Cable Cowboy: John Malone and the Rise of the Modern Cable Business

by Mark Robichaux

But cash was in short supply, and Magness was always on the hunt for more. He quickly realized big banks hadn't a clue where the flyspeck towns he served were. Bankers had to ask for chamber of commerce brochures of the cities TCI wanted to wire, and they wanted to know details like exactly where on the map the city of Ogallala, Nebraska, could be found. TCI had started out buying or building systems in the West, wary of spreading itself too thin, but soon Magness realized that to tap the money markets back in New York, he needed to start operating cable systems back East; then the bankers would know what this new cable business was all about. By 1968, TCI had tapped a healthy new vein of capital: insurance companies. In exchange for an initial loan of $10 million, Teachers Insurance and Annuity Association received a slice of TCI through warrants and convertibles. Like many cable TV operators at the time, Magness financed the construction of his systems through his equipment supplier, Jerrold, which had access to money when few cable companies did. Jerrold loaned customers like Magness what they needed, taking notes that essentially were promises to pay back the full amount.