When We Were Kings
Once upon a time, their ranch was the grandest, not only in texas but also in the world, captained by visionaries and bound by blood. Those days are over.
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At least initially, Hunt did act more like an asset manager than a visionary. He focused on getting rid of the businesses that were faltering, such as the company’s cotton warehouse in Galveston, a lumberyard in Kingsville, and a horse farm in Kentucky. The company’s only significant purchase was a 5 percent interest in a small bio-tech firm in California that makes environmentally friendly pesticides. Hunt would not publicly say how he planned to put his own stamp on the King Ranch. According to some sources, however, he told shareholders that he wanted the King Ranch’s energy company to launch a major exploration program, which could cost $250 million a year over the next four years, to acquire 200 billion cubic feet of oil and gas by the year 2000 (the company owns 46 billion cubic feet today). Members of Hunt’s staff also had talks with Louis Vuitton and Estée Lauder about nationally distributing a line of King Ranch luggage and King Ranch colognes to be sold in department stores. King Ranch cologne? Although it is hard to imagine an increasingly faceless corporation arousing much interest outside Texas with such a product (the idea might have worked fifty years ago, when Assault was winning the Triple Crown and people were talking about the King Ranch), the idea demonstrated how far Hunt was willing to go to increase revenues.
And no one could criticize his efficiency. Company insiders say the pre-tax profits of King Ranch, Inc., in 1997 were more than $32 million. The company had a whopping $200 million either in the bank or invested in securities, and it had almost no debt. What’s more, because of 3D seismic technology, deeper oil wells were being successfully drilled on King Ranch land, making the royalties higher than ever. The now eighty or so family stockholders split an estimated $27 million in oil royalties in 1997 plus another $9 million in dividends from the King Ranch corporation itself. For the first time in years, it was hard to find anyone in the family complaining.
Nevertheless, Hunt still had one big problem: Tio Kleberg, the last irascible remnant of the old King Ranch. Hunt could hardly fire him for poor work performance. By Tio’s own accounting, the agricultural department that he supervised had for the previous three years brought in $15 million to $18 million annually in after-tax profits—the best three years on record. But Hunt told the board of directors that Tio’s job should be done by two men—one to run the King Ranch’s farming operations across the nation and someone else to run the cattle business. Hunt already knew the man he wanted to head the cattle business: an intellectual much like himself named Paul Genho, the respected manager of a major Florida cattle operation who held a Ph.D. in animal science.
To get rid of Tio, Hunt knew he needed unanimous support from his eight-member board. Although six of the board members came from outside the family, two were younger cousins of Tio’s—John D. Alexander, Jr., of San Antonio and James H. “Jamey” Clement, Jr., of Dallas, both private investors in their early forties. Clement had grown up with Tio on the ranch during the sixties, when Clement’s father was helping run the ranch’s corporate affairs. Alexander was the sole grandson of Bob Kleberg, Jr., the man who perhaps more than anyone had insisted on home rule. (Around campfires at the ranch in the summers, Kleberg would tell his grandchildren, “Do what you can with the ranch, but above all, keep the family together.”) Yet neither Clement nor Alexander—sophisticated young businessmen, adept at corporate affairs—was particularly interested in cattle ranching. Alexander preferred playing polo. When I asked the two of them if they someday might want to run King Ranch, Inc., there was a long pause, and they glanced at each other and grinned. “Everyone is always interested in a position like that,” Alexander finally said. “Whether that is the right thing for the company or for the shareholders is another issue.”
What Alexander and Clement did believe was the right thing for the shareholders was for them to support Hunt over Tio. Tio said that he had no inkling he was going to be fired when he was asked to come to Houston to meet Hunt and Zaleznik. He said they gave him no reason for his firing except that a change was needed. He also said that they repeatedly told him how excited they were about having him bring his skills to the board of directors.
Tio returned to the ranch and broke the news to his wife and three children, the eldest of whom, 27-year-old Chris, had been working as a cowboy at the ranch and was scheduled to depart that summer to work as a manager at the King Ranch’s cattle ranch in Brazil, the company’s last remaining international property. In the stoic Kleberg manner, Chris kept his emotions to himself, but many of Tio’s employees and the Kineños were beside themselves. At a good-bye party for Tio, one old man wept and said, “Who will take care of us now? These new people do not know us.” A group of friends published a letter to the editor in the Kingsville newspaper that read, “In its long and fabled history, King Ranch has had no greater servants or friends than Stephen (Tio) and Janell Kleberg. Their twenty-eight years of devotion to King Ranch, its land and its people, are beyond reproach.”
