Stephen Keating has written the latest book John Malone
doesn't want you to read.
Actually, Liberty Media Group chairman Malone probably does
not care a fig whether or not you read Keating's Cutthroat: High Stakes and Killer
Moves on the Electronic Frontier. But then, Malone never signed off on Cablevision
magazine's cover last year that assigned that description to L. J. Davis' The
Billionaire Shell Game, subtitled, "How Cable Baron John Malone and Assorted
Corporate Titans Invented a Future Nobody Wanted." So apparently, that declaration is
up for grabs.
Malone is one of three protagonists in this new nonfiction
tome (Johnson Books, www.cutthroat.org) by The Denver Post business reporter
Keating that in some ways updates the Davis book. Keating centers on the cratered News
Corp.-EchoStar Communications Corp. deal to create a "DeathStar" satellite
juggernaut, rather than on the cratered Bell Atlantic Corp.-Tele-Communications Inc. deal
featured in Davis' book.
EchoStar chairman Charles Ergen is at least as prominent a
character as Malone in Cutthroat, followed in importance by News chairman Rupert
Murdoch.
Ergen gets the last word here, declaring that "Malone
got what he wanted" by first helping Murdoch to realize that the EchoStar deal
wasn't in his best interest, and later selling TCI to AT&T Corp. and getting a
pot of cash to "go run a content company."
Murdoch, too, "got what he wanted" in the form of
greater distribution for his cable networks, although he had to settle a
breach-of-contract lawsuit Ergen filed.
In an interview, Keating said he was trying to get at
"basically the strategic aspects of the business and the fact that there's
really no enduring relationship that can't be undermined. I wanted to show what I
thought was a fascinating culture and really some of the personalities and power plays
within that."
As it turns out, that culture has begun to draw authors the
way cable has drawn investors since the DeathStar deal crumbled. Before Keating came
Davis, and TheWall Street Journal reporter Mark Robichaux has been working
on a Malone book for seemingly as long as anyone can remember.
"I think it's good that there are so many books
coming out about this, because it was undercovered," Keating said. "When I
started looking into it, there were no books about Malone, but many on [Microsoft Corp.
chairman Bill] Gates and [Time Warner Inc. vice chairman Ted] Turner. He's a tougher
subject, but I think he's kind of more interesting for that reason."
Ergen also comes through as an interesting character -- one
who is now grumbling about aspects of the newly passed law to allow retransmission of
local broadcast signals. Local-into-local was the DeathStar mantra. Has the landscape
changed so much that investors no longer fear a direct-broadcast satellite killer
application?
"I guess the question is: Will the bill even
survive?" Keating said. [Sen. John] McCain [R-Ariz.] was here yesterday, and he
doesn't support it. Ergen is against it, and I guess DirecTV [Inc.] supports it. I
think it's going to be a sleeper."
As for Ergen's response to the bill:
"Charlie's a great game-player. I'm sure he'd accept it if it passed
and meanwhile bark about it if it's not what he wanted. One thing that I think comes
out in the book is how much he learned from going up against guys like Malone and Murdoch.
It seems to me that he evolved over this decade as pretty calculating and yet
risk-taking."
Meanwhile, since the DeathStar deal broke apart in 1998,
cable has been on a big upswing, helped, of course, by investments from the likes of
AT&T, Gates and Microsoft cofounder Paul Allen.
Will those kinds of affirmations sustain cable's rise?
"That certainly helps. It's almost like cable is this island unto itself, and
now it's been joined unto these larger forces of broadband and computer processing,
and that's part of a long-term trend. But to me, it's interesting how much
perception matters. Cable was doing Internet and telephone in some markets long before
Bill Gates invested in Comcast [Corp.]. But when that happened, everybody sat up and said,
'They can really do it.'"
Ergen and DirecTV are also chugging along. Can cable and
DBS prosper and coexist?
"This is the proof of Malone's fear of DBS. DBS
is not charging ahead, and if the local-channels bill were to get passed, it could cut
even deeper into the cable space."
The fact that both are growing now could be "a factor
of the economy," Keating said. "It's not clear to me if the market's
expanding or people are keeping lifeline cable and adding DBS."
In the book, Keating is candid about the principal players
and some of the supporting cast, such as former AT&T Broadband & Internet Services
CEO Leo J. Hindery Jr. ("he sometimes treated truth as a variable") and former
Federal Communications Commission chairman Reed Hundt, who mixed "erudition" and
"conceit."
Does that pose a problem for his ongoing coverage of the
industry? Keating said he and his editors discussed that, and he's decided to do more
general-assignment reporting, while still weighing in on some media stories when
appropriate. "There are some obviously opinionated statements in there, but I felt
that they were supported by other reporting or other people's views," he said.
Some of those statements and reporting will be on display
in an upcoming Multichannel News excerpt from Keating's book.
