Interview Date: Thursday February 15, 2001
Interview Location: Toronto, Canada
Interviewer: Jack Cole
Collection: Hauser Collection
This interview was conducted with Ted Rogers and Phil Lind.
COLE: My name is Jack Cole and we’re here in Toronto at the headquarter offices of Rogers Communications to interview two distinguished gentlemen who have a long history in communications and cable, not only in Canada, but their neighboring country to the south, the U.S. This interview is with Ted Rogers, Edward S. Rogers is his formal name, everyone calls him Ted, and Phil B. Lind. Both of them are Toronto natives, having been born in Toronto and I think we’re going to let them talk for themselves. First I want to say that this interview is made possible through the generous grant of The Hauser Foundation. Ted, we’re going to start with you because age before beauty I think.
ROGERS: Oh, you’re letting the youngest start are you?
COLE: I know you have not only your own distinguished background in communications, but I know you have a long and storied heritage in communications starting out with the production of radio tubes, radio receiver sets, and why don’t you tell us something about that.
ROGERS: Well, thank you very much and thank you for coming to Toronto. We always enjoy distinguished visitors and we thank you very much for this honor. Like so many people in the cable and broadcasting industries, family plays a big role and in my case my father invented the alternating current tube. Before that they were all direct current tube and you had a bit of a hum behind it and that made possible the radios being able to be plugged into the electric light current, as it was then called, and operating on alternating current. So he started with his radios, Rogers Bacherless Radios, in 1925 and they were introduced here at the Canadian National Exhibition and sold across Canada and in the United States. He was an inventor, yes, but he traveled everywhere. He picked up ideas, he visited many laboratories in Canada and the United States and he would pick up an idea here and an idea there and then add his own ingredients to it, like so many others that you and I know and respect in our industries. And then he started, using the same principle of alternating current, he started an over-the-air radio station called CFRB, Canada’s First Rogers Bacherless, and that really was like the FM radio of today. It didn’t have that hum behind it and now you had the AC radios and the AC broadcasting. It was the first station in the world to use an alternating current and that sort of super sound. That was in 1927. In 1931, he got a license for television broadcasting here in Toronto, one of the first in North America.
COLE: In 1931?
ROGERS: 1931. One of the things I’m proudest of was of course these were the depression years and he ran an ad apologizing that they were 1,800 orders behind in 1930 and of course there was massive unemployment which increased and here he was apologizing that he couldn’t make them fast enough for what the public wanted. So he created employment, he gave hope to people, he made his customers’ lives just a little better, he found needs to fill and I think he surprised and delighted people with his products. And of course those are all key words for Phil and myself and our company – to find a need and fill it, to try to surprise and delight our customers, try to be innovative – not just in a technical way, but with products. He was working on radar in 1939 when he died at the age of 38.
COLE: And how old were you when he died?
ROGERS: I was five and when you’re 38 you don’t have a lot of life insurance and that sort of stuff and so most of what he had was closed down or sold or I say stolen by some rogue. We had enough to be comfortable. The war was on and so on but my mother was always very strong that I had an obligation to try and get it back and to do my best to get the family name restored in communications to what it was. So she was a very strong, beautiful, talented woman, a person that I would debate with and argue with. I remember I was at law school one year and I was very active in politics and I had a little radio station and various other things and I failed and then they changed the course and I had to go back for two more years if I went back. So I went to her and said, “This is ridiculous, I shouldn’t do this. I’ve got to get on with my life.” And she said, “Ted, if you start something, you finish it.” Great lessons.
COLE: Good advice.
ROGERS: Good advice, great effect on my life. So that’s the background in the Rogers family of communications and of course Craig McCaw, Ted Turner, so many people in the communications industry had a background where they had family in the business and it inspired them and helped them.
COLE: I even have a recollection of at one time you were booking bands around the country. Was that when you were in college?
ROGERS: Yes it was, and I had ten bands at the top and I was working in a radio station in Windsor in the summer.
COLE: And that was in the days of the big dance band that was the rage.
ROGERS: The big dance band. I worked for Symphony Sid at CKLW and then on the weekend I would take a car and I would go and visit about ten sites and I would collect from the owners and pay off the people. I had a problem because at the end of that cycle was a place called Baysville and I was dating a girl who was there at a camp. So it was important to me, you know, that everything was fine at Baysville and it was owned by two policemen, this dance hall, and they came to me, oh I guess about August the first, and they said, “We’re not making a go of it. We’re not able to afford to pay you anymore for your orchestra.” This was sort of tragic news for me and I said, “Have you ever considered selling liquor?” And they said, “My, what an idea.” And so they survived for another four weeks and on the last week of the year, the long weekend, they were raided and closed down, but at least we got through the summer.
