Call Me Ted

by Ted Turner

  When I explained that I had been told that the Al-Rashid Hotel was on the target list for that night, he almost took my head off over the phone.

  “First, we warned you to get your people out of Baghdad. Their presence is complicating our mission. Second, target lists are secret [profanities omitted]. Now, do you think I would strike a hotel in which my friend Bernie Shaw is staying?”

  With an eardrum throbbing, I thanked him and advised our personnel to stay in the Al-Rashid.

  The creation of CNN is the business achievement of which I’m most proud, and CNN’s coverage of Operation Desert Storm was the network’s proudest moment. By being there—live and in person—we gripped viewers around the world. Bernard Shaw, John Holliman, Peter Arnett, and our crew showed incredible bravery and did a fantastic job. Here in the United States our ratings skyrocketed and there were nights when our viewership surpassed the broadcast networks’. Just over ten years after launching and being ridiculed as “Chicken Noodle News,” CNN had established itself as the most capable, trusted news outlet in the world.

  The ground phase of the Gulf War would last just one hundred days, and events—and ratings—at CNN returned to normal as the year progressed. By that summer, the big news in Atlanta was the Braves. Prior to 1991, the team had finished in last place three years in a row and hadn’t had a winning season since 1983. I remember after one particularly bad year I got a call from Rankin Smith, who was then the owner of the Atlanta Falcons and a friendly rival. “Ted,” he said, “I have to ask you. What does it feel like to lose a hundred games in one season?”

  “Well, I don’t look at it that way, Rankin,” I responded. “The way I see it we won sixty-two games and that’s more than the Falcons have won in the last ten years!”

  The truth is that over the course of the years we did a pretty poor job of running the ball club. Among other bad decisions, within a four-year period I managed to fire two of the greatest managers of all time: Bobby Cox and Joe Torre. Fortunately, Cox agreed to return to the team partway through our dismal 1990 campaign and then we hired John Schuerholz from the Kansas City Royals to be our new general manager.

  At last, in 1991, we turned it around. The Braves went “from worst to first” in one year, surging to a National League pennant and electrifying the city of Atlanta. Jane Fonda and I had a great time at the games, and after so many years of watching the Braves lose, it was an incredible thrill to participate in the World Series. Even though we wound up losing to the Minnesota Twins in a tense, seven-game series it was a lot of fun.

  When Jane and I first began dating, we didn’t think much about getting married. We’d both been divorced twice, and I didn’t want to make the mistake of rushing into another marriage. But Jane and I were really getting along well so I said to her, “Let’s make a rule that we live together for two years and if things are still going well we can discuss marriage then.” She thought that was a good idea and it’s just what we did. After two years had passed we were still doing great so I raised the issue of marriage. Jane was still hesitant so I suggested, “Here’s the reason I think we should get married. I’ve got five children and you have two. They’re all getting to marrying age and we ought to show them we believe in the institution of marriage to try and encourage them not to be afraid and to show them that marriage can work. We’ve been getting along great and there’s no reason why we shouldn’t get along just as well if we’re married.” Jane thought about it and agreed. We planned a quiet ceremony at Avalon plantation in Florida. The guest list was small—just our closest friends and family—and it turned out to be a wonderful event. Jane’s son Troy walked her down the aisle and she looked stunning. I was overjoyed that this wonderful, intelligent woman would now be my wife.

  Unfortunately, my mom was too ill to attend, but when Jane and I flew to Montana for our honeymoon we stopped in Cincinnati to see her. I knew it made her feel good to see the two of us so happy. A few days after our visit, she was interviewed for an article in The Cincinnati Post in which she told them how proud she was of me. She passed away the next day.

  My mom was a beautiful, dignified, and gracious woman. She had some tough times with my dad and even more difficult struggles caring for my sister but she remained strong throughout. My sadness at my mom’s passing was tempered by the fact that she had been able to enjoy her grandchildren and some of my success.

