J. C. Sparkman
Interview Date: Thursday July 19, 2001
Interview Location: Denver, CO USA
Interviewer: Paul Maxwell
Collection: Hauser Collection
MAXWELL: Hi. I'm Paul Maxwell with The National Cable Center. We're here today with the Gus Hauser Oral History Project for the National Cable Television Center and Museum in Denver. We're interviewing J. C. Sparkman today.
To start, I'd like to ask J. C. to clarify a couple of things for us like, what does J.C. stand for.
SPARKMAN: Just J. C. I don't have a name.
MAXWELL: You don't have a name?
SPARKMAN: I came from a poor family. We couldn't afford first names.
MAXWELL: That's good. Well, when did you get into cable television?
SPARKMAN: In 1956.
MAXWELL: You had been in the Air Force if I remember.
SPARKMAN: Yes, I was in the Air Force.
MAXWELL: That's when they threw you out?
SPARKMAN: I was discharged October 14, 1956, and I went into the cable television business October 15, 1956.
MAXWELL: Where was that?
SPARKMAN: Lewiston, Idaho.
MAXWELL: Were you from Idaho?
SPARKMAN: No. I grew up in eastern Washington.
MAXWELL: So it wasn't far away.
SPARKMAN: It wasn't far away.
MAXWELL: who did you go to work for there?
SPARKMAN: A company called A&J Distributing.
MAXWELL: A&J Distributing. They were a cable company?
SPARKMAN: We actually sold material to cable customers as well as actually building cable systems throughout the Idaho, Montana, and Washington area.
MAXWELL: What did A&J stand for?
SPARKMAN: Alan and James, I believe.
MAXWELL: Alan and James?
SPARKMAN: Not me. That wasn't mine.
MAXWELL: Not a presand is those days?
SPARKMAN: No, it was not.
MAXWELL: How long were you there?
SPARKMAN: Three years.
MAXWELL: Three years? That taught you the cable business both from, I assume the standpoint of how to build it plus a little bit of how to run it.
SPARKMAN: Yes, how to build them, how to run them, and also how to finance them.
MAXWELL: Which, if I remember right, in those days was the critical element.
SPARKMAN: The critical element.
MAXWELL: A large number of companies got started by supplying and taking the risk at the same time.
MAXWELL: So what happened to A&J?
SPARKMAN: A&J subsequently went out of business at a later time after I left. It moved into some things other than cable, and they didn't work out for them.
MAXWELL: And where did you go from there?
SPARKMAN: I actually ended up with Jerrold.
MAXWELL: Which was doing much the same thing at that time, right?
SPARKMAN: Exactly. Yes.
MAXWELL: How old was Jerrold when you joined it?
SPARKMAN: Oh, I don't know – probably ...
MAXWELL: I'm trying to remember when Milt [Shapp] started it.
SPARKMAN: Me too. I think probably maybe 7 – 8 years old, maybe 10.
MAXWELL: So this was '59 or 60 when you joined.
SPARKMAN: Actually, indirectly, I was with Jerrold [sic] until '65 and then I joined Jerrold in '65.
MAXWELL: Jerrold, for hose who might not be familiar, was the first major manufacturer of items that made a cable system work.
MAXWELL: At Jerrold, did you have the Western territory or what did you do for them?
SPARKMAN: I was working in the Western territory. My first job – I had an office in Portland, Oregon and then I moved from Portland, Oregon to the San Francisco Bay area with Jerrold. Then I moved to Kansas City to take over the regional job in Kansas City. It's one of those – I bought a house in Kansas City that we never moved into. The evening after my wife and I had closed on the house and she was on her way back to San Francisco, I received a call from Jim Forgy who was my boss. Jim asked me to move to Philadelphia. At that point in time, Jerrold owned a house in Kansas City and I moved to Philadelphia. But I never bought a home in Philadelphia.
MAXWELL: Milt was still running the company then, wasn't he?
SPARKMAN: No. By this time, Bob Beissinger was running the company. At that point in time was the time that they sold the company to General Instruments.
MAXWELL: And that was Monty Shapiro, right?