COLE: Did you know that your fabled neighbor, late neighbor, to the south, Irving Kahn, when he was a college student, spent his extra time booking bands through his uncle, who was Irving Berlin, and Irving told me that he never had more spending money then when he was booking those bands.
ROGERS: Well, I love music and I love business and I love meeting people. The first thing was to get the band contract. The next thing was to then say to them, “Well, would you like us to supply the sound system?” And we would charge for that. But now you had control of the hall and once we had the sound system and the orchestra, then I got into a third business which was taking pictures, Polaroid pictures, and through the sound system I would say, “Now you’ve got your dream girl here tonight. It’s a wonderful evening, great temperature. This is unique and you don’t want to lose it; it’s a memory you should cherish forever. And the price is only $2.49.” My cost was something like 40 cents. My final thing was a tap dance routine. For an extra $10 I would do a tap dance routine. There weren’t too many requests, but…
COLE: I was going to say I bet you did a lot of tap dancing.
ROGERS: Not as much as I would have liked. I think the cable business and the broadcasting business are very much like what we’re talking about, the band business. Finding needs, making people happy, making them laugh, entertaining them.
COLE: Well, I know that one of your theories of business, for example, didn’t you at one time make FM radio receiver sets available to the public at cost to build up an audience? That is such a lesson to the cable industry, how they have given programming to build up connections.
ROGERS: Well, I guess we’re jumping ahead a little bit and I was fortunate enough to be able to buy a small FM station back in 1960 for $85,000. It was the nation’s first FM station and it really wasn’t a radio station. It was there to transmit background music without renting wires from the phone company, but the fellow tired of it and I was able to buy it. And you’re right, then only about 5% of the homes had FM and in 95% of the homes and cars you couldn’t listen to us. So what we did was, we had Canadian Westinghouse build radios, FM radios, and we sold them at cost and we put them free into the reception rooms of the advertising agencies and into the media buyers and that sort of stuff, and they loved the music.
COLE: When did you first become involved in the cable TV side of the industry?
ROGERS: That would be about 1966-’67 and Phil and I got together in 1969 and we’ve grown ever since. Had a lot of fun.
COLE: Tell that story about when you were in college and you were a little bit of an entrepreneur with an antenna aimed at Buffalo.
ROGERS: Well, I was in boarding school and in those days they did not allow television in the boarding house. So, I was challenged by this and I managed to get a small television set and get it into my room and put it in the cupboard and then I took an outdoor antenna and laid it flat on the roof of that house, the house that we all lived in. And then I put pulleys down, just outside the room that I was in. So during the day it would lie flat and at night with the pulleys it would pull out and it was aimed at Buffalo and you could see the television quite clearly. At the end of the time, I would put the pulley back down and you couldn’t see the antenna during the day at all. The only trouble was there was a night there was an ice storm and I was trying to pull it up and trying to pull it up and unfortunately, it broke and the antenna half up crashed down and broke the junior housemaster’s window and Miss Mulholland’s window and then crashed into the cement. Of course there was a huge uproar, all the lights went on and the senior housemaster, his name was Mr. Bigger, he didn’t hesitate, he aimed right for my room.
COLE: Well, I imagine when it was working your room was rather crowded.
ROGERS: That was the start of Rogers Cable because I made sure I got favors in return.
COLE: Now Phil joined you in the late ’60s?
ROGERS: Yes, it was ’69 and Phil might tell you about some of our first efforts in community programming, which has been very important to Rogers and to the whole industry. Remember the time we climbed up?
COLE: Phil, tell us about that.
LIND: We were televising the air show in Toronto, only the problem was we weren’t very skilled at managing cameras and so we’d have a spotter and he’d say, “Now, here comes the plane. The plane’s now coming.” So we’d line it up and sort of set to follow it. Well, of course the planes were far faster then we were. And we’d be, “Where is the plane? Where is the plane?” And the plane’s gone by.
ROGERS We wouldn’t shoot directly into where the plane was coming from; we’d try to catch it from a cross-shot and of course we weren’t very smart so… But it was fun.
COLE: When Phil came you really got involved on the cable side and began to grow and grow through acquisitions and franchises and my recollection is that not only did you grow in Canada; you acquired some very valuable properties in the United States.
ROGERS: But before we could do that, we had to make right what we had here. We had to get the thing so it had a semblance of breaking even and moving forward and Toronto had many new Canadians, people coming from Europe and different countries and they didn’t speak English. So our salespeople going to the door would not make a sale. This was tragic; we were running maybe 35-40% penetration. We didn’t have enough money to pay the interest, and so Phil came up with an idea and that was, we were only twelve channels in those days, we’ll get converters. We’ll increase the channel capacity and we will start to program separate channels with different language programming and then we’ll hire some language salespeople and go to the door and say, “Guess what we’ve got for you? Programming in your own language! This is unique; you can’t get it anywhere else but Rogers.” So we went from 35% to 45% to 55% to 60% penetration. Now the bankers were smiling and actually paying for lunch and now we could move on, but Phil sort of thought before we do anything we should try to maybe do a merger here in Canada and then move into the United States.
