Interview Date: March 14, 2000
Interviewer: Jim Keller
Abstract
James Hall describes his start in cable, obtaining franchises in Louisiana, and developing partnerships. He talks about using Spencer Kennedy (SKL) equipment, Bob Brooks as engineer, and financing the system. He recalls building systems for International Equity Corporation (Comcast), his move to Storer, and the company’s expansion across the United States. He discusses the formation of the Florida Cable Television Association, his roles in the organization, political battles, pole attachment issues, and creating cable access for multi-unit dwellings. He notes Storer’s success in franchising and substantial growth, the importance of the company’s broadcast division in supporting cable, and mentions Cox’s similar situation. Hall describes the decentralization of the cable division, the hostile takeover of the company, Comcast’s unsuccessful bid, and the eventual sale to Kohlberg, Kravis and Roberts (KKR). He remembers his feelings about the dissolution of Storer, and the company’s purchase by TCI and Comcast. He talks about returning to the business by building his own small system, what he might have done differently in his career, battles with utility companies, and plans to expand his system with the involvement of family.
Interview Transcript
JIM KELLER: This is the Oral History of James H. Hall, currently president of Plantation Cablevision, Inc. serving the resort communities around Lake Oconee in Georgia. Jim is one of the earliest cable operators in the south, having built a system as early as 1957. He is truly a cable pioneer and is a member of the Cable TV Pioneers. Jim, in his 43 odd years of cable experience, has faced virtually every problem known to the cable industry. It’s going to be an interesting few minutes in talking with you, Jim. First of all, tell us a little bit about yourself, where you grew up, where you went to school, what you did prior to the time you got into the business.
JIM HALL: I’m a native of Louisiana. I grew up in Monroe – West Monroe, attended the parish high schools, went to Louisiana Tech and then went into the Navy. I went to the naval electronics school out in San Francisco, a 52-week school that took you from the beginning to the end. I spent 4 years in the Navy aboard the U.S.S. St. Paul and the U.S.S. Iowa. I made two trips to Korea, came back and returned to my home town, and I entered the television repair and service business. Television was just coming to the area at that time.
KELLER: Utilizing your training that you had in the service.
HALL: That’s correct. We had one television station in the marketplace at that time. I became interested in cable TV. I had heard about it. I started looking around and the nearest system was in, I think, Hattesburg, Mississippi. I made several trips over there, talking to a fellow by the name of Bob Journiga, an old name in the cable TV industry. He showed me around. I was fascinated by what they were doing. I went back to Monroe and West Monroe and secured the franchises for …
KELLER: Let’s go over that very quickly. I want to go into detail about this franchising effort down there because, if I understand it, you were one of the first systems built when there was a local station in the market. That station was owned by a former governor of the state of Louisiana.
HALL: That’s correct.
KELLER: So there must be a story in your franchising effort there.
HALL: Well, there is a story, a lot of stories. They go along with those early franchising areas. In those days, people thought you were a little out of your mind if you came in and asked for a franchise for a cable system because they didn’t think it would work – even the local TV dealers and TV guys said, “This won’t work. We have to put up antennas to get those out-of-town signals.” But we were successful and not without the local station fighting us. The guy was an ex-governor of Louisiana. His name was Jimmy Noe [James A. Noe]. He owned Channel 8, I believe it was, in Monroe, and he had the audience. We wanted part of it so naturally … and he had the medium to fight us. But we were successful and got franchises for both those towns.
KELLER: Did he put any political pressure on the councilmen to not award the franchise?
HALL: I’m not so sure that that didn’t happen. I guess I was a little naïve in those days. I thought it could be done and it was being done other places. So we did it – and we were the first system in Louisiana.
KELLER: First system in Louisiana – Monroe and West Monroe.
HALL: That’s right.
KELLER: Once you got the franchise, then you had to get the financing to be able to build it. At that time, in those days, it was an easy situation was it?
HALL: Not at all. I guess I really started looking at cable in maybe 1956 or maybe as early as 1955. It took us that long to find someone that would be interested in partnering up with us. Fortunately, we met the guys at SKL, Spencer Kennedy Laboratories, who were makers of cable equipment. They put us in touch with some guys from Ellenville, New York. They were our partner. That’s how we built that first system.
KELLER: Did SKL take a piece of the action at that time?
HALL: I don’t believe they did. I think it was this group from New York and us, with us having an equity position for our efforts in the franchise.
KELLER: As you looked around, though, in Hattesburg and other places in the south, you had to run across the Jerrold operations down there. Had you ever thought about going with Jerrold, since they were financing at the time?
HALL: We did, but we just didn’t have any contacts with Jerrold. At that time, SKL had just come out with this broadband amplifier that delivered all the channels – 12 channels at that time. That was broadband.
KELLER: Who did you meet at SKL?
HALL: Don Spencer and Kennedy and Bob Brooks. Bob was my engineer on that job.
KELLER: He was with Spencer Kennedy and went on to form a company of his own in the St. Louis area.
HALL: That’s correct.
KELLER: Very successful. Well, you had a good engineer, then, in Bob.
HALL: Certainly did. That friendship goes back a long way.
KELLER: Do you still see Bob?
HALL: I see him at the shows occasionally, at the Pioneers. I understand he just sold his fiber company.
KELLER: Yes, I understand that he did too. After you got the system built, how long before it really got up and producing the kind of revenue you wanted, pay off your debts and give yourself a little bit of money?
HALL: That was tough in those days. I’m not sure that we ever got to where we wanted to get. In those days, we had to charge $125 for installation fee to recoup part of our construction money. The monthly service rate was $3.50 a month.
KELLER: Was that set by and controlled by council?
