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John J. Rigas, Cable TV Magnate Who Pillaged His Company, Dies at 96 John J. Rigas, Cable TV Magnate Who Pillaged His Company, Dies at 96
(32 minutes later)
John J. Rigas, who turned a $300 investment in a local cable television system into the nation’s sixth largest cable company, only to see his empire collapse after he was convicted of looting the business of hundreds of millions of dollars, died on Thursday in Coudersport, Pa. He was 96.John J. Rigas, who turned a $300 investment in a local cable television system into the nation’s sixth largest cable company, only to see his empire collapse after he was convicted of looting the business of hundreds of millions of dollars, died on Thursday in Coudersport, Pa. He was 96.
His death was confirmed by William T. Brennan Jr., a funeral director at the Thomas E. Fickinger Funeral Home in Coudersport, where Mr. Rigas lived.His death was confirmed by William T. Brennan Jr., a funeral director at the Thomas E. Fickinger Funeral Home in Coudersport, where Mr. Rigas lived.
The son of Greek immigrants, Mr. Rigas served in the infantry in World War II before becoming one of the pioneering entrepreneurs who created the cable television industry in the 1950s. Over five decades he became a billionaire and built a highly successful family-run business, Adelphia Communications Corporation, with 5.5 million customers in more than 30 states. At the height of his success, in the late ’90s, the family bought the Buffalo Sabres of the National Hockey League.The son of Greek immigrants, Mr. Rigas served in the infantry in World War II before becoming one of the pioneering entrepreneurs who created the cable television industry in the 1950s. Over five decades he became a billionaire and built a highly successful family-run business, Adelphia Communications Corporation, with 5.5 million customers in more than 30 states. At the height of his success, in the late ’90s, the family bought the Buffalo Sabres of the National Hockey League.
But Adelphia, along with the Rigas family fortune, came crashing down in 2004. Mr. Rigas and his son Timothy, Adelphia’s chief financial officer, were convicted of securities fraud and bank fraud for falsifying Adelphia’s earnings and diverting more than $3 billion in company funds for their own use. Another son, Michael, pleaded guilty to a lesser charge.But Adelphia, along with the Rigas family fortune, came crashing down in 2004. Mr. Rigas and his son Timothy, Adelphia’s chief financial officer, were convicted of securities fraud and bank fraud for falsifying Adelphia’s earnings and diverting more than $3 billion in company funds for their own use. Another son, Michael, pleaded guilty to a lesser charge.
John Rigas was sentenced to 15 years in federal prison and Timothy to 20 years; both sentences were later reduced by three years. In 2016, at 91, John Rigas was granted compassionate release; he was 82 when he entered prison in 2007 with bladder cancer and a heart ailment. Timothy Rigas was released from prison in July 2019 after serving 12 years. John Rigas was sentenced to 15 years in federal prison and Timothy to 20 years. (Both sentences were later reduced by three years.) John Rigas was 82 when he entered prison in 2007, diagnosed with bladder cancer and a heart ailment. In 2016, at 91, he was granted compassionate release. Timothy Rigas was released from prison in July 2019 after serving 12 years.
The case began in 2002, when prosecutors asserted that the Rigases had concealed nearly $2.3 billion in company debt from stockholders and portrayed the company, which was dangerously overextended, as having sound finances. In the spring of that year, Adelphia revealed that the Rigas family had “co-borrowed” $2.3 billion with the company over several years. The money, it turned out, had been made available for the family’s personal use. On the day of the disclosure, Adelphia’s stock fell 30 percent. The case began in 2002, when prosecutors asserted that the Rigases had concealed nearly $2.3 billion in company debt from stockholders while portraying the company as having sound finances even though it was dangerously overextended. That spring Adelphia revealed that the Rigas family had “co-borrowed” $2.3 billion with the company over several years. The money, it turned out, had been made available for the family’s personal use. On the day of the disclosure, Adelphia’s stock fell 30 percent.
