Unlock the secrets behind Ted Turner's meteoric rise in the business world, from the heartbreak of his father's suicide to his groundbreaking launch of CNN. Curious about how Turner's early years working at his father's billboard company shaped his business acumen and relentless work ethic? Or how his love for history influenced his strategic genius? This episode promises to offer a treasure trove of lessons from Turner's autobiography, "Call Me Ted."
Get ready for a gripping tale of resilience and resourcefulness as we recount the dramatic period following Turner's father's tragic suicide. Imagine being faced with the option to abandon your family's legacy or fight tooth and nail to reclaim it—Turner made the bold choice to honor his father’s memory and take back the family business, despite overwhelming odds. This chapter of his life is a testament to his unyielding determination and innovative problem-solving skills, traits that would define his illustrious career.
Finally, we'll unpack Turner's strategic business moves that cemented his status as a media mogul. From his ingenious accounting strategies and savvy acquisitions like WJRJ and the Atlanta Braves to his bold decision to launch CNN, Turner's story is a masterclass in visionary thinking and effective leadership. We'll also explore his acquisition of MGM Film Studio, his revolutionary approach to creating Turner Network Television (TNT), and his eventual merger with Time Warner. Learn how Ted Turner’s military discipline and historical insights shaped a leadership style that continues to inspire. Join us as we navigate through the extraordinary life and career of one of the most influential figures in the media industry.
Unlock the secrets behind Ted Turner's meteoric rise in the business world, from the heartbreak of his father's suicide to his groundbreaking launch of CNN. Curious about how Turner's early years working at his father's billboard company shaped his business acumen and relentless work ethic? Or how his love for history influenced his strategic genius? This episode promises to offer a treasure trove of lessons from Turner's autobiography, "Call Me Ted."
Get ready for a gripping tale of resilience and resourcefulness as we recount the dramatic period following Turner's father's tragic suicide. Imagine being faced with the option to abandon your family's legacy or fight tooth and nail to reclaim it—Turner made the bold choice to honor his father’s memory and take back the family business, despite overwhelming odds. This chapter of his life is a testament to his unyielding determination and innovative problem-solving skills, traits that would define his illustrious career.
Finally, we'll unpack Turner's strategic business moves that cemented his status as a media mogul. From his ingenious accounting strategies and savvy acquisitions like WJRJ and the Atlanta Braves to his bold decision to launch CNN, Turner's story is a masterclass in visionary thinking and effective leadership. We'll also explore his acquisition of MGM Film Studio, his revolutionary approach to creating Turner Network Television (TNT), and his eventual merger with Time Warner. Learn how Ted Turner’s military discipline and historical insights shaped a leadership style that continues to inspire. Join us as we navigate through the extraordinary life and career of one of the most influential figures in the media industry.
I made the official announcement in September of 1995. The little billboard company that I struggled to hold together had grown into a diversified entity that was being acquired at a value of more than $8 billion. I would now be the largest shareholder of the largest communications company in the world. I wish my father could have seen what we'd accomplished with the business he left. I'm sure he would have been proud.
Speaker 1:I recently read Call Me Ted, which is the autobiography of Ted Turner. It was a really interesting book. Several lessons learned that I learned, I hope to pass on to you, about running your painting business, especially lessons in regards to vision, resilience, leadership and also learning from history. So let's dive in. So first of all, ted Turner was born in 1938 in Cincinnati, ohio, and here's some excerpts from the book. By the time I was 12, during my summers, my father had me working 42 and a half hour weeks at his billboard company. I spent a lot of time with the construction crew, the bill posters and the sign painters the guys who had to go out in the Georgia summer sun to build the billboards and post the signs. The toughest assignments I got were cutting weeds in front of the billboards. So from early in his childhood he's helping his father with his billboard business, which really instills a hard work ethic into Ted Turner. And on top of that he also ends up going to military school, which I think also instills some more work ethic in Ted. Another excerpt from the book my love of reading began at an early age and most of my intellectual energies went towards books.
