by Allen Salkin
Reviewers had mixed reactions to the new shows. Most loved Iron Chef, though a reviewer for Toronto’s The Globe and Mail found Alton Brown’s Good Eats vapid, writing, “It’s hard to believe hungry viewers can be any wiser about good eating after half an hour spent in the company of a comedian who defines steer as ‘basically a bull that’s been . . . well, let’s say that they don’t make much time with the ladies.’”
Rick Marin, a trend reporter for The New York Times, took a longer view—whether or not the shows were good, people were talking about them, and that was new. When he asked the Food Network spokesperson to explain how chefs had managed to rise in the pop culture pantheon, Heidi extolled the sex appeal of her male stars. She referred to them as “hunks” and then immediately coined a term for the phenomenon of chef-hunk: “Really, you could call them ‘Chunks.’”
Wrote Marin, “The chef-hunk—‘chunk,’ if you will—is visible on almost every other page of Bobby Flay’s latest cookbook, Boy Meets Grill . . . Recipes aren’t the only things viewers request, said Heidi Diamond, senior vice president of marketing. ‘Indecent proposals’ are not uncommon, she said. ‘They’re passionate about these cute-boy chefs for a variety of reasons,’ she said. ‘Food is so sensual. There’s something magic about these people’s hands and the way that they caress a knife or handle a naked potato.’”
Next Heidi got People magazine to profile Ming Tsai in its “Most Sexy” issue:
It’s that playful smile—in addition to his five-peppercorn grilled steak, Asian gazpacho, and Jasmine tea soufflé—that leaves fans of the Food Network’s Emmy-winning East Meets West with Ming Tsai hungry for more . . . “I don’t think of myself as a true celebrity, like Ricky Martin or George Clooney,” he says. Perhaps not. But Tsai can do something neither of those guys can: deliver both the sizzle and the steak.
—
By mid-1999 Food Network was on the air in about 40 million homes, making it one of the rare start-up networks to find a toehold in the national cable lineup. About 67 million homes subscribed to cable television. In the fourth quarter of 1998, the network averaged a 0.3 rating. That meant roughly 130,000 homes, an increase of 50 percent from the previous year, were tuned in at any given time. Advertising revenues were up 80 percent to $36 million.
Ken and others at Scripps thought that they would be able to quickly improve the bottom line at Food Network by using their track record with HGTV to convince cable providers to start paying subscriber fees. They were wrong. Cable operators who had been carrying Food were happy to continue paying nothing until around 2003, when the original agreements negotiated under Reese and his immediate predecessors expired. DirecTV was the first to pay a few cents a month for Food, starting in 1997, but that was only after the network kicked back $7.6 million in “launch incentive and advertising fees” to close the satellite deal, according to filings made with the Securities and Exchange Commission.
For new providers, Ken and his deputy, Susan Packard, offered to bundle HGTV and Food Network together for a package price. The price wasn’t much higher than it had been for HGTV alone, a few pennies at best, but at least it cemented a practice of cable providers paying something for Food. The idea was that in the future it would be easier to ratchet fees up from two cents to five than from zero cents to anything.
Although Tryg and others who shaped the original TVFN business plan had hoped to find a dependable second revenue source beyond advertising, they never had. The magazine, food brands, and Couponix that Jack, Joe, and Tryg had imagined had not been developed. Blame a combination of never-ending management and ownership turmoil, the exigencies of the original rush to put out a signal, an ongoing inability to step back and think strategically, and the fact that no one else was exactly stepping forward and offering to start a magazine or a brand of chocolate bars with a financially troubled brand. Bobby and Mario’s restaurants were booming, Emeril’s spices were selling, but the network had not figured out how to extract its cut. As a result, the Food Network gambit had become to keep the business painfully trim but ticking, trusting that it would teeter slowly into profit someday, at which time it could begin to grow more vigorously.
Food Network did survive, but the model was frustrating. For years, the network’s executives had to go to its owners, whoever they happened to be at the time, begging for every significant expenditure, a few hundred thousand for Two Fat Ladies, a few for a new logo, a few more to try Emeril Live. Even if the network was marginally earning more than it spent by 1999, it had not earned back its start-up costs. On paper it was still in the red, and Reese, for one, had not started receiving dividends.
He was not happy with the new owners. First, Reese became concerned that Scripps was going to make drastic changes in the advertising department where he still had friends. Under the name of his holding company Pacesetter, he sent threatening letters to Scripps. In one, dated August 17, 1999, he announced that Pacesetter would resist the company’s attempts to move the advertising traffic department from New York to Knoxville and asserted that HGTV’s ad salespeople were illegally selling spots to national advertisers that were supposed to be reserved for local cable providers to sell on their own.
Ken tersely replied, “. . . we fail to see how Pacesetter can ‘resist’ moving the Food Network traffic function or why we need to report to you or convince you of anything related to HGTV.”
