Rebirth of England

In 1971, John Smith's father, Julian Sinclair Smith, acquired WBFF-TV, a local television station in Baltimore, Maryland, USA. After continuous development, the Smith family established Sinclair Broadcasting Group in 1986.

However, Julian's health declined later. In the 1990s, Julian's eldest son David Smith became the group's CEO and began rapid expansion.

In 1995, the Sinclair Group already owned 13 TV stations. In order to quickly expand its scale, David Smith decided to take the company public.

In the same year, the group acquired five more TV stations in one fell swoop.

Until now, Sinclair Group has more than 100 local TV stations across the United States, becoming one of the largest television operators in the United States.

From this process, it can be found that David Smith can be said to be very important in the development of Sinclair Group. Therefore, Barron would say to John Smith that he wanted to overthrow David Smith's influence on Sinclair Group. The "rule" of the Clay Group is very difficult.

Although the Sinclair family, including David Smith, is usually very low-key, he is very radical in the management of the company.

In the past 10 years, Sinclair Group has grown from owning more than a dozen TV stations to its current scale of more than 100 TV stations through acquisitions and mergers.

The consequence of this is naturally that the company takes on a lot of debt.

John also told Barron’s that in the early days of Sinclair Group, especially after it went public, such aggressive strategies did bring development to the company, but after accumulating so much debt, what he wanted more was stability. Let's adjust the company's financial structure before proceeding with the next step of expansion.

In addition, John Smith also had differences with his eldest brother regarding the future development direction of the company.

John Smith believes that with current trends, young people are spending less and less time on television. He believes that the Internet is about to change the tradition of the media industry, and Sinclair Group should increase its attempts in the Internet industry in the future.

Therefore, he once proposed to acquire some potential media websites, but David Smith did not agree with this and directly vetoed John's proposal. Instead, he was prepared to spend a lot of money to continue to acquire TV stations...

Of course, this kind of thing has not happened before. What led John Smith to decide to launch a "rebellion" was last week when their father Julian Sinclair Smith suddenly suffered a stroke and was hospitalized. Even after rescue, he could not Never woke up again...

You know, Julian has a total of six children, five sons and one daughter.

The first three children were born to Julian's ex-wife, and John Smith, his fourth brother and sister were all born to Julian's current wife...

Relatively speaking, these six children can easily be divided into two camps emotionally.

If it were before, although his father Julian had been the chairman of the group, David Smith had been in the CEO position for more than ten years, and his control over the company was not at all what John Smith and his "current three siblings" had. Comparable.

Even in matters within the group, David Smith and his "three brothers from the ex-wife" have been intentionally or unintentionally denying and suppressing the "three current siblings", and they can only endure it.

But the current situation no longer allows them to hesitate. With their father Julian's situation, he will pass away at some point - now David Smith is already acting as chairman - if that happens, the other party will The "three brothers from the ex-wife" will inevitably slowly exclude John Smith and others from the Sinclair Group.

And John Smith is not without supporters among the board of directors and major shareholders.

After all, SEM Group can be said to be the most successful investment of Sinclair Group in recent years, and Sinclair Group has received huge profits.

This investment was originally proposed and led by John Smith.

Therefore, with this performance, his ability has been recognized by some people.

Moreover, the idea of ​​expanding investment into the Internet industry advocated by John Smith also has supporters among the board of directors and shareholders.

In addition, although under the leadership of David Smith, the Sinclair Group continued to carry out acquisitions and expansion, it also accumulated a lot of debt and did not have time to digest it in the future...

This has also led to the Sinclair Group's stock price performance not rising much over the years.

Under this strategy of continuous expansion, some shareholders will inevitably have doubts about this.

Here we need to explain the current shareholding situation of Sinclair Group. It can be said that since its listing, Sinclair Group has continued to introduce investors due to continuous acquisitions, but their family has also not relaxed its interest in stocks. of repurchase.

Therefore, up to now, the Sinclair family's shareholding in the group still exceeds 43%. It can be said that the control of the shares is still very solid.

Among them, the Sinclair Family Trust owns approximately 25% of the shares of Sinclair Group, and each of the remaining six children holds approximately 3% of the shares of Sinclair Group.

In terms of shareholding ratio, the "three brothers from the ex-wife" and the "three current siblings" are basically the same.

The key lies in the 25% stake owned by the family trust...

According to regulations, the trust fund holds a total of 7 voting rights for stocks. If their father Julian dies, his current wife, John Smith’s mother, will only have the beneficial rights of the family trust and not As for voting rights, each of the six siblings has one vote. The key is that their father Julian’s voting rights will go to his eldest son David Smith...

In other words, David Smith will have two voting rights, and the "three ex-wife brothers" will control the family trust's shareholdings with a voting ratio of 4:3 relative to the "current three siblings".

This decision is understandable. After all, as the boss of the Sinclair family, David Smith has held the position of CEO since before the group went public, and is naturally more trusted by his father Julian.

Therefore, when the other party dominates 25% of the shares of the Sinclair Group owned by the family trust, if John Smith wants to "resist" his eldest brother, he has only two ways to achieve it.

One is to obtain shareholder support of more than 50% of the shares.

Or obtain the support of more than half of the votes cast by the board of directors.

No matter which method is used, it is crucial to obtain the support of Barron, who holds 12.5% ​​of Sinclair Group shares and has a seat on the board of directors.

The Sinclair Group's board of directors has 11 directors. In addition to the six brothers and sisters of the family, the attitudes of the other five board members are particularly important.

To oust David Smith from the board, John Smith would need the support of six of those votes.

According to the information John Smith revealed to Barron, he has now received another vote on the board of directors, plus the three votes of the "current three siblings". As long as Barron supports his proposal, he will get another vote. If they vote, the board of directors can be convened to complete the "feat" of removing the eldest brother David Smith.

"We are friends, John. As long as it is good for the Sinclair Group, I will support you."

Barron smiled and said:

"But before that, I still want to know, where are you planning to make a breakthrough next?"