Speaker 1:I checked out nearly every book in McAuley's library that had anything to do with history. When it came to books I couldn't get enough. Mcauley is the military academy he ends up going to and throughout the book he'll give analogies to how he thought about business and things that happened in history and I think that really helped him develop some of the strategies that he ends up employing, especially with the launch of CNN, which we'll cover here in a little bit. After the intense discipline of Macaulay, I didn't find the college workload very challenging, so he was accustomed to a large workload and this made things easier for him in college. And on top of that I think his dad you know he was working him all the time in his business. So Ted Turner just seems to have a huge work ethic. He's always throughout the book he's just doing amazing things in the business, but he's also doing other things outside of business. It's like how do you even find the time for all these things? So, uh, I think that started early in his childhood. Really, um, getting that work ethic. Another quote from the book I decided to enlist in the Coast Guard.
Speaker 1:After signing up at the recruiting station, I headed to Cape May, new Jersey, for 13 weeks of training. Most people consider bootcamp to be a pain, but I loved it. It was just like being back at Macaulay I embrace. I embrace the discipline and structure. Again, being back at Macaulay. I embrace the discipline and structure. Again. He got sensitized to work early in his life and that made things easier for him. He ends up getting to a crossroads in his life where he doesn't complete college because his dad doesn't pay for all of it. So he ends up not completing college because he ran out of funds. So he does some other things and he's deciding on whether he should go back and help his dad in the business or should he go off and do his own thing. And here's a quote from the book I spent.
Speaker 1:I spent a lot of time contemplating my future. I realized it was time for me to stop delaying the inevitable. My father and I had a complex relationship, but I loved him. I had a great opportunity in front of me and I really did enjoy the billboard business. I went back to Savannah to begin my full-time career with Turner Advertising Company. By this time I'd spent eight full summers there and, given my range of responsibilities, I really understood the business well. So Ted ends up going back after college and working with his dad and he really learned a lot from his dad about business, which really set him up.
Speaker 1:I'm going to go into this quote here. My dad had some unusual ideas, but he was a very clever businessman. He was also as ethical and honest as the day is long. There were many days when he drive me to and from work and the entire ride he'd only talked to me about business. We'd cover everything from detailed accounting principles like depreciation to broader concepts like motivation techniques and the importance of hiring and motivating good people. As a boy, I saw firsthand the value of hard work and customer relations. It was almost as though he gave me the business degree I didn't get in college.
Speaker 1:Oftentimes he'd punctuate his lessons with funny stories or memorable expressions, once to drive home a point about the difficulties of attracting good, loyal employees. He told me, heck, jesus only had to pick 12 disciples, and even one of those didn't turn out well. One of his favorite mottos was one I've used myself ever since Early to bed early, to rise, work like hell and advertise. And this is kind of funny because just read the autobiography of Arnold Schwarzenegger, he also loved that same phrase, and he actually got it from Ted Turner, and I also think it's really awesome that Ted's dad passed on so much knowledge to Ted, and I think that's something that, as entrepreneurs, we should definitely strive to do for our kids as well. So Ted described here him going back and working for his dad.
Speaker 1:I was going to try my best to do everything right. I'd work the hardest, follow every rule and seek excellence in everything I did. My father had made it clear that he wanted me to run the business one day, and I was determined to show him that I was capable. As the boss's son, I made a point to impress the other employees by being the first to arrive every morning and the last one to leave at night, and that's one of the common thing that we see throughout the book is that Ted is leading from the front. He doesn't ask his team to do anything that he's not going to do, which is a common thing in the military which I did 13 years in the military and we're always about the military is always about leading from the front. You want to lead your troops in the battle. You want to be with them sleeping on the ground out in the woods. You know you're doing everything, that you're not going to ask them to do anything you're not going to do. And Ted Turner really embodies that idea, even though you know he was only in the Coast Guard for a little bit and he did a military boarding school when he was in high school. He really takes that ethos throughout his life and the way he runs his businesses.
