Bob

"for Harrison. Bob knew that Carleton County potato farmers were shipping a lot of potatoes to the Birds Eye plant in Maine that processed them into frozen french fries. He felt that there was something promising there, something worth exploring, and he was right. Fast food restaurants with french fries as a central focus were slowly making their pres- ence felt. McDonald’s, Burger King, A&W, Kentucky Fried Chicken all appeared in the mid-1950s in the United States, and the list has kept growing ever since, as did their demands for french fries. Fast food outlets had arrived to stay and they were grabbing a large share of the restaurant food market.25 Bob suggested to Harrison that the time was ripe for a home-grown"

"getting going In many ways securing funds and tax concessions was the easy part. The entire project would fail miserably if they didn’t get some high- level expertise in the frozen food industry onside – and quickly. ­Harrison and Bob had paid a few brief visits to a frozen food plant in Maine, but that had mostly shown them how much they didn’t know."

"After a thirty-minute meeting, I promised to give him half a million dollars for his idea. TCI agreed to give Bob $180,000 for a 20 percent stake in Black Entertainment Television (BET) and loan the remaining $320,000."

"Well into the 1980s, cable-TV operators still had few females or people of color as executives, due in part to ingrained biases, but also the industry’s roots in technical and operational fields, which were traditionally male-dominated. Our spartan crew was mostly all white guys from the West. Bob was our leader, a contemplative cowboy with the wits of a business tycoon and the quiet stability of a ranch boss. He had the final word on big decisions, and I looked to him for advice and approval."

"Still, the threat Bob and I feared most was a corporate raider pouncing with a hostile takeover. If we didn’t get the stock in friendly hands, we would be toast."

"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.”"

"Two years later, the favor was returned. We got a call from a representative at Teachers Insurance, a longtime lender to TCI that still held warrants on our stock. The representative said that Teachers, Travelers, Equitable Life, John Hancock, and the others would be willing to lend $78 million to TCI, one of the largest loans to the cable industry at the time, at a rate nearly two points cheaper than the banks were offering, with much more flexibility. The insurance companies had seen how consistent our returns were over several years and felt confident to commit to a new line of capital for us. We first flew to New York to finalize the paperwork and celebrated, then quickly called a meeting in Denver to give the news to our banks. I’m sure Bob wanted to tell them all where they could go, but I stepped to the front of the room and said politely, “I’m happy to announce TCI has arranged for alternate financing, so it’s going to be possible for any bank that wants to reduce their exposure to do so on a timely basis.” Then we let the banks know that their interest rates weren’t good enough. “From this day forward, the company is a prime-rate borrower,” I said, meaning TCI deserved lower rates than other companies were getting. Five of the seven banks wanted to stay in, and they rewrote their covenants with more flexible terms and lower borrowing rates."

"BET launched in 1980 and, within a decade, became the first Black-controlled company on the New York Stock Exchange. When Bob sold it to Viacom in 2001 for $3 billion, he became a billionaire—and in turn made many Black shareholders millionaires along the way. In 2003, he broke another barrier, becoming the first Black owner of a major U.S. sports team with the NBA’s Charlotte Bobcats. I didn’t just back Bob with capital—I opened doors. He built a brand, lifted others with him, and earned every bit of the value he created."

"Bob and I had known Heritage chairman Jim Hoak for years, so we flew out to Des Moines, Iowa, to check his temperature. Bob and I had doubled up in a single room at the local Holiday Inn, and the night before we met Jim, we made a beeline for the hotel bar after dinner, still chewing over the issues of control. “What if we did this with two classes of stock?” I asked Bob. “TCI can split its stock, then issue a class B share for every share that exists.” Bob looked at me, his empty face begging for an explanation for this unprecedented maneuver."

"Only about a third of the TCI investors swapped their shares for Liberty stock. After my talk with Ted, I bought as much of Liberty Media as I could, swapping in a third of my TCI shares for what amounted to nearly 9 percent of Liberty shares in return. After borrowing $25.6 million to exercise the options I was given, I would come to control 20 percent of Liberty’s class B stock, which was allowed ten votes per share. And using rights Bob transferred to me, I would control close to 40 percent of the shareholder votes at Liberty."

"At his first cable system in Memphis, Texas, TCI caught three TV stations from nearby Amarillo, about 80 miles away, and Lubbock, about 140 miles away. Bob paid $100,000 to a Forth Worth company to erect a thirty-story tower on a sixty-foot rise near town. Subscribers paid $33 to get hooked up, plus a $6.60 monthly fee. From their kitchen table, they started off with Betsy handling billing and Bob managing construction. When they couldn’t build, they bought, merging the cable company with a large common carrier microwave company, whose big dishes could transmit TV signals to cable-TV headends far away by line of sight. By the time the company went public in 1970,TCI was already the tenth-largest cable operator in the country. But the sudden growth had left TCI bloated with debt."

"By the end of 1974, our debt was around $150 million, and our interest payments had doubled to $12 million a year. TCI’s annual revenue was less than $35 million. The debt ate at me, sure, but it literally raised Bob’s blood pressure and his tolerance for whiskey. He took it personally when bankers pressed us, feeling umbrage at the inference that we weren’t good for the money."

"One of TCI’s largest shareholders, homebuilder Kaufman & Broad, which owned close to 20 percent, had whispered to Bob that they were ready to get out of their investment in TCI, which was understandable. Bob had given big investors in TCI his inflated stock, assumed the debt of the construction on the business, and committed to building out these underdeveloped franchises. Now, with the stock in the tank, those investors were rethinking their position."

"“And the only difference after this two-for-one stock split,” I told him, “is that the class B shares would have ten votes per share, giving holders of that stock ten-to-one voting power over regular class A shares.” If we could redeem Hatch’s B shares and buy enough class B shares on the open market, we could safeguard control. So TCI split the stock, and Bob swapped all his class A shares for Hatch’s super-voting B shares, and then exchanged as many class A shares as we could on the open market. Hatch then used his shares in TCI to acquire the 25 percent stake in KSN from the Heritage company in Des Moines. To facilitate the trade, TCI bought an interest in Heritage, whose stock shot up when it sold its KSN position. Eventually we would acquire all of Heritage."

"“We’ve got to get a lot bigger,” I told Bob and others the next morning in his office. We needed to get bigger because the bigger we were, the more cheaply we could buy everything: parts, debt, and programming. Economies of scale bring costs down. And if we didn’t get big fast, someone else would—scale economics was going to determine who was going to survive. “If you can buy ’em and finance ’em, I can drive synergies,” said JC, instantly reminding me why I was grateful he was with us. From that day forward, we made a goal of rapidly growing through acquisition and organic growth."

"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."

"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."

"The Tisch family now was worth about $30 million, more money than the entire family would ever need. No longer did Bob and Larry feel compelled to check out every proposal that met their requirement for a 12 percent pretax return on their investment. Larry Tisch was carving out a reputation as a persuasive negotiator—the kind who"

"As Tisch explained it, “We let people have authority, otherwise they lose their effectiveness.” But the Tisches weren’t known for pa- tience. They did not wait for problems to solve themselves. “A decline of any kind concerns us,” Bob said. “We go in immediately to see how we can do better.”"

""I don’t know how many times I went to see Bob because he owed me money, and returned just as happy – without getting the money," says another. "That man could really talk his way out.""