The Ferré Media Group
Teaching Notes
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
Executive Brief
This is a very successful and enterprising 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.
Five next-generation members of the Ferré Rangel family are successfully leading the
While the origin of the family business could be traced back another generation, a
separation of companies and assets among siblings of the second generation to which
Antonio Luis Ferré, Chairman, belongs, makes the Ferré Media Group akin to a first to
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
1993-1996
1996-2002
Stage II
Shareholder/
Family Strategy
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 cement operations of
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 differentiate
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?
a. 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 enterprises: a board of directors with
f. 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
policy-making, drafting of owner plans and conflict resolution.
g. The board of directors welcomed independent outsiders to its
membership. Several additional boards, also with independent
h. 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 created to differentiate between
2. What does the Chairman, A. L. Ferré need to do next to insure that the legacy of
enterprise and innovation continues?
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
3. What does the Chairman, A. L. Ferré need to do to insure that corporate
governance and corporate control contribute what they can 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 insure 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
children, who were ages 11 to 1 years old at the time.
▪ And finally through the newly created business unit and holding
company boards of directors with independent outsiders, he has
designed a governance system that insures that professional family
and nonfamily management will be held accountable, and that both
customer and shareholder interests will be represented in setting