Interview Date: August 14, 2012
Interviewer: Lela Cocoros
Abstract
Jim Faircloth begins his interview by describing how he moved from a radio broadcasting career to working with a fledgling cable system. He discusses his next move to Storer Cable, its genesis in Alabama, and how cable was received when television came to communities. He comments on the company’s growth into many new markets, the rise of satellite transmission and before it was sold, Storer’s strategy in terms of expansion. He explores his transition to becoming a cable broker and explains how that worked, but also noting the government regulations affecting the brokerage business, leading to his recruitment to Millisat, a company whose business plan was to develop cable properties in very large multi-family dwellings. He talks about the challenges of programming in the international systems. Faircloth comments on his pride in being one of the founders of CTAM as well as his induction into the Cable TV Pioneers. Next he describes his move to former Westar properties as chief operating officer, and reflects on different corporate cultures. He explains how his current company received a prestigious technology innovator award. He goes on to speculate on the future of the cable industry, naming consolidation, retransmission consent, and programming costs as concerns. He names Bill Bresnan, Jim Hall, Arnold Muller, Julian Brodsky and Bill Daniels as some of the most important founders in cable, as well as discussing in detail the franchising days. He concludes with thoughts about camaraderie in the industry.
Interview Transcript
LELA COCOROS: Hi, I’m Lela Cocoros with The Cable Center. Today is Tuesday, August 14, 2012 and I’m here with Jim Faircloth, cable pioneer and president and founder of JKF Media Services. Good afternoon.
JIM FAIRCLOTH: Good afternoon to you, Lela.
COCOROS: So let’s start with your background. Just kind of where you grew up, where you were born and a little bit of growing up background.
FAIRCLOTH: I was born on a Navy base in Florida but didn’t stay there long. Spent a few years in Hawaii. My dad was a Navy pilot. But really, for all practical purposes, grew up in southwest Georgia. Finished school there. Went off to college, then after a couple of years, went back to my fledgling radio broadcasting career in the early ‘60s. Spent most of the ‘60s playing music. Basically, doing news, chasing politicos around, doing interviews on some campaigns in the South. And in 1968, the town where I was working was developing a cable system. It was under construction and they asked me to help them with the microwave testing with a license I had. I was able to do that. Didn’t know what I was signing in many cases but I worked with the cable folks a year before they opened the system. And about half way through the build, I was really intrigued about what the cable system was going to bring to this community that got one channel of NBC programming.
COCOROS: What community was that?
FAIRCLOTH: It was Tifton, Georgia. Southwest Georgia. There was an NBC affiliate, still is, in Albany, Georgia. About 40 miles away. The next nearest was in Tallahassee or Columbus, Georgia. Which was equidistant, maybe 90 miles. Very weak signals. So there wasn’t much television and there were a lot of new shows like Bonanza and Laugh-in and the early Star Trek. So, we were anxious to get cable TV. Just before the grand opening, I developed some vocal problems, overworking myself on the air and other activities, so voice related, basketball play by play, things like that. In crowded rooms. And had to take some time off from the radio station and as I came back, the cable system had their grand opening and asked me to do the broadcast for them. After a few days with the cable people and of course knowing all of what they were doing with the script I had, I was more intrigued by it and they offered me a job. About 200 miles away in Alabama, they were developing a new system over there and they had a manager locally where I was living and they took me over to Montgomery, Alabama to start that one. And it was a couple of years then they brought me back. That little company was acquired by Storer Broadcasting, which was the beginnings of Storer Cable.
COCOROS: So what was it like back then being in the community and how cable was received and television was coming to town?
FAIRCLOTH: Well, initially, as a lot of cable guys will tell you, we had the truck chasers. Those were the fun days. You put the logo on the truck and park it in the middle of the street and people would come out of their doors and want to sign up. So, kept the gravy after a year or two, saturate the system, begin to offer more if you could. Of course, in those days we had whatever broadcast we could bring in, local origination. Anything to make it more appealing to a broader mass of public. Of course, the rates were $4.95, $5.00 a month.
COCOROS: And how many channels back then?
FAIRCLOTH: Twelve in that system. There’re some neighboring systems that had been built previously that were just 6 channels. But we were all the way up to 12. Later went to 20, then 30, 35 of course. It was an interesting time because the growth was coming as fast as we could hook people up and anytime we opened a new community that enthusiasm would start all over again. Things were great for a few years until satellite technology came along and gave us the opportunity to offer more channels. Because my company was growing so fast at the time, developing new markets, I was transferred quite a bit. That had its pluses and minuses obviously. Uprooting the family every year or two but the same time, learning new communities and being promoted in the business much faster than someone my age would have been at the time.
