Case 1: THE BINGHAMS AND THE LOUISVILLE COURIER-JOURNAL COMPANIES

(Part II)

To the outside world the family appeared rife with conflict. Seemingly, it was capable of
communicating about what ailed it and its businesses only in print, never face to face. In the early
1980s, as broadcast news and other channels of information gained favor, the demand for
newspapers slumped. Evening newspapers in particular— the Bingham’s other newspaper, the
Louisville Times was an evening daily—began to close their doors. Both the family and the business
had problems to address and no way to address them.

The board became paralyzed by the sibling dynamics. Finally, Barry Jr. gave Barry Sr. an ultimatum:
Either Sallie and Eleanor had to leave the board or he would resign as president of the enterprises.
Eleanor resigned. Sallie, however, would not, and when she was not reelected by her own family,
the war began. Sallie fired the first shot by announcing to the family that she wanted to sell all of her
interests in the companies. Lehman Brothers valued Sallie’s shares at between $22 million and
$26.3 million, but her own appraiser valued her holdings at $80 million. Despite the huge gap,
negotiations began. Sallie ultimately lowered her asking price to $32 million, but Barry Jr. would
never agree to anything higher than $26.3 million, and the negotiations stalled. In the meantime,
Eleanor decided that she, too, wanted to sell or swap her newspaper shares for WHAS (the radio
station) shares. In a final attempt to pressure his children into a compromise, Barry Sr. issued an
edict, nicknamed the 13th commandment, that if Barry Jr. and Eleanor could not come to an
agreement, the companies would be sold.

Soon thereafter, Barry Sr. issued a memo announcing that the company would be sold. Barry Jr.
saw the memo posted at the employees’ bulletin board. At the age of 80, Barry Sr. still controlled 95
percent of the stock through a voting trust, so the decision to sell was clearly his to make.

Unable to communicate and resolve their differences, family members cashed out. All emerged
cash-rich, but those who cared about the legacy were heartbroken. The newspapers had won eight
Pulitzer prizes and were bastions of quality journalism in the South. Barry Jr. called a companywide
meeting after the announcement to express his disagreement with his father’s decision to sell the
company and to tell employees how much their collective past meant to him. Employees wept as
Barry Jr. spoke; they knew this speech marked the end of an era.

The Bingham papers were taken over by the Gannett Company, which proceeded to close down the
evening newspaper, reduce personnel by a third, and cut news staff by 10 percent. Advertising and
circulation for the morning paper increased; as did profits.The Louisville Courier-Journal had an
impressive financial turnaround. But editorial standards changed, and Pulitzer prizes proved
elusive.