Business Success, Community Service, and Integrity Underscore the Life of this Broadcast Industry Leader
"Be an 'A number one' person"; that was the admonition of John Pappas to his youngest son Harry. Such lessons were commonplace in the Pappas household, where honor, integrity, loyalty, hard work, and patriotism were greatly admired in others and expected from the Pappas children. The ethical foundation laid by Harry J. Pappas' parents, his siblings, and his uncle, had an enormous impact in shaping the man that Harry would become. In fact, to know about Harry J. Pappas, one must know a little about his family history and his formative years.
John and Katherine Pappas immigrated to the United States from the island of Crete, Greece. Settling in Utah, John worked for a time in the coal mines, where in the event of a cave-in, the rule was "mules out first," because "mules cost money -- Greeks don't." The dangers of mining and the callousness of the mine's owners caused John to quickly leave the mining business to start a family farm, where he raised sheep and grew grapes and various grains. Katherine was the quintessential Greek-American homemaker, offering limitless amounts of love tempered by discipline. While in Utah, Katherine gave birth to twin boys, Pete and Mike, and a girl, Mary.
Life in Utah was difficult, sometimes unbearably so. In pursuit of a better life, John picked up his family and moved to Modesto, in the heart of California's fertile San Joaquin Valley, where so many other immigrants from Crete had settled. It was here that John and Katherine's fourth child, Harry, was born in 1946.
Brothers' Broadcast Achievements Inspired Harry's Entry Into Profession
Pete and Mike's fifth grade teacher thought that her class would learn more about the world by taking field trips to see how local businesses operated. One of these trips was to radio station KTRB in Modesto, a trip that would leave an indelible mark on the twins. Pete and Mike were impressed by the men working at KTRB, dressed in white shirts, suits, and ties. Here was a profession that commanded respect, they thought. Moreover, the building was air conditioned, a far cry from the hot summer sun under which their father toiled in the fields.
In the early 1950s, a new radio station, KBOX, sprang up in Modesto. Full of moxie, Pete and Mike asked the station manager, Milt Hibdon, if they could have their own radio show. They had been turned down at Modesto's leading station, KTRB. Milt laughed, threw a stack of contracts on the desk, and told them they would have to sell their own advertising to have a show. Within two weeks, the brothers returned the contracts -- they had sold all of the ads for their first program, and "Pete and Mike's Dance Time" was born.
The show grew from one hour on Saturday nights to two hours, six nights a week, and eventually was broadcast on two stations simultaneously, Pete at KBOX and Mike at KGDM (now KRAK) in Stockton. A Friday night television variety show on Stockton's KTVU, produced and hosted by the twins, followed shortly thereafter.
Pete and Mike's success as on-air personalities led to their sponsorship of dances at the California Ballroom each Saturday night. Crowds of 500-800 teenagers would pack the hall to hear covers of the new music of the day -- Rock & Roll -- performed by a large, live band. Young Harry got his first taste of entrepreneurship here, working for his brothers running the soft drink concession, while sister Mary sold the tickets in the box office. Here, Harry learned an important business lesson: control the cash.
After graduating from high school, the twins entered the military, Pete in the Navy and Mike in the Marine Corps. Upon their honorable discharge in the late 1950s, they accepted positions as salesmen-announcers at separate radio stations. Undoubtedly, that fifth grade trip to KTRB had firmly planted in the boys' minds the notion that this was the profession for them. Before long, Pete established himself as the top-billing salesman at his station, and Mike became the manager of yet another station.
Mike worked for a station group owner called Golden Pacific Group, which at the time held a construction permit from the Federal Communications Commission to build a new AM station in Las Vegas, Nevada. After discussions with Golden Pacific, Mike was named the General Manager and Pete the Station Manager of KVEG-Las Vegas.
February 1962 probably wasn't the best time to build a radio station in Las Vegas. The area's 210,000 residents were served by six AM and three FM stations, three television stations, and two daily newspapers. Of the radio stations, only three were operating in the black. Only one television station was consistently making a profit. Yet, in only its fourth month of operation, KVEG took in more money than it spent. The station never looked back.