COCOROS: Were these all in the southeast part of the U. S.?
FAIRCLOTH: For the most part, yes. Florida, Georgia, Alabama, South Carolina.
COCOROS: So, let’s go back to 1969, Storer Broadcasting, so what was Storer’s strategy in terms of expansion?
FAIRCLOTH: Well, initially, we had two bases of operation or the company did. I was not that involved at the time of course. Sarasota, Florida was our flagship and similarly on the west coast, Thousand Oaks, California. The company had acquired some smaller systems, Ojai, California. Laguna Beach bought from Jack Kent Cooke. The South Georgia group that had been my company, Empire Cablevision. Gradually expanded until we had pretty much run out of markets to either acquire or build. We lost a couple of key markets, Gainesville, Florida, Pensacola, Florida to Cox. After we lost the Myrtle Beach purchase to Cox, they outbid us on that one; we decided we needed to expand further into the West where there were no cable systems so we built a good chunk of Houston. I did part of the Dallas suburbs. A large section of Phoenix and suburbs of Portland, Oregon. So we expanded across the country. Our footprint grew considerably. The southeastern region grew into New Jersey and Arkansas with the Little Rock franchise. Oklahoma City. So we had a lot of new markets starting all at the same time so that the people who were – we had a very aggressive management training program – and I remember several of those trainees who would come in wide eyed and not knowing much about cable and spend 6 or 8 months with a seasoned manager, two or 3 years and the next thing you knew they were on their way to Houston or somewhere. So it really was quite interesting. It was either advance very quickly or burnout. We had some successes and some that weren’t so successful.
COCOROS: Interesting. So, eventually Storer was sold to KKR [Kohlberg Kravis Roberts], right? Can you tell us about that and what led to that?
FAIRCLOTH: Well, KKR had done a leverage buyout of Wometco Cable a couple of years earlier and apparently that worked out very well for them. Wometco also owned some Coca-Cola bottling divisions…
COCOROS: I remember Wometco Home Theater.
FAIRCLOTH: That’s right and they were quite profitable. They sold off the bottling divisions and had the cable systems almost debt free. So they ran those for several years and actually still held them at the time that they took Storer private. But what really led to it was the fact that we were so aggressively building these large markets. I mentioned Phoenix and Houston and Dallas and others. Portland, that we were borrowing a lot of money and our stock was, I wouldn’t say depressed but it was challenged. And the Storer Broadcasting stockholders since the ‘40s had been accustomed to nice returns and just growth and dividends and suddenly it was a little bit of unease, unrest out among the non-insiders about what the company direction was going. So a group of New York corporate raiders, not KKR, called the Constant Partners, took a run at Storer and formed a committee for full valuations or something like that. And so KKR came in as the white knight and our board elected to go with their offer and we ultimately went through that LBO [leveraged buyout] that closed in December of 1985 and essentially changed the company overnight. What it had been – a family company really since the ‘20s in radio and since the late ‘40s in television and the early ‘60s in cable – transitioned it to a very aggressive, buying, selling, swapping chess pieces. And so the company, the heart if you will, was taken out of it initially with the departure of Peter Storer. The last family member as chairman, who left very shortly after the LBO. That definitely changed things overnight. And as you know, of course, KKR did not hold that company, the Cablevision very long. They sold the broadcast stations, television stations in 7 markets within the first year. And within another year, 18 months, they were spinning off the cable systems to TCI, Knight-Ridder and the other half to Comcast.
COCOROS: And that was when Brian Roberts was just coming onto the scene as an up and coming Comcast executive?
FAIRCLOTH: Bob Clasen, president of Comcast at the time. Brian was sort of the understudy. Of course, that all changed shortly after that. I recall Brian telling me at the time that Storer prior to the KKR, after the closing but prior to Comcast becoming involved in acquiring half the company, half the cable systems, that Comcast had big plans beyond just being a larger cable company. Now we know what those were. (Laughter)
COCOROS: Sure do. Okay, so how long were you then at Storer after the Comcast, TCI, what was it?