SPARKMAN: Monty Shapiro – yes. When they sold it to General Instruments, John Malone was brought in by Monty Shapiro from Mackenzie to figure out how to make Jerrold a profitable company for General Instruments. Then John was hired to run general Instruments. That's about the time I joined TCI.
MAXWELL: GI had other businesses in those days.
MAXWELL: Half a dozen, if I remember.
SPARKMAN: Yes, several, including gaming for the race tracks and the chip business and so on.
MAXWELL: You also had ... Weren't they one of the patent holders on TV tuners?
MAXWELL: Or was that later when they picked up somebody?
SPARKMAN: No, that was not General Instruments, that was ... gosh, I can't say the name right now. I'll think of it.
MAXWELL: Think of it. Yell it out when you think of it. I was confused on ... Did they make them under patent then?
SPARKMAN: They made them under a patent, yes.
MAXWELL: Right, because I remember seeing GI tuners at some point that I remembered.
SPARKMAN: Yes. Bill Hamlin was the man that owned the patent on converters, which we subsequently picked up, an acquisition in TCI which goes down the road a little ways.
MAXWELL: That's interesting. John always looked for opportunities, we do know that.
SPARKMAN: Yes, yes.
MAXWELL: So how long were you in ... Did you follow John to TCI or did you ...
SPARKMAN: No. I came to TCI about the same time that John came on board at GI. I came in '69, and I believe John came in '72.
MAXWELL: I remember when John came in '72.
SPARKMAN: Of course I knew John all that time. So I joined TCI in 1969.
MAXWELL: I think when I first met you in about 1970 or so. Bob Magness, of course, created TCI and was running it. If I remember, you were in operations with Bill Brazeel.
MAXWELL: That's right, because I remember I think Bill first introduced me to you in those days.
SPARKMAN: Yes. When I first came on board at TCI, Bill Brazeel – I worked for Bill Brazeel or with Bill Brazeel actually. At the time I came on board in 1969, TCI had 56,000 cable subscribers.
MAXWELL: And how many subscribers did TCI when you finally sold it to AT&T?
SPARKMAN: I believe directly and indirectly in the 18.5 million.
MAXWELL: What's the compound growth rate of that? I wonder what it is. We'll have to work that backwards.
SPARKMAN: A lot.
MAXWELL: A lot.
SPARKMAN: An awfully lot.
MAXWELL: When I first met the TCI folks, I met Bob and you guys, it was almost a family business or it felt like that with the way Bob ran it. Betsy was here, and you were just beginning to show some growth in those days by accumulating other systems.
SPARKMAN: Yes. We bought a few systems. I think our first large acquisition was the systems of Foot, Cone, and Beldon which included Pueblo and several other areas. From there we just kept going.
MAXWELL: It never did slow down, did it?
SPARKMAN: Actually there was a time in 1971 – 1972 when it slowed down considerably. It was a time like, frankly, quite like we're experiencing today except there were some other factors that were even worse than we are today. There was no money to be borrowed. The credit lines had all dried up. The interest rates were climbing at an astronomical rate.
MAXWELL: 18%, 19%, and 20%.
SPARKMAN: 18% - 20% interest rates. As a matter of fact, there was one point in time when our interest payments at TCI were more than our total income, which was very difficult to run a company that way.
MAXWELL: I can imagine. Was John here by then?
SPARKMAN: That was about the time John came on board to help us see if we could straighten it out. Anyway, we prevailed through all of that, and fortunately the bankers were, in most cases, cooperative. Therefore, we grew through that. Then by 1979, we had grown to about 550,000 cable subscribers.
MAXWELL: For people who don't know today, in those days cable systems were relatively small, scattered, not so urban, and they weren't what they are today which is everybody subscribing to television.
SPARKMAN: Practically no urban systems, as a matter of fact. I think, at that point in time, if you did the average cable system, they were somewhere in the neighborhood of 1,500 – 2,000 subscribers. I think today's average is up in the 8,000 – 9,000 to give a kind of thumbnail of what it was then versus now.
MAXWELL: That sounds right.