It is worth noting that broadcasting in the 1960s was dominated by station owner-operators. Even group owners such as Golden Pacific were committed to their communities and their professions and were fierce watchdogs over local governments, a far cry from the modern-day multinational conglomerates that own so many broadcast outlets. The commitment to localism demonstrated by Golden Pacific and other owners had an huge impact on the brothers that would last their entire lives. These mentors taught the Pappas brothers that true broadcasters worked to serve the audiences first and never compromised their role as public trustees for selfish business interests.
Harry graduated from high school in 1963, and decided to move in with his brothers in order to attend the University of Nevada at Las Vegas. College lasted just one semester though, as Harry gave in to the siren song of the radio business. He joined the KVEG staff as a salesman and part-time announcer, adopting the on-air moniker "Harry Holiday." Watching his brothers work molded Harry. At KVEG, he was indoctrinated in all facets of radio station operations.
On Their Own
Although the Pappases had an excellent relationship with Golden Pacific, and the company was doing well, the brothers had a burning desire to be the owners of their own radio station. They sold the stock they had acquired in KVEG back to Golden Pacific and began to look for a good investment. Their search took them back to the San Joaquin Valley, to the community of Tulare.
An analysis of the Tulare radio market showed that nearly all of the area's stations were profitable or at least breaking even -- that is, except for KGEN. Tulare County was, and still is, a largely agricultural, rural area. So, it's not hard to imagine that KGEN's Country & Western format would have attracted plenty of listeners. Yet, poor management decisions drove the owner to seek federal bankruptcy protection.
The three brothers took their savings and the proceeds from the sale of their KVEG stock, a total of $35,000, and purchased KGEN; $5,000 was left over from the purchase for working capital. Within four years, the station's billing had risen sixfold. The profits from operations financed the construction of a sister station, KBOS, which became one of the most popular FM stations in the Fresno and Tulare-Kings Counties markets.
The Pappas Brothers, throughout their careers, were drawn to the challenge of "doing something that others said couldn't be done." This became the model for the Pappases' success: find a diamond in the rough, a neglected or poorly-run station, purchase it at a distressed price, and do whatever it takes to steer it back to profitability. The brothers never bought a station that was already a success; they took others' failures and made them successes, "turning sows' ears into silk purses," as the saying goes. Where failing stations weren't available, they would look for an opportunity to build a station from the ground up.
On the heels of their success, Harry set out to pursue his next dream, one of a new independent television station to serve Central California. There had been seven previous attempts to establish such a station, and all had failed. Harry educated himself in all aspects of television broadcasting, and he studied the business plans of the seven failures. He resolved that he and his brothers would never repeat those mistakes.
Moreover, the federal government had recently adopted new rules limiting the programming content ownership interests of the Big Three networks; this created a much more competitive landscape, resulting in the ability of independent stations to purchase quality programming no longer owned or controlled by the networks.
However, the financing picture wasn't as attractive. Banks and other well-heeled investors only saw the seven failures that had come before; they couldn't understand the opportunity that the new government rules had presented.
It was time for a new strategy -- "instead of getting one investor to put up a million dollars, you get a million investors to put up one dollar each." The tactic worked; based on the Pappases' reputation for integrity and success, the fact that they were local people with local relationships, and the future prospects for the station, local businessmen, relatives, and smaller investors contributed the required capital, and construction began. On October 11, 1971, viewers in the Fresno-Visalia market welcomed their newest television station, KMPH -- one letter for each initial of "Mike," "Pete," and "Harry."
Harry served as General Manager of KMPH from its inception. After all, it was he who had provided the vision and passion for television that had brought the station into existence.
