John Kluge: The benevolent billionaire goes out in style
In a life that continued for two and a half decades past his obituary interview with the New York Times, media-shy billionaire John Kluge would endure controversy in the form of a socialite ex-wife and an illegal hunting operation; and even his grandest business deal would incite some ire. But for the past 20 years, the biggest headlines John Werner Kluge made were the ones noting his eye-popping donations.
The billionaire whose TV stations became the Fox network and whose money helped shape Albemarle County, died peacefully on the night of Tuesday, September 7, two weeks shy of his 96th birthday, sources say. At the time of his death, Forbes listed Kluge as the 35th-richest American, with a total fortune–- even after hundreds of millions in donations–- of $6.5 billion.
"He was a wonderful man," says brother-in-law Ludwig Kuttner. "He had a great career. He was very charitable. He was great to the community and to education."
Education would shape Kluge's life. That, and deal-making.
A fortune in the making
According to the German-American Hall of Fame, Kluge came to America in 1922, when he must have been age 7 or 8. He reportedly worked on a Ford Assembly line; and, as his legend would have it, he won a scholarship to Columbia–- and then got the school to double it. He supposedly augmented his tuition via savvy poker-playing. Whatever the truth of such Kluge-told tales, he would repay Columbia–- which now calls him a "Horatio Alger for the Twentieth Century"–- many times over by pledging $400 million for scholarships to be paid posthumously.
"Obviously, his financial generosity was extraordinary," notes Michele Moody-Adams, Dean of Columbia College, "but he also gave of his time."
Moody-Adams recalls Kluge's 95th birthday celebration last September, where he mingled with the students whose education he furthered.
"He was so lucid, engaging, and engaged with students he was meeting," she recalls, describing an outpouring of support and comments from scholarship students upon hearing of his death. "There are many who have said they would not be here but for the program," she says. "They're very grateful."
In all, including more than $100 million he donated to the school 20 years ago, Columbia appears to have gained at least half a billion dollars from Kluge.
Closer to home, Kluge's philanthropic efforts include the UVA children's rehabilitation center in Charlottesville and UVA's aboriginal art collection, both bearing his name, as well as the 7,379 acres of manicured estates in the southern part of the county Kluge gave to UVA for education and resale in 2001.
Last November, Kluge and his wife, Maria Tussi Kuttner Kluge, donated another $3 million to the University to foster compassion in end-of-life care.
As it turned out, Kluge would bestow about $63 million on UVA, whose former president, John Casteen, says he recalls being powerfully affected by a 20 years ago conversation when Kluge–- a German immigrant from modest means–- expressed interest in creating scholarships to help minority students from every nation gain a university education.
"After more than a quarter-century of work with philanthropists of almost every kind and of all sorts of means," Casteen says in an email, "I have come to see the Kluges as the most purposeful philanthropists I have known."
Restaurants and Globetrotters
In 1989, Forbes measured Kluge's wealth at over $7 billion and called him the richest man in America. At the time, he was married to the former Patricia M. Rose, a British-Iraqi socialite and sex columnist for the magazine run by her first husband, Russell Gay.
A few disrobed stills from that magazine, Knave, a sort of Penthouse for the Austin Powers set, were enough to create an uproar in 1985 when Prince Charles and then wife Lady Diana were slated to attend a Palm Beach fundraising party the Kluges were hosting. That same year Patricia Kluge helped her husband put the finishing touches on their 17,865 square-foot home, what was then the largest dwelling in the county, the appropriately named Albemarle House.
While rumors would later abound that Patricia was some sort of porn queen, her lone film role came in The Nine Ages of Nakedness, a campy 1969 romp through world history through the eyes of a time-traveling photographer. One of the few actors to keep her clothes on, she plays a bellydancer. And that 1980s New York Times obit interview explains the early attraction: “At one party," Kluge reportedly told the Times, "she cooked the dinner and then she did a belly dance on the table, and I said to myself, Ã¢â?¬Ë?Where have I been all my life?’”
