Interview Date: Thursday January 17, 1991
Interview Location: Plano, TX
Interviewer: Ed Allen
Collection: Penn State Collection
Note: Audio Only
ALLEN: This is Thursday, January 17, 1991, and we are recording at the home of Bill Strange in Plano, Texas. This is Tape 1, Side A. All right, we are ready to begin and where we would like to begin, Mr. Strange is at the beginning. You were born in Dallas?
STRANGE: I am a native born Dallasite, born June the 21st, 1921, at Baylor Hospital in Dallas and with the exception of a few years, I resided in Dallas, or its environment all of my life.
ALLEN: Can you tell us a little bit about your mother and dad?
STRANGE: Yes. My father was an executive with the Ford Motor Company. My mother was a housewife. In the past my father had represented Henry Ford up in Detroit and chose to come back to Texas.
ALLEN: What was his profession?
STRANGE: He was a plant executive with the assembly plant. Well, he was a sales executive located at the assembly plant in Dallas.
ALLEN: And his first name was …
STRANGE: William. I am a junior.
ALLEN: Was he a native Texan?
STRANGE: Yes, but not really. He was born on Indian territory. It wasn’t even the United States, where he was born. As you know Oklahoma became a state in 1912. But, his family soon moved to central Texas where he was reared.
ALLEN: And then he came to Dallas to work for Ford?
ALLEN: You were born here then?
ALLEN: And your mother’s name?
STRANGE: Was Martha. And she was reared as an only child from a rural mail carrier and a station agent down in central Texas. She is a daughter of an old pioneer that gave away about half of the county to get the Santa Fe Railroad to come through that area. She married my father and they were wed for fifty-three years when he died. She is still alive today in a nursing home and her mental faculties are great. She is bedridden but she is in good shape.
ALLEN: Her maiden name?
ALLEN: Did you have any brothers or sisters?
STRANGE: I have one brother. He is alive in Fort Worth.
ALLEN: Older or younger?
STRANGE: He is two and a half years younger and he is in the automobile business.
ALLEN: And your schooling was all in Dallas?
STRANGE: Yes. I finished Woodrow Wilson High School and SMU. I attended a year at TCU and got my degree at SMU and that was the extent of my formal education, although as you well know we continue to learn.
ALLEN: And when did you graduate from SMU?
STRANGE: It was in 1943. I didn’t know there was going to be a G.I. Bill so I joined the enlisted reserves in order to get my degree, which I did. I carried twenty-four hours in one semester. I made one A, six Bs, and a C and I was so thrilled. I reported to the military. I was first assigned to the tank destroyers and then to the air corps. I became an aerial gunner. I served in the states. They froze me as an instructor. I was there until I was discharged in 1946; was recalled in the Korean War as an adjutant in the truck battalion. I had been in the automobile business. I served a full year in the Korean deal. So I put time in two wars. My son served in Vietnam. So we all had some. He was in active combat duty more than I was. I was on active duty, but I wasn’t in the firing.
ALLEN: Where were you stationed during World War II?
STRANGE: In Harlingen Air Force Base, down in the Rio Grande Valley. We trained aerial gunners. I was a gunner. Well, I had been in school in Denver–gunnery school.
ALLEN: What was your major field of study at SMU?
STRANGE: General business.
ALLEN: And when you got out of the Air Force then in 1946?
STRANGE: I joined with my father and my brother in the automobile business. We were automobile … I bet three careers would sum up my vocation. I was ten years an automobile dealer–a Ford dealer–in west Texas and in east Texas, and following that I was in the investment banking business for ten years as an allied member of the New York Stock Exchange, partner in several stock brokerage firms. Then in 1970 I joined Charles Sammons as his deal man and was with him until I retired in ’86.
ALLEN: What caused you to leave the automobile business and go into the investment business?
STRANGE: Well, I made money for everybody but ourselves. I went broke in the car business in 1957. I couldn’t make it on borrowed money and that is what I had. So I sold out. I say I went broke, I sold out.
ALLEN: Where did you start in west Texas?
STRANGE: A little country town named Tahoka. The county seat of Lynn County south of Lubbock. I did pretty well there, but when I got down to Gladewater, the company had a couple of poor model cars that just killed me.
ALLEN: Where is Gladewater?
STRANGE: It is in east Texas, in the east Texas oil fields, down near Longview, Kilgore, Tyler.
ALLEN: So you started in ’46 in west Texas and in ’56 in east Texas?
STRANGE: I left the car business in ’57 which was in east Texas and got into the security business in ’58.
ALLEN: Who were you with in the security business?
STRANGE: I was initially with Bache and Company and then I was with a firm called Goodbody and Company, a member firm. It was bought out by Merrill Lynch. And then I was with Ling and Company which was a member firm, and then I left them to go with Charles Sammons.
ALLEN: While you were in the investment banking did you have any exposure at all to the cable industry or was Sammons?
STRANGE: No, I did not. I was actually hired by Sammons as a deal man, an acquisition man, perhaps. Really, there was no perhaps about it. Nearly all of my career in the cable business was that of a negotiator, a deal man, a franchisor. During the time that I was in the investment banking business, I was the mayor of the local community in Richardson, Texas and was also president of the Texas Municipal League which is an association of elected officials in Texas. Sammons thought there would be a great benefit in their relationship with cities and the franchising to have someone who had experience in municipal governments and so it was with that background that I went with cable television, went with Sammons. I was originally hired by Charles Sammons, worked right outside his office and subsequently they had some reorganization and they put me over in the cable company. I still related direct with Mr. Sammons. Until the day he died he kept three phone lines, one to the president of the company, one to my desk, and one to the marketing man. He personally kept his fingers on what was going on. So it was a unique and interesting relationship.
ALLEN: The time that you were mayor of Richardson was while you were in the investment banking business, so it was not a full time mayor position?
STRANGE: No. It was never designed that way. It generally works out, but it is pretty time consuming. They have the city manager form of government, what is referred to as “weak mayor,” weak from the standpoint of authority to do anything. The city manager is charged and empowered with the running of the city and the hiring of everyone with the exception of the city attorney and city secretary. But, it takes a lot of time in relating to constituents, and appearances, and meetings and representing the community. And–oh I don’t know–there is a lot that is read into it that is not there.
The American people, well not only the American people, but the people everywhere want to look to have elected officials, all seeing, all knowing, all powerful, as their representative. You have some of the best government in cities such as with the Jim Tates of Philadelphia, and the Jerome Cavanaughs of Detroit, the Bob Wagners of New York, all of whom were my contemporaries. I knew them very well, but they were strong mayors. You get the Boss Crumps and the guy in Boston and you get the fellow Hullihan out in California. You get these real strong mayors that develop.
So Texas and California and North Carolina worked principally on council manager’s form of government in which the professionals run the city and the rule of the mayors is intended to be, but the people won’t let it be, a ceremonial function to preside at the meetings, kiss the babies, and welcome the 10,000th resident to the whatever. It’s a ceremonial deal, but as I say, the people still want to be able to elect their mayor, and they want whatever the mayor says to be the deal. They want to be able to reflect, “we know the mayor” type deal. So that’s what we were. I never had a demonstration at city hall at all, wouldn’t permit it. I told them we were not running a popularity contest. We were here to get the facts.
ALLEN: How long were you mayor?
STRANGE: Well, I was mayor actually two years, mayor pro tem two years, so I was involved four years. The last two years I was on the road all the time. I was speaking to all of the municipal officials so I brought up a pretty good wealth of experience in local municipal government to the people.
ALLEN: The position of mayor was an elected position?
STRANGE: Elected by the council.
ALLEN: So it wasn’t a popular election.
STRANGE: Well, you had to run for office and I was elected. I was very gratified with a very heavy vote. The council chose to elect the mayor’s spokesmen for the council or presiding officer for the council.
ALLEN: So you were elected to council and then chosen by the council as mayor.
STRANGE: That is correct.
ALLEN: How big was Richardson at that time?
STRANGE: When I went in it was about 10,000 or 12,000 and we planned for the community to be 125,000 or 130,000. I think today it is about 80 or 90 or around 100.
ALLEN: And what were the years that you were?
STRANGE: I was involved from ’60 to ’65.
ALLEN: And all of this time you were in investment banking?
STRANGE: Sixty-six. Yes.
ALLEN: And when did you start with Sammons?
STRANGE: In 1970.
ALLEN: So you were about twelve years then in the investment business?
STRANGE: Well, actually it was ten years. Ten or eleven years, somewhere like that.
ALLEN: How did you happen to end up with Sammons? What was the occasion of your going into his company?
STRANGE: His general manager was needing some help because he was convinced that Sammons should expand its cable operations and some other operations and he wanted to get out of the hotel business. I actually sold a bunch of hotels. I was the deal man. They needed a deal man and that is when they came to me.
ALLEN: They came into contact with you because they had been using you as an investment banker?
STRANGE: No, no. I think I got a very little bit of their business. I had come in contact with them … my secretary knew their secretary, and there were some social relationships, but it was minor. They did some checking around, and if you are in politics, you get publicity and that type of thing.
ALLEN: Could you describe what the Sammons Company was like when you joined them?
STRANGE: Well, it was …
ALLEN: What was it composed of? What were the elements?
STRANGE: Well, there were three or four major ones. At one time, he had eighty some odd corporations. It was very big. It was one of the largest and remains so to this day, one of the largest private corporations in America. His base of operations was created by insurance companies of which he owned six. I could name them but that is not germane. Then he was in what was called the “distribution business”–the supply business. They had supply firms.
ALLEN: In what lines? Food?
STRANGE: No. Oil well supplies was one of them. They owned a firm called Vinson Supply Company, a major supplier of oil tubing and things of that sort. They had Briggs Weaver which is a big major supplier of hardware supply type things. It was companies that I didn’t particularly care for because it was heavy inventory, but they made money and that is what counted. He was in cable television, insurance, and the supply business. Then he had several ancillary or spinoff-type businesses. He had hotel businesses. He owned some hotels, old downtown hotels.
ALLEN: In Texas?
STRANGE: Everywhere. Well, I say everywhere, in several states. I negotiated the sale of the ones in Destin, Florida; Charleston, South Carolina; and Greenville, South Carolina. He owned a hotel, still does, a magnificent place in Asheville, North Carolina, still owns a hotel in San Francisco. He owned one in Texas which we sold. He liked the hotel business. Later on, I will tell you that is how come we used that hotel business to get our money out of Canada when we were expropriated in Canada by the Canadian government on our cable property.
ALLEN: Can you tell us something about Charles Sammons the man?
STRANGE: Yes. He was like a second father to me. He was an extremely … well, there is no better word for it than the word tight. He was affable, people liked him. He was an entrepreneur that started out as an orphan, up here in Plano of all places, as a hay hauler and later on did laundry and all that sort of thing. He bought an insurance company called Reserve Life which was his basic firm. It was in the accident and health business. He was a master at direct mail. He was an entrepreneur, a pretty good salesman, a very good negotiator. He would make a deal and whenever he was ready to make a deal, he didn’t fool around. So I would say in trying to put it all in a capsule, he liked to have his hands on all the details.
I can remember one attorney going to him one time and saying, “Mr. Sammons, I need to discuss my compensation with you,” and he said, “up or down.” He had a dry wit about him. There was a period of time when he was real active when I was there. We would meet outside his office at five o’clock for cocktails. He liked his scotch. We sat there and one day I took my shoe off unconsciously. I didn’t realize I had it off. And he looked at me and he said, “Bill, does the shoe hurt your foot or whatever?” I said, “No Mr. Sammons, I just think better with my shoe off.” And he said, “Hell, take the other one off.” He had a wit about him that was very interesting.
