Journalists and Generals
Ted Turner, the founder of Cable News Network and Turner Network Television, spoke to Ken at a forum sponsored by the Newhouse School at Syracuse University. Below is audio, and a partial transcript of their conversation.
KEN AULETTA: Most of us would be satisfied in our lives if we had one transformative idea that entered the bloodstream of business or life; I think that Ted Turner's had a transformative business career, and also a transformative philanthropic and social career. He's also had, as we all know, some major disappointments: he lost his company, he lost his job, he's lost a good deal of his fortune.
Ted, in the past few weeks, a movie for which you put up about seventy million dollars came out, "Gods and Generals." It's probably been the bloodiest battle since Gettysburg, if you read the critics and you look at the box-office receipts. Why did you do that?
TED TURNER: Well, I really wanted to make a statement. I commissioned and started a production company about three years ago called Ted Turner Pictures, because this particular project, "Gods and Generals," was being developed by Turner Broadcasting, my old company. I thought that this movie needed to be made, and at the time I was worth about seven billion dollars, and obviously I didn't anticipate—how many people knew that AOL Time Warner was going to go down eighty per cent? I talked to a lot of people I really respected for their financial intelligence, and nobody saw it coming. Anyway, it was only one per cent of my assets, and I figured I would just do it, and do this documentary series that's going to run on public broadcasting, about weapons of mass destruction. I wanted to do these programs because I thought they were important. At that point, I knew I was going to leave the company, because Gerry Levin had taken away all my duties, and I wanted to stay involved in the business. And it didn't amount to that much at that time. But now "Gods and Generals" would be about ten per cent of my assets, because I went down ninety per cent, roughly. I would never have taken on that big a project on my current financial base. At any rate, I'm proud of it, and a hundred years from now, because it's historically accurate, people will still be watching it—at least, history classes will.
Let me ask you about another project. I'm told that in the past two weeks, as American journalists have been coming out of Baghdad, you volunteered to go in for CNN as a reporter. Is that true?
Where'd you hear that? That's supposed to—I didn't tell you that. Nobody's supposed to know that.
Well, now that it's out, why don't you share the secret with us?
Well, honest to God, I did. It was a spur-of-the-moment thing; I knew they were having discussions about whether or not they were going to stay in Baghdad this time. Incidentally, I understand they have three people who volunteered to stay, at least preliminarily. And, of course, it's very dangerous, but I think that if we have volunteers it would be a sad day if CNN wasn't there. But apparently some people wanted to pull out. And I did say, "Well, you know, if nobody else will do it, I'll do it." And they said, "No." But, because I'm sixty-four, and I've been pretty well wiped out anyway, I might as well go out. I thought it'd be kind of good—here I am, going down in flames. I think it would be a dramatic way to exit the world. But they turned me down, and, really, it probably wasn't that good an idea. They said, "You're not really qualified to do it." I said, "Well, all you have to do is hold the microphone up and say, 'The bombs are falling all around me.' There's no magic to this game." That's what they said when I started CNN: "You're not qualified to do it." I wasn't qualified to do anything, it's true. I was a classics major.
Did you watch Bush's speech last night, in which he gave Saddam a deadline of forty-eight hours?
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I certainly did.
What'd you think of it?
My position is that I'm very much of an internationalist. No nation, including Rome at the peak of its power, has ever been more powerful than we are. You're very easily resented if you're rich and powerful. If you're rich and powerful and arrogant, then everybody's going to hate you. And I was once rich and reasonably powerful, but I was nice to everybody. For instance, Putin was the vice-mayor of St. Petersburg when we had the Goodwill Games over there. And I went over there often to check on the preparations and everything, and sometimes Mayor Sobchak was not available to come out to the airport and pick us up. But Putin would come. Putin would sit there next to the driver and ask me how everything was going and so forth, with the interpreter. He was my handler. And I was nice to him, thank God. You know, be nice to your driver, because he could become President of the country! So we got to be good buddies during that time. I went around making friends, because I'm a businessman, primarily, and I like to make money. And the way you make money is to have happy customers who like you. And the way you do that is to go out and be nice to everybody. That's what the United States used to do—the United States used to be a country that went around trying to help those in distress. We didn't start the wars, but we would help the good guys win at the end, and then we'd rebuild the countries. America stood for something: we stood for helping out in the world. We realized the mistake that we made by not joining the League of Nations, and we were instrumental in the formation of the United Nations, and we were great supporters of the U.N. After all, we're a country of joiners: the Rotary, the Lions, Kiwanis—it's all about making friends. Right now we're going out to see how many enemies we can make, which is really not good for business.