LIND: I suggested maybe one merger but of course Ted said, “One more.”
COLE: One’s not enough.
LIND: One’s not enough; what about two or more. So not only did we acquire Canadian cable systems, and Jack, you were there at the time. You were representing Canadian cable systems.
COLE: Another one of my clients gobbled up.
ROGER: The thing that was astounding to me was, we went to them and said, “Look what we’ve done here with multi-language programming, we’re the very best in engineering, we can help you people. So we’ll just sort of merge our companies and take over your management.”
LIND: And they were outraged because they were like four times our size and they said, “Why would you merge with us? We might take you over but you don’t take us over.” Well, we did.
COLE: Phil, was that the first big merger in cable?
LIND: During the ’70s we grew ourselves. We just tried to get, like Ted said, we got extra channels and we grew our business but then in the late ’70s we started to get on the acquisition trail.
ROGERS: For example, Canadian Cable Systems had Syracuse.
LIND: But even before the States. We were interested in CCL and we acquired CCL and then in 1980 we acquired Premier Cablevision out west and so at that point we were huge in cable.
COLE: You were by far the largest Canadian operator.
LIND: Yes, and at that point, the CRTC said, “Mr. Rogers, we don’t want to see your face up here for the next ten years, anyway.” And so we said, “What can we do? I guess we go down to the States.” Canadian Cable Systems had Syracuse at that point and we thought, “Well, there’s something to do down there.” So we started down there.
COLE: And you had some major franchise acquisitions down there.
LIND: Oh, absolutely.
ROGERS: Well, his first one was Minneapolis.
COLE: I remember that!
ROGERS: We won it and we lost it and we won it.
LIND: It took us many years because Storer was…
COLE: And lots of legal fees.
ROGERS: Oh yes, you’re right.
LIND: Lots of legal fees. And then we had Portland, Oregon. We had the suburbs of these areas too. We had lots of communities in Orange County in California. It just grew and grew and grew.
COLE: As a matter of fact, Phil, weren’t you at one time the president of the Canadian Cable Association and I know you were on the board of directors of the National Association in the United States and I don’t believe anybody else has ever held those dual positions.
LIND: No, never.
ROGERS: Now, you know what’s interesting back in the early ’80s – the engineering plant that we built, I’m going to brag for a moment…
COLE: Please do.
ROGERS: …was so good that all of the channels then were on channel, we didn’t have leakage and things like that, and secondly they were interactive in real time. Interactive in real time, which I mean, now they’re just starting to get this stuff to work.
LIND: Yeah, and guys like John Malone were very, very interested in what we were doing in interactivity, but you think of it, it’s 20 years later and we’re still trying to get things done.
COLE: Find the right box.
ROGERS: Yes, that’s right. It’s ridiculous.
LIND: We were there in the early ’80s. We had printouts where we watched every house, every six seconds or something, are you on, what channel, etcetera, etcetera, automatically. At the NCTA board meeting I’d always sit there and I’d always bring these read outs and Malone would just sit right beside me every time because he liked that stuff a lot.
ROGERS: We could tell at any half hour period what all our customers were watching. In other words, you might have 82,000 were watching channel 10 and 91,000 were watching channel 12.
COLE: So much more sophisticated than the polling processes that they were using.
LIND: Absolutely. And we saw things like HBO winning in number three and number two spot at say 11:00 at night, things like that which were unheard of. I mean, HBO second in cable households? True, you know, but not widely known.
COLE: And not true in a speculative or guessing kind of way, but specific figures.
ROGERS: But there were storm clouds. There was trouble. Because my friend Lind, he would be winning franchises and then Watson, he’d be building them.
COLE: Promises v. performance.
ROGERS: And then they’re all looking to me to finance them.
LIND: Yeah, what’s the matter with that?
ROGERS: And Phil was getting to be too successful. Just to give you one example, we had a system at Mulino, Portland, and I think the same chap on regulatory is still there.
LIND: David Olson.
ROGERS: David Olson. David, if you’re watching this, good luck my friend and we love you. But you see, Mulino was spread out and was going to cost a lot of money and you’d have to build a business case and go to the bank and the bank would say, “Well now, we’ll loan you money and we’ll give you so much money per customer you have or it would depend on the cash flow.” There would be always a formula deal as you know, so we would work this out and go in and the manager would approve it and it would have to go to head office be all bedded. The problem was that while it was being bedded, we were maybe not doing so well and by the time they came back and said, “It’s approved.” We’d say, “Well, there’s a problem here. We’re in default.” And they guy would say, “How can you be in default on a brand new loan? How do I process that?” So we went through that six times.