By 1976, a new federal rule prohibiting common ownership of television and radio stations within the same market was set to go into effect. In order to avoid running afoul of federal law, a realignment of the brothers' interests was engineered. In June 1977, Mike purchased his brothers' interests in KGEN and KBOS, becoming sole owner. Pete bought his brothers' interests in KTRB and KHOP in Modesto, radio stations which had been purchased by the Pappases a number of years before; likewise, Pete became sole owner of his stations. A side benefit of the exchange was that it made the future disposition of the radio properties much simpler, providing for the early retirement of the twins.
Harry purchased his brothers' interests in Pappas Television Incorporated, becoming the largest single shareholder in the parent company of KMPH. The next year, Harry's solely-owned firm, Pappas Telecasting Incorporated, purchased all of the assets of Pappas Television Incorporated in a leveraged buy-out, paying the original shareholders $4.75 for every $1.00 they had invested. Harry says, "I did an LBO before I knew what that was."
With ownership interests swapped, Pete and Mike seemed prepared to settle into a simpler life. But fate was not so kind to the twins; while visiting with family and friends in Price, Utah in August of 1986, Pete Pappas suffered a massive fatal heart attack. In January of 1990, Mike Pappas passed away from heart failure after suffering from cardiac problems for years. An era was over, but a new era, one of building a television empire, was about to begin.
The Growth of an Empire
The years following Harry's acquisition of KMPH saw steady growth. Not only was KMPH consistently ranked as one of the top independent television stations in the United States, but after several years of competitive hearings, Pappas' applications to construct new stations in North Carolina and Nebraska were approved. WHNS-Asheville and KPTM-Omaha went on the air in 1984 and 1986, respectively. Both were the first UHF commercial independent stations to serve their markets. Additionally, WHNS achieved the distinction of being one of the highest-rated independent stations in the U.S. within 90 days of sign-on, and KPTM was long ranked among the top five independent stations in the U.S.
In 1988, Harry was approached by executives from Fox, who were looking to expand the distribution system for Rupert Murdoch's fledgling fourth network. Fox's Barry Diller applied a "full-court press," badly wanting KMPH and Pappas' other stations to affiliate with the network. When the network appeared headed for success and the deal was right, Harry agreed to a Fox affiliation for KMPH. The decision paid off, as the Fox Network has grown to a position of parity with the other "Big Four" networks.
Besides KMPH, Pappas has gone on to affiliate other stations with Fox: KPTM-Omaha, WHNS-Asheville, KTVG and KSNB-Lincoln, Nebraska, KBFX-Bakersfield, and KPTH-Sioux City, Iowa. Additionally, the company received the Fox Broadcasting Outstanding Affiliate Achievement Award in 1989 for Harry's idea to create the Fox Children's Network (FCN). By its 10th year of operation, FCN was a business unit worth several hundred million dollars. FCN was a Fox affiliated stations program cooperative wherein the profits from its operation were apportioned to each affiliated station in accordance with its audience contribution to the whole. While FCN had all the classic advantages of a network system of distribution to local stations, it was revolutionary in the respect that all of the network's profits flowed to the stations.
Along the way, the Pappas station group has been expanded continually through construction of new stations and opportunistic acquisition of existing ones. The company currently owns or operates stations in the following markets: Los Angeles; San Francisco; Houston; Sacramento; West Palm Beach, Florida; Albuquerque, New Mexico; Greensboro, North Carolina; Austin, Texas; Fresno, California; Green Bay, Wisconsin; Des Moines, Iowa; Omaha, Nebraska; El Paso, Texas; Lincoln, Nebraska; Reno, Nevada; Sioux Falls, South Dakota; Yakima, Washington; Columbus, Georgia; Bakersfield, California; Corpus Christi, Texas; Sioux City, Iowa; Yuma, Arizona; Eureka, California; and North Platte, Nebraska. In Fresno, Lincoln, Omaha, and Reno, Pappas has duopolies (two stations in one market). The Pappas Telecasting Companies group of affiliated stations is the largest privately-held, commercial television broadcast group in the United States in terms of U.S. Household coverage as defined by Nielsen Media Research.