They had an old cafeteria, not a cafeteria, it was one of those greasy-spoon restaurants on the ground floor of the building. It was called the Century Cafe, I think. I went in there one day and he invited me to sit with him. They had what they called “plate lunches” and they would cost about $1.35 at the time. This was 1970. I got a plate lunch. The waitresses were all women from forty to sixty. So I visited with him, ate my plate lunch and I put down 35 cents for a tip. Sammons picked up one of the coins. I don’t remember which one it was. It was probably the dime, but I’ve told this story where I have said he picked up the quarter. And he handed it to me with this comment. He said, “Bill, let’s not over tip in here, I eat here everyday.”
He was very snug, but yet if he wanted to buy something, and he was convinced that it was right … I got a real lecture from him one day in a friendly sort of way. I was buying a system and I was in his apartment in New York and talking to him back in Texas. I was about to buy a real small system in North Carolina. The man had gotten a bid of $125,000 and I was convinced that I could buy it for $110,000. And so I said, “Mr. Sammons I am bidding $110,000.” He said, “Okay Bill, whatever you think. Are you sure you know the difference between the 110 and the 125? If it is worth 110, it ought to be worth 125.” And I said, “Well it is your money I am spending and I am trying to do it right.” “Well, whatever you think Bill.”
So I thought better and called back to his attorney who had been with him for a long time and I said “Ken” and I related the incident. He said, “Bill, I’ve got one thing to say to you, don’t lose the deal.” He felt that if you were going to buy something, then you are going to buy it for the long term. Who in the world could say within a few dollars of what something was worth. If it was worth having, go ahead and get the deal before you lose it. That was his philosophy.
Now he never even began to buy if the price in his opinion was out of line. But if I would tell him the asking price, he would say, “What do you think it is worth?” I would tell him and then I would say, “I am not going to give that for it.”
Once he got an idea what something was worth he thought he had bought it. He didn’t even want to know after he had bought something. He didn’t want to know any more of the details. We had to go to the banks and get the money. He had plenty of wealth, but we always borrowed the money. He said that’s what banks are for. Banks put up money. That was the way he was. When he borrowed the money to buy Reserve Life, he never paid that note. That is what is called an “evergreen loan.” He borrowed $25,000 from Republic Bank in 1938 and that company became worth, oh I don’t know, several million dollars, but he never paid the loan back. That is what he maintained. I am sure that they renegotiated and all of that.
Charles Sammons was a visionary in a way because very early he saw cable as a good business. He likened it to the insurance business. You see he never had any oil, he didn’t make his wealth in oil at all. He made his wealth in insurance to begin with because he said if you get that money coming in weekly, it is a cash business. This is what he maintained, and the cable was that way. In fact, if some of his other officers had expanded upon his desires, he would have been bigger than TCI because he would commit to buy just like that. In the early days we could have bought and look where we would have been. But, by that time, he had gotten substantial wealth and the other officers were feeling well let’s not go too far. Not Charles Sammons. He didn’t care how much he owed. Until the day he died at age ninety-two, he was ready to borrow money which was unusual for a man of those years. He never began to pull in and sit on and get conservative.
So in summary I would say that he was a unique Texas entrepreneur. He abhorred flashiness. He would not demonstrate wealth. He did not want a story about him written up anywhere. I remember one day he gave a million dollars to the Salvation Army with the express intent that they not publish it until he was out of town. Now it wasn’t that he was such a benevolent guy, he just didn’t want the publicity that goes with the showmanship that a lot of people that he knew … all people are great on the showmanship, and he didn’t want any of that. In fact, he wouldn’t let us talk to the press, no big articles. So many times I have had to speak to the press and they would ask about Charlie Sammons, and I would have to take a different tack to get their mind off of it.
So he was a unique entrepreneur who saw the future of this country in communications. He was one of the early leaders.
ALLEN: So he was really a self‑made man?
STRANGE: Oh, no question. He was the epitome of the self‑made man. Absolutely.
ALLEN: How did he live? Did he have a large Dallas home?
STRANGE: No. That is a good question. He was in the process of building a Dallas home and his wife was in the attic at the finishing stages and she stepped through the attic to her death. When that occurred, he moved into one of his apartments which was Crest Park Apartments down in Highland Park where he died. That happened in 1969 and when that did happen he subsequently remarried … until his death was married to Elaine Sammons, who now assumes the responsibilities he had. He never again went into the building of a home. He had a lovely penthouse apartment at the Crest Park apartment building that he owned. I can remember one time he was kidding me about wearing his shoes half soled. He was snug. He was a tight guy, but he lived that way and there wasn’t any flashiness about him at all.
ALLEN: You mentioned he had an apartment in New York. Was that pretty much for business?
STRANGE: Yes. A couple of times he was there and I was somewhere else and I had to go over and see him about something, and hell, he would eat in the apartment. He wouldn’t go out and pay those high prices. One time he was contemplating going public and Merrill Lynch (a proposed underwriter at the time) took them all out to a very expensive restaurant and he ate their … out for spending so much money that he subsequently had to pay for. That kind of thing. So it was just his style. He didn’t like anybody throwing money away.
ALLEN: Was he a man who worked constantly or did he occasionally get away?
STRANGE: Oh no. He didn’t know what a vacation was.
ALLEN: So he didn’t have property down on the coast.
STRANGE: Yes. Well, he had these hotels. He liked the one in Asheville. He also bought the Grand Bahamas Hotel. I don’t know how many millions he sunk and lost in that, but that would be the extent of his vacationing. But he was working all the time that he was there. He wouldn’t call back the many times that he was outside the United States because of the phone bill, but people would come to him. He was a great entrepreneur. I liked the guy.
ALLEN: How big was the cable operation in 1970?
STRANGE: It was approaching close to 100,000 when I joined.
ALLEN: And where did he have properties?
STRANGE: In about six or eight or ten states. He had property in Canada. He was driving in Canada one Sunday and noticed that there was cable up in the air. He stopped and called the person that owned it and wrote him a check on a Sunday. I have forgotten the exact dollar–two, three, or four hundred thousand dollars. He didn’t have the money in the bank so he called the bank on Monday and told them he gave them the check for the cable system. That system subsequently got up to 22,000 subscribers.
ALLEN: Where was that in Canada?
STRANGE: It was in two cities. Trois-Rivieres and Shawinigan in the Quebec Province. Canada subsequently passed a law that all communications properties must be owned by 80 percent Canadian. We, of course, came under that and had to dispose of the properties.
ALLEN: Were those the only two properties in Canada?
STRANGE: Yes. And they dilly dallied around about disposing of them. Our people came up with a real good suggestion of forming a co-op and selling it to the subscribers. We couldn’t get that approved by the Canadian government. Let me say right now about Canada. When you are outside the continental limits of the United States, you are a foreigner and don’t you ever forget it. I don’t care what language you speak. When you are outside the continental limits of the United States, you are a foreigner. At any rate, it got down to where it looked like we really had to sell our properties so we made a deal with a Canadian and incidentally it had to be a French Canadian because we were in the Province of Quebec. We had dallied around, our people dilly dallied around, and I got called into it after the fiasco. I probably would have done the same thing they did in retrospect. They continued to fight the government to maintain that they were doing a good deal. We had lawyers out our ears. So what happened is that we came up with a sale of the properties for $3,700,000. I remember this like it was yesterday although it was twenty years ago … and got an escrow of $370,000 cash. Our people went to what is known as the CRTC‑Canadian Radio and Television Commission. The chairman whom I subsequently dealt with was a man named Pierre Juneau, a very powerful man in Canada. We had prospects to sell and we went to Pierre Juneau and said that we had these two prospects to whom we can divest ourself of our properties in Canada, and will you grant the permit to them? The answer was, and listen to this: That neither of them are unacceptable. Isn’t that a hell of an answer? So we went ahead then and signed a contract for $370,000, correction, $3,700,000 and got $370,000 escrow money. And the Canadian government granted the permit to the other man. Our man that was the head of the enterprises which governed the cable systems and the insurance and everything had a terrific personality conflict develop between he and Mr. Sammons and Mr. Sammons fired him. And we are now into January of 1971.
ALLEN: Who was that man?
STRANGE: A fellow by the name of Darrell Manley.
ALLEN: Was he a Canadian?
STRANGE: No, no, here in Dallas. A native Texan, a good man, and frankly he was trying to enlarge the company to benefit Sammons, but Mr. Sammons was going to run his company. At any rate, they were having a board meeting in January and I get a call from Mr. Sammons and the board. They called me up into the board meeting. Mr. Sammons said, “Bill, where do we stand up in Canada?” I said, “Mr. Sammons, we are an illegal operator. We have a cable system going on without a permit.” He said, “Well, I want to send Ernie Blank,” who became the head of the enterprises and his hotel man who was a good friend of Sammons. “I’ll send him to represent me. I want you to represent the board. You all go to Canada and see if you can get this straightened out.” He said, “What’s been done?” I said, “Very little. I have contacted the U.S. State Department and our State Department in Ottawa is prepared to receive me when we could go.” So we went to Canada. I made three trips to Canada.
When we got there, the State Department in Ottawa told us that we all have had plenty of time to get out of this deal. You see that infuriated us. One of the reasons I wanted to back Representative Bryant’s bill that we should have a quid pro quo that if you can’t own but 20 percent in Canada, a Canadian can’t own but 20 percent here. We had a Canadian come in and buy a Texas cable system. At any rate, our laws let anybody own it.
At that time the Arabs were thinking about coming in and buying our communications property and I was incensed over it. At any rate we ended up sitting down with a new guy. Well prior to that I went to the U.S. State Department in Ottawa and they said, “We can only help you sub-rosa. We cannot get involved in this. You’ve had enough notice in this. You knew what it was.” Pierre Juneau, get this, assigned his brother-in-law to be with us in every meeting. They got Mr. Sammons disturbed at one time. So we sat down in a negotiation session with a fellow named Ernie Blank who is Swiss (I think he is naturalized now) spoke fluent French, German, and English. We went in and sat down … I remember the man vividly. He has even called me once when he was in Dallas. He said, “I might have given you a million and a half, but I believe I would only give you a million, one hundred.”
ALLEN: This was the man who had been identified as the person that the Canadian government had wanted to have the system.
STRANGE: Had granted the permit to.
ALLEN: And what was his name?
