““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Hubbard Broadcasting's Stanley S. Hubbard
Some people have aviation in their DNA. Stanley Stub Hubbard got it from his father, Stanley Eugene Hubbard, who took up flying in 1916, started a few marginally successful airlines, opened an airport in Louisville, Ky., and helped organize the Metropolitan Airport Commission in 1943. By then he had already established himself in radio-and had passed on the flying bug to his son.
"My dad was an aviation pioneer and a radio pioneer," Stanley S. said proudly, as we chatted in his KSTP-TV office in St. Paul, Minn. "He bought a radio station in 1923. We were the first regularly scheduled news program in the U.S. In 1948 he put TV on the air."
The elder Hubbard stopped flying after he got into radio. Said his son, born in 1933, "We had an old Stearman in the backyard of our lake house. I used to sit in it and pretend to be flying."
But in the early fifties, Stanley E. bought a Cessna 180 and started flying again. His son started flying, too. As the family-owned Hubbard Broadcasting grew, a succession of airplanes followed, including a Gulfstream V. Stanley S. took the reins of Hubbard Broadcasting in 1981 and that year established U.S. Satellite Broadcasting as a subsidiary. USSB went public in 1996 and Hubbard sold it to Hughes/DirecTV for $1.3 billion in 1998. Hubbard Broadcasting today has some 1,100 employees and owns a dozen television/radio stations and two cable channels.
The March issue of Forbes listed Stanley S. Hubbard as the 743rd richest person in the U.S. (down from 297th in 2007), with an estimated net worth of more than $1.6 billion both years.
I understand you began working for your father in 1951. What was your first job?
I started working here at KSTP-TV as a file clerk and later became a news photographer. I'd listen to the police radios and go out to chase accidents, fires, holdups, murders-everything. We'd come back to the studio, process our own film, make eight-by-ten prints, dry them, mount them on cardboard and give them to news writers, who would write stories around what we'd tell them. Then we'd get into the studio, where we had two cameras and two easels. When the announcer went from one story to the next, the photographers would pull the pictures, faster than the eye could see. At home, all you would see was the picture change. It's a little different now.
You became president of Hubbard Broadcasting in 1967, took over the business in 1981 and became chairman and CEO in 1983.
My dad had a stroke and withdrew from the business in 1981. He was still chairman in title but was never here. He died in 1992.
I've heard you say that as chairman and CEO your job now is "chief cheerleader."
That's right. All of our companies are run by very good people. Our kids grew up in the business and are good executives. If they weren't, they wouldn't be here. I chair the board meetings and get into things about policy and large investments. I talk to people and once in a while they'll listen to my ideas-sometimes they even take my ideas. But they run the business on a daily basis. Some of our grandchildren are also working for the company.
Do you have advice for running a family business?
You better know your kids. If they haven't got what it takes, don't let them in the business. I've seen that mistake time and time again. We're lucky that our kids all get along and respect each other for what they can and can't do.
To what do you attribute this?
My wife Karen and I sent our kids to public school. We live along the St. Croix River. If you go one block back, there are low-income homes. Our kids went to school
with all those kids and got along. They are really down to earth. We made them work. The neighborhood kids would ask, "Why do the Hubbard kids have to work so hard? They can afford to get the lawn cut."
What do you consider the main role of the CEO?
To make your company profitable by providing a public service. I don't care if that public service is selling diapers or cameras-giving something of value to society for which you get paid. And make a profit-you've got to run your business, so make a profit.
What are the most egregious mistakes a CEO can make?
The most egregious mistake a board of directors can make is to hire a CEO who is a sociopath. Some of them are in jail now. A sociopath is a person who has no social conscience. Their big thrill in life is not just making the companies successful, it's scamming. I think ethics is
the most important thing.
How did you get into using airplanes in the business?
