Case Detail

Case Summary

Freedom Communications, Inc: Family Enterprise or Liquidity?

Case Number: 5-307-504, Year Published: 2007, Revision Date: August 08, 2018

HBS Number: KEL339

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Authors: John Ward; Carol Adler Zsolnay

Key Concepts

Family Business, Governance, Succession, Finance


The case presents the history and continuity challenges of Freedom Communications, a family business that by the new millennium had become the twelfth largest media company in the US, with about 7,000 employees and estimated value between $1.5 and $2 billion. The case details intra-family conflicts related to maintaining Freedom as an ongoing business versus exploring liquidity-generating options including selling the company, spinning off businesses, and going public. In August 2002 a narrow majority of family owners voted to explore liquidity options in detail.

Freedom had been in business nearly 70 years by that point, and had weathered family strife including disagreements about what second-generation members were best qualified to run the firm and a related lawsuit to dissolve the business. Since the early 1980s, only non-family executives had served as CEO, but family members continued to be involved as employees and owners, contributing to ongoing disputes about leadership, sale of shares, and the business's future. These interactions culminated in the decision to explore broad liquidity options. Students will explore how a mature family business should manage succession-related and liquidity-option issues within and across generations to ensure that family owners, managers, employees, and shareholders remain satisfied with their roles, company performance/operations, and share ownership.

Learning Objectives

After reading and analyzing the case, students will be able to: understand the importance of strategic succession and liquidity planning to prevent conflict in family firms; generate liquidity options for a family business and appreciate risks; recognize practical steps a growing family business can take to improve family relationships even within the context of major past conflicts; understand issues related to ownership, governance, and careers in the family business.

Number of Pages: 20

Extended Case Information

Teaching Areas: Family Business, Finance, Strategy

Teaching Note Available: Yes

Geographic: United States

Industry: Media

Organization Name: Freedom Communications, Inc.

Organization Size: Medium

Decision Maker Position: Board members, family members