John Malone Overtakes Ted Turner as America’s Largest individual Land Owner
Both of these men are on my list of top tycoons to study. Both competed and collaborated for decades in the cable-TV industry where they did deals both big and small. Malone is typical of the men covered in The Tycoon Playbook. They all had the patience and discipline to start off small and build an empire one step at a time. Malone earned a Ph.D. in operations research from Johns Hopkins in the late 1960s and then joined General Instruments Corp., which was part of the cable-TV industry. After quickly becoming dissatisfied with the company’s management he took a major gamble by quitting and moving to Denver where he accepted a 50% pay cut for the privilege of working for a startup teetering on bankruptcy owned by a Bob Magness. The company was Tele-Communications Inc., which later was renamed TCI.
The Great Growth Strategy
The two men then quickly became the most fearsome team in the game of gobbling up cable-TV systems across the USA. TCI eventually became the second largest cable company in the nation surpassed only by corporate behemoth Time-Warner.
One particular instance of Malone’s savvy was understanding that the cable-TV business was what is now called a “content business” long before most people had any idea that such a thing existed. He was also good at engineering complex financial transactions in the field of telecommunications. Entering a business deal with Malone is like playing chess with a grand master — not only are you going to lose, but it’s going to take years for you to figure out just how early and thoroughly you were outmaneuvered. Malone has crossed fountain pens with the greatest media titans of the telecommunications age — Ted Turner, Rupert Murdoch, Barry Diller — and often walked away richer.
On his new focus on acquiring raw land:
Taylor, who attended Yale but didn’t know Malone, has been watching Malone’s acquisitions with interest. “When there’s any kind of uncertainty in the national or international economy, everybody sits on their money,” Taylor says. “You don’t invest in long-term assets when the world may be coming apart. On the other hand, if you’re really smart and really rich, that’s when you do invest in long-term assets because that’s when everybody is trying to get rid of them. That’s where I think Malone fits into it.”
You can read the article on Malone’s foray into land here.
I’ll wrap this module up with a wonderful quote from Cable Cowboy: John Malone and the Rise of the Modern Cable Business TCI, which also sums up the Playbook strategy:
As the 1970s began, TCI had gobbled up so many new cable systems that it was like the winner in a pie-eating contest—victorious, but a bit woozy from the pace of integration and a little anxious about keeping it all down.