SPARKMAN: They were small systems. We were a small system cable operator, mainly in the Mountain Time zone for many years until we started expanding off.
MAXWELL: You did some of the early things to connect those systems, too. I can't remember the name of the microwave company.
SPARKMAN: Western Microwave.
MAXWELL: Western Microwave.
SPARKMAN: That was done by Bob Magness actually prior to both John and I coming on board. Bob Magness and Larry Romrell actually were the two who put the microwave systems across Wyoming and Montana, mainly to bring the Salt Lake City signals to Montana which frankly made the systems in Montana and Wyoming very, very successful operations. They were key to the operations of those systems.
MAXWELL: Where was the first system ... Were you out of the Denver headquarters the whole time?
MAXWELL: So you had operational authority. You ran operations, in effect.
SPARKMAN: Yes I did.
MAXWELL: And made sure that things got installed, that systems got upgraded, and so on. It must have been interesting going from the ... I do remember an early TCI system I saw that was sort of "left over". No it wasn't. It was a TelePrompTer one, one of the few they had up in Montana that had paired wire still, three channels.
SPARKMAN: That's what we call open wire cable. There's an interesting story on the side line on that. In Vernal, Utah where TCI owned the cable system, we had an open wire line running ... It was very low resistance and the signal would go along ways without amplification. Anyway, we also ran power up them, and we had 440 so we could get enough amperage. A horse got in it and was killed. We always talked about the horse we owned at TCI. It was rather an expensive horse.
MAXWELL: I'll bet that was an expensive horse!
SPARKMAN: But, yes, the open wire cable was used in a lot of cable systems, especially in the mountain areas because they would put antennas on top of the mountains and run the open wire cable off, not as low as fiber, but pretty low loss. Therefore they could run it a long ways.
MAXWELL: There wasn't a lot of interference in the air in those days.
SPARKMAN: No there were not a lot of TV stations out there, so it worked well.
MAXWELL: I bet changing that stuff out was fascinating.
SPARKMAN: Very fascinating.
MAXWELL: The construction effort of moving ... Cable has a history of having a capacity level. It gets filled. The capacity grows. It gets filled. The capacity grows. It's always that ying yang of content versus the conduit you've been putting in the fields and into people's homes, so that must have been an interesting thing to watch.
SPARKMAN: Very much so. When I first became involved, if we could get three channels, mainly the networks – the three networks existed at that point in time in the '50s – if we could get the three channels on a cable system, we felt we had all the service we needed and we would ever need. I've said that many times in my time in the cable industry. Frankly, the amplification, unlike what they are now, Jerrold had what we called strip amplifiers. Each of them were single channel. You would come into the amplifiers, then go into each individual one, and then come out the other end, marry them back together, and go on down the line. It was an interesting way of building a cable system. You couldn't go very far between amplifiers.
MAXWELL: No, I bet not.
SPARKMAN: At that time we used what was called coax cable and not the coax cable that we've used in the last 25 years. The loss factors in it were very high.
MAXWELL: Were they not shielded the same?
SPARKMAN: They were shielded the same, just a different configuration that frankly they just didn't have the ... The loss was much higher. We would actually go into the customer's home with what we called a pressure tap. We'd clamp a device around the cable and screw in a tap. It would go in and touch the center conductor. You'd hook a piece of 59 and run it into the house. It was very simple, but it worked well.
MAXWELL: Not like today.
SPARKMAN: As a matter of fact, there was a point in time, for many years - and this is what I think was one of the things that caused the cable industry to start growing – was that for the first time in the development of an industry, the rural areas were getting more television service than the metro areas. For a long time, as you have lived in the Denver area for a long time, you'll recall there was only three channels in Denver, period. Finally an independent then a few more channels came on. But you would go to Wyoming and they would have channels out of Denver, channels out of Utah, and on and on. So they had a lot to choose from comparatively speaking.
MAXWELL: We called those distance signals in those days. One of the things that continually has happened to the cable industry is Washington finds us every once in awhile. One of those things was the distance signal rules that came in the early '70s, '74, '75.
SPARKMAN: Early '70s. Exactly.