Stations in Fresno, Los Angeles, Asheville-Greenville-Spartanburg, Green Bay, Des Moines, Omaha (two stations), Reno, and Sioux City, have been built from the ground up by Pappas, which has been one of the largest constructors of new television stations in the U.S. Other facilities purchased by Pappas have been significantly upgraded, usually with new, more powerful transmitters and/or better transmitter sites. For example, in 2002, KAZH-Houston was moved to the Senior Road Tower Farm, where all of Houston's VHF and its leading UHF stations are located, and its transmitter power was increased to five Megawatts. And WSWS (now called WLGA)-Columbus, Georgia/Opelika, Alabama has relocated its transmitting facility adjacent to that of the market-leading VHF stations.
An interesting case study in the building of television stations surrounds Pappas' construction of KAZA-TV in Los Angeles. Pappas purchased the construction permit for this station, which had been allocated to Catalina Island -- 22 miles off the California coast, with a population of only 3,500 -- hardly the ideal location for a television transmitter. The company undertook a lengthy engineering and legal effort, which culminated in the FCC allowing KAZA-TV's transmission facilities to be located atop Mount Wilson in July, 2001. Mt. Wilson is home to the transmitter sites of all of Los Angeles' VHF stations' and most of its successful UHF stations.
In 1995, Harry again put his money on a fledgling network, The WB. WTWB-Greensboro was re-launched in September 2000 and by the following May was recognized with WB's "Froggie" award as the fastest growing affiliate in primetime. KFRE-Fresno became a WB affiliate January 1, 2001 and continues to be the fastest-growing station in the market. KXVO-Omaha consistently ranked as one of the top WB affiliates in the U.S. KREN-Reno was a leading performer among WB affiliates, particularly among stations in markets of similar size. And KPWB-Des Moines was constructed by Pappas in 2001 and grew rapidly to outrank and outperform the PBS, PAX and Fox affiliates in just 15 months. The bet paid off -- the Pappas-owned WB affiliates made significant inroads versus their competitors and continue to grow in service to the public.
In January 2006, Warner Bros. and CBS stunned the broadcast world with the announcement that they would shutter their WB and UPN networks and form a single new network, called The CW, in September 2006. After considering the potential of a new network backed by two of the industry's most prolific producers of television programming, Pappas decided to affiliate ten of its stations with The CW. On September 18, The CW made its debut, covering nearly the entire United States, including Pappas stations WCWG-TV/Greensboro, KFRE-TV/Fresno, KCWI-TV/Des Moines, KXVO-TV/Omaha, KCWL-TV/Lincoln & Hastings-Kearney, KREN-TV/Reno, KCWK-TV/Yakima, WLGA-TV/Columbus, KSWT-DT/Yuma-El Centro, and WSWS-LP/North Platte.
Not long after the announcement of the formation of The CW, Rupert Murdoch's News Corp. fired its own volley in the network wars -- the establishment of its second network, MyNetworkTV. Showcasing English-language versions of the telenovela concept that is so popular in Latin America, MNTV launched September 5, with an affiliate lineup that includes Pappas' KDMI/Des Moines, KPTM-DT and KKAZ-CA/Omaha, KDBC-DT/El Paso, and KPTH-DT/Sioux City.
In 1998, after the construction permit was acquired for KPWB, Harry and his wife Stella gave away nearly 50% of the station to long-time employees of the company as a gesture of gratitude for their loyalty and service well-rendered. This was not just another perk for upper management -- most of the recipients were rank-and-file employees.
Incidentally, Harry's first WB affiliate, channel 31 in Sacramento, was also rescued from financial distress. Harry purchased debt secured by two television stations, thus allowing the former owner to keep his stations out of the hands of creditors. As a side benefit, Harry was given the opportunity to buy one of the two stations, channel 31. Pappas Telecasting made substantial improvements in news programming and facilities. The ratings soared, revenues and profits increased and the station was sold three years later for a substantial profit. That profit has since helped finance more growth.