FAIRCLOTH: Effectively a year. I had been offered a position in a different division. I was running the Western Division out of Phoenix. Those properties were being traded to Times Mirror. A couple of California systems had been sold. The Oregon properties were under contract to sell, so effectively my Western Division was not going to be there. So I was offered a chance to go to Louisville, Kentucky which I had franchised just a few years earlier and was not very keen on the idea. So we worked out a separation plan that would go over a number of months so I could see some of the transition through and leave the company on my terms but also leave it in good hands with some of the people. The area vps who had reported to me took smaller pieces of the region and kept it in place. So there were some personnel shuffling. I’d like to think it took at least 4 people to replace me.
COCOROS: And this was what – ‘86?
FAIRCLOTH: That was ’86, end of ’86.
COCOROS: So from there you went to Millisat?
FAIRCLOTH: No, I was recruited by Tom Puckett.
COCOROS: Oh.
FAIRCLOTH: A fellow pioneer. Chairman of HPC [Hardesty, Puckett & Co.] Puckett and Company. Founder of the brokerage firm. Originally out of Topeka, Kansas and now in San Diego. Tom had come to me 5 or 6 months before the KKR closing on behalf of a client that wanted to acquire one of the Arizona systems, Glendale, Arizona. While that deal didn’t work out, the time that we spent together, we really clicked and the president of the company at the time was a fellow named Jim Queen. Jim Queen decided after Tom went to San Diego that he wanted to stay in the Midwest, Kansas City and start a paging company. So the two partners split. Tom recruited me to come to San Diego as president of the brokerage firm. And really when I thought about it, I had been doing cable valuations for two years prior to parting Storer, so the process of becoming a cable broker was more seamless than I might have imagined. And that was a fun period. The magazine coverage called it the salad days of brokering because there were so many transactions between ’87 and ‘90…
COCOROS: Oh my gosh, a deal a day.
FAIRCLOTH: Just about.
COCOROS: So explain to people who might not be familiar with a brokerage firm how that works in terms of cable transactions.
FAIRCLOTH: Well, generally we represented sellers. Whether we were going to a market and we would say, I’ll pick on Topeka again, might be ready to sell, might have matured to a point or the founders of the company were a certain age where they might want to cash out for their kids – we would go in and make a pitch to them that we could get between this and that for their business. We did some of that. Some came to us. Tom Puckett established a real nice beachhead in the Midwest. In fact, he likes to say truthfully, that he sold some towns in the Midwest 5 or 6 times. Sell it to one company that would sell to somebody else and so there was a lot of what we would call tombstones with TC Puckett’s name on them with these various transactions. I had so much history in the southeast that I began to travel a lot in the South and do more and more deals in the southeast on the cable side. And then when paging transactions began to heat up, we did some of that as well, but cable was always the bread and butter. We would facilitate trades when two parties couldn’t get together on the valuation, my cat is prettier than your dog, you know. We’d show both sides that plusses and minuses of their operations and facilitated a number of large trades that kind of put us on the map. We were also recruited by, were contacted by Marvin Davis at one time to consult on buying pieces of Storer. This was prior to TCI and Comcast doing their deal. Cox was in the mix as well looking for some of those properties. Dick Clark Productions hired us to go really evaluate some communities that didn’t have cable. If you could imagine in the late ‘80s there were still a few. And so we did that. So it was interesting times but principally if you wanted to, the ABCs of the brokerage business is representing the seller and getting maximum price and leaving the closing table with everyone feeling good about the deal.
COCOROS: So this takes us to the late ‘80s, early ‘90s?