MAXWELL: I don't remember for sure, but I remember that we had leap frog. The rules were arcane and very interesting.
SPARKMAN: Yes. As a matter of fact, it was another move, frankly, by competition and government. To back up just a moment – the cable industry, at the time, was thought of in Washington DC as a bunch of rebels and cowboys.
MAXWELL: In Bob Magness' case it was true.
SPARKMAN: It was true.
MAXWELL: He was a cowboy.
SPARKMAN: But they really kept trying to find ways to stifle us. They'd throw a rock on the road and we'd either go over it or go around it. The broadcast industry, which in retrospect if they had thought it through would have owned the cable industry from the get-go, they decided to fight it rather than to join it. By the fact that they pressured the government into making rules to stifle cable, in turn they stifled themselves because of the rules, they were unable to own cable in their own cities. Therefore, it left the door open for companies like TCI to go in. It was a matter of time until public pressure said "There will be no more of this controlling signals." Therefore, via microwave, we had brought the Los Angeles signals, for example, all the way into New Mexico, all the way into Colorado. There was a lot of services being moved around. It was a matter of being able to deliver the things to the people they wanted to watch – sports, movies, and so forth. It worked out well.
MAXWELL: It changed viewer habits, that's for sure.
MAXWELL: Importation and the moving around of the independent signals especially began the deterioration of the ruling by the networks. That's for sure.
SPARKMAN: Exactly. The independent stations ...The one that really helped us move into the next level of cable was Ted Turner with TBS out of Atlanta. When he put that on satellite, ... There's an interesting story. When Ted was trying to raise the money to put this on satellite and move it around the nation, he was going around making presentations to all of the major MSOs at the time. He came into our office, and he had been to several others before he got there and been turned down. He started his presentation to us. He was into his presentation, and we knew what the value of an imported independent, and especially an independent with sports on it, would be. So we were very interested in getting into this with Ted.
MAXWELL: Did he have the Braves all the way back then?
SPARKMAN: Yes he did. He had the Braves and the Hawks.
MAXWELL: But he didn't own them but they had a license.
SPARKMAN: He had a license for them and a license that he could move anywhere. He could take them anywhere.
MAXWELL: Right. There was no restriction.
SPARKMAN: Exactly. So anyway, about half way through his presentation, he had himself so worked up, as you know Ted – he was walking around the room and we were wearing out the swivel in the chairs following him. Ted says, "The hell with you. I'll do it myself." Then he walked out.
MAXWELL: Didn't even finish the presentation?
SPARKMAN: Didn't even finish he presentation. He said, "The hell with you guys. I'll do it myself." And he did.
MAXWELL: And he was right.
SPARKMAN: And he was right. There can be people critical of Ted, but I think Ted a big, big factor in helping build the cable television industry. Then when he gets into CNN, I mean, ...
MAXWELL: It changed the world.
SPARKMAN: It changed the world.
MAXWELL: It did. Of course, he followed Jerry Levin at HBO up on the satellite.
SPARKMAN: Yes he did.
MAXWELL: You knew he once owned the wrong satellite.
SPARKMAN: I'm aware of that.
MAXWELL: You're very aware of that, I'm sure.
SPARKMAN: I'm aware of that one, yes.
MAXWELL: But that's a whole different story.
MAXWELL: Not for here. When HBO came along, it changed the dynamics of how you could package and deliver programming. I know you remember all the different crazy ideas about pay TV in those days.
MAXWELL: Can you talk about some of those?
SPARKMAN: Pay TV was a, first of all the most difficult thing was how we were going to control it. We could put it on the cable, and we could deliver it to all the homes, but delivering to the specific homes who were going to pay for became a big technical problem. So we developed traps. We developed a lot of things. But the HBO going on satellite, ... I think it's worth mentioning, I think that most people forget that actually Chuck Dolan was the one who started HBO.
MAXWELL: Yes. Nobody really forgets that.
SPARKMAN: Frankly I don't know the processes of how it happened to end up as it did with Time. But HBO was really the beginning of the differential between cable and regular broadcast television. Very frankly, HBO really terrified not only the broadcasters but Hollywood. So it brought us an entirely new political enemy, if you will, in the sense that Hollywood was afraid that it was going to kill all the theaters. It did have some impact, I'm sure.
