Chapter 1: Keys on the Table CHAPTER 1 KEYS ON THE TABLE I had done this a hundred times before in a dozen different bank boardrooms, and each time the scene was the same: a cavernous, wood-paneled room with a long mahogany table polished to a sheen. Around it sit a dozen or so aging men in starched white shirts and neckties, frowning and looking up periodically from the financial numbers on the documents in front of them. But on this afternoon in 1975, the banks had requested the meeting, not us, and far from a polished boardroom, it was in our brown, flat, single-story office building in the long shadow of the Rockies. I knew this meeting would be different. The past couple of years had been pure hell for both of us. Bob Magness was the chairman of a struggling cable company on the outskirts of Denver named Tele-Communications Inc., and he had brought me in as the new CEO two years earlier. TCI had been a bright young star in the rapidly growing cable television business.

We were hanging coaxial cable across the country to provide rural areas with better reception of broadcast signals from CBS, NBC, and ABC, and eventually hundreds of new TV channels and the internet. One day, this would lay the foundation for the largest cable operator in the U.S., serving one out of every four homes, and give rise to a robust, two-way digital communications network in the U.S., providing the platform for the likes of Amazon, Facebook, and Google, and unlocking immense value in a new digital economy. Bob and I had no idea of any of that potential back then. That morning, we merely were hoping to survive the day.

Bob, a World War II vet and part-time rancher and cottonseed broker, had launched his cable company in Memphis, Texas, in 1956, after a chance conversation with two strangers in a cotton gin, where Bob did business. Sold on the idea, Bob and his loving and loyal wife, Betsy, sold their cattle, mortgaged their house, and jumped in. He and a small team of friends started climbing telephone poles and hanging wire, with Betsy stationed at the kitchen table as head of accounting. Several years later, Bob moved operations to Denver and took TCI public in 1970. When I first accepted the offer to come work for Bob, the pitch was solid: Come out West and run one of the largest cable operators in this new industry! Long-term contracts to wire big cities were worth millions of dollars. This set off a land grab across the country, and TCI had taken on crushing debt to finance furious growth. Around this time, TCI reached more than 621,000 subscribers through 151 systems in 33 states, with annual revenue around $34 million a year--and $84.8 million in debt.

Almost immediately after I arrived in 1973, several things started breaking the wrong way for us: oil prices quadrupled, the inflation rate shot up to double digits, and interest rates skyrocketed to 12 percent in July 1974, more than doubling borrowing costs year over year. That hit the cable business especially hard, because for us more debt was like rocket fuel. The variable cost of stringing wire from pole to pole above ground had doubled, thanks to new regulations and price increases from suppliers. In big cities, where cable had to be buried underground, the costs could run as high as tens of thousands of dollars per mile. Now the banks were balking at any more lending, yet we already had pledged TCI to pour half a billion dollars into new construction to win cable franchises from local governments in Tennessee, Washington, and elsewhere. On top of that, in return for franchise agreements to operate there, we had inherited promises made by systems TCI bought to build community centers and parks. Despite healthy revenue gains and operating margins of 40 percent, our debt was closing in fast, and for the first time in my career, I was scared. To consolidate the loans he had already accumulated, Bob had drawn a $77.

5 million bank line of credit in 1972, just before I joined. And we had borrowed $76.5 million of it. A week earlier, I had called a loan officer to arrange the meeting where we would ask to borrow the final $1 million. Before I could even get the words out, he cut me off. His tone on the other end of the line struck me as a little rude: "By the way, don''t ask for that other million. If you don''t want the house of cards to come down, don''t ask." What was I thinking? I was educated at Yale, I had worked in the most famous laboratory in the world at Bell Labs, I had trained at the fabled McKinsey & Company, and I had been CEO at Jerrold Electronics, the dominant (and highly profitable) supplier and financier to the cable industry.