FAIRCLOTH: Yes. In 1990, as anyone involved in the financial part of the cable business understands the Federal authorities instituted what they called the High Leverage Transaction Rules. Highly Leveraged Transaction. Which essentially shut the brokerage business down for a couple of years. Nobody could get money to do a deal. If you didn’t have the cash, you weren’t going to do the deal. And so we closed… we’d opened an office in Atlanta, we closed that one. We downgraded Topeka a little bit and Tom Puckett and I very amiably parted ways because we weren’t doing enough business to support both ends of the country. And I was recruited by someone you might know, a fellow named Mike Ween, a former Denverite now down in Florida somewhere. Who was, I think, one of Ann Carlsen’s early mentors in the search business. And Mike recruited me to go up to Seattle and join a company called Millisat, a subsidiary of an international cellular carrier, Millicom, SA based in Scandinavia. And Millisat business plan was to develop cable properties in very large multi-family dwellings. For example, we had 30,000 units in Glasgow. We had 15,000, I think in Hong Kong. South of France we had a group of systems. Outside of Madrid, the southern coast of Spain we had 15,000 or so passings. Not that many customers. And in the states, we had markets in Dallas and Houston and Miami and Portland and Seattle. Lots of places where we had 2,000 customers in one location. We had addressability that was able to handle the disconnects and reconnects which helped a lot. We typically had one technician per city and all of the CSR’s were in Seattle. Belleview, Washington. And it was a growing little company. But Millicom, when the cellular business really took off in the early ‘90s, Millicom had to be sitting around the board table, I wasn’t there at the time, saying what are we doing with this little cable thing. The little TV thing. So they decided to sell and they asked me how I felt about that and I said “Swell, I’ll help you do it.” So I can began to unravel – the U.S. business was easy. In fact, I called Tom Puckett and he helped put together deals on most of the U.S. properties. We sold a few just on the phone out of our own shop. And then the international properties were a little more difficult. Hong Kong was particularly difficult to unload because the transition to mainland China was about to happen.
COCOROS: Was happening, right, exactly.
FAIRCLOTH: Was about to happen. So we had to be very cautious about how we handled that deal. We couldn’t sell the French and Spanish properties to the same company so there was a little in getting that done. So it took almost two years but we got it done and a lot of international travel ensued which led to some consulting opportunities later.
COCOROS: That’s great. Just all the different cultures and all that, how did you see the business in different countries?
FAIRCLOTH: Initially the biggest challenge in Hong Kong was programming because we had a difficulty even though mainland China hadn’t taken over, I had to negotiate with the Xinhua News Agency to get permission to bring CNN International into our little cable systems. And anything else of international flavor they were very choosy about what could be shown. They had developed what they called soap operas or passion plays, their versions. They were very tame. What they produced that we then imported into the Hong Kong operation. Programming was the biggest challenge there because this one building would have 30,000 units and getting penetration to was not difficult, getting your return on your invested capital was not difficult, but getting programming to feed the wishes of the…they all wanted soccer of course. There was a lot of international horse racing. That was another big channel that we had going out in Asia. In Europe, it was a language problem because I remember in Albertville, France, we had 8,000 units on a one square block area that we passed and we had something like 1600 cable connections and they asked me to go ahead literally door to door in one of these places and find out why and turned out that there were 8 different languages spoken in this one building.
COCOROS: Oh my gosh.
FAIRCLOTH: So between the BBC which they had without paying service and a couple of other international channels from France and Canal+ premium service, they didn’t see a great need for cable. So they had these splendidly built, mostly Philips headends, nice cable systems passing tens of thousands of homes with very few customers. So that was a different challenge there. Of course, regular challenges, in Spain you could hire someone but you can’t let them go ever. They have labor court that can go on for 6 months so if you decide that someone is absolutely a worthless employee and they need to hit the road, you have to go to labor court and you have to send a manager to labor court and it takes up to 6 months to get it done. And at the end of the 6 months, quite often, you have another 6 months to pay this person. So you’re very careful in your recruiting of new talent, that’s for sure.
COCOROS: Absolutely.
FAIRCLOTH: Different challenges in different countries.
COCOROS: Is there anything before we move on to the next step in your career, any moments that you found particularly challenging, interesting or that you’re most proud of in this time frame of your career?
FAIRCLOTH: In this time frame or back then?
COCOROS: Either one.
FAIRCLOTH: I think probably I would point to the founding of CTAM. I got a call from, actually our CEO at the time Ken Bagwell, and he had known Greg Liptak through these Ohio broadcasting groups and said there’s going to be a meeting in Chicago next week or next month or whatever, September of ’75 and we need you to go. And you’re going to meet some other cable people and of course Bill Bresnan, Chuck Dolan. I met Gail Sermersheim for the first time at that meeting. It was just a who’s who of the cable business at the time. And out of that meeting sprang the CTAM organization. I’m sure because the size of Storer, I was elected to the first board. So being a board member of the first board of CTAM is a particular point of pride for me. And then, being inducted into the Pioneers in my first year of eligibility. Nominated by Bill Bresnan and seconded by Polly Dunn. Was also another highlight of my early career.
COCOROS: And what year were you inducted?
FAIRCLOTH: ’89. 1989. Yup. Just a couple of years later, Gail decided that she had enough of the board and wanted to go off to do some other fun things, called me after the, I think it was the New Orleans meeting and asked if I would take her seat on the board. The other… Bill Bresnan and the others on the board said sure. So I joined the board in like ’92 and I’m still there. So that was pretty special to me because we’ve done a lot of good things in those 20 years.
