by Ted Turner
9
WTCG: “Watch This Channel Grow!”
By the late 1960s we owned five radio stations but I was frustrated to be based in Atlanta and not have one there. I looked around but it was clear that there weren’t going to be any twenty-four-hour stations for sale anytime soon. I might have been able to get my hands on a daytime AM station but those seemed to be losing propositions. The situation was frustrating. I had energy to burn and knew I’d be restless if the company didn’t keep growing and diversifying.
At about that same time I noticed an ad on one of our billboards for a UHF TV station called WJRJ, Channel 17. I wasn’t following the television business back then—to be honest, I didn’t even watch much TV. I remember having to ask someone what UHF stood for. (“Ultra High Frequency,” was the answer, which I soon learned was a fancy way to describe a station most people couldn’t see because their antennas couldn’t receive it.) Still, this business intrigued me. The VHF—Very High Frequency—stations in Atlanta were all strong network affiliates that were probably worth more than my entire company. But since the VHF stations were so strong and because they basically split the market three ways, I figured I might be able to get my hands on a UHF competitor at a price I could afford. As I asked around town, it appeared that WJRJ was not doing well and might be on the block. The idea of getting into the TV business was exciting and if my options came down to buying a lousy radio station or a lousy TV station, I wanted to bet on the medium that looked like it would grow.
Channel 17 was owned by Rice Broadcasting, which was run by Jack Rice, Jr. (not only was his name on the parent company, his initials provided the call letters for WJRJ). I went to see him and my visit confirmed that the business was indeed in bad shape. They had just gone public (the market for new issues was really hot at that time), but the station was bleeding cash. This wouldn’t be the worst thing, though, since our radio and billboard businesses were quite profitable and we could use these losses to lower our tax obligations while we turned the station around. I also came up with another way our company could squeeze value out of this deal. In an average month about 15 percent of our billboard inventory went unsold. With signs all over Atlanta, I could put the unsold ones to use promoting our station, just as we had done to promote our radio stations. The more I studied this deal, the more I wanted to do it.
My board, on the other hand, thought I was crazy. The directors were mostly friends of my father’s and they were having trouble getting used to my more aggressive style. They also read reports from analysts who did not believe that UHF stations would ever be successful. (I remember one who referred to UHF as “the lunatic fringe of broadcasting.”) But after considering it carefully I wanted to go ahead. Television would be a new challenge and it looked like it might be a lot of fun.
Rice was represented by Atlanta investment bank Robinson-Humphrey, and everyone involved was prepared to make a deal. Disappointed with the station’s performance, they thought that now might be a good time to merge with a partner or make an outright sale. They valued the company (which consisted entirely of the TV station, WJRJ) at $2.5 million. At the time the rest of our company was probably worth about $7.5 million, so this would be a big deal for us. There was no way we could pay cash, so we negotiated a stock swap that would leave me as the largest single shareholder in the combined company but would drop my percentage ownership to about 47 percent. My board of directors continued to raise objections but they knew I had voting control of the stock and in the end my enthusiasm wore them down.
Despite getting my board’s blessing, closing the deal would take a while. The Federal Communications Commission must approve any change of control at a station using the public airwaves. It’s a slow, bureaucratic process and between their scrutiny and all the other details we needed to resolve, it took nearly six months to go from a letter of intent to closing. A few months into this process a second UHF station signed on in Atlanta. They were part of a bigger group called U.S. Communications and they came into town with their guns blazing. They had catchy call letters for the Atlanta market—WATL—and they kicked off with a huge promotional campaign. We were pretty sure that their monthly programming budget was four times that of Channel 17’s—$100,000 to our $25,000—and after just two months on the air, their ratings were higher than WJRJ’s, which had been in business for two years.
