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John Rigas, Cable TV Pioneer Who Landed in Prison, Dies at 96

John Rigas, Cable TV Pioneer Who Landed in Prison, Dies at 96

John Rigas, the cable television pioneer who devoted half a century to building Adelphia Communications Corp. into the nation’s sixth-largest operator, only to be convicted of looting the company and driving it into bankruptcy, has died. He was 96.

His death was confirmed by William Brennan Jr., a funeral director at the Thomas E. Fickinger Funeral Home in Coudersport, Pennsylvania, where Mr. Rigas lived, according to the New York Times. He had been diagnosed with bladder cancer in the 1990s.

A federal jury in 2004 convicted Rigas and his son, Timothy, of bank and securities fraud, finding they had lied about the source of $1.6 billion used to buy Adelphia stock and debt and had stolen $51 million in cash advances. John Rigas was sentenced to 12 years in prison; his son, the company’s former chief financial officer, was sentenced to 17 years. They began serving their terms in 2007.

John Rigas, Cable TV Pioneer Who Landed in Prison, Dies at 96

The U.S. Supreme Court twice rejected their appeals, most recently in October 2010. At the time, both father and son were at the low-security Federal Correctional Complex in Butner, North Carolina. John Rigas was granted a compassionate release from prison in Waymart, Pennsylvania, in February 2016, due to his failing health. His son was released in 2019.

The criminal charges stunned those who knew the chatty and self-effacing Rigas, who adhered so much to small-town values that he removed racy adult programming from the big-city cable systems he acquired.

Town’s Benefactor

Rigas had kept his corporate headquarters in Coudersport, with a population of about 2,600, where he began his cable TV company in 1952. The diminutive Rigas was the town’s benefactor, but his largesse sometimes came directly from the company coffers.

The two men spent $26.5 million in company money to buy timberland near their Coudersport home and $13 million to build a company golf course on land owned by Adelphia and their family, prosecutors said. Adelphia paid for antiques, family residences and a personal trainer for the men, witnesses testified.

At the sentencing in June 2005, U.S. District Judge Leonard Sand said John Rigas “long ago set Adelphia on a track of lying, of cheating, of defrauding.”

The Rigases also failed to disclose more than $2 billion in personal loans from banks that Adelphia was obligated to repay. When the company finally revealed details about the family’s borrowing in March 2002, the news precipitated a financial crisis for Adelphia.

Three months later, the company sought refuge in bankruptcy court. Comcast Corp. and Time Warner Inc., the two biggest U.S. cable providers at the time, bought Adelphia’s assets and divided its 5.2 million customers.

“I can’t imagine this happened to us. I made mistakes, but not illegal mistakes,” Rigas said in a series of interviews with Bloomberg News in 2006 and 2007 as he awaited the result of his first appeal while free on bail. He insisted he was a victim of federal prosecutors bent on showing they were tough on corporate crime after the Enron Corp. accounting fraud.

“Here were these Joe Palookas from a small town. Nobody knew them,” Rigas said of what he saw as the campaign to persecute his family. “Make an example of them. They were after white-collar crime. I think we became victims of that.”

Early Life

John James Rigas was born Nov. 14, 1924, to Eleni Brazas and James Rigas, Greek immigrants who settled in Wellsville, a small town in the southwestern corner of New York. Rigas, the eldest of four children, was born above the restaurant his father operated. For the first few years of his life, his parents shared their apartment with another family from their Greek village, Arahova.

“My playground was essentially the alleys and the main street. There were five other Greek families and we became very close,” Rigas reminisced in an oral history recorded on Oct. 11, 1989, for the Cable Center in Denver.

In addition to his public schooling, Rigas attended a Greek school in the afternoons. Following his high school graduation in 1943, Rigas was drafted by the U.S. Army and served with the armored infantry in Europe before he was discharged in 1946.

With the G.I. Bill, Rigas could afford to attend college. He applied only to Rensselaer Polytechnic Institute, because three older Greek friends from Wellsville were already attending the school in Troy, New York. Rigas struggled in his mechanical engineering courses, however, and switched to management engineering, where he studied business, accounting and marketing.

After his college graduation in 1950, Rigas worked briefly in his father’s restaurant.
“I wanted to give it a try, and I’m glad I did. But I sure couldn’t make a ham and egg sandwich,” Rigas recalled.

A Greek friend in the movie-theater business encouraged him to look at a run-down theater for sale in Coudersport, located not far across the state line in Pennsylvania. Rigas later admitted that he overpaid for the theater, which saddled him with debt. He took a daytime job as an engineer at a Sylvania Electric plant and ran the theater in the evenings, hoping to recoup his investment before television stations reached rural America.

Cable Purchase

In 1952, Rigas was befriended by a film salesman who urged him to hedge his theater investment by obtaining a local license or franchise to import TV signals via wire to homes in Coudersport. Rigas purchased his first cable TV franchise from another entrepreneur who had beaten him to the city council, paying either $100 or $300. The sum varied when he recounted the story in later years, but he always remarked that he overdrew his checking account to make the purchase.

Rigas soon welcomed well-heeled partners who repaid his initial investment and gave him 25% of the company formed to build Coudersport’s cable system.

They signed their first cable customer in 1953, the same year Rigas wed Doris Nielsen, a schoolteacher in Wellsville whom he had met on a blind date during college. Rigas said that when his own energy ebbed, his wife pushed him out the door to compete for a new cable franchise.

The couple had four children: Michael, Timothy and James, and daughter Ellen.

In 1954, Rigas teamed with his younger brother Constantin, nicknamed Gus, to build a cable TV system in Wellsville. “Adelphia,” Greek for “brother,” was chosen as the name of their enterprise. Gus Rigas remained with the company for 22 years, bowing out when John Rigas’s three sons returned from college to join the business.

Timothy attended the University of Pennsylvania’s Wharton School of Finance, while his three siblings earned undergraduate degrees from Harvard.

Michael, who also earned a law degree from Harvard, became Adelphia’s executive vice president of operations. James, who obtained his law degree and a master’s degree in economics from Stanford University, became executive vice president of strategic planning.

Tight-Knit

The family remained tightknit. The two unmarried sons, Timothy and Michael, lived in their parents’ house into their late 40s.

Although Adelphia became a publicly traded company in 1986, the Rigas family retained control. As late as 2001, the board of directors’ nominating committee consisted solely of family members: Rigas, his three sons and son-in-law Peter Venetis. All five resigned as officers and directors in May 2002.

A month later, Adelphia filed its bankruptcy petition and on July 24, 2002, Rigas was arrested and taken in handcuffs from his Manhattan apartment, along with sons Timothy and Michael.

Rigas didn’t testify at the 18-week trial. He and Timothy were convicted of all charges except five counts of wire fraud. Their criminal tax-evasion charges were dropped in 2012.

A mistrial was declared in the case against Michael Rigas after a jury deadlocked.
In the wake of the convictions, John Rigas’s sons James and Michael built two small cable companies into Coudersport-based Zito Media LP, which services 46,000 subscribers in 17 states, according to the company’s website.

©2021 Bloomberg L.P.