Speaker 1:All right, let's go back to the book here. Turner Advertising Company was already one of the larger billboard companies in the South by the summer of 1962. When my father put together a deal that would make it the biggest. My father had developed a close relationship with a successful billboard operator in Minnesota named Bob Nagel and together they hatched a deal proposal. They would go in together, purchase General Outdoor and then split it into two pieces. The merger quadrupled our revenues overnight. The sales price was about 4 million, a value roughly equal to what our entire company was worth at the time. To afford the deal, my father had to finance nearly all of the purchase price.
Speaker 1:So this is a deal that his dad sets up and this is the beginning of the end for his dad. The stress of all the financing he had to put together for this deal ends up killing him. He ends up killing himself, which we'll get to in a second and Ted basically says that he thinks it's because his dad went through the great depression and his family really tried to avoid debt and just taking on so much debt Just wasn't. He wasn't mentally capable of of doing that. Even though the business was doing fine and it could could, uh, meet its debt obligations, his dad just couldn't mentally deal with it. It reminds me of something that Charlie Munger said the problem isn't getting rich, it's staying sane.
Speaker 1:Going back to the book, dad was elated, the most energized I've ever seen him, unbeknownst to all of us, his upbeat behavior just came just as he was approaching the brink of collapse. He was like an engine that runs at its fastest right before stripping its gears. My dad had always had mood swings, but almost overnight his behavior became significantly more erratic and unpredictable. One day he'd be high as a kite and the next he'd be in the state of abject depression. He'd always been a fairly large man, but now he was putting on more and more weight, growing a big pot belly. After years of smoking two or three packs a day, he developed a bad case of emphysema that, combined with his drinking weight gain, took a heavy toll on him physically, and I think this is a lesson that we should just take. You know, being sober and staying away from that stuff can really help you in your life, and it's something that Charlie Munger has also pointed out that the folks that are most successful are staying away and staying sober, or at least not overindulging in those things.
Speaker 1:Going back to the book, it's clear to me now that reaching new heights in business and material wealth actually could have undermined his mental state. He told me a memorable story on the subject. He was preparing to enter Duke University just as the depression hit. His parents lost nearly everything and they struggled to tell him that they could no longer afford his tuition. At a young age he consoled his mother, saying don't worry, mom, when I grow up I'm going to work really hard and I'm going to be a success. I'm going to be a millionaire and I'm going to own a plantation and a yacht. Given their circumstances at the time, these were very lofty goals, but by the time he shared this story with me, he had achieved all three. He said that now, having checked off each of these goals, he was having a really tough time reevaluating things and coming up with a plan for the rest of his life. Then he told me something I've never forgotten. He said, son, be sure to set your goals so high that you can't possibly achieve them in one lifetime. That way, you'll always have something ahead of you. I made the mistake of setting my goals too low, and now I have a hard time coming up with new ones. So I think this is a really interesting lesson here, where he set his goals too low and then, once you reach them, it was like a dog that you know when they're chasing a car. They finally catch the car. Okay, what are they going to do now? You know when they're chasing a car. They finally catch the car. Okay, what are they going to do now? And and this this ends up potentially leading to why his dad ended up killing himself, and I think Ted really learned from this and he he seemed he seemed to anyway because his vision was huge and he set really big goals and he ended up accomplishing incredibly a lot of them as well. So in the early 1960s Ted takes over his father's business and we'll go back to the book here.
Speaker 1:My phone rang and it was my father calling. He said he was calling to tell me he was selling a large chunk of the company All the recent acquisitions and major market operations to Bob Nagel. I couldn't believe it. I was stunned and I tried to talk him out of it. I told him we were finally in the big time and the company was doing well and there's no doubt in my mind that we can make our debt payments. And then some, when it was clear I wasn't getting anywhere, my shock gave way to anger and I said dad, all my life you've taught me to work hard and to not be a quitter, and now you're the one quitting. What's happened to you? How could you do this? Dad remains surprisingly calm and unmoved. I hung up the phone, dazed and disappointed.
