John Rigas Founded Adelphia Communications Corporation

1829 WordsAug 9, 20168 Pages
John Rigas founded Adelphia Communications Corporation (“ACC”) in 1952 for $300. The company was fittingly named Adelphia, Greek for brother, as it employed generations of Rigas family. Skip ahead twenty years; Adelphia officially became incorporated. Roughly ten years later, John Rigas bought out his brother Gus’ stake, and his three sons became employees of Adelphia. His son-in-law was also the head of the board of directors. This positioned the Rigas family into all of the senior executive positions at ACC. After continued corporate growth, ACC made its initial public offering in 1986, yet the Rigas family held nearly all of the control over every aspect of operations. (International Directory of Company Histories, 2003) Adelphia’s initial board was made up of nine board members and five of the nine were the family of John Rigas, owner and founder of Adelphia. This meant that the Rigases had 100% ownership of class B super voting shares, which gave the family majority voting rights. This is how the family maintained control of the board even after the company went public. Investors did not quickly pick up on this, as this was the era of the “tech” bubble and most were just looking to “get in” on it. In an attempt to be competitive with large cable companies, ACC made several large acquisitions in 1999. Rigas acquired three cable companies at a price tag of over $8 billion growing Adelphia’s subscriber count to over 5 million customers. Thus, ACC became the

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