by Ted Turner
Our lawyers kept digging until one of them remembered a provision he had carved out in the deal we had reached with RCA a few years before when we sold our Atlanta uplink facility to them. This clause stipulated that whenever RCA allocated new satellite transponders, they owed Turner Broadcasting a right of first refusal. RCA had leased several transponders in the years since this agreement was signed and in every case they had overlooked this particular provision. While this contract had no direct bearing on the current situation (and the truth is, we wouldn’t have needed these transponders had they been offered), they were technically in breach. It looked like we might have some leverage in our negotiations.
Our backs were against the wall, but that also played to our advantage. I’m convinced that one of the reasons I’ve been successful is that I’ve almost always competed against people who were bigger and stronger but who had less commitment and desire than I did. RCA was a huge company, but for Turner Broadcasting, this dispute meant everything. We had bet the future of our company on CNN and had already poured millions into it. Now, less than four months from launch, we were in jeopardy. We had to succeed.
Our team flew to New York to meet with the RCA satellite people at their plush executive offices. I decided that I had no choice but to play tough and let them know I was serious. I contended that we had been good partners for a long time and as such they should help figure out a way to get us a slot on SATCOM I. I also argued that our lawyers considered RCA to be in breach of our earlier contract regarding our first refusal rights and said that if they didn’t sort this out quickly we were going to sue and take our case to the FCC. We had already invested more than $30 million in CNN and we would seek at least that amount in damages. I also made the point that it probably wouldn’t look good to the regulators that RCA also happened to own NBC. These were senior executives—the top people in the satellite division—and I told them they better make it clear to RCA’s top management that we would litigate if we had to.
We got their attention and left that meeting with the sense that the RCA people almost wanted us to sue them. Turns out they were in a bind because we weren’t the only programmer with a SATCOM III slot reserved who now wanted space on SATCOM I. Since they had only two openings available there, if they granted a transponder to CNN, they would have no logical or legal explanation as to why Turner was taken care of while the others were not. Of course, if a lawsuit from us would actually do them a favor, we were more than happy to oblige. Our legal team worked around the clock and by the end of February, Turner Broadcasting sued RCA for breach of contract.
Within a week the court ordered an injunction. We were granted access to SATCOM I for the next six months, taking us beyond our June 1 launch date. Then in April, the FCC weighed in and ordered this access period to be extended through December. While this didn’t give us all the security we would have liked, we could move forward with our plans and we were confident that between April and December we would come up with a long-term solution.
While we went to the brink with RCA, the business of building CNN continued and the atmosphere in Atlanta was chaotic. One of our biggest challenges was recruiting. Prior to launch we had to hire about three hundred people and attracting them wasn’t easy. We did find some people in Atlanta, but in most instances, joining CNN meant a move from a different television market and taking a chance on a business that many in the industry viewed as a long shot. Oftentimes we made offers to people whose spouse also happened to work in television and for whom a move to Atlanta would mean sacrificing their job. Many local stations would not allow husband-and-wife teams to work together but we told them that was no problem at CNN. We didn’t have these rules and we hired quite a few such pairs. An anchor’s wife might be a producer at a different station or a camerawoman’s husband might work with a competitor’s studio crew and we’d just hire both of them. We wound up with so many spouses and family members on the CNN payroll that I joked the initials might as well stand for the “Cable Nepotism Network!” We did many things differently, and we managed to attract some great talent. We didn’t often get people who were at the height of their careers but we did find some promising up-and-comers who were attracted by CNN and the chance to be on the ground floor of something new, ambitious, and exciting.
Along with hiring the staff, Reese Schonfeld also had to figure out how to fill a twenty-four-hour, seven-day-a-week news schedule, something that no one else had ever done before. He realized that we couldn’t do it all with breaking news and felt we should hire a group of well-known people specifically to provide editorial commentary. I thought that was a good idea as long as we did our best to get people from across the political spectrum and we always identify their views as their own, not CNN’s. We managed to sign Bill Simon, Bella Abzug, Phyllis Schlafly, Rowland Evans, and Bob Novak, among others. It was an impressive group, and combined with local anchors from around the country, Reese and his recruiters assembled a solid on-air team.
A TED STORY
“These People Are Nuts!”
—Lou Dobbs
(LOU DOBBS IS CURRENTLY THE ANCHOR AND MANAGING EDITOR OF CNN’S LOU DOBBS TONIGHT .)
In late 1979 I was working as a reporter and anchor at KING television in Seattle when I got a couple of calls from a headhunter trying to hire people for this proposed new news service in Atlanta. After I turned them down a couple of times, Sam Zelman, the CNN executive in charge of putting together the on-air team, gave me a call. When I let him know I wasn’t interested he said, “Well you ought to at least come down here. You’ll meet a lot of unusual people, if nothing else.”