Speaker 1:Just a few days later I got another call, but this time it was from my stepmother. Dad was dead. After a relaxed breakfast, my father walked up to his bathroom, climbed in the tub and shot himself. As worried as I'd been about him, I never thought it would come to this. I felt I'd lost my best friend. So his dad ends up killing himself and he, right before he kills himself, he sells the business to someone else and this is a shock, obviously to Ted. But he's not going to just let this deal happen. So let's go back to the book here.
Speaker 1:Turner Advertising represented my father's life work. He loved the company and what he'd really want me to do was to save it. The deal document was informal, just a handwritten note, and my father signed it the day before he killed himself. I intended to try to keep the company together. My father was not of sound mind when he entered into this agreement. Nagel made it clear to me that, while he admired my father and mourned his death, he had no intention of going back on the deal. Fortunately, nagel neglected to place non-compete clauses on any of our employees, so there were no legal issues holding us back.
Speaker 1:In the billboard business, a company leases. Leases are his most valuable assets and if you really wanted to foul up a competitor. Jumping the leases was a great way to do it. Most leases could be canceled within 60 or 90 days. To jump a competitor's leases, you call the owner of one of the billboard sites and find out what he was being paid. If he tells you it's $50 per month, you tell him that as soon as he's able to cancel which often will be no more than 90 days out, they could as soon as tomorrow. And then they would pay him $75 to take over the location. So, basically, ted Turner, he goes to Nagel and Nagel's like no, I'm going to keep the deal, you know, even though your dad killed himself the next day. Sorry, but I'm going to still purchase the company from him. And so Ted's like okay, well, I'm not going to just roll over, so I'm going to go back and jump all the leases to make the, the, the company, less valuable. So he starts up an uh, basically another company, and takes employees from Turner Advertising and jumps all these leases to make the asset worth less, so that he can basically go back and renegotiate. And I think the lesson here is, if you're buying a company, make sure you have the person who's selling it to you sign a non-compete, otherwise they'll just start the same company again. So that was a key miss on Nagel's part. Going back to the book here, these same guys could now call their Atlantic contacts, but now they'd be doing so on behalf of a different company.
Speaker 1:My team and I worked the phones feverishly and within a matter of days we caused significant damage to the assets Nagel hoped to acquire. He could now tell that I didn't intend to go quietly into the night. With that in mind, he met with his advisors and came up with a new offer, presented in the form of two $200,000 alternatives. If I agreed to return all the leases and simply go away, he would pay me $200,000 cash. This was 1963 and I was 24 years old, and that was a ton of money. 1963. And I was 24 years old, and that was a ton of money more than a million dollars today.
Speaker 1:My other option, if I wanted to retain the general outdoor assets, was to pay $200,000 to Nagel, and for this price he would tear up the agreement he had reached with my father. I'm sure Nagel thought I'd jump at their offer to buy me out, but without considering how in the world I would come up with another $200,000, I agreed on the spot that I would take the second option. This was my chance to save the business and I wasn't going to blow it for $200,000. After further consideration, they said they'd accepted my $200,000, but I had to make the payment within 90 days. So he jumps the leases, he gets Nagel to come up with this new offer and he said I'll give you $200,000 to go away, or you have to pay me $200,000 to get out of the contract. So he's like, yes, I'll pay you $200,000 to get out of the contract and he agrees to it, but he has no money to pay him. And this is something that Ted Turner does several times throughout the book, where he'll agree to the terms of whatever before he actually has the money or knows how he's going to get it. So he's like, yeah, I'll do it. And then now he has to figure out okay, how the heck am I going to get $200,000 to buy this guy out? All right back to the book.
