A Story of Family-Business Succession How Roy H. Park Jr
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Out from the Shadow, Into the Light: A Story of Family-Business Succession How Roy H. Park Jr. Rebuilt Park Outdoor Advertising by Overcoming Betrayal and Charting His Own Course Abstract Roy Hampton Park Sr. (1910-1993) was the son of a North Carolina farmer and onetime newspaper reporter who became a multimillionaire entrepreneur and media mogul, with holdings that at one point reached 25 percent of the U.S. population. The net worth of his conglomerate, alone — Park Communications Inc. of Ithaca, NY, which included seven television stations and 144 newspapers in 24 states with 2,650 employees and annual income of $160 million was $711 million. He also founded several other companies as well, among them: Hines-Park Foods Inc., creator of the Duncan Hines brand of packaged foods (sold to Procter & Gamble in 1956); Park Outdoor Advertising Inc., a billboard company; and RHP Inc., a real estate company. Upon his death, $600 million of his estate was dedicated to creating the Park Foundation Inc. Park Sr. was known as a difficult and demanding owner and boss. His wife — Dorothy Dent “Dottie” Park (1912- 2016) – provided a moderating influence on some family-business decisions, sometimes siding with her husband and sometimes with their son. She was the longtime leader of the Park Foundation. Son Roy Jr., born in 1938, eventually became CEO, and finally owner, of Park Outdoor. Roy Jr. earned a BA in journalism at the University of North Carolina Chapel Hill in 1961, redeeming himself for flunking out of Cornell University as a sophomore. He went on to earn an MBA from Cornell’s Johnson Graduate School of Management. After a seven-year career with the national advertising firm J. Walter Thompson Co., he returned to the family business in 1971, eventually to run Park Outdoor Advertising. But the path to becoming independent from Roy Sr.’s influence was a rocky one, involving many skirmishes, setbacks and betrayals. Daughter Adelaide Park Gomer, born in 1943, did not participate in the family business, but later became very active in the Park Foundation and currently serves as president. This case study focuses on how the absence of succession planning for Park Sr.’s vast empire shaped the career trajectory of Roy Park Jr. and Park Outdoor Advertising. His father’s example showed Roy Jr. “what not to do” in both business and succession planning. (Roy Jr. has two children, Elizabeth, born in 1962, and Roy III “Trip,” born in 1967, and seven grandchildren.) Park Outdoor, of which Roy Jr. remains owner and CEO, is the only property still in the family. Immediate family members serve on the Board of Directors. Park Communications Inc. and Roy Sr.’s holdings were sold after his death in 1993. Sale proceeds were used to fund the Park Foundation. 1 This case also explores the role that Roy Jr.’s experience at non-family firms played in building his credibility and rebuilding a troubled family business. The case is abstracted largely from “Sons in the Shadow, Surviving the Family Business as an SOB * *Son of the Boss” by Roy H. Park Jr. and with personal interviews with the younger Mr. Park. Narrative Entrepreneurs strive to build something of value – and to be rewarded for that accomplishment. Roy H. Park Sr. worked relentlessly to build a massive media empire, and his success in doing so was handsomely rewarded and recognized. Having worked in public relations, publishing and advertising, he teamed up with Duncan Hines to franchise a line of over 250 food products throughout the USA, and used a creative approach to sell the idea to a famous gourmet who never endorsed anything. Worth more than $350 million in 1984, the self-made Park Sr. – media executive, entrepreneur and philanthropist; founder of the Park Communications television, radio and newspaper conglomerate; and creator of the Duncan Hines brand of packaged food products — was named to the prestigious Forbes 400 list that year. (For comparison, this is the same year that Donald Trump first appeared on the list on his own with an estimated individual fortune of $400 million.) Where the majority of those on the list had either inherited wealth or parlayed inheritances into greater wealth, Park had built his empire himself. Further, Park was one of the few on the list who had achieved success in fields other than oil and gas, real estate, or manufacturing. He would go on to achieve a net worth of $ 711 million, with holdings that included seven television stations and 144 newspapers in 24 states with 2,650 employees and annual income of $160 million. This did not include his real estate and agricultural