STRANGE: Henri Audette. Why I remember that name, I will never know. A reasonably decent sort of guy. He was in a powerful position. So I spent the first meeting getting him to agree to meet again. After a series of several meetings, each time I would get back Mr. Sammons would come over and he would put his foot up against the desk, “Well, how do we stand?” I got him up to a million nine. And Sammons came over and he said, “What do you think Bill?” I said, “I think I can probably pull another hundred thousand but I stand a chance of losing the deal.” And he said, “We had that sold for three seven. I said, “Yes sir.” He said, “Get the lawyers.” I said, “Mr. Sammons, you are about to kiss off $2 million. “I don’t give a damn, Darrell did, I can do it.” And now my head is swimming. I got the deal that is salvageable at $2 million, and the old man is about to kick it out because it was unfair. Somebody told him he had a 50‑50 chance in the courts in Canada. I set up some telephone conference calls. I got some lawyers off ski slopes in Vancouver. I had our lawyers in Washington, our lawyers in New York, I had lawyers in Ottawa and Toronto, no Montreal, not Toronto. Montreal, that was where our principal attorneys were. And all of them, you know, you can imagine what the legal expense was this time. It was incredible. And all of them saying, “Well you have a chance at this.” So finally, I said, “Mr. Sammons let me tell you something sir. You are fixing to fight with the Queen of England.” He said, “I don’t give a damn, right is right.” I said, “Mr. Sammons, now wait a minute. We’re not in the United States. We are in their country.” Well, he still smoldered and I got a hold of Blank, and I said, “Ernie, talk some sense to the old man.” I said, “We could do something with this $2 million for crying out loud.” So he muttered and sputtered and finally gave the okay to do the deal. And here comes the shocker. We did the deal and then couldn’t get the money out of Canada. So I am telling you I was just crushed. Here I worked the best deal I could get which was still highway robbery. The properties in the United States were worth $6 million. We sold them, we had a deal for $3,700,000 and then ended up getting $1,900,000. I told them that if we didn’t get the deal done I was going to hold a press conference, call the Wall Street Journal, the Canadian papers and accuse Canada of being another Chile. It was right after all the Allende’s stuff in Chile and I was really going to raise some hell with them. I was trying to get them to get something done. I knew that they had us in a barrel. There wasn’t any question about it. Well sir, a light went on, and our people started leasing 737 airplanes. We formed a company called Adventure Tours with the money that we had in Canada. We filled those airplanes up and took them to our hotel in the Bahamas in the winter, but we made them pay us in St. Louis and that is the way we got our money out of them. Later on Adventure Tours paid the cable systems the $1,900,000 for our Canadian properties which gave birth to a very successful company that they have here in Dallas called Adventure Tours. So that was our experience with the Canadian deal. Why our government permits unequal treatment of its American businesses is unbelievable.
ALLEN: Was Sammons the only U.S. cable company that had Canadian property?
STRANGE: Oh no, no. One of the biggest was CBS. You know CBS owned cable property and chose subsequently to divest themselves of the cable properties in the states and in the process divest themselves to the cable properties in Canada and formed the company called Viacom.
ALLEN: Had they divested their Canadian before this law was passed?
STRANGE: No, not before that law was passed they had not. But now well I don’t know. I am a little hazy on that. It was either … if they did it before it was right before. My sense of recollection is that when Canada passed that rule they divested themselves.
ALLEN: Who else was involved in the investments in Canada?
STRANGE: There were several other companies. It wasn’t very big at that time.
ALLEN: CBS was the major player.
STRANGE: Yes. According to my recollection. Sammons was not unusually big, although there weren’t many cable systems then. This whole thing took place in 1970, over twenty years ago. They didn’t have pay-tv in Canada for ten years after we had it.
ALLEN: When did Sammons first get into the cable business in the U.S.?
STRANGE: It was in the late ’50s.
ALLEN: Can you recall some of the properties?
STRANGE: I can remember one that sticks out in my mind pretty good–Carlsbad, New Mexico.
ALLEN: Did he basically buy or did he build systems?
STRANGE: No, he nearly always bought. He didn’t get into any building until later. See, he loved cash flow. He didn’t like to start up. He wanted to buy something that was immediately cash coming in.
ALLEN: Now what were some of the other systems in 1970 that Sammons owned?
STRANGE: In 1970, he had a couple in Oklahoma. We had some in Tennessee. He had some in Pennsylvania.
ALLEN: Sammons still is in Harrisburg, Pennsylvania. Was he in Harrisburg that far back?
STRANGE: Well, on October 8, l971, we purchased–and I was on this deal–we purchased all of the cable systems of an equipment manufacturer by the name of Jerrold Manufacturing Company, and Harrisburg came in that package. Also there was some of the stuff in Illinois. We had one or two systems … one in Glendale, California. I think that was not in the Jerrold deal, but was in Sammons. We had one or two Californians, but by and large the company overnight doubled to 200,000 subscribers in the fall of ’71.
ALLEN: You negotiated that deal?
STRANGE: No, I was with Darrell Manley from Sammons who did. I couldn’t think of parent company. So we negotiated that purchase giving $30 million for the 100,000 subscribers in 1971. And as I say at the time, it was the biggest trade that had ever been made. The Wall Street Journal reported it and all that sort of thing.
ALLEN: Why did Jerrold or General Instruments decide to get out of the cable business?
STRANGE: Well, they said and I think very properly so, they were in a manufacturing business selling to cable systems. They were continually being accused of taking care of their own to the detriment of the other customers that they had. There were cable operators. There was a lot of resentment to the fact that they had operating systems and were also manufacturers. So they chose to expand their manufacturing systems and that is one of the things that they took the money for. They continued to become the dominate and I guess are so to this day, probably the dominant supplier, manufacturer to the cable industry.
ALLEN: Were there others who were interested in buying Jerrold?
STRANGE: Yes. There were several, one of which was one of their people who subsequently died, God rest his soul, Bob Beisswenger. He had put a group together, was looking at buying it. There were several others. You know when you get started on a buying deal, you hear so and so is interested. Unless you actually see, you can hear anything about who is interested and they will tell you that others are interested and they may or they may not be. That is all a part of corporate acquisitions. You can run into anything. There was some heated trading back and forth on our part.
ALLEN: Who were you negotiating with at Jerrold at the time?
STRANGE: Well, the final negotiation … Beisswenger initially, but the final negotiations, Moses Shapiro, a man that had long run General Instruments. He was regarded then and I suspect to this day as the popular CEO of General Instruments. I think he helped. He bought the deal from Shapp … bought the Jerrold companies. As you know, Jerrold is the middle name of Milton Shapp, former Governor of Pennsylvania.
ALLEN: You say there was some tough negotiations, tough in agreeing upon price or other factors?
STRANGE: No, it was getting them to accept the deal. I mean we were just wanting to be able to trade with them. We would have pretty well given them what they wanted. We were interested and that was the form of negotiation. They were a tough negotiation from the standpoint of price dealing and there was tough negotiation from the standpoint that they’ve got a piece of property that you want and to be able to get your time on the “dia” so to speak.
ALLEN: So did you approach them about buying?
End of Tape 1, Side A
EDITOR’S NOTE: The historical references to Mr. Malarkey and the early days of the NCTA can be misleading. Readers who may be researching this period should also read the oral history of Martin F. Malarkey, who was the president of NCTA from 1950 to 1956, and that of E. Stratford Smith, who was executive secretary and general counsel during that period.
ALLEN: Today is Thursday, January, 17, 1991, and we’re in the home of Bill Strange. This is Tape 1, Side B. Bill, I had just raised the question as to whether you had approached Jerrold or Jerrold had approached Sammons about the possibility of buying the properties?
STRANGE: I do not recall exactly. The only way that we would have been involved with them is if someone would have told us it was available. My recollection the more I think about it is that we learned that it was going to sell or be sold and then we cut ourselves in the deal because we had to get in to see Shapiro. We came into the deal late, really.
We contacted them after hearing it was for sale. They did not say to us come and buy us, not at all, or our systems are for sale. No, it was not done that way. We learned of it … the exact way we got the information I do not recall. But we were either told by some banks or bankers or a broker, perhaps. There wasn’t a broker on the deal. But some way we picked up. As you know in the cable TV industry, there’s not very much that isn’t known.
ALLEN: It’s a small industry.
STRANGE: Very few secrets.
ALLEN: That’s right. Well, you really hit the ground running in the cable business, then, when you joined Sammons because of the Canadian deal which was perking when you came in apparently.
ALLEN: And then, the Jerrold acquisition. Was that the first acquisition you were involved in?
ALLEN: Didn’t start small, did you?
STRANGE: No, they put me to work. Then, shortly thereafter I got involved …. You remember the Report and Order of the FCC came out in March of ’72. It discussed franchising and what goes in a franchise and even discussed local origination as to the number of subscribers mandated, all of which was subsequently changed. So I next embarked on a series of franchise changes and rate increases and things of that sort back in there and to get new franchises written that would be in compliance. Then, as we were getting them into compliance with the Report and Order, they changed the Report and Order.
ALLEN: So you were updating the language of the existing franchises?
STRANGE: Yes, to a great degree we were. One of the things we did was to get included in our franchises the ability to pass through the franchise fees and things of that sort. And then, of course, in the early stages many of the franchises were one page or three pages and granted in upstairs closet meetings and then last for fifty years or perpetuity and so forth.
And then I embarked upon … I have twenty-seven rate increase applications. I got twenty-six out of the twenty-seven. But they were certainly justifiable. They had been set at five years for like ten or twelve years at five dollars. You go in there and show that after ten or twelve years you want fifty cents or seventy-five cents. And I wrote articles in the press about rate increases and was picked up that way.
So my time was spent doing that kind of thing and at the same time constantly looking for acquisitions because Mr. Sammons was really, really interested in acquisitions.
ALLEN: So once you got the Jerrold properties along with the ones that he had, you were up around 200,000 subscribers.
ALLEN: Did that put you as one of the larger of the …
STRANGE: Yes, it put us in the top five or six in the United States.
ALLEN: Who were the other ones that were up in that category?
STRANGE: TelePrompTer was running number one. Cypress … Warner was running number two. Cox was in there. Times-Mirror was in there. All of the players were in there but to a lesser degree.
I was quoted several times in the trade press. One of the most interesting comments that I had received was that I had written a sort of an article concerning a rate increase hearing which was a mythical rate increase hearing. I ended up showing how that no matter how good you were doing and how necessary it was, it got down to the political. I captioned this, “How do you vote?” In other words, can you be fair? I mentioned about the cable system had requested approval and the rate had been $5.50 for thirteen years and they wanted to increase it 75 cents. And then went on to say that there were articles about the rate increase hearing and the radio station was telling people to come before the council … all this. And the cable system presented its financials. They had $2 million invested. While they weren’t losing money, there were making only a small return. The net was $100,000 on a $2 million investment. And they want to add a satellite receiving station. They wanted to do some things like that. In order to do that investment, they had to have rank.
Now, then, this was the thing that I got a lot of calls about. I’m saying, in the beginning, I want the reader to assume a fantasy. Actually play a role with me and follow the steps. It may or not sound familiar. Pretend you are a newly elected council person in the city of Wonderfultown, Best State, USA. Now then, the first one to speak is the wife of a friend of yours. In fact, she and her bridge group work hard for many nights during your campaign. It was a tough, hard race and this lady contributed money as well as untold hours of work writing letters to voters and editors, making phone calls, putting up yard and bumper signs. In fact, she had been like a person possessed with working to help get you elected. The city council job pays only ten dollars a meeting with a pay limit of fifty-two meetings a year regardless of how many are held. Your friend, her husband, is a developer in the city and he gave $1,000 to your campaign. He is also present and will speak. The lady remarks, “Everything’s fine as far as the cable pictures and complaints about the company are concerned,” but she’s simply opposed to any increase in rates. She states, “All the other vital services prices are set by the state.” Now get this, this is printed in 1971, ’72 or ’73 and it’s the very argument that’s being made today, the very argument. The lady says everything’s fine she is simply opposed to any increase. She states all the other vital services set by the state … the city council’s had an opportunity to stop at least one requested rate increase. She reminds the council the various utility rate increase is just inaugurated. The husband follows her and says he’s developed a tract of land in town approximately two and a half miles from the cable trunk. And the nearest home … the cable system won’t run cable to his development without having to pay a proportional share of the installation cost. Her husband’s quite adamant about not granting the rate increase unless the city requires the cable operator to bill to his proposed development.
The next two speakers are two sweet old ladies in their seventies who actually compliment the city and their service. Their only complaint is that they’re on social security and don’t want to pay any more even though it’s only an additional 75 cents a month.