Speaker 1:Here I learned a lesson that would stick with me throughout my career. When the chips are down and the pressure is on, it's amazing to see how creative people can be. And with a 90 day clock ticking, we had to get really creative very fast. I was very fortunate to have Erwin Mazzo on my side. He was an accountant and realized that nearly all of the $200,000 cash payment to Nagel and his other partners would go straight to the government. Since their deal with my father was only a couple of weeks old, this payment would be treated as a short-term capital gain and would be taxed at his ordinary tax rate. But back then guys like Nagel would have been in the 90 percentile tax bracket, so taking the cash would not have been much of a deal for him. Armed with that knowledge and short on cash, we went back and offered them $200,000 in Turner advertising stock. That way they could hold their value in equity as long as they needed to to shield themselves from the heavy tax on short-term gains. They accepted my offer. They accepted my offer. So this is a cool accounting way that they got out of that. Ted got out of having to pay $200,000 cash because of the the fact that it was a short-term capital gain. You know, basically if you hold an asset for less than a year, it's short-term capital gain. And back then the tax brackets were really high. For the super wealthy it's like 90% tax bracket, so it would be classified as short-term capital gain tax at the ordinary rate, and so that was a pretty amazing move. They went back and they accepted the offer to just take the equity instead. And so now Ted has ownership of the business, it has control of the business, and now he wants to grow. Here's from the book.
Speaker 1:I was eager to expand. The first opportunity I found was a billboard company in Chattanooga, tennessee. The price was steep $1 million. We couldn't produce that kind of cash and still continue to meet our debt requirements. After convincing the sellers to finance 75% of the purchase price over seven years at a high interest rate, we found a bank in Chicago to fund the balance. The bank had been looking to expand their investments in the South and they lent us the rest of the money in return for equity and the Chattanooga company.
Speaker 1:My father had always maintained that maintain many of his different billboard businesses as separate legal entities. In part to provide this sort of flexibility, we could offer equity in that Chattadooga company without diluting our ownership of Turner Advertising. This arrangement also allowed for periodic reorganizations to offset potential capital gains liabilities. So he wants to grow the business and he wants to do this through acquisition. So he's going around figuring out what he can buy to grow the business and then and he wants to do this through acquisition, so he's going around figuring out what he can buy to grow the business and then one of the things he's doing is keeping all these acquisitions and separate like um entities, probably maybe LLCs. That's what I kind of think of. A common vehicle is used. Like you, you have a separate LLC, llcs, but then you have like a um a separate LLCs, but then you have, like a um, a parent LLC that that owns all these separate LLCs, these sub LLCs, and that can be really useful for spinning one of those sub LLCs off and or, like, like he said, um, getting ownership in that sub LLC. And then it can be really efficient for tax purposes because you have your parent LLC as the S corp owner, uh, that the uh tax as an S corp, and and then so you only have one S corp return but you have all these sub LLCs that flow into the parent, the parent. So, um, I'm not sure if that's what he did specifically, but that is a common structure that I that I see a lot of folks doing and that works well.
Speaker 1:So, in 1970, turner purchases Atlanta Independent Television Station, wjrj, and renames it WTCG, standing for Watch. This Channel Grow and this station later becomes a cornerstone of Turner Broadcasting System. And here's a quote from the book the more I learned about TV stations, the more I realized that ours was a disaster. Of the 35 people who were on the payroll when we took over, only two were still there a year later the custodian and the receptionist. So the first, you know he's doing this acquisitions to grow the business, and the first TV station he bought was terrible. He has to do a lot of work to get it turned around, which he ends up doing. And then here's another interesting thing, a quote from the book the only show that aired live from our studios was a religious program hosted by a young couple named Jim and Tammy Faye Baker. Well before they went on to national fame, they got their start with this local show in Charlotte and before long they were bringing in more money in a week than the entire station made in a month.
Speaker 1:I think this shows the power of television and Ted kind of realizes this that you can with television you can get folks to buy things right off of right from your program and get that that revenue coming in right from the programs that you provide. So one of the other things that Ted is doing he's in the Atlanta market and he's airing sports on his TV stations and his ratings are really tied to how well like the Atlanta Braves are doing. And so he goes to Dan, the owner of the Braves, and he says this Dan, I consider us to be partners and we need some more excitement next year. What are we going to do to keep the team on track? He looked at me and said well, I don't know what you're going to do next year, but I but I do know what we're going to do. We're selling the team. What? I was shocked. The Braves meant a lot to my business and there were constant rumors that someday they might move out of Atlanta. Who are you going to sell to, I asked To you? Donahue answered Me. I was stunned.