COLE: It must have been some comfort that you were not alone in that.
LIND: Well, it was some comfort, but it wasn’t much comfort to us. I mean, the fact was, none of these franchises made any sense economically unless you considered terminal value. Well, they wouldn’t let you consider terminal value.
COLE: Banks were not fond of that.
LIND: And we were lucky because we had Canadian banks who were familiar with cable more so than U.S. banks.
ROGERS: So they helped us and as a matter of fact, the Toronto Dominion would go and set up sort of wooden shelters where we were in Orange County and open up branches and things like that. They’re all closed now but we had a lot of support from our Canadian banks and from some U.S. banks. I think the banks were very kind to Rogers.
COLE: Well, when you got those franchises, and Phil, I know you had a great deal to do with the franchising part of it, it was an environment I recollect in the United States where you had to promise the world even to play in the game and the franchising process was a little bit of “can you top this?” And the high bidder gets it and then it became a process of building a system that had some financial realism to it.
LIND: There was a certain amount of once you got the franchise, a year or so later you had to go back and have a day of reckoning with the…
COLE: Do a little bit of adjusting.
ROGERS: This was a big of a racket, by the way. This was his guaranteed income. It never stopped.
COLE: Phil had a reputation in the United States of being a master at that task.
ROGERS: We call it the get back program. You see, the first thing is you give them all these bonuses for getting the franchises and then Lind comes to me and he says, “Okay, here’s my criteria for next year.” And it’s to get back. I’ll never forget, we promised to plant 100,000 trees in Portland or some such place. 100,000 trees? I mean, there wasn’t space to plant 100,000 trees. So we had to deal with our friend David Olson and I don’t know what we gave him instead of 100,000 trees.
LIND: But by and large we had really sterling relationships with our cities in spite of the fact that we had to get back. We had some difficult people to prove.
COLE: Part of your job was to cultivate those relationships and to cultivate some manner of trust existing between the franchise authority and the operator.
LIND: And we always have had very good relationships that way.
ROGERS: Not to flatter Phil, but I think that’s totally because of Phil personally and the people that he brought around him, had a feeling of trust and confidence and so on. I think it also helped that we were from Canada. I think that they felt Canada is a small country and over the years it’s been a good neighbor to the United States and notice where these markets are – Minneapolis; Portland, Oregon, in other words, not too far from the border.
COLE: Border states really.
ROGERS: Border states so if things went back we could sort of run out fast.
COLE: Phil, why don’t you tell us something about those days when you were engaged in the franchising of systems and your competitors were the fellas south of the border who were the local boys.
LIND: Well, that was always something that we had to deal with obviously, because they were Americans and we were not. And they used to make a big thing of that, say, “Well, there’s a foreigner, don’t go with them.” So one of things we did was we always had a high degree of local content. In other words, we had 10%, 20%, 30% of local ownership in these and they were tax driven deals.
ROGERS: Limited partnership.
LIND: Limited partners, but they had to put up money. They weren’t like these rent-a-citizen deals.
COLE: They were real business deals.
LIND: Yes, and so we did that and we always found really good local partners to partner with but that sometimes wasn’t enough. I remember one time when it was an energy crisis and somebody in Canada, the Minister of Energy said, “We’re going to stop gas going down to the States.” And we were like, “Oh my God, this is awful!” But then, one time this Iranian embassy, well when the Iranians flipped over and had a revolution and then Khomeini or whoever and then the Americans were…
COLE: Held hostage.
LIND: Yes, held hostage and then they escaped through the Canadian embassy.
ROGERS: Ken Taylor.
LIND: Well, that was huge for us. For example, we went down to the Minneapolis Star & Tribune and took out a full page ad – “Thank you Canada” from Americans. But we were the Americans. We played Canada. And things like that. I mean, we wanted to say that we were two countries very aligned. I mean, we weren’t foreigners in the classic sense. I remember another case where there was a guy associated with another group in Portland and he stood up and said, “You in the city council shouldn’t have Canadians down here in Portland.” And I thought, “My God, he’s the president of a major paper company, pulp and paper company, that also has interests in BC.” So I called up the Minister who was regulating that in BC and I said, “You might want to hear what this guy had to say about this.” And then he called up the guy and he said, “If you’re going to say that then your BC licenses are in jeopardy.” He said, “Oh my God, we’re not going to say that.” So he had to get up then the next day and apologize for everything. So of course all that played well for us. We just wanted to be like everybody else, that’s all. Actually, we wanted to be more American than them. We wanted to out-American the Americans. That’s the only way to win franchises in the States.
