Interview Date: Thursday June 20, 2002
Interview Location: Denver, CO
Interviewer: Bill Riker
Collection: Hauser Collection
RIKER: This is the oral history of Wayne McKinney, who began his long career in the cable television industry in 1956. Today is June 20, 2002, and we are interviewing Wayne at The Cable Center's international headquarters in Denver, Colorado as part of The Center's Hauser Oral and Video History Program. I am Bill Riker. Wayne, thank you for coming today.
McKINNEY: You're welcome.
RIKER: Why don't we start with some of the background. Where did you grow up and where did you go to school?
McKINNEY: I grew up in San Angelo, Texas, born on October 5, 1931 in the Shannon Hospital – I even remember where. I started college at East Texas State University in Commerce, Texas in 1949, and after a year and a half of that I went into the service because of the Korean conflict, and spent four years in the Air Force. I came back, started back at school, got married in '55. I had a part-time job trying to get out of college and unloading sheet rock for a lumberyard, and I mean that is tough work. Two sheets, really tough on a guy, and I'm walking down the street one day and this guy I knew came out of a doorway and he said, "Hey, come here Wayne, I want to talk to you." This was in January '56 and the guy's name was Charlie Reynolds, and he said, "I'm working with this cable system here and we're just really getting started and I need some help."
RIKER: This was in...?
RIKER: In Sulphur Springs? Texas?
McKINNEY: In Sulphur Springs, right. We talked a little bit and I was tired of unloading sheet rock for a lumber yard, and I went to work for the cable system there, didn't know anything about cable or anything, but started working and climbing poles, and learned how to climb, go under houses and wiring things. The system was owned really by Mr. Rodgers, Robert M. Rodgers, and he was new at it too, and he didn't live in Sulphur Springs and that was the reason Charles was there trying to get it going. Anyway, I worked 20 months, supposedly part-time, but I was coming to work at noon from commuting to college 20 miles away, and really working seven or eight hours 'til dark. I worked 20 months and until I worked there we had about 850 customers. But that was the only system they had and I got out of college with a master's degree and made a trip to west Texas and did some coaching and teaching.
RIKER: You did some teaching, right.
McKINNEY: And after that first year out there, I wasn't really pleased. The head coach almost got fired because he'd just won 80 football games. In west Texas they believe in their football.
RIKER: You get fired for winning 80 football games?
RIKER: Oh, eight.
McKINNEY: We had an eight and two season and three of the guys on the school board wanted to fire him because we didn't beat one team, but anyway, after that school was out in the middle of '58 and I had a summer job out there teaching swimming and bow and arrow and some of those things for eight weeks, but I had two weeks off and I went back to Sulphur Springs. By that time Bob Rodgers was up in Springdale starting a cable system – Springdale, Arkansas. Me and Charles ran up there to talk to him and we talked about me coming to work. I said, "Well, I'm kind of obligated. I've agreed to do this summer program," and so I did that for eight weeks and then Charles called and me and Bob Rodgers got on a conference call and I made a deal to go to Springdale in August of '58.
RIKER: And you became chief technician for them?
McKINNEY: Well, I was the manager, chief technician, the whole bunch.
RIKER: So you ran the whole operation there.
McKINNEY: Yeah. And I had a contract from Bob that when we got 400 customers up there that I owned 5% of the company, and I've got a copy of that here somewhere. (PRODUCES COPY OF CONTRACT)
RIKER: That's the contract?
McKINNEY: That's the contract, a copy of the original.
RIKER: How about that.
McKINNEY: But anyway, in 1960 – I went up there in August of '58 – in 1960 I earned the 5% of the company and the guy, Charles Reynolds, also had got a deal with him for 5%, and then Charles left and did other things. In '61 I was the technical guy of the whole thing, but we didn't have but two systems. The other thing that was significant up there is that we got a franchise in Bentonville, Arkansas and that was a little town then where they didn't have but 3,000 people, and that was our third system. It happens that on the city council of that outfit was a guy named Sam Walton, and he had a little store on the square there in Bentonville, and I got to be around him, and Sam got so mad that he had to... we were trying to sign an agreement with Bell Telephone to use their poles, and they had all this in there about you can't run any Muzak, no music or anything, we couldn't run FM. The city owned the power poles and so we said, "Well, we'll sit somewhere on poles." And the Bell Company said, "You can't do that." And the city said we could, and they cancelled the Bell franchise, Bentonville did. Of course that didn't do any good, they were paying them franchise tax and they quit paying for two years, but anyway, I got to know Sam Walton before he was Sam Walton.
