Wayne Perry

"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.""

""We always leveraged future growth," explains Wayne Perry. "We would go to a programmer and we'd say, 'We're at a hundred thousand subscribers today. We want you to give us the discounts equal to two hundred and fifty thousand subscribers and we'll promise to be there by the end of the contract. If not, we'll have to rebate you all the money.' " Programmers liked the idea because of the prospect of increased revenue from a larger subscriber base. "It was a gamble, but in effect we allowed ourselves to get the discounts equal to the bigger players," admits Perry. "Therefore we could compete in both acquisitions and our current financial performance. We had to grow.""

"Those following McCaw's career were amazed at his skillful use of debt, his shrewd sense of timing, and his willingness to take huge risks. "They were having fun. I don't think they had fear of failure. So they were willing to push things to the max," says Gordon Rock, McCaw's friend in the cable business. Maybe that's how it looked to outsiders. But Craig McCaw felt otherwise. He had talked his brothers into pledging everything they owned to finance purchases by the company. They had agreed to receive few or no dividends so that company cash could be used to fuel rapid growth. Any one of them could have pulled out at any time, which would have broken the company. Wayne Perry, the rare outsider to attend family meetings, swears there was no family strife. The brothers trusted McCaw totally, he says; McCaw was their leader. But they recognized the downside. The disas- trous end of Elroy's deal-making career had taught them what happens when mistakes are made. Craig McCaw knew the truth. "We were always scared to death," he says."

"To Craig McCaw, going public in 1987 did not mean he had to go public. The plan was to raise $2.3 billion from a stock offering, plus another $400 million from bonds sold to investors—giant gulps of gas to help the McCaw organization move faster, pay off some debt, and grab still more cellular territories. It would have helped for McCaw to wave the company flag in public at such a crucial time. But he chose not to make the traditional appearances before analysts and other Wall Street groups, claiming he wasn't good at orchestrated events. Instead, Wayne Perry led the McCaw team on the road show to London, Boston, New York, and elsewhere. What might have seemed a liability—a chief executive seemingly missing in action—ultimately proved an advantage. McCaw in person was certainly a business vision- ary. But McCaw as the mysterious figure whose absence embodied his unusual style, whose thinking was so lofty that doing a road show would be a needless distraction . . . now, that was a real visionary."