The Certain Victor In The Paramount WarAmy Barrett
The wall of photographs makes it clear: Gordon Crawford is a player. Interspersed among the numerous family photos blanketing the walls of his downtown Los Angeles office are shots of a smiling Crawford arm in arm with entertainment dealmaker Herbert A. Allen. There's Crawford with longtime friend and Warner Brothers President Terry Semel. And over there is Crawford, clad in fishing attire, alongside buddy Ted Turner and wife Jane Fonda, during one of his annual trips to Turner's Montana ranch for a week of fly-fishing.
Unknown to many outside the tightly knit circle of entertainment-industry potentates, the low-profile, soft-spoken Crawford is a key figure in the hottest takeover battle in years. As entertainment, cable, and cellular-communications analyst for Capital Group Cos., the Los Angeles-based investment management and mutual-fund giant, the 46-year-old Crawford holds sway over 10 million shares of Paramount Communications Inc., roughly 8% of the stock. Indeed, Capital Group is Paramount's largest institutional shareholder and could have a major impact on whether Viacom Inc. or QVC Network Inc. wins control of Paramount.
The bidders are lobbying hard. Crawford speaks at least once a week with Viacom Chairman Sumner M. Redstone and even more frequently with QVC Chairman Barry Diller. And it's not the first time Crawford has been in the thick of a takeover brawl, either. In 1989, Crawford openly backed Warner Communications Inc. over Paramount in the fight for Time Inc.--which Warner ultimately won.
This time, if Crawford has a favorite, he's keeping it to himself. He says he's only interested in the highest bid. "At the end of the day, the guy who puts up the most cash is going to win," says Crawford. Indeed, the Paramount battle has already made Crawford's clients and mutual-fund shareholders a bundle. His Paramount stake, amassed since 1985 for an estimated $400 million, is now worth $808 million, and the bidding isn't over.
BIGGEST COUP. No doubt, a lot of Crawford's clout comes from his firm's deep pockets. Managing more than $125 billion in mutual-fund and pension-fund assets, Capital Group, one of the nation's largest investment managers, has accumulated hefty stakes in just about every major publicly owned entertainment, cable, and cellular-communications company (table), including both rivals in the Paramount fight. And Crawford not only directs much of his firm's overall media investments but under an unconventional team-management system at Capital Group, he also runs portions of several of the company's mutual funds, such as AMCAP Fund, Fundamental Investors, and Growth Fund of America. Together, the various pieces of the funds he oversees total about $4 billion in assets.
The Paramount buyout is sweet, but it's not Crawford's biggest plum. His all-time hit was the 38% stake he bought in Liberty Media Corp. in 1991, when the cable-programming company was spun off from Tele-Communications Inc. Wall Street was slow to appreciate Liberty's valuable assets. Crawford paid $1.25 for shares that will fetch about $35 each if Bell Atlantic Corp. gets the regulatory go-ahead to acquire Tele-Communications. "That was the coup of all time," says Donaldson, Lufkin & Jenrette Securities Corp. analyst Dennis H. Leibowitz.
Crawford has had his turkeys as well. Caught up in the 1980s' binge of independent film startups, his investments in Imagine Films Entertainment and Carolco Pictures Corp. were big losers. His big stake in Time Warner Inc. has been a laggard. Even Crawford admits he erred by selling millions of shares in McCaw Cellular Communications Inc. a few weeks before the announcement of its deal with American Telephone & Telegraph Co. "We left a lot of money on the table on that one," he laments.
Still, many money managers have deep pockets and enviable track records but don't have the entr e to industry heavyweights that Crawford does. Movie moguls value his insights into their business so much that they often seek his counsel. Former Columbia Pictures Entertainment Inc. executives Victor A. Kaufman and Lewis J. Korman, for example, came calling before they created Savoy Pictures Entertainment Inc. in early 1992. Over dinner at the Beverly Hills Hotel, they sought his advice on the planned capital structure of the film company and on whether the timing was right for a new production company at all. "Every time we've done a financing of some sort for Savoy, we've called Gordie," says Enrique F. Senior, managing director of Allen & Co. and Savoy's investment banker.
For all his glitzy connections, Crawford is decidedly un-Hollywood. Raised in Greenwich, Conn., Crawford joined Capital Group in 1971 after earning an MBA at the University of Virginia. Married for 27 years, Crawford is a homebody who is more likely to be found coaching his niece's soccer team than making the Hollywood party scene.
While scoring some huge successes at the office, Crawford has experienced tragedy at home. In April, 21-year-old Brett Crawford, one of his two sons, fell into a gorge during a hiking expedition in Taiwan. Crawford's friends came to his aid--Ted Turner offered to press the Taiwanese army to join the search for Brett, while superagent Michael Ovitz made calls to Washington politicians to keep the search a top priority. Brett's body was never recovered, and he is presumed dead. "It's been a bittersweet year," Crawford says quietly, adding that the outpouring of support from friends and family is helping him through "a very slow recovery."
There has been plenty to keep Crawford busy at work. Entertainment, cable-television, and telecommunications companies are all trying to prime them- selves for the multimedia age--and it's Crawford's job to figure out how to make money from that. He has Capital Group well-positioned in such key companies as Turner Broadcasting System, Gaylord Entertainment, Cablevision Systems, Jones Intercable, and Comcast. "It's like musical chairs," says Crawford of the cable business. "The telephone companies are circling these remaining chairs, and it's getting late." With major stakes in just about every chair out there, Crawford is likely to come out a winner whenever the music stops.
CRAWFORD'S TOP FIVE MEDIA TREASURES Company Shares Value % of shares Million Billion outstanding TIME WARNER 35 $1.536 9.0% NEWS CORP.* 20 1.205 8.0 TELE-COMMUNICATIONS** 32 0.948 3.8 PARAMOUNT COMM. 10 0.776 8.0 WALT DISNEY 12 0.498 2.3 *American Depository Receipts **Class A Shares DATA: CAPITAL GROUP INC.