RIKER: Which eventually grew into...?
McKINNEY: Wal-Mart, Sam's Club. And what a guy! He had a memory better than Bob even. I mean, like I left up there in Springdale in January of '64 and moved to Tyler and three or four years later, the guy I'd left up there, Bill Bailey, led a meeting and he said, "Oh, I want to tell you. Sam Walton asked about you the other day." And I'd been gone four years. I said, "What?" He said, "Yeah, he said that red-headed guy, McKinney. He said what's he doing know." And some other people up there in Springdale at that time – I was 27 years old, I guess, then – and we had some other people that made it big, the Tyson's food deal. I knew Don Tyson when he was Don Tyson, the son, so I brought a lot of memories from northwest Arkansas when I moved to Tyler. Anyway, when I moved down there I was the chief cook and bottle washer and engineer...
RIKER: You were vice-president at that time, also, weren't you?
McKINNEY: Yeah, right, vice-president. We started gathering up some other systems and just it kept snowballing and most of what we bought at that time were some systems that weren't working very well. We bought some junk, you might say, and that's how we kind of got started in the business. Bob, as we started doing all these things, Texas Community Antenna was the mother deal of all of it, and as a deal came along and we added maybe two or three systems here, Bob would make another group and get investors. We wound up eventually having six S Corporations, which at that time you could have ten stockholders, and we were... let's put it this way, I was an investor in each one of those and I got the opportunity to invest as we did those things, and we grew and had a lot of systems and everything. In fact, when we went public in 1982, the reason we went public was that we had so many S Corps that if somebody died and created more stockholders that would kill that S Corp and you had to go back and recapture everything, all the advantage of being an S Corp. My wife died in 1981 and Bob and Don Cowan, who was our CFO, they got to talking right quick, if it had been me, it would have busted four of those S Corps, because my wife and two kids would have all owned part of the deal.
RIKER: And that would be over ten.
McKINNEY: And that would be over ten in four of those, and we got real nervous and by '82, January of '82, we went public with part of those. Bob said, "Well, we want to perpetuate this anyway. We want to make it a public company." So, that's how we went public, by my wife dying, you might say.
RIKER: Nacogdoches, Texas, this was a town that caught my eye when I was reading about you last night because my next door neighbor works for a corporation who's headquarters are in Nacogdoches, Texas, and I never heard of it before. But I understand that Bob Rodgers went up against Jerrold in that town. Is that right?
McKINNEY: That's right. That was in '60, and Jerrold had bid to these four guys that had the franchise and most of those four guys lived in Lufkin, but they had the franchise for Nacogdoches, and Bob got a little help from Entron and we were the distributor for Entron for a number of years, and Hank Diambra was the guy that was running Entron then and he was a machinist really, with both those fingers going. Anyway, he kind of financed a little deal on that, and Bob wound up owning half of Nacogdoches and the four other guys owned the other half. Bob owned that individually for awhile, and after about three years we got 700-800 customers there, and those four guys wanted to sell it. They thought that was all that you'd ever get. So, Bob went back and made a deal to do an S Corp and got some more investors and bought it, and then two years later we had 3,500 customers, and we built it out then.
RIKER: A good investment.
RIKER: How many channels were you carrying in a lot of these systems at this time?
McKINNEY: Five channels. Well, in Springdale, Bentonville, everything we were building was mostly five channels. I'd like to back up to Sulphur Springs. When I was working part-time, and we didn't have any AGC, this is in the '50s, late '50s, and my job in the summertime when it would cool off at night, about every third amplifier I'd go and put up a ladder and put a three pad in because the signal would come up at night, and then in the morning, if I was working, if I wasn't going to school, I'd got take them out in the morning, back to work. And that was our AGC.
RIKER: The AGC was Wayne McKinney.
McKINNEY: Well, yeah, but Charles Reynolds, he came up with something that was used in a brooder house for chickens, and these boxes were on cross arms and they were – you saw one of those – twelve tubes, it was a meter.