The already small UHF market in Atlanta had thus been split in two and while our decision to buy Channel 17 was looking worse by the day, television was still where I wanted to be and I was determined to give it a try. Radio and billboards were okay but this was a chance to get into an exciting new game with some real upside. I was sure that some portion of TV’s growth in advertising had to come at the expense of radio and outdoor so this move made sense from a diversification standpoint. I knew how to sell advertising and assumed that the rest of the TV business couldn’t be that hard to learn. I had confidence in my abilities and figured things at the station couldn’t be so bad that we couldn’t turn it around.
Our deal finally closed in January of 1970. Upon taking control of WJRJ we changed its call letters to WTCG, for Turner Communications Group, the new name of our newly diversified media company.
I had a lot to learn about the TV business so I dove in headfirst. My radio and billboard experience gave me a good sense for the advertising side of things but television programming was a whole new world. When I was a kid we didn’t have a television set at home and the military prep schools and Brown didn’t have them either. Once I was out of school I was too busy to watch much TV—maybe a football game or a movie here or there. I bought a couple of books about the industry and subscribed to the TV trade journals. I also talked to a lot of people, including general managers of other stations and anyone else I could think of who had some knowledge to share. Even my local competitors were pretty forthcoming. I was kind of like Jimmy Brown getting information from those skippers; they didn’t see me as much of a threat and they didn’t mind telling me what they knew.
Unfortunately, the more I learned about TV stations, the more I realized that ours was a disaster. Most of the thirty-five employees we inherited were either lazy, on drugs, or both. The terrible work ethic started at the top. When I’d walk into the GM’s office he’d be sitting there with his feet propped up on the desk reading The Wall Street Journal. I’d say, “What are you doing reading the newspaper? This place is going broke! You need to get out and hustle!” It was the most poorly run business I had ever seen. We hired new people, bought some new equipment, anything we could afford to help turn things around. Of the thirty-five people who were on the payroll when we took over, only two were still there a year later—the custodian and the receptionist.
Our shows were weak, so I decided to make programming my top priority. As an independent station without prime-time commitments to a Big Three broadcast network (which back then were ABC, NBC, and CBS), we had flexibility and opportunities to be creative. During late night, after prime time, the three Atlanta broadcast affiliates ran programs like Johnny Carson and Dick Cavett. I loved movies and figured there had to other people out there who would prefer to watch them instead of talk shows. Sure enough, when we put films on in late night, our ratings improved. Sunday mornings were a similar story. The other stations all ran religious programming and I knew there had to be viewers who would appreciate another option. This was in the days before VCRs, and broadcast TV was the only way people could see movies at home. We began airing our best films in Academy Award Theater and I actually served as the show’s host. After being introduced as “R. E. Turner” I’d walk to my easy chair, sit down, and introduce the movie. It was a lot of fun and I think viewers liked seeing a live local person taking part in the programming. Academy Award Theater was our first big hit.
I’ve made a lot of programming decisions this same way ever since. I look around to see what the competition is running, figure out whose tastes aren’t being met, and provide them with an alternati
ve. From watching the competition I believed that most of what the networks were airing was garbage, full of gratuitous violence, sex, and stupidity. Knowing how quickly TV viewership was growing, it troubled me to see how much junk people were watching. With limited choices and so much poor programming, I felt that a station like ours could compete if we offered something that was more wholesome. I concluded that the great old TV shows could compete against new, crummy ones and for years that became a guiding principle for how we programmed the station.
About six months into our ownership of WTCG, a bankrupt UHF station in Charlotte went on the market. But Channel 17 looked like it might lose as much as $900,000 for our first full year and there was no way I could convince the board, let alone our bankers, that this was a good time to add another struggling station to the company’s portfolio. Still, I made an exploratory trip to Charlotte and the station seemed to have a solid infrastructure and lots of new equipment. I was convinced that TV was where I wanted to be, so I decided to buy the station on my own. And because it was in bankruptcy, I was able to buy it for less than $1 million.
