John Kluge, who built a small investment in a radio station into the radio, TV, and film empire Metromedia and became one of the world’s richest men as a result, died Tuesday at his home near Charlottesville, VA. He was 95. Kluge was an immigrant from Germany in 1922, graduated from Columbia with an economics degree, and worked for Army intelligence during World War II. After the war, he got into broadcasting by buying his first AM radio station in 1946 in Silver Spring, Maryland, for $15,000. Bloomberg said his “investment strategy was simple: Buy cheap properties and include only those that might increase in value under his management. Then sell.”
He entered television by buying Metropolitan Broadcasting Co. in 1959 after it was too late to break into network television. Metropolitan was later renamed Metromedia Broadcasting, and eventually grew into seven TV stations and 14 radio stations. Using a syndication programming strategy of re-running network sitcoms like M*A*S*H* and low-budget movies, Kluge turned Metromedia into the largest independent television business in the U.S. and took the company private in a leveraged buyout in 1983. He then sold off properties piecemeal for $4.65 billion, including the 1985 sale of 7 big-city television stations including NYC, LA, and Houston, to Rupert Murdoch for $2 billion — a deal that formed the Fox television network.
Kluge’s Metromedia at one point owned a 70% stake in Orion Pictures whose box office fortunes were up and down. Then known for producing quality film fare, Metromedia in May 1986 purchased a 6.5% share in the studio because Kluge was an old friend of legendary Orion Chairman Arthur B. Krim. That was also the year that Orion films received 18 Academy Award nominations. Kluge kept upping his stake in the studio. So was Sumner Redstone’s National Amusements, and the two men soon got into a bidding war for the company’s shares. Wall Street looked on with disbelief as Orion’s stock price rose to unjustified heights given the studio’s big long-term debt. By 1988, Kluge bought out Redstone’s shares to own 68% of Orion. But 1989 and 1990 were bad years for the studio despite Oscar winners Dances With Wolves and Silence Of The Lambs. (At the 63rd Annual Awards, host Billy Crystal even joked about Orion’s financial problems.) Also, a TV production unit never panned out. Kluge had kept the studio afloat with periodic injections of cash but in 1991 announced that his stake in the studio was up for sale. That April, Kluge removed his pal Krim in a management shakeup. But the studio’s losses mounted, and its creditors grew impatient. On December 11, 1991, Orion filed for bankruptcy, delaying the release of many of its films already in the pipeline. Orion was eventually able to exit bankruptcy in 1996, but the studio was more or less moribund. In 1997, Kluge’s Metromedia sold Orion to MGM.
For many years, before the tech and dot-com bubble, Kluge was considered one of the world’s richest men worth $6.5B. In 2002, he resigned as chairman of Metromedia International Group, but remained on the board.