HALL: No. No. The rates were not controlled. It was kind of a marketplace rate. I guess these guys, our partners, brought that structure down from New York. That was kind of the way the cable industry was running. You had to have that money to keep building. We did manage to build out most of the areas that we had under franchise. We had reasonable amount of success. We did some neat things in those days like bringing in the prize fights. I remember we carried the Liston-Patterson fight, gave it to all our customers with no charge to attract them to cable.
KELLER: How many subscribers did you end up with before you sold the Monroe system?
HALL: We probably had somewhere around 4,000 subscribers.
KELLER: And you, by that time, paid off the debt to SKL, and you were still in good shape at that time?
HALL: Right.
KELLER: Then what did you do after you sold the system? And you sold it to ATC didn’t you?
HALL: We sold it to Monty Rifkin. Then I went with what’s now Comcast – at that time it was International Equity Corporation – and I went to Meridian, Mississippi. They had just received a franchise in Meridian, and they wanted some time constraints to build that system. I had a little experience in building and the technical end of it so I went with them to get that system.
KELLER: Did you build again with SKL Equipment?
HALL: No. We built it with Jerrold.
KELLER: Oh, with Jerrold at that time.
HALL: We went with Jerrold. They had bought Tupelo. They had built Laurel franchise …
KELLER: That’s Comcast then?
HALL: Yes. Then they had to build Meridian, and we were under some real time constraints. We had deadlines to meet. Not only did we have deadlines to get the system built, but we had to hook up 90% of the people that wanted service, by a certain deadline. We had some performance bonds up to insure that we would do that or we would forfeit those bonds. So, once we got the system built, then we had to hook up all those people. We had a lot of people wanting cable in Meridian, Mississippi at that time. And I had every contractor that I could find, doing installs. I rented every truck that I could find, hired every guy and trained him to go out and do installs. We met our goals.
KELLER: As I remember the story, Dan Aaron was the one that got that franchise in Meridian?
HALL: Yes.
KELLER: And he convinced the people, what was then the Equity Corporation, to build it. Is that right?
HALL: Yes.
KELLER: By that time, Julian Brodsky was only a financial advisor to Ralph Roberts, wasn’t he – at that time?
HALL: I believe that’s correct.
KELLER: And that was the beginning of what is now the vast corporation of Comcast.
HALL: The early beginning.
KELLER: You’ve had a number of situations in and out of Comcast over the years, haven’t you?
HALL: I went from Meridian down to Sarasota where Comcast had formed a partnership with the Philadelphia Bulletin to build Sarasota. I believe they purchased an old underground system down there.
KELLER: Who put in that underground system, do you remember?
HALL: I don’t remember the guy’s name but he’s one of the early guys down there. It was called SCAN – Sarasota Central Antenna Network. It had a tower up on top of the building. He had one little part of Sarasota wired underground – place called Harbor Acres. We took that over, and then we built a brand new system down there, again using Jerrold.
KELLER: There were three stations in the Sarasota/Tampa area at the time, weren’t there?
HALL: In Tampa. There was not a local station in Sarasota.
KELLER: But you could receive Tampa pretty well, couldn’t you?
HALL: You could receive the two channels out of Tampa pretty well – the ABC was up in Newport Ritchie, and it was a little difficult to get in. It was good market, and people were ready for cable in Sarasota when we built that system.
KELLER: So you built it and then you stayed in Sarasota. So that was the first time you became a Floridian?
HALL: That’s correct.
KELLER: That turned into almost a lifetime down there, didn’t it?
HALL: I spent a lot of years in Sarasota – very nice community, and we enjoyed living there. The Philadelphia Bulletin decided that they wanted out of the cable business for some reason. For some reason, Comcast – International Equity – did not exercise their right to purchase it. So they put it on the market for sale, and that’s when Storer Broadcasting Company came in and bought it.
KELLER: And so began you career.
HALL: At that time Storer had a system out in California, and they bought Sarasota.
KELLER: What year was this, Jim?
HALL: That was in 1970. Storer was … That was beginning of the eastern region, and Bill Shiller was out in the west running the western region. We kind of grew together from there.
KELLER: Do you remember, or have you ever been told, why Storer wanted to get into the cable business?
HALL: I think George Storer Sr. kind of like the cable business. Terry Lee liked the cable business.
KELLER: Terry Lee was the president of the company.
HALL: Terry Lee was the … I think he … actually he was the executive vice president, I think. Well, maybe he was president. I guess he was president. But he really pushed for cable. At that time, they were dedicated to building an eastern region cable division.
KELLER: but they already had operations on the west coast.
HALL: That’s right – out in West Lake, out around the Los Angeles area. We ended up with Laguna Beach out there and some of the other communities out in the west. From Sarasota, we started growing that region. We had a competitor in Sarasota – a guy by the name of Sam Booth, an old cable guy. He came down from Martinsburg, Virginia and built the southern half of the county while we were building the city of Sarasota. He later sold out to GTE. Then later we bought GTE out.
KELLER: This is still Storer?
HALL: Still Storer. We were growing – the cable division. We ended up with all of Sarasota. We had Venice, Florida, which was down south of there. We ended up with Bartow, Lake Wales, and a lot of areas around Florida.
KELLER: Then you moved, for some reason or another, your operation of the eastern division from Sarasota to Atlanta. Is that correct?
HALL: That’s correct – 1978. We were growing at such a fast clip that we had expanded out of the state of Florida, and we into the franchising business in a heavy way at that time. So we moved the eastern region up to Atlanta so that our people could travel better. It suited our growth pattern.
KELLER: Who were your other people in you division, your marketing person, your engineering people?
HALL: Harold Null was my vice president of engineering, an old cable guy. Jim Faircloth was my director of operations. I guess the three of us kind of started and built it up to what it was.
KELLER: Just to regress just a little bit. You helped form the Florida Cable Television Association. What year was that?