Speaker 1:My dad taught me early on that long-term relationships with your customers and partners are important because you never know, the guy who you're friendly with today might be able to help you out tomorrow. He was right. For the past few years I demonstrated to the Braves management that the team was important to me, and now that they were offering me a first look chance to buy the franchise. The Braves were a key asset and I had to go for it. Major League Baseball was high quality programming for channel 17. And by owning the team I could control its long-term TV rights. As Charlie Munger says, relationships run the world and Ted got this opportunity because of the relationships he had. So again, sage advice from his dad on maintaining long-term relationships with your customers and partners.
Speaker 1:In 1976, wtcg begins distributing his television content via satellite, making it one of the first super stations in the US. So Ted Turner was an early adopter of this satellite technology. I'm going to go to the book here. I also saw that people were signing up for a new service to get local stations that were unable to tune in with their antenna. This technology was often referred to as CATV for community antenna television, or more simply, cable TV. I became friendly with cable TV operators. Back then broadcasters saw cable operators as the enemy. For many years local TV stations had a monopoly and they viewed cable operators with fear and suspicion. And so Ted is really able to see the big picture and he sees this cable TV as an opportunity, not as a threat to his local station. So he ends up going into this cable TV thing. One of the things that he's issues he runs into and there's many issues on setting up this cable empire he ends up setting up this cable empire. He ends up setting up. But one of the problems is now that he has this larger audience with cable tech TV. There was Nielsen. The the Raider that um basically gives ratings for shows, didn't have a way to track satellite uh, how many people are watching satellite shows? And so Ted Turner had to basically prove to advertisers that he did have an audience. But the advertisers couldn't look at his Nielsen ratings. So here's going back to the book.
Speaker 1:We quickly concluded that the only way to generate revenue from our expanding audience was through direct response ads, the ones that sell the latest record compilation or steak knives and end with a phone number to call to purchase the products. Since most of those companies, since most of these companies couldn't afford it, we often produce the TV commercials ourselves. We did manage to sell a lot of merchandise. Direct response revenue would prove to be vital for us while we worked to convince traditional advertisers that we were worth considering. So he's getting money from the direct response, which I think you might've learned from the bakers, like I mentioned before, and they ended up coming up with a way to track how much, since those folks were sending in checks to buy those steak knives or whatever they saw on TV. They could track where their audience was by those checks being written to them, and so they were kind of able to prove to advertisers like hey we're actually getting, we have a large audience from these locations based off of the direct response that they that they earned money from as well.
Speaker 1:And Ted Turner ends up hitting a lot of different impediments to growing this cable business. Uh and here's what John Malone said about Ted Turner he always had this kind of basic, almost childish logic about him that refuses to accept artificial impediments. I think one of the his big secrets of success over the years is that things that most of us would sit there and ponder all these regulatory and legal reasons why it might not be something you could do, ted would just say, oh hell, you can overcome those kinds of things and he'd just go and do it. And so there's a whole bunch of legal and regulatory issues that Ted Turner had to get through starting this cable empire. He ends up growing and he basically just takes it head on and deals with it. Here's another quote from the book. These issues were uncharted territory. All of us the regulators, the broadcasters, program suppliers and leagues were sort of sorting things out on the fly. I was working as hard as I could. I'd go all out during the day working on sales, distribution, regulatory issues, whatever the battle happened to be, and I'd work right up to until it was time to fall asleep. I had a pull down Murphy bed in my office and I would literally work until the point of total exhaustion. Then I put my head on the pillow at night, worried about the problems, then wake up and spend the next day trying to solve them, and so this is one of the most difficult times in his life, and he comes up with a lot of creative things as he grows the cable business. One of the things was the way he did his programming. Here's a quote from the book.