That marriage ended in divorce in 1991. Patricia kept the 48-room house and its Arnold Palmer-designed golf course and went on to a new career in wine and philanthropy with a new husband.
Kluge went on to find love with the former Maria Tussi Kuttner, a holistic health practitioner, who, like him, was German-born.
One of Kluge’s most celebrated moments would later be celebrated in a television movie called The Miracle of the Cards, about a British boy named Craig Shergold, who was suffering from what was thought to be a fatal egg-sized brain tumor. Midway through a record-setting chain-letter campaign that eventually resulted in his receiving a reported 35 million get-well cards, Shergold got one particular letter from Neal Kassell.
A renowned UVA neurosurgeon working with a then-experimental device called a gamma knife, Kassell– thanks to a Kluge donation– was able to destroy the tumor in 1991 to save Shergold’s life.
John Kluge's business interests were varied. At the height of his fame, the firm he created, Metromedia, owned subsidiaries selling everything from lawn tractors to steak dinners to Academy Award-winning films. In 1997, though, he sold off most of his film library–- about 2,000 titles including such Orion Studios hits as Dances with Wolves, Platoon, and The Silence of the Lambs–- to Metro-Goldwyn-Mayer for $573 million.
Another Kluge interest has been restaurants. While his surviving company continues to operate and franchise over 800 eateries bearing such names as Ponderosa and Bonanza (both inspired by America's top-rated 1960s television show), Kluge shut down all of his approximately 150 Bennigan’s steakhouses and his 58 remaining Steak & Ale restaurants in 2008–- as he filed for Chapter 7 bankruptcy for the Metromedia subsidiary that operated the two latter chains.
Something that remained a passion for the nonagenarian was supporting a local group called Hiromi T'ai Chi. As recently as April, Tussi and John Kluge hosted an afternoon fundraiser for the group at their Albemarle home, Featheridge. Thanks to their donations, Hiromi teaches T'ai Chi, a Chinese martial art known for uniting mind and body, to underprivileged area children.
Wife Tussi says the couple shared a fascination and respect for the art and says her husband had a "remarkable" ability to help others rise to their own potential.
"In everyone he met, he always saw the best they could be and do," she says, "and they would live up to it."
He also could see a good business deal.
One of the oft-told tales of Kluge's business success is that shortly after buying D.C. radio station WGAY (now WIHT), he ran into a friend on a D.C. street who mentioned that Dumont Broadcasting needed a buyer. The Dumont stations helped Kluge launch Metromedia–- and Kluge's fortune.
The cheapskate billionaire
The man whom Forbes would eventually call the "cheapskate billionaire" had a penchant for wringing profits from formerly struggling firms. A biography posted at the Museum of Broadcasting notes that Kluge pinched pennies by headquartering Metromedia not in Manhattan but across the Hudson River in the cheaper office space of Secaucus, New Jersey.
The Museum goes on to note that another Metromedia success strategy was simply keeping costs low by re-running old TV shows–- a scheme that reached its pinnacle when Kluge secured syndication rights to M*A*S*H, the dark comedy set in a mobile combat hospital in the Korean Conflict.
"John Kluge represents the TV entrepreneur in the true sense of the word," writes Douglas Gomer, author of the Museum's biography. "Because his efforts have been directed toward a less glamorous side of the television industry," Gomer notes, conventional broadcast biographies have focused on figures such as David Sarnoff and William Paley. "But as a pioneer in independent television station ownership and operation," Gomer concludes, Kluge "deserves the same degree of attention."
Kluge's biggest success brought him plenty of attention– not all of it adulatory. It was his 1984 leveraged buyout of Metromedia. Kluge had already served as CEO when Metromedia was a public company, and he took it private in a deal that secured his fortune–- and touched off a wave of debt-funded deals that didn't necessarily benefit the former shareholders or the American public.
