Case 3: The Ferré Media Group
Suggestions for Use
This case is a rich display of family culture, family influence in regional economics
and politics, sophisticated management practices, and a continuing entrepreneurial
culture across generations of owners. This case also highlights challenges to the effective
governance of the family-business relationship and the unique role of in-laws. As in the
Vega Food Company case, discussion will benefit from a certain level of sophistication in
Executive Brief
This is a very successful and enterprising fourth generation family business. El Nuevo
Día and Primera Hora newspapers enjoy a commanding share of the news market and
receive approximately 70% of all advertising dollars spent in the local market.
company, and turned it into one of the top 45 dailies, by circulation, in the United States.
His spouse, Luisa Rangel, held a variety of positions in the newspaper over the years, and
directors. She played a very active role in family communications, successor
development, and the transfer of power across generations. Family members and key
In 1993, the Ferré Rangel family began to meet regularly as a family to discuss family
In 1995, the first family business retreat was held. This forum, for the first time,
included the in-laws.
Exhibit 1.
Ten-Year Succession and Continuity Process at the Ferré Media Group
Between 1997 and 2002, every member of the next generation grew into a position of
significant responsibility. The company was restructured. The new organization gave
more responsibility and autonomy to business unit presidents, created separate boards for
A retaliatory move by the government, frustrated by repeated coverage in the
newspapers of corruption, waste, and poor management in local government, led to
reductions in ad revenues and the blocking of environmental permits required in the
Finally in late 2002, and as a result of this renewed commitment to running the
enterprise by next-generation family members, corporate statutes, buy sell agreements,
and estate plans were developed and funded. Separate classes of stock were created to
1993
1996
1996 2002
Stage II
Managerial
2002
Shareholde
r/ Family
Strategy
Discussion Questions
1. What leadership, management, and governance best practices have the firm and
the owning family already implemented? How do they seem to be working?
The Chairman-CEO, A. L. Ferré, created the governance bodies found to contribute
to the effective management of the relationship between owning families and their
The CEO spouse, Luisa, held a variety of positions in the firm but acted primarily as
the chief trust officer of the owning family. She promoted open communications,
conflict-resolution among the siblings, developmental conversations across
generations, and was active in both family council meetings and family retreats.
A family council was formed ten years before the transfer of power was scheduled to
take place and in conjunction with the family retreats became the primary forum for
communication, education, and conflict resolution.
Finally in late 2002, and as a result of the renewed commitment to running the
enterprise by next-generation family members, corporate statutes, buy sell
agreements, and estate plans were finalized and funded. A, B, and C class stock were
2. What does the CEO need to do next to ensure continuation of the legacy of the
enterprise and its history of innovation?
A. L. Ferré is the architect of this enterprise and co-architect of this family. His
legacy is already embedded in the family culture and the company culture. It is also
now captured in the more decentralized organization and decision-making structure
3. How can corporate governance and control contribute to the continuity of this
family-owned business?
Precisely what he has recently done.
Through new corporate statutes, shareholder agreements and buy sell agreements,
he has continued to ensure agile control by owner-managers running the
company. Other shareholders can achieve liquidity and pursue other dreams, if so
inclined.
Through family council meetings and family retreats that include the in-laws, he
While not in the cards right now, the business unit structure and the variety of
new ventures sponsored over the past decade also bode well for any