Speaker 1:I was looking at the listings and TV guide. It occurred to me that every other channel started and ended all their programming at the top and the bottom of the hour. What prevents us from extending a program through the end of the hour and starting the following one at 7.05?. I envisioned that people watching our competition would start flipping around at the end of their show while the other channels would all be running commercials. We'd be showing programming. Another benefit of the strategy was that we got our own little slot in every program guide. A group of channels would be listed together at the top and the bottom of the hour. But we were there all by ourselves at 05 and 35. We tried it and immediately our Nielsen ratings improved. And so I thought that was really funny because I always wondered you know, back in the day, you have like an actual physical TV guide that you'd have, open it up and see the times, actual physical TV guide that you'd have and open it up and see the times. And I always wondered why some stations would randomly have their time starting like on off times. So that was interesting and creative, uh, on Ted Turner's behalf.
Speaker 1:And so in 1980, ted Turner launches a CNN or cable news network first 24 hour all news television network in the United States. Cable news network, first 24 hour all news television network in the United States. And he'd actually been thinking about this idea for like five years and he was certain that one of the major networks would start a 24 hour news program because they had all the reporters and all the infrastructure already. And so he sat on this idea for five years. And here's a quote from the book a 24 hour sports service made perfect sense and it wasn't long before ESPN's plans were developed. They ultimately launched in 1979 and all movie format also was also logical. Hbo had a big first mover advantage there.
Speaker 1:The other concept that that struck me all the way back in 1975 was an all news channel. To me it was obvious. So for years he's wondering okay, abc, nbc, one of these major networks, they're going to start a 24 hour news, so I'll let them do it because they have all the resources and I'm not going to do it. And so he waits and waits, and waits and nobody's doing it. And he asks around and nobody wants to do it. They thought it was going to be too expensive or whatever the case was. So he ends up saying, okay, well, I'm going to do it if they're not going to do it. Here's another quote for the book.
Speaker 1:Clearly, the companies for whom the economics of a 24-hour news would have made the most sense were the big three broadcasters. They already had most of what was needed Studios, bureaus, reporters, anchors almost everything but a belief in cable. I'm often asked if I ever did any formal research on the viability of 24-hour cable news and my answer is no. I had spent over five years thinking about it and it was time to get going. Henry Ford didn't need focus groups to tell him that people would prefer inexpensive, dependable automobiles over horses. And I doubt that Alexander Graham Bell stopped to worry about whether people would prefer speaking to each other on the phone. If viewers liked watching news on television, why wouldn't they want? The option to do it at any hour of the day Makes a lot of sense. It seems obvious to us now. Wasn't obvious to people back then. I liked how, in his response, he's tying back analogies of the past Henry Ford, alexander Graham Bell. So he learns from history and he goes ahead without doing any market research on implementing CNN. And it was a lot of risk and in the beginning they didn't make a lot of money but they ended up just dominating after they earned back their overhead costs. And here's another quote from the book that I thought that was really cool.
Speaker 1:As a student of military history, I likened the CNN launch strategy to Rommel's desert campaign during World War II. On several occasions the German general attacked the British when he knew he didn't have enough fuel to conduct an entire offensive. What he intended to do was strike when they weren't expecting it, overrun their lines and then capture their fuel dumps. At that point he could refuel his Panzers and continue the offensive. My vision for financing CNN was similar. If we had enough cash to get on the air and could somehow get through our first year of operation, people would see that this was viable and a valuable service. Once the concept was proven, we would have easier access to capital. So he went into this not even having enough capital to really keep it going. He just was betting that once it got on the air it would be successful and he would have access to capital more access to capital, because people would be interested in getting a piece of it. And he compares this to Rommel's strategy in North Africa when he's attacking the British and getting their fuel. And so I thought that was really interesting.