The last speaker is your priest who says he appreciates the problem confronting the council but he’s there to protest any increase in the cost of cable TV. He says there’s a large number of people who can’t pay any more. You know how dedicated and committed a person is toward those less fortunate.
The hearing is closed and the matter is before the council. You recall the company’s presentation … seemed reasonable. And, yet, you remember your friends and now they said cable’s okay but that you shouldn’t support a pay increase. You remember vividly how your supporters worked for you. In fact, you realize that if it weren’t for them you wouldn’t be there. As you deliberate, you weigh the decision … anger all your friends and make a foreign corporation pleased or vote against it and keep your supporters, your voters happy.
Now my question, could you be objective? I’ve always maintained you cannot have rate settings done by local government bodies. It cannot be done over a long period of time and have it done in an objective manner.
ALLEN: Well, you obviously had found a way of reaching those local government bodies if you applied for twenty-seven rate increases and got twenty-six.
STRANGE: Well, the case was well made. It wasn’t so much that I was any particular articulate spokesman or anything like that. But once you could demonstrate that they’d had the same rate for years and years and years … but the key to it was that any time you did a rate increase you had to give them something. So you’d always go prepared to give them something. It may have been just a new office … I don’t know. In the early days it was giving them additional channels, doing something. Or wiring an additional area. That’s the sad thing. You never could, in dealing with a municipality, get it on the basis that you were justified it by your investment. No sir. It was what have you done for us today? What are you going to do today if we give you this? They have no business setting the rates. It’s not a utility. It’s not a necessity. It’s a nicety.
But you’ve got to remember this, that the telephone industry, to a degree the power industry, almost both of them literally wrote the constitutions of the various states. If you want to read an interesting book that’s out of print called Insull, named after the great utility magnate out of Chicago. And they started off and had everything set in place. You want to bring some effect, you try to handle the PUCs everywhere.
So now comes along a young upstart industry and so you have elected officials and people everywhere have a bite at the apple in the formation of the control and the legislation effecting this industry. You don’t see them arguing in the Congress about control of telephone or power or gas or any of those others. They’re seizing upon this because of the politics. Who in the world could be for the cable company beside the cable owners? Man, it’s like jumping on crime. You can jump all over the cable people, you’re not going to lose any votes. See? And the fact of the business is, Gore has capitalized on this. He’s created a platform. He is the so-called savior of the people because he is going in there and fighting their battles.
Now, the horrible thing of this whole deal is that we’ve got some bad characters in our industry. Should never have been in the industry but they are and we can’t help that. But there’s an old saying, if you throw manure up in the air it gets on everybody. And that’s exactly what has happened because of the horrible practices to a great degree …. I’m sure you know this but a big portion of it is brought about by the financial industry. They made commitments and loans on the basis of the fact that there was no control over the rates. If the guys didn’t do a good enough job of paying on the loan, they just raised the rates to protect themselves. And on that basis, they continued to bid up the prices of which there’s no way you could come out.
I used to look at systems being offered for sale. There was no way we’d pay that kind of money because you’ve got to make money in the business. If you have to pay what you have to pay, you can’t do it. Well, they didn’t care so those are the things that the good, decent operators have to …. And we have some wonderful cable operators in our industry. Good, responsible cable operators. I can name you four or five. In fact, for the record, I would say right now you’ve got a company called Continental which is a very fine operator. You’ve got a company called Telecable … a very fine operator. You’ve got a company to a degree, Times-Mirror is a very fine operator. Cox operates a quality operation, they are quality operators. Comcast by and large runs a quality operation. Sure they have some … when you have large operations, you’re going to have an outlet or two that are not going to treat the public right.
You know our Lord missed out on one out of twelve. You start hiring a bunch of people, you’re going to have a foul ball now and then. But we have some very fine … and there are others that I didn’t name that are very fine, responsible cable operators. And we’ve got some horses asses.
ALLEN: Who were some of the key players with Sammons when you joined the company in 1970 … inside the company?
STRANGE: Well, it was very small. We had a chap who was president of the company by the name of Bill Karnes. In fact, he’s still in the engineering business. He was heavy in the engineering tide. We had a chap before him he had just left before I got there by the name of Doug Jarvis. A very active chap in the financing. He’s now with Chuck Dolan in New York. He made a big contribution to the company. Two or three others.
When I was with the company I really wasn’t with the company. I was with the headquarters in which I was doing the acquisitions and so forth. Then was put over in the company in the first year or two and was working on those major situations of the acquisition of the disposition, again, and the acquisition and then began to do some rate increases.
ALLEN: So in sequence the Canadian thing, the Jerrold acquisition, the rate increases … what came next in your activities with Sammons?
STRANGE: Then, contemporaneously, I was heavily involved with the National Association and spent about 50 percent of my time in working on and with the National Association.
ALLEN: How soon did this work start after you joined Sammons?
STRANGE: Oh, it started in the mid to late ’70s. I was working primarily first on relations with legislators. Then I got very active in working on structuring of the board so that there would be more of the smaller operators that would have a seat on the board.
ALLEN: Do you want to talk a little bit about the legislation and what kind of things you were trying to do and who were the key players in Washington?
STRANGE: Well, at that time what we were initially doing, and I think that the National Association did a reasonably good job, what we were trying to do is to establish the bringing in of folks from the hinterland to the Hill. Setting up where they would call upon their legislators and to in turn get that done in the various states. That came to fruition, that came to pass.
ALLEN: Who were some of the cable operators who were particularly active in coming to the Hill?
STRANGE: You could always depend on the Joe Gans’ … there was quite a few out of Pennsylvania. Polly Dunn out of Mississippi. Tom Solsby from Communications Properties out of Austin. We had Gale Father and several of them out of California. California was very active in working the Hill. Pennsylvania was pretty active in working the Hill … the Barcos.
Then at one time we had a real split and old George Barco got so mad he resigned over … I think it was the copyright bill. We as an industry … there never had been a copyright since …. Well, let me correct that. That’s right. The copyright bill was about 1909 if my memory serves me. And they never had changed it to include such things as jukeboxes and all this other sort of thing. So, it came along and they needed a copyright bill. So we agreed to a copyright bill. All along I was in a group that was fighting the royalty tribunal because I felt like you took and set aside a group that would have literal life and death over you. But, nevertheless, George Barco had one way about the copyright. I’ve forgotten now who … I want to say Russell Carp with TelePrompTer but it was either he or Bud Hoffstetter. One of them came with the copyright bill. And the industry supported the copyright bill because one, politically, its day had arrived and it was something that needed to be done. And so there was quite a bit of acrimony had developed with a few of them. As I say, George Barco was so against it he quit over it and he was the former head of the National Cable Association, former president or chairman, whatever the title was at the time he was there. And George Barco made a lot of fine contributions to cable and to legislation. I think in due respect … while I’ve given George due respect, we were and are now in an evolving political situation because it’s a new industry.
I’ll give you an example … maybe it could be more easily understood. If you can imagine a gigantic giant reaching down with his hand and pulling up all the telephone poles. Now we have no telephone, no power or nothing else off of those telephone poles. And now then we turn around and we come into all the communities and tell them we are going to put in a utility. If you can imagine the people who want to have the say so about what’s done … it’s incredible. And, in fact, in the past I recently resigned from an activity that I was assigned to do because I had to answer to about seven different people. And I said, “Now, I’m going to tell you something. A camel is a horse drawn by a committee. And you all can take this and stick it in your ear.”
And in a sense that’s what the cable industry is faced with. Having to create …. I just got through reading an article in one of the trade press in which franchisors now today are talking two to five year franchises. What this says … it screams out loud that it’s the regulator that wants to manipulate, that’s what it is. You see, once again, if you’re jumping on the cable company from a regulator standpoint, there isn’t anybody going to come to their defense. It’s just like jumping on crime. You’ll be applauded because nobody likes to pay a bill. I don’t know why. They want the service … they want this item, they want the other item but nobody wants to pay for it.
ALLEN: So your career activities with Sammons, then, cutting deals or buying systems and representing Sammons in Washington. You were the primary spokesperson for them at NCTA?
STRANGE: That is correct.
ALLEN: Did Sammons ever get into building systems?
STRANGE: Yes. It actually started … oh, after we got the Jerrold systems, some of them needed expansion and they did some building.
ALLEN: Some rebuilding?
STRANGE: Yes, and extensions kept cropping up. As you see in the cable industry you have two ways to make money. You either got more money from the customer or you got more customers. The reason the rates stayed low for ten or fifteen years, there wasn’t any need of raising rates. If all you want is more money, all you had to do is string another line and get some more customers. Then finally when you got about 70 or 80 percent of your area wired, if your expenses continue to increase, and they would, then the only way you’d make any more money is to raise the rate. So what we were in the extension …. Now I got the franchise for Fort Worth in 1981 and we built the city of Fort Worth and that was a gigantic undertaking. Many, many millions of dollars.
ALLEN: Did you have the entire city of Fort Worth?
ALLEN: And any of the surrounding communities?
STRANGE: We subsequently got some of the surrounding communities. We had one or two and got Fort Worth. It was quite a political deal but we got it.
ALLEN: Was that the first build that Sammons did?
STRANGE: Not the very first. It would be hard for me to recall the very first. From scratch, the very first one was Turlock, California, if my memory serves me right.
ALLEN: Mid ’70s?
STRANGE: Late ’70s. They got the franchise out there … it was an original Sammons franchise.
ALLEN: How did Mr. Sammons take to the notion of building when you said he was really more interested in the cash flow nature of acquisitions?
STRANGE: By this time he knew that if you built you’d get X number of subscribers so he was for that. In fact, a group of us went up to look at, and I was interested in building Brooklyn. I wasn’t when I went. We retained a car. The fact of the business is, a car and a driver to drive us over to Brooklyn. And to this day, I think Brooklyn is one of the finest looking cities in America. They really get a bad rap but that is a beautiful town. We drove for miles. I couldn’t believe what an attractive community Brooklyn is … the absence of graffiti and everything. We came on back and I remember this is one of the last meetings that I was in. And Sammons owned commitments and I sat there and Sammons and I were the only ones that wanted to do it. He would not overrule his top people when they came in with logical arguments because if we all were for something, he’d buy it immediately because if it didn’t work he could say they’d screwed up. But if they told him it wasn’t going to work, if he overruled them then he would run the risk that he would be accused that he screwed up and he didn’t like to feel that way.
But, at any rate, one of the questions came up and I said …. The president of the company was neither pro nor con. He was absolutely neutral on it. Said I’ll build it if you want us to. And Sammons said, “What do you think, Bill?” I said, “I think we ought to get the franchise and ought to go.” The engineer was asked, a brilliant engineer we had by the name of Hank Chiconi, and Sammons asked, “What’s it going to cost … a hundred thousand a mile?” The engineer said, “Could and more.” And I interrupt about that time saying, “You certainly could do it for two hundred thousand, couldn’t you?” He says, “That or more.” And he kept going to where he says, “Remember this.” You see he had about a thousand homes a mile in some of those areas … three to five hundred homes a mile. But the wires were hanging on buildings … absolutely hanging on the sides of the homes. And what would happen to those wires and then on the maps underneath … oh, it was a nightmare! And so we did not go into the building on Brooklyn. We thought about the Bronx.
Then the state of New York regulatory thing became so intolerable. You see, we got East Hampton on the Jerrold purchase. Now I dealt with those people at East Hampton and I’ve never been in a political meeting as bad as that one was. They tried to run our lawyer out of the meeting. I’m telling you, people that have a lot of assets and have some time can be real asses in a meeting. Just terrible.
