Cyndi Chiaro is general counsel of Miramar Services, Inc., the family office serving descendants of Edward W. Scripps, a newspaper publisher who founded a media empire based in Cleveland in 1878. Below, she delves into the formation and structure of the family office:
What are the origins of the family office?
We consider Edward Willis Scripps, the newspaper pioneer, to be the G1 for our office. Our G2 was his youngest son, Robert Paine Scripps, whose six kids made up G3. E.W. always wanted control of his company to stay within the family, so he put all his business interests into a trust and made Robert Paine its trustee.
The trust was a generation-skipping trust, so the value of E.W.’s media businesses grew tremendously for most of a century for the benefit of his great grandchildren that he never knew: our current G4s, most of whom now have children and grandchildren of their own.
While the trust was stewarding the family’s media empire, the company moved into many lines of business to complement the legacy newspapers. The company got into radio, then TV, then cable systems before getting into cable networks, such as HGTV and Food Network. The cable networks were spun into a second company — Scripps Networks Interactive — which was sold to Discovery Communications in 2018 for $14.65 billion.
The trust terminated in 2012 upon the death of E.W. Scripps’ last grandchild, who was alive when the trust was created.
How and when was the family office established?
The formal family office, Miramar Services, was incorporated in the state of Kentucky — suburban Cincinnati — in 2002. Two G4s had the idea to create the family office in anticipation of trust termination. Essentially, what it did was extend most of the functions of the longstanding trust office and make those services available to the entire family, not just the trust beneficiaries. Before Miramar, the trust office would help family members with tax returns or maybe some simple bill payment. But the creation of the family office provided a full suite of financial and lifestyle services for a much larger number of people.
Further, the president and CEO of the family office was serving as an individual trustee on a couple dozen trusts that family members had set up over time, which is not advisable from a risk perspective. So, in 2006, the family’s private trust company was formed in Nevada.
The family also created an investment partnership, a series LLC, that’s domiciled in Nevada. When the trust terminated, this entity held the trust’s diversified asset holdings (stocks and bonds) and continued the collaborative investing model that had been so successful for decades.
Who does the family office serve today?
Today, we serve more than 200 individuals in just under 100 households. This includes about two dozen members of G4 and some young G7s, so we run quite a gamut. Our family members range in approximate age from 0 to 80. We have more than 60 employees, with most in suburban Cincinnati.
How are the family office investments structured?
The series LLC was created prior to trust termination and held the trust’s diversified assets (stocks and bonds). The trust beneficiaries ultimately received membership shares in this partnership.
The entity now has five series – Series I is bonds, and Series II is stocks. Series III, IV and V are all private equity series to provide that exposure. We are a manager of managers. The LLC’s governance structure includes an internal board and a robust investment committee.
We work with each client to develop appropriate asset allocations considering many factors like how the assets are held and, if in trust, the purpose of the trust or spending for assets held outright. For example, a generation-skipping trust for grandkids who haven’t been born yet would have a very different asset allocation than a revocable trust for someone who is currently using the assets for ordinary living expenses.
How did you build consensus among family members to continue investing together once the trust terminated?
We host an annual meeting that is now called the Scripps Family Reunion. This will be its 32nd year, and every family member is invited.
In the 1990s, G3 had the idea to start hosting an annual gathering so they could get to know each other. It was a brilliant idea. It was like a family reunion with business mixed in, including a session about the trust for trust beneficiaries.
What developed out of those annual meetings was relationships among people who previously didn’t know each other that well. When the trust terminated in 2012, family members were able to navigate the complex next steps because they had become close over the previous two decades. Some folks have questioned whether these annual meetings are still needed since the trust has fully distributed. Of course, everyone has their own opinion on the question. But I believe they have come to recognize the answer is a resounding ‘yes’ — now more than ever. The 32 years’ worth of family meetings and family reunions have given our clients something that’s priceless: deep connections with each other and their legacy.
