Murdoch’s
New York Post
also made fun of me. They doctored a picture to show me in a straitjacket with a headline that said, “Is Ted Turner Crazy?” Instead of letting this bother me I decided to have some fun. Shortly thereafter I gave a speech in New York and I told the audience that I was still mad at Rupert and now I was considering shooting him. This was a sophisticated New York crowd and they were startled until they realized I was joking when I added, “I figure that now that his own paper says I’m crazy, I can kill him and get off by reason of insanity!”
The negotiations over Fox News were further complicated when New York mayor Rudolph Giuliani got involved on the side of News Corp. I don’t know what kind of deal those two had together but Giuliani pressed the case that Time Warner needed to carry Fox News and even offered up one of the city’s channels as a slot they could use. (Local communities have the right to a certain number of public access channels when they allow a cable company to serve their market.)
I stayed out of the way while a deal was worked out in the summer of 1997. Fox wound up being very aggressive with launch fees, ultimately offering to pay Time Warner Cable more than $10 per subscriber to gain carriage in New York. This was an expensive strategy but it certainly proved helpful in gaining national distribution quickly. Before long, Fox News was in millions of homes and, sadly, their ratings eventually surpassed CNN’s. While we tried to stay true to our mission of delivering news stories in an unbiased fashion, their strategy of reporting and airing talk shows with a right-wing slant proved to be popular.
Throughout this period I continued to spend time with the divisions that reported to me, and I enjoyed working with Mike Lynne and Bob Shaye at New Line Cinema. They were great entrepreneurs and while they had built their business primarily with smaller budget films, I challenged them to spend more money on bigger projects.
A TED STORY
“You Guys Should Make Really, Really Big Movies”
—Michael Lynne
Ted was significantly influencing our decision making going back to 1994 and 1995 when we were doing
The Mask
and
Dumb and Dumber.
We were still committed to modest budget films—I think
Dumb and Dumber
cost $16 million—it’s what we had always done. But there was a time when we were down in Atlanta for a management meeting and in the course of talking about the movie business, Ted said, “You know what the problem is? We’re not making enough hundred-million-dollar movies.” He turned and he looked at Bob and me across the table, and with everyone else in the room, he said, “You guys should make really, really big movies; maybe the most expensive movies that have ever been made!” We all laughed because at that point we probably had never made a movie for more than $35 million.
This was not really an actionable plan but in a funny way this statement stayed in the back of our heads and from time to time Ted would reiterate this point and keep pushing us to stretch and do the kind of big blockbusters that he had in mind. He really believed—maybe a little more than we believed it at that time—that we could deliver at the level of any major that was out there if we had the wherewithal to do it. So when
The Lord of the Rings
came along, the idea and the concept and the potential was so extraordinary that we decided that it was the right thing for us to do.
Disney’s Miramax had controlled the rights to
The Lord of the Rings
trilogy, but when director Peter Jackson wanted to shoot the first two movies at the same time, they balked. When Jackson had brought the project to New Line, Mike Lynne and Bob Shaye had a different idea. After seeing a demo tape of how he envisioned mixing real people with hobbits and showing the new technology he planned to use for the big crowd scenes, the New Line executives encouraged Jackson to consider shooting
all three
films at once. Jackson loved that idea and when the concept was finally brought to me for approval, I loved it, too.
Mike and Bob were very creative but they were also great businesspeople; over the years they had figured out a way to lower their risk on movies by getting up-front advances from international distribution partners. Moving forward with an unproven, expensive trilogy was a major gamble, but when Bob and Mike told me that they wanted to do it I enthusiastically agreed. It turned out that I was giving a green light not only to what was by far New Line’s most expensive venture ever, but a project that would become the most successful trilogy in movie history. Even after the efficiencies gained by shooting the three films at once, the total production expense was more than $300 million (only slightly less than what three individual
Star Wars
movies might cost), but taken together these movies grossed nearly $3 billion at the worldwide box office and generated an even greater amount in home video and merchandise sales.
When the third of these films won the 2003 Oscar for Best Picture, I was right there, cheering!
Through the first three quarters of 1997, Time Warner’s stock started climbing. As Jerry and I made our case for how well the two companies—and the two of us—were working together, investors understood. Whether I was encouraging better cooperation between divisions, raising concerns about expensive artwork, or fighting with Murdoch, Wall Street analysts appreciated seeing a new level of energy at what Jerry often referred to as “The New Time Warner.” We also focused on plans to improve the company’s performance. One of these was to turn TBS from a superstation to a pure cable network. The details of this conversion are complicated but essentially we were able to move from a situation where we generated revenues from advertising only to one where we collected subscriber fees just as we did with CNN and TNT. In exchange for these fees we provided cable operators the ability to insert local ads, and given TBS’s strong ratings, this was valuable inventory. When we netted out the value of that lost inventory from the new revenue we would generate from subscription fees, we would add about $100 million a year to Time Warner’s bottom line.
Within the first nine months of 1997, Time Warner stock jumped by about 50 percent. The ramifications of this growth became clear to me when I was flying to New York for business meetings and to receive a special award from the United Nations. Looking through my monthly financial statements I realized that since the start of 1997, the value of my Time Warner stock had increased from roughly $2.2 billion to $3.2 billion. I’d made a billion dollars in just nine months. At that same time, I had been considering ways that I could make a meaningful statement at the upcoming United Nations event. That’s when it hit me. I would donate a billion dollars to the United Nations!