At any rate, the state of New York’s posture with regulations is horrible, just horrible. So we’ve elected to get out. I don’t think we have but two or three systems left in New York. So the purpose in reciting is that was it cooled our ardor for the major city up there.
ALLEN: Would you take the Fort Worth franchise as a kind of a case history? How did you start it? What process did you go through? What kinds of presentations did you have to make?
STRANGE: To begin with, we had just been turned down in Dallas and Fort Worth had its application a short time after that. So I put together a local group in Fort Worth and so did all of the other cable companies. I think, maybe, about six applicants. I put together a local group that was politically strong and we got the franchise on a six to three vote. But we came with the latest state of the art. We had dual cable but we only activated one cable. Gave them fifty-some channels with the idea in mind that should it develop the need, that you could utilize the second and it would already be up there.
It was a very heavy document–a big two books. Of course, there were some representations in it that the city had called for that we should do that the demand wasn’t there to do. And we had all the negotiations afterwards that went on about when are you going to run an institutional line and there wasn’t any institutions. I think there was one. And such things came … see this cable industry brought that on themselves of promising them the blue sky and not able to deliver the blue sky because there wasn’t any demand for it. All that junk of bank by cable and shop by cable. Although in all fairness shopping channels did come along and enjoyed a good fad. Some are even on to this day.
But the representations were done because they were encouraged to do so. And so they were encouraged to shoot their best shot and everybody …. One person, Storer, bid in this deal … 232 channels. Now, who in the hell is going to look at 232 channels? So it was a heated political deal. We incurred the wrath, in a sense, because there’s been animosity between Fort Worth and Dallas for nearly a century. The very thought of somebody east of the Trinity owning a cable system in Fort Worth was an (???). So what they did was that that was the need for local ownership. We built in five or six … well, I’m failing to find a word. It would be a cell, a core or center in which it had the studios in it and everything. It had five studios … none but one got used type of deal.
ALLEN: Heavy access type of …
STRANGE: Heavy channels. You see, that’s another thing. You can get a group of people interested in producing television who are very vocal, catch the attention of the council, and there may be eight or ten or twelve people. The press is on them and the TV. All the media is on them and everything and they represent no one. And the viewer, in particular, they don’t represent. But the governing body goes along with this saying this is good for the people. We had the franchise, built the system from the ground up … I forgot. We built Connecticut down from Hartford where the brass company is. I can’t recall the name of it right now. It will come to me in a minute. Name a town or two in Connecticut.
ALLEN: New Haven?
ALLEN: It was down on the shore?
STRANGE: Well, it was south of Hartford.
STRANGE: No, over from Danbury.
ALLEN: Okay, we’ll look it up.
STRANGE: It will come to me in a minute. At any rate, we got the franchise for it in the Jerrold purchase. We subsequently built it completely.
ALLEN: Jerrold had the franchise and hadn’t started to build?
STRANGE: That’s correct. Waterbury, Connecticut … that’s the one. And we built Waterbury.
ALLEN: So that was back in the early ’70s then … ’73?
STRANGE: About in there. That was one of the first we built. What was so interesting about the Waterbury franchise is I get a call, fact of it is he came down … the Reverend Everett Parker who is the head of media for the United Church of Christ based in Washington. He came down and said, “We want you to give us the franchise. We can relate to the needs of the people that cable will do this for.” We said, “Sir, what do we get for this?” He said, “Oh, taking care of the downtrodden,” and all that sort of thing. So Darrell Manley, who at that time I’m answering to, said, “Bill, why don’t you go to New York.” So it was set up that I was to go to New York and meet Reverend Parker to discuss what he was talking about and wanted to do.
The day of the meeting there was a big article in the New York Times in which Reverend Everett Parker is cited that if we don’t do this they are going to do something against us up there. I told him, “Get it on. Let’s go. We’re going to build it. We’re not giving this to anybody.” He protested for the P.U.C. and everything on the basis that they, the United Church of Christ, could relate to the downtrodden through the utilization of the cable TV system. So that, again, was a part of what we would run into and absolutely got a tremendous amount of acceptance with the governing body. I even told them one time, “You folks are failing in spiritual leadership so you’re trying to jump over here in the commercial realm,” for crying out loud.
At any rate, we had run into that sort of deal and you do in dealing in the cities. We got to where … Sammons to this day has really only two major cities–Fort Worth and Harrisburg. There’s no way you could get Sammons to go for a major city operation.
ALLEN: And the Harrisburg thing came as part of the Jerrold acquisition?
STRANGE: Yes, and we continued to build, build, build. It was a well run showplace for us, really in a sense. It just grew with the whole industry growing. It was the first thing that Jerrold, I think, built and we took it over in October 1971 and continued to build it. We’ve had good relationships.
Now Easton, Pennsylvania, was a Sammons system bought from a Chinaman up there. It was a good system and we continued to build it. So from the standpoint of taking one over and going from scratch, we did Waterbury, we did Fort Worth, we did Turlock, California. There are others, I just can’t recall.
ALLEN: Do you care to comment a little bit on the difference between the success in franchising Dallas and Fort Worth? What did you do differently in Fort Worth or what was the different environment in Fort Worth? You had one strike against you already because you were from Dallas and you still got Fort Worth having lost the Dallas franchise.
STRANGE: Well, it’s very difficult to pin it all down but in the Fort Worth application, we took our Dallas application and smoothed it out, added to it. I made both presentations. Our politics was better in Fort Worth than it was in Dallas. And as history has shown …. Steve Ross, the head of Warner Brothers, came in and was the power behind the throne that got Dallas. It took me years to find out what happened. We were supposed to be … we offered them everything and, in fact, we were second in the Cable Television Information Center’s analysis. Somewhere along the line in the Dallas deal we did not do our politics correct. Number one, we didn’t have any local investors with us. I don’t know that it would necessarily have helped. Warner did … no, Warner didn’t. But Warner had some very influential citizens. They came in and tied up one of the major advertising agencies that the head of the cable operation subsequently became a vice president of. I’m not saying that there was anything that was done that was not kosher but they did their politics better.
ALLEN: You learned from the Dallas experience?
STRANGE: Well, not so much. It took a long time to even find out what happened. Fort Worth was down and done before then. We came in with the deal in Fort Worth … a pretty fresh deal of what they were looking for. Of course there was some learning process but I think that our particular application made a lot of sense. We were recommended by the CTIC on the Fort Worth deal. I’ve always wondered where they saw the error of their previous ways. I don’t know. It was big city politics … that’s about the best way I know how to describe it. What works in one town may or may not work in another town.
ALLEN: How long did it take to build Fort Worth?
STRANGE: Nearly two years … a little over a year.
ALLEN: Any idea how many miles of cable that involved?
STRANGE: I did know and have forgotten. I would say it’s probably … hundreds of miles.
ALLEN: You just weren’t involved at all in that end of the business?
STRANGE: No, not at all.
ALLEN: Did Sammons have a number of presidents in the cable operation?
STRANGE: No. I can pretty well name every one of them. Way back in the real early days with Mr. Sammons, a fellow named Frank Valentine who was an attorney. They were very small. Following Frank Valentine, I think, was Doug Jarvis. Following Doug was Bill Karnes. Following Bill Karnes was Jim Whitson.
ALLEN: When did Whitson succeed Karnes?
STRANGE: September 15, 1973. Whitson was a bottom-line man. He was the inside of the whole company. He put me in the outside of the … backed me 100 percent.
ALLEN: Was he someone who came up from the inside of the company?
STRANGE: No. He was a former financial plans man with Jim Lane who was a entrepreneur here in Dallas. Jim Whitson was very heavily accounting oriented and Sammons’ operations are one of the finest financial operations in the country.
I never will forget the first day he came in. He said, “Well, how much money do we make around here?” And the fellows started putting their hands in the air saying, “Well, you see you don’t understand the cable business.” So he says, “Well, how much money are you losing around here?” “Well, you don’t judge a cable company by what it makes or loses. You judge it by how many homes you’ve got behind the cable,” and so forth. And he said, “Well, I go by how much money we make.” And he introduced a new dimension. He was later held a high ….
Bob Hughes, incidentally, runs a good company. Prime cable is a very good operator. And Bob Hughes pointed to Whitson many times on the way that we would operate.
Well, we would have … a headquarters for a company our size … most companies would have eighty or ninety people. We’d have forty. We shared secretaries. I shared a secretary with the president of the company because I was an extension of his office. I didn’t have to have a secretary. He never dictated a lot of letters. I’d dictate a few. It was that kind of an attitude. We ran that kind of an operation. We never used private planes. Once, in the latter stages, we began to use a car and driver if we were in a hurry but we refused to take a limo. It had to be a sedan and a driver, not a limo.
ALLEN: So this whole concept of Sammons that every dollar was important …
STRANGE: Carried right on through the company, yes sir. We flew tourist on every … if we couldn’t go tourist we’d wait for the next plane. Now, I will tell you, I’ve been in some nearly all night meetings and on the way home, it was a Friday night … I had authority because I had the credit card to do it with. I’d go first class coming home particularly if I was coming in after hours and I was worn out. But we went tourist. We watched the dollars.
ALLEN: How long was Whitson president?
STRANGE: Well, up until about two years ago and he’s now the executive vice president of the total operation.
ALLEN: So he’s still with them?
STRANGE: Still identified. Mark Weber, the original manager of Harrisburg, is the president today. He became president about three years ago. He’s certainly a veteran cable man and a good man. He’s done a good job. He’s running it like they want it run.
ALLEN: We’re just about to the end of this tape, so I think we’ll stop at this point.
End of Tape 1, Side B
ALLEN: This is Tape 2, Side A of the interview with Bill Strange in Plano, Texas. Today is January 17, 1991. Bill what was the rest of the acquisition policy or history as far as Sammons was concerned?
STRANGE: Well, we would keep a running contact if you please with the brokers and with the industry as to properties that were available. We would do a brief analysis of what was being offered. We turned down probably 90 percent of what was offered if we didn’t think that it was a good buy for us now. We weren’t going to buy on the future potential. We were going on what we could do today. So over that period of time we looked at a lot of potential acquisitions.
ALLEN: The criteria that you used was potential profitability, the condition of the company. What kinds of things were you looking for?
STRANGE: Well, you pretty well hit it on the head. We used a criteria for the most part of trailing cash flow. All of the brokers, the majority of the sellers, always wanted to tell you about potential cash flow, first year cash flow, second year cash flow, and then some would get into all kinds of criteria to use. But basically we wanted to be somewhere at a decent cash flow which you could then always equate to a dollar per subscriber. We never paid any attention to the dollar per subscriber because you could have a five dollar subscriber, a seven dollar subscriber, or a ten dollar subscriber. Your dollars per subscriber will vary, but if you go on a cash flow multiple which we did, then we would know where we were. Well, they would present stuff to us, or we would have presented to us systems that they would asked for twelve or thirteen times first year cash flow. They would project in there rate increases and all of that sort of thing. In many cases it was unrealistic because some would only have two or three or four years on it and then they would project a rate increase and two years later a rate increase. Politically speaking that just ain’t going to work. They made up beautiful presentations. All of that took time and that is where I spent an awful lot of my time. We did do acquisitions anytime anything was near us, close to us, we would do it, as did other companies.
ALLEN: So you concentrated a lot of your acquisitions in Texas and Oklahoma.
STRANGE: No. We had very few systems in Texas. We were heaviest in Pennsylvania.