I finally made the trip in January of 1980. This was just six months before the announced launch date and when I walked into this old ramshackle, run-down Georgian colonial I thought, “These people are nuts!” It certainly did not meet my preconception of what an innovative new television news outlet might look like, but I stayed long enough to have dinner with a group of CNN people and they were great. Everybody was completely energized. When I met Ted he didn’t know me from Adam but he greeted me like a long-lost brother. His enthusiasm was infectious and he was absolutely the definition of charismatic. He was in super sales mode and explained to me that CNN was going to be the greatest thing in the history of Western civilization! My visit didn’t leave me feeling like this would be the case, but I was convinced that win, lose, or draw this would be a wonderful thing to be a part of.
At the time that we dodged the RCA satellite bullet, our all-important sale of WRET hit a snag. Our station manager in Charlotte had gotten into a dispute with representatives of a local African-American group called the Charlotte Coalition. They had been lobbying the station for more minority employment and the airing of more minority-related programming. And instead of being respectful and listening to their concerns, our manager got into a fight with them and ordered them out of his office. Following this shabby treatment, they filed a lawsuit against the station. The FCC was very attentive to potential issues of discrimination, and this claim was sure to hold up our license transfer.
Without this sale and the $20 million in proceeds, we were in big trouble. As this dispute dragged on we were forced to take out a $20 million loan at 25 percent interest, requiring us to make $400,000 interest payments every month. We couldn’t afford to keep this up through a protracted legal process, so I set up a meeting in Charlotte with members of the coalition, and in addition to our lawyers, I asked Hank Aaron to come with us. Hank was well respected in the black community and when he pointed at me in our first meeting with the coalition and said, “This guy isn’t prejudiced,” it was a powerful moment. Yet despite Hank’s support, it was a tense series of negotiations.
In difficult situations like this, I try to be as straightforward as possible. I made it clear that I agreed that our manager had been in the wrong and as president of the company I took responsibility for his lousy judgment. I apologized for this behavior but explained that if they went forward with
this suit, they wouldn’t be punishing him; they’d only be hurting my company.
At one point in the negotiations I actually got down on the floor on my hands and knees and begged for forgiveness. I clasped my hands together and said, “You gotta let me sell this station or I’m a goner!” Somehow, between Hank Aaron’s support and my demonstration of genuine contrition, we got the negotiations back on track and worked out a deal. They would drop the lawsuit if I agreed to make a certain level of donations to the United Negro College Fund and some other worthy causes that they supported. With the lawsuit resolved, our license transfer was approved, and we completed our $20 million sale of WRET.
We were now just weeks away from CNN’s debut. Practice and preliminary trials for the 1980 America’s Cup had begun in Newport so my schedule was tight, but I wanted to be sure we put together a noteworthy launch that would let the world know that the Cable News Network was going to be something really important. We decided to hold a ceremony in front of our new offices—out on the lawn of the old Progressive Club. In addition to our own employees, we invited advertisers, cable operators, and members of the press. The network would begin satellite transmission at 6:00 P.M., so our event was scheduled to begin around 5:30. I flew down to Atlanta from Newport that morning.
We invited a combined Armed Forces Band, with top-notch musicians from the Army, Navy, Air Force, and Marines. They arrived a few hours early, as we were assembling bleachers and the viewing stand. While they were rehearsing, I asked them to play “Nearer My God, to Thee,” which I read was the last song played on the Titanic when she went down. We taped the performance so that in case the Cold War ever got hot and nuclear weapons were being launched, CNN could sign off its final broadcast with the Armed Forces Band and this recording. These were young service people and when they played this beautiful melody I had tears in my eyes. (By the way, as I understand it, this tape remains in CNN’s library—but thankfully they’ve never had to air it!)
Once our guests arrived I kicked off the program with a few comments, then handed the stage over to our other speakers. In addition to Reese and other Turner executives, I invited NCTA president Tom Wheeler to say a few words to emphasize how important this new network was to the cable industry. When it came back to my turn, I discussed the important role I expected CNN to play in disseminating information and bringing people together. Finally, I read this statement, which had been prepared by our PR department:
To act upon one’s convictions while others wait,
To create a positive force in a world where cynics abound,
To provide information to people when it wasn’t available before,
To offer those who want it a choice:
For the American people, whose thirst for understanding and a better life has made this venture possible;
For the cable industry, whose pioneering spirit caused this great step forward in communication;
And for those employees of Turner Broadcasting, whose total commitment to their company has brought us together today,
I dedicate the News Channel for America—The Cable News Network.
Then the band played the National Anthem, as was the custom for television stations when they signed on and off each day, and CNN went on the air. It was a thrilling moment. We still had a lot of work to do to make CNN a success, but we had already cleared substantial hurdles and had defied numerous skeptics simply by getting on the air. As proud as I was and as much as I would have loved to stay for the entire reception, I had to leave a little early to catch my flight back to Newport and the America’s Cup trials.
16
A Dagger Pointed at Our Heart
I decided to pursue the 1980 America’s Cup with the same boat and largely the same crew we won with in 1977. With Courageous also taking the prize in 1974 we were asking her to win three cups in a row, a feat that had never occurred. Our competitors now had had six years to study her design and to use this information and the latest technologies to build a faster boat. I could have tried to build a new one as well but designing and building a twelve-meter yacht takes a lot of time, energy, and cash, and given everything else I had had going on, especially getting CNN off the ground, I just couldn’t do it.