I had turned down a plush job with an absurdly big salary in New York, with a car and driver, to take this job instead. I had joined a bunch of cowboys and a near-bankrupt former cottonseed salesman who had bet his farm, literally, on a newfangled business called cable TV. I had uprooted my family, moved across the country, and taken a pay cut--on a promise. I had risked everything. I even had taken out a $60,000 loan from the Bank of Denver to buy TCI stock at $7 a share when I joined--a year later, the stock had fallen to $3, weighed down by high interest rates, wild inflation, and an unrelated industry scandal, briefly bottoming out at 78 cents. My start date at the company should have been my first clue: April Fool''s Day. We were minding every nickel at the office, and my wife, Leslie, and I were counting pennies at home, using coupons at the grocery store, never eating out, and going for a month without a home phone at one point. The vise grip of home and work was squeezing my brain.

We had already started slashing salaries at the office, and we were doubling up in hotel rooms and flying economy to every new city. I had not expected this. The worst, though, was that I wasn''t the CEO people had expected me to be, the father I had wanted to be to my kids, or the husband I had promised to be for my wife. In honest moments, Leslie would let her frustration show: "You promised me after McKinsey and Jerrold you''d be home more, and that we''d have dinner together like a family, and you''re not, and we don''t." As we waited for the bankers to arrive, I realized that this one meeting would determine the fate of the company, our employees, and my career. The imminent risk of losing the company and going bankrupt was an existential threat that had resurrected old demons of self-doubt, particularly the fear of letting everyone down. As the bankers arrived, they fanned out around the table in our cramped conference room. The only friendly face among the gaggle of them was that of Donne Fisher, our treasurer at TCI, and he looked like a man in the back of a long line at the DMV--irked and impatient, yet keeping it all in check.

I opened the meeting with an introduction heavy on promises and light on numbers, because I knew the numbers couldn''t save us. Then Donne and I left them to deliberate privately. Bob walked into my office and asked how things were going. He still looked every inch the laconic cottonseed salesman he had been a decade earlier, with a molasses-slow Texas drawl and dressed, almost always, in a white Western dress shirt, a bolo tie, and a cowboy hat that was perched atop neatly combed white hair. As Donne and I gave him a read on the room, he just stared off into the distance. In Bob''s eyes I couldn''t tell if I saw fear or despair that afternoon, maybe a bit of both. He was genuinely stoic, as if he were witnessing an accident in slow motion. In many ways, I guess, he was.

The first thing the bankers decided was that one of their members had to leave: the representative for the Teachers Insurance and Annuity Association of America, which had different agreements than the banks; he was now regarded as being too close to the company. The man walked out of the meeting, stunned and a little stung, and joined Bob, Donne, and me. As we were all sitting on a couch waiting in my office, with the clock literally ticking, Bob finally stood up and said to no one in particular, "I can''t take it anymore. I''m leaving." And he drove home. After an eternity, representatives of two of the largest debt holders, the Bank of New York and Philadelphia National, came to my office. Donne and I looked at each other, then looked at them. Tom Renyi, who would later become the CEO of the Bank of New York, revealed the verdict.

"Well, the banks have conferred, and we''re prepared to give you the extensions that you''ve requested," he declared. And then came the sucker punch: "However, we think because of the deteriorated nature of the credit, the banks are entitled to an increase in the interest rate." The damned fool. When I heard those words, I knew it was over. I lost my breath and felt my skin go numb. "Tom," I said quietly, "I was afraid you were going to say that. I''ve got every knob in this company turned down as tight as they''ll go." Then my voice started to get louder.

"We''ve got people working sixty-hour weeks and getting paid for thirty. We''re working overtime to just get over this hump. And that''s all it is--a hump. dWe can get over it." I sounded like a gambler with a hot tip. "But if you do this now, it will kill us," I continued. "It''ll so demoralize everyone. I just can''t continue to run the company if you''re going to do that!" "And so if you think you can extract this little bit more juice out of the company.

here''s the keys to everything." I pulled my ring of office keys out of m.