ALLEN: Okay. Then closest you mean closest to where you were at the time.
STRANGE: Closest to operating system, yes.
STRANGE: Yes. We had almost no systems in Texas. We had two old systems in Oklahoma. Huh, I can’t think of a system we had in Texas.
ALLEN: Until Fort Worth and the ….
STRANGE: That’s right. Exactly right.
ALLEN: What did you consider a good cash flow price?
STRANGE: Well, at that time we would not give over ten times cash flow, and of course you had to look at what constituted cash flow. If the system was really run down, you would give less than ten times because you would have to go in there with a rebuild, and then you got to be able to recover, that’s an additional investment of the system.
ALLEN: You said you would give more than ten times, you would give less than ten times, if you had to rebuild.
STRANGE: We would end up giving more because of the rebuilds. That was added on up. We were not known as the highest buyers. In retrospect, we made a mistake, because inflation took care of people that went ahead and paid more. As time went on, those that did it in between ’80 and ’84 just made out like a bandit from the value standpoint. It was before the prices had gotten into the astronomical heights of what they got to. When I heard of some of the prices. Oh we made a major acquisition, I had forgotten about the Atlantic City deal, because it was in New Jersey. We were heavy in New Jersey, about the second largest. Frankly, I went from disliking New Jersey to loving New Jersey. They went from a horrible governmental climate to an understanding governmental climate and they took it out of the cities. The city would select the franchise operator but from then on the regulation came out of the state office. That’s the best of all of the worlds.
ALLEN: What state office? Did they set up a special state office?
STRANGE: A division of the Public Utilities, known as the cable office, I have forgotten the exact name, but it was the Division of Public Utilities. In the state of Connecticut the cities have nothing to say about the franchising. It is all done by the PUC. In the state of Massachusetts, it is a combination. In the state of New York, it is the local, then the state. It is a maze of regulations.
Also running concurrently with all of the other things that we were doing, we were working with the various associations to get active in relating to the state legislators. In New York I spent lots of time in Albany working with the state association to relate to the New York Cable Commission. Oh, I debated a lot of guys, a lot of state regulators. I have articles on the cities and that type of thing because I don’t care what the government’s level was–municipal, state, or federal. They all wanted to be involved in cable. They went from anti‑business to pro business in New Jersey. New York is still horrible. Connecticut is good, Massachusetts is good.
STRANGE: Excellent. Vermont is not worth a damn. New Hampshire is not worth a damn. California, pretty good. It is heavy local, but it is pretty good. I say pretty good. You have got your hands full, but that’s California. Doing business in the various states, forgetting that a cable business is a world all of its own, because they have their own eccentricities. A Californian is a Californian is a Californian.
ALLEN: How long did Sammons remain active in business, right up until his death?
STRANGE: Yes. Almost. Well the last six or eight months he was not very active, but then nothing was done, because he had his fingers in everything, particularly in the cable industry. Cable was his love. He liked the insurance business, but the cable and the hotel business were his real loves, because he actually began them. Way back in the early days when the association would meet, they would use his hotel out in California. He would put them all in one meeting room, and the same over in the Grand Bahamas. That was long before I got there. He was back there in the earliest of early days, back there in the days of Marty Malarkey and those folks, way back in the ’60s. He was just as active as you could imagine.
ALLEN: So he was an active member of the NCTA as well as …
STRANGE: Well, the NCTA wasn’t too active then. It was a social group. They would meet annually and share their experiences, etc., but then it became … the NCTA. I got heavily involved because the NCTA’s role until the ’80s was that of a fireman. They would take issue against the things and fight fires, etc. I never will forget, I said I am tired of fighting fire, why don’t we come with our bill. Let’s do our bill. And there were quite a few other guys involved in that, too. I certainly was not the only one. I was active because I popped off a lot. But we came with our own bill. We tried several of them.
ALLEN: And when did NCTA turn to the proactive rather than the reactive stage?
STRANGE: Well it was, and that certainly is a good way to put it because they were reactive until they became proactive and that was, I would say it was in the ’81 or ’82 range that they began to become proactive. It came with the Senate Bill 666. I will never forget that one, because of its similarity to the Book of Revelations, which was accepted by the Senate Committee and then the House took issue with it. Along with the development in the industry and the publicity and the franchise hearings you began to see a need for legislation and so we finally came, which was passed in ’84, with the Cable Act and we almost failed to get that passed. Metzenbaum just almost had it killed. In fact, it passed on the last day. I got particularly upset. I was at markup. You are familiar with markup.
STRANGE: I was in markup and I had a dear friend of mine who later got beat by Treadroot for senator. I will think of his name in a minute. He was a congressman from Macomb, Mississippi where we have a system, an old Sammons system. Tim Worth chaired the committee. This was a subcommittee on House and Energy. And in markup, there was something, I have forgotten now the details on it. They got those fellows all completely turned around and I took issue with Worth’s assistant because of what they had done, and this is a significant point. I have forgotten about it until now. We had in the Cable Bill, in our proposed part of the Cable Bill, the right of the cable operator, if an apartment tenant called them for cable, they would just deliver them cable. We had that in the bill. Congressman Jack Field of Texas represented the real estate interests and they cut off the Cable Bill a right of entry to multi-family dwellings. Fifty percent of America lives in multi-family dwellings, duplexes, apartments, etc. And, as a result, a tenant in an apartment became a second class citizen. They could call up and they could get telephone, they could get electricity, but they could not order and get cable because it had to come from the landlord. I got so mad over that, and when they voted, I was realizing what was happening. Markup as you know is a tense period of the day. And I am back up from the audience, back around there talking to a congressman. I said, “You all lost your minds. You are keeping us out of serving the apartment dweller.” Well, he didn’t understand that. So then I took in and really locked horns with a guy named Aworth who was one of the worst staff assistants, either he was AA or he was a legislative man, and I wasn’t the only one that had ever locked horns with him. He was operating under the strength and privilege of the congressman’s office. To this day, the cable industry has had to go in the various states and get the right of entry because we were precluded by the real estate lobby under the Cable Act of 1984. They gutted us on that. We had it in and they cut it out. That was one sad feature because from then on it created a horrible monster called “SMATV” Satellite Master Antenna Television. It caused legislation and lawsuits because when Dallas was being built, as when Fort Worth was being built, the apartment people were wanting it, and so the apartment owner would put up the dish and get the programming to sell to the people. The poor cable operator in Dallas had to give their subscribers the full litany of services whereas the apartment owner was not required to do so because it was private property. Once again, sitting there trying to play God, the regulators were absolutely screwing up an industry. But, we were facing the political facts of life and it is difficult when you try to explain this to the man on the street; however, when you get the whole story out, he understands and agrees, but to stand up there in markup and try to get it across is impossible.
ALLEN: Did you have any occasion in your early days of working in Washington, of working with Lyndon Johnson?
STRANGE: Not up there. I had known Lyndon in Texas, but not in Washington. He had pretty well gone by that time. Let’s see yeah. He had left there in, well Kennedy was slain in ’63, ’64 he was elected, ’68, yeah I didn’t come up. I knew him.
ALLEN: You served as an officer at NCTA?
STRANGE: Yes sir. I was vice chairman one time. I was on the board for ten or twelve years and was very active in bringing about reorganization of the board.
ALLEN: Would you like to talk about that a little bit?
STRANGE: Well, there is not a whole lot to say about it other than the fact that it took me quite a number of years to get across that there should be a larger representation, various size systems and at the same time we wanted to keep in the big investment companies. Yet we wanted the voice of the small ones because every time you turn around, the congressman wants to hear from somebody from Hickory Bend or Skunk Hollow. They are not so interested in somebody coming down from Boston or New York, and yet they have allegiance to the support of the companies from Connecticut, New York or California. Congress wants folks from home coming up there, so the cable association had long utilized calling up the small operators. It is amazing how many of them are close to the Congress. Joe Gans is a good example. So, at that time, I felt like we needed to have a structure at which we had geographical directors, and they needed to have geographic districts. One of the major changes that was brought about was that anyone who paid “X” numbers of dollars of dues ought to have representation or not have to run for office. So we had set up that the top ten dues payers could name a representative on the board. Well, that kept the big monies together on our board. We didn’t want to do what the National Association of Broadcasters had done. They got a super board and a junior board. We kept all one board. What actually runs an association is the executive committee. Historically on the executive committee are the officers of the association, but in this new plan that I got in, they had to pick two little ones, two small operators, for the executive committee so that we kept an input of the small operator coming in which in a sense is good politics. Some of the major cable operators are wonderful guys, very intelligent, bottom line oriented, just as fine a group of people that you ever want to be with. But sometimes they get isolated in a tier of executives and they really don’t get the full feel from the vox pop so to speak. The only thing about it is that I don’t care what the size of the company, your company is composed of some little systems, and so you do have a way of finding that out. Then we wanted to have representatives from other interested commitments, so we would have diversity. We ended up having a board of about thirty-eight or thirty-nine versus a board of about thirty or thirty-one. It took us about six or seven years to get that across.
ALLEN: And how big was the executive committee when you finished?
STRANGE: It went, I think, to a total of eight or nine from about seven which I felt was right. I got it sold and I felt it was right that we recognize the little guy and there are seats on that board right now you cannot have over a few thousand cable customers. That seat is reserved. We had a seat reserved for the independent operator, and from that standpoint it took a lot of time. It took a lot of bargaining and a lot of cajoling and kidding, and they kidded me a lot about it, but I didn’t care. If I thought it was right, I did it. I think to this very day the success of the cable TV industry owes much to the association.
ALLEN: Who have been some of the leaders of the association that you feel have made the biggest contributions?
STRANGE: Oh, I would probably lead off with Ed Allen of California and Trygve Myhren of Denver. Without a doubt they made tremendous contributions. There is a man in the forefront now that I think makes a tremendous contribution–Jim Robbins, President of Cox. Then we had, oh there is, I really am amiss, probably the greatest leader we had is our biggest operator. I have the greatest respect for John Malone. I think that John Malone, well without reservation, has made the greatest contribution. He came out of Jerrold. He was former president of Jerrold and he went out and joined with Magness at TCI. John could have thrown his weight around and could have done things and caused things to be done that would have personally benefitted him and not the industry and he chose not to do it. So I have to put Malone way up there.
ALLEN: Any of the paid executives staff?
STRANGE: Oh, no question about it. I would put Bill Arnold up pretty high. Very high. I put the Kaitz in California very high. No question about Jim Mooney. I think he did and has done an admirable job. They spend too much, I think. You know I am coming out of my Sammons days now. They could run that thing a whole lot cheaper, but what the hell, they get the job done. People don’t do things. I used to raise Cain about the way they would spend money, and they all laughed at me and said, “Damn, you must have gotten off the tourist section of the airplane.” I said I did. That kind of thing. Mooney, I have got to give him all the kudos. There is another outfit that I have got to give a lot of credit to, more so than any individual and that is the group of Washington attorneys. Probably little enough credit is given to them. You see they got paid alright, but they ate and slept this industry. Guys like Steve Matthews, Jack Cole, and the old guy with Midwest Video, George Shapiro, the fellow that has just gone in the industry, quit a great practice, I’ll think of his name in a minute. But as a group the Washington Communications legal group much kudos are due them.
ALLEN: You have received a number of awards. I can see as I am sitting here the John Mankin for the award from the Texas Association, the Polly Dunn Award. Do you want to talk about these?
