Cox Enterprises is a family-owned holding company with operations spanning cable TV, broadcasting, publishing, and auctions. Its flagship subsidiary, Cox Communications, is the #3 cable system operator (behind Comcast and Time Warner Cable) serving more than 6 million customers with TV, Internet, and digital phone services. Its Manheim unit is the largest wholesale vehicle auction company in the US, with about 145 locations. Cox's media operations, overseen by Cox Media Group, include Cox Newspapers (eight daily papers), Cox Television (about 15 local stations), and Cox Radio (about 80 stations). Cox also owns a majority stake in AutoTrader.com, an online used car listing service.
The family of founder James Cox, now led by grandson and chairman James Kennedy, has been able to diversify its fortune through Cox Enterprises into holdings that span the country. However, unlike highly integrated media conglomerates such as Time Warner and Walt Disney, Cox's operations do not benefit as much from multi-purposed content and cross-promotion. Its focus on technology and telecommunications, though, does put the company in a position to capitalize on the rapidly converging digital media world.
Accounting for more than 60% of sales, the company's Cox Communications unit has focused on expanding the number of different services it delivers to subscribers. The cable company has been heavily marketing bundled service packages that include digital phone and broadband Internet access. It has also expanded video on demand (VOD) offerings. Cox Communications has also built a mobile communications network to offer cellular phone service and wireless broadband Internet access to its customers.
The Cox organization has also invested heavily in digital media and services in conjunction with its telecommunications infrastructure. The company has more than 100 online properties, including websites for its newspapers, television stations, and radio stations. To help its flagship AutoTrader property grow, Cox turned to Providence Equity Partners for investment in 2010. The private equity firm acquired a 25% stake in the online listings service, providing additional capital that AutoTrader can use for both organic growth and possible acquisitions. Providence Equity has a number of media-related investments, including video website Hulu and comparison shopping site NexTag.
Real world publishing, however, has not been so kind to the company. Its Cox Newspapers unit has struggled along with the rest of the newspaper industry with declining readership and advertising revenue. In response, Cox put all but three of its papers up for sale and plans to use the proceeds to pay down debt and to fund new business investments. Its remaining properties, including the Atlanta Journal-Constitution, the Palm Beach Post (Florida), and the Dayton Daily News, plan to boost their online publishing efforts to expand readership. Cox is also selling its Valpak direct mail advertising unit.
Cox reorganized its media operations in 2009, forming Cox Media Group to oversee its broadcasting and publishing businesses. The company's direct marketing arm, Cox Target Media, now falls under the Cox Media Group's umbrella as well. Longtime newspaper chief Sandy Schwartz was named head of the new division. Cox Enterprises acquired the remaining shares in Cox Radio for about $70 million to make the business a wholly-owned subsidiary. It had previously controlled about 95% of the broadcasting unit.
Cox divested a portion of its cable programming business in 2009, selling a 65% stake in the Travel Channel to Scripps Networks Interactive. Scripps Networks contributed about $180 million to the new joint venture, which valued the lifestyle network at $975 million. Cox acquired the Travel Channel in 2007 when the company exchanged its 25% stake in cable channel operator Discovery Communications for $1.3 billion in cash.
Company veteran Jimmy Hayes was tapped to replace James Kennedy as CEO of Cox Enterprises late in 2008. He was previously head of finance at Cox Communications. Kennedy, who remained chairman, had led the business since 1987.