LaGuardia Airport lounge
New York City
July 1983
◆ Chuck Dolan, founding chairman Cablevision Systems. I remember being thrilled to have NBC as a partner. It was the same feeling I had the first time I came to New York. I was 16 years old when I got off the train at Grand Central from my home in Cleveland, and the first thing I did was walk up Park Avenue to 51st Street and turned left to Rockefeller Center and NBC. To my mind, that was the center of New York. And that’s where I landed up in business with Bob Wright. ◆
Chuck Dolan is not like anyone else in the cable industry. He is a tough negotiator but a gentleman’s gentleman, plain and simple. He was the rogue spark that made even impossible ideas seem possible. The concern was never whether his ideas were brilliant or worthwhile, but how best to finance them. He would worry about that, too, a little, but never enough. And that made NBC and the deep-pocketed GE a perfect partner for him.
But that came later. In 1983, I almost went to work for him.
During my time at Cox Cable, Chuck and I often met up at cable industry meetings. We learned that we both had ties to Long Island (I was raised there, his company was based there), and we had the same deep affinity for content and programming. We quickly became friends. So when we returned from an annual cable conference late one summer afternoon in 1983, it just seemed natural to retire to a lounge at LaGuardia Airport after we landed rather than rush back to our offices, for what turned out to be a very candid conversation.
Several weeks earlier, Dolan had made me an offer—to join his family business, Cablevision Systems, as its operating CEO. In the airport lounge, away from the hustle of the workplace, we talked about it for a couple of hours over coffee and sandwiches. Our discussion was easygoing and without tension, but in the end, we couldn’t make it work. I wanted more equity and autonomy than Dolan offered. So, with regret and undiminished mutual admiration, we agreed to disagree and separately went on about our business.
Our personal and professional relationship was never jeopardized. Instead, a few years later we forged a long-term partnership that was far more productive than me working for him would have been.
It happened this way. In September 1988, just 2 years into my NBC presidency, Chuck and I resumed discussions, this time about crafting an alliance between our companies that would allow us—a broadcaster and a cable operator—to pursue program opportunities neither might have otherwise done alone. We named it Rainbow Programming Services, owned 50/50 by Cablevision and NBC. It gave NBC half interest in dozens of regional sports channels and the national entertainment channels American Movie Classics (AMC) and Bravo. And it gave Cablevision a badly needed financial cushion. Although it was the eight-largest cable operator in the US, Cablevision was losing $23 million annually. Dolan knew that sharing the cost of creating and managing cable channels, and tapping NBC’s know-how, would assure new revenues. With $410 million in annual operating earnings, NBC was the most profitable TV network and ready to assume risk in diversifying its cable content.
For our part, we knew that a partnership with Cablevision would give us a bridge to other cable operators with many program services we would never have attempted on our own. All in all, a perfect win-win partnership. I had a dry-run 6 years earlier at Cox when I led it into a programming partnership with Dolan’s Cablevision, which was the forerunner to Rainbow Media. Chuck had offered to bring in Cox, Comcast and Tele-Communications Inc. as investors in his early collection of eclectic entertainment services at the time: Bravo, The Kung Fu Channel and The Playboy Channel. Pitching the deal to the conservative Cox family dominated board of directors was surreal! Anna Cox was a proper former US ambassador to France who enthusiastically embraced the idea of supporting televised arts on Bravo. Garner Anthony, my boss, was the open-minded but cautious husband of Barbara Cox, the chain-smoking matriarch. The room went dead silent when I mentioned Playboy until Barbara sealed the deal with a rousing, “Sounds kinda neat! That’s a hell of an idea!”
That frequently was the response I got from anyone I pitched Cablevision ideas to over the years. It was everything I could do to keep up with Chuck and his unconventional notions, many of which we actually executed. I knew better than to take him lightly. Seven years after launching his first cable system, Chuck sold it to Time Warner along with Home Box Office, which he had created. That’s how Time Inc. came by HBO and the valuable Manhattan cable franchise. Time Warner left Dolan the cable franchises on Long Island, which were thought to have almost no value. Chuck created Cablevision on those Long Island systems, and soon it was on its way to becoming a $1 billion cable operator. So whenever Chuck called or came by my office, I made time and listened intently. I knew another adventure was under way.