STRANGE: I am very, very grateful. I received the Larry Boggs Award in the National Association which is the highest award they give and I am very, very appreciative. I guess maybe we, as an industry, are a convention-going, award-making outfit. We do too much of. I am very thankful and happen to be the type that when I get involved in anything I give it all I’ve got and make a lot of noise with it and that gets you a lot of recognition–some earned, some not earned. I have applied myself and I have been very, very grateful for the recognition that I received. There are others that have done just as much, if not more.
ALLEN: Were you pretty active with the Texas Association?
STRANGE: Not as active as I wanted to be, but anytime that Bill Arnold called me I would go down there. He didn’t call often, but I went down there and cornered a senator or two and worked with that. I was active behind the scenes. We would get them involved with the National and that type thing.
ALLEN: Was that same true with Southern?
STRANGE: Yes. I was involved in the southern. My involvement in the southern was in getting their recognition as players. You see initially if you are outside of Washington or outside of being a big operator, you didn’t get that recognition. The southern association and various other state associations were tending to their business of relating to the state or states. Soon there developed a relationship that Washington (NCTA) would want something done and vice versa and there was not this relationship that existed that needed to be. This was to me a glaring example of a need that needed to be filled and subsequently we got the various directors of the NCTA to go to all of the state associations that were meeting and all the state associations had a director that was responsible back to the state association. It was in that arena that I related to Texas and to Oklahoma, to the Midwest and to the Southern Association. I didn’t do too much in California. California was so heavily represented. They had such good representation working with them, and that is where my time and my involvement was working with the associations.
ALLEN: So if Sammons had properties in the area, you would become identified with it?
STRANGE: Most generally it was done that way. We had some properties in California, but we had a Sammons man out there to do it, but by and large that is correct.
ALLEN: We talked a lot about acquisitions of Sammons. Did you divest in any properties during the time?
STRANGE: Very few. Once in awhile we had one that wouldn’t work or fit in. I can remember one that we sold in Jasper, Texas, a little bitty system by itself out of the way. We disposed of that. One little system over in Mississippi that we had bought and it didn’t fit in. We didn’t sell very many. Mr. Sammons never did want to sell any. To him, it was just like selling one of his children. He would not. So we did not dispose of properties. Now we did get him to acknowledge the need to dispose of old downtown hotels. That was something whose time had come and we did that. He never liked to sell anything.
ALLEN: What was the corporate structure that Sammons used at that time? Every local manager didn’t report directly to the president of the cable company.
STRANGE: He did. He sure did.
ALLEN: He did?
STRANGE: They didn’t have any regional managers per se. In the early days they would report right to the president. They never did have. Well, I will correct. In about ’74, Mitson began to set up two regional areas. It was half of the United States and the managers reported to them. They would report to the operation vice president. But Sammons has always been lean. I think I referred to that earlier in the organizational structure.
ALLEN: But it just seemed that you were responsible for a lot of individual cable operations and to have the president dealing with every one of them individually.
STRANGE: But in a way, it was not bad because they sent right now today, particularly, they have the computers which everything goes into them and we used to have. They did have and do have today a very fine operator down in (this is an old Sammons system) Lynette, Alabama. He would just raise Cain to get somebody to come down to their system. Well, they wouldn’t go down there because it was a money maker, it was so totally decentralized; that manager ran that system. And of course, I have always said that in a corporation the finest compliment that you can pay a local operating manager is never go around them, because you are paying them the finest compliment in the world. But you let something go wrong and you will see somebody show up, and so it was that sense of operation. Now it rapidly got away from that in the mid to late ’70s. They began to have regional, just so many things‑‑beginning to have additional builds, buying vehicles, and all of that that they then began to set more budgets and all of that that led to more of a central organization.
ALLEN: Did Mr. Sammon’s conservation of funding include compensation or did he keep his managers a long time?
STRANGE: I will tell you how he governed compensation. It was really funny the first time. Nearly every year he would get a list of everybody and all of his companies that made above a certain dollar. It was interesting to me. I began to watch how that level would increase. He wanted a list of everybody that made over $25,000. When I was hired by him, I was making … this was 1970, in 1968 or ’69, I had made $100,000. I don’t remember the exact figures, but in order to go to work for Charles Sammons he okayed my salary of $20,000. He had to okay it.
ALLEN: What in the world motivated you to go to work?
STRANGE: Well, I had made money in the brokerage business, buying and selling stocks, but I saw a great opportunity to get in on the ground floor of what I thought would be a great company. That was just the salary. I was to get certain other fringe benefits. The only point I am making is that of not being any hero taking any big cut, but it was the fact that the old man okayed any salary above $20,000 at that time. That was salary, and subsequently established an ESOP and that type of thing. He had his hands on everything, yes.
ALLEN: Back to the original question, did the managers in the systems stay for an extended period of time?
STRANGE: Yes, believe it or not. Because they were left alone.
ALLEN: And they were compensated fairly.
STRANGE: They were not highly paid. Most of them could go anywhere for more money, but the fact that they had a direct line into the president of the company, the fact that it ran a pretty good company, nobody got on them about anything.
ALLEN: Would he bring the managers together?
STRANGE: Yes, they did. Fairly reasonably so, at least once a year.
ALLEN: Into one of his hotels?
STRANGE: That is correct. Later on it wasn’t one of the hotels. Most everyone that I can remember now was at one of his hotels, or he brought them to Dallas. We put them up in one of his apartments, apartment buildings, several times. Then we finally got to where we were taking motel rooms around where our building was. He wouldn’t know all of that. We did a lot of things that he didn’t know. We had to.
ALLEN: It didn’t hurt him if he didn’t know.
STRANGE: That is right. Oh, he was a great guy. He really was.
ALLEN: And when did he die?
STRANGE: He died in November 1985–Thanksgiving time.
ALLEN: And you were still with him at that time?
ALLEN: And how much longer did you stay with Sammons?
STRANGE: Just about a year. Just finished up and took retirement. I retired in ’86.
ALLEN: Retired from Sammons, but not from the business world.
STRANGE: That is right. Well, yes, although even from time to time I would do some work for Sammon’s people, but I had my own little cable systems in for a couple of years and …
ALLEN: Where do you have cable systems?
STRANGE: I do not now. I did then. I sold out. Now I am in the paging business.
ALLEN: Did you buy cable systems after you left Sammons or while you were still there?
STRANGE: While I was there. I got approval to do so. I bought them with my nephew, and I bought little bitty ones. We would never buy one with 1,000 subscribers.
ALLEN: Where were you buying?
STRANGE: Well, I bought up in Lake Texahoma, built it from scratch, Tahoka where I had been in the city council and the Ford business. We got that franchise. We got about 300 subscribers, that kind of thing. And in Midland County, we had about 400 subscribers. In Roby, Texas we had 200 subscribers. Then I got Rockwell, about the time I was to retire which had a thousand subscribers. We built it to 3,000, that type thing.
ALLEN: Is your nephew still involved?
STRANGE: Well he was with me as partners and we sold out. Now we are both partners in the paging business, headquartered in Tyler. We bought Centel Telephone’s Texas paging operations. We would do about three-quarters of east Texas. Once again, I don’t want in a major market. It is too cutthroat. It is very, very difficult to make money. Big corporations think that it is worth having the numbers, that they just will do anything to get the numbers.
ALLEN: Do you have any continuing relationships with the cable industry at all now, Bill?
STRANGE: No. I have a great interest. In fact, I got incensed the other night looking at the Ace Awards that were given. I was telling Ben Conroy about it yesterday or the day before … I was embarrassed. I got embarrassed first, then I got mad. I am going to Washington to visit with them about it. Everybody was a big comedian and everybody is talking off color. And they were all saying, well we’re cable, we can say and do these sorts of things referring to Dick Cavett as “little dick.” And then James Woods, the great actor, he gets up there and tries to be a comedian and talks about Brian Dennehy, the big guy and the little and then making a big to-do over Jerry Lewis as a Golden Ace Award. What the hell did he have to do with cable? And they are trying to outdo Hollywood. Hollywood is what it is. But in direct answer to your question I do not at this time have any businesses in cable. I am hopeful. In fact, I went to New York last week to see about buying into a cable operation.
ALLEN: Now you showed me earlier a transcript of a debate you had with Jack Valenti. That was in 1988 and you were out of Sammons by then.
STRANGE: That was ’88?
ALLEN: I think that’s what that said.
STRANGE: Well, if that was ’88, I was still with Sammons, so I didn’t leave Sammons then until ’88. I thought I did.
ALLEN: Let me check that. Hold on. What we need to do now is to go back and update those dates, so the death of Charles Sammons was?
STRANGE: November 12, 1988.
ALLEN: Of 1988 and then you retired?
STRANGE: That December.
ALLEN: Had you planned to retire at that time?
STRANGE: Yeah, the death had nothing to do with it.
ALLEN: It was an unrelated incident. And you said that he had been active up until the last six or eight months before his death.
STRANGE: Well I think I retired in ’88. Yes, I retired in ’88, that’s right. I think.
ALLEN: One of the things which I gather you continue to have an active role in conjunction with the Women in Cable is the Dru Strange Scholarship Fund. Do you want to talk about that for just a moment?
STRANGE: I’ll be glad to comment on it. I don’t want to dwell on it. Our daughter Dru came from the theater into cable as a representative of Showtime, calling on cable operators. She was killed on January 30, 1980 in an automobile accident in Kansas. And the cable industry was very wonderful in remembering Dru and so we set up the Dru Strange Memorial which created a scholarship fund in her name with Women in Cable. And Marjorie and I have made contributions to that scholarship fund over the years. There have been several fund raisers for it and it has gotten fairly big. If you have never seen applications for a scholarship fund, it is pretty interesting to look at. Women in Cable now have two or three funds. They are getting very strong in their foundations and I don’t know today the status on their scholarship fund because it has kind of changed a little bit. But, I haven’t looked at it this year for what we do, but we have every year contributed, so that is the extent of it. She was very active and the industry was very wonderful in remembering Dru and making contributions to her fund.
ALLEN: Have you met any of the people who have benefited from the scholarship?
STRANGE: No, I talked to one, but I haven’t met her.
ALLEN: So your activity is primarily continuing to build the principal of the fund.
STRANGE: Yes. As a contributor.
ALLEN: Bill, I would like to end the interview by asking you for any observations you may have about the future. One of the issues that is facing cable right now is the likelihood of some additional regulation coming from Congress and you alluded to this earlier because of some of the practices of some of the people in the industry have again drawn the attention of Congress to the industry. What do you see as happening in this next legislative session as far as regulation is concerned?
STRANGE: From a national standpoint, I think it is probably going to end up as a standoff. I think there is going to be a lot of flurrying, etc. And I base it on two or three bases. Number one, there is not the resentment and antagonism coming from the public. It is not a big issue with the various representatives, and that has been developed primarily by the urging, and incidentally I would like to give a good tribute to Bob Miron who has taken a big leadership role in that, former Chairman of the NCTA, encouraging a responsible service attitude. This has reduced the complaints and the bitches which again a congressman goes by. You know everything can be fine, and then two or three people start raising Cain, it becomes an issue, so with that cry reduced, the effort number one is put back. You have got two or three people who keep this as a continuing thing and I think it is running its course with them … the Gores and the Metzenbaums and that group. They are not drawing a lot of additional support. Now the Washington press immediately seizes upon it. Coming along almost parallel to it is the new strength of the FCC. Now the problems of the cities as well as the problems of our country are more concerned with a lot of other things other than regulating cable right now. The national picture with the Arab situation, but more important the recession, the concerns that weigh on the national scene. Then on the local levels you have got the FCC coming along and defining the number one thing that has always been rates. Such astute guys as a new operator in Tennessee that go in there and raise the rates before they even take over. And they did it in Ohio with Metzenbaum’s background of all places. So I think, in my opinion, what is going to happen is that you are going to continue to have more conversation. It will be picked up in the press because it is saying something. Gore surprised the dickens out of me when he voted for President Bush. That told me he was a pretty astute politician because he doesn’t want to have it back on him later on that he wasn’t in favor of supporting the boys. Now that may be a harsh accusation, but I feel it. But at any rate, Mooney and others are still calling in their chits, the cable industry itself is cleaning itself up, and frankly I don’t think anything will be done.