Speaker 1:So in 1986, turner acquires MGM Film Studio but later sells parts of it off, while retaining MGM's film library, which helped establish the Turner Network Television TNT channel in 1988. And he does a lot of recolorization of older films, which was a bit controversial, but he makes a lot of money from that. And then in 1996, turner Broadcasting mergers with Time Warner Incorporated a deal reportedly worth seven and a half billion. So here's a quote from the book. The final reason I agreed to the deal was a simple one, and he's referring to the Time Warner deal.
Speaker 1:I was flat out tired. It was now more than 30 years since my father's death. I've been running the company on my own ever since. 30 years of long weeks in 18 hour days would get anyone, and by this time I was exhausted. And so I think you know, once he, once Time Warner purchases and the deal, he's ends up being the biggest shareholder.
Speaker 1:But he ends up being he doesn't have control and he's kind of pushed to the outside and he's not that happy. He loses control of the business and then, after the dot-com burst in 2001, he ends up losing a lot of his net worth because of the stock just plummets. After the dot-com burst in 2001 timeframe and here's another quote from the book I lost nearly 8 billion in roughly 30 months. This means that on average, my net worth dropped by 67 million per week, or nearly 10 million per day, every day, for two and a half years. Losing that much money so quickly might have been a record, but obviously it wasn't the kind I was hoping to set. So, ted Turner, he still ends up being a billionaire, so we can't feel too bad for him, but he does lose a lot of his net worth out of that Time Warner deal.
Speaker 1:And, uh, I think part of the reason why is he kind of lost control of the business. He wasn't able to help solve those issues. He kind of got pushed out to the outside of the business and you know it had a lot of issues that he wasn't able to problem solve. And, um, I think that's a a a lesson that if you are, you know, getting a partner in your business, um, sometimes partnerships can work but you know you gotta really make sure that they're going to work. It's like a marriage and I think a lot of people, a lot of entrepreneurs, they, they value having that control, that total control in the business and if they give away part of that control, it can, it can cause issues and so you got to really be careful of those partnerships. But overall I think the lessons was one vision you got to think big and Ted Turner founded CNN in 1980, the first 24 hour news network, and this was a really revolutionary concept at the time, even though it retrospectively it seems kind of obvious, why wouldn't you do that? But it was a really big, revolutionary concept and he took it and ran with it. And so I think, in our opinion, businesses, you know, having a clear, ambitious vision for where you want to go in your business is important.
Speaker 1:The next one, next lesson, I think, is resilience. So Ted had a lot of issues, a lot of problems that he faced in his business. You know, from the start of his of owning Turner Advertising, you know his dad kills himself and he has to get back the business from Nagel. And you know his dad kills himself and he has to get back the business from Nagel. And you know he just demonstrates a lot of resilience. You know he could have just, you know he just lost his best friend, as he said, his dad, and he could have, you know, just kind of let that happen. It'd been very easy to do that the business was already sold. But he doesn't and he fights back even though it was in such a hard time for him. So he, he shows a lot of resilience.
Speaker 1:And and then the third lesson, I think his leadership lead from the front. At one point, uh, ted says that he ran his businesses like he sailed, because one of his hobbies was sailing. And he said, as captain of the ship, he would get a great team together and he would then focus on the strategy of being the captain, like navigating the waters. And so I think that's a good lesson is, we should run our boats, we run our businesses like Ted Turner was sailing his boat. You want to be the captain of your ship, captain of your company, get a great team together so you can focus on the big picture, focus on the strategy.
Speaker 1:He wasn't afraid to get his hands dirty with leadership. He still had that mentality, that military mentality of leading from the front, and so that never went away. And then the last lesson I think it's learning from history. That's something that Ted definitely did In his military upbringing. He was reading biographies of not just military leaders but of business leaders, and he took those concepts and applied them throughout his life. And I think that's something that we're doing right now and something that we should continue to do. And with that, I really recommend Ted Turner's autobiography is super, super interesting. There's so much I didn't cover, but I really recommend you go out and get that book and with that I'll see you next week.