HALL: Back in the early 70’s, or maybe even before that. I moved to Sarasota in ’66, and I met the guys down there – Harry Harkins, Bill Hemminger who built Port Charlotte, Orlando Brilliante over on the other coast. We basically formed the Florida Cable Television Association.
KELLER: Do you remember why you formed it? Was there a particular reason?
HALL: To serve the political needs. We were always getting hit with something in Tallahassee so we felt we needed to be a little better organized. Some of the other states were organized at that time – Pennsylvania Cable Association, some of the others. We had a lot of different operators in Florida at that time. Clark Swanson had an operation down there, the Naples system; Bill Ryan who ran that system for Dr. Palmer; Doug Dancer down in Clewiston. We had a lot of old timers down there in the cable business. We had a good association so we were able to get a grass-roots political entity that could go to Tallahassee. We won a lot of battles in Tallahassee against sales tax, never had a sales tax on cable down there for a lot of years. I don’t know what they do today. That was the purpose of the Florida Cable Television Association.
KELLER: Florida also had some major problems with power company builds and municipal overbuilds throughout the years. How did you go about handling those?
HALL: Seemed like we always had some kind of problem with Florida Power and Light. From the early years, we had to fight them on rates – pole rates. Finally the federal government regulated pole rates. Those battles were ongoing. Florida Power and Light did get into the cable business, not very successful. I think, today, they finally are out of the cable business – think they sold out their properties. But at one time, they were actively franchising in areas where they served customers.
KELLER: As I recall also, you were the pioneers in getting cable access into multiple-unit buildings. Do you remember that story?
HALL: Oh, yes. We kind of developed the multi-family code and system. We had so many condominiums going in in Sarasota and Venice, Florida that we came up with a way to put those on a bulk rate. They were primarily occupied about 50% of the time and had a lot of people moving in and out. So we found it a lot easier. So we set up a whole department to market those and sell the association on one rate and one level of service. It worked out really well.
KELLER: As I remember the story, and tell me if I’m incorrect, that some of the developers of these condominium complexes would retain the amenities to themselves – the party room, the services that were coming into the building, anything that could be potentially be revenue-producing. I understood, at one time, they kept the rights to provide television in there to keep out everybody else. Do you remember that story and how were you able to break that?
HALL: Well, we had some lawsuits on some of those issues – the right of entry lawsuit – finally got some legislation passed that could not keep cable out of those areas through the Florida Cable Association. That was an on-going problem.
KELLER: It served the entire industry well throughout the country, not only in Florida.
HALL: I think we pioneered a little ground down there. We had some good people on the Florida cable board.
KELLER: Do you remember some of the others other than the ones that you mentioned before?
HALL: Bill Ryan – I don’t whether I mentioned Bill or not – and Clark Swanson who later sold his system.
KELLER: Clark was never a Floridian though, was he?
HALL: No. I think he’s from the Midwest. I understand he’s now in California making wine.
KELLER: That would make sense. As the company was now developing, as it went through the mid-’70’s into the early ’80’s, how large did Storer get?
HALL: When I left Storer, we had about 1.5 million subscribers in 1985.
KELLER: Did this include some of the franchises that you had been awarded early on in the ’80’s?
HALL: Yes. We were one of the most successful companies in franchising. We had a two-prong program. A lot of people didn’t realize that. Not only did we acquire systems that were close to us and cluster them, we were in a mode of franchising and acquiring. With that brought a lot of commitments to build high tech stuff at the time. We met all those commitments and all those deadlines.
KELLER: And the Storer board still supported you strongly all the way through this?
HALL: Absolutely. Along the way, Storer sold the radio division to finance the cable division. We were always very fortunate that we had the broadcast division that was throwing off a lot of cash flow to support us. We had a great relationship with the banks that supported us. We had a good, a very good company.
KELLER: It was interesting that you had three divisions, at one time, of the company. But they all came into a single balance sheet and a single cash flow P&L. Is that correct?
HALL: That’s correct.
KELLER: The three divisions – radio, cable, and television – is that right?
HALL: Right. All three divisions. And we worked pretty close together.
KELLER: At any time when you were involved with the cable division, did your division ever out-perform, in terms of cash flow, the broadcasting division?
HALL: I believe the answer to that is yes. Toward the end, we were out-performing the ….
KELLER: I don’t want to get into the end because that in itself is a story that wants to be told.
HALL: We were growing at such an enormous rate that our cash flows were overtaking the broadcast division.
KELLER: And you were still relying, early on, on the cash flow from the broadcast division to finance the …
HALL: Absolutely. Without the broadcast division, we may not have been able to do – I’m sure we would not have been able to do – what we did.
KELLER: That’s interesting because there were two broadcasters that became very successful. One is still in it. Of course, that’s Cox. The other is Storer. Both of these broadcasters provided the cash and the cash flow to build their cable systems.
HALL: Well, let’s say they saw the light.
KELLER: Yes, they did – Leonard Reinsch and George Storer, Sr.
HALL: Yes that was the vision on their part. George Storer was a pioneer in broadcasting. He put stations on the air from the get-go, and we put cable on the air from the get-go.
KELLER: Did he ever tell you why he was so intrigued with cable?
HALL: I think he just saw that as the future of the company – that this is where he needed to be – to enhance the value to the stockholders. Some say that it was all Terry Lee. But I’m sure George Storer had to put his blessing on it or it wouldn’t have happened.
KELLER: Did they ever try, even before it was outlawed, try to build a system in their broadcasting markets?
HALL: No. We never franchised in the broadcast market, and we never tried to buy a system in our market.
KELLER: Was that intentional?
HALL: I think it was.
KELLER: Because as you know, it was later outlawed by the FCC.
HALL: It just ended up to be a problem. We never had that problem – like Cox had in Atlanta where they had the cable system at one time and owned the TV station. They had to get rid of the cable system. They had a kind of problem, you know, what do you do? Which one do you keep?