McKINNEY: He worked out a deal to where he could get a little fan to run when it was hot in the daytime, and when it would cool off the fan would shut off, and we had four or five of those that worked in the system. Blonder-Tongue had some AGC stuff, supposedly, but it wasn't really that workable. Anyway, Sulphur Spring is where Texas Community Antennas really got started.
RIKER: Now I know that customer service was a real big issue, something that Bob Rodgers liked to focus on, and that's still important today.
McKINNEY: Yes, well, we did get an award in 1994 or '95 as the best operator, and I guess that was part of customer service, but I was really retired by then, anyway. Mel Jinski and some other people were doing that work in those days, but we wanted to make everybody happy and we worked at it.
RIKER: Well, let's back up a little bit then. Going back to, let's say, in 1969, when the Society of Cable Television Engineers wanted to get started – I understand you're a charter member of that group.
McKINNEY: That's correct. Back to Bob, though a little bit, a lot of people at that time thought that we were organizing a union, and some of the operators weren't really interested in that, and Bob had a background in electronics and everything, and I mean, he said, "We've got to have capable people." I met with Bill Karnes in Dallas one time and we actually took IEEE's document and made it fit for SCTE, and that's what we took to San Francisco in 1969. Me and Bill – the other guy, I can't even remember his name, didn't show up to that one meeting – and we doctored that up a little bit to fit the SCTE. Of course we didn't know how the SCTE was going to be named when we went out there. There was a little bit of discussion about that, and even later – I think I was the one that said, "Well, we're running FM and some other things," in 1969, "we ought to have something about broadband." But it didn't get in there, and now broadband is what everybody's talking about.
RIKER: Well, in those days there were a number of different systems around the country. Engineers were experiencing the same kinds of problems around the country, but not really having a group of people together to talk about common solutions. SCTE kind of provided that forum for the discussion of issues, and it has grown ever since.
McKINNEY: Yeah, it sure has.
RIKER: You're a senior member of SCTE now, aren't you?
McKINNEY: That's correct.
RIKER: When did you become a senior member? Tough question?
McKINNEY: Tough question.
RIKER: Back in 1994, Ted Hartson and I co-founded what we called the Loyal Order of the 704, and for those people who don't know, the 704 was the first piece of mass-produced test equipment manufactured by Jerrold Electronics, and Ted had a real affinity for that piece of gear, and we wanted to create something similar to the Cable TV Pioneers, which I know you're also a member of, and we'll get to that later on. I remember seeing you at the first 704 meeting.
McKINNEY: Yes, I think I was there.
RIKER: Was that the first piece of test equipment that you pretty much cut your teeth on?
McKINNEY: Oh, yeah. The 704 had C fittings, and I think maybe I spoke to this before, we cut links of wire, made baluns out of them and it was foam dielectric, like twin-lead, but it was in foam, and a shielded cable – I mean shield on the outside of it – and we did baluns and made two-way splitters out of them with C fittings on cert buckets. You could mount it on the lid, and then poke it into the cert bucket, and then you shorted that where it wouldn't leak.
RIKER: That's kind of like the coffee can amplifiers that we saw earlier today. What other test equipment did you find very useful in your position?
McKINNEY: Well, everybody had an RCA twelve-channel marker system in the old days, and then a 601 sweep generator. It was different than oscilloscopes. The first oscilloscopes, we built them, and actually got them to work too, believe it or not. We didn't spend a lot of money on things that weren't needed. Bob was very conservative and even right before he passed away, he said, "We could have probably done a lot more if I wanted to get out and buy a lot more." You know, more money, but he was real conservative. I can think of something in 1975 – we bought five systems from Vikoa, and a guy representing Vikoa was a guy named Phillips, and these were in Lafayette and Crowley and Rain, in south Louisiana – there were five of them – Kaplan and Abbeville, and we had been down there two days jawing with these people and Phillips had two or three of his money men with him and they failed to show up with all the necessary paperwork and he sent two of them home before we got through with it. He said, "Why did you come? You didn't bring the material that we needed." But anyway, we got something signed and held back some money, and Bob never was one... he wouldn't hardly carry a credit card or a dollar bill or anything, he would write a check. We went to Landry's restaurant there in Lafayette – and he was going to buy all the dinners, and there were about twelve or thirteen of us. He was going to write a check, and they don't take checks. I always packed two or three hundred dollar bills stuck in mine just for emergencies. He said, "You won't take my check?" And they said, "No, we don't take checks. We take cash." I was standing right behind him and I said, "Bob, I've got it." So I bought the dinner for the big celebration for buying those systems in 1975, and he paid me back. He apologized and he said, "I should have had something with me." But he was conservative.
