Todd Neff – TRANSCRIPT
So many success stories. Personal, professional, business, politics, art, science. So many success stories involve some huge leap, some leap into the void that pays off and leads to fortune. You may find these stories inspirational. I have to be perfectly honest: I find them daunting, a little bit unsettling. Because I look at my own life and I ask, “Is this going to happen to me, and if it does, will I recognize it? And if I recognize it, will I have the guts to make the leap myself?”
So I took a look at some of these leaps into the void, because if super successful peoples’ success in fact does not hinge upon living on the edge, then maybe there’s hope for me. In particular, I look at the stories of three of the world’s most successful business men. They’re from right here in Colorado.
First is Charlie Ergen, Chairman of Dish Networks; John Malone, who is a former CEI of TCI, the cable company and founder of Liberty Networks; and then the diversified investor, Philip Anschutz, who made his money in oil and gas, telecommunications, railroad, and more recently, entertainment. He owns entertainment venues all over the world, including the Staples Center in Los Angeles. He doesn’t own this, yet. These are the three richest people in Colorado by billions of dollars.
Each is self-made. Each is a brilliant businessman, strategist, tactician, financial engineer, and each has his own story, his own legendary story about how he took some pivotal risk early in a career that led on to the business pantheon. So let’s take a look at these legends.
First, Charlie Ergen. It’s 1980; Charlie Ergen is 27 years old, bouncing around the West, he tries his hand as a professional card player, runs into a satellite-dish salesman, is intrigued – 10-foot dishes, about the size of this red dot. He convinces his future wife Cantey and his friend Jim DeFranco to put together $60,000 to buy the sales franchise rights for the mountain west. The business is quite successful, so much so, in fact, that they have to change the name from EchoSphere to EchoStar because the foreign partners are having a hard time pronouncing the word ‘sphere.’
But he wants more; he wants his own satellites broadcast direct to homes. So he gets the license finally, after years of trying, in 1992, but he doesn’t have his own satellite, so he loads up on $335 million in junk bonds, 13% interest, and hires what’s now known as Lockheed Martin to build him two: EchoStar One and EchoStar Two. They’re very cartoonish-looking satellites.
To save money and to speed the pace of launch, he brings in China Great Wall Industry Corporation, who has a Long March rocket to do two launches, one for each satellite. Two of the last five Long March rockets have failed. For some perspective here, one of the last 90 Boeing Delta rockets has failed, so this is something of a risk. But in December of 1995, EchoStar One takes to the skies and Ergen founds Dish Network a few months later. The very next Long March rocket veers off course and takes out a Chinese village.
Ergen is known to say more than once in the ensuing years, “I bet this company on the nose of a Chinese rocket.”
Next up: John Malone. It’s 1963 and John Malone graduates Phi Beta Kappa from Yale in electrical engineering, hires into Bell Laboratories, the esteemed Bell Labs. He earns two masters degrees and a PhD on the company dime. He is, as an aside, so physically fit at this point in his life that he’s witnessed doing a one-armed chin-up, meaning that in the unlikely event that he doesn’t outwit you, he can always just go ahead and kick your ass.
He goes on to consult with McKinsey for two years, hires into a company that makes equipment for and loans money to cash-strapped but growing cable companies. He’s 31 by 1972, he’s running a 3,000 person operation so well that Steve Ross, the legendary chairman of Warner Communications in New York, says, “Hey buddy, would you like to run my cable operation? I’ll pay you $150,000 per year”; that’s $775,000 in today’s money. “I’ll let you have a limousine, but it won’t have to go very far because we’ll move the headquarters closer to where you live in Connecticut.” Malone thinks about it and instead goes out to something called Tele-Communications, Inc in Denver.
TCI, as one writer put it at this point, had “lurched from crisis to crisis over the previous 20 years in a western cow town.” It’s run by Bob Magnus, a hard-drinking, former cottonseed buyer and rancher, who tells Malone, “I can’t pay you much, but you’ve got a great future here if you can create it.” Malone builds TCI into the largest cable company in the world, sells it for $44 billion to AT&T in 1999.
Finally, Phil Anschutz. It’s 1967, Philip Anschutz is 27 years old, based in Denver, has his own oil exploration company, not a whole lot of money in the bank. The phone rings at 2 am. It’s a rig supervisor up in Gillette, Wyoming. There’s been a blow-out, Anschutz gets to the scene, ankle deep in crude, natural gas wafting in the air, and he reacts by getting the well capped and then he does something extraordinary: he runs around and buys as many oil and gas leases as he can before the word gets out. He goes back to Denver, turns the TV on, and the top story in the news: Massive Oil Field Fire: Gillette, Wyoming.
He heads back to the scene, flames everywhere, calls Red Adair, the famed oil field firefighter Adair tells him, “Kid, I checked you out; you don’t check out.” Anschutz begs, and Adair relents. Meanwhile Anschutz figures out that Adair is the technical adviser to a biopic, basically, that Universal Studios is filming. It’s on Adair’s life; John Wayne’s 144th movie: Hellfighters.
He makes a deal with Universal, in which Universal will pay him, Anschutz, $100,000 for the rights to film Adair’s crews putting out Anschutz’s fire. That’s a pretty good deal. He pays off Adair and the rest, as they say, is history. Now those are the legends. Here’s some back story.
First, Charlie Ergen, before he got into the satellite TV business, he had his CPA and his MBA, he’d worked as a financial controller most recently for Frito-Lay. Before he launched his first satellite, he was a multimillionaire, having reaped the rewards of having grown a very successful business. And then that satellite on the nose of the Chinese rocket – that was insured. The next satellite, EchoStar Two, they launched on a French rocket. John Malone knew from the time he was at Bell Labs that he was not cut out to work his way slowly up a corporate hierarchy.
It was not, as his biographer put it, the fortune, either financial or personal fortune, that he had envisioned for himself. He knew the cable business intimately, and for all its flaws, TCI was the fourth largest cable company in the United States at that point, in a consolidating industry. And this dude was talented, and he would’ve landed on his feet had things not worked out. Phil Anschutz’s father was a wildcatter, and he’d learned the ropes of this inherently risky business from his dad. The biggest risk Phil Anschutz took in Gillette, Wyoming was to be in the oil exploration business in the first place.
With that Universal Studios story, you know some legends are in fact myth. I watched Hellfighters Drinking, smoking, cavorting, a Malayan bar fight, towers of flame! What more could you ask from a movie? And then I called the director, Andrew V McLaglen, who was 91 years old and still directs plays up in Friday Harbor, Washington, and the story goes more like this: the stunt coordinator for the movie was a guy named Fred Knoth, he was a CU grad, go Buffs. He went out to Gillette to watch Adair fight this fire, and then he took that impression back to the Universal Studios back lot and recreated it with copious volumes of diesel and propane, and then took that knowledge and redid it again on location in Casper, Wyoming, and in Houston.
All of the fires, excluding those at the ends of cigarettes, were simulating in this movie, including this one. Now as long as we’re immolating myths, Charlie Ergen was never much of a professional gambler, and John Malone, well, he could probably still kick your ass. I know he could kick my ass still, I mean look at the guy Ergen and Anschutz could join him for sort of a bad boy billionaire smackdown filmed live at the Staples Center via Chinese-launched satellite.