Born to Be Wired

“It made me realize that the adage is true: in every crisis lurks opportunity. So if I could learn something from a near-death experience, maybe the whole thing was worth it. That day, now fifty years ago, I made a promise to myself that I never have broken: *If we get out of this alive, I will never bet the whole farm… on anything. No deal is ever worth doing that.*”

““Tom,” I said quietly, “I was afraid you were going to say that. I’ve got every knob in this company turned down as tight as they’ll go.” Then my voice started to get louder. “We’ve got people working sixty-hour weeks and getting paid for thirty. We’re working overtime to just get over this hump. And that’s all it is—a hump. dWe can get over it.” I sounded like a gambler with a hot tip. “But if you do this now, it will kill us,” I continued. “It’ll so demoralize everyone. I just can’t continue to run the company if you’re going to do that!” “And so if *you* think *you* can extract this little bit more juice out of the company… here’s the keys to everything.” I pulled my ring of office keys out of my front pants pocket and threw it down on the table in my office. “You run it and let me know how you make out.””

“When I first accepted the offer to come work for Bob, the pitch was solid: Come out West and run one of the largest cable operators in this new industry! Long-term contracts to wire big cities were worth millions of dollars. This set off a land grab across the country, and TCI had taken on crushing debt to finance furious growth. Around this time, TCI reached more than 621,000 subscribers through 151 systems in 33 states, with annual revenue around $34 million a year—and $84.8 million in debt.”

“Now the banks were balking at any more lending, yet we already had pledged TCI to pour half a billion dollars into new construction to win cable franchises from local governments in Tennessee, Washington, and elsewhere. On top of that, in return for franchise agreements to operate there, we had inherited promises made by systems TCI bought to build community centers and parks.”

“Despite healthy revenue gains and operating margins of 40 percent, our debt was closing in fast, and for the first time in my career, I was scared. To consolidate the loans he had already accumulated, Bob had drawn a $77.5 million bank line of credit in 1972, just before I joined. And we had borrowed $76.5 million of it. A week earlier, I had called a loan officer to arrange the meeting where we would ask to borrow the final $1 million. Before I could even get the words out, he cut me off. His tone on the other end of the line struck me as a little rude: “By the way, don’t ask for that other million. If you don’t want the house of cards to come down, don’t ask.””

“I even had taken out a $60,000 loan from the Bank of Denver to buy TCI stock at $7 a share when I joined—a year later, the stock had fallen to $3, weighed down by high interest rates, wild inflation, and an unrelated industry scandal, briefly bottoming out at 78 cents. My start date at the company should have been my first clue: April Fool’s Day.”

“I had pulled the keys out for effect, but the truth was I was dead serious. I also knew that all banks dread having to seize a customer’s business, because they know nothing about running any business; they’ll just screw it up. They know only money.”

“Plus, in our loan accord with the banks, they were allowed to boost the interest rate on our debt only with our approval. So I told them straight-out: “You can put us in the tank, you can put us into bankruptcy, and you can call a default, but you can’t raise the interest rate unless we agree to it… and we’re not going to agree to it because I think it’s the wrong thing to do at this time.””

“Without saying it aloud, Bob and I knew the bankers saw us as just numbers on a balance sheet—and they would never understand what drove us. Bootstrapping the business over the past two years had forged a strong bond between us all at TCI. This was our life’s work, something built on grit, optimism, and a trust that ran deeper than any balance sheet could reflect.”

“I have spent my career negotiating deals in telecommunications, music, sports, horses, land, media, and more. I have been a buyer and a seller, depending on the deal and the moment. Altogether, over a lifetime, I figure I have had a hand in hundreds of transactions, maybe thousands.”

“Now, in a lot of those deals, we focused hard on one measure: cash flow, or specifically, EBITDA (earnings before interest, taxes, depreciation, and amortization). It gives a clearer picture of operating performance and a firm’s ability to borrow or invest. Some people say I all but invented the term. I can’t swear to it, though it is true that I helped make it a whole new form of currency on Wall Street.”

“The most valuable assets in any business are people and relationships.”

“I may have neglected to appreciate this at the time, when we were down in the fray. Now that I am a bit older and slowing down, just a little, I have realized that, all along, the most important element was *who* was involved, not what. The people whom I befriended, learned from, and fought against—rather than the deals or the payoff—gave me the most satisfaction. And the right people produced the highest upside—giving my journey meaning and enriching my knowledge of the world.”

“Contrary to the clichéd image of a rapacious business titan, I never sought to build a conglomerate, or family empire, and I can just as easily be a seller or a buyer. I believe in creating value while you own the assets you build or buy, and doing it in the most efficient way. All the stakes that I have owned in a wide array of cable channels, overseas cable systems, and other assets are less an empire than a mutual fund with a desirable portfolio of properties.”