COCOROS: Absolutely. And then you went…so after you helped sell the Millisat properties you started your own business.
FAIRCLOTH: Well, actually interesting, on the way back from Seattle, on the way home to Georgia because I always maintained a residence there, on the way back in the summer of ’93, I had a call from Tom Puckett. And he was representing a company called Weststar that was dissolving a partnership that had interests in California, Idaho, Nevada and the Cayman Islands. One of the partners wanted to keep the Cayman Islands and the other three wanted to keep the U.S. properties. And they couldn’t agree on a valuation of the Cayman property so Tom called me and I think I was somewhere outside of Manhattan, Kansas when I got the call to see if I would go to the Cayman Islands and spend a week and kind of get a feel for what the value of that new cable operation was. And I said sure. Don’t have anything to do but unpack when I get back. So I took the job and I needed an entity to do the work under so I formed KFB Services at that time. And one thing led to another. I had a few other calls and some of those European connections that I had made through Millisat and Millicom started to come back around. Two of the big banks in Europe, Crédit Lyonnais and Crédit Agricole owned some large cable properties and they engaged me to consult for them. As I said one thing led to another. And then a project in East Germany and a project in Taiwan. It seemed that when I would finish one and take a breath and wonder what I was going to do and the phone would ring and there’d be something else to do.
COCOROS: And another place to visit. Great opportunities.
FAIRCLOTH: And that transitioned for a few years. I actually did some brokerage out of my shop. Just solo jobs. A couple in concert with another pioneer, Mike Jeffrey and I co-brokered several small cable systems for Showcase Communications in New Hampshire, Vermont and Massachusetts. We did a little consulting together as well. Some valuation work. But after probably ’98, I’d done my last large, one man brokerage deal and had another call from Tom Puckett who said that Chris Hilliard was sitting in his office with the Weststar people, same people who had the Cayman Islands deal, and wanted to acquire the Weststar U.S. properties and form a new entity and asked if I would sign on or be interested in signing on as Chief Operating Officer. So, it didn’t take long to think that was a pretty good idea. So we opened a shop in Reno, Nevada as sort of central to California, Nevada, Oregon, New Mexico and Idaho at the time. We bought 65, 000 subscribers in those five states. Built it up as best we could. We had pretty smooth sailing for a while and in the winter of 2000, a lot of the local market began to get local signals from Dish and we lost 7 or 8% of our customer base that year in these Dish local to local markets. And our investors got a little antsy. A couple of them sold their investments to outside investors. It wasn’t the same happy group that started the company. Chris Hilliard, my partner, went back to Nebraska to his other businesses and I stayed on with USA Media Group…
COCOROS: The name of the company?
FAIRCLOTH: Right. Stayed on through 2004 which was about 5½ years until we sold the last pieces. We actually sold to Jerry Kent. We sold him the last remaining properties to Jerry and his Cequel Media. Then went back to Georgia and hung out the shingle again.
COCOROS: So you’re pretty comfortable in both roles inside a company or being independent and what are the differences in how you feel about working in those places?
FAIRCLOTH: Sure. I really like hands on. I guess I probably didn’t realize some of this until after I was gone from Storer because I had 1200 employees in the Western Division. You knew so many of the families and of course all the managers and their families. We didn’t have HR departments in those days so my secretary handled all those personnel issues and they would come in with a story a day practically if somebody needed something. Being able to provide something, it was easy for me to say yes to that meant a lot to a family in Texas or Colorado or somewhere. Was very rewarding. I enjoyed that part of a big corporate culture but when we had a corporate HR group come in and suddenly, if I wanted to hire a new manager for Houston for example, they had to go through the drill in Miami and sometimes they didn’t pass when they should have passed, I thought. So it was a whole different thing, you know. I was not sorry to leave some of those things…
COCOROS: Bureaucratic type things.
FAIRCLOTH: Not sad to leave some of that behind. And I really learned when I was reintroduced to the smaller operations again, that’s where I started and how much I enjoyed the local communities. You know the mayor and you’re comfortable walking into city hall. The clerk is Janice and you get a cup of coffee and you go have a meeting. Just very comfortable.
COCOROS: So what do you see happening with technology? Your company in 2001 got the Most Technology Innovator of the Year from Cablevision which is quite an accomplishment for a small company. So, talk us through the technology side of this and how you see thing evolving.