MAXWELL: It did. It had an impact as it would come to towns, on movie ticket sales. It actually did.
SPARKMAN: Yes. It actually did. So that's when specific rules started being set up by the producers in Hollywood in the sense that they would not release anything to HBO until it had gone through its entire theatrical presentations and so forth and so on. Even then, it was a big, big service for us. We started launching HBO in - I can't remember the exact year. But when we started launching HBO, we were launching at least one, sometimes three, systems a week. For the first year we launched, I was at every launch. It was a killer, but it really worked well.
MAXWELL: All those 10 meter dishes are ...
SPARKMAN: Yes, yes.
MAXWELL: I helped put the one in at Vero Beach with Dick Jackson.
SPARKMAN: The first one we put in was in Minot, North Dakota. It was the beginning, to me, of the really legitimacy of cable in the sense of public opinion. No one could say that the only thing we survived on was signals we stole from the broadcasters. That was used so many times, and even one of our past vice presidents and presidential candidates made statements about how the cable industry was stealing it even from the satellite because he forgot that the private industry put up the satellites. But anyway that was another issue.
MAXWELL: In dealing with customers in those days, because up till then you were delivering what people in big cities took as a given – television signals – so people weren't against paying or anything, but it was always a problem of value versus what you're charging. HBO changed those economics radically.
SPARKMAN: They changed them radically. For an example, even when HBO became a factor, when they started, our monthly service fees in Montana, for example, were in the $4 - $5 range. We had some systems that were $3.50 a month per subscriber. Clearly, it doesn't take an economic genius to figure out that you don't do a lot of work and upgrades on that kind of income. When HBO came along, we were charging, in some cases, more for HBO on a per month basis than we were for all the other channels.
MAXWELL: If I remember, it started at $5.95 and $6.95, right?
SPARKMAN: Yes. And so subsequently it became a value issue with some of our customers because, for example, we'd have 10 channels on a system that we were charging $5 a month for. We'd bring HBO in and we'd want to charge $6.95 a month for. People would say, "Well, how can you charge that much for one channel when we get ten channels for this?" Very frankly, as a marketing ploy, I started raising the price in some of the plants, and I'd raise the price far enough on the basic service that my HBO penetration would go up because it no longer became a value issue.
People, in some cases, ... I shouldn't say people – I think cities – and for political reasons, would continually talk about us charging for signals that were free. And they are free if you take them off the air.
MAXWELL: If you deliver them to the house ...
SPARKMAN: If you can't get them off the air and you have to deliver them to the house, then they would never acknowledge the fact that we spent money on the wires and cable and maintenance on the cable, and on and on and on. It was a political issue more so for the politicians than the people.
MAXWELL: I think we were all seeing that.
SPARKMAN: I've been to many, many city public hearings on rates and whatever, and have one or two people in the room. The first thing I always did when I was able to ask the people questions who were testifying, I would ask if they were a cable subscriber. You would find the majority of the time they weren't – the ones who were complaining about the rates – which was rather interesting.
MAXWELL: That is interesting. That's a very interesting point.
One of the things, ... By the way, it was '75 when the satellite went up.
SPARKMAN: That's right.
MAXWELL: And rolled out that fall, the first ones, which was a lot of fun actually in those days. It was bringing space age to small towns. You got a lot of mileage off that kind of positioning. But all that time, TCI was growing.
SPARKMAN: We were growing. And through that time, and from the time the satellite, we started acquiring companies, not on the basis that we acquired when we were ... after '80 – which I'll get to in a moment. But we were acquiring, we'd fix the ones we would acquire, and then when we got that one so that we had it, we would go borrow money on that one and go buy another one.
SPARKMAN: In 1979 at the Anaheim Cable Show, that was the first year that there was a lot of programmers who showed up.
MAXWELL: Right. That is the first year.
