PR as Strategic Asset Protection

“Drafts of McCaw lending agreements were written and rewritten, studied and lengthened, a tedious process usually done without McCaw's direct involvement. The agreements became very compli- cated—which is exactly how the McCaw teams wanted them. They wanted long, intricate, crushingly ornate loan documents. "The more complicated it was, the more I enjoyed it," says Hooper, who had to do the required reporting on the agreements. "I thrived on the chaos. We loved complexity, because in it we found flexibility."”

“To further sweeten the picture, Lumry and Hooper did everything they could to shift costs from daily expenses to capital accounts, where spending would not count against cash flow (that is, revenue left after operating expenses). Nearly everyone in the organization focused on CFAM, cash flow after marketing. Was that dollar spent on just main- taining something—an operating expense—or on extending its useful life—a capital expense? If a plausible case could be made for the latter, then that's where the money would be slotted. For example: Didn't Cal Cannon spend a lot of his time overseeing construction of that new plant? Sure. So 30 percent of his salary became a capital expense, and CFAM looked rosier. How about Cal's staff and their expenses? Same thing. Independent auditors accepted the shifts. "We got to know the accounting rules very well. We really stretched the definition of 'expanding the useful life of an asset,' " Hooper says with a laugh. Moreover, as the McCaw organization did more borrowing, Wayne Perry, Rufus Lumry, Steve Hooper, and others carefully worked over the loan agreements to give the company wiggle room. The McCaw team fogged definitions of debt or capital expenses, built "back doors," and otherwise structured agreements to follow Craig McCaw's oft-repeated dictum, "Flexibility is heaven."”