenager, Worth desperately wanted his parents’ approval, but was frustrated. A mixture of defiance and lack of ability led him to rebellious indolence, refusing to apply himself academically and failing several subjects. He became laconic, difficult and antisocial. Neither of his parents had the time or the inclination to try to bring him back by supportive intervention.

The other older boy, Barry Jr, fared little better. Besides his reading problems, he was doubly self-conscious on account of his obesity. But once enrolled at boarding school, things changed dramatically for Barry Jr. He became very self disciplined, conquered his weight problems, and began to grow in self-confidence. Meanwhile the younger Bingham children, Sallie, Jonathan and Eleanor, all remained at home, growing up in a busy household, although the youngest boy, Jonathan, felt neglected because of his father’s long absences. The youngest child Eleanor was a mediocre student but was more independent and self-contained. Overall none of them experienced much contact with their parents.

When Worth’s foretold entry to Harvard occurred, Barry Sr took care to offer his son counsel against the evils of drinking and bad company. Worth listened carefully and respectfully and then set off with gusto to do exactly what his father forbade. Lacking any natural academic gifts to offset his unruly life, Worth barely scraped through. But he grew in confidence that he could work hard whenever he needed to. This he proved during summer jobs at the Louisville Times.

NEWCOMERS TO THE FAMILY

Sallie also followed family tradition, going to Radcliffe College in Cambridge, Mass. Unlike her brother she was a bright student. Her inner desire was to emulate her parents’ life by developing a good career and having a successful marriage. She got engaged to Whitney Ellsworth, the editor of the Harvard Advocate. Sallie seemed to have achieved what she wanted, and to be headed for a dazzling career as a writer, with a happy marriage.

Meanwhile, Worth married Joan Stevens. After their wedding, Worth began working at the family firm as assistant managing editor of the Louisville Times. Their first daughter Clara was born in 1963.

Barry Jr, who followed the family tradition by graduating from Harvard, took up a job as a television researcher at NBC in Washington. He married Edith (Edie) Wharton, who lived with her two sons from her first marriage. Barry Sr was gradually bringing the next generation into the family businesses and giving them a chance to display their talents. Mark Ethridge, the long-standing publisher of the Louisville Times, who had been instrumental in bringing the family newspaper to national prominence, helped to clear the way by retiring in 1963.

FAMILY TRAGEDIES

The youngest son Jonathan was reluctant to follow the family tradition and go to Harvard, but in the end he succumbed to the pressure and expectations, only to drop out at the end of his junior year in 1961 so that he could sign up for courses closer to home at the University of Louisville. He was able to convince his parents that he could do well if he pursued science, which he did, eventually fulfilling his destiny and their wishes by ending up at Harvard Medical School. Alas, that was as far as the road of fate would take him.

One day, while tinkering with an electrical gadget, he took a high- voltage shock and died instantly. Jonathan’s premature death shook the family badly, especially Mary who was inconsolable. More was to come.

That summer, heading out on vacation with his wife and newborn, Worth met with a road accident and was killed.

The loss of the eldest son and the heir to the family business was a blow not just for an emotionally fragile family but for the business. With two of his sons laid to rest Barry Sr made an effort to focus his thoughts on how to perpetuate the family newspaper business.

THE NEW HEIR AND RESPONSIBILITIES

Barry Jr, the second-born son, was still young, inexperienced and a ‘little boy’ in the newspaper business, but now he was confronted with the possibility of taking on the responsibilities of editor and publisher. Many of the senior executives at the newspapers felt Barry Jr was not equipped to do the job. Although Barry Jr acknowledged that he was not ready to take on the burden immediately, he knew that refusing the torch could prompt his father to sell the newspapers. In less than a week after Worth’s funeral, Barry Jr became the assistant to the publisher. His father retained the titles of editor and publisher with the understanding that as soon as it was feasible, these responsibilities would be transferred to his only surviving son.

But the curse of the Bingham boys was not yet played out. Barry Jr was diagnosed with Hodgkin’s disease, the cancer that had killed his grandfather. His condition was severe and required extensive radiation therapy and surgery. The vultures started circling. News of Barry Jr’s illness had attracted prospective buyers, and Barry Sr for the first time talked about an eventual sale of the company.

But Barry Jr was a determined character. He had shown this by overcoming the reading disorder as well as fighting his weight problem during his youth. Now he turned these same energies to the task of defeating his illness. This he did through a rigorous and obsessive regimen of exercise and diet. He stuck unswervingly to his plan, and sure enough he found himself miraculously on the road to recovery. Barry Jr returned to his newspaper desk with even more energy and effort. All the time these events were unfolding the paper’s profits were eroding, and by the mid-1970s the company was barely breaking even.