COLE: Well, it must have been successful because you got more than your share.
ROGERS: No, we didn’t get more than our share.
LIND: We did actually.
COLE: Yeah, you did.
LIND: We got almost everything we applied for. We didn’t win in Miami and we didn’t win in Clearwater, but outside of that I think we won almost everything we applied for and that was fairly rare.
ROGERS: Well, Phil, again not to flatter him, but Phil a) because of his personality, his background and interests and his ability to attract a good team really caused that to happen because they’re looking to the people who they’re talking to and judging the applicant by those people.
COLE: Well, you two gentlemen have been a good team for quite a long time now and as I see it complement each other very well. Tell me a little bit, Phil, about when you decided, and I’m not sure when this was, when you decided to sell your U.S. properties because it was not too long ago, was it, that you got out of the United States.
LIND: Well, we did it in two times actually. The first time was in 1979, where all of these things that we’ve done – we should discuss Bobby Rosencrans too, and the UA Columbia thing.
COLE: You got a lot of little systems. Some were little. San Antonio was huge. That was a very nice acquisition that you all made.
ROGERS: I bought that phoning from Quebec City from a hotel room. I more or less made the deal on the phone. I probably overpaid but we ended up 50/50 and if I knew then what I know now, I would have dealt with it differently. I think we could have done things differently. We had partners who were of strong opinions and we were of strong opinions. Rosencrans ran it, an outstanding individual.
COLE: Absolutely, a perfect gentleman.
ROGERS: And we were very short of funds as well and that caused us to have to take certain positions. You know, I wish we could have developed it all together but we couldn’t. We had what we had won in the franchise and then we had this other interest and we never sort of got them all put together.
LIND: And the debt load was huge for us. Huge.
ROGERS: And the phone calls kept getting more intense. (LAUGHTER) It’s all very fine until the work out squad starts to go around the floor. We still remember that fellow.
COLE: It’s an experience that many cable entrepreneurs have undergone.
ROGERS: Four times. Four times mortgages on the house. But I think ’87 would be the final…
LIND: Yeah, ’87.
ROGERS: I think we bought that 50% interest in ’81, I’m just trying to pull it out.
LIND: That’s about right.
ROGERS: We sold in ’87 because we were in wireless in Canada.
LIND: ’89 was actually the termination of the sale, in ’89.
ROGERS: We couldn’t do both. Financially we couldn’t do both, so we had to make a decision. Was it the right decision? Financially, probably not. We probably should have stayed in the States and not done wireless, except we were convinced you had to be a certain size in the States and I couldn’t figure out how to put them together with the limited resources we had. Remember, I started with just that FM station I paid $85,000 for, so I didn’t have a lot of equity.
LIND: If we’d had more equity we could have been a major player in the United States. At one point we were like third or fourth or something in the States.
ROGERS: We like the people in the States.
LIND: Oh, wonderful.
ROGERS: We got along with them well. They loved Phil; he was on the board for many years. We never really had any arguments. We treasured the opportunities we had in the States and just felt really good about it and in fact, still do.
COLE: Well, I couldn’t agree more that Rogers has always enjoyed, because of its people and you two, a marvelous reputation in the States for integrity and just good people.
ROGERS: Thank you. Maybe they don’t know us too well.
COLE: Maybe they don’t get here too much, huh? Phil, you took a major part… when you all acquired McLean Hunter here in Canada, that raised a bit of an uproar, did it not, at political levels?
LIND: In Canada?
COLE: Maybe a concentration of control?
LIND: Yeah, but you know, we managed to put that one to rest pretty quickly. There was an uproar at first but then we were able to, Ted appeared at that press conference, remember? And I think we talked about selling Canadian stories, Canadian ideas, things like that. We managed to put that to bed and for the most part, most people supported the acquisition of McLean Hunter throughout. The biggest problem was in selling that U.S. piece because Ted Rogers, you know, likes to make challenges and in this case it was a real challenge because he had, what? 90 days or 60 days or something that he had to get this thing through. Not by the regulator because this was an open tender and what did you have? 60 or 90 days?
ROGERS: Something like that. Yep.
LIND: And we had to get permissions from the States. We couldn’t close until we had permissions and so…
COLE: Did that mean dealing with every franchise authority?
LIND: Yes, absolutely. And we had, honest to God…
ROGERS: Here we go again for the bonuses.
LIND: Yeah, well, I practically didn’t sleep at night on that because it wasn’t like most of the time when you have a year or two and so you can take your time with it and the recalcitrant ones you don’t care about for awhile. This time we had like this much time to get them all and we were terrified and then the biggest problem was the FCC because initially we had with McLean Hunter a hostile takeover. And that’s okay at the FCC, they have rules for that, but they don’t have rules for a friendly takeover within 30 days or 60 days. They don’t have those rules. They can’t do that. They don’t have that.
