Interestingly, they were entertaining Gordy Crawford that weekend and at one point Tom Brokaw and his wife showed up. Here I am trying to have a confidential conversation with all these people around, so I took Ted aside and showed him my list of five reasons why this made so much sense and after agreeing with my points he said, “Wait a second, I have to talk to Jane,” and he came back and said, “Okay!”
A TED STORY
“I Do Have to Make One Phone Call”
—Tom Brokaw
I think Ted had forgotten that he’d invited us over that weekend and when I arrived with my daughter and my wife, Ted and Jerry Levin came around the corner and Ted said to me, “Hey, we just made a deal! Maybe now we’ll buy CBS, or maybe we’ll buy NBC and you’ll come work for us!” Jerry was stunned and I walked over and said, “Congratulations Jerry. If you’ll excuse me, I do have to make one phone call.”
I needed to get back to Bill Gates as our discussions with Microsoft were still ongoing. The future certainly would have looked very different if I’d made the deal with Gates instead of Time Warner and I sometimes wonder how things would have turned out. I hated having to call Bill to tell him our deal was off.
A TED STORY
“I Was Just Heartbroken”
—Bill Gates
I was still hoping to do our deal with CNN when Ted called and said, “Maybe it’s wrong, but I decided to do it. Jerry came out and talked to me and I’ve agreed to do a deal with him.” I was just heartbroken and I still wonder if I’d just made it a little more concrete to Ted that he had this other solution if he would have done a deal with us instead. I think my personality and Ted’s would have worked fine together because we’re both long-term conceptual thinkers, willing to bring in a broad set of considerations into any decision. He’s a wild optimist and I count myself the same. He’s always thinking about how the pieces can come together in a different way. We both love decisions that seem crazy to other people but then they wake up five years later and see why it was obvious when at the time it seemed weird. In the media business, Rupert Murdoch is often thought of as a good long-term thinker, but even Rupert would say that Ted’s in a league by himself. Ted’s a major wizard in terms of having a whole new way of thinking and doing things.
Anyway, the more I think about that CNN deal not happening, the worse I feel about it.
There was a lot that went into my decision to merge with Time Warner. The timing seemed right for a number of reasons, not the least of which was the fact that I’d never been part of a really big company, and I wanted to see what it would be like to be on top of the mountain looking down. I was also very proud of what we had built at CNN and I liked the idea of merging with a company with strong journalistic credentials such as those at Time Inc. Jerry would be CEO and I’d be vice chairman, but since I would have responsibility of overseeing the company’s cable networks (including HBO), my day-to-day responsibilities wouldn’t change much.
From a deal perspective, I thought that our company’s stock was trading at about what it was worth but that Time Warner’s was significantly undervalued—maybe by as much as 50 percent. I believed we’d be merging into a company with significant upside. A lot of Wall Street analysts thought that Time Inc. and Warner Communications were never properly integrated after their merger and I figured that if we could execute better and get everyone cooperating, we could really get the stock up significantly. Jerry and I were very different personalities but I thought we could make a good team. He was soft-spoken, and I was confident that my enthusiasm and energy would help drive performance and create buzz about our stock.
I did have some anxiety about no longer being CEO but I had already given so much of my autonomy to Time Warner and TCI that I felt this wouldn’t be such a radical change. And since I would own about 10 percent of the new company’s stock, and other big stakes would be held by supportive partners like TCI and Gordy Crawford—a good friend of mine who had invested on behalf of his company, Capital Research and Management Group—I figured that the ultimate control of this new company would be in friendly hands.
The final reason I agreed to the deal was a simple one. I was flat-out tired. It was now more than thirty years since my father’s death and I’d been running the company on my own ever since. Thirty years of long weeks and eighteen-hour days would get to anyone and by this time I was exhausted. I still planned to work hard but I liked the idea of being supported by a larger company. Besides, our assets fit together really well and in Warner Brothers, we finally had the big studio we needed.