Pappas' other broadcast interests include Pappas Teleproductions, a television commercial and program production studio based in Fresno, founded in 1980. PTP has produced award winning commercials, documentaries and video presentations for clients ranging from Fortune 50 companies to local businesses. They have shot on location in Israel and the Middle East, Europe, Asia and throughout the United States. Their editing, graphics, and post production skills are unsurpassed in Central California and widely respected throughout the West. And KTRB-AM, Modesto, California, the same station that young Pete and Mike toured so many years ago, is now owned by Harry. It was authorized by the FCC to relocate its transmitter site and to be licensed to serve San Francisco and the entire Bay Area. The station will be re-launched from the Bay Area in February 2007. Taking the place of KTRB in Modesto is a new station put on the air by Pappas - KMPH-AM 840.
Successful entrepreneurs are sometimes driven to venture outside of their core businesses, especially when their vision generates idea after idea. Harry is a co-founder and past member of the Board of Directors of Visalia Community Bank, founded in 1977. Hariton Homes is Pappas' homebuilding entity, which has successfully constructed developments in California and Colorado. And Harry has purchased and rehabilitated a number of properties, most notably a Visalia, California shopping center that had been vacant for two years. Many in the community considered it to be the biggest eyesore on Mooney Boulevard. But within a year and a half, Harry's company had built additional structures, and the shopping center was fully leased.
The shopping center was, in part, a thank you to the original shareholders in KMPH for having faith and trust in Harry and his brothers when larger investors had not. Harry allowed them to purchase shares in the property for one penny each, a nominal amount, and a bargain even considering the center's distressed value. When the property was sold, each share returned $550.00 to the investors.
Those who have achieved success are often recognized with awards, and this holds true for Harry. He is fortunate enough to have been honored a number of times and in a number of ways.
Received the prestigious Ellis Island Medal of Honor from the National Ethnic Coalition of Organizations, designed to honor "remarkable Americans who exemplify outstanding qualities in both their personal and professional lives, while continuing to preserve the richness of their particular heritage."
Received the American Hellenic Institute's Hellenic Heritage Achievement Award which "recognizes individual Greek Americans, business leaders and members of Congress for their achievements."
Received the American Broadcast Pioneer Award from the Broadcasters' Foundation, recognizing broadcasters who have "made an enormous contribution to the broadcasting industry and their respective communities."
Honored as an Archon by the Patriarch of the Greek Orthodox Church for outstanding service to the Church and distinguished leadership within the community.
Invited to give expert testimony before the Subcommittee on Communications of the House of Representatives during hearings to consider regulations affecting the communications industries.
Testified before en banc hearings of the Federal Communications Commission regarding proposals to modify the Financial Interest in Syndication rules.
Testified before the Subcommittee on Telecommunications and the Internet of the House of Representatives during a hearing held with regard to the Subcommittee's consideration of H.R. 3717, the "Broadcast Decency Enforcement Act of 2004".
Received the American Hellenic Council of California's Theodore Saloutos Award, presented to a "distinguished member of the Hellenic-American community for his or her extraordinary accomplishments and devotion to Hellenism".
Was inducted into Broadcasting & Cable's Hall of Fame, the industry's highest honor.
Of course, implicit in a successful career is the obligation to give back to one's community. This has been one of Harry's beliefs since his earliest days in broadcasting, when he witnessed first-hand Golden Pacific Group's dedication to serving all the people of the local communities served by broadcast stations. Toward that end, Harry has served as a member of the board of directors for a variety of organizations, including Mill Creek Hospital in Visalia, the Executive Committee of the Greek Orthodox Archdiocese of America, KVPT-Valley Public Television in Fresno, All Saints Foundation, Order of Saint Andrew (served as Western Director), and Valley Children's Hospital Foundation.
Additionally, Harry has served on the boards of the following broadcast industry organizations: Fox Network Board of Governors; National Association of Broadcasters (three terms); Independent Television Stations of America (served the maximum four full terms), and the Television Bureau of Advertising.
