A clandestine 1997 effort by Microsoft Corp.'s Bill Gates and Comcast Corp.'s Ralph and Brian Roberts to grab a key block of Tele-Communications Inc. voting stock infuriated John Malone, who had been scrambling to lock up control of his cable company following the death of TCI founder Bob Magness, according to a new biography of Malone set for release in November.
"Malone was livid, especially with the Robertses, with whom he had been partners in deals that shaped the industry," writes The Wall Street Journal
reporter Mark Robichaux in his new book, Cable Cowboy: John Malone and The Rise of the Modern Cable Business
(John Wiley & Sons, $27.95).
Magness, Malone's business partner of 30 years, died in November 1996. He left behind 32 million supervoting shares of TCI stock that his heirs needed to sell to pay estate taxes. Malone ended up acquiring the Magness shares for TCI, but not before fending off Gates and the Roberts family, who stood to gain considerable control over TCI if they had obtained the stock.
Then-TCI president Leo Hindery was just as irate as Malone, because Gates and the Roberts family had worked anonymously through Wall Street banker Steve Rattner to bid for the Magness stock.
"Bill Gates was never an issue — he has the right to go after anyone; that's business," Robichaux quotes Hindery as saying. "But Brian broke the code — there will come a time when I will make that son-of-a-bitch pay, but right now I need some stuff done."
Robichaux's book takes a long and largely favorable look at the life and legendary business career of the 61-year-old Malone — his rescue of TCI, his financial alchemy and his hardball business tactics, which enriched TCI shareholders and Malone himself but generated political backlash in Washington.
LOTS OF ACCESS
Robichaux gained unprecedented access to the reclusive Malone, meeting with him 23 times since 1997 mostly in Malone's Denver office. One interview attempt occurred aboard Malone's 80-foot yacht Liberty but had to be aborted due to heaving Atlantic seas.
"I hugged a toilet below deck for six hours and retched," Robichaux confesses.
Robichaux also reveals that AT&T chairman C. Michael Armstrong fibbed when he told Hindery that he had destroyed an AT&T-commissioned background check on him, saying the company was wrong to dig up dirt on Hindery.
"It has never been shared with anybody. Don't worry about it," Armstrong told a skeptical Hindery, who had been the subject of a highly unflattering profile in The New York Times.
A few months later, "as Malone sat in a board meeting, the [Hindery] findings were shared with his fellow [AT&T] directors," Robichaux said.
Robichaux's book plows a lot of ground familiar to cable-industry insiders, but it also contains some priceless moments.
One involves a meeting where a young, brash Ted Turner made a hyperactive pitch for his superstation idea to a group of cable operators who were just beginning to learn of Turner's manic ways. When Malone's secretary offered the group more coffee, Malone looked in Turner's direction and quipped, "Does he look like he needs more coffee?"
Another involves Hindery — and will probably tickle those enjoying the current spat between Hindery's Yankees Entertainment & Sports Network and Cablevision Systems Corp.
Trying to advance his cable-telephony strategy, Armstrong ordered Hindery to threaten Cablevision chairman and patriarch Charles Dolan with retaliation if Dolan refused to sign a local phone deal with AT&T, Robichaux says.
"Wait a minute!" Hindery told Armstrong. "You don't tell Chuck Dolan anything. You beg Chuck Dolan, you plead with him, you ask him, but you don't tell Chuck Dolan he's doing anything."