A TED STORY
“Our Stories Are Not So Dissimilar”
—Dick Parsons
(DICK PARSONS IS THE RETIRED CEO OF TIME WARNER. IN 1995, HE SERVED AS THE COMPANY’S PRESIDENT.)
I was on vacation when I got a call from Jerry, who said, “Get back in the office. Ted’s agreed to sell the company.” To do the deal we had to get John Malone’s blessing, so I rushed back from vacation and Jerry and I flew back out to Montana to pick up Ted and the three of us flew to Denver to see Malone. I was new to Time Warner so the first time I met Ted was when we picked him up at the Bozeman airport. He got on the plane and after introducing himself, he started explaining to me who Ted Turner was—how he was a self-made man, how in the early days of TBS he used to peel the stamps off the incoming mail and reuse them, how he built his empire, why he wanted to merge with Time Warner, how he wanted to see what it was like to be big and have some muscle, how he and Jerry would be a great team, etc.
That took about a half hour and then he proceeded to explain to me who I was. We’d landed in Denver and our plane was on the tarmac waiting for the car when he said, “Now, you know, our stories are not so dissimilar.”
And I said, “What do you mean?”
“Well, take you. You were born black—
bad break!
But you know, you worked hard and you overcame it. I’m white but I had some tough breaks, too, but I did all this work and I overcame it and so it’s the same thing.”
After nearly falling out of my chair I said, “Well, I guess I see where you’re coming from, Ted.”
Someone once said that there’s supposed to be a little box in everybody’s head and when an idea forms before it comes out, it goes in that box and gets checked out for political correctness and appropriateness and timeliness, but Ted doesn’t have one. If the idea forms—BOOM—out it comes and he will say things that will just set you back on your heels. But because he’s such a fundamentally guileless and genuine guy, he gets away with it.
A TED STORY
“A Pretty Darn Good Marriage”
—John Malone
In all honesty I thought that this was a pretty darn good marriage. Given Ted’s creativity and Time Warner’s resources I believed they were going to be able to do a lot of great things. I was unhappy that we ended up not being the marriage partner but I also thought that this was probably a smart business decision for Ted. By this time his politics had swung liberal and there was no way our politics can be regarded as liberal; we’re libertarian but not liberal.
For Ted the sale brought him prestige and a bigger platform and he felt he was merging with his buddies—people he’d worked with for years. These were the days when Ted and I were spending time together at his ranch and he was asking my advice about how to play his cards and I said, “Look, Jerry Levin owns no stock. He has some options but no stock. On the other hand, Ted, you, me, and Gordy Crawford will be the three largest shareholders of the company and collectively we’ll be somewhere like 40 percent of the company. As a practical matter, Ted, you’re taking over Time Warner if you play your cards right. I think Jerry’s a good guy and I think you’d look hard to find a guy who will work as hard as he will. I see this as him working for you—not you working for him—but you’ve got to really work the board. You need to make sure the board knows that they will get reelected because of your support and if I were you I would invite the board—the independent directors—down to the ranch and I would really spend some time courting them. Because I think this really turns out to be your company.”
That was my advice, and I still think that had the AOL deal not come along it would have been Ted’s company.
It took several weeks to agree to the terms of the deal and the negotiations with TCI and our other cable operator-owners were complex, but we worked everything out. Jerry Levin and I made the official announcement in September of ’95. 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 biggest communications company in the world.
I wish my father could have seen what we’d accomplished with the business he’d left. I’m sure he would have been proud.
The New Time Warner
I
n October of 1995, just after we announced our agreement to merge with Time Warner, the Atlanta Braves made it to the World Series for the third time in five years. After suffering through so many dreadful seasons it was exhilarating to be a consistent contender. After a strike forced the cancellation of the ’94 postseason, the 1995 regular season started late and the schedule was shortened to 144 games. The Braves won ninety of theirs, then beat the Colorado Rockies and Cincinnati Reds in the playoffs to face the American League champion Cleveland Indians in the World Series. The 1995 Indians had an amazing 100–44 record during the regular season and after coming up short in our last three postseason appearances, it looked like the Braves had another uphill battle.