KELLER: That happened a lot. But in the early days, Cox and Storer were the two broadcasters that developed into major companies in cable. As you were developing, you got to be big in Kentucky, as I remember. What other states were you operating in?
HALL: You’re right. We were big in Kentucky. We won the franchise in Bowling Green, Jefferson County, Kentucky, which surrounded Louisville, which was a tremendously big area, our northern Kentucky complex which was across the river from Cincinnati. Six towns up there together and the county banned together and issued one franchise for the whole area. That was a good community.
KELLER: So you were operating in Florida, Kentucky, California.
HALL: South Carolina. We had Charleston, South Carolina, which was a good system. We had systems in Alabama, a lot of systems in Alabama.
KELLER: You had Montgomery, didn’t you?
HALL: Montgomery and south of Montgomery. We had a lot of small systems – and, of course, Georgia, south Georgia. We didn’t get up into the Grade “B” of Atlanta. We had a complex in south Georgia, Tifton and the area around Tifton. It was a good little complex. We had Albany, Georgia. We tried to get things in geographical locations that made sense.
KELLER: So your eastern region really grew faster than the western division, didn’t it – or not?
HALL: Yes it did. However, in the western division we had the Dallas area, an area around Houston, and all the stuff up in the northeast. It was growing at a good clip also.
KELLER: And you were the executive vice president of the eastern division. Is that correct, Jim? Or vice president of the eastern division. You became executive vice president.
HALL: I was vice president of the eastern division. In 1980, we moved both the eastern region and western region to Miami, moved all our operations to Miami in order to better control the build-out of all the successful franchising that we were doing.
KELLER: With you in charge, right?
HALL: And I became the executive vice president of the cable division. I ran the whole thing.
KELLER: How many subscribers did you have then?
HALL: About 400,000.
KELLER: And you grew it to over …
HALL: 1.5 million in about 4 years.
KELLER: Oh, that’s substantial.
HALL: We were busy. We were very busy.
KELLER: Can you recall how many of them were new franchises or how many were acquisitions?
HALL: Most of that growth was new franchises.
KELLER: In the ’82 – ’85 periods.
HALL: Right. The 400,000 was a lot of acquisitions to go with what we had. But the big growth was the new franchise.
KELLER: And you always stayed in touch with Comcast, though, didn’t you?
HALL: Yes, I did. They were good friends of mine – Julian Brodsky, Ralph Roberts, Dan Aaron.
KELLER: And they always kept close tabs on you too, ’cause I understand that they wanted you back. And it almost happened a couple of times, didn’t it?
HALL: Well, they made overtures a couple of times and one in 1978 or …
End of Tape 1, Side A
Start of Tape 1, Side B
KELLER: Jim, you were developing a company and going along very smoothly. Everything was very successful. You built it up to about 1.5 million subscribers. Then one day it seemed like the ceiling fell in. What happened?
HALL: Well, Conistan Partners, I never will forget that name, came on the scene.
KELLER: Who were they?
HALL: They were a group from, I believe, New Jersey. They had bought quite a bit of our stock. Their plan was to liquidate the company. They wanted to take over the company and liquidate it.
KELLER: Did they ask for a number of seats on the board originally?
HALL: Yes, they did.
KELLER: I want to go into detail on that.
HALL: They demanded seats on the board.
KELLER: But they didn’t have a majority of the stock, did they?
HALL: They did not have a majority of the stock, but they solicited the stockholders.
KELLER: This is when they went into the proxy, but that was sometime after they demanded seats on the board, and they were rejected as I remember.
HALL: That’s correct.
KELLER: How did that play out?
HALL: Well, to the best of my memory, we spent a lot of time talking to our stockholders. It got down to a proxy fight from there that caused each of us a lot of time and effort to communicate with our stockholders.
KELLER: Why do you think that a company like Conistan, who were raiders, corporate raiders, there’s no doubt about that – I don’t think I’m overstating that …..
HALL: Right.
KELLER: Why do you think they wanted a company like Storer?
HALL: They thought the break-up value of the company was worth lot more than the whole. They thought the pieces could be sold off at a real profit. Stock, at that time, was selling for $22 a share. They had probably seen our analysis that we put out to the analysts, where we were going, and they saw the value. There was really a lot of value in Storer at that time. Our top management owned a very small percentage of the outstanding stock. A lot of it was in pension funds. A lot was held individually. We were vulnerable.
KELLER: Were they able to get the voles on the pension funds? Obviously they were.
HALL: Obviously they did because they wound up with the seats on the board out of that proxy fight.
KELLER: So that was one factor that the management had very little ownership in the company. Why do you think that break-up value was higher than the value of the company itself, other than the fact that it was a depressed economy at that time?
HALL: We were coming off the 20% interest years, 22% interest years. Like you say, the economy was down. The public and Wall Street had not realized the value of the company. We were just beginning to turn the corner and generate those cash flows from that building.
KELLER: What had you told your stockholders and the analysts about the future of the company?
HALL: Well, I’m sure what every company does – we put out the reports and told them where we were going. I guess Conistan made a better story. There was no doubt that the value was there. Later, when the company was bought out by KKR,
KELLER: That’s another story I want to get into.
HALL: … the stockholders won. They got a big boost in their price per share.
KELLER: Conistan felt that by dividing it up – that would be dividing it up between, at that time, cable and broadcasting, is that right?
HALL: That’s correct.
KELLER: … and selling them off individually and not as one company. Which of the two divisions do you feel they felt had more value.
HALL: At that time, I’m sure they thought the broadcast division had …. Broadcast was probably selling, at that time, pretty good multiples, and we had some good stations, good markets. I don’t remember the shares outstanding at that particular time, but if you look at the market capitalization of the company at that time, it’s pretty easy to see that there was a lot of value in the cable side if you sold off the broadcast, paid off a lot of the debt, then you could sit on that cable division and let it go up.