The truth is Chuck always knew there would be a way to make things financially whole, even though the process would not be pretty. He was willing to take that risk in order to move the needle. That’s the kind of partner you want when you are trying to blaze new frontiers and challenge conventions.
And I’d do it again.
◆ David Zaslav. Bob always used his relationships to build NBC into a major cable program player, and his most important relationship was with Chuck Dolan. There was a constant ebb and flow of ideas between them, then a rigorous discussion about the channel we wanted to launch or the program direction we wanted to go, and then we would get in there and fight it out with the other team. But ultimately the strong personal relationship and respect between Bob and Chuck prevailed, and things would get done. These guys genuinely liked each other. It was like magic.
Cable was very unstable in the 1980s. It wasn’t clear that programming for cable was going to be a good business. So Chuck and Bob used each other and their companies as a hedge and got twice as far together as either could alone. Back then, Chuck was limited by the size of his company as one of the smaller primary cable operators. So more times than not, NBC/GE would provide the funding and Dolan would open doors, which allowed us to take a lot more swings together.
We lost a lot of money on cable for a lot of years, and not a day went by that Jack Welch didn’t ask about it. Bob’s mantra was, “I know we’re losing money, but we need to be here, and eventually I believe this will be a business worth betting on.” And he was right. ◆
◆ Josh Sapan, chief executive officer Rainbow Media Holdings, now AMC Networks. When Bob agreed to make NBC a Rainbow Media partner in 1989, it was considered a daring and even foolhardy move. Cable programming was a big financial risk, so it required an explorer’s mentality to try new things, knowing you might fail. Bob made a similar call 2 decades later with NBC’s purchase of Universal Studios. And it also succeeded against all odds.
Chuck was the rugged individualist and tough negotiator to Bob’s disciplined strategist. Bob’s participation was largely one of construction: assembling the pieces and approaches that helped shape the modern cable business. You only need to look at NBC Universal’s cable assets today. They contribute the lion’s share of the company’s overall profit, and every one of them had their roots in a vision that started with Bob. NBC’s cable-ization was Bob’s doing. ◆
Not everything was always hunky-dory with Chuck. We had an especially rough time over FNN. The 1991 recession prompted a pullback in advertiser spending; all media companies suffered a loss of revenues and earnings, Dolan’s heavily leveraged Cablevision Systems in particular.
Failure for some is opportunity for others, and I saw this as a chance to continue our cable buildout. So we began pursuing the bankrupt Financial News Network. To me it seemed an ideal way to fortify CNBC, which was struggling to gain subscribers and advertisers. GE balked, so I turned to Cablevision, our CNBC partner, to share the risk. When Chuck began to get cold feet, I knew our alliance could be in trouble.
Cablevision was notorious for financially overextending itself; at the time, it was $1 billion in debt. It was rough for Chuck. Cablevision’s losses continued to mount on the sports channels, and CNBC continued to spew red ink. Dolan told me he wanted to get out of CNBC and be reimbursed for his original $34 million investment. I told him since Cablevision was voluntarily withdrawing from our CNBC joint venture, NBC and GE were not obliged to make it whole, but he would get a large tax loss. Cablevision potentially faced serious covenant issues on some of its loans from GE Capital. So I told Chuck he could walk away from CNBC, and NBC/GE would continue the buildout.
It was a difficult discussion that rocked the core of our friendship. Chuck was stunned and disappointed. In the end, Cablevision forfeited its stake in CNBC. So NBC assumed full control of CNBC and paid $155 million for FNN, the integration of which changed the course of business. But the tension and hurt feelings from that break rippled through the partnership for years. Unfortunately when Dolan withdrew, NBC/GE had to assume 100 percent of CNBC’s losses.
◆ Tom Rogers. You have to understand their symbiotic relationship to realize why their partnership worked in good times and bad. Chuck saw Bob as someone who was strategically smart and understood industry dynamics. Bob considered Chuck someone who appreciated the creative potential for cable programming and a willingness to try new things. They were both very tough negotiators skilled at dealing with cable’s very tough crowd. Bob is extraordinarily good at seeing all sides of a controversial or difficult issue. When he and Chuck stood together on something, it was hard for anyone to resist. That’s principally how they got so much done.