Kluge and his longtime right-hand-man and chief financial officer, Stuart Subotnick, had "dumbfounded their critics," according to Jim Murray, in his book Wireless Nation.
"In a matter of weeks they lined up all they needed with a complex combination of private investors, venture capital, and a massive pile of fresh bank debt," Murray writes. "The deal structure, laden with interest deductions, cost the U.S. Treasury more than it did any of the participants."
That wasn't the end of the controversy. Although Kluge bought the company for the then jaw-dropping sum of $1.1 billion, he sold its pieces for at least five times that amount, prompting a 1987 discussion about insider information in a Fortune article entitled, "Are shareholders cheated by LBO's?"
Murray, who says he became good friends with Kluge, notes that there was nothing underhanded about the Metromedia deal–- that his friend used the system to make money.
And Kluge certainly didn't cheat his newfound nation out of his time. He served in U.S. Army Intelligence during World War II, a conflict that put him in opposition to his native Germany.
"He was like Zelig," laughs friend and Charlottesville resident Boyd Zenner, referring to the Woody Allen film whose title character pops up at myriad historical events and mentioning Kluge's wartime experiences and his friendships with Hollywood royalty including Tony Bennett, Frank Sinatra, and Gina Lollabrigida.
"Anytime you mentioned something from the 20th century, he'd say, 'Oh, yeah, I was there,' Zenner recalls, "and he pretty much was."
Metromedia's television stations became the nucleus of what Rupert Murdoch would later buy and brand as the Fox Network. At one point, Kluge's Metromedia was America's largest billboard company and owned Snapper lawn tractors, the Harlem Globetrotters, and Ice Capades. Later, Kluge and Subotnick founded the professional soccer team now known as the New York Red Bulls.
But not everything succeeded.
In 1995, Kluge and Subotnick formed Metromedia International Group, a publicly held company aiming to tap the burgeoning markets of China and Eastern Europe with cellular phone systems. At some point, the company went private, and last year the now North Carolina-based firm declared Chapter 11 bankruptcy protection. In January, a trust bearing Kluge's name filed a claim for $10.8 million as part of the bankruptcy.
Also in the mid-1990s but closer to home, Kluge constructed a 26,000-square-foot structure for his collection of 72 restored and historic horse-drawn carriages. County zoning officials, however, initially declined to allow the Keene-area to open to the public as a museum, situated as it was in a rural area, and he later sold off the carriages.
As detailed in a lengthy story by Avery Chenoweth in Spy magazine, the peak of local controversy came in 1988, when Patricia and John Kluge ran afoul of laws and neighbors over their British-styled exotic bird hunts. They'd lend historic guns to period-costumed guests who would then begin shooting game birds.
The problem was that to keep the exotic game alive for such fish-in-a-barrel slaughters, some neighborhood dogs in Keene were also slaughtered–- along with hawks, a legally protected species. Albemarle and state officials pressed criminal charges, and the British gamekeeper was convicted and deported to the mother country.
Higher moments at Albemarle House included fund-raising parties for Douglas Wilder, who was elected Virginia's first black governor in 1989. That same fall, at a party for all of America's governors, Albemarle House was the alleged site of Bill Clinton's first eyeful of eventual grope-alleger Kathleen Willey.
"Their mansion was like nothing I had ever seen in my life," Willey recounts in her biography. "With Roman pillars and every extravagance, it was beyond grandiose."
After the divorce, Kluge let his ex-wife keep the mansion while he opted to live at the humbler Morven estate, a three-story Federal house built of red brick with white columns. (Prior wives were Theodora Thomson and Yolanda Galardo.)
The man in the pool
In the early 1990s, Kluge bought four adjacent Palm Beach properties for the sum of $16.5 million and began demolishing unwanted houses for what became one of his primary residences. He also had a multi-level condominium in Manhattan, and his vacation homes included a restored castle he bought in the 1990s for about $6.5 million near Queen Elizabeth's Scottish country farm, Balmoral.