KELLER: The debt was all in the cable division then?
HALL: Right.
KELLER: I know this is painful. I can see it in your eyes every time you discuss this type of thing.
HALL: Well, it wasn’t a pleasant time.
KELLER: I know. It’s a story that has to be told, though, especially from someone who was on the inside at that time.
HALL: We were in the process of building, not only a good company, but we were building a great company. We had some great people. We had gone through a time when we centralized. We all went to Miami to build this infrastructure and build this company. We were in the second phase of our growth, really. Now we were decentralizing. My job was, at that time, to decentralize the company. So basically I was tearing down everything that we had done.
KELLER: Now decentralize the company – you’re talking about the cable division or the entire company?
HALL: The cable division.
KELLER: The cable division.
HALL: The broadcast division basically was always decentralized. When you’re in a market like Atlanta, Georgia, Detroit, Michigan, you’re running the show, the guy on the spot. The general manager has the responsibility and the authority because it’s a local business. I always thought cable was the same way. The closer you can get to the consumer, the better off you are.
KELLER: I’m in absolute agreement with you.
HALL: So what I was doing, …. We consolidated for one reason – that was to get a handle on everything and get everything built and get it done. Then I wanted to put it back out to the field where it belonged, for the operations. We were pretty deep into the process of doing that. We were putting a vice president of operations with his financial guy out in the field, and his engineering guy – so we wouldn’t have any corporate ….. They would be judged on their own operation. That’s the way I thought the company should be organized, should be run. We were about half or three-quarters of the way into that when this all started, so it kind of slowed all that down.
KELLER: When was the first time you recognized that you had a major problem, vis a vis potential corporate takeover?
HALL: I guess at the board meeting that was held out on Miami Beach when Conistan got their board seats. I felt like our company was in the process of changing.
KELLER: You or the Storer board never had any idea that someone was buying up that much of the stock? They must have had some idea.
HALL: I don’t think that we were really that aware of it. I think it came right off the wall, and I think it came pretty fast. I think they did it very quietly and very fast.
KELLER: With their stock, they came in. How much stock did they have when they came in and demanded seats on the board – percentage?
HALL: I believe it was around 22%, something like that.
KELLER: They did have a substantial share at that time.
HALL: Yes.
KELLER: Had they bought all of this on the open market or had they taken out some of the pension funds and other corporate …?
HALL: I don’t know. I don’t know the internal workings of that. My job was in operations mostly, and building. I did get involved to the point that I personally called stockholders and people with large blocks of stock to try to persuade them that the best thing for the company – even institutions, I called on some of the institutions – to try to convince them that they were better off staying with us, that we were building a premier company and their stock would be more valuable in the future.
KELLER: Were you able to tell them how much in the future? How long in the future?
HALL: Sure. Absolutely. Because we had to project it. And we knew exactly where we were going. Our projections were pretty well on target with what we were doing.
KELLER: So what was the story that Conistan told them, that they could get it immediately rather than wait for a couple of years?
HALL: You have to look back and see. When Storer was a public company and had the broadcast division, they always paid a dividend. A lot of people were used to that $1 a year, whatever it was, dividend. Then along the way, we had to do away with some of that in order to build the cable division. Maybe some of them were disenchanted that we had let them down or something. Or maybe they just didn’t understand what we were building. That’s what I was trying to do was convince people that we were building a premier …
KELLER: Do you think AT&T and Mike Armstrong might be having that same problem today?
HALL: Could be. Maybe you ought to say history repeats itself.
KELLER: Because there again was a little old lady’s stock and put it away in safe deposit box and collect dividends.
HALL: Right. Exactly. And that’s kind of what Storer was. It was solid. We strayed off into the airline business, Northeast Airlines, that we probably shouldn’t have done, but that was when cable was in its infancy.
KELLER: That didn’t hurt the company.
HALL: That didn’t hurt the company that bad. We lost some money. But it later turned out well because we merged it with Delta. I’m not sure we lost that much money. But it didn’t slow us down in anything we wanted to do.
KELLER: How many seats were on the Storer board at that point? I’m going into this in detail because I think it’s a major aspect of the cable development.
HALL: And I’m trying to remember because I was not on the board. It was like a nine-man board, something like that.
KELLER: And how many seats did Conistan demand?
HALL: Or maybe it was a seven-man board. Conistan ended up with four seats on the board, I believe.
KELLER: They still got a majority then with only 22% of the stockholders. By this time they had other people’s promises too.
HALL: Right.
KELLER: So what occurred after that, step-by-step?
HALL: Peter Storer contacted Lehman Brothers. George Weegers was our financial consultant from Lehman. That was when the plan was put together to see what we could do. We needed a white knight and that’s when KKR came on the scene.
KELLER: KKR – Kohlberg, Kravis, and Roberts. What did they do for you, if anything? They made an offer, didn’t they?
HALL: They put together a plan, made an offer. Their first offer was not accepted. I believe at that time, I think Comcast talked to … I know they did.
KELLER: I know they did.
HALL: Comcast talked to Storer.
KELLER: What I’m doing now is getting the other side of the story from the inside. I got this story in another oral history from Julian Brodsky.
HALL: Well, Julian’s probably closer to the inner workings of it than I was.
KELLER: But I did know they made an offer.
HALL: Comcast made an offer, offered to leave it as a separate company.
KELLER: The cable division?
HALL: I think the whole company.
KELLER: The whole company.
HALL: I think they offered to leave the whole company intact and let Peter Storer and Terry Lee run it. That didn’t go anywhere.
KELLER: That’s because the four men, the Conistan four men, united.
HALL: Well, I don’t know. I don’t know.
KELLER: It seems to be reasonable to assume that.