SPARKMAN: So John and I had many, many meetings at that show, and companies that we talking ??? We were on the way to an investors meeting at about 6:30 AM to be there at 7:00. John said, "Are you seeing what I'm seeing?" I said, "John, we got a choice." He said, "We got a choice. Either we get big or get out." So we never went tot he meeting. We went back to the hotel, checked out, came back to Denver and had a meeting with Bob and presented Bob with what we thought. Bob agreed. At that time we had 550,000 cable subscribers in round numbers. We took off. My words to John and Bob and Donn Fisher were, "If you guys can buy them and finance them, I can fix them." So we started doubling the size of the company every 18 months, and we did that for several years.
MAXWELL: The 80's were when CNN launched.
SPARKMAN: That's right.
MAXWELL: And that's when MTV launched.
SPARKMAN: That's right.
MAXWELL: The value proposition for the customers changed too.
SPARKMAN: Changed dramatically. If you recall MTV launch, it was a free service till we got everybody hooked. Then they started ... not "we got everybody" till they got all the cable operators hooked. Then they started charging us big time. But that was another issue. We started buying several companies and getting systems in larger and larger towns. Then in the 80's with the satellite issue, the early 80's, the franchising frenzy started. I will tell you that we at TCI applied for most of them. We won virtually none because we were somewhat practical in our approach. When we would lose we would generally celebrate for losing because some of those franchises, people bet the farm on.
MAXWELL: I know. You also learned a lot about each of the cities while you were scouting them.
MAXWELL: In the years as cable grew and the politicians paid attention here or there and other times, I remember in particular an incident that you and Bill Brazeel actually allowed me to tag along on. It turned out to be one of the more infamous events in cable's history. But cities got into the habit of demanding more and more and more. TCI wasn't very happy about just going along to get along always. Can you tell me about the famous turn off?
SPARKMAN: Yes. You're talking about Vail.
SPARKMAN: Yes. Actually what happened, the city of Vail demanded certain things in the franchise.
MAXWELL: It was up for renewal, right?
SPARKMAN: It was up for renewal, but it wasn't quite expired yet, but it was up for renewal. It was totally impossible, economically, to work with what they wanted to do. So we said, "We cannot do that." So the city council called a city council meeting and without public hearing, without any due process, cancelled our franchise. The lawyers came into my office and said, "You can't operate that system in the state of Colorado without a franchise. It's against the law." So I said, "Fine. We'll take care of that." That's when Bill Brazeel and I and you left for Vail. This was in mid-afternoon. I had some technicians meet me at the headend. Actually what we did is ... At that time we had a weather scan and we put a card on the weather scan saying "If you wonder why your cable system is turned off, call the city manager or the major." And we put their phone numbers there. We putt that on all channels. Then we shut the system off, and it was just ten minutes into the movie Bullitt. Then you and Bill and I proceeded to go downtown to have dinner and waited.
MAXWELL: We didn't wait long.
SPARKMAN: We didn't wait long until the mayor came storming into this place looking for us.
MAXWELL: I think we had our drinks just served when John Dobson came.
SPARKMAN: Yes. I said to him as you probably recall, "We cannot operate a cable system without a franchise in the state of Colorado. Until you reissue us a franchise, we can't turn the system back on." He said, "I'm giving you your franchise back." I said, "I don't think you can do that." That was on a Friday, I believe. The system was off over the weekend. Monday they called an emergency council meeting and gave us our franchise back, and we turned the system back on.
MAXWELL: But they missed a Broncos game on that Sunday which caused enormous consternation in the Vail Trail, the paper.
SPARKMAN: Yes, yes. It was not something that we wanted to do. It was something that created problems later with new rules out of the FCC and whatever. There was a complete over-reaction by a lot of people, but no one wanted to listen to the fact of why we couldn't operate in the state of Colorado without the proper authority. We had no authority to operate there. So we had no choice but to shut it off.
MAXWELL: We did have a good dinner though.
SPARKMAN: It was a good dinner.
MAXWELL: That's going into cable's lore these days. I remember we did a big spread on it in TV & Communications Magazine, the trade journal that I worked for back in those days. It was an interesting experience. But legally, there was simply no question. Right or wrong, the city council yanked the franchise.
