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

by Mark Robichaux

For two decades he had relentlessly driven himself and his wife, Betsy. They had started out with a single cable system in Memphis, Texas, that they had built themselves, and they had ultimately assembled a company with more than 200 cable systems in the top 100 markets.' Magness had done it by constantly doubling up on his bets and accumulating a mountain of debt, always gambling that Americans' hunger for this new thing called television would permit his company to grow fast enough to stay ahead of the bill collectors. For most of the previous two decades, this upstart approach had worked-but now Magness was in trouble. Debt threatened to cripple, or worse, destroy the company. It was 1972, and in just a year Magness had nearly doubled the size of TCI, which now had $19.2 million in annual revenue. Its debt load was at an obscene level for a borrower of its size: $132 million, or about six and a half times total revenue, when it should have been a fraction of that. In one year, TCI's stock had fallen more than 50 percent because of its ailing finances. If Magness didn't do something dramatic-like land John Malone to lead him out of this mess-he was in danger of losing TCI to a hostile takeover, or worse, to those bastards at the banks.