“I built this portfolio with one clear goal—the same one that I believe anyone who is an active member of the management of a public company should share: to maximize the value of the shares of the company over a medium term. Because that is why you were hired—to maximize shareholder returns. The recent fad of “stakeholder capitalism” relegates shareholders to merely one of myriad groups a company is obligated to serve, and it is simply impractical to serve multiple masters and remain productive. You have to honor your obligations to your employees, yes, and you must honor your obligations to your lenders. But you must *maximize* the value for your shareholders.”

“I navigate by rational analysis of the hard data, but also by my sense of the people who are sitting at the table in front of me. I have come to appreciate those relationships more. As far back as I can remember, I have always perceived myself as different because I was such an introvert. And for much of my life, I thought of that as an impediment. I regarded myself as mismatched to the world to some degree, handicapped by an absence of social skills or the drive to socialize, and envious of the people who felt at ease in crowds and parties. Even the people I think I am close to sometimes see me as cold and aloof. I have come to realize later in life that, like other members of my family, I am a high-functioning autistic.”

“People like Monty Shapiro, my first business mentor, when I was in my twenties, who told me, “Son, always ask, ‘What if not?’ What if things do *not* go as planned?” He taught me to assess the worst that could happen and ensure that we could live to fight another day, advice that I hear in my head thinking over every big deal.”

“To my chagrin, I was unable to convince Netflix founder Reed Hastings to merge his then-upstart company into DirecTV when I was chairman. Waiting for dinner to be served at a party hosted by Herb Allen at his annual Sun Valley retreat in 2011, Reed explained to me that he was betting the entire company on a rapid switch to distributing movies over the internet. I could see that he was close to cracking the code on streaming content ahead of cable TV, satellite companies—everyone. He passed. Sometimes it’s hard to catch lightning in a bottle.”

“I also have had the rare opportunity to help some gifted entrepreneurs with great ideas, like Bob Johnson, who came to me with a concept for a cable channel appealing to African Americans called Black Entertainment Television (BET). After a thirty-minute meeting, I loaned Bob $320,000 and gave him $180,000 for a 20 percent stake in BET. He later became one of the first Black billionaires in America. And John Hendricks, who called me in 1985 in a last-ditch play to help save his struggling but promising network called Discovery. TCI wired John $500,000 within forty-eight hours after I hung up the phone with him. Prior to its merger with Warner Bros., Discovery reached a market cap of $16 billion and could be seen in more than 220 countries and territories, in fifty languages.”

“I found a lifelong friend in Ted Turner, a funny and fearless maverick who created a new “Superstation” to compete with the Big Three broadcast networks, which had held a lock on over 90 percent of viewers since television was invented. It was Ted who taught me one of the most enduring lessons in my life: about the power of wealth to do good in society and the absolute necessity to save this planet, specifically the most beautiful open spaces in this country.”

“News Corp. Chairman Emeritus Rupert Murdoch, who at various times has been my competitor—or my consigliere, gave me a master class in business strategy. I am still learning the black magic of programming from Barry Diller, who is a bona fide genius and a maestro of television and internet content. And I am reminded of my own ambition when I counsel Mike Fries, who is one of the hardest-working, team-building, risk-taking entrepreneurs I ever have seen, helping to build one of the biggest broadband companies in the world with Liberty Global.”

“It is a rather astonishing business tale. One of the most sophisticated networks in the history of humankind was first laid out by a ragtag group of risk-takers, idealists, and “cable cowboys.” They strung wire across the country, driven by their own aspirations for a better life and fueled by vivid dreams of success in a free market.”

“The lawnmower was assembled from spare parts, with precious few safety features, by my father, a born inventor who loved to build and repair things in the cavernous, white wooden building behind the house that he called simply “the barn.” But it never held a farm animal that I know of, and there was no hay. A more appropriate name would have been the laboratory, a place where he could repair—or invent—virtually anything. It was one of innumerable mechanical projects started by my father, many of which lay half-completed on the work benches in the barn, including some of the first models of working TV sets. Embedded in the things he built, or the motors that he repaired, were lessons for solving complex issues that lay ahead. My father was a soft-spoken man, but his expectations were clear, and I yearned for his approval. No matter his mood, he remained stone-faced and unflappable.”

“I missed him then as I miss him now. The unfulfilled need for his approval, maybe more than anything, is a major element of what drives me, and over a lifetime, with male mentors, bosses, and friends, I’ve tried to prove my worth.”

“We were Presbyterian in name mostly; my father had no patience for the small talk and handshakes that came with Sunday mornings. Instead, our religion was practiced quietly at home, anchored in his strict, simple code: You are responsible for your life. Do your best. No shortcuts. No loafing. No cheating. Catholics had it easier, he’d tell me—they could sin, confess, and be forgiven with a fresh start. But for my sister and me, there were no excuses. The pressure to get it right the first time lingers still. I learned to forgive others easily, but forgiving myself was always a silent negotiation with the ghost of my father’s expectations.”