HALL: Yes, but if they were for the breakup of the company and selling it, what difference does it make – the money’s the money – and they were in it for the profit. They wanted to see it sold. So they really shouldn’t have cared whether it went to Comcast or KKR. KKR made a revised offer after Comcast got in the picture. They finally prevailed.
KELLER: But it was also very recognizable, at that point – from your standpoint, that KKR was going to do the same thing that Conistan was going to do, wasn’t it?
HALL: Well, anybody that followed the history of KKR would know what that …. They weren’t known for keeping companies.
KELLER: No, another leveraged buyout.
HALL: No. That’s right. They’re leverage buyout artists. That’s what they did. They bought Wometco before us. At the time, we were the largest leverage buyout that they’d ever done. I think the price got up to about $96 a share so the stockholders got a big win from the $22 that it was when Conistan first came in.
KELLER: Do you think Conistan was bartering at this, at this point playing one off against the other to build up the value?
HALL: Oh, I’m sure they were. I’m sure that was going on.
KELLER: How did you, from an operator’s standpoint in the operating division, feel about what was happening up on the board level? Did you just go about doing your business on a daily basis?
HALL: Oh, yes. We had a job to do. We had to keep getting those systems built and those subscribers hooked up and generating that cash flow because that’s where the value was.
KELLER: Didn’t you just lose a little bit of your incentive when you saw what was happening?
HALL: It was a real disappointment to know …
KELLER: I can still see it in your eyes as I said before.
HALL: … that we were not going to be a surviving company some day. I knew that was in the picture whether other people realized it or not. I think I realized that sooner or later that we would be gone. As it happened that’s what their …
KELLER: With KKR, it was inevitable. They weren’t going to hold on and operate.
HALL: No. However, I never will forget the first management meeting that we had in Wyoming after they took over the company.
KELLER: Wyoming being the home of George Storer, up at Saratoga.
HALL: Right. They stood up in front of all of us in Wyoming and said, “We like this company and we like this business and we want to assure you we’re going to keep it.”
KELLER: You don’t think they lied to you?
HALL: Well, I wouldn’t say that.
KELLER: You’re too much of a southern gentleman to say that.
HALL: They’re in the business to make money. That’s what they were in it for. They saw the value. We had to have them. I keep saying it was a win for the stockholders. They did make their money. I’m not so sure that their money wouldn’t have been better invested had they left it for the long run. Storer stock, if we’d still been around, I think would have been a better play… from the money they got up front. But management got a piece of it. So they took care of management. And KKR got a big, big piece of it. And Storer went away.
KELLER: Did Lehman Brothers bring KKR into it as a white knight?
HALL: Yes.
KELLER: And the white knight turned black – from your perspective?
HALL: Well, it lasted a little while. But, yes, it was certainly a different operation after they came in.
KELLER: In what way? Because now you’re talking about people who have no operating experience at all in any business. They’re financial people. They play with the bucks.
HALL: At the time, I informed my people that worked for me because I felt very close to all the people I brought along. I had good, reasonable people out there. I informed them that things were going to be different. “Don’t listen to all the things you hear. Things are going to get tight. They’re going to squeeze the dollars out of it because we’ve incurred a lot of debt.” I think the fee on the thing was like $80 million at that time.
KELLER: You were building all the time so you had to have a considerable debt.
HALL: No. I’m talking about the KKR fee.
KELLER: Oh, the KKR fee. You had to pay that off.
HALL: Sure. Things started changing, tightening up.
KELLER: If I were a field manager, how would they have changed for me?
HALL: You may have seen a little more emphasis on cash flow. We had to tighten up these things, got to do this, maybe not as much capital to spend in areas that you needed to spend them on. We were always pretty lenient with our guys with what needed to be done, and we stepped up and did what we were committed to do. Some of that may have been curtailed a little bit.
KELLER: But it was painfully obvious that it was being done.
HALL: Yes.
KELLER: They were milking the cash flow.
HALL: Yes. It probably didn’t last long enough to …
KELLER: How long did it last?
HALL: It lasted about three years.
KELLER: And then came the next episode.
HALL: Well, the first one was the broadcast division was sold to Gillette. So that was the first sign. And then the cable division was eventually sold.
KELLER: I want to go into that sale of the cable division because there were some rather unusual characteristics about that, and some of it not the total being sold at any one given time, but being under a joint ownership for a number of years. Isn’t that correct?
HALL: Yes.
KELLER: You were still heading that division when that happened?
HALL: No. I had left just before that happened.
KELLER: Why was it not sold outright in its totality?
HALL: I’m not sure there was any one company that could handle it at that time.
KELLER: TCI couldn’t handle it. I know that.
HALL: TCI and Comcast banded together to do it.
KELLER: And then there were still parts of it that were left over after they got through, weren’t there?
HALL: Yes, a few pieces here and there.
KELLER: It was an unusual and rather unique operation for a time.
HALL: We had already embarked, before they sold, on a program of getting rid of some of the things that didn’t fit after the franchising. So we had sold a little stuff just to clean up our …. In fact, our reorganization that I was talking about – of getting everything under the regional guys out there – if we had something out there that didn’t fit, we had already sold some of those things. And we did some trades. We did some great trades to better cluster what we had.
KELLER: This was in the mid-’80’s so this was really in the early stages of clustering.
HALL: Yes. We were ahead of that curve. We made a big trade with Times Mirror because we had Phoenix, Arizona. They had a lot of stuff around Phoenix. Phoenix was a good operation for us. But they had Louisville, Kentucky, and we had everything around Louisville. So that made for a good trade, that and some other stuff. It was a very complicated trade deal. CEA was involved with us and helped us figure all that out. I was deeply involved in making that transition, that trade with Times Mirror.
KELLER: But you weren’t involved in the joint ownership of TCI and Comcast at the time they were operating.