The respect Bob and Chuck had for each other far exceeded any friction that existed between them or their companies. On an operating basis, it was difficult to get the companies to work well together, which is why Cablevision and NBC eventually went their own way.
The low point of their partnership was when we were going after FNN to strengthen CNBC in its early years and Dolan wanted to bail on us. Cablevision was always highly leveraged and a lot of companies were struggling at the time because of the weak economy and slow cable uptake. Bob essentially told Chuck that if he didn’t want to go along he could just hand over his 50 percent interest in CNBC and go home.
Marc Lustgarten, Cablevision’s then chief negotiator and a principal architect of the company’s growth strategy for 2 decades, was outraged. He told me that Chuck felt it was the most heavy-handed move he had ever seen in the business—and he had been involved in a lot of heavy-handed moves! After that, Cablevision began taking a harder line on many of the things we wanted to do with them, and generally became less flexible. But the partnership didn’t stop functioning, and Bob and Chuck never stopped talking.
The high point of the NBC-Cablevision partnership was more personal: a Radio City Music Hall benefit Bob and Chuck organized for Marc, who died from pancreatic cancer on August 30, 1999. Marc was more than counselor; he was the heart and soul of Cablevision’s thought process as it morphed from a small cable operator into a broad entertainment and sports colossus. There was comfort and hope for all of us in celebrating Marc’s life and raising funds for pancreatic cancer treatment and cure. Marc would have liked the star-studded October 4 black-tie event that marked the reopening of Radio City Music Hall just a month after his death. ◆
Cablevision was the most influential driver of NBC’s entry into cable. And NBC was the wind in Cablevision’s sails as it struggled to gain greater footing in an industry of giants. We learned how to leverage Cablevision’s position to try new things, and we sometimes got a little ahead of ourselves. In fact, there were at least two instances when our partnership failed in projects that could have had tremendous financial payoff. The cutting edge usually comes with a price.
The first was the Olympics Triplecast, our trial pay-per-view offering during NBC’s telecast of the 1992 Barcelona summer games. We were taking a free-wheeling approach to showcasing the less-watched live Olympics events in ways that even ESPN did not imagine. It was universally opposed by broadcasters, cable operators, advertisers, GE—and viewers. We lost a lot of money—$100 million total. After an initial meeting with Chuck, Jack Welch was convinced the financially troubled Cablevision would not keep its promise to underwrite half of the losses. No one was more surprised than Jack when I handed him a check from Chuck for $50 million several months after the Olympics. Chuck later told me he upheld his end of the bargain because he believed that we had given the Triplecast our best effort and that other cable operators fell short on their marketing and support of the service.
We applied everything we learned from that experience to produce more profitable Olympics pay cable efforts in subsequent years, which consumers and advertisers eventually embraced. In the end, we gained more than we lost, although it was painful for us at the time.
Our second major failing was SkyCable, an alternative satellite-to-home service brainstormed by NBC, Cablevision, General Motors’ Hughes Electronics and Rupert Murdoch’s News Corp. We got as far as the February 1990 press conference at New York’s posh St. Regis Hotel, announcing the unusual $1.3 billion venture, before it promptly began to fray.
If SkyCable had succeeded, it eventually would have morphed into something called DirecTV. So for a $40 million investment, NBC would have had a considerable ownership stake of DirecTV’s $40 billion business—a jackpot return. If we had been able to put all the pieces together, SkyCable would have been an important strategic and economic undertaking that would surely have changed the balance of media power.
◆ Tom Rogers. To execute on his cable plans, Bob built a separate army that was really successful and practical and aggressive—and Chuck Dolan was a general in command. There was a value to the Cablevision deal beyond the properties that we invested in. It gave us chess pieces to play the game, to not only participate broadly in the cable industry but to make other deals. The partnership overall gave us access to the cable club. This was especially true after the failure of the SkyCable venture, after which our relationship with the cable guys dramatically improved. They saw NBC, primarily a broadcast company, was willing to take a hit for them. They saw we were substantially invested in their industry with stakes in AMC and Bravo, A&E, and the History Channel and regional sports channels, in addition to creating our own from scratch like CNBC and MSNBC.
