Adelphia Communications Corporation was an American

cable television Cable television is a system of delivering television programming to consumers via radio frequency (RF) signals transmitted through coaxial cables, or in more recent systems, light pulses through fibre-optic cables. This contrasts with bro ...

company with headquarters in

Coudersport, Pennsylvania Coudersport is a borough in and the county seat of Potter County, Pennsylvania. It is located approximately east by south of Erie on the Allegheny River. The population was 2,371 at the 2020 census. History The Coudersport and Port Allegany Ra ...

. It was founded in 1952 by brothers Gus and

John Rigas John James Rigas (November 14, 1924 – September 30, 2021) was an American businessman who was one of the founders of Adelphia Communications Corporation, which at its peak was one of the largest cable TV companies in the United States. He was ...

after the pair purchased a cable television franchise for US$300. Combining various cable properties, the company became one of the most successful in the United States and reached over two million subscribers in 1998. In addition to cable television, Adelphia later started providing high-speed internet, phone services and voice messaging for businesses. Despite its success, in 2002 the company filed for

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...

amid an internal

corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...

scandal. An investigation was launched and later revealed that some members of the Rigas family used $2.3 billion to illegitimately purchase personal luxuries. A trial for the case was launched and saw John Rigas being sentenced to 15 years in prison, while his son Timothy Rigas received a sentence of 20 years. John Rigas was released in 2016 as a result of health issues. Following the file for bankruptcy, a plan for company restructuring was approved in 2004; amongst other things the plan included a full cash payment to possession lenders, bank lenders and joint venture partners. In July 2006, Adelphia sold its cable operations to

Comcast Comcast Corporation (formerly known as American Cable Systems and Comcast Holdings),Before the AT&T merger in 2001, the parent company was Comcast Holdings Corporation. Comcast Holdings Corporation now refers to a subsidiary of Comcast Corpora ...

(which now uses the

Xfinity Comcast Cable Communications, LLC, doing business as Xfinity, is an American telecommunications company and division of Comcast Corporation used to market consumer cable television, internet, telephone, and wireless services provided by the c ...

brand) and

Time Warner Cable Time Warner Cable, Inc. (TWC) was an American cable television company. Before it was acquired by Charter Communications on May 18, 2016, it was ranked the second largest cable company in the United States by revenue behind only Comcast, opera ...

(then part of Time Warner, later known as WarnerMedia) for $17.6 billion. In 2007, Time Warner Cable officially succeeded Adelphia as a publicly traded corporation but the cable assets were spun out in 2009 and was acquired by

Charter Communications Charter Communications, Inc., is an American telecommunications and mass media company with services branded as Spectrum. With over 32 million customers in 41 states, it is the second-largest cable operator in the United States by subscribe ...

in 2016 and it is now known as

Spectrum A spectrum (plural ''spectra'' or ''spectrums'') is a condition that is not limited to a specific set of values but can vary, without gaps, across a continuum. The word was first used scientifically in optics to describe the rainbow of colors ...

. The Rigas family established a successor company, Zito Media, to provide cable service in some areas not sold to Time Warner, including most cable systems in

Potter County, Pennsylvania Potter County is a county in the Commonwealth of Pennsylvania. As of the 2020 census, its population was 16,396, making it the fifth-least populous county in Pennsylvania. Its county seat is Coudersport. The county was created in 1804 and ...

History

Adelphia Communications Corporation was founded in 1952 by brothers

John John is a common English name and surname: * John (given name) * John (surname) John may also refer to: New Testament Works * Gospel of John, a title often shortened to John * First Epistle of John, often shortened to 1 John * Secon ...

and Gus Rigas; they purchased a

franchise based in

for US$300. After 20 years in the business, Rigas incorporated the company under the name "Adelphia" which in the

Greek language Greek ( el, label= Modern Greek, Ελληνικά, Elliniká, ; grc, Ἑλληνική, Hellēnikḗ) is an independent branch of the Indo-European family of languages, native to Greece, Cyprus, southern Italy ( Calabria and Salento), souther ...

means "brothers". In the upcoming years, the Rigas family combined various cable properties under the company name and made it public. In 1989, the company established Adelphia Media Services which would allow commercial opportunities on local, regional and national levels. Two years after, in 1991, the company created Adelphia Business Solutions subsidiary which provided different types of products to businesses such as, high-speed Internet, phone services, and voice messaging. In 1998, Adelphia reached two million users in subscription.