“My first entrepreneurial opportunity came when I was around twelve years old. GE’s small appliance division in Bridgeport was unloading hundreds of small, broken radios that had been returned for various reasons. The price couldn’t be beat: $1 apiece. Using money from the paper route, I bought the surplus radios. Using Dad’s equipment in the barn, I repaired the radios on nights and weekends and sold almost all of them for $4 apiece—a 300 percent profit!”

“My father reveled in the joy of figuring things out, especially anything mechanical. He could hold his own with the smartest person at the party but preferred to be in the quiet of his shop; he was an intellectual in white sports socks.”

“There were few items we couldn’t take apart and put back together. When he got his ’47 Fleetwood, we dropped the oil pan and changed the main bearings. Just going and buying bearings for his Cadillac was too easy. He was convinced a new quasi-exotic metal was better for bearings than the usual metal coating, and that’s how the bearings got to be too tight: he electroplated them with just a touch too much metal. One family vacation we spent hours sitting by the side of the road waiting for the Cadillac to cool. My parents would never fight in front of us, but you could almost see the smoke coming out of my mother’s ears. My dad was only mildly embarrassed. That was Dad.”

“In some ways the mental tasks in class were like the ones that occupied my weekends in the barn, fixing a radio. To this day, I can get lost in thought while figuring out a problem and be completely content. My wife says I overthink and extrapolate for everything, from menu choices to movie night. I was a loner in my teen years, and I could bury myself in books while isolating myself from the high school social scene.”

“I enjoyed fencing: the power of the épée, the self-reliance the sport required, and the competitive thrill of a one-on-one duel—in one bout the tip of a sword broke off in my shoulder. I soon became undefeated against other prep schools in Connecticut, in part because I was stronger and faster, but more because I learned early that calm beats rage, and control beats pride.”

“Anticipating your opponent’s next response is critical. In fencing, “second intention actions” entail blade movement and footwork to draw out a counterattack from your opponent. Your first attack is the diversion, and it has to be convincing enough to draw out your opponent’s reaction. Once you know their reflexive move to a particular attack, then you can go in for the kill. Business can work that way, too.”

“When it comes to emotions, I am more of a stoic like my father. Happiness seems to me a relative measure, because it must be juxtaposed to expectation. If you walk through life expecting everything to be wonderful and trouble-free, you will never be what most people consider happy.”

“I can appear to be distant and unapproachable at times. But my autism, wherever it is on the spectrum, has gifted me with the ability to hyper-focus on intricate challenges and pursue a goal with dogged determination. From a young age, I saw patterns, connections, and solutions others overlooked, and this attention to detail helped me identify opportunities early and gave me a competitive edge. With a virtually photographic memory at the time, I could recall verbatim entire sections of books. Little by little, the contradictions in my life stopped feeling like mistakes and started to feel like information. I didn’t “overcome” my thoughts—I learned to understand them, to use them. In time, what once felt like disorder became direction.”

“Maybe he was too naive or simply too focused on mechanics, and not enough on finances. Throughout his career, my father was considered an extremely good problem-solving engineer, but the people who were controlling the business, whether his employer or his partners, focused on the money side. This left him with a lingering belief that he had been taken advantage of, and that, in turn, left him feeling less than competent. I vowed to avoid ending up like that, with no control, no sense of the business-finance side, and no partner I could trust.”

“It was an idyllic life in a classic suburban American neighborhood in the 1950s, a stone’s throw from Long Island Sound and the Atlantic Ocean, which has always been a source of solace for me. The waves, the salt air, the gulls, and sand of Long Island Sound hooked me from an early age. And the feeling I got driving a boat on the water was one of absolute freedom. I loved the sheer scale of the ocean, the endless miles of undulating blue water, all of it moving in a connected, harmonious rhythm that comforts me to this day.”

“Moments later, I looked in the rearview mirror to see George, having recovered his composure, smirking at me. That is how I remember my friend decades later: smiling mischievously, always ready for our next adventure. George and others taught me that the friends you make are the measure of your life. And even the people you leave behind, you never really lose, because those moments are preserved in memory, and they fortify the bonds of friendship over time and space.”

“I was never a fast learner, but I was diligent and focused, and I had the intellectual grit to stick with a problem. So, by the second year at Yale, I was pretty competitive with the smarter kids in class, and by the third year I was outrunning them. It was my persistence more than anything. I stayed with it, and by the end of the term, I had the answers before most others in class.”

“Brilliant ideas never came to me like a bolt of lightning. Creative genius for me was the constant assemblage of prior exposures and putting those things together for a solution.”

“The workload felt light since most of my classes were in engineering—all clean lines and logic, the kind of structure my mathematical mind felt at home in. I was driving a Jaguar, flush with freedom, and head over heels in love. Time felt elastic then—and there was a sense that everything good was still ahead. It was one of those rare stretches in life when everything clicked.”

“Today I’d call myself a libertarian by nature, a fiscal conservative, and a somewhat social liberal.”