In 1957 we bought KOB-TV in Albuquerque, our first expansion outside Minnesota. Getting there by airline was a real pain. So in 1958 we bought a surplus Twin Beech, which had a crappy Air Force interior. My father didn't want to spend any money on fancy interiors. He had a carpenter do the interior walls out of plywood. You know, that plywood made the interior like a sounding box for a speaker. Boy, it was loud in that airplane. But my father wouldn't fly unless he was the pilot. He said he felt like a "rat in a trap." So he drove while other executives and I flew.
You told me you went on to buy and sell a number of airplanes over the years-an Aero Commander, a DC-3, a Martin 404, a Convair 580, a Fairchild F27, a Gulfstream I-and then you got your first jet, a Gulfstream II. Why was that?
In 1980, I wanted to get the direct broadcast satellite business going. I gave speeches all over the country and made more than 1,200 appearances. A lot of times the cable guys would be there, saying, "DBS [direct broadcast satellite] stands for 'don't be stupid.'" Cable at that time had only 12 to 15 channels. Right out of the chute we would have had 32 channels of unbelievable picture quality. If we had gotten DBS going in 1981, there wouldn't be any cable now.
When we got that business up and running, we needed a faster airplane. So I bought a GII. The GII is a wonderful airplane. We also bought a Hawker 400F and had guys flying all over the place. Then I bought another GII, which I never really used because I bought a GIII. Sold that to some guy on the East Coast and bought a GV. I went to Moscow for the Bush Administration and also flew it to China, Australia, New Zealand and Vietnam.
One day my son Rob came in to me and said, "Dad, we don't fly overseas hardly at all. Is it worth $25 million to not have to stop for fuel every two years?" So we sold the GV and kept our GII, our first jet aircraft. It went into service in 1969 and now has more than 15,000 hours. That's nothing if you maintain the aircraft. It's beyond me why anyone would go out and spend $30 million on a GIV-SP, unless they are going across the ocean 25 times a year. There's a lot of ego in airplanes.
What aircraft do you have now?
We have the GII, which we fly about 300 hours a year, a Cessna Caravan, helicopters at the TV stations, a Citabria and a Cessna 172.
The broadcasting industry has obviously changed considerably since your father bought his first radio station in 1923. How do see the industry developing in the next five or 10 years?
A lot of [advertising] money is going to the Internet that came off television and newspapers-a lot of wasted money. What do companies use to get people to go to their Web sites? Television advertising. Television is the only thing that gets a mass audience-shows like Desperate Housewives (one of my favorites) and Grey's Anatomy get the mass audience. It works.
It used to be the [television advertising] money came over the transom. Now you have to work for it. The business has changed. I think television will be around for a long time, but we may have to think of
a new paradigm.
Do you think about this often?
Part of my job as chief cheerleader is to be always thinking about where we're heading. I talk to whoever I can talk to; I listen to whoever I can listen to. I try to analyze what goes on. I ask people, "How many advertisements do you pay attention to on the Internet?" I haven't found anyone yet who does.
If you were, hypothetically, President of the United States, what would you do?
First, I'd try to figure out how to get rid of [congressional] pork.
I'd try to explain to our great American people the importance of business and jobs, and that the way to prosperity is to create more jobs. All this rhetoric about taxes on the rich is just going to destroy jobs.
I'd try to provide the leadership that's not there.
I'd back off on this global warming nonsense. It's going to be very interesting to see Al Gore and his guys made fools of in five years. Actually, global warming is a very good thing, if it happens. The last time was between A.D. 1000 and 1350. There was less sickness and fewer hurricanes, and people prospered. The Canadians and Russians are worried about global cooling, because they've been watching sunspot activity, which is down.
CEO Files Résumé: Stanley S. Hubbard
Position: Chairman, CEO and president of Hubbard Broadcasting, Inc.
Previous positions: "I grew up in the business."
Education: BA, sociology, minor in history, University of Minnesota, 1955.
Personal: Age, 75; wife Karen; married 49 years; children, Kathryn Rominski, Stanley E. Hubbard, Virginia Morris, Robert W. Hubbard; Julia Hubbard Coyte; 14 grandchildren; homes in Lakeland, Minn. and Angel Fire, N.M.