holdings, his investments, or collection of watches and antique cars. In a September 1984 article called “Every Decade, a New Career,” Forbes described Park, 74, as a “serious man, a onetime newspaper reporter who became a centimillionaire.” His son, Roy Jr., then 46 and working in the family business since 1971, had seen firsthand much of what it had taken for his father to achieve such heights. What he also was about to see, though, was his father’s talent for dealing his son a devastating blow, even while basking in the glow of his own achievements. Roy Jr., who had rejuvenated Park Outdoor Advertising Inc. not once but twice, was shocked to read the following in Forbes: “Roy Park has a son and a daughter, but neither is likely to succeed him.” The article continued: “The implication (was) clear: Park’s son had yet to prove himself.” The article quoted Roy Sr. as saying, “You can’t treat somebody special just because he’s your son,” adding that, even when he did name a successor, he probably would find new projects rather than retire. “Every decade or so, I need a different career.” While the coverage thrilled Roy Sr., brought the company national publicity, and generated excitement among the people of Ithaca – where the Park family had lived for four decades — Roy Jr. was reeling. His father had taken the national stage to publicly denigrate his business acumen and leadership. 2 Roy Jr. promptly prepared his letter of resignation, telling his father that, “expressing (your) true sentiments (in Forbes) leaves me no choice.” In particular, he objected to Roy Sr. characterizing Park Outdoor as unproven, which he saw as unfair to the entire staff. The younger Park also released a memo to all Park Outdoor employees explaining his abrupt resignation. (Park Outdoor was a separate company and not part of the Park Communications conglomerate.) Roy Jr. had managed the company profitably from 1971 to 1975, at which point his father reassigned him. In the memo, he detailed how, in 1981, his father had asked him “to take back an operation which had been badly mismanaged, was losing money, and was faced with a bleak future.” He lamented his father’s choice to publicly convey “the impression that I had failed to prove myself and was … unworthy of succeeding him.” Roy Jr. noted that he never expected special treatment as the boss’ son, but instead insisted on treating all employees with respect. Further, he told his employees: “Hard work and teamwork from people like you in the field restored the company to profitability, and indeed, this year we are headed for record profits for Park Outdoor.” Roy Jr.’s resignation was big news in the regional business community. In reaction to his son’s move, Roy Sr. – true to form — again turned to the media to respond. The Ithaca Journal wrote: “Roy H. Park Sr. said today he regrets the decision of his son, Roy H. Park Jr., to resign as Vice President of Park Outdoor Advertising.” When the senior Park eventually did reach out directly to Roy Jr., it was to begin negotiating for the son’s return to Park Outdoor. By late fall 1984, they had hammered out a proposal that would name the son as President and CEO of Park Outdoor and would call for Roy Jr. to buy the company from his father within seven years. The agreement also gave Roy Sr. the right to sell one division – the profitable poster and paint plants in Scranton/Wilkes-Barre, PA – if he could do so by Dec. 31 of that year. Given the tight time frame – Dec. 31 was mere weeks away — the son dismissed any serious concerns about that provision. But that final clause — whether borne of Roy Sr.’s ruthlessness or his desire to see his son prove himself, or of the son’s kinder instincts or naiveté — set up perhaps the most explosive betrayal Roy Jr. was to experience. Just ahead of the Dec. 31 deadline, the younger Park learned that his father had secretly negotiated the sale of the Scranton/Wilkes-Barre division— to their closest competitor, at a bargain price. Roy Jr. learned the news only when his employees called on Christmas Eve to tell him of their layoffs. According to the Ithaca Journal, Roy Sr. “dumped the Scranton plant at a discount price to thwart and hopefully discourage his son. … The expensive and unsuccessful transaction was never discussed. … It was a preemptive strike not easily justified, and in any event vindictive.” The sale eliminated Park Outdoor’s largest and potentially most profitable division, and reduced the company’s size by a third. “It was beyond comprehension that a father would do that to his son,” Roy Jr. recalled. “I trusted him but should have known better.” Twice in a single year, the son found himself deeply wounded by his father and considering his next move.