HALL: No. I left prior to that.
KELLER: And where did you go? I don’t want to get off this yet because this is still too much of a story. When you were going through the Conistan – KKR scenario, what did you personally feel that was happening?
[Break in tape; presumably what follows is a direct continuation]
HALL: I was building something. I wanted to see it finished, and I didn’t get to see that played out. I would have loved to have seen what that company would have been like today had those of us that built it been able to hang in there and maximize the cash flow and the stock and see what it would have done for the stockholders. I would have loved to have been able to do that.
KELLER: Of which you were one.
HALL: Yes. And that was a big disappointment to me, a personal disappointment.
KELLER: When these people, and I don’t want to go into …
HALL: Because I never dreamed it was going to happen, I guess.
KELLER: A big surprise.
HALL: Right. It was a big surprise. I always looked at Storer as so stable and so good that we were not vulnerable. But we were. So I guess I learned a ….
KELLER: It could happen to any company, telephone companies …
HALL: Sure. Well at that time it was happening to everybody that it could happen to, and it didn’t stop with us. It went on to a lot of other companies that went through leverage buyout.
KELLER: Who finally sold Sarasota back to Comcast? Was it KKK or was it ….?
HALL: No. It was from TCI. I think they kind of split up …
KELLER: Oh, that’s right.
HALL: They kind of split up the properties. “I’ll take this one. You take that one.” It was a value type thing.
KELLER: But they couldn’t do that. Was it because no one could finance it or because of regulations, and I don’t remember which, do you?
HALL: No. It was not regulations. I think it was pure dollars.
KELLER: It was too big for anyone to handle.
HALL: It was too big for anyone to digest at the time, even though Comcast could have probably handled it. But I think there may have been some properties …. You know, Comcast wasn’t big in the west, and there were probably some properties that they would have to turn around and resell. So it was probably better that they brought in TCI as a partner. Maybe they thought that TCI could help them in the negotiations.
KELLER: Julian felt that was a good relationship. He has nothing but respect for John Malone and Bob Magness and that group.
HALL: Right. They did the right thing by buying it. It was a good buy.
KELLER: At least they’re back in the hands of cable operators.
HALL: That’s correct.
KELLER: But you didn’t want to go back with them?
HALL: No, no. I did a little consulting for Comcast on the Storer deal when they were doing it since I knew all the ins and outs of it.
KELLER: It wasn’t a conflict of interest, you don’t think?
HALL: No, no, not at the time because I was already out. So I did some work for Comcast on it.
KELLER: And you were probably comparing the two properties or one property against another one and it was going to …
HALL: Right. Tell them which ones that …
KELLER: You knew the insides and outsides.
HALL: Right. I knew the insides.
KELLER: We have just gone through, in great detail, the break-up of Storer through the Conistan, KKR era. Then TCI and Comcast bought it and operated it as one company for awhile before they brought it …
HALL: Right. They had to. They had time limitations for tax purposes. They had operate as one company until they could start splitting it apart.
KELLER: That’s the hooker I was looking for. I knew there was some reason why, whether it was financial or regulatory or the fact that there were some tax situations.
HALL: The tax implications, if they split it too soon, I think, or something. They kept it together – kept the office in Miami, kept our computer center running. In fact, my chief financial officer ended up being president of the old Storer group down there, kind of manned the office and kept everything … finished up the pieces.
KELLER: Except they didn’t have anything except financial situations to go.
HALL: Yes, right.
KELLER: What happened to Terry Lee?
HALL: Terry Lee retired and moved to Naples, Florida. Several years ago he passed away.
KELLER: He did retire then, after that.
HALL: Yes. After that he retired.
KELLER: Was he as devastated as about it as you were?
HALL: Oh, I don’t think so.
KELLER: He did pretty well.
HALL: Yes. He did all right. Peter Storer left even before that. Peter Storer sold out before the company even broke up.
KELLER: Who did he sell his stock to? On the open market or did he sell it to somebody?
HALL: I think he sold it to KKR.
KELLER: That would be reasonable.
HALL: I think he took his money ….. There was a little rift between Terry Lee and Peter Storer. I think Peter said, “Well, I’ll just get out,” so he just took his money and left.
KELLER: That would be a hard, hard decision for him after all those years in this whole thing.
HALL: That was his company and his name on it.
KELLER: And he ran it as his company, in spite of the fact that it was a public company.
HALL: Right. We probably should have bought the company.
KELLER: A lot of things can be looked at differently in hind sight.
HALL: Oh, yes.
KELLER: What happened to Jim Hall after you left? You consulted with Comcast for awhile.
HALL: I moved to my lake house on Lake Oconee and decided I would just sit back and take a little time off and reflect.
KELLER: This was what year?
HALL: This was ’85. I’d see what I wanted to do with the rest of my life. I had all intentions of going back to Sarasota, Florida where we had lived and raised our children for 13 years. I loved it so well that we just stayed there.
KELLER: On the lake.
HALL: On the lake.
KELLER: You said earlier that your wife just kept adding onto the house.
HALL: Right. She kept adding on to the house so I had to stay. But I did a little consulting work and a little brokerage work. Then the lake area started to grow, and we didn’t have any television out there. I couldn’t resist the opportunity to build a cable system. So I built, with the help of my sons, a cable system at the lake.
KELLER: And how large is the system now?
HALL: It’s about 3,000 subscribers.
KELLER: Small system.
HALL: Small system, but we all live there and it’s in a nice community – 6 golf courses, 19,000 acre lake. So whether you want to fish, hunt or do nothing, it’s a good place to be.
KELLER: I may come down there when I retire.
HALL: You should.
KELLER: Some of my other friends have already gone to this lake. I’ve heard similar stories about how great it is.
HALL: There are some cable guys on the lake. Charlie Railey’s down at the lake. Ed Star is down at the lake. Jerry Channy, Frank Hamilton….