The man gave interviews about as often as Jacqueline Onassis, which is to say not very much. But to his friends he was gregarious–- a teller of ribald jokes with a penchant to hurl back friendly insults, says friend Boyd Zenner.
"I'd go visit them in this really cool house in France," says Zenner. "His physical therapist would come early in the morning. It was so beautiful there, all these fragrant flowers, and suddenly, I hear this horrible music–- like, "My Way," or something. He and his physical therapist were in the water singing. Horribly."
As Zenner peered down at the pair in a swimming pool, "John looked just like the cartoon guy in the Hawaaian Punch commercial– wearing some sort of inflatable thing– and he had on this great big crazy straw hat, these Cool Hand Luke sunglasses with stars of light shooting off of them."
Zenner says when a servant leaned over to tell John something. "But every time he or someone else would try to talk to John, he'd just paddle away, laughing really loud.
"Another time I was there, with Julann," says Zenner, referring to Julann Griffin, creator of the long-running game show Jeopardy! who now lives in the Charlottesville area. "The three of us were sitting up on the rooftop having dinner, and all three of us had really bad hand tremors," Zenner recalls. "It was hilarious to see us trying to pass these little china cups back and forth. It was like there was an earthquake going on. We were all laughing at ourselves.
"I wonder what he was like when he was younger," wonders Zenner. "He must have been hugely type A, but by the time I met him, he didn't give a sh*t. He was extremely chill."
Griffin, who first met Kluge when both lived in Los Angeles in the 1970s, says he was known then for his kindness and for his "midwest" work ethic, which he developed as a child and young man.
"He'd trudge through the snow to keep an appointment when the owner wasn't even there," she says. And she recalls him describing living on Hershey bars long before he made his fortune. "He never complained," she says. "It made him appreciate everything anybody did.
Zenner says that Kluge had suffered from various health issues including diabetes late in life, and his health really began fading this year. But a summertime visit to a friend's 100th birthday reignited a glimmer of his ambition.
"He came back really motivated to live to 100," says Zenner. "I know it's because he was totally competitive. He didn't want to think anyone could outlive him."
The final days
In the opening scene of the classic film Citizen Kane, the reclusive titular character utters the word "Rosebud" as he passes from this earth, an initially cryptic reference to something special from childhood. Somewhat similarly, seven years ago, Kluge told the Library of Congress, at a celebration honoring a $60 million gift, that he had a favorite china figure that he kept from his own childhood in Chenmitz, Germany.
"Every every time I think I'm too smart for my own britches," Kluge reportedly told the Library, "I look at that horse, and I know exactly where I came from."
"He was the anti-Citizen Kane," says Zenner, who was among 30 or so of Kluge's friends, family, and caretakers gathered around him when he died peacefully in his bed at Featheridge. "He always wanted all kinds of people around," she says.
"We both had a huge acceptance of life and death," says his widow Tussi, who orchestrated her dying husband's final day with his comfort in mind. In addition to the inclusion of loved ones, who sang as they stood around him early that evening, a harpist played, and a massage therapist gently stroked him. Several hours later, and surrounded by people, John Kluge slipped away silently. Besides Tussi, Kluge is survived by three children, Samantha, Joseph, and John W. Kluge II.
"I will never be afraid of death again," says Zenner. "It was the most gentle thing."
Jim Murray, who visited Kluge earlier on that final day, recalls having several conversations with his friend about the prospect that this year might be Kluge's last. He says the notion gave some happiness to the business tycoon, well aware that 2010 is the only year in recent history with no tax on inheritances. Next year, for estates the size of Kluge's, the so-called federal "death tax" leaps from zero to 55 percent–- a difference that means billions to those Kluge leaves behind.
"He's got to be chuckling right now," says Murray, "that the one year he would die is the year with no estate tax."
–with additional reporting by Courteney Stuart
–story rewritten, corrected, and expanded for print at 1:18pm, Tuesday, September 14 (original headline: "John Kluge: Business titan, UVA donor dies peacefully at 95")