FAIRCLOTH: I have to start that answer when I first got the big thing to put on your desk, the big globe that’s got Bill Daniels name on it – Tom Puckett asked me if I was really going to put that in my office because we had competed for some many years with Bill Daniels. We had the first launch of OpenTV’s interactive platform in our Half Moon Bay system. It was south of San Francisco for those not familiar with the market. 8,000 subscribers. So it was a good test market. Not a lot of miles of plant. It’s a very condensed market. High income. High profile market. High demographic. So we introduced OpenTV which was huge in Europe and Asia but nowhere, couldn’t get anywhere in the states. They were based somewhere in the bay area, Pleasanton, somewhere in the east valley, east bay. They made a pitch to us and we said yeah. So we had the interactivity in the internet modems, so it was easy enough for us to do. When the industry happened – CTAM was in San Francisco that year – so when CTAM came to San Francisco we had the CEOs, Mike Willner, everybody came down to Half Moon Bay to see it in action. And it ultimately didn’t go anywhere. Didn’t get broad acceptance in this country because interactivity took a different track in the states. But it was an interesting process. It taught them what could be done here. I guess it was valuable to them. It put us on the map a bit more. We did some other things that year but that was the principle reason that the technology award was given to us.
COCOROS: And now it’s just a whole other…
FAIRCLOTH: It’s exploded, exactly and with the IP technology, I remember actually going to the co-op within a year of my leaving — I served two terms on the NCTC board and within a year, year and a half of my second term ending, I took a client back into NCTC to pitch an IP headend for the southeast based in Atlanta and the programmers wouldn’t sign on to it. They said no way, never and of course, the next thing you know here comes U-verse and other people doing what we were asking to do a couple of years earlier. It took a while for the programmers to come to grips. Their concern was the control of their product and once, as you know, once it’s digital, it’s out there forever and someone else can own it and do what they want with it. Make bootleg copies to send overseas. But that technology of course has gone even further than where we are today. It’ll be interesting to see where the aero business goes and how the regulations that come down and whether that court ruling is challenged and if retransmission consent is really under fire.
COCOROS: Well, that leads me to asking where do you think that things are going to be headed in the next few years in terms of the industry? I mean even the industry itself is being redefined moment by moment. Just kind of where do you see things headed?
FAIRCLOTH: I think every panel I’ve probably ever done on at a convention or anywhere else or just sitting in a group of bankers answering that question, it’s always been more consolidation. And you look at it now and say how can there be more consolidation? Well, there is still the Mediacom’s that might go at some point like Insight went last year, you know. There’s always another deal. And I certainly don’t see Comcast or Time Warner or Cox making any major announcements like that but pieces of Charter and different swaps and trades. So continuing consolidation. So many of the Mom and Pop systems that have been acquired through the years, there are still some out there. I think about Morgan City, Louisiana where I did some consulting for an investment 5-6 years ago and Morgan City is still in the same hands as it was, the Price family, as it was in the ‘70s, early ‘70s and before. And the founder, Allen Price was someone I knew in the Southern Association when I was president of the Alabama Association and he was head of Louisiana delegation and now his three sons and one daughter run the company. Still independent. Now they have to go back and do financing every few years but there’s a case where there’s a very nice property that’s right for acquisition that the family’s not interested in today. So there’s still several hundred thousand more, if not a million or two more subscribers up for grabs up there. Consolidation is part of the answer. Regulatory, as I said, retransmission consent is a huge issue and it’s really the bread and butter of the business is our programming, of course. But now so many cable systems bread and butter is more internet, some telephony that have to carry the video proposition because the margins have been so underlined by programming costs and retransmission consent costs. It’s very difficult.
COCOROS: Never dull.
FAIRCLOTH: No, never dull. I know in the early ‘80s our California systems, the highest was Ojai with 58% operating margin. Today a system like that would do very well without internet to do 30%. It’s all different.
COCOROS: It’s interesting. Anything else you want to – did I hit everything or is there something, are there any other stories or recollections.