RIKER: Well, it's obvious that Bob Rodgers was a great influence upon you.
McKINNEY: Oh, yeah. He gave me a chance on everything that came along. I mean, all these S Corporations. The other thing about those though that were bad in a way, we were making money and you have to distribute it, but then when you distribute all the profits you don't have anything to work with and so we would take profits every year, turn around and loan money back to the company, which they would pay interest, but a lot of times we were paying taxes on a lot of money that we didn't have, and it was tight there for a few years. We were making headway but nobody was getting real rich. I think Bob said that when he was 40 years old it turned out he was a millionaire. That's in that book, I think, and he was proud of that. He made it to a million when he was 40.
RIKER: I feel like Jay Leno, (holding the book to the camera) but this is the book about Bob Rodgers that was written after he passed away? Is that correct?
RIKER: Now I understand from Bob Rodgers biography that he actually got a start in entertainment and had built a number of theaters, is that correct?
McKINNEY: That's correct. Even when I was working part-time in the first go-around, he was building drive-in theaters. He built four or five or six of those, and then he'd turn around, open up, sell them, and make a profit. Then he got into building homes, small houses, developing subdivisions, and a lot of the property around where he lived were some homes that he built. I mean, they were not... they were a thousand to twelve hundred feet, two or three bedrooms small deals, but they were selling. He bought a lot of property right there where the office is right now, and at one time that was his runway. He had a private little airplane and he had a strip there that was paved. Now there's a row of churches and buildings and everything. But he was entrepreneurial in a lot of things. He did more than in cable, but once he got into the cable business and decided that that was going to really work, he quit doing those other things.
RIKER: You still live in Tyler, Texas, is that correct?
McKINNEY: That's correct.
RIKER: And as these systems were growing, because you had quite a few of them in a number of different states at that time, didn't you?
McKINNEY: Yeah, we had some in Arkansas and Louisiana, Texas. We didn't have any in other states until later when we bought Jack Kent Cooke's stuff. There was one in Clovis, New Mexico and Gringo, Mississippi out of that bunch – I believe that was from Jack Kent Cooke. There were so many deals that... well, we bought Amarillo and bought that from a guy named Marsh, I believe. He owned the TV station in Amarillo and the cable system, and he buried twelve Cadillacs sticking nose down out on the highway as a monument to the Cadillacs. It's still there. When that deal was cut – Bob had a real problem with him. He wanted Bob to pay all the bills that he owed currently. We were trying to buy assets and he wanted him to pay all the bills that were outstanding, and finally they got off in a room together by themselves and there was a group of lawyers and money men and everything, and Bob said, "Let me ask you something. If you owed your maid two or three week's salary, would you expect me to pay your maid?" Something like that, in that fashion, and the guy finally got the idea, and they made a deal. Amarillo at that time had more customers than Lafayette. It was about '82, I guess, when that happened, '83. And at that time it had about 28,000 customers, and it was the biggest system we had. Then he had some other deals. He was always thinking. We bought different things from different people, there's a story behind every deal that he ever made in there.
RIKER: And with each new purchase you encountered new technical problems?
McKINNEY: Yeah, I'd say usually, well, like Amarillo. It had a lot of seal-o-matic cable in it, which leaked, but that was along about the time that I was leaving when that came up. But we always had technical problems. Everything had different kinds of equipment, if you buy a system here and one here, and so you were trying to teach technicians to maintain different types of equipment and we tried to standardize there for a number of years and we did, but we mainly went with C-COR. I don't think that Cox even thinks today that that was a bad deal because everything we upgraded with that to 750, they think that's great.
RIKER: What were some of the major technical advancements that you saw during your time at TCA that you thought were really important to the evolution of the industry?
