What Will Happen to Cooke’s Investments Is Not a Sure Bet

What happens now to Jack Kent Cooke’s treasure trove?

Cooke died Sunday at the age of 84, leaving behind a myriad of investments ranging from the Washington Redskins pro football team to the Chrysler building in New York, the Los Angeles Daily News, a Kentucky thoroughbred breeding farm, plus real estate stretching from Riverside County to Virginia.

Of this collection, the Cooke family seems all but certain to keep its hands on the Redskins--in what turned out to be one of Cooke’s shrewdest investments.

But Cooke, whose net worth Forbes magazines pegged at $825 million, didn’t always bankroll winners.

His 500-acre Elmendorf Farm near Lexington, Ky., which Cooke bought for about $43 million in 1984, had already been put up for sale.

“His estate will be lucky to get about 25 cents on the dollar,” because Cooke bought at the peak of the thoroughbred market, said Michael Brown, publisher of the Racing Update newsletter.

Meanwhile, the Chrysler building, the 1920s Art Deco Manhattan skyscraper, already has a 20% vacancy rate, and it could jump to 40% in a few years if it loses more big tenants, analysts speculated.

If the Cooke family puts up for sale the Woodland Hills-based Daily News, there may be several possible buyers, although the Cooke family faces getting $50 million to $100 million less than he invested in the paper, said media analyst John Morton.

Cooke, who was married five times, is survived by wife Marlene, his son, John Kent Cooke Sr., 55, a young daughter, Jacqueline, and several grandchildren. The terms of Cooke’s will are not known. And John Cooke did not return a call Tuesday seeking comments about the family’s plans.

But Jack Kent Cooke said that he wanted the Redskins to stay in his family’s hands after his death.

“And there has never been any indication that anything other than that is going to happen,” said Charley Casserly, the team’s general manager.

John Cooke Sr. is executive vice president of the Redskins and has overseen the team’s day-to-day operations since 1982. “John has been involved in every major decision since I became GM in 1989,” Casserly said. “He’s always carried himself with a low profile. He’s not one seeking publicity. . . . It’s not his personality.”

Last year Financial World magazine said the Redskins franchise was worth $184 million. But a new 78,000-seat Redskins football stadium will open this fall, and it could boost the Redskins’ value by $50 million, analysts have said.

Cooke gradually bought the Redskins over 25 years, finally taking full ownership in 1985. His total purchase price for the Redskins was $15 million to $21 million, according to published reports.

Large estates typically face a whopping 55% tax rate. But it’s been reported that Cooke had already shifted 10% ownership of the Redskins to his son, John.

If so, Cooke lowered the value of the his estate’s holdings in the Redskins, because a partial stake in a business is valued at a significantly discounted price, and so it will pay lower taxes, said Melvin Kreger, a North Hollywood tax attorney.

Newspapers were an early love for Cooke, and he made his first fortune by buying and selling papers and radio stations in his native Canada.

In 1985, Cooke paid the Chicago-based Tribune Co. $176 million to buy the Daily News, a competitor of the Los Angeles Times. Cooke paid 44 times the paper’s 1985 profit--an amount that analysts said was far too high.

But Cooke invested in a new printing plant for the Daily News and other assets, raising his investment to $250 million to $300 million, media analyst Morton said.

Three years ago Cooke put the paper up for sale. At the time, Morton said, it was only marginally profitable, and after more than a year, no deal had taken place; Cooke then took the paper off the market.

Cooke installed Larry Beasley as president of the Daily News in 1994, and Cooke was pleased that the paper’s profits improved, Morton said. He said that if the Daily News was put up for sale, it might fetch $175 million to $200 million.

Morton said possible buyers might include: William Dean Singleton’s MediaNews Group, owner of the Denver Post and papers in Pasadena, West Covina and Whittier; Freedom Communications, owner of the Orange County Register; and Thomson Corp., the Toronto-based publishing conglomerate. Most big publicly held newspaper chains would be unlikely to bid on the Daily News because of the competition in Southern California, he added.

Any newspaper concern that already owned papers in the area might also run into anti-competitive problems with the Justice Department if they bid for the Daily News, Morton said.

Asked if his company would be interested in the Daily News, Freedom’s CEO Jim Rosse said, “I don’t have any comment on that.”

The Times Mirror Corp., publisher of The Times, also had no comment.

Times researcher Ron Weaver contributed to this story.