The trouble was just beginning. After Adelphia’s longtime accounting firm, Deloitte & Touche, refused to sign the company’s annual report to the Securities and Exchange Commission, its already plummeting shares were delisted. Adelphia later filed for bankruptcy and was eventually divided up and acquired by Comcast and Time Warner. The trouble was just beginning. After Adelphia’s longtime accounting firm, Deloitte & Touche, refused to sign the company’s annual report to the Securities and Exchange Commission, Adelphia’s already plummeting shares were delisted. The company later filed for bankruptcy and was eventually divided up and acquired by Comcast and Time Warner.
During the trial of the Rigases, prosecutors contended that family members had used a deliberately confusing cash management system to funnel the $2.3 billion “loan” to themselves. In one instance, the prosecutors said, the family diverted $13 million to build a golf course and country club near Adelphia’s corporate headquarters in Coudersport. The family also used shareholder money to pay for safaris in Africa and $6,000 to ship two Christmas trees to Mr. Rigas’s daughter in New York City, prosecutors said.During the trial of the Rigases, prosecutors contended that family members had used a deliberately confusing cash management system to funnel the $2.3 billion “loan” to themselves. In one instance, the prosecutors said, the family diverted $13 million to build a golf course and country club near Adelphia’s corporate headquarters in Coudersport. The family also used shareholder money to pay for safaris in Africa and $6,000 to ship two Christmas trees to Mr. Rigas’s daughter in New York City, prosecutors said.
According to court papers, Adelphia said in a statement: “The Rigases, not Adelphia, had the use and enjoyment of over $3.2 billion (including interest on the $2.3 billion loan) of Adelphia funds and credit, and the Rigases, not Adelphia, used Adelphia’s credit and its bank accounts to purchase assets and operate their own private ventures. In short, the Rigases have been enriched while Adelphia suffered.”According to court papers, Adelphia said in a statement: “The Rigases, not Adelphia, had the use and enjoyment of over $3.2 billion (including interest on the $2.3 billion loan) of Adelphia funds and credit, and the Rigases, not Adelphia, used Adelphia’s credit and its bank accounts to purchase assets and operate their own private ventures. In short, the Rigases have been enriched while Adelphia suffered.”
Mr. Rigas professed his innocence and refused to take a reduced sentence in exchange for a guilty plea. “I believe there is a time when you can’t compromise your values,” he told USA Today in a 2007 interview. “My legacy is to my grandchildren, and you have to stand up — as difficult as it is — for something. And that is not something to be compromised or amended.” Mr. Rigas professed his innocence and refused to take a reduced sentence in exchange for a guilty plea. “I believe there is a time when you can’t compromise your values,” he told USA Today in 2007. “My legacy is to my grandchildren, and you have to stand up — as difficult as it is — for something. And that is not something to be compromised or amended.”
His conviction was upheld on appeal, and the family had to forfeit $1.5 billion in assets to Adelphia.His conviction was upheld on appeal, and the family had to forfeit $1.5 billion in assets to Adelphia.
Some in the industry believed that Mr. Rigas was in part a victim of bad timing. With financial scandals at Enron, WorldCom and Tyco raising public concern about corporate malfeasance, they argued, Adelphia’s financial transgressions were blown out of proportion.Some in the industry believed that Mr. Rigas was in part a victim of bad timing. With financial scandals at Enron, WorldCom and Tyco raising public concern about corporate malfeasance, they argued, Adelphia’s financial transgressions were blown out of proportion.
“It was a complete miscarriage of justice,” John C. Malone, a fellow cable industry pioneer and competitor to Adelphia who is now the chairman of Liberty Media, said in an interview for this obituary in 2012. “The S.E.C. had been asleep at the switch and was embarrassed by Enron and WorldCom, and so the first chance they got to whack somebody, they did.”“It was a complete miscarriage of justice,” John C. Malone, a fellow cable industry pioneer and competitor to Adelphia who is now the chairman of Liberty Media, said in an interview for this obituary in 2012. “The S.E.C. had been asleep at the switch and was embarrassed by Enron and WorldCom, and so the first chance they got to whack somebody, they did.”
