Interview Date: March 29, 2011
Interviewer: Larry Satkowiak
Abstract
George Delaplaine discusses his interest in the cable business as a way to expand his family’s newspaper business, noting that newspapers are also part of the communications industry. He talks about the impact of television on print media and advertising dollars, and how cable filled a vacuum in a town with no television station. As an entrepreneur, he discusses the importance of hiring the right people to staff the myriad jobs required to manage a cable system, including construction; securing capital; dealing with municipalities as well as power companies and telephone companies, in order to utilize their poles and rights-of-way. He remarks on his management qualities. Delaplaine concludes with thoughts about cable’s future, and his belief that good customer service is the key to successful operation of any cable system.
Interview Transcript
LARRY SATKOWIAK: It’s May 29, 2011 and we are here at The Cable Center in Denver, Colorado with George B. Delaplaine, Jr. of GS Communications. George, welcome to the Cable Center.
GEORGE DELAPLAINE: Thank you very much for having us Larry and your staff.
SATKOWIAK: George, your family has been in the printing business since the late 1800s, can you tell us how and why you became involved with the cable television business?
DELAPLAINE: I think that was mainly because of what I saw when I was in the service. I was very fortunate during World War II to be selected to go to a service school called the Electronics Technician School. Whereby, we had to learn all about how to fix the communications gear on any ship, any submarine, any piece of naval gear which was available and it was through that that I saw the possibility. Since the family had been in the newspaper business and I thought “Well, newspapers, communications, let’s see how can we expand this” because I knew that my family was growing and it was going to be my sister’s side of the family [business] also. I was going to have to expand for the family. In communications, I saw the possibility where both visual as well as text could be handled by way of wire. Very slow, but it was possible to use a telephone wire, but the wire that goes much faster, delivers much more information in a given period of time is coax cable. And that’s what cable television, I found out about is based upon. So that is what it was, it was to expand the family business. To get involved in something in the communications area, just not newspapers. So that is how I came about that through my introduction in the Navy and also realizing that newspaper is just a part of the communications industry. There are other factors.
SATKOWIAK: How far back does your family in the publishing business? I know it’s been a number of generations.
DELAPLAINE: My grandfather on my father’s side started the newspaper as part of a printing business which he started in 1880. I sometimes tell acquaintances that the newspaper was started in ’83, that’s 1883. And that it was incorporated by my grandfather in 1888. At a time when incorporations had to practically take an act of the state legislature. We still have the old handwritten book from which the original by-laws, constitution and by-laws were set forth. Handwritten information and at that time he incorporated, by the longer the name you could dream up, the more prestigious in the business community. And so businesses like the Great Northern Railway or the Great Northern Paper Company, Great Atlantic and Pacific Tea Company, Great Atlantic and Pacific Tea is A&P and now Food Fresh. And then there was Great Britain, so you can’t not have great in the title [?] on your doorstep.
SATKOWIAK: Your family is involvement in the newspaper business obviously led you to get into the cable television business, where did the idea come from to go into the cable television business and was it a family affair, family venture?
DELAPLAINE: It actually started quite simply as time went on, my father was one of four boys and three of them were involved in the business. Two of them had died in 1964. That was the same year in which our local Community, which was 42 miles from downtown Washington and 45 miles from downtown Baltimore, it became the dual highway between linking Frederick, Maryland with Washington, DC and I-270 opened up the same day in which the Washington circumferential highway, the Beltway was opened up on its last link. So that brought Frederick in less than an hour, about three quarters of an hour from downtown Frederick to right around the Capitol building in 45 minutes. Which was really a tremendous advance over the hour and three quarters it used to take to get down anywhere close to that by driving an automobile. So with that in mind, I knew that people were coming in to Frederick. I knew that there was push out from people from Washington because Montgomery County, Maryland had – that’s the neighboring county between Frederick County and Washington, DC – they had taken about 25% of its land and pretty much put it into a non-developmental bank. People who had property in that bank of land really could not use it for any type of real estate development. It was limited to 50 acres to 150 acre tracts of land and they could not do anything other than maybe pay residents or tenant farmers, other than farm, they can’t do much more with it. So there was this leapfrog opportunity which I saw coming into Frederick and I knew that the rinky dink country newspaper that we had at that time couldn’t compete with these people who lived [in Washington]. Washington is government oriented and everybody in Washington who has any substance at all is reading the Washington Post. These people were bringing the Washington Post reading habits with them. I knew that Frederick was marginal in its reception of television signals back in 1964. And so I knew that it was cable, seemed to me to be the way to answer the problems we had. I foresaw that people wanted to get pictures; also if we owned cable one of these days we would be able to distribute the newspaper by way of our own wire. We wouldn’t have to pay the telephone company. And so that is how I rationalized on this whole thing. Let’s say it was not – it sounded sort of like pie in the sky but I was realistic enough to know that people with television were coming along, it was taking so much of the advertising dollar, it killed Life Magazine, it killed Saturday Evening Post, it killed Look magazine, it killed advertising dollars there. Advertising dollars went to television and Frederick was not big enough to have its own television station. Cable was the natural output.