I thought about running for President one time, a few years back, when I was married to Jane Fonda, and she said, "I've already been married to one politician"—Tom Hayden—"and when he ran for the Senate I knocked on half the doors in California, and we got slaughtered." She said, "I'm not going to be married to another politician." And, hell, so I didn't run. And, you know, the marriage broke up anyway.
I mean, this situation is so desperate now. I'm so miserable and unhappy. Not completely, but I'm worried about the world situation, worried about AOL Time Warner, worried about the human family, worried about weapons of mass destruction, worried about what terrorism is going to hit us next.
Do you believe Saddam Hussein when he says he has no weapons of mass destruction?
I don't really know. I don't think he has as many as France or Pakistan or India or Israel or Britain, or certainly not us or Russia. We've got the most. I mean, if we want disarmament, why don't we offer to disarm? That's what we signed in the Nuclear Nonproliferation Treaty, thirty-five years ago—just to put everything in real perspective. Who are we to say that we can have thousands of nuclear weapons and other people can't? India can't, Pakistan can't. Why? Don't we believe that all men are created equal? I mean, if we got 'em, I think they have a right to have 'em.
So North Korea has a right to break its treaty and have them?
No question about it. They have the right to. Doesn't Russia have the right to have them?
Then do you believe that we should not be exercised about what North Korea is doing now, and just live and let live?
I think we should be exercised about it, but I think we ought to be exercised about the thousands of warheads that the United States and Russia have pointed at each other on hair-trigger alert. That's why I started the Nuclear Threat Initiative, to reduce that threat. I do not think that our primary fear today is from nation-states of any kind. North Korea's military budget is $2.1 billion a year, Iraq's is $1.4 billion. And ours is approaching $400 billion. They're not going to attack us. If we are attacked by a weapon of mass destruction—and I think we probably will be at some point, particularly the way we're acting—it will be from a terrorist organization. Only an insane state would attack the United States, because we have massive military capability; we have enough nuclear weapons alone to destroy humanity completely.
I study history a lot, and I thought it over carefully before I backed the U.N. the way did. I think that without the U.N. we wouldn't be here today. The U.N. was a forum for people to let off steam, mainly the Soviets and the Americans during the Cold War. And without it we wouldn't have come up with a successful end to the Cuban missile crisis.
So, in light of George Bush's ultimatum this week, do you think the U.N. is dead?
I think the U.N. has been wounded. And we didn't need to wound our primary international conflict-resolution body. We have to have a U.N. just like we have to have a federal government. Is it perfect? Is it superefficient? No, but neither are large federal governments. But it performs a very valuable function for us. And the only way you can combat terrorism or global warming or overfishing in the oceans is to have a global body to oversee certain areas. As complex and interconnected as the world is today, we must have a U.N. or its equivalent, and it has been hurt by our unilateral action. There's a lot of resentment and anger all over the world now, and I just hope that this war is over quickly. I hope that we're quickly victorious and that Saddam Hussein is removed. I hope everything goes well and that we try to heal the wounds as soon as it's over, and that we reaffirm our involvement with the U.N. and with nato.
Let's talk a little bit about business. In 1996, you worried that Turner Broadcasting was too small in a world that was consolidating. You sold it to Time Warner. Was that a mistake?
Wait a minute. I didn't look at it that way. I got close to ten per cent of the stock in that merger, if we count the options and so forth. And I thought—and it was true—that with close to ten per cent of the stock and my shareholders coming in Gerry would have to treat me very carefully. And he didn't get into a war with me. He just kept chipping away at my authority, and I made the mistake of allowing it to continue without standing up, because it was the easy thing to do. Rich Bressler and I wanted to buy NBC. We had a deal done. Gerry killed that. If we'd merged with NBC instead of with AOL, you'd have a fifty-dollar stock today. But, just as soon as he merged with AOL and I dropped down to three per cent, it was goodbye, Turner. I mean, he called me on the phone and said, "I'm terminating all your duties." And I said, "Gerry, I've got a year and a half to go on my contract. CNN and the Turner networks report to me, for another year and a half." He said, "We're abrogating contracts wherever we want to; your contract's been abrogated." And what's more, he said, "All you can do is quit. You'll get paid off, but you can quit if you want to." And I said, "Gerry, in my whole life I've never talked about abrogating a contract." It sounds like something that Enron would pull, you know? Not negotiate their way out of it, just tear the contract up? That's basically what happened.