ALLEN: Would you comment a little bit more on what you see as the emerging role of the FCC. You see it becoming a stronger and stronger agency?
STRANGE: Yes. I do. It is coming from two sources, number one you have got a different type of leadership in the FCC, but number two the Congress is looking to it to be an umpire so to speak. They are giving it the strength and are paying attention to it, and the FCC is feeling its leadership. One other thing that I think that is because of the developments you may or may not be aware of. The administration was not so much for spanking cable. When they got down to where this legislation was passed in the House by a voice vote. It got delayed in the Senate by some parliamentary procedures, but the word came from the Hill that the president wasn’t going to sign it. So you have got the administration opposed to it, you have business practices opposed to it, the advent and the promise of the FCC and it is asserting itself constantly. You have got something that politicians can point to and say that they are going to take care of it. Calm down I am not getting too much hell from home, so that is the reason I think that with knowing that nobody likes to be a part of legislation and finally the president vetoed it. See, it is just not good politics.
ALLEN: You don’t see cable becoming more and more regulated as a public utility, rather than continuing to be regulated in the communications side?
STRANGE: Correct. Now there will be a little bit of utility regulation by the FCC. I have always maintained that I didn’t have any problem with it if you have 100 percent saturation. It then becomes somewhat of a necessity. But if you are going to regulate me then you are going to guarantee me making a profit. But they don’t want to do that in the other regulation. You asked any city that is regulating rates, they will not at all endorse the idea of taking care of you making a profit, and you should regulate only when you serve the 100 percent in my opinion, or 90 or percent whatever the case might be.
ALLEN: What do you see the telephone companies’ role in communications or particularly in cable related activities over the next few years, changing?
STRANGE: Oh a small amount, not a great deal. They are playing so much with the optical fiber. I think that they have so much to do on their own phone deal. I think there will be some experimental deals in some places. John Malone once again, there is a guy, if you haven’t interviewed, by all means a must. John Malone has got some very good and definite ideas, and I would be anxious to read about them. The telephone company has about all it can handle and a lot of this is smoke screen to get the people off the telephone company where they come in and let us have the other. I think we have got one of the greatest telephone systems in the world. If you don’t think so, go outside the United States and make a telephone call. But, I don’t know, with the development and advent of cellular and all that has to be done with that and the part that the telephone company is playing, there will be some of those operating entities that stick their foot in the water and will get in. I don’t look for them to come in to the Congress and be done by the federal level.
ALLEN: You don’t think the telephone company will put cable out of business.
STRANGE: No sir. I sure don’t. I think that the more that they go into cable you are liable to have some cable companies going into the phone business. You see, there are two major things that we have failed to sell. I say we because I feel a part of it regardless of whether I am in it now or not. We have failed to tell our story of what we have brought and are bringing to the public. All you’ve got to do is to look at The Discovery Channel, look at CNN, look at C‑SPAN, and see what we have done to contribute to the information and education of this country. CNN got three reporters over there sending messages back that nobody could get back.
ALLEN: You mean in Baghdad.
STRANGE: That’s right. In fact, the business is, Tom Brokaw asked Bernard Shaw how are you all getting out and none of our people can? Now, I am not necessarily trying to overly applaud CNN, but through the advent of cable TV we made contributions that we don’t get credit for. That is number one. Number two, the second area that we have a real problem in is getting the story about the regulation and the fact that we are overly regulated and always have been, but we are a business. We are an entrepreneur, we are not an institutional type business. We are not a utility. You don’t have to have us. Now if we are bringing you something that you don’t have to have, then it is a new venture. It is a business for crying out loud. But we can’t seem to get that across to people. Everybody wants to control a new entity. There are other thoughts that I have that will come to me on that, but in particular, one of the biggest exposures, we haven’t emphasized what we brought to America. How about the Weather Channel? You couldn’t have had a weather channel without cable. You wouldn’t have had satellites bringing this stuff if we didn’t have cable subscribers and commit to pay for that to bring it to them. We wouldn’t have done it.
ALLEN: The marriage of cable and satellite has been probably the most important technical change.
STRANGE: No question about it.
ALLEN: Do you see anything else upon the horizon in terms of a technical change of that magnitude?
STRANGE: Well, maybe not of that magnitude. I think you are going to see some additional utilizations of cable with the computers. I think you will be able to add a computerized access through the utilization of cable. I think you are going to see cable perhaps be combined with computers. We are becoming, and the biggest reason that I stay in the communications industry, I am in it in a country cousin sort of way with paging. Every individual is going to be a walking communications center. We are now selling, and I don’t have one, but we are selling a wristwatch pager, where we have got it down where it doesn’t beep. They used to call them “beepers.” That is bull. They are not “beepers” they are pagers. Mine vibrates and lets me know when I need to go make a call. So the field of communications is in its infancy. My mother is in a rest home. She is getting hard of hearing. She is 92, and she runs her television too loud. I have just ordered her a wireless set that fits on her ears that nobody can hear but her, but it comes across the hospital room as wireless communications. You see, our whole future, there is no telling what is going to occur and cable will be in the forefront because those guys have got the wiring into every home in America or access to have it into every home in America. A lot of people say, well you got wires to every home in America, well it’s a two pair wire, it’s the telephone wire coming in, and once again about the telephone. You have got to remember the telephone company is a utility and they have a guaranteed rate of return, okay. They get, and if you don’t believe this, you visit with telephone people. You ought to do it. You are going to find that they’ve got a utility mentality. They don’t know a damn thing about having to make a payroll, when to have to cut down, any of those kinds of things because they are a guaranteed business. Now, they have done an excellent job in delivering telephone service. I don’t consider them a threat in getting in some of the others. They got so damn much money that they could buy their way into some of these businesses and are doing it. When it gets down to running them, they are going to have to be run in an entrepreneurial manner and that is the thing about cable. If you want to kill cable, you just get it fully regulated. The government can run a war and that is about all they can do.
ALLEN: How about programming? Anything happening in the world programming? You mentioned some of the unique programming that is available on cable. Have we run the gamut?
STRANGE: Of course that is one of the big problems facing not only cable but take a look at your networks. My God, every year they have a fight for programming and then they go by some rating system. I understood that the “Cosby” show didn’t make the rating systems. No, I was in New York and it wasn’t the “Cosby” show, it was Tony Randall. He said for five years “The Odd Couple” didn’t even make the ratings, but the guy in charge of their network kept them on, and then finally they hit the ratings. Programming, because of the very nature of the beast, is always going to be a problem … will be well rewarded when you can. Look at the “Cosby” show. Here is a guy who was an ordinary comedian, an ordinary motion picture player, an ordinary television actor became a multi‑multi‑multi millionaire because he hit the right niche on programming, a very fine healthy show, but his timing was there. I think the premium is going to be paid on programming. I think cable will be in pretty much because it is able to do it.
Now you are going to have to get away from the censorship. I am so violently opposed to censorship. Censorship should be executed by the home. You know I don’t want them to come and show Triple X for anybody who wants to sit down and look at it, but I think it should not be denied. I think there should be some form if there are people that want to see that crap. They ought to be able to see it. I think you can put the restriction on it, like Boston did the “combat zone” or something, but the educational media possibility in cable is just absolutely fantastic. Entertainment is always going to be the thing that’s the problem, getting new programming.
ALLEN: But you don’t see any new initiatives, things that we are not doing now coming down the road, like the Weather Channel or other kinds of services?
STRANGE: Yes, I do. I think it is going to be led by C‑SPAN. Have you ever seen the House of Commons in operation? I have. I saw it on C‑SPAN. Do you know they said that they cannot seat all of their members? Do you know that a member of Parliament has only one assistant? Do you know that they sit there and holler at that prime minister and argue and everything else? It is the most fascinating show on TV to watch the House of Commons. Now I have said that in order to say that you are going to see a lot more things take place. It’s going to come out of Discovery, it is going to come out of C‑SPAN, it is going to come out of this. When you start seeing the Australian animals, animals are a great show, very informative. When you start seeing the way some people … I cannot understand the Islam religion of bowing down on a prayer rug five times a day and expect them to fight a war. But we are going to see programming come out of what is now being created by cable, I think.
ALLEN: So the opportunity to understand other cultures.
STRANGE: Yes and the need to do so.
ALLEN: That is correct.
STRANGE: Yes, you sure are going to see that. Right now, can you think what has happened in the last two years? Have we had anything more dramatic than the freedom in Europe? Just fabulous. Now we are having people tell us about it. This guy Hedrick that is on “Washington Week in Review” that writes The New Russians and the others. His whole life is Russia. When you start seeing some things about Russia, they talk about a famine over there, bullcorn. They had the greatest agriculture year they ever had, but what happens, a certain amount of it goes to state stores. They take it off and funnel it and people line up to get it because they get it at way below the market. They are not lined up at those stores because that is the only place they can get the food. They are lined up because they get an artificial price. Well, now they are introducing the American free enterprise system of entrepreneurial way of doing things. It is just changed. The change is so traumatic. The pathetic thing in this country is the fact that there are people who quit reading. We don’t read. So, if we can use this instrument to educate them, people don’t read magazines. Hell they don’t read newspapers, editorial page, I laugh. Who reads the editorial page. Certainly not the masses.
ALLEN: I gather from your enthusiasm that if you were to give advice to a young person that came to you and said, “Bill, should I go into the cable business or not?” you wouldn’t hesitate.
STRANGE: No, I wouldn’t hesitate. I would say, I would broaden it a little. I would say any facet of the communications industry. That is the industry– communications. You could even count IBM in it. I would absolutely go to work for IBM. Go to work for one of the telephone companies, because if you’ve got something on the ball, you could shoot up like nobody’s business. That’s the key to the whole thing. I will tell you something that is really needed is leadership in the municipalities– in police work, in government. But, hell, they rank along like a used car salesman, so why go through all of that? You have got to change the image. You haven’t got time to change an image, so go on and get where you have the acceptance. I would stay out of the fast buck fields, the real estates, the brokerage businesses–the fast buck stuff. I would get where I liked what I did.
ALLEN: Probably stay out of the car business.
STRANGE: Greatest training in the world. I wouldn’t take anything for the training it gave me. It lets me walk out this door and lets me say that if I didn’t have another nickel I could get a job and make a living, because I don’t fear anything along that line. But absolutely stay out of the car business. Go to something that you really like. If you like what you are doing, you are going to be a success. You define the terms of success, whether it is acquisition of money or whether it is happiness in what you are doing. What the hell, I got a lot of friends that have tons of money. I wouldn’t change places with them. They are sick to the world.
ALLEN: On behalf of the Cable Television Center and Museum thank you for this morning and we appreciate it.
STRANGE: Well, I enjoyed visiting with you and you let any politician talk and they enjoy visiting, see and if a fellow lets them talk, they like the fellow.
ALLEN: Thank you very much.
STRANGE: Well, you are welcome.
End of Tape 2, Side A