Those Guys Have All the Fun - James Andrew Miller [110]
Even after a decade on the air, even after signing contracts with the NCAA, NASCAR, the NFL, and Major League Baseball, even after turning a profit by establishing the dual revenue stream, still no one wanted 20 percent of ESPN—not until the Hearst Corporation stepped up with its checkbook open. And it could be argued that Hearst’s interest was piqued less by ESPN’s potential than by the fact that the company held a tax certificate, soon to expire, that could be used to save Hearst millions of dollars (the 20 percent cost about $175 million; the certificate brought that down to $140 million). So now the company was owned by CapCities and Hearst, with Steve Bornstein in charge, reporting to Burke and Murphy.
ROGER WERNER:
I thought the Hearst people were great guys, but they didn’t really bring anything to the dance. I wanted some leverage out of that deal somehow. We didn’t get it.
By 1990, I’d watched all of my peers on the distribution side become billionaires, and I’d never been with any company long enough to even have a 401(k) plan. We went through so many management changes, changes of ownership, not management, but guys that we reported to during the eighties. It was Getty, and then Getty/ABC, and then Getty was acquired by Texaco, and then Texaco put all those assets on the block and the company was acquired by ABC. Then ABC immediately spun off 20 percent to Ross Johnson and RJR Nabisco. Then RJR Nabisco was acquired by KKR in that Barbarians at the Gate saga. Then CapCities came in and acquired ABC. That was my decade. I don’t know how many changes of ownership that was, but I spent probably a third of my time while we were trying to build the company making presentations to new owners and telling them what the hell we were trying to build, literally. And none of them gave us the equity ownership that should have been there.
STEVE BORNSTEIN:
You weren’t going to make real money working for CapCities. We were always paid significantly less than our colleagues at HBO or CNN. Time Warner and Viacom always would pay them more. We had no contracts at CapCities. You took what they gave you. To their credit, both Dan and Tom Murphy took a lot less money out of the company than their colleagues would in similar circumstances.
ROGER WERNER:
Bill Daniels was a cable industry pioneer from Denver. He had become a mentor of mine and was one of ESPN’s earliest cheerleaders. His health was failing, and he asked me to join him to help him with a bunch of regional sports networks in partnership with John Malone. They had networks in Southern California, Texas, Colorado. They had a piece of the Sunshine Network in Florida and some other stuff. It was all losing money, tens of millions of dollars. I got equity and a cash guarantee, so I left the company and joined Bill on a personal-services contract to fix his sports TV stuff, build it up and find new owners for it; that was the mission. And I did that in spite of my love for Tom Murphy and Dan and the company and everything else, simply because I was forty years old at that point and had literally made no money from a decade that I created something that everybody said was worth $2 or $4 billion. I just said, you know, I can’t get a major financial whack out of the deal here. I’m going to stay here, be an executive buried in this huge corporation making good money, but never having any independence. I felt like I had to exercise control over my future, and it was time to leave.
So the early management at ESPN all reached that point where they saw the value of what had been created, but they hadn’t shared in the ownership of any of that value, got frustrated, and left. In retrospect, I wouldn’t trade my time at ESPN for any of my money. As you get a little older and wiser, it’s not about the money. That’s not the scarce resource.