Our prime competitor in the U.S. trials was Dennis Conner, my former crewmember and eventual rival in 1974. After skipping the 1977 event, Conner was now putting a tremendous amount of energy and resources into his 1980 campaign. In addition to financing and building a new boat—Freedom—he had hired Robbie Doyle to help with Freedom’s sails. Robbie was on our crew and made our sails in 1977 and was doing the same in 1980. The competition in 1977 could only guess about what sails we had and how to beat them, but with Doyle on two teams in 1980, Conner knew exactly what we were using and had the time and resources to make improvements. It was as if, before World War II, the British had a Messerschmitt 109 or the Germans got the Spitfire and they had three years to test their own planes against them. Dennis also spent a lot of time sailing and practicing with his team. In the twelve months leading up to the trials, he was on the water over three hundred days to our seventy. America’s Cup yacht racing was becoming a full-time sport and it was getting much more difficult to compete as an amateur.
From the first preliminary trials it was clear that Freedom was the boat to beat. They took eleven of twelve match races and it was obvious that Conner’s training, testing, and investment in new technologies like Mylar and Kevlar sails were paying off. It was a difficult time for the Courageous crew. In a sport like baseball, teams go through losing streaks, but at least they change cities every few days. At the America’s Cup trials, you’re in Newport all summer, and getting beaten day after day is especially hard. The same guys who had a great time winning together three years before were now struggling to keep their spirits up.
It was a difficult time for me, too. We were sailing hard every day, and losing a lot more than we won. After a long day on the water, I’d shower, have dinner, and then spend the evening on the phone catching up on business in Atlanta. It had been a real dash leading up to CNN’s launch and now that we were up and running, it turned out that our expenses were nearly twice what we had budgeted while our revenues were about half. The Newport trials would have been tough enough, but with CNN losses four times our projections, the pressure was excruciating.
One evening, as I stood in the shower after a day of racing, my body started to shake. I’d been stressed before but this was a first and I realized I was pushing myself to the brink. Once I managed to calm down I thought about the situation and realized that I was struggling to do three things well. I was trying to build a business, race boats at a world championship level, and of course, attempting to raise a family. Something had to go. Ignoring my family was not an option. My five children were getting older—the older two were nearly grown—and already knew I wasn’t spending enough time with them. So it came down to sailing or business, and my decision became clear. In 1979, I became the first sailor to be named Yachtsman of the Year four times (I also received the honor in 1970, 1973, and 1977). I had already accomplished more in the sport than I ever imagined and it was hard to come up with any unmet goals that would keep me motivated. Quitting the company was a possibility—I probably could have sold Turner Broadcasting for hundreds of millions of dollars and never worked another day in my life—but unlike sailing, with my business career, I still had mountains to climb and I was excited about the future. In particular, CNN looked like it would not only be interesting, but also I believed it could have a major impact on the world. Then and there on that evening I decided that the 1980 America’s Cup would be the end of my sailing career.
So it came almost as a relief when, at the end of the final trials in August, the selection committee’s boat pulled alongside ours to tell us we were eliminated. I said my goodbyes and headed for Atlanta while Dennis and Freedom went on to successfully defend the Cup against Australia. In hindsight, we should never have entered the competition wi
th such an old boat and with so little time to practice. The sport was moving in a different direction—with full-time participants and corporate sponsors—and it was passing us by. For me, retiring from the sport of sailing was bittersweet, but it was time to move on.
Turner Broadcasting would take every bit of effort and ability I could muster. Keeping the business going while staying ahead of our creditors and competitors was hard work. CNN was off to a rough start. In addition to mounting losses that were well beyond our projections, media critics were taking shots at us. We had a lot of kinks to work out and some began referring to the network as “Chicken Noodle News.” But often our coverage of a story would demonstrate that we were competent journalists and that the twenty-four-hour news concept was powerful. One such occasion was the MGM Grand Hotel fire in Vegas in November of 1980. Apart from the local stations, CNN was the only television outlet to follow this story from start to finish.
But despite these successes, we continued to confront institutional and competitive barriers that made our work difficult. In these early days, our crews were denied access to the White House pressroom and any other press pools organized to cover the president. We were told that only “the networks” (meaning ABC, NBC, and CBS) were allowed. When we responded, “But we are a network,” it fell on deaf ears. The broadcast networks had no interest in CNN joining their exclusive club and the White House press people had no incentive to change policy, either.
CNN could not cover Washington politics adequately without access to the White House pressroom so we were forced to sue, and we went all the way to the top. In addition to ABC, NBC, and CBS, we also named in our lawsuit President Ronald Reagan, White House press chief Larry Speakes, and Reagan’s chief of staff, James Baker. Our claim that CNN was unfairly being denied access placed the White House in a no-win situation. There was no way they could defend shutting out our journalists and once our case was made public, the issue was resolved in our favor.