After an angry meeting in early September between Reese, Ken, another Scripps executive, and Eric Ober, Reese filed for an injunction on September 24, 1999, to prevent the move of the advertising traffic department. Reese’s lawyers offered as evidence the claim that Scripps had already “defrauded” the ABC television network “through a similar scheme. If Food Network’s national advertisers are defrauded in this manner, the damage to the reputation, goodwill, and profitability of Food Network and its investors, including Pacesetter, will be irreparable and incalculable.” The matter was settled without court action, but then through a clerical error, Reese got his hands on an internal Scripps strategy document, which said that the company intended to leave Food alone to teeter forward with little new investment until they were sure that HGTV was officially profitable.
Reese did not realize how close HGTV was to black ink. To hell with it, he thought. Who knows when that will be. He was tired of waiting for profits and decided to get whatever he could right then for his stake.
The CEO of Scripps, Bill Burleigh, a news industry veteran like Reese, met with him to discuss a buyout man to man. Basic terms were agreed to, but as negotiations were wrapping up, Eric received a call from a Scripps executive in Cincinnati. Reese had a special request he wanted included in the deal. “He wants two tickets to every Emeril Live taping,” the executive said. “Is that okay? Can that be worked out?”
Eric laughed. Emeril tickets were at a premium. There was a lottery for seats. Tom Brokaw’s daughter had called him personally to request tickets. But Eric understood how these things went. The ducats would allow Reese to demonstrate he still was somebody at Food Network.
“That’s fine,” Eric told the Scripps man. “We can always give him two tickets.”
On December 16, 1999, a Scripps press release announced: “The E.W. Scripps company has increased its controlling stake in the Food Network by acquiring the 5 percent share held by Pacesetter Communications, Inc.”
Scripps now owned 64 percent of the network. Terms of the sale of Reese’s stake were not publicly disclosed, but it is believed the total paid to Pacesetter was between $10 and $20 million.
Eric was surprised Reese had taken so little. When he eventually found out the approximate price, Eric did the math—$10 or $20 million for 5 percent meant Reese was accepting a valuation of between $200 and $400 million for the entire network. Eric believed the network’s prospects were bright and it was worth far more.
Reese got two-thirds of the price himself after paying off those he had cut in at
the start. He sent George Babick around $700,000. He also sent checks to Sue Huffman, the original head of programming; Connie Simmons, Reese’s executive assistant and lawyer; and Stephen Cunningham, the ProJo consultant who had brought Reese aboard. Steve got $1.5 million. As Steve remembered the transaction, it was only around this time that Joe Langhan came forward suggesting that Steve consider cutting a check to him for a small portion of the proceeds. Steve talked it over with his wife. Joe had hired Steve in the first place, and it did not seem fair that the man who had done more to start the network than anyone else should receive nothing from this sale. Steve’s wife wasn’t so sure at first, but told her husband that if he thought it was the right thing to do, he ought to do it. Reese did not contribute, but a check was cut to Joe for around $200,000.
“Turned out to be perhaps the most foolish financial move I ever made . . . If I’d hung around long enough, they would’ve made me very rich. As it is I did fine, but it’s just a matter of impatience.”
—REESE SCHONFELD
New York charities did well in the deal. For years, Reese and Pat could be counted on to donate a pair of Emeril Live tickets to benefit auctions.
—
On August 10, 1999, Jennifer Patterson, the spectacled half of Two Fat Ladies, died of cancer. Heidi phoned Eric with the news. Food Network had made Jennifer famous in America. “We have to do something,” she said.
He sent Heidi to England. “I’m dispatching you like the president dispatches the vice president,” Eric said. “You’re on funeral duty.”
The funeral was as bombastic as Jennifer. Her casket was preceded by pallbearers carrying her motorcycle helmet.
Back in New York, Eric met with Eileen. Two Fat Ladies was still one of the network’s highest-rated prime-time shows. Eric wanted the show to continue, death be damned. “You know, it’s like Menudo!” Eric said, referring to the popular Mexican boy band that retired members when they reached puberty and replaced them with new boys. “Why don’t we find another fat lady and just make it the Two Fat Ladies again?”
Eileen was appalled. She had known Jennifer and Clarissa since she’d worked at the BBC. “We can’t do that!” she protested.
Eric was dispassionately calculating: Hits are hard to come by. “Well, why don’t you call the producers and find out?” he pushed. “Because I’m sorry she’s dead, but there’s no reason not to try to continue the show.”
Eileen stopped protesting, but she ignored Eric’s order and he did not bring it up again. With Reese on his way out of the picture, Scripps was promising to loosen the purse strings, trusting that they would be able to wrest Food from its troubled path into the sunlight of the Scripps way.
Even without new episodes of Two Fat Ladies, the network’s cultural cachet was rising. More than one teenager in the late 1990s was indulging in the after-school habit of grabbing a bag of chips and watching Food Network after school. There they would sit, shoveling Doritos in their mouths while imagining that they were actually eating ravioli with sage, flourless chocolate cakes, and colorful fizzy cocktails. Food Network was small enough to still be cool, and you didn’t have to hide it like porn.
The ongoing road show overseen by Joe Allegro and Rich Gore, rebranded as Food Network Live, was profitable and drawing crowds at its stops around the country. Tyler, Sissy, Mario, Boggs, Emeril, and Ming were all making regular appearances, each pulling in a few thousand dollars a night and selling stacks of cookbooks along the way.