FAIRCLOTH: I think we – between the international and cable beginnings, we’ve covered most of the stories. I would like to pay an homage to Bill Bresnan, Jim Hall, Arnold Muller, Julian Brodsky, some of the people I admired so much as a young executive. Of course, worked directly for Jim Hall and Arnold Muller. People like Bill Bresnan who was the first person to approach me after the Storer announcement was made. It was a Western Show and all the East Coast guys got on a plane and went home the last day of the Western Show which was always a Friday and didn’t stay for the banquet. Only the California, the western guys would stick around for the closing banquet which was always a terrific event. And in those days I lived either in Georgia, Florida or somewhere in the southeast. I always stayed over and took a redeye or the early flight the next morning to stay for that banquet. Well, I’d stayed over that Friday night and Bill was also an East Coast guy that would stay and he was seated down at a table near the bandstand and I was up on one of the mezzanines and he walked over on the break to ask me what I was going to do and if there is anything that you need, I’m here, you know. And Bill and I did a lot of business in the years that followed in the brokerage business that I was not thinking about at the time but as with so many other people in this business, he meant a tremendous amount to me.
COCOROS: He touched so many people.
FAIRCLOTH: Exactly and I think this Ethics in Business Award is so timely and so well deserved. When I think about people like Bill and Julian and others, the late Dan Aaron also of Comcast. You never had to worry after a handshake. We did a lot of trades of small systems without many numbers or a lot of backup or papers or books or brokers. We like this one, you like that one. You’re here, we’re there. Let’s do the deal. Handshake and off you go. So the people like that, I said when I was in the CableFax One Hundred one year, I think it was ’99, they asked me if there was anything, I think, I’d like to be changed about the industry and I said some of those great founders, if we had more of them back today, we’ll never get over missing Bill, for sure. But there’s so many others as well, Burt Harris of course was another one who like Storer was in the broadcasting business and really became a cable guy at the end. He certainly did. But people like that had the integrity and the stand behind any deal that they shook hands or even agreed on the telephone to do. I would like to pay honor to those people who have meant so much to my career because I think maybe as late as 10 years in my cable career; I was still looking back at radio. It still had that appeal of playing the hits, you know. People like Bill and Jim Hall convinced me that this was the business I wanted to be in so I hung it out. Now the only question that remains is when I’ll ever want to hang it up. (Laughter) Not today.
COCOROS: Okay, so let’s talk a little bit about the franchising days and give me a story about one of your exploits in the franchising presentation days.
FAIRCLOTH: Those were the wild and wooly days so we could go for another hour on those but a couple in particular, I mentioned Julian Brodsky a minute ago. I was scheduled to be in Nashville, Oklahoma City, somewhere the following day and had to be – no it was Clearwater – franchise the next night. But there was a franchise hearing that was called at the spur of the moment in Jacksonville Beach for three of the beach communities that were franchising separately from the city of Jacksonville, Florida. And CEA had a little airplane at the time and they asked me to hop a ride with them. We were doing a lot of work with them in those years and I took the flight over and walked into the city hall in Atlantic Beach, I think it was, and Julian Brodsky is sitting across the aisle and he comes over and sits down next to me and the room is about half full of people and he slaps me on the leg and he says “Jimmy, how are ya? What are you doing here?” So we chitchat for a few minutes and they call the meeting to order and we give our presentations in alphabetical order as we usually did. So Comcast came first and he waved so long as he went out the door and I gave mine. At the end of the day the footnote is we both lost to Cox. It was one of those deals that really exemplified the time and the camaraderie, the relationships that we were so close that even had we been competing for the sweetest prize on the vine, we’d still been shaking hands at the beginning, at the end of the meeting. It was that kind of relationship.
The other one real quick was back to Bill Bresnan. It was in St. Louis and the Webster Grove suburbs, Webster Groves on the outskirts of St. Louis, and I honestly don’t know to this day why Storer was interested except we had the Florissant franchise which was going to be sold had we not acquired something else and eventually was to Continental. We show up at Webster Grove and there’s Bill across the room, TelePrompTer of course, I’m Storer and Lou Brock is signaling him. And of course as an old baseball player and a fan all my life, that’s Lou Brock, the retired Cardinal Hall of Fame guy. So, we hadn’t given our presentation, CableCom, ??? General, maybe Cox. The early ones had gone ahead of us. Adams Russell. So all of that came before the break. So when the break came I hadn’t done mine. TelePrompTer hadn’t done theirs and Lou Brock gets up walks over and sits down next to me and introduces himself. And I say well it’s really a pleasure to meet you. And he said “Yeah” and he said “I asked Bill what I was supposed to do.” They had just hired him and made him VP of sports programming or something but he was going to be the big draw for the franchise. And he says “I asked Bill what to do and he said to go over and ask you.” (Laughter) So here we are competing for a nice franchise and I said “Well, it’s sort of routine and you just sort of talk about your company and everything.” He went back and came back over there again and said “I asked Bill and I still don’t understand and he said well, just watch him.” So, I did my presentation and they did theirs and Bob Brooks actually won that franchise and Bill later invested in the Brooks Fiber and Brooks Properties.