  At the conclusion of ’91, I was named Time magazine’s Man of the Year. The recognition came in large part because of CNN’s emergence as the world’s news leader following its Gulf War coverage but the article also gave me credit for my past success as a yachtsman and my other contributions to the communications industry. It was a long way from selling billboards in the South, but I knew that I wasn’t finished yet.

  25

  Movies and Cartoons

  Moving into the 1990s my basic strategy for our company was clear. I wanted to own as much programming as possible and to air that product on the networks we owned and controlled. My continued hope was that one of these networks would be ABC, NBC, or CBS, but it didn’t look like my directors from Time Warner (the name of the company formed after the 1989 merger of Time Inc. and Warner Communications) were going to allow that. But cable continued to grow and the success of TNT encouraged me to look for more opportunities to launch new entertainment channels.

  I’d always had an interest in cartoons. When we ran them in the early days of WTBS they got good ratings and the early Warner Brothers and MGM cartoons that came with our acquisition of the MGM library performed very well on the SuperStation and TNT. Kids were attracted to cartoons and I got the idea that we should make one that would teach them about the environment. I thought it would make a lot of sense to reach children early and help them understand their role in taking care of our planet.

  To do this I pulled a small team together, including Barbara Pyle, the head of our in-house environmental team, and we came up with a concept called Captain Planet. Working with the animation company DIC Entertainment, we produced a series where the superhero and his team of helpers (“The Planeteers”) battled villains (they had great names like “Hoggish Greedley,” “Venomous Skumm,” and “Duke Nukem”). Because this was a new kind of show and since the subject matter was something that many in Hollywood really cared about, we attracted some stars to do voice-over work, including Tom Cruise, Whoopi Goldberg, and Jeff Goldblum. The show did well on our networks, but most importantly, it really did teach kids a lot of valuable lessons. Today, when I speak to younger, college-age audiences, I ask them to raise their hands if they watched Captain Planet and I’m amazed that so many hands go up. It was gratifying to make a series that kids enjoyed while also learning valuable lessons. Captain Planet made me that much more interested in being a bigger player in children’s programming.

  In 1991 I heard rumors that the animation company Hanna-Barbera Studios might be for sale. They were owned by Cincinnati-based Great American Communications, which had bought the company as part of its deal for Taft Broadcasting in the late ’80s. Hanna-Barbera’s founders—Bill Hanna and Joe Barbera—met each other in the ’30s when they worked together at MGM. When that studio closed its animation business in the late ’50s, Bill and Joe started an independent production company and achieved great success through the ’60s and ’70s.

  Using a “limited animation” technique, they were able to produce animation at a cost that allowed for series production, as opposed to one-off theatrical shorts and full-length features. But after a string of hit shows, including Huckleberry Hound, The Flintstones, Scooby Doo, and The Jetsons, the studio hit harder times in the ’80s as other animation companies entered the series marketplace. Hanna-Barbera didn’t do as good a job managing their library as had rival firms like the Walt Disney Company, and with Great American facing financial problems, a sale of Hanna-Barbera to a more strategic buyer was a logical step.

  The most obvious of these was the Walt Disney Company. Disney knew how to market
animated characters and adopting Fred Flintstone, Scooby Doo, and Huckleberry Hound into the same family as Mickey Mouse and Donald Duck made good sense. Hanna-Barbera’s library could also support the Disney Channel. Word got around Hollywood that Disney CEO Michael Eisner did get the first crack at making this acquisition, but fortunately he balked at the asking price of $312 million and submitted an offer rumored to be about $200 million.

  With Disney out of the running—at least temporarily—I decided to move quickly. If we could buy Hanna-Barbera and combine their library with the Warner Brothers (Bugs Bunny, Daffy Duck) and MGM (Tom and Jerry) animation that we had acquired when we bought MGM, we’d own about two thirds of all the cartoons ever made. Our plan was to use those shows to start a channel that ran nothing but cartoons, twenty-four hours a day. True, the Disney Channel and Nickelodeon ran some animated shows, but no one was doing nonstop cartoons, and with this great animation library this would be as much of a no-brainer as twenty-four-hour news had been. Just as it never made sense that people could only watch the news at 6:00, 7:00, and 11:00 P.M., why should kids have to wait until Saturday morning for cartoons? I also liked the fact that Hanna-Barbera’s shows were all wholesome and family-friendly—not full of all the violence that seemed to be working its way into kids’ animation in those days. For a little over $300 million I’d be buying the opportunity to launch a unique and valuable cable channel.