SATKOWIAK: The emergence of the cable television industry in and around your area – let’s talk about that for a second. What were your greatest challenges in forming a business like this type of a business? Did you have regulatory problems that you had to overcome? How did the city receive the effort that you were trying to do? And what about capital formation and trying to get a venture like this off the ground?
DELAPLAINE: Very unusual thing. There was actually a time when cable television was first promoted of course in the smaller cities, particularly very rural areas of the country. Frederick was marginal. There were places in downtown Frederick where a cable television signal was not very good. Particularly along the major highways. Places up high – people with a tall antenna could get the pictures. So we knew it was going to be marginal. So there were two other factors. Two other groups who were thinking about cable television and they both had good connections with the city government. The city government was perplexed to know as which group to take. So they finally decided the only way to it was not a franchise agreement. It would be the group which got the agreement but across the city lines, the city property lines, public streets and thoroughfares first. The representatives of one of these two factors came to me and asked me if I thought if our family would be interested in taking a partial investment. And I said “I’ll talk it over with the family but it’s very interesting and I’ll let you know very shortly.” The next day I called him up and said “Yes, the family thinks that we would like to participate in this.”
It was just a number of factors that were involved in this. Mainly, the investors, the original group and those who came along later, were really working at a faster growing system than we had and I was the treasurer of the company and all the money passed through the office, cable office. My responsibility was to make sure all the money was handled properly. And so, as soon as we started cable in 1967, I made comments and notes everyday on paper how many, how much dollars we took in this week, dollars so far this month and what it was at the end of the month and we compared. For the next two years that’s what we did. For the investors really were expecting to get a very handsome return on their money in a short period of time and it turned out that I saw that we were gaining each year but it was not going to be a slam-dunk immediately. So we were able then to buy out all the other members of the group without too much extra money going out. With the income coming in, the way tax rules were, we were able to take the savings from not having to pay income tax because we had a wholly owned subsidiary which was losing money against the one which was making money. So we had a good cash flow from the beginning from the two operations. As things went on, it just started to blossom and it just grew and grew. Fortunately I was able to build a good team that included a regular finance man and he helped me to organize the financing and how to present the financial statements necessary to go along. I had a very good person as who knew how to build up systems and how to work with cable operators and how to do some horse trading on the side. I also had a very good person who knew how to handle people both internally and how to deal with structuring people in the right type of operation and also how to promote cable and our image to the outside world.
SATKOWIAK: The hiring of key people is obviously very important to any business and as we talked about earlier, an entrepreneur obviously has got to have good people around him. I know you have been quite fortunate in that way. Do you want to tell us about some of the people that you built that business with.
DELAPLAINE: Well, the three that I alluded to were the three who stayed with me, who really knew how to operate and grow the business. Bob Cole, who is with us here today, is the one who is a real pioneer in cable. He knew enough of the technical operations to be able to know the type of people necessary to do the work and also, not only in delivering the signal but in doing the build out because cable did an awful lot of building. Extending out, aerial and underground. We were learning how to dig trenches. We learned how to work with the city and the county and the state. We learned how to work with the power company and the phone company. To utilize their poles and their right of way. Bob does all that work, knows how to deal with others. Now the deal with the internal as far as making it work and getting the right public relations going – Marlene Young was in charge of that aspect. She is just a charming person and is able really to sense the mood of people and match their skills with the business needs. We have had absolutely no problem at all with any thought of anyone unionizing the company. We were always going with entrepreneurs, eager for enterprise. Phil Hammond certainly did know the way financially. He had his CPA, his started in banking and he knew how to talk to bankers and how to present the information that bankers really needed in order to make it go. And these are the three legs of the business and all I did was just give my nod of approval for whatever they were putting together. It was great because I was also running the newspaper at the time. I was the editor and publisher of that. I had to go out and do some public relations speaking. I ran for a while a weekly column for the newspaper. I had to be alert as to what was going on in the arts community. Also in going out and doing a little front work for – as we were expanding. We had to go out to find out about who the civic leaders were, the governmental leaders. Not only in our own community but in three other states. So I did have a lot going on my plate besides just the cable operation. Also, in the meantime we were raising four sons and had a little farming operation, teaching them how to live on the outside, what it was like, what was necessary in order to budget your life and budget your time.