COCOROS: Interesting.
FAIRCLOTH: He ended up with a piece of it after all but we both lost that night to the locals.
COCOROS: That’s funny.
FAIRCLOTH: So there are many stories. Nashville was a long process. Little Rock which we lost the first go around but the winning company which shall not be named reneged on some promises so the city told them to go away and they called us back and said is your proposal still good a year later. I was on vacation in North Carolina, a little ski place up there with no phone in the room and no cellphones of course those days. And they said can you come back to Little Rock and make a presentation tomorrow night, they want to give us a franchise so came back and that’s how we got Little Rock, Arkansas. Every company and franchising team has a million of those stories. Some of us – one of Ann Carlsen’s people lives down in Atlanta, was on the Cox franchise team and she and I…
COCOROS: Was that Terry?
FAIRCLOTH: Terry, right. After Hall of Fame dinner, we’re trading some of those stories about some of their lead guys she worked for and was up against me.
COCOROS: Talk a little bit, when we were talking about Terry, referring to Terry Thompson, talk a little bit about the camaraderie in the industry. Just kind of your personal – you talked a lot about Bill and Julian and some other people, but just generally your take on it and if somebody were to come into the industry now, it’s a different world of course. What are the high points of knowing different people through different experiences and how everyone is connected?
FAIRCLOTH: Most people of my generation, Les Reads and Paul Maxwells of the world would tell you that the conventions in those days when there was the Western Show, the Texas Show, the Mid-America, the Atlantic Cable Show in Atlantic City every year, Southern Cable Show in Atlanta, was an opportunity for younger middle management people in these regions to attend a convention and to participate and sometimes leading to promotions that opened other doors for them. And you got to know people in other parts of the country. There’s a gentleman named Gene Cook when I was first, still running the Eastern Division for Storer, started attending the Western Show because the reasons that would take way too long to explain, Storer didn’t belong to NCTA in the earlier years. Some of the broadcast hard feelings kind of thing. So, the Western Show was our big show and I met Gail Oldfather and Gene Cook and some of the people that were really the names out west and I think that happened a lot. And you developed friendships over the years and camaraderie that you see these people at the Pioneers, the ones that are still active and the ones that are still around. There were very, very, very few stories even in the franchise battles where there were acrimonious feelings about individual or a particular company. There were a few. A few dirty tricks. So like political campaigns. Sometimes it’s not all the truth that you get from the other side and a little money changed hands a time or two I understand but for the most part, I’d say well up into the 90% of people were very simpatico. You didn’t have hard feelings against the other guy if he won. And again, just another coda on the franchise years, we fought and fought and fought for the city of Fort Worth, which is Arnold Muller’s hometown. Arnold was the president of the Cablevision at this particular time in ’78, ’79 and we spent months and millions in Fort Worth to get the franchise. And there were five of us on the front row there when the vote came in and we lost it to Sammons. And Arnold leaned over to us and said “Boys, we just snapped the feet from the jaws of victory.” He was telling us “You know, we might have won but what would we have done with it?” Because it had developed into all the promises that we would have been really straining to maintain. And actually we did turn down, turn back one big city franchise, Minneapolis, Minnesota. We spent a cool million plus there and fought five or six companies for the award and after the award, they came back asking for more on top of what we had committed and finally got to the point where we said “No thanks.”
COCOROS: Was Minneapolis one of the later cities, large cities to be wired?
FAIRCLOTH: Yeah, ’81. It was.
COCOROS: That’s my recollection.
FAIRCLOTH: We some of the suburbs, Fridley, St. Cloud, Bloomington, Roseville. So we had some nice suburbs. Sort of coveted the city along as well to go with it but it wasn’t to be.
COCOROS: Thank you very much Jim. This was really interesting.
FAIRCLOTH: My pleasure.
COCOROS: And it’s always a pleasure to see you. So thanks for coming to The Cable Center. We’re at The Cable Center and it’s Jim Faircloth and it is the 14th of August, 2012 and I’m Lela Cocoros. Thank you very much.