COLE: It makes no sense.
ROGERS: I know. It makes no sense.
LIND: But my God, I was just sweating bullets and Les Adler of your firm was the greatest. Absolutely the greatest.
COLE: I appreciate hearing that and so will Les.
LIND: Well, he was and we had our people fanned out all over everywhere trying to get these cities to approve this deal quickly. So we had guys in Florida and guys in Michigan. Remember Don Vardan in Detroit? We were just frantic trying to get these things approved so quickly.
ROGERS: But it worked out. I wish we hadn’t sold Fort Lauderdale, I mean what a wonderful market.
ROGERS: But you can’t do everything. That’s the trouble. We’re very fortunate with what we have at Rogers.
COLE: Ft. Lauderdale would be nice this time of year.
ROGERS: Well, we’d have to go down and inspect it. Always of course at this time of year. And the boat show is in Ft. Lauderdale too, in October.
LIND: And San Antonio’s always a great place to go and visit.
ROGERS: And what do they call it? The Walk?
LIND: Oh, yeah. The Riverwalk.
ROGERS: Unbelievably nice.
LIND: So it’s a great place. We wish we were still there, but…
ROGERS: We made a lot of friends.
COLE: There’s no question about that. You all did make a lot of friends and preserved a reputation that was richly earned.
LIND: And Drosis? Angela Drosis? Let me tell this story. Missy Gurner was asked by Ted to sort of work up a memo on the subject. They had the San Antonio Spurs; they had made a deal with the previous – Rosencrans – and boy, oh boy, Rogers looked at this thing and said, “We’re losing. How could anyone have signed this deal?” Rosencrans signed it because he was after the franchise at the time, but the deal wasn’t too sensible a deal and Rogers said, “I’ve got to get out of this. This is crazy.” And Angelo Drosis, who owned the San Antonio Spurs at the time was hearing this and said, “Oh, Rogers says he’s going to get out of it, ay? I’ll fix him.” So this is all lined up for a great battle of the giants when Ted went down to see him.
ROGERS: To have breakfast.
LIND: Well, Ted just had one more thought. He said, “I’ve got an idea.” So he said, “You go up there, you go up to his office.” And Ted was on the phone and then about half an hour later he arrives to meet Angelo Drosis and I don’t know what you said exactly, but you said, “You know, Angelo, I know that you’re a tough bargainer and I’ve got something for you. I’ve got something for you!” And the door opens and in walk these guards with a million dollars in paper money.
ROGERS: Five dollar bills. See, we owed them and they never paid him and that was another huge argument. So I thought the way to start a relationship with him is to not just give him a million dollars but to…
LIND: But really give him the million dollars.
ROGERS: And the deal was that they were in great weighty sacks and they were to load them up on his desk and then leave and then of course he says, “Wait a minute, wait a minute! How do I get to use my desk?” He told that story all the rest of his life.
LIND: The number one picture on the wall, on his “me” wall, was he and Ted with this million dollars in five dollar bills all over everywhere.
ROGERS: We amended the contract and reached an agreement.
LIND: No, he amended it and he gave us what we wanted and he swore that he wouldn’t do that. I mean, he made the contract livable after that.
ROGERS: But you know, when we had to sell, when we sold – we didn’t have to sell – but when we sold, you know you negotiate with people that are going to buy it and we negotiated in the case of San Antonio a flat amount. In other words, we’ll sell you this system for x amount, but at the last minute they came back and said, “Well, what if you don’t have the number of subscribers that you said you would have? What happens if you lose 10,000 subs or something? We want to have a formula so we don’t pay you as much.” We resisted that and said, “No, no, a deal’s a deal and we’re not going to change it.” But finally, after intense pressure, I said, “Well, will you make it reciprocal?” He said, “Of course I’ll make it reciprocal if you get more subs.” So I said, “Okay.” So we amended the agreement and then we went out and hired a fellow who was an extraordinarily popular Hispanic and he did our ads. And the ad said something like, “Rogers Cable: Tremendous, tremendous service and a tremendous bargain. In fact, if you subscribe today, if you call right now, there will be no installation fee and if we don’t install it within four hours, we’ll give you a $100 cash.”
LIND: No, in groceries.
ROGERS: In groceries, that’s right. Groceries. So anyway, thousands and thousands of new orders came in and isn’t it strange, we were so incompetent that nobody got installed on time, and so…
LIND: But we were after subscribers.
ROGERS: Right. So then the owners, who didn’t seem to have a sense of humor, were furious because I think there were 28,000 extra subs at $2,800 bucks a piece and they knew that it cost us $100. So they were so mad they cancelled the closing dinner. I mean, can you imagine?