SATKOWIAK: All the marks of a true entrepreneur.
DELAPLAINE: As a matter of fact I ended up being named “The Entrepreneur of The Year” in 1999. I was named the Master Entrepreneur of Maryland at that time.
SATKOWIAK: How many subscribers did you have in the cable business at your peak?
DELAPLAINE: At our peak, when we sold, I believe it was about 125,000.
SATKOWIAK: And what year was that?
DELAPLAINE: And that was in – well, the negotiations extended over a year. When they finally made the final blow and got the final check in, the final amount of money, it was on March 11, 2001. So we remember that date because it was six months before 9/11. Some dates that we happen to keep in our minds and we never forget.
SATKOWIAK: Of all the different things that you’ve done over the years, was there a high point, especially in your cable career that you say “Gee, this is really wonderful kinds of stuff.” Is there really one moment that you can point to that you think this is all worth it?
DELAPLAINE: I think about each day and I believe that the Lord gives us our life a day at a time. And each day particularly I’d go in the office and I’d see the reports, to see how the cable was growing, see how the newspaper circulations increasing, to see how our people react – I’m a walk around manager. I would walk around through the newspaper office and through the cable operation, to the cable office and enter through the back shop in both. I knew the newspaper – practically how to run every piece of equipment. There was a day I had to climb poles for the cable industry. So I know what it was like. What these people went through. When there was bad weather, I knew what it was like. I was out with them all the time and made sure that our telephone number was connected not to the local exchange but to the wider exchange so that everyone of our newspaper subscribers in our central base and everyone of our cable subscribers could call me at home with a listed telephone number. So we were available to the people. The only time that really that I got a call and this was a time when a newspaper was not published everyday – we took Sundays off and six legal holidays – it had to be early in July of one year, the telephone rang and said “George, I know you’re a good guy trying to do a good job for them but I didn’t get a paper today and could you see that I get one real quick.” And I said “John, I’ve known you for a long time and I’ll let you know a little secret.” I said “We don’t publish Christmas, we don’t publish New Years, we don’t publish Thanksgiving, we don’t publish on Memorial Day, we don’t publish on Labor Day and we don’t publish on July 4th, which happens to be today.” And he said “Oh” and hung up.
SATKOWIAK: The cable industry has changed an awful lot in recent years and obviously we’ve looked at the success of the pioneers, but what do you think is in store for cable in the future?
Delaplaine: You know, I think that it is such a changing field now. I never thought that the dish would ever amount to anything but the dish has taken away a lot of basic cable subscribers. Cable systems though really provide exceptional service, not only for regular cable service, the basic thing that started us off but the internet connection that we have, the high speed internet connection and also the telephone connection. I believe that is has a much better chance for future survival than probably the telephone company. I know that Verizon is in our hometown. It’s in our whole area. Verizon was trying to bring fiber to the door and they really had, I don’t know how many million dollars in the state of Maryland and Washington, DC and they went so far and then they sort of backed off on it all. AT&T was also going strong in an awful lot the same way. They were going to fiber to the node and then branching out with cable which is the way cable’s been going. I think that the winner is probably going to be the one who gives the best service. That is the biggest thing and this is what we built our newspaper on – we deliver service to the customer. Making sure the product gets to the final person in a timely manner and the same thing with cable TV service and with the internet service. Whoever of these three comes along and makes it easy for customers to talk to someone if they have a problem and discuss it and to quickly get that problem resolved – that is by far the number one problem which is going to be facing any of the alternate – cable as well as any of the possible competitors. Getting quality customer service.
SATKOWIAK: I couldn’t agree with you more. That seems to be the sweet spot for everyone and I know as a family business in your town that had to be extremely important for you obviously going back for a number of years. Do you have any last comments that you like to record for us since our time is just about done now?
DELAPLAINE: There are going to be other developments in the future. It’s been 10 years now since we sold the business and I really haven’t followed that closely but whatever it is the real key is going to be the service to the customer. Giving the customer what he or she wants in a quality manner and a satisfactory way and resolving any questions that they have as quickly as possible. That’s all I can say.
SATKOWIAK: Good words. This is Larry Satkowiak speaking with George Delaplaine for The Hauser Oral and Video History Program. George, thank you very much.
DELAPLAINE: Thank you very much for having me. It’s been a pleasure visiting here and talking with you.