Harry and his wife Stella have started two foundations to aid their church: the Harry J. and Stella A. Pappas Foundation for Orthodox Christianity, a supporting organization for the religious, charitable, youth education and cultural activities of the Greek Orthodox Archdiocese of America; and the St. George Greek Orthodox Church Foundation in Fresno, California. They have contributed personally to hundreds of worthy causes at schools, churches, community groups, and to needy people. As Harry and Stella say, "Giving till it hurts means giving so it helps."
Guiding Business Principles
Harry's broadcasting career has been guided by a set of principles that he calls "The Six Ps."
People -- Find the best people to work for the organization. Treat them like you want to be treated. Ask them to be their best and create an enjoyable environment so that they can flourish.Power -- Maximize the signal of each station so as to reach the widest possible audience with the clearest picture.
Programming -- Secure the best available programming in order to attract the greatest number of viewers. Offer what other stations can't or won't provide to the viewers.
Promotion -- Give the audience a reason to watch -- not just during ratings periods, but all year long.
When these principles are diligently applied, it leads to two additional Ps: Performance and Profits.
One way to achieve success in business is to spot trends before others do, then capitalize on those trends. A shift that became obvious to Harry in the 1990s was the explosive growth of the U.S. Hispanic population. Harry and Ricardo B. Salinas, Chairman and Chief Executive Officer of Grupo Salinas, parent company of Mexican television network TV Azteca, first met in 1999 to explore ideas for reaching the U.S. Hispanic market. They soon agreed that the best solution would be to create an entirely new network. This would require a strong TV station presence in markets with large concentrations of Hispanic population, a full lineup of high-quality proven programming, the latest technology, and a top management team. The result was the creation of the Azteca America television network, a joint effort between Pappas Telecasting Companies and TV Azteca, which is one of the largest producers of Spanish-language television programming in the world.
During the past several years, the two parties have concentrated on creating separate companies -- the U.S. network entity owned by TV Azteca, and a station group owned by Pappas. The structure is an affiliation of content provider, Azteca America Network, and television station distribution system, Pappas' Azteca America station group, similar to the Fox Network model, except that in this case, the largest market full-power stations are owned by Pappas. Pappas' stations in the Hispanic-dominant markets of Los Angeles, San Francisco, Sacramento, Houston, and Reno were the first Azteca America affiliates and form the nucleus of the network; Pappas has since added a station in Omaha. The network began full-time operations in August of 2001.
Another trend that Pappas and his team picked up on is the number of sites popping up on the Internet that facilitate the sharing of user-generated content. This demonstrates that people have a real need to share with others what they have created.
At the same time, viewers have long been troubled by the concentration of media control in the hands of just a few mega companies. The "local" stations that used to serve their communities' needs so well increasingly shun the local angle in favor of a national or international slant.
In response to this, Pappas Telecasting has launched a historic online initiative called "CommunityCorrespondent.com." This Web site is the first in America to allow viewers who capture news or who report on matters about which they are expert to provide information so that it is viewed not only on the World Wide Web but can also be selected for inclusion in Pappas stations' newscasts and other programming.
Citizen journalists armed with cameras, camcorders, or mobile phones with video or picture capability, often can capture newsworthy events long before traditional news crews can arrive, thereby extending the reach of the newsroom. With CommunityCorrespondent.com, contributors get to decide what is newsworthy. In this way, viewers have the opportunity to let Pappas' newsrooms know what kind of stories are important to them.
CommunityCorrespondent.com is an answer that liberates and empowers America's citizens so that their voices are heard and made more effective.
Like so many other Americans, Harry J. Pappas and his brothers built successful broadcast careers based on a belief in the American dream. Like all immigrant parents, theirs greatly desired a better life for their children. The ethic of dreaming big, working hard, creating and achieving was taken to heart by these men and their sister. Over the course of nearly forty years of hard work, Harry, indeed, has lived his life as the "A number one" person his father expected him to be. Along the way, he has built the largest privately-owned commercial TV station group in America by serving his audiences first. Or as Harry puts it, "Ours is a group of 'A number one' people who create 'A number one' stations."