In 2014, while Mr. Rigas was in prison, his wife of 63 years, Doris (Nielsen) Rigas, died. But Mr. Rigas was not allowed to attend the funeral. After his release, he returned to Coudersport and spent the rest of his life trying to clear the family name.In 2014, while Mr. Rigas was in prison, his wife of 63 years, Doris (Nielsen) Rigas, died. But Mr. Rigas was not allowed to attend the funeral. After his release, he returned to Coudersport and spent the rest of his life trying to clear the family name.
John James Rigas was born in Wellsville, N.Y., just north of the Pennsylvania border, on Nov. 14, 1924, in an apartment above the Texas Hot, a hot dog restaurant owned and run by his father, Demetrios Rigas, who went by James. He and Eleni (Brazas) Rigas raised four children as part of a tight-knit Greek immigrant community.John James Rigas was born in Wellsville, N.Y., just north of the Pennsylvania border, on Nov. 14, 1924, in an apartment above the Texas Hot, a hot dog restaurant owned and run by his father, Demetrios Rigas, who went by James. He and Eleni (Brazas) Rigas raised four children as part of a tight-knit Greek immigrant community.
John Rigas was a diminutive but determined high school athlete who was named to the Wellsville High School sports Hall of Fame for his prowess in football, basketball, baseball and track.John Rigas was a diminutive but determined high school athlete who was named to the Wellsville High School sports Hall of Fame for his prowess in football, basketball, baseball and track.
“Our football coach would say, ‘Give the ball to Rigas!’” Mr. Rigas recalled in a 1998 interview with Living Prime Time magazine. “I didn’t want the ball. I knew I was going to get smeared. But every now and then, a hole would open up and I had to decide immediately if it was the right hole, because it would close up fast. So I tell people, ‘Keep taking the ball. It’ll hurt once in a while, but look for that opening. It will be there.’”“Our football coach would say, ‘Give the ball to Rigas!’” Mr. Rigas recalled in a 1998 interview with Living Prime Time magazine. “I didn’t want the ball. I knew I was going to get smeared. But every now and then, a hole would open up and I had to decide immediately if it was the right hole, because it would close up fast. So I tell people, ‘Keep taking the ball. It’ll hurt once in a while, but look for that opening. It will be there.’”
Mr. Rigas worked at the Texas Hot during high school. He graduated in 1943 and joined the Army, seeing combat in France. After the war, he enrolled at Rensselaer Polytechnic Institute in Troy, N.Y., and got a degree in engineering. He then worked in a Sylvania electronics components plant in Emporium, Pa., a 120-mile round trip from his home in Wellsville.Mr. Rigas worked at the Texas Hot during high school. He graduated in 1943 and joined the Army, seeing combat in France. After the war, he enrolled at Rensselaer Polytechnic Institute in Troy, N.Y., and got a degree in engineering. He then worked in a Sylvania electronics components plant in Emporium, Pa., a 120-mile round trip from his home in Wellsville.
But the ambitious Mr. Rigas had an entrepreneurial itch. He borrowed heavily from family and friends in the local Greek community to buy a movie theater in Coudersport, a town of about 2,500 people south of the New York border. But the ambitious Mr. Rigas had an entrepreneurial itch. He borrowed heavily from family and friends in the local Greek community to buy a movie theater in Coudersport, a town of about 2,500 people just south of the New York border.
Though he made little money from the theater, it gave him the opportunity to enter a new business when one of his movie distributors suggested that he look into buying into the local cable outlet. He became a partner in the town’s cable TV franchise in 1952, but to do so, Mr. Rigas and his brother, Gus, borrowed heavily. Though he made little money from the theater, owning it gave him the opportunity to enter a new business when one of his movie distributors suggested that he look into buying into the local cable outlet. He became a partner in the town’s cable TV franchise in 1952, but to do so, Mr. Rigas and his brother, Gus, borrowed heavily.