SPARKMAN: That's exactly right.
MAXWELL: They thought they were holding that over your head.
MAXWELL: It turned out the other way around.
SPARKMAN: Some people need to think where they're going sometimes, I guess. And the other side of it too is that we didn't always do everything right in the cable. But that was one where I felt totally right and had no choice - the only system we ever shut off actually.
MAXWELL: It's the only one that ever did get shut off.
SPARKMAN: Yes, yes.
MAXWELL: ... for reasons like that. Channels have been yanked before, recently even. But that was an interesting time. I must say that Vail wasn't quite as antagonistic after it got back on. And you guys did spend some money upgrading there.
SPARKMAN: Of course we did. We brought some more signals in via microwave because they decided that maybe if we were going to do all those things, we should have a rate commensurate with what we were doing. So they did that properly. Then they got everything they wanted. As I told them many times when we were trying to get the franchise, "We'll do anything you want. You just have to pay for it."
MAXWELL: An interesting concept.
SPARKMAN: Yes, very interesting concept.
MAXWELL: As you were acquiring a lot of companies in those years, I remember one that you got from, as we fondly called him in Golf & Devour, which was from Golf & Western, Charlie Bludhorne would go in this direction for awhile and change. You picked up a company called Athena, which you reminded me of the name. But that had a great second act.
SPARKMAN: the second act was a big, big help to TCI. Actually we paid, I don't remember the exact figure, but something like $15 - $20 million for the Athena properties. They had some good properties. It turned out to be very good properties later. Anyway, in the archives of that, Athena had been the owner of some Resorts International stock. When there was allowed to be casinos built in New Jersey, Resort International ended up with one of the franchise for building a casino in New Jersey. That stock, which was worthless at one time, all of a sudden became worth about $35 million. That was a big, big, big life to TCI at a time when we needed the cash. It gave us the opportunity to move on down the road and buy some more.
MAXWELL: That was a serendipitous piece of acquisition in that case.
SPARKMAN: Yes, it was – very much so.
MAXWELL: So in the 80's you mentioned that TCI began almost doubling every 18 months or so, sort of like Moore's Law for cable in those days. That must have been an interesting thing to try to assimilate all those different companies.
SPARKMAN: It was devastating sometimes. It was a time when, frankly, I would go many, many weeks at a time without a day off because as we would buy these companies, we would go in. I had what I called a transition team made up of some very, very good operating people. We would go in and we would do whatever necessary changes to bring them into what we called the TCI family fold and TCI policies. We would move very quickly. Sometimes we were closing as many as two companies a week. Therefore it really was a hard time. But we were able to accomplish it and frankly we paid anywhere from 8 – 12 times the cash flow of the companies, buying them through those times.
My job was to make sure that within six months time, they looked like we paid under five times cash flow for them. We were able to accomplish that with the team I had in every case except one – that was the Storer acquisition. As you are aware, that was a different kind of a structure and frankly it took about 15 months to get that there. But with that, we were able to build a base in TCI that was very solid, a very solid company with solid fuel management. We clearly did not have enough people to go into every acquisition and change all the people out. Generally, the only people that left were the top people. The other people we were able to convince tem that they would have a better life with us doing it the way we did it. We had, as you're aware, a very, very strong, happy group of people at TCI. They worked very hard. They built an incredible company.
MAXWELL: You did another thing in those years too. You created some partnerships with some damn good operators too.
SPARKMAN: Yes we did.
MAXWELL: This allowed you to jointly control some cost that helped everybody. But some very, very good cable operators were involved in that. One of them that comes to mind is Bill Bresnan.
MAXWELL: As you know, Bill Bresnan is a very, very dear friend of mine. I've had a great deal of respect for Bill ...
SPARKMAN: He's about to be back.
MAXWELL: - I know - ... since the time when he was running the system in California, in Palm Springs. But anyway, when Bill left American Cablevision, when they sold out, he came to us and we partnered with Bill and Bill was a good operator. It was just a matter of ... because Bill did it all. He did a good job. We had a lot of partners in that light. When we felt that we were stretched far enough, management-wise, for awhile till we needed to catch up, that we would move into the partnerships to grow. It worked out very well.