Billion-Dollar Gift
I
n addition to being active with Rotary and other civic organizations, my dad was also philanthropic with his own small resources. Not only did he make contributions to causes that he cared about, but I also discovered after I left Brown that while he never paid for my full four years, he did support the tuition of two African-American students at his alma mater, Millsaps College. It made a big impression on me to see someone as hard-charging as my father take the time to quietly help out two young people like this. Sometime during the 1970s—years after my father’s passing but before I had made a significant amount of money—I attended a seminar on philanthropy in Washington, D.C. At dinner I was seated next to a man who was quite a bit older than I and we began discussing charitable foundations. He told me that his father had been wealthy and that he had set up a family foundation when he was still a relatively young man. His children at the time were already young adults and he made each of them members of the foundation’s board of directors. This man described what a wonderful thing his father had done because it brought his family together. He and his siblings learned about what their father wanted to do with his fortune—what kinds of things he was interested in supporting—and it was fun for them to gather at regular times throughout the year to sit around a boardroom table and decide what good things they wanted to do with his money.
I filed this away in my mind and told myself that if I were ever wealthy enough to have a foundation, this was how I’d do it, setting it up while I’m still relatively young and helping to keep my family together by putting each of my children on the board. That time came in 1990 when I finally had sufficient resources to create the Turner Foundation, with a board of directors consisting of my five children, Jane Fonda, and myself. My family and I have always taken an interest in protecting the environment so that’s where we decided to place our emphasis. Every grant we make is decided by a majority vote of the board and we’re all treated equally.
When we first started meeting we had quite a bit of contention—we disagreed about funding this organization or that. But over time, we learned to compromise and respect each other’s opinions and it really brought my children together. And since the work we were doing was philanthropic, it made us all feel good about what we were doing. I can also remember the first time my kids outvoted me on one of our grants. They were nervous about how I would react but when I showed a sense of humor and said, “On this board, we’re all equals—I’m just another banana in this bunch,” they all realized that this was how compromise and cooperation are supposed to work.
Today, the Turner Foundation’s executive director is Mike Finley, a former superintendent of Yellowstone National Park. I’ve known Mike since the mid-1990s when Jane Fonda and I went to Yellowstone to learn more about their wolf rehabilitation program. I took an instant liking to him and tried for several years to convince him to come work with me, and in 2001, after years working in the Park Service, he agreed to join us. Mike’s done a terrific job and, in the years since its creation, the Turner Foundation has invested nearly $300 million in grants and has made a significant impact. I wish I could remember who that man was who first gave me the idea for a family foundation, because I owe him a debt of gratitude.
While the Turner Foundation helped me understand the impact we could have through philanthropic contributions, my earlier experience with the Better World Society opened my eyes to the power of assembling a team of international leaders to address global issues. Had I not experienced these two organizations, I don’t think I would have had the confidence to move forward with what I was about to propose to the United Nations.
I rarely plan speeches far in advance and when I do I don’t usually write a full script but instead jot down a series of bullet points on the themes I plan to cover. I’m much more comfortable just being spontaneous. So when I was being honored as the 1997 Man of the Year by the United Nations Association, I only left myself about seventy-two hours to consider what I’d say that evening.
The United Nations has long been one of my favorite organizations. It’s vitally important for the world to have a place where leaders can get together and try to solve global problems, and I’ve always believed that as long as countries are talking, they don’t go to war with each other. If it hadn’t been for the United Nations, I honestly don’t think we would have survived the Cold War. When Nikita Khrushchev was angry, the U.N. gave him a forum where he could vent, and it was far better for him to burn off steam by banging his shoe on the podium than by launching nuclear missiles. The United Nations isn’t perfect, and it has its flaws like any other organization, but the ideals it stands for are worth our support, and because of my long-standing passion for the U.N. I wanted to say something meaningful and memorable that night.
When I first came up with my billion-dollar pledge idea on that flight to New York, it wasn’t the first time I’d thought about giving a big sum of money to the U.N. About a year before, when Boutros Boutros-Ghali was still secretary-general, I discussed the idea of my buying the debt of nearly a billion dollars that the United States owed the United Nations for dues our government had not yet paid. I thought it was a disgrace that these payments were in arrears and wondered if I could purchase a note from the U.N. at a discount, then turn to the United States government and ask them to pay. I could be the “repo man” for the U.N.! I quickly learned that individuals could not get involved with collecting U.S. debts. As it developed, the United States was still about $1 billion behind in its payments in 1997 and my idea was simply to make a billion-dollar gift directly to the U.N.
Once we were settled in our hotel room in New York, I explained my idea to Jane. Tears formed in her eyes and she told me, “I’m proud to be married to you.” I was still nervous and I tossed and turned that night, and then called Taylor Glover, my right-hand man, early the following morning.
He answered the phone, and I said, “Hey, pal, I have an idea. Are you sitting down?”
Taylor answered, “Better than that, I’m lying down.”
I apologized for waking him up but went on to explain my idea. While he might have still been groggy this wasn’t completely out of left field for Taylor since he’d been involved in my past discussions about U.N. debt payments. Once he understood that my new plan to make a direct gift of a billion dollars, I asked him to start working with our attorneys to figure out how to get this done.
When Taylor said he’d get right on it I said, “Please do, because I’m thinking about announcing it tomorrow night.”
There were many issues to resolve, including tax ramifications and questions around my control of Time Warner stock. I thought through that day, and that night I had trouble sleeping. I’d given away lots of money over the years—probably close to $200 million by that point, including gifts to the Turner Foundation, the McCallie School, Brown University, and The Citadel, but never had I made a gift this large. This one would represent close to one third of my entire net worth, but I kept reminding myself that it was really just nine months earnings so it wasn’t that big a deal.