2002 internal corruption scandal

On March 27, 2002, Adelphia officials announced that $2.3 billion unrecorded debt was collected via co-borrowings between Adelphia and other Rigas family entities under the family's private trust, Highland Holdings. Legally, the Rigas entities should have paid the debt. However, if they were not able to, the company would be held accountable. An investigation was launched and later revealed that the Rigas family used the funds to illegitimately purchase personal luxuries. The alleged purchases included Christmas trees, 17 company cars and 3,600 acres of timberland purchased for $26 million for their home yard. Rigas resigned from his position as CEO in May 2002 after being indicted for

bank fraud Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many ...

wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical or electronic mail system to defraud another, and are federal crimes there. Jurisdiction is claimed by the federal government if the illegal activity ...

, and

securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in lo ...

. The

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

(SEC) described the scandal as, "one of the most extensive financial frauds ever to take place at a public company."

Trial

A trial for the case was launched. Federal prosecutors proved that the Rigases used complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing $100 million for themselves. In June 2005, John and Timothy Rigas were found guilty for "looting and debt-hiding". John Rigas was sentenced to 15 years in prison, while Timothy received a sentence of 20 years. On December 14, 2015, Rigas' lawyers announced that he was terminally ill with bladder cancer and had between one and six months to live. Rigas was diagnosed with cancer prior to his conviction and, under his sentencing, could seek compassionate release if he had less than three months to live. Judge Kimba Wood issued an order allowing for Rigas's release on February 19, 2016. Rigas survived for five more years after his release; he died September 30, 2021, age 96. Adelphia would-be headquarters in Coudersport

Adelphia would-be headquarters in Coudersport

The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...

'' noted that this differed considerably from other

accounting scandals Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "language ...

Enron Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth, both relatively small regional compani ...

and

Worldcom MCI, Inc. (subsequently Worldcom and MCI WorldCom) was a telecommunications company. For a time, it was the second largest long-distance telephone company in the United States, after AT&T. Worldcom grew largely by acquiring other telecommunic ...

, saying "For the one trait that distinguishes the Rigases from virtually every other culprit on Wall Street is that they didn't sell their stock. The evidence suggests less that they intended to defraud than that they intended to hide inconvenient facts until they could be righted. This is also, of course, against the law; it's just a more tragic crime than ordinary looting."

Further developments

After struggling to find an alternative, Adelphia Corporation filed for bankruptcy on June 26, 2002. Subsequently, the company asked for a $1.5 billion loan to restructure under bankruptcy protection. According to BankruptcyData.com, the company's bankruptcy ranks 12th by assets in the United States history of bankruptcies. A plan for its restructuring was approved on February 25, 2004. According to William Schleyer, then-CEO of the company, "Adelphia’s proposed plan of reorganization is the product of relentless effort and reflects the dedication of Adelphia’s management and bankruptcy teams, and our almost 15,000 employees in 30 states and Puerto Rico who are helping to make Adelphia a better company." Amongst other things, the plan included a full cash payment to possession lenders, bank lenders, joint venture partners and, no payments to claims and equities of the Rigas family. In July 2006, Adelphia sold its cable operations to

and

Time Warner Warner Media, LLC ( traded as WarnerMedia) was an American multinational mass media and entertainment conglomerate. It was headquartered at the 30 Hudson Yards complex in New York City, United States. It was originally established in 1972 by ...

for $17.6 billion in cash and shares in Time Warner's cable unit. Out of that amount, Time Warner shares and $15 billion were planned to be administered to creditors. Following that, Adelphia ceased to do business. The effective date of the Adelphia Plan of Reorganization occurred on February 13, 2007.

was allowed to distribute approximately $6 billion in shares to Adelphia stakeholders and succeed Adelphia as a publicly traded corporation. The Rigas family established a successor company, Zito Media, to continue to provide cable service in some areas not sold to Time Warner, including most cable systems in

Sports ventures

Buffalo Sabres and sports broadcasting

In addition to its cable interests, Adelphia had substantial interests in the sporting world. In 1990, it launched

Empire Sports Network Empire Sports Network was an American regional sports network that was owned by the Adelphia Communications Corporation. The network was available on cable providers in much of upstate New York (stretching from Buffalo to Albany), as well as p ...