The World Series opened in Atlanta and behind our strong pitching (we had one of the all-time great rotations that year, including John Smoltz, Greg Maddux, and Tom Glavine), the Braves managed to win the first two games, then split the first two in Cleveland to go ahead three games to one. With an opportunity to win it all on the road, we lost game five and flew home to Atlanta with a 3–2 lead and two chances to clinch at home.
Jane and I attended all of the playoff games—both home and away. It was fun but exhausting. Tired as we were and as much as we wanted it to end, it was better to return to Atlanta for a chance to win the championship in front of our home fans. Tom Glavine was our starting pitcher in Game 6 against Dennis Martinez of the Indians. It was a scoreless tie after five and a half innings until David Justice hit a solo homer in the bottom of the sixth. Glavine wound up pitching eight shutout innings and gave up just one hit. Our closer, Mark Wohlers, came on in the ninth and retired three straight Indians. When Marquis Grissom caught that final fly ball we all went wild! The players poured onto the field and the entire crowd—myself included—was jumping up and down, hugging and high-fiving everyone. After nearly twenty years of hard work we were celebrating a World Series championship. When they handed me the trophy I couldn’t believe how heavy it was, but I managed to hike it up on my shoulder and the crowd’s response was deafening.
It’s difficult to compare winning the America’s Cup with winning the World Series. In the sailing, I was an actual participant whereas here I was the owner. Both triumphs were thrilling and that night I became the first person ever to win both an America’s Cup and a World Series. After buying the team in ’77 I told everyone we’d win a championship within five years. It took a lot longer than I had expected but in some ways I think that made it even more satisfying.
Throughout all this excitement, my marriage to Jane was going well. Of all the relationships I’d had in the past, this one was the most intense and fulfilling and we were together most of the time for our first several years. Jane enjoyed spending time with me in Atlanta and at my various properties. She convinced me to exercise more and to eat better and I helped her learn how to fly-fish during our trips to Montana. We spent hours discussing important issues like the environment and world peace and it felt good for me to be with someone who was passionate about so many of the same things that I was. Jane also took an interest in my work and I would use her as a sounding board when I was thinking through important decisions. We got along well with each other’s children and we managed to spend a lot more time with them.
Still, I know that being married to me wasn’t easy and it was certainly an adjustment for Jane. Probably the hardest part was keeping up with our busy schedule.
A TED STORY
“He Has to Keep Moving”
—Jane Fonda
Given everything that happened to Ted when he was a child—the beatings, the psychological manipulations—like his father asking him to beat him, his mother screaming outside the door, his father coming home drunk at night and telling him stories about women—there was complete toxicity. When he first told me these stories, I wept, and it was just so weird. Here I was crying as he was telling the story and he couldn’t understand why I was emotional.
As a result of his upbringing, for Ted there’s a fear of abandonment that is deeper than with anyone I’ve ever known. As a result he needs constant companionship and keeping up with him can be exhausting. It’s not just all the constant activity—it’s his nervous energy that almost crackles in the air. He can’t sit still because if you sit still the demons catch up with you. He has to keep moving.
For him to have survived what he survived more or less intact he had to spend every minute of his life thinking about how to protect himself and that makes it harder for him to open up to other people or to get to know others as whole people. The fact is that the things that allow certain people to become super achievers are the exact opposite qualities that allow them to have successful relationships.
On the business front, things went fairly smoothly between the summer of 1995 and the fall of 1996 as we worked through the details of integrating Turner into Time Warner. As often happens after a merger there were some casualties in the executive ranks. One of the most high-profile departures was that of Michael Fuchs, the longtime head of HBO and recent chairman of Warner Music Group. Michael was a brash guy and he wasn’t shy about speaking up about his displeasure with Jerry Levin and his management of the company. He was particularly upset when he found out that HBO would be reporting to me after the merger, not directly to Jerry as it had in the past.