MAXWELL: It did really.
MAXWELL: Some of the companies involved, I know, were big contributors to the whole culture of the place. So when you were still at TCI, you retired ...
SPARKMAN: Six years ago.
MAXWELL: Six year ago. The Bell Atlantic, you were still there then weren't you?
MAXWELL: You watched that fall apart. That couldn't have been that disappointing.
SPARKMAN: Yes and no. It was a value issues. We felt that it was going to be good value to the stockholders and whatever. Also, looking on down the road, we knew the businesses would be coming even more capital intensive because of the things we felt were going to have to be done. When we looked at the two cultures, and we really figured very quickly that there was just no way that the cultures were going to marry and work. We could see it happening that it was just not going to work. At first I was excited about it because, frankly, I was getting tired of running 80-90 hours a week. That's what my job entailed. I felt this might give me some relief. But frankly, two things happened. We felt the cultures were going to be difficult. Then I think Bell Atlantic figured out that when the smoke cleared, we would be in control.
MAXWELL: I know that the due diligence team took up the entire Hyatt across from the offices at that time. I thought that was an entertaining thought all by itself.
SPARKMAN: Yes it was. It was quite a time, quite a time.
MAXWELL: You were gone though by the time AT&T, not fully gone, ...
SPARKMAN: I was still on the board. I was involved to some degree on the board. I was there when the AT&T thing was going on.
MAXWELL: So were those cultures that different that you didn't think that would not work?
SPARKMAN: Well, I anticipated some problems...
MAXWELL: I think everyone would.
SPARKMAN: ... in putting together the cultures and there have been some problems. I think like I discussed with you, I've had people talk to me and really searching and digging for me to be uncomplimentary or critical of AT&T.
MAXWELL: It doesn't make sense.
SPARKMAN: It makes no sense because, frankly, I look back on it. Going back, as we've talked to this interview, I started at TCI when there was 56,000 cable subscribers. I grew up with it. So, yes, I had control of it. And as you know, I had very good control of it. But I knew where everything was.
MAXWELL: I think you hid half of it.
SPARKMAN: The complexity of it was something that didn't bother me because I didn't pay any attention to the complexity of it. It is a very complex, hared thing to run. It's not something that you turn the page and someone who it totally unfamiliar with it comes in and is able o pick up the ball and run with it that well. It takes time. It takes time and unfortunately as time goes on, a lot of money gets spent.
MAXWELL: Yes it does. After you left TCI though and it became part of AT&T, you got really bored sitting around. I know well. So what have you been up to in the last few years?
SPARKMAN: I serve on several boards in cable as well as manufacturing, programming. I started a couple of small companies, sold them. About 1 1/2 years ago, the company that my son was with became for sale. We put together a group and bought that company. So now I'm ... Then we bought a couple more companies here in the U.S. and bought a company in the U.K. and are looking at some more companies in Europe and so on. I guess I'm back in the throe, if you will, and I'm not running 80 – 90 hours a week, do not intend to, but it's a lot of fun. I'm an avid golfer. I play a lot of golf. Golf is not the only thing I like to do. I enjoy building companies. I'm enjoying what we're in now. As everybody's aware, the economic structure of today's world is a tough one whether you're in the U.S. or Europe or Asia or wherever you might be. But I've always looked at bad economic times as times of opportunity, and I'm finding that to be true.
MAXWELL: It's hard to get cable out of your blood, isn't it?
SPARKMAN: It certainly is. You know, I miss the family at TCI, the people. We had some real, real good times.
MAXWELL: Well, we all miss Bob Magness.
SPARKMAN: Bob Magness, you know, had got to be the ... If there was a guy who was going to be king, Bob Magness would be king. He was a man who ... If you didn't like Bob Magness, you couldn't like yourself. The guy was just an incredible man - to put it bluntly, put up with one hell of a lot of mistakes from me – and never raised his voice. He was just a great guy.
MAXWELL: That's a good way to end the interview.
SPARKMAN: Thank you.
MAXWELL: Thank you.