As you’ve probably heard, it’s a tough time to be a media company. Newspapers are shedding reporters and editors in stunning numbers, magazines are losing advertisers and slashing pages, and network news divisions are closing bureaus and trimming coverage. Blame cable television, blame the recession, blame blogs and Twitter and Craigslist; regardless of the cause, the industry is engaged in a massive struggle not merely to reinvent itself and retain its relevance, but also, simply, to survive.
The Puerto Rican media giant Grupo Ferré Rangel, publisher of the island’s largest newspaper, El Nuevo Día, is in a better position than most communications companies to overcome the current environment’s significant obstacles.
For one thing, the Internet has penetrated Puerto Rico far less deeply than it has the mainland U.S. That has given Grupo Ferré Rangel time to assess the impact of the technological revolution in the States and adjust its strategies and tactics accordingly.
More significantly, the family members who make up Grupo Ferré Rangel’s leadership can call on an entrepreneurial legacy that has seen the company move into and out of several diverse industries over the decades, and a decision-making process that has fostered open discussion, nimbleness and prudent risk taking.
In short, this is a company that isn’t afraid to try new things—or to dump those ventures should they fail.
“We are entrepreneurs,” says company president María Luisa Ferré Rangel, 45. “We enjoy it. We are always thinking of doing something else, something new and something different.”
Ferré Rangel’s great-great-grandfather was a French engineer who traveled to Central America in the 19th century as part of France’s ill-fated attempt to construct a ship canal across Panama. Like many of his countrymen, he fell ill in the substandard conditions; to recuperate he went to Cuba, where he married and started a family. One of his sons—María Luisa Ferré Rangel’s great-grandfather—earned an engineering degree from the Sorbonne by mail and, with political upheaval and unrest roiling Cuba, emigrated to Puerto Rico, where he used his own capital to start a foundry. He and his sons expanded the business from metalwork to cement and paper, and one of the sons, Luis A. Ferré, bought a newspaper, El Día, in 1948.
Twenty years later Luis was elected governor of Puerto Rico, and his oldest son, Antonio Luis Ferré, now 75, bought the paper from him, moving it from Ponce to San Juan and changing its name to El Nuevo Día. Realizing he needed outside journalistic expertise, Antonio Luis handed the reins to Carlos Castañeda, a Cuban exile working in New York as Life magazine’s artistic director. According to María Luisa, Castañeda accepted the job on the condition that there would be no ramifications when the paper criticized Luis’s actions as governor.
Antonio Luis and Castañeda modernized the publication, giving it a more metropolitan outlook and emphasizing catchy photographs and shorter stories. After about five years El Nuevo Día began breaking even, and with circulation increases came more advertising. Antonio Luis had employed his own children at the paper during their summers off from school, and about a decade ago he began turning over control of the paper and the other properties of the family’s holding group to them.
Today María Luisa, in addition to serving as the parent company’s president and CEO, is the publisher of the paper, and all four of her siblings hold senior leadership roles: Brother Antonio Luis, 43, who formerly ran the firm’s cement company, is chief operating officer; sister María Eugenia, 42, is El Nuevo Día’s president; brother Luis Alberto, Antonio Luis’s twin, is its editor; and sister Loren, 39, is the paper’s vice president for new products.
In addition to El Nuevo Día, which is Puerto Rico’s most widely read newspaper, the group publishes a paper called Primero Hora and owns a commercial printing company, a marketing firm, a developer of software applications for mobile phones and office complexes in Guaynabo, near San Juan. It also runs a charitable foundation. Grupo Ferré Rangel sold its cement business, which had been listed on the New York Stock Exchange, in 2002.
Grupo Ferré Rangel says its annual revenues are approximately $200 million, a figure that has remained steady, with gains from its diversification efforts making up for advertising losses on the media end.
Sipping coffee in a restaurant just off the lobby of an upscale Manhattan hotel, María Luisa explains that the family can call on its willingness to embrace new ventures as it deals with the “big challenge” of Internet encroachment in traditional media terrains.
“We look at it as an opportunity to reinvent ourselves,” she says. “Initially out of situations like this, you find opportunity and new things to do.”
In Grupo Ferré Rangel’s case, the opportunity is the chance to get in on the ground floor of online media in Puerto Rico and leverage El Nuevo Día’s brand in the digital space; the paper’s website is among the island’s most visited. And while antitrust laws prevent the company from investing in broadcast media outlets, it continues to seek ways to expand its reach in the industry, exploring such avenues as magazines and billboards. The firm also has launched an online auction site, a popular food and dining guide, and a magazine and website for young teenagers.
“We’re transitioning the company from what was considered a newspaper company to more of a media content company that distributes its various content through all the platforms we have,” María Eugenia Ferré Rangel says. “Our website is the largest website in the island after Google and all the search engines. Our mobile site has grown immensely, too. So we’re already distributing all our content through all the different platforms. We do integrated selling and integrated distribution of different types of content that are not traditional to the paper.”
