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Like Father, Like Son: Tom Murphy Jr. Joins Berkshire Hathaway's Board of Directors
Let's meet the newest addition to Berkshire's board
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With Christmas fast approaching, I had originally planned just one article for this week — The Curious Case of Anne Scheiber — but it seems that Warren Buffett and co. had other plans.
On Monday, Berkshire Hathaway officially announced the election of Thomas S. Murphy Jr. (of Crestview Partners) to the company’s board of directors, filling the spot left open by Sandy Gottesman’s recent death.
The Murphy addition also puts Berkshire back in the NYSE’s good books.
I wrote in October:
The New York Stock Exchange mandates that its members must fill their boards with more independent directors than non-independent ones. Gottesman’s death leaves Berkshire with an even split of 7-7 among the two types of directors, so the company needs to bring on an independent director to restore the majority “as soon as practicable”.
If the Murphy name sounds familiar, that’s for a very good reason: Tom Jr. is the son of the late, great Tom Murphy (of Capital Cities/ABC fame). The elder Murphy also served his own stint on the Berkshire board and remained a close friend and confidante to Warren Buffett up until the very end.
In A Song of Ice and Fire (which inspired HBO’s smash-hit Game of Thrones), the Northmen often remark that, “There must always be a Stark in Winterfell.”
I guess the Buffett version of that adage is, “There must always be a Tom Murphy on Berkshire Hathaway’s board of directors.”
So what do we know about the younger Murphy?
Not much. Tracking down information about his life and career proved more difficult than expected.
Nonetheless, I tried to dig up some interesting facts and stories that I hope will provide an informative look at Berkshire Hathaway’s newest director…
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Starting Out: Tom Murphy Jr. got into the money game in much the same way as Peter Lynch — by caddying for financial big-wigs during his summer breaks from college. “One of the guys I caddied for worked at EF Hutton,” he told OneWire in 2014. “And, when I was getting out of school, I bumped into him and he said, ‘You should come see us.’”
The firm tossed him right into the deep end of its municipal bond business — and Murphy never looked back. “It just sort of snowballed from there,” he said.
Murphy eventually moved over to Goldman Sachs and, there, received a crash course in M&A and private equity. He stayed at Goldman for nearly eighteen years, until his retirement in 2003. That decision, though, would not last long…
🚫 Retirement: Staying retired must not run in the Murphy family. Tom Sr. retired as CEO of Cap Cities/ABC in 1990, but returned to the role four years later after the sudden exit of his successor, Dan Burke. He capped off this encore by spearheading the “merger of equals” between Cap Cities and Disney. The man is a legend.
Tom Jr. didn’t stay retired for long, either. After battling — and beating — cancer in 2003/04, he received an offer too good to refuse.
“I was sitting at my kitchen table and my good friend, Barry Volpert, who was my classmate at Harvard and my colleague at Goldman for many years, came to visit,” he said. “[Barry] said that he wanted to start a private equity firm — and did I want to do it with him?”
“I had lost about fifty pounds and had about 250 stitches in my neck from the surgery I had just gotten out of. I said, ‘I”m a little busy right now. I’m trying to get healthy.’”
“He said, ‘You’re going to get better and, once you get better, you’re gonna want to get back to work because retirement almost killed you — so let’s get back after it.”
And, thus, Crestview Partners was born.
Private Equity: Here’s how Murphy describes his work with Crestview…
We’re focused on troubled, out of favor, dislocated companies. We actually move towards the blast zone, rather than running away from it.
We’ve got four industries that we pay attention to — energy, healthcare, media, and financial services. 99.99% of the stuff we do are in those industries and suffering from some type of dislocation. We get involved trying to solve problems.
Not exactly a student of the “buy excellent companies at fair prices” school of thought.
But, if that element of his private equity experience sounds quite un-Berkshire-like, Murphy also preaches the importance of partnering with acquired companies for the long haul, working directly with founders to solve problems, speaking plainly in order to bring different divisions together, and lavishing credit on local management instead of distant Wall Street bankers.
Fun Fact: There is now a distinct “Cap Cities/ABC — The Next Generation” vibe on Berkshire’s board with both Tom Murphy Jr. and Steve Burke as directors.
Murphy Sr. and Dan Burke (Steve’s father) transformed Capital Cities from a collection of regional television stations into one of the most impressive media giants in Hollywood. Hopefully, some of that magic rubbed off on their sons.
There will no doubt be cries of nepotism — and I’m sure the ESG folks aren’t thrilled, either — but In Warren I Trust.
🎄 Merry Christmas! 🎄
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