  Once again, I needed approval from my board but on this occasion, it turned out not to be a problem. They had kept me from buying FNN out of concern that we would become too powerful in news, but the kids business would be a new growth opportunity for us, and as cable operators they probably liked the idea of a competing channel giving them negotiating leverage against Nickelodeon and Disney. Time Warner could have objected or even gone after Hanna-Barbera themselves, but Turner Broadcasting owned Warner Brothers’ pre-1948 library—including the bulk of their classic animation—and that made the deal far more logical for us. We’d still have to figure out how to handle the financing but the board gave me the green light.

  I knew Great American’s CEO, Carl Lindner. We had always gotten along well so I called him up directly. After the usual formalities I got right to the point. “I understand that you’re considering selling Hanna-Barbera, is that true?”

  “Yes it is, Ted,” he replied.

  “And I heard you’re asking $312 million for it?”

  “That’s right, Ted.”

  And I said, “I’d like to offer you $312 million. Would you accept cash?”

  “Yes, Ted.”

  “I’m hereby offering you your asking price of $312 million cash at closing.”

  And he said, “Well, Ted, you just bought yourself Hanna-Barbera!”

  Sellers dream of getting a call like this but once again this was an asset that would be extremely valuable and I wanted to get it off the market right away. We scrambled to work out the financing and made a deal with the Apollo Investment Fund, run by former Drexel banker Leon Black. We each put in $50 million in cash, Apollo helped raise the rest in debt, and we closed on the deal in December ’91. (We later bought out Apollo’s 50 percent.)

  I was really excited (it felt great having both Fred Flintstone and George Jetson on the payroll) and we started planning to launch the new channel. We played around with different names for the business but we decided that such a powerful, simple concept—twenty-four-hour cartoons—needed a simple name. We settled on calling it Cartoon Network and I told Scott Sassa, the dynamic young executive who I had put in charge of our entertainment businesses, that the channel would launch on October 1, 1992, at high noon.

  Cable distribution was particularly tight at this time as the broadcasters had been provided with “must carry” rules handed down by the FCC. This regulation put pressure on cable operators to carry the signals of local broadcasters. If the local station exercised its “must carry” rights, they would be put on the cable lineup but they were not owed a subscription fee. Their other option was to negotiate for “retransmission consent,” meaning they could try to extract a subscription fee for their signal. When it became clear that the latter option probably wasn’t viable, the bigger station groups did a smart thing. They decided to create their own cable channels and told the cable operators that they wouldn’t haggle over carriage of their over-the-air stations if they went along and launched their new cable channels. This was how Scripps launched the Food Network and Home and Garden Television, and ABC and Hearst, part owners of ESPN, gained carriage for ESPN2.

  I didn’t like these rules because they were intended to protect the broadcasters. They didn’t need the help, and it resulted in filling cable systems with channels that wouldn’t have been there otherwise. (We would later challenge these rules in a lawsuit that went all the way to the Supreme Court. In 1997, in the case of Turner Broadcasting vs. the FCC, we lost by a 5–4 vote.)

  These retransmission deals slowed the Cartoon Network’s distribution but we knew it was just a matter of time before we were carried everywhere. Not only did we manage to collect subscription fees for the service but also our ratings were boffo. From my days at Channel 17, I’d learned that a good show—old or new—could compete and the classic Hanna-Barbera shows still were popular. Since some of our younger viewers hadn’t seen these programs before, they didn’t even know they were old. We produced new shows as well, and used Hanna-Barbera’s production capabilities to make hits like Dexter’s Laboratory, Johnny Bravo, and The Powerpuff Girls. They also helped us revive the Captain Planet franchise by producing The New Adventures of Captain Planet.