You once said to me that you hate feeling fenced in. In fact—
How many people here like to be fenced in? I mean, what in the hell is wrong with that? Not even your dog wants to be fenced in. They even wrote a song, "Don't Fence Me In." It's one of my favorite songs. [Singing] "Give me land, lots of land, 'neath the starry skies above, / Don't fence me in. / Let me ride through the wide open country that I love, / Don't fence me in." Right?
Ted? Do you feel fenced in at AOL Time Warner?
Not really. I've got as much clout as anybody else. I just figured out the other day just how many media people there are on the AOL Time Warner board who really have a lot of experience. I mean, Dick Parsons, our chairman, God bless him, he came over a year before we merged with Time Warner, but before that he was a lawyer and a banker and a very good one. But the media business—Fay Vincent ran Columbia Pictures for a while, before he was commissioner of baseball. And baseball is sort of being in the media business. But I think Fay and I are the only ones with extensive media experience, and that's tough for a media company. There are no journalists on the board. Not a one. I mean, here we are, we like to think of ourselves as one of the great media companies. We should have a journalist on the board.
Ted, in your company, you've already announced that you're going to step down as vice-chairman at the annual meeting in May. Do you plan to step down from the board?
I haven't made my final decision. I want to go and talk to the board about it. But, with a war and everything, I don't want to leave them in the lurch. So I probably will stay on for a while. Maybe they won't want me to. I don't know.
When you talk about the money you've lost, I guess from seven billion—
A lot of people have lost money. I'm not the only one, I just lost—has anybody here lost more than ninety per cent of what they had three years ago? There's a woman—you must be a shareholder in our company, huh?
How could someone who has had such a successful business career put all his eggs in one basket?
Well, they were all in one basket to start with. I had only a little teeny tiny basket. We were always undercapitalized. All my life, I had all my eggs in one basket. I never invested in any other companies, because I had concentrated all my efforts and all my resources into what I had control over. And where I messed up was not realizing that the situation was very different now.
But I did not know enough about AOL, and neither did the Time Warner side of the company. We did not know that we were buying AOL at its absolute high, and that they didn't have a good strategy for making the transition to broadband. We didn't know what we were getting into. Just like the South didn't know what it was getting into when they started the Civil War. You know, that's the thing that's so frightening about wars or doing something when you don't know what the consequences will be. The timing was absolutely terrible for us, because the Internet bubble was at its absolute peak and was just about to burst just as we were agreeing to the merger. By then it was too late. I should have resigned from the board then and sold at least half my stock, like one of my ex-wives did. My kids were bailing out. Why in the hell didn't I have enough sense to do it? But most of them got caught, too. My whole family pretty well got caught. We were just in the wrong place at the wrong time.
Let's talk about something else that's dear to your heart: CNN. You've described, in press clippings I've seen, the Connie Chung show as "awful."
I shouldn't have said that. I should've said, "Leaves room for improvement."
If you were running CNN, how would you improve it?
I don't know. That's the good thing: I'm not running CNN. I did run it for twenty-two years. People say, "What would you do if you were running the Braves right now?" I say, "I ran them for twenty years." Normally, people don't become C.E.O. of a company till they're in their late fifties, and then they usually retire at sixty-five, so they've maybe run the company on average seven years—they've worked their way up. But my dad died when I was twenty-three, and I took over the company. I was the C.E.O. then. By the time I was fifty-five I had already run the company for more than thirty years. And we were always on the march. We went from thirty-five employees in 1970 to twelve thousand in 1996, when we merged with Time Warner. And I did pretty much keep control during that time. But I was tired. And I'm tired now. I look good physically. I mean, I'm sixty-four, I weigh the same thing I weighed when I graduated from high school, I'm in pretty good shape, but I can't hear very well. I'm suffering the same old ravages as everybody who's getting older. How many people in this room are getting older? We're all sharing that together. So when I merged with Time Warner it was partly because I was tired. Also, I didn't think I had enough cards to win the game. There was going to be, as we've seen with Viacom and Disney and NBC, more and more consolidation in the business, and either you were one of the big players or you were going to be marginalized. And I thought merging with Time Warner—our assets were very complementary. I thought that the merger made lots of sense, and it did. The stock price tripled. We all got rich on the Turner-Time Warner merger. That was the best merger in history. So we just turn around and make the worst one. It just proves: don't get too high when you're winning, don't get too down when you're losing.