KELLER: You have a little cable club right on the lake, huh?
HALL: Yes.
KELLER: As you look back over your 43-odd years in cable television, and I’m not saying it’s over, what mistakes do you think that you made, if any? We always talk about the great successes that we have …
HALL: Oh, I probably made a lot of mistakes. I guess somebody asked me that not long ago, “What would you do if you had to do it all over?”
[Break in tape]
KELLER: What would you do if you had to do it all over again?
HALL: If I had to do it all over again, I would have probably somewhere along the line, gone out on my own and built my own major company.
KELLER: At what time do you think that would have been most feasible?
HALL: Probably in the late 70’s when money was available for cable, early 80’s. It was pretty easy to partner up. In fact, even after I left Storer, the guys at TCI said, “Hey, if you want to go out and buy some systems, we’ll be your partner.” That was another honor, you know. I’ve had a lot of honors.
KELLER: They’ve done that with a number of people.
HALL: Bill Bresnan did it. I could have done that. At that time, I wasn’t quite up to it, I didn’t think, after I left Storer. I didn’t rebel again. I should have done that 10 years prior to that if I had been going to do that. Or I should have built it on my own, bought some systems, clustered them, and built them. I knew how to operate them. That’s probably my only regret. Being in the cable business has never been a regret. I love it. It’s been a great industry. I’ve seen it change. We fought a lot of battles. Today there’s a whole different set of challenges out there.
KELLER: New battles. Tell me some of the battles you fought.
HALL: Everything from cities to telephone companies. We had real battles, that people probably don’t remember, with the telephone companies.
KELLER: I sure do.
HALL: You remember. They wouldn’t let us own their poles.
KELLER: A lot of my gray hairs are because of that.
HALL: Power companies, fighting legislation.
KELLER: FCC. You had a great friend, not maybe a great friend, but a good acquaintance in Senator Lawton Childs of Florida. Can you talk a little bit about that relationship?
HALL: Lawton had a place close to Sarasota on Anna Maria Island. We became pretty good friends. He and his wife, or his wife when he was senator, started a place in Washington called Florida House. They bought an old house and right there from the windows, you could see the capitol and the Supreme Court. It was kind of an old, run-down house. They were raising money to fix it up. I got involved in that from a Rotary meeting where I heard Rhea speak trying to raise money.
KELLER: That’s Rhea Childs?
HALL: Rhea Childs, Lawton’s wife. She was raising money to fix this house up. I saw an opportunity to do some good public service there, so I volunteered to make some spots through our news bureau in Washington. We did some great public service spots, got all the cable systems through the Florida Cable Association to run them, and we got the broadcasters involved to run them. I ended up on the Florida House board which I was proud. It was a proud thing to be on that board.
KELLER: The house still exists though.
HALL: The house still exists. It’s kind of like an embassy to the state of Florida.
KELLER: Well, the way it’s going, you need a visa to get down …
HALL: I don’t think so. I haven’t been back in a number of years. We used to hold an annual Florida Association gathering there, and I hope they still do. We used to hold a cocktail party there every year for our senators and representatives. It’s a great way to know your political guys. Maybe that’s one of the things that we tried to do well at Storer was stay involved in the communities and with the local politicos and state, national. The industry needed to do that.
KELLER: Oh, I think that’s one thing the broadcasters taught us.
HALL: Absolutely. You better do it. So we did that. I was president of the Florida Cable Association and chairman for about three years. That was another honor that was bestowed on me. Later, I got the Morris Dunn award from the Southern Cable Association. I was on their board. Cable’s been great to me. It’s been fantastic, and I appreciate every minute of it.
KELLER: What does the future hold in store for Jim Hall?
HALL: What does the future hold in store? I have, and my whole family’s been in the cable business. I don’t know whether you knew that or not.
KELLER: I did know that.
HALL: All three of my sons are working with me now. My daughter used to be with Disney. She lives in Atlanta, raising her family. So we’re kind of a cable family. I just like to see things grow. I like to see our little cable system grow, and that’s why I built it. It’s something to leave to them.
KELLER: What are you projecting it will grow to – 10,000, 20,000, 30,000?
HALL: It could be. We can be another Hilton Head where we are. So we could have 8,000 – 10,000 subscribers there. We’re trying to stay state-of-the-art, putting in a lot of fiber, already launched high speed internet access and it’s very popular.
KELLER: You’re staying right ahead.
HALL: We’re just moving right along. I’m sure one of these days the boys may want to sell it, but that’s all right too.
KELLER: Jim, I think it’s about time that we wrap this thing up. I want to put a tag on it at this point. This oral history of Jim H. Hall is made available and presented by a grant from the Gustave Hauser Foundation and is part of the Oral and Video History Program of the National Cable Television Center and Museum. Thanks again, Jim. I appreciate it very much.
HALL: Thank you, Jim.
KELLER: It’s been a pleasure.
HALL: It was an honor.
KELLER: Thank you. That’s what I love about this program is that I’m reliving my last 40 years.
HALL: And you’re doing a great service.
KELLER: We think it is. And thanks to Gus for funding this thing.
HALL: I didn’t realize till today that Gus funded this.
KELLER: Yes.
HALL: Gus bought our system in Minnesota. It was one of those little pieces that we franchised outside Minneapolis. We had Brooklyn Park and some of those communities, good communities. We applied for the city of Minneapolis. We didn’t win that.
KELLER: You were lucky.
HALL: Yes. Probably were. But we decided the growth wasn’t in that area for us, and we sold it to Gus.
KELLER: He did all right, and he’s a great benefactor. He saw the value of this program, thankfully, and has funded it for about 100 oral histories.
HALL: That’s great. I know you must enjoy traveling around and doing this.
End of Tape 1, Side B