  In short, the Cartoon Network was a huge success. Several years after the launch, I was with Michael Eisner. He leaned over and said, “Do you want to know the biggest mistake I ever made?”

  And I said, “No, Michael, what was it?”

  “Not buying Hanna-Barbera when I had the chance—I should have never let you get it.”

  In addition to launching new channels, I was still eager to make sure that TBS and TNT continued to have access to new and better programming. It was good to have libraries but without a studio I worried that we might get cut off from new content. It would be like the United States having its oil supply cut off—we could survive for a while but pretty soon we’d be in big trouble.

  When Martin Davis was exploring selling Paramount, we had conversations but they never went anywhere. He knew that I had spending constraints and he suspected correctly that my board didn’t want me to buy a major studio. This was frustrating for me, as I thought it was obvious by then that owning production and distribution capabilities made sense. I think most of our board members knew it, too. I was convinced that Jerry Levin and the other Time Warner directors would say that they didn’t want us to buy a studio because it was too expensive, too risky, or too distracting, but that what really concerned them was that we’d end up competing with Warner Brothers. The terms of their investment in Turner gave them the right to veto such deals, but it bothered me when I thought they would use their veto against the best long-term interests of the Turner Broadcasting shareholders.

  I was determined to obtain production capabilities and if they wouldn’t let me buy a big studio, perhaps I could go after a couple of smaller ones. Around that time, I got a call from Alan Horn at Castle Rock Entertainment, a successful production company he had founded in the late ’80s along with a talented team of producers and executives, including Rob Reiner, Glenn Padnick, Andrew Sheinman, and Martin Shafer. They had produced a string of very good movies (including A Few Good Men, City Slickers, and When Harry Met Sally) and also had experience producing TV series (including Seinfeld, which was about to become a huge hit).

  A TED STORY

  “We Bonded Right Away”

  —Alan Horn

  (A FOUNDER OF CASTLE ROCK ENTERTAINMENT, ALAN HORN IS NOW PRESIDENT AND COO OF WARNER BROTHERS.)

  I had spoken with the investment bank Allen and Company about selling our company and ha
d been fishing around with some potential buyers but we weren’t getting traction with anyone. My wife, Cindy, knew Jane Fonda from some work they had done on environmental causes and I had met Ted Turner years before when I was working for Norman Lear and he and I visited Ted on one of his properties. I remembered him from that time as being great fun and I decided to invite him and Jane over for dinner to talk to him about selling our company.

  So Ted and Jane came over to our house and as they walked around and saw my collection of western art, Ted said, “Hell, you’re buying western art and I’m buying the West!” We bonded right away. Ted was very straightforward about his interest in buying our company and very quickly thereafter we worked with his financial people on the subsequent details and had all the deal terms in place.

  Another company I set my sights on was New Line Cinema. Run by its founders, Michael Lynne and Bob Shaye, New Line began by producing low-budget films for the college market. Their success grew with Nightmare on Elm Street and they had another hit with a live-action version of Teenage Mutant Ninja Turtles. The films they made weren’t always my cup of tea—especially the horror movies—but they were the right size and I liked Bob and Mike a lot. I liked the fact that they were entrepreneurs who understood how to be successful with limited resources. If we could merge them into Turner, increase their budgets, and allow them to make bigger films, we could grow them into the kind of studio that we were being prevented from buying.

  A TED STORY

  “I’m Acquiring You Guys”

  —Michael Lynne

  A close friend of mine named Roy Furman headed up an investment firm that concentrated heavily on the media business. Roy would periodically meet with key people in the industry to talk about ideas and early in 1993 he had a meeting with Ted. Roy had a list of about ten items he wanted to discuss with Ted and around number nine he mentioned New Line. The only reason we were even on the list was because Roy had been involved with our initial public offering—we had absolutely no interest in doing a transaction at that time. But when our name came up Ted zeroed in and New Line became the only thing he wanted to talk about!