WOMEN IN THE BUSINESS Sallie’s marriage with Whitney Ellsworth ended in a divorce soon after the birth of their baby son. Soon after she met a young Russian immigrant lawyer, Michael Iovenko, and within less than a year after her divorce they were married. Barry Jr promptly invited his brother- in-law Michael to sit on the Bingham board, an offer he gladly accepted, and he began to forge close bonds with the family. The family took a liking to Michael. But far from making Sallie happy, these developments had the opposite effect. She had grown bored with him and decided to end the marriage in 1975, returning from New York to Louisville two years later. Meanwhile she also joined the Bingham board but would rarely attend meetings. Barry Sr had been feeling guilty about his relationship with Sallie and what had been happening to her. The bond was still strong between them. He could see how desperate she was, and he yearned to heal her wounds.

Barry Sr had always hoped his daughters would some day become more involved in the business. He felt that all three children would become closer if they functioned as active co-owners of the family business. With his usual optimism, he had never dreamed that his business goals and his family goals could be set on a collision course by putting them in harness together. Like many a parent wishing for peace among their offspring, he gravely underestimated the persistence of the childhood antagonisms that existed among his heirs, particularly between Barry Jr and Sallie. To complete Barry Sr’s wish to knit the family together he also appointed to the board his wife Mary, Worth’s widow Joan, Barry Jr’s wife Edith and his youngest daughter Eleanor.

The youngest of the brood, Eleanor, lacking a profession of her own, depended on her parents for money. The self-sufficient child had grown into an undisciplined adult, with no intellectual pursuits, living for the moment and scarcely thinking about a personal career. Yet she was attracted to the idea of working for the Bingham companies. So Barry Sr – in accord with his dream of family inclusion – acceded. In the fall of 1978 Eleanor arrived at the newspaper office bearing a grand new job title – director of special services. Colleagues reported that Eleanor did not act as an ordinary employee, and ignored office etiquette.

Both Sallie’s and Eleanor’s positions with the company were, frankly, little more than sinecures, but they sat on the board. This gave them somewhat grandiose presumptions about their role and contribution. Some board members, not least Barry Jr, felt their comments at meetings were often gauche and embarrassingly lacking in business acumen. Sallie would often pontificate on the responsibilities of ownership and journalistic tradition, and scoffed at Barry Jr’s obsession with computerization and cable television. For his part, Barry Jr could not stand it when his authority was challenged. The truth was that none of the Binghams had much business savvy, especially in terms of the company’s finances.

A CRISIS OF TRUST

For decades Sallie and Eleanor had been distant from the family enterprise, unlike Barry Jr, who had had the benefit of regular conversations and insights with his father about their shared dream for the family business. Sallie and Eleanor also regarded their dividends as remuneration that they expected to receive independent of the company’s performance. They soon felt unwelcome on the board, where they had responsibilities but little influence. The sisters began criticizing Barry Jr in front of employees about his ‘anti-women bias’. The emerging split in the family started to become public knowledge when a local magazine headlined an article on the sisters ‘The Bingham black sheep’.

In 1980, in order to retain control, the family initiated a share buy- back agreement. The pact stipulated that if a stockholder of the Bingham companies wanted to sell shares to an outsider, the family had to be given 60 days to match the bid. Although Barry Jr was keen to execute this agreement, his sisters demurred. They showed little regard for his leadership, declaring they were not prepared to sign, also demonstrating they retained a vestige of leverage and power. A crisis of trust was developing.

For his part, Barry Jr had failed to grasp that he could not dictate policy in the firm, and that much of his power derived from the confidence that the rest of the family had in him. His disquiet was heightened when Sallie managed to acquire an operational role in the business, as the CourierJournal book editor. She performed well in the job and began to feel more at home. The position was initially temporary but to Barry Jr’s great dismay it was soon made permanent, without his permission. Sallie continued to be liberal in her criticism of his competence, and now she had a platform within the business from which to do this.

Barry Jr, frustrated by his sister’s interference, felt he needed external support to guide him through these troubled times, so he brought in family business consultants and reshaped the governance, hiring professional board of directors. This provided him with the rationale he needed, backed by his experts, to remove his sisters from the company.

But Barry Jr’s move to force his sisters to leave the company boards did not go down well with other board members, who felt it was breaking up the ownership group just because he couldn’t tolerate his sisters. Trying to bring matters to a head, he presented his parents with three options:

1. sell all three companies,
2. remove his sisters from the company,
3. or find a new publisher.

But he didn’t want his father to sell up, and he pressed his parents to get his sisters out of the business. The effect of this manoeuvre on Barry Sr was to puncture his optimism. With the utmost reluctance he concluded the only way to buy peace would be to remove all family members from the board, including himself. Only one member resisted: Sallie. For her, the seat on the board was a family entitlement. She decided that there was only one choice left to her: to sell her stock in the family firm. She confronted the family with an ultimatum: pay her $42 million for her shares or she would find the highest outside bidder to sell them to. Meanwhile, Eleanor threatened that if she was not given a more active role in the business, she would sell too. Faced with this logjam Barry Sr decided to sell the family firm, leaving behind him a trail of disappointed children. With this decision the era of the Bingham media dynasty was over. The family’s lack of cohesion, shared values and clarity of roles had finally fragmented the firm.