NBC ended up with a greater ownership, economic investment, and governance in many more cable channels than almost any other media company at one time. So as an anchor of the cable industry, they couldn’t deny us. When Comcast assumed ownership control of NBCU in 2011, 85 percent of the operating cash flow was generated by what was arguably one of the healthiest, most competitive cable businesses in America, yet the company’s overall self-esteem was low because its broadcast was in a slump. The people at NBC didn’t feel like they were winners because the NBC TV Network wasn’t winning. It’s strange how that dynamic still prevails after all this time. ◆
30 Rockefeller Plaza
Bob Wright’s office, 52nd floor
New York City
June 12, 2002
No matter what endeavors we pursued that succeeded or failed, Chuck and I remained bound by our Rainbow partnership. More than a decade later, it had expanded to include regional sports networks co-owned with cable kingpins John Malone and Rupert Murdoch, in addition to American Movie Classics, Bravo, and our own local sports and news channels. We had succeeded well enough that by 1996, Rainbow Programming accounted for 1/3 of Cablevision’s estimated $2.5 billion acquisition value. By 2000, Rainbow was 26 percent (or about $1.5 billion) of NBC’s $13 billion in newly created assets. Rainbow and Dolan had become so important to our company’s economics, I good-naturedly referred to Chuck as “the thirteenth apostle of NBC.”
So it was bittersweet, but not completely unexpected, when after 13 years, we cashed out of the Rainbow partnership in 2002, taking all of Bravo with us. It became our first major entertainment cable network. NBC unloaded its 25 percent stake in Rainbow by paying Cablevision about $400 million in GE stock and $250 million in cash for the remaining 80 percent of Bravo it didn’t own. That allowed GE to maximize its return for relatively little investment. It was a choice arrangement unique to good partnerships.
Our formal business relationship ended in 2002, but our personal relationship flourished with regular telephone calls and lunches, and serving on the board of AMC Networks, which was built on Rainbow.
◆ Brandon Burgess. NBC’s complete acquisition of Bravo in October 2002 was all about what I call harvesting the golden years. Bravo was incubated in the early 1990s and was a core element of Rainbow. We had wrestled for some time with the possibility of acquiring the channel by itself or along with other Rainbow assets. That’s when we decided to buy out Cablevision and take full control of Bravo as our first major entertainment cable channel, which was a big deal at the time. It was a very attractive, seamless deal that got us into the cable entertainment business for the first time as a wholly owned operator. NBC’s stake in Rainbow was worth $1 billion and the purchase price of Bravo was $1.25 billion. We owed Cablevision the increment of a quarter billion dollars, which we ended up paying for by buying $250 million in Cablevision stock and then giving that back to Cablevision in a tax-free exchange.
And the rest is history. Bravo’s value tripled and its household distribution increased from the high 70s to somewhere in the mid-90s.
It was a different way of creating value than our 50/50 venture with Microsoft to create MSNBC, which NBC also eventually took over. Both were examples of transactional harvesting of NBC’s investment portfolio. It took more than a decade for Bravo and MSNBC to be accepted as full assets. They helped GE get its head around the fact that we were getting competent in what we were doing in cable. After that, it was all about transforming NBC into a much bigger, diversified media company with the Universal merger. ◆
Chuck and I remained career-long friends and business partners, bobbing in and out of various programming ventures that swung from huge successes to painful failures. But they always managed to push the envelope. No one else could have pulled it off. Our daring enterprises became the glue that cemented our business and personal relationship for the next 2 decades and advanced both our industries. And I’m proud to say that our personal friendship remains undiminished.
Atlanta, Georgia
May 22, 2011
Our 2011 Autism Speaks walk at the International Plaza in Atlanta was very well attended. Suzanne and I were there to participate as usual and to speak to the crowd. Then, the night before the walk, I get a call from Chuck Dolan. He has a home down in Wellington, because some of his children are active in big-time horses, and that’s the polo capital of the US. Chuck leaves me a voice message that he and his wife, Helen, want to go on the autism walk with us the next day. He wants to know where to go and when to be there.
So I call back with the particulars, warning him not to drive to the walk because there will be thousands of people there. It’s easier to hire a car and have the driver drop you off at the starting point.