Even though I executed this transaction separate from the company, my board was not happy, concerned about me trying to manage two money-losing stations in big, competitive markets. Most displeased of all was Irwin Mazo, my chief accountant (and onetime ocean navigator). He had been a close friend of my dad’s and after doing everything he could to keep me from buying the Atlanta station, the Charlotte deal was the last straw; he resigned from the board. (Later I found out that before Mazo left, he tried to have me replaced as the company’s president, but he realized that I owned too much stock for anyone to push me out.) Not long after Irwin left, Jim Roddey, who was running the company day to day, decided he’d also had enough, and he resigned as well. These were big blows given all we had in front of us, but I’ve always considered myself to be a good open-field runner and I was more determined than ever to make it work.
I renamed the Charlotte station WRET (which happen to be my initials), and quickly discovered that despite the better-looking physical plant and equipment, the operation was in poor financial shape. Complicating matters, I had committed myself to a serious schedule of sailing races and I was away a lot. Fortunately, I hired a smart guy from Price Waterhouse named Will Sanders. Will was great with the numbers and tough on spending, but even after his effective work keeping things on track while I was gone, WRET was clearly undercapitalized. It got to the point where we couldn’t pay some of our key suppliers, without whose forbearance we’d have to go off the air.
When we were beginning to get desperate, Sid Pike, who was running station operations in Atlanta, came to me with an idea. He suggested we go on the air with a telethon but instead of raising money for a charity we’d ask for viewers’ pledges to save our station. I thought it was worth trying and since we didn’t have any better ideas we gave it a shot. All weekend we ran movies but instead of putting ads on during the breaks, I’d come on and tell people that if they wanted us to stay on the air, we needed their help in the form of a direct cash loan. I’d say things like, “By the rules of business, we’re failing, but before we go off the air we’re asking for your support. We air about three thousand movies a year, so it’s probably worth a few of your own dollars to help keep us afloat.” Well, the money started rolling in. Little kids brought in their piggy banks and we had policemen and firemen come on the air and tell us why they felt the need to give. It was a lot of fun and when all was said and done, we raised about $25,000 and generated tremendous goodwill in the community. (By the way, we kept receipts for every donor for whom we had a record and when we turned the corner three years later we paid every single one back with interest—$4 for every $3 we borrowed—about a 10 percent annual return.)
As scary as things could get on occasion, this was a great time for the company. Every day was a battle but we refused to quit. The telethon (which later became known as the “beg-a-thon”) helped keep us afloat and from that point on we started taking more creative, fun chances with the programming. As in Atlanta, we ran a lot of old movies but tried to do it with a little twist. One of our more memorable showcases was a horror feature hosted by a guy we called “Dead Ernest.” At the start of the show he’d be lying down in a coffin and then he’d slowly sit up like a vampire and introduce the picture. Sandy Wheeler was our GM then and he had a lot of great creative ideas like this. We also made some important decisions when it came to series reruns. One was a programming swap with another station in town owned by Cox. We had rights to Ironside and Marcus Welby, two shows that were highly regarded on their networks but which turned out to be duds in syndication. We swapped them for The Andy Griffith Show, which turned out to be a huge hit—one that really helped turn the station around (and made us a lot of money for years to come).
We were also aggressive and creative when it came to ad sales and I personally went on a lot of calls. When potential advertisers criticized us for running old black and white shows when color TV was all the rage, we’d tell them that our black and white programming would help their color commercials pop out of the clutter. Others would say that since our shows were older and old-fashioned that our viewers were probably that way, too—not as smart or wealthy as the people watching our competition. I’d tell them they had it backward—our viewers were actually much smarter than our competitors’ because you had to be a genius to figure out how to pull down a UHF signal!
A TED STORY
“Just Plain Fun”
—Terry McGuirk
(TERRY MCGUIRK BEGAN WORKING AT TURNER COMMUNICATIONS BETWEEN HIS JUNIOR AND SENIOR YEARS AT MIDDLEBURY COLLEGE IN VERMONT. HE WENT ON TO WORK AT TURNER FOR MORE THAN THIRTY YEARS, ULTIMATELY BECOMING THE COMPANY’S CHIEF EXECUTIVE OFFICER. HE IS NOW THE CEO OF THE ATLANTA BRAVES.)