You have, over the years, invested in things that didn't maximize shareholder value—for instance, documentary series you did because you thought it was important to do, and "Gods and Generals." What is the argument you would make to shareholders as to why it is important for them to allow you or journalists to spend money even if it doesn't maximize their returns?
I think that, with a journalistic or an entertainment company, if you have the bean counters—the accountants—run that company, it's a dead company. When you're in show biz—and even the news is, to a degree, show business—you're best off if you have somebody running the company who understands programming, and the importance of programming. Remember, it's a business of hits. You've got to have hits. And in order to have hits you have to make a lot of programs. It's just like developing baseball players for your farm system. You hope that you're going to have a Barry Bonds, a Hank Aaron—that you're going to develop a star. How much did it help the Washington Post to have Woodward and Bernstein do Watergate? You call that good journalism, but that investigation went a long time and cost the Washington Post Company a lot of money. And it's not only money. It cost CNN the risk of people's lives to be in Baghdad in '91. But we were there. That didn't produce any profits right then, but a couple of years later CNN was worth several billion dollars more than it was before.
I'm a greater believer in the investment, and, quite frankly, New Line reported to me when they came up with this project "Lord of the Rings." It was a three-hundred-million-dollar project, the biggest project in motion-picture history. Bob Shaye and Mike Lynne were reporting to me, and I said, "You like this project?" They said, "We like it," so I said, "Well, go ahead and do it." You have to take risks. If you don't have a risk-tolerant constitution, you should not be running a—if you've got a bean counter running your network, it's a bad situation. You're not going to win.
When you look at your business career today, at the age of sixty-four, what do you think the keys to your success were?
They're the same keys to everybody's success. I tell you, I just moved out of CNN Center and over to a little building I bought several years ago, while the stock was a little higher, and guess what my new address is. 133 Lucky Street. I'm going to make a turnaround, baby. I'm on Lucky Street, now. Save me a place at the table! . . . What's the question?
So luck is the key component of success?
It's always hard work, study, think things through very carefully. When I came up with the idea for CNN, twenty-four-hour news, people said it was pretty revolutionary, but there was already twenty-four-hour radio news in New York, WCBS, and you could get the baseball scores anytime if you waited for fifteen minutes. So I knew all-news television would work, but I never thought that I'd be doing it. I thought, NBC, CBS, or ABC, one of these companies that already had the infrastructure, would be the one to do it. It's a no-brainer. But they didn't do it. Two or three years went by and they didn't do it. So I decided to do it, and I said, "What can go wrong?" Because a new business venture is like a military campaign: You have to think it through; you have to work hard, figure things out very carefully; you've got to motivate employees, you've got to get everybody pumped up.
As you said earlier, you're a history buff. Throughout history, who would you like to have met?
Well, when I was a boy, I was more fascinated with military history than anything else, because I went to military school, my father was in the Navy, and, growing up in the South, the Civil War was all around me. And the two people who inspired me the most as military leaders were Alexander the Great, who was a general on land, and Horatio Nelson, who was probably the greatest captain on the sea. I was racing sailboats by then, and I used to fantasize that I was with Horatio Nelson when I was going to the America's Cup, that I was going out to battle. But the battle was in sport, and when the race was over you lived. In war, if you lose, you die. In sport, if you lose, there's another event next weekend. In baseball, all you've got to do is wait twenty-four hours.
But as I grew up my interest turned from war to peace. And I took those statues of Horatio Nelson and Alexander the Great off my desk and put them up in the bookcase, and on my desk I put a bust of Martin Luther King, Jr., and one of Mahatma Gandhi, because those are my two heroes now. Nonviolent, you know. With Rupert Murdoch, I did challenge him to fight me in the ring. And I said that he could wear headgear—he's seven years older than me—and I wouldn't. I would have—literally, I think I would have torn him apart. But, then, on the other hand, he might have gotten lucky, he's a pretty tough old—it would have been horrible if that had happened. But just to be able to get my hands on him, I was willing to risk it all. It was in good spirit. I wasn't going to kill him with a knife or anything; I just wanted to get my hands on him. Because I boxed when I was a kid. But I'm a man of peace now, and I've withdrawn my challenge to Rupert. ♦