McKINNEY: I would say that the earth stations, and something besides TV. I mean besides off-the-air stations, you got HBO and some of that stuff that you wouldn't normally get. Our first earth station went up in De Ridder, Louisiana. I don't know why; I think it was because we were trying to renew a franchise, mainly, and we were promising more pictures, and we built an earth station in De Ridder, and it was the first one. Right after that we went to New Iberia, Louisiana and built one. This was in '77. These were the five meter size. When the pre-amps got better to where you didn't have to have a ten-meter. The big ones, we didn't buy any of those.
RIKER: I remember building some of those ten-meter dishes.
McKINNEY: Kenneth Gunter used to say that they built one in Florida and they were the first with a ten-meter down there and all that. Me and Ken go back a long ways too. When I started grade school in San Angelo, Ken was two doors down from me, and he's two years younger than I am. And then his dad got into appliance building, and he moved away across town to the richer part of town. I've known him since grade school. I don't know whether that's a plus or not, sometimes. He was a member of our board for about ten years.
RIKER: Ken had worked for Bob Rosencrans and they were one of the first ones to put up satellite dishes to receive the HBO feed.
McKINNEY: That's right. That was what Ken bragged about, that ten-meter in Florida.
RIKER: The Cable Center did a special last year on the 25th anniversary of the first satellite delivered programming from HBO, which was the Thrilla from Manila.
McKINNEY: Oh, okay. That was a big boxing match.
RIKER: Have you any ideas as to what the future holds for the cable industry? We're going through a lot of changes at this point in time.
McKINNEY: Well, I just noticed in the hotel over here, I think everything in the hotel I'm staying in is digital, and they're good, solid pictures. But that's being pushed, and then everybody thinks they've got to get into this video on demand, or VOD, or whatever you want to call it. Maybe that's what's going to sell. I'm probably not going to buy it. Everybody's pushing digital, video on demand, and maybe that's what the industry needs, and I hope that cures some of the problems that we're facing right now. The economy's about to kill us.
RIKER: Yeah, and of course the cable industry has always been tight on funding, as you've talked about with TCA getting off the ground. Unfortunately we're still tight on funding.
McKINNEY: We had a guy named – I don't mind mentioning this, either – Jim Ackerman was on our board for years and he kept telling Bob at every board meeting, he said, "You're underleveraged, you don't owe enough money, you need to get out of here and do bigger things." Bob said, "Well, I'm right where I want to be. When money gets tight I'll be able to buy something and I won't owe so much." We had some good board members. In fact, the last four or five years, Fred Smith, a guy that's head of the Don Reynolds Foundation, and that's the seventh largest in the United States right now. Don Reynolds had all the billboards, a lot of television stations, and owned some cable systems. They sold those cable systems to a Stevens group in Little Rock, who were brokers, the largest independent brokers at one time, I don't know that they still are, and we made a contract with them to get Rodgers Arkansas and Vallejo, California and two or three other deals, and then traded Vallejo for Fort Smith, Arkansas, which tied in with our deal. Anyway, Fred was a good man on that board. He's well-read and started out delivering papers for Don Reynolds when he was about 13 years old in Fort Smith, and now he's the chief of the foundation. I have a lot of respect for him.
RIKER: So how many systems did TCA have at its peak?
McKINNEY: Oh, we were about 55 systems when it sold to Cox in '99.
RIKER: So Cox bought them in 1999. Was that a smooth transition?
McKINNEY: Oh, I guess it was. We had our attorneys and their attorneys working on it, and some of our people, and the board felt that if we didn't do this we'd get sued by the stockholders. It was a good deal, really, or it looked that way, and the day we signed the papers for that one of attorneys showed up with Cox shirt on. He had gone to work for Cox. Somebody said, "Well, that's Judas." I won't say what his name was. Yeah, it was still good for me and the rest of the stockholders.
RIKER: And the systems had been upgraded by TCA?