Now, you have to understand something about Chuck. He’s in his 80s, and he refuses to have anybody drive him around Florida. Well, the next day we have the morning walk, and there is no sign of Chuck. I have people out looking for him. He doesn’t carry a cell phone with him, so there is no way to contact him. Then, out of the blue, Suzanne and I see Chuck and Helen walking around in the crowd, taking it all in. Chuck’s got a fancy single-lens reflex camera with him, and he’s taking pictures of everything going on around him. When we finally meet up, he says, “Gee, I’m sorry we’re late.” And then Helen explains: Chuck got a speeding ticket!
“I can’t believe I got a speeding ticket,” Chuck splutters. “I was doing sixty in a forty-mile-per-hour zone. I was coming down Southern Boulevard, which is a six-lane road, and it’s Sunday morning and it’s empty. It’s like the German Autobahn. People were going eighty on that road and I got stopped for going sixty!” The car he drives is a 1980s Jaguar convertible. It’s not a great car. It’s not a reliable car. It’s not a car that an 80-something guy should be speeding around in. He’s a billionaire and this car has not been restored, but he loves it. I doubt that even agreeing in September 2015 to sell his family’s Cablevision Systems to French telecommunications giant Altice for $17.7 billion will change Chuck’s buying habits. He remains a scrappy pioneer and a simple man with a good deal.
The thing about Chuck is he’s always engaging; he is a very creative guy. He’s as interested as ever in programs and ways that people can connect with material. And he has that inherent curiosity about how to do these things. The idea of connecting people and information, that’s what Chuck loves to talk about. That’s his whole life.
The right partnership is a powerful thing. It is a companionship of compatible resources and intersecting interests that can raise you to new heights, professionally and personally. I have been fortunate enough in my life to know three such partnerships—with Chuck Dolan; for a while with Jack Welch; and for many years with my wife, Suzanne Wright.
There are two fundamental reasons why you form a partnership. One is necessity. Maybe you don’t have the ability, money, time, or effort to pursue a business endeavor yourself. Maybe there are certain resources or capabilities you don’t have that the other party has, or vice versa. The second reason is that you can accomplish what you want to do more quickly and economically with an ally. Sometimes you have the cake mix and another party has the frosting. And sometimes the best strategic alliance —or “coopetition”—is with a competitor.
You have to believe that your partner can contribute enough of the right resources so that the venture becomes successful, and when it does, you can’t feel bad about having a partner. You would be surprised how many people in business worry about the problems of success. They worry about whether the other guy has too much, or more than they do. A lot of that goes through people’s heads in corporations all the time. They don’t want to share the success with anybody.
Large companies generally like to think they know enough about something that they can do it by themselves. Sometimes that works and sometimes it doesn’t. Sometimes, by the time they get it done, it’s too late. Or they don’t want to give up control. So they avoid partnerships if at all possible because they can be difficult to manage. They would rather just buy the assets they need, which can create other problems.
Look across the business landscape, in good times and bad, and you generally don’t see a lot of partnerships or joint ventures—and there is a reason for that. They can be tricky to negotiate and execute, and there are never any guarantees they will be successful. But strategic alliances with others can be an absolute necessity to growing a company that is lodged inside a corporation that does not want to invest in your future vision. That’s what I faced at NBC. Partnerships with companies like Cablevision and Microsoft were an end run around GE’s aversion to taking risks and investing in emerging businesses such as cable and the Internet, where it was imperative for NBC to gain traction.
The only way I could advance my cable agenda was to identify companies that needed what we had and that had what we needed, and then negotiate a win-win arrangement to build something more together. It sounds simple. It wasn’t.
And it has not been any easier trying to build Autism Speaks from scratch. We have woven together every kind of partnership we know how—from regional parent groups and legislators to Google—to secure the funding and resources we need. I’m convinced the nonprofit world needs to learn to do partnership better.
Through it all, my most successful and cherished partnership has been the one with my wife, Suzanne. For nearly 50 years, she has been the heart and soul of what we were able to accomplish at NBC as well as at Autism Speaks. To this day, we complement and support each other beautifully to get the job done.
Partnerships have been the cement that has held my life together.