, a

regional sports network In the United States and Canada, a regional sports network (RSN) is a cable television channel (many of which are also distributed on direct broadcast satellite services) that presents sports programming to a local market or geographical region ...

serving central and western New York. Adelphia supplemented Empire with a

sports radio Sports radio (or sports talk radio) is a radio format devoted entirely to discussion and broadcasting of sporting events. A widespread programming genre that has a narrow audience appeal, sports radio is characterized by an often- boisterous on ...

station, WNSA, in 2000. As an individual, John Rigas acquired the ownership of the

National Hockey League The National Hockey League (NHL; french: Ligue nationale de hockey—LNH, ) is a professional ice hockey sports league, league in North America comprising 32 teams—25 in the United States and 7 in Canada. It is considered to be the top ranke ...

(NHL)'s

Buffalo Sabres The Buffalo Sabres are a professional ice hockey team based in Buffalo, New York. The Sabres compete in the National Hockey League (NHL) as a member of the Atlantic Division in the Eastern Conference. The team was established in 1970, alon ...

hockey club in 1997. At least some of the misappropriated Adelphia funds were being used to subsidize the Sabres, who were consistently losing money at the time. On the day John Rigas and his sons were arrested, the NHL seized control of the Sabres franchise. The team remained a ward of the league until 2003, when

Tom Golisano Blase Thomas Golisano (born November 14, 1941) is an American billionaire businessman and philanthropist. He is the founder of Paychex, which offers payroll and human resources services to businesses. Golisano owned Greenlight Networks, a fiber ...

purchased the team. WNSA was sold off in 2004 and is now WLKK. Empire Sports limped along until 2005, when it was finally shut down; its sports rights were split between MSG (which acquired the Sabres television rights) and Time Warner Cable Sports (which acquired most of the remaining assets and shut down in 2017).

Adelphia Coliseum

One previous marker of Adelphia's success before its bankruptcy included its 1999 purchase of the

naming rights Naming rights are a financial transaction and form of advertising or memorialization whereby a corporation, person, or other entity purchases the right to name a facility, object, location, program, or event, typically for a defined period of ...

to a football stadium,

Adelphia Coliseum Nissan Stadium is a multi-purpose stadium in Nashville, Tennessee, United States. Owned by the Metropolitan Government of Nashville and Davidson County, it is primarily used for football and is the home field of the Tennessee Titans of the Nati ...

Nashville, Tennessee Nashville is the capital city of the U.S. state of Tennessee and the seat of Davidson County. With a population of 689,447 at the 2020 U.S. census, Nashville is the most populous city in the state, 21st most-populous city in the U.S., and ...

. It was built as the home of the

Tennessee Titans The Tennessee Titans are a professional American football team based in Nashville, Tennessee. The Titans compete in the National Football League (NFL) as a member club of the American Football Conference (AFC) South division, and play their hom ...

. Adelphia was not a well-known company in Nashville, and had only a small presence in the area (its subsidiary, Adelphia Business Solutions, a commercial telecommunications provider, was offered as an alternative to the dominant

BellSouth BellSouth, LLC (stylized as ''BELLSOUTH'' and formerly known as BellSouth Corporation) was an American telecommunications holding company based in Atlanta, Georgia. BellSouth was one of the seven original Regional Bell Operating Companies after ...

). The name was taken off the stadium in 2002 after Adelphia missed a payment and subsequently filed for bankruptcy. It was known as simply "The Coliseum" for four years before becoming LP Field in 2006. Today, it is known as

Nissan Stadium Nissan Stadium is a multi-purpose stadium in Nashville, Tennessee, United States. Owned by the Metropolitan Government of Nashville and Davidson County, it is primarily used for football and is the home field of the Tennessee Titans of the Nati ...

References

External links

LFC
Adelphia Bankruptcy Real Estate Auction
Adelphia chapter 11 bankruptcy siteAdelphia
(Archive)
News article on Rigases convictionNews article on Adelphia's decision to offer X-rated pornography
{{Authority control Cable television companies of the United States Corporate scandals Defunct mass media companies of the United States Companies based in Greenwood Village, Colorado Companies based in Potter County, Pennsylvania American companies established in 1952 Telecommunications companies established in 1952 Mass media companies established in 1952 Mass media companies disestablished in 2006 1952 establishments in Pennsylvania 2006 disestablishments in Colorado Defunct companies based in Colorado Defunct companies based in Pennsylvania Companies that filed for Chapter 11 bankruptcy in 2002 Companies formerly listed on the Nasdaq Comcast Time Warner Cable Charter Communications