McKINNEY: Yeah, a lot of them were upgraded by us and they're still working on some. We've got – I say "we" – Cox has got five or six of our larger systems, which are 750 MHz already, when we sold. I've got to get back to Bob – when we went public, and Bob did a lot of studying there for the first six months, and he had reviewed this deal about different classes of stock, A and B and ten votes for one share, and so he brought that to the board and he said, "I want to tell you something. I've looked at this," and he said, "I think we're going to stay one vote, one share, and that's fair to the customers and fair to the stockholders." That was right after we went public, within six months, and I think now that some of these other customers are going to feel the same way, that have more voting shares than they can handle. The other thing we did, from the very beginning, we paid a dividend every quarter up until the quarter before Cox got a hold of us – Cox closed us out in August 13, 1999, and we paid a dividend in April and we'd already signed before that dividend in March, and we paid a dividend in April, but we didn't in July because Cox had already said, "Don't." But we would pay the dividend every quarter all the time we were public.
RIKER: That's great. And then you stayed with the company as a director all the way up until the sale to Cox?
McKINNEY: Yeah, I really kind of phased myself out from '84 to '86. Well, our CFO did too, our finance guy, Don Cowan, we both retired effective January 1, 1986, and stayed on the board. Well, Don passed away about five years later, but I stayed on the board until we closed out. In fact, the last three years I was head of the audit committee. I did learn a few things, besides engineering, about money.
RIKER: In fact, since your retirement you've stayed in the money business a bit, haven't you?
McKINNEY: Well, I think so. I'm in it today.
RIKER: What have you been doing since your retirement?
McKINNEY: Can I talk about a collection of stuff?
RIKER: Anything you'd like.
McKINNEY: Okay. In 1986, I'd retired, me and my wife went to England, Scotland, Ireland, spent 33 days over there, and I went to the biggest department store, Harrods. Everybody's got to go to Harrods.
RIKER: I've been there myself.
McKINNEY: Looking through the records and things, I found a little book, a small book, and in that book, the guy that wrote it... the name of it was So You Want to Collect Miniature Scotch Whiskey, and it wasn't 40 pages, you know, and I went back to the room that day, that night, and read it, and I came back to Harrods the next day and bought four or five miniatures. The next trip over there, two years later, I found out where he lived and everything, and when he retired from Shell Oil, he bought three whiskey stores up in Scotland and he wrote the book because every time they'd ship him whiskey they'd send a miniature – like a 100 bottles of whiskey and they'd send 20 bottles of miniatures – and so he kept getting these miniatures and that's the reason he wrote the miniature book. Every time I go over there now, I see Alan Keegan, the guy that got me into this, and I've got over 10,000 bottles of whiskey, miniatures.
RIKER: Are they empty or are they full?
McKINNEY: The only ones that aren't full are the older stuff, like the American whiskey, they were pull caps, they had a little tab, you know, and the tax sticker is still on them and they're empty. They evaporated. You need to keep them in something that's pretty well controlled temperature-wise, and I have all these on display. But anyway, I've spent a lot of time with that plus B&W Finance. I go over there about every other year and I'm going this year.
RIKER: You and your wife Joanne came in earlier today and got a change to tour The Cable Center and I know that you made a large contribution to The Center to help us out in some of the projects that we have related to the museum component. What did you think of the building and what motivated you to become so involved?"
McKINNEY: Well, anything that happened in cable I've always tried to be involved and one of the things that got us started, I guess, was when Bob passed away the board of TCA gave a hundred thousand dollars to the museum, and then I saw the need and I gave a hundred thousand. I'm proud of what I've seen here today. It's going to be real nice when everything gets up and running.
RIKER: For the record, TCA and Joanne and Wayne McKinney have contributed funding to create an audio self-guided tour where people coming into the building will get a set of headphones with equipment that will take them on a tour throughout The Center and explain all the exhibits that are here and available for viewing. Is there anything else you'd like to discuss that we haven't touched upon so far?
McKINNEY: Oh, I don't know, I rambled. The main thing I'd like to say about Bob is, like I said, he always gave me a chance. I can't say enough about him. I guess I could say he's my hero.
RIKER: Well, there's a lot of people in the industry that we all think of as mentors, and obviously Bob was yours. Well, Wayne, it's certainly evident that your role in the development of the cable industry has been significant, and on behalf of The Center and the Hauser Oral and Video History Program, I would certainly like to thank you for the time that you spent with us today. Your interviewer has been Bill Riker, and thank you very much.
McKINNEY: Thank you, Bill. I enjoyed it.