Taking on more debt to expand the company became a practice that Mr. Rigas embraced throughout his career. He acquired small suburban cable systems around the country, particularly in South Florida, Western New York and Pennsylvania.Taking on more debt to expand the company became a practice that Mr. Rigas embraced throughout his career. He acquired small suburban cable systems around the country, particularly in South Florida, Western New York and Pennsylvania.
“John was quiet, but he was hard-working and a builder,” Mr. Malone said. “He was definitely good for the growth of the industry.”“John was quiet, but he was hard-working and a builder,” Mr. Malone said. “He was definitely good for the growth of the industry.”
Adelphia “was made up of a lot of little systems stitched together and run as cheaply as possible,” Alan Breznick, a cable industry analyst with Light Reading, said in a 2012 interview. “It wasn’t known for great customer service or innovation and wasn’t in the same class as Comcast or Cablevision. But it wasn’t one of the worst, either. It inspired a lot of loyalty because they would go to places that other cable companies wouldn’t go.”Adelphia “was made up of a lot of little systems stitched together and run as cheaply as possible,” Alan Breznick, a cable industry analyst with Light Reading, said in a 2012 interview. “It wasn’t known for great customer service or innovation and wasn’t in the same class as Comcast or Cablevision. But it wasn’t one of the worst, either. It inspired a lot of loyalty because they would go to places that other cable companies wouldn’t go.”
Mr. Rigas’s survivors include his four children, Michael, Timothy, James and Ellen.Mr. Rigas’s survivors include his four children, Michael, Timothy, James and Ellen.
Mr. Rigas was revered in Coudersport because he put Adelphia’s corporate headquarters there, hired hundreds of local workers and gave generously to local charities. He was an active member of the town’s Chamber of Commerce and Rotary Club. His arrest and the collapse of the company stunned the community.Mr. Rigas was revered in Coudersport because he put Adelphia’s corporate headquarters there, hired hundreds of local workers and gave generously to local charities. He was an active member of the town’s Chamber of Commerce and Rotary Club. His arrest and the collapse of the company stunned the community.
At the same time, the N.H.L. stripped him of his authority over the Sabres. But what was especially galling for Mr. Rigas was the turnabout by Deloitte, which had had a long relationship with Adelphia, and by Buchanan Ingersoll, the company’s legal firm for a decade, which refused to represent the family during the litigation. In addition, Mr. Rigas was furious with James R. Brown, Adelphia’s vice president of finance, who pleaded guilty in a deal with prosecutors and became the government’s key witness.At the same time, the N.H.L. stripped him of his authority over the Sabres. But what was especially galling for Mr. Rigas was the turnabout by Deloitte, which had had a long relationship with Adelphia, and by Buchanan Ingersoll, the company’s legal firm for a decade, which refused to represent the family during the litigation. In addition, Mr. Rigas was furious with James R. Brown, Adelphia’s vice president of finance, who pleaded guilty in a deal with prosecutors and became the government’s key witness.
Seeing himself as a tragic hero, Mr. Rigas told USA Today that he felt as if he had been part of the final scene in the western “High Noon,” in which the marshal confronts the outlaw gang alone. “I felt like I was Gary Cooper,” he said. “Because all this time, people are saying, ‘You can depend on us,’ but when you really needed them, and expected them, they weren’t to be found.”Seeing himself as a tragic hero, Mr. Rigas told USA Today that he felt as if he had been part of the final scene in the western “High Noon,” in which the marshal confronts the outlaw gang alone. “I felt like I was Gary Cooper,” he said. “Because all this time, people are saying, ‘You can depend on us,’ but when you really needed them, and expected them, they weren’t to be found.”
Alyssa Lukpat contributed reporting.Alyssa Lukpat contributed reporting.