I was looking for a job for my final college summer and my father recommended I interview at Channel 17. My dad was general manager at the CBS affiliate in Atlanta but they had a serious nepotism policy so a position there was out of the question. Fortunately for me, my father was one of the few people in town who had respect for Ted and what he was trying to do and he thought a summer at Turner would be a good experience for me. I wound up having so much fun that summer that I worked there again the following Christmas vacation and Spring Break and after my graduation I went to work there full-time.
Having just earned my bachelor’s degree in history I went to Atlanta thinking this job would be a placeholder before I went on to teach or pursue some other very different kind of career. The only problem was, the job was just plain fun. There were only about thirty full-time employees at the station and almost all of us were in our early or mid-twenties. Toward the end of that first summer I was still thinking about what I really wanted to do for a career when Ted came walking into our little sales office. At this point I was the tenth man on a ten-man advertising sales team and Ted told us he had just bought a station in Charlotte. “I’m losing $50,000 a month,” he said. “It’s a total disaster and I need a couple of guys to pick up and go there to help straighten things out.” Everybody ran into the bathroom or hid under their desk. Sitting in the back of the room I raised my hand and said, “I’ll go.”
I was the only guy from Channel 17 who went and I arrived in Charlotte shortly after WRET’s famous “beg-a-thon.” That stunt had helped the situation somewhat but things were still in rough shape. The new salespeople Ted hired were following a group that had earned a very bad reputation in town. I can still remember making a call to a local furniture store only to have the owner chase me out of his store with a gun. Our general manager was a guy named Sandy Wheeler. I don’t know where Ted found him but he was quite a character and every single day at 10:00 A.M. there was an all-staff prayer meeting in the conference room. Everything at the entire station just stopped. For many of us in the sales department, this was not our cup of tea and we made sure to be out of the office on calls every day at that time.
Almost everythin
g we aired was taped syndicated programming. About the only show that aired live from our studios was a religious program hosted by a young couple named Jim and Tammy Faye Bakker. Well before they went on to national fame, they got their start with this local show in Charlotte and before long they were bringing in more money in a week than the entire station made in a month.
It really was a wild place to work. That station had a culture and beat of its own like nothing I’ve ever seen before or since.
The first year under our ownership WRET and WTCG each lost almost $1 million, but we were making significant progress. More people started buying UHF antennas, which helped enlarge our audience, and as a result more advertisers started spending money with us. Still, even as our revenue grew, Will Sanders was smart enough to realize that the company needed more capital and he pushed me to shed some assets. With TV becoming my focus, we sold our radio station in Jacksonville, Florida, and the billboard company we owned in Roanoke, Virginia.
I’ve been lucky many times in my career but what happened next was one of my greatest breaks ever. Out of the blue, WATL went off the air. Their parent company was losing money on each of its six UHF stations and they decided to pull the plug on WATL rather than continue to fight it out with us. Just like that we went from being one of two independents in the market to being the only one, and I knew that instant that this was a huge moment for us. Our direct competitor had capitulated and I was so excited I decided to throw an on-air celebration. It was literally a televised cocktail party. I’m sure people wondered what we were doing and it didn’t make for great TV but I couldn’t contain how happy I was and didn’t mind sharing our success with our audience.
With WATL out of the way, we were now the only independent station bidding on syndicated programming rights for Atlanta. The three network affiliates bought a limited number of newer movies and some syndicated series from the Hollywood studios and aired them selectively in local time periods, while the network supplied the bulk of their high-profile programming—prime time, soap operas, national news, and such. The film studios sold their products on a market-by-market basis and with WATL gone, no one else in Atlanta was buying old movies. This left literally thousands of titles with no one else competing to air them in our market. These old films were long since fully amortized by the studios, and in the old days the actors and actresses were paid a flat fee up front and didn’t participate in any “back end” revenues from syndication (after all, TV didn’t even exist when most of these movies were made). This meant that any revenue they generated from the Atlanta market would be found money that would drop straight to their bottom line.