COLE: Poor sports.
ROGERS: I didn’t start it. I wanted to just have what we agreed in the first place.
COLE: Well, I know the story of Rogers doesn’t end with cable. You are still big in television and you have moved in in a big way to professional sports.
ROGERS: Well, Phil will tell you about that because what we have is, years ago… I’ve got to tell a story. Years ago, Lind got us into this pay-per-view business in hotels and this was to be a great business and a future – pay-per-view and all sorts of things. What he forgot about was that sometimes, you see, there is a light cord there that is plugged into the socket and what happens in a hotel is that the counter for the service sometimes gets kicked out and so everybody gets free movies, right? So we called this business, because it had a certain degree of consistency in losses, we called it the “Lind Lemon”. Very unfair, very unfair because we soon hardwired it in and it made a lot of money, so…
LIND: But then they didn’t call it the “Lind Lemon”. That was a genius idea; that was a perfectly ingenious idea.
ROGERS: And now we have a new “Lind Lemon”. Would you like to tell them what you…
LIND: It’s the Bluejays.
ROGERS: Oh, you go ahead.
LIND: The Toronto Bluejays and it’s the next “Lind Lemon” at the moment.
COLE: At the moment, at the moment.
LIND: At the moment it’s a lemon, but over time and if we get the Sports Net work that we can use it on, you know to use the three hours a night times 160 games, it will be a brilliant acquisition because really sports teams now have to be owned, or most of them are owned, by media companies.
COLE: In the U.S. and everywhere.
LIND: They have to be owned that way.
COLE: Even in Europe now.
ROGERS: We think, although in the short-term, we’re kidding here, in the short-term there will be significant losses. We have a problem that the income is in Canadian dollars, people attending the games and the costs of the players are in U.S. dollars.
COLE: That is the problem.
ROGERS: And the Canadian dollar doesn’t deserve to be called a dollar anymore, it’s a peso, and so there are serious problems, but putting together a situation where you’ve got the sports team, you’ve got your large cable group, your large wireless group, your media group, it just makes all the sense in the world if you get off a plane in Philadelphia, you’ll go by and you’ll see Comcast…
COLE: Well, it seems to me that all of the great strategic planners are looking at it just like that now.
ROGERS: I’ll tell you one reason why. You’ve heard of the new technology, there’s two of them, there are two of these boxes that have a hard drive and can record many hours of television.
LIND: Like TIVO.
ROGERS: TIVO, and when they do that they can delete the commercials. So what is the value of ordinary programming if the commercials are deleted? What is the value to the broadcaster? It gets smaller and smaller. There is one kind of programming that will not be effected and that’s live programming and when you think about it, sports and live news are the type. You’re not going to be recording a sports event and watching it the next day because you know what the results are. So that’s going to be live; you are going to see the commercials. So, we think that sports franchises will become more and more valuable and be quite unique assets.
COLE: I think you have a lot of company in that concept with your colleagues south of the border here. It seems to be a direction that many people are heading in. Big companies, and even some smaller ones. And it’s happening in Europe.
ROGERS: It’s not all wonderful. I mean, there are issues and problems, but what it will do is, especially here, we bought it, it was owned by people in Belgium, and the owners weren’t here. So I think the city feels that Rogers has restored local ownership and we get a lot of people who thank us for that and I think they’ll give us a nod on our cable and wireless products. It’s just another factor. I must say, I’m told that it hasn’t been run as well as it might have. Even the food concessions, the food’s not very good and it’s too expensive. We want to surprise and delight our patrons. We want them to come and enjoy the night, feel that they’re not ripped off on pricing, they’ve got good value and they’re surprised and delighted. And they say, “You know, it was good of Rogers to restore local control here and they’re giving us good value.” So it’s another reason to stay with Rogers Cable or Rogers AT&T Wireless. And likewise, we think that those businesses with the millions of customers they have, we can promote the Blue Jays and sell an awful lot of tickets. We’ve got a field over there that’s what? 50,000 it can hold, they only sell half. That’s the bad news. What’s the good news? They only sell half.
COLE: So you’ve got a good upside.
ROGERS: We’ve got a good upside. And even if you literally give away the top seats for five bucks, now people start to see the field filled, they see it on television and they say, “Those guys from Rogers are miracle workers!”
COLE: And it becomes a much greater attraction and can build the fan base.
ROGERS: Yeah. We’ve got a great guy running it too, Paul Godfrey. He’s Mr. Toronto and an outstanding individual.
COLE: This opportunity has been a special pleasure for me to sit down with two of the titans in an industry that we all three have come to love so much and I would like to ask each of you to sum up your feelings and attitudes about your life in the industry and if you want to say anything about the future that you see down the road, I know that people would be pleased to hear it.