Even with the debuts of Iron Chef and all the other new shows, the cultural cachet was only rising so far. Food was still a minor cable player at best. When Eric pulled Joe and Rich into his office and demanded to know why they were still featuring PBS stars on the road shows, Joe explained that they needed them to sell tickets. He showed Eric a marketing survey that showed only 17 percent of households had ever heard of Food Network.
The network president didn’t want to hear it. “Meeting’s over,” he said, furious.
Eric had been doing his best to professionalize the operation. He saw the old F.O.R. hierarchy as antithetical to a serious enterprise. He had rooted out nepotism in previous jobs, and managed to force Reese’s wife, Pat, out of the network, despite her contributions, by not assigning her to any new productions. A $5 million marketing campaign debuted in the late fall of 1999, timed roughly to coincide with the network’s sixth anniversary. Heidi put together the media, which included “Let’s Talk Turkey” ads in newspapers and bus shelters, over an image of a well-fed bird and the lines “Great legs, tender breasts. Recipes, menus, and more at foodtv.com.”
Nevertheless, Eric got a rude taste of the disdain held for the network by one person in the lifestyle TV establishment during an uncomfortable meeting with Martha Stewart. The Food Network had negotiated with Martha to buy the rights to thousands of her old daytime shows, which they could strip the cooking segments from and assemble into half-hour blocks to run late at night, early on weekends, or wherever they might fit. It was a good deal for both parties. Martha and her company would make a few million dollars for old content and the Food Network would get thousands of hours of evergreen shows for a low per-hour cost.
In the final meeting at Martha’s offices, the lifestyle queen let her representatives shuffle the papers around as she stood facing the opposite direction, alternately looking out a window and poking at her mobile phone. When it came time to sign, she strode to the table, signed the papers, and strode out of the room without gracing Eric or his team with a handshake or even a glance.
Eric turned to his Food Network lawyer and said, only half joking, “The only other thing I want in this agreement is I don’t ever want to have to see that woman again for the life of the contract.”
—
Like most of the others who had been at the network since before Scripps bought it, Matt had been worried about the corporate parent draining the network of pizazz. Eileen assured him it wasn’t going to be so bad, and they’d proved it with Iron Chef and Good Eats. As Matt and Alton worked together to make Good Eats even funnier, they grew closer. They joked about both being “smart nerds” and shared recommendations about favorite books of philosophy. Matt and his mom sewed a pink and blue quilt for Alton’s daughter Zooey when she was born. Alton confided in Matt that he hoped they could someday make an episode of Good Eats in which Alton’s grandmother would show how she prepared biscuits. It would be a love letter to “MaMae,” who had helped raise Alton after his father’s suicide.
Matt and his brother Daniel were cast in two episodes of the second season of Good Eats. Matt played a scientist and Daniel a physicist. They sat on a roof with Alton talking about chicken bones.
But with Matt now appearing on camera and seeing good ratings coming in for Iron Chef, his baby, his sense of his own genius was starting to grow out of proportion. Eileen hadn’t meant to, but, not unlike a mad scientist, by coming to depend on Matt, she had tinkered with something unstable and was in danger of creating a monster. The success went where it often goes in a brain untempered by age: straight to the ego. Matt was walking tall, sure that he knew best and that whatever he touched would turn golden.
Eric Ober was planning to address the entire staff of the Food Network at a party to celebrate the results of the relaunch. To inspire the troops, he wanted to focus on a particularly hard worker. He asked Eileen who he should shower praise on.
She asked him to give it to her project, Matt.
And so in the ballroom of a glittery Times Square hotel in front of the entire staff of the network, Eric singled out Matt, the upstart he’d once thought of as a little shit. “I just want you all to know that a lot of the success of Food right now comes from the effort and dedication of one young man, Matthew Stillman,” Eric declared, raising a glass. “This is the golden boy of Food Network.”
The applause rang for a long time in Matt’s ears.
You Reap What
You Sow
When Iron Chef’s ratings doubled the network average, Ken admitted that he’d been wrong about the Japanese show and that Eric had been right to approve it. In New York he told Eileen, “Hey, that’s great stuff, keep on doing your magic.” But overall he was less thrilled with the pace of progress at Food. Back in Knoxville, Scripps’s head of investor relations was reporting to him that big stockholders were perplexed at the direction the company was taking by pouring money into a cable network that might—might—earn profits in three or four years. When Ken would be trotted out to face the investors, they’d pepper him with questions about low subscriber fees. “What are you going to do, young man, if this doesn’t work?” one asked Ken, then in his late forties.
Criticism came from all directions. He and his corporate colleague Ed Spray were still hearing from cable operators about the quality of most of the programming, and from some of the internal people at the network about the squalid state of the facilities. Ken agreed with most of it. Before Scripps bought majority ownership of Food, when Ken was on the road trying to sell HGTV to cable operators, the operators argued that they only had room for one lifestyle channel and Food Network was free. Ken’s comeback about the competition and its low-budget content was, “Well, yeah, it’s free, but it’s not good.”