The evolution in its media holdings notwithstanding, Grupo Ferré Rangel may yet diversify even further, inspired by its history of commercial experimentation. Changes in the economy and in the media industry, María Luisa says, could force the company “to look outside the industry as a family and say, ‘Maybe this is the time to move to something else,’ and change like my father did from industrial, cement and construction to communications.”
Overlaying the group’s operations is an interconnected leadership structure that family members credit with fostering success. Each of the company’s individual enterprises has its own board of directors; above those is Grupo Ferré Rangel’s board, consisting of Antonio Luis Ferré, his wife, their five children and three non-family members, who together decide matters such as new business ventures and capital purchases.
According to patriarch Antonio Luis, the family governance structure has allowed the firm to capitalize quickly on new opportunities.
“We have been able to move nimbly because our decision-making process is fairly streamlined and simple,” he says. “We don’t have a lot of committees and a lot of staff forces to analyze different possibilities.”
He describes a process in which one of the family members brings an option to the group to consider. Some staff members then study what has been suggested and present their findings at a family meeting. Parents and children bat the idea around with the staffers and then—at either that meeting or one in the near future—come to a decision and move it to Grupo Ferré Rangel’s full board of directors.
“There it has to be justified and studied, and if it’s promising and it looks successful, we will experiment with it. If not, we will discard it,” Antonio Luis says. “As you see, it is a very simple process, and that has made it easy to take a look at a number of things without spending a great deal of money and a great deal of time.”
In addition to those boards, the Ferré Rangels formed what they call the Consejo de la Familia—a family council that serves as the mechanism to discuss the group’s family-related business issues. Decisions are put to a vote, with a simple majority carrying the day.
“We are very lucky,” María Luisa says. “We are very sure of each other and we trust each other very, very much. I think that’s a key in a family business: trust, more than love. Love is very important, but love doesn’t mean trust. Trust is very important, and respect. We respect each other very much, and we trust each other very much. We discuss respectfully and openly, and sometimes we can get upset about something, but we have discussed that at the end we come to an agreement always. We cannot come out of a room with somebody saying, ‘I’m not in and I’m not part of it.’ So we discuss it, we talk about it, we might change some things, we might not, but at the end, the majority rules.”
Family business consultant Ernesto Poza, a professor of global family enterprise at Thunderbird School of Global Management in Glendale, Ariz., has worked with the Ferré Rangels for 15 years. He has helped guide the transition from Antonio Luis’s control to that of María Luisa and her brothers and sisters. Poza observes that the family’s shift in industries through the generations is uncommon.
“A lot of families get wedded to that founding operating business and define themselves rather narrowly,” Poza says. “As a result the secret to continuity is in some ways threatened by the viability of that operating business continuing to not just survive but hopefully, since the family is growing, thrive so as to create opportunities for more family members in a growing family.
“What the Ferrés have done is rare,” Poza continues. “They are in a great minority. They have defined themselves as an enterprising family and as an enterprise that will look around at opportunities, some of which may be outside of their immediate area of core competence. They begin small but from what constitutes, in effect, small experiments or small entrepreneurial opportunities, they begin to learn the business and if, after that period of experimentation, it continues to look promising and what they’ve learned seems to equip them to get bigger at it, they proceed to get bigger at it.”
None of this is to say that Grupo Ferré Rangel has been uniformly successful. Not every new venture has panned out. The family started a newspaper in Orlando, Fla., but pulled the plug after five years. It experimented with an online portal, but that, too, didn’t last. María Luisa notes that on occasion, the energy and drive of the younger generation—of her and her siblings—have led to too-rapid expansion.
“Sometimes, you move so fast you don’t think about certain basic things that you need to think [about], to organize: transition, and who is going to run what, how are you going to get contributors?” she says.
Indeed, the fine line between settled structure and entrepreneurial risk taking has served the Ferré Rangels well, but it is a tough one to walk, concedes María Luisa.
“There is always a tension among them,” she says. “We are great believers in balance, and that is one of the hardest things to do, have balance in life and everything you do, because sometimes you feel one way and sometimes you feel the other way. The challenge is to have the balance, to do both and to be able to swing the way you want depending on the necessity.”
She credits the Ferré Rangel family dynamic—the strong, respectful relationships—with imposing the kind of order that has allowed the company to function effectively. The freedom to discuss and debate issues in a healthy way means more than what one might find in the company handbook, she says.
“There are always policies,” María Luisa says. “Policies are good, but policies cannot run the business. You have to listen a lot, you have to ask a lot of questions, you have to go outside the circle of confidence and broaden your perspective.… My father always said there’s only so much we can study and research and analyze. There comes a point where you have to make a decision that comes out of your instinct of whether it’s good or not. We do a lot of research, we do a lot of analysis, but at some point, there’s a philosophy that if you don’t try it, you won’t know, so you have to go ahead and jump and get all the backup that you can to try to make it work.”
And if not, well, as the Ferré Rangels have learned, there’s always something else.
Thomas W. Durso is a freelance writer based in Glenside, Pa.