Meanwhile, life at the ranch had to go on. One morning the cowboys looked up and saw Tio riding toward them on his horse. Since 1971 he had been at every roundup, threading his horse in out and of the milling cattle, his experienced eye looking for those cows that should be kept for breeding and those that should be shipped off for sale. This was his last King Ranch roundup. In the saddle he received a call on his cell phone from a friend halfway across the country who had just heard the bad news. The friend kept hearing the sound of cattle wailing in the background.
“Tio, where are you?” he asked.
“I’m in the middle of the Alazon pasture on a good quarter horse,” Tio replied, “doing what I love to do.”
IN A TEXAS MONTHLY STORY ABOUT THE KING RANCH almost twenty years ago (“The Last Empire,” October 1980), writer William Broyles described Tio Kleberg, who was then just 34, as the family’s rising young star, determined to be as worthy as the Klebergs who had come before him. The article hinted at the challenges to come, but Tio and others in the family seemed full of hope that the family tradition would endure. As Janell said then, “Keeping the family and the ranch together is more important than any of us.”
She turned out to be eerily prescient. The new leaders of the King Ranch decided to keep the family together by turning their backs on Tio, one of the few remaining heirs who still believed there was more to the ranch than its wealth. Other heirs, however, could persuasively argue that by embracing Jack Hunt, who might turn the King Ranch into an even bigger corporate Goliath, the family is doing exactly what the family has done in the past: whatever it takes to keep the ranch from going broke. “There’s a lot of tradition in this family about persevering in the face of negative odds,” says John Alexander. “That’s what I really look to when I think about King Ranch, not just one individual here or there.”
But can this family stay together as a family without its connection to the land—a land that once defined them, sometimes overwhelmed them, but ultimately enlarged them? Will their understanding of their own heritage be blurred by their increasing demands for dividends? Some day, the oil and gas royalties will run out, and the future heirs, who no doubt will have even less contact with the ranch than today’s heirs, might wonder why they are burdened with so much property that is not generating any income. “It’s possible you’ll see the next generations sell off hundreds of thousands of acres of the old family property so they can bring some better dividends for that year,” Tio says. “I know it happens in other families all the time. I just never thought it would happen to this one.”
As for Tio and Janell, they received the right in their severance package to keep leasing their home on the ranch for another seven years. But they are not sure how long they will stay. Nor is there any guarantee that Tio will last on the board past his one-year term. Hunt and other board members could always ask him not to stand for reelection, or Tio might quit. Hunt has told me that he would like for Tio to remain a public presence at the ranch: It is difficult for anyone, including Hunt, to imagine the King Ranch without Tio in his starched blue jeans, denim shirts with the Running W embroidered on the pockets, straw cowboy hat, great mustache, and unlit cigar.
The new group of leaders insists that the King Ranch legacy will not die—and perhaps it won’t. But so far, they have not gotten off to an auspicious start capturing the spirit of the place. At the annual family meeting at Summer Camp in mid-June, the board of directors decided to honor Tio and Janell. Zaleznik asked the couple to come to the front of the room, and as they did the entire family stood and applauded. They kept clapping, perhaps because they were not sure what else to do at such an awkward moment. Or perhaps because they didn’t want to admit that something had gone out of their world for good.
Finally, Zaleznik stepped to the microphone and presented Tio and Janell with a painting. It showed them on horses, riding off late in the day toward a distant pasture. Tio was in a denim jacket and Janell in a windbreaker. The grass around them was green—too green, actually, for the King Ranch. Those who came up later and gave the painting a second look said nothing out loud, but it was clear that the landscape could not possibly have been South Texas. Tio and Janell were riding on horseback in a pasture that looked like someplace in California, where it turned out that the artist lived.
Outside, it was another hot afternoon, so hot that the heat was bouncing off the scrub brush. As predicted, another drought was coming. In the past Tio would have been anxious to slip out of the meeting and get together with his cattlemen and talk about what to do next. But now all he could do was stand with his painting, smiling graciously with his wife, listening to the applause go on and on.
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