LIND: Well, I think looking back first, two things come to mind. One, is the type of individuals that we’ve been fortunate enough to attract over the years have been wonderful, wonderful people to work with. I think the second thing is the type of person generally in the cable industry and in the regulatory side has been very, very interesting, in the States, especially. The type of people in the cable industry and peripherally, like Terry McGuirk and Ted Turner and all these people have been so marvelous. I mean, they’re very, very fabulous individuals and they’ve been marvelous to work with over the years. I think the second thing is the cable industry itself. It sounds sort of corny, but it is a really fascinating, fabulous field because it is so ubiquitous. I mean, it has everything. It has entertainment, it has sports, politics, everything that we’re interested in it has and so everyday has been a joy to be at work. And everyday in the cable business is fantastic as far as I’m concerned. Now where does it go in the future? More of the same. I mean, we haven’t begun to fight the kinds of battles that are going to be in cable. I mean cable can offer so much to so many people. We’re sort of at phase 2 of a five phase deal, I think. We’re at the bottom steps of what we can offer and you can offer us by interacting back to us. The future is huge. No doubt.
ROGERS: Well, I agree. And I think it’s useful for some of the people who may see this tape, they’ll be younger and they won’t appreciate that when we started television was mostly, what I’ll say, homogenized. You had a number of television stations over the air and they put on news and sports and movies and different things at different hours and there was no such thing as a channel really just doing one thing. The reason for that was there wasn’t enough channels over-the-air. Channels were very restricted and so the real hope for wired broadband cable is to be able to offer a whole lot more channels than would be available through the air and that made possible a revolution in programming. The thought that if you like golf, you can watch golf at any time of your choice. Now people will say, “Well, you don’t want to watch golf all the time.” Actually some do, but you want to be able to watch the programming of your choice when you want it and that’s what cable is all about. That’s really what’s driven cable to be able to start to have specialized programming channels where people can tune in at any time. My wife likes game shows – so it’s unbelievable – she can actually watch a game show 24 hours a day. Someone else enjoys news, which I do, so you’ve got a number of choices. So that’s really what cable has done. It’s a revolution. Now I think that’s going to continue and the next stage of it is going to be not just that you tune into a golf channel or a sports channel or a news channel or a music channel, a jazz channel, but that you can pull out specific programs at the time of your choice and that’s where interactivity comes in and that’s where we move into so much more software involvement with our cable, with our broadband cable. And then you get into a new world, which is data and digital, which is where the world is going and we’ve got this large pipe and we now can put high-speed modem service on it. Hundreds and hundreds of thousands of Rogers customers are already on that service. So we’re on the same pipe, but now on a fraction of the pipe we’re starting to put down the high-speed Internet service and soon we will have local telephony sharing that base and also the digital. So you will have it all going together. Now this is incredible, this is incredible, but it’s part of the trend, moving from homogenized provision of programming to a very specialized. Now, we’ll be able to pull it out video wise or even Internet wise. I think it’s terribly exciting. What I’ve enjoyed, and maybe if we were in the cement business or the car business or something else, we could say the same thing, but I don’t think so, listening to other people. This is a North American business and we’ve been privileged to be a part of it. Everybody, I guess, says that, but I really mean it. We were there at the very beginning. I mean, you know a person like John Malone for 30 years. The man is first of all, I think, a genius; he’s a thoughtful man. He’s a man who has no airs, who will sit and talk with a person who’s climbing the pole or talk to the Vice-President.
LIND: Bud Hostetter, the same.
ROGERS: These are unique people that you consider your friends.
COLE: I think you could say, and I have often said, that it is quite a fraternity.
ROGERS: It is. It’s a family, a fraternity, a family. And somebody like Dolan, who has matched the engineering brilliance and the programming acumen – I think he is a unique person. But the Roberts family are unique in different respects.
COLE: The Gene Schneiders.
ROGERS: That’s right.
COLE: There are so many people that you’re so proud to call your friends and your colleagues.
ROGERS: And you can call them. I enjoy saying, when I’m with Ralph and Brian, I enjoy saying about their company that Brian, in my opinion, could have got the job as President of Comcast even if his last name was Rogers.
ROGERS: So what it’s meant to my life, it’s brought a lot of chuckles, a lot of happiness and I don’t think it’s over. I know the number of businesses are getting smaller and people are retiring, but somehow I think we’ll all keep going as long as the good Lord lets us and truly, as I always like to say, the best is yet to come.
COLE: Well, on that note, I think we’ll wrap this up and I will try to correct a mistake from the beginning. This is February 15th in the year 2001 and we’re in the offices of Rogers Communications in Toronto and it has been a special pleasure for me to talk to these two gentlemen. Thank you.
ROGERS: Thank you very much.
LIND: Thank you.