I finished reading a second biography on William Richard “Billy” Wilkerson’s life. Unlike the first one, this one detailed his entire journey until his death in 1972. It also focused more on what led to his founding The Hollywood Reporter and his various entertainment and restaurant ventures.

I shared many of my concluding thoughts on Billy’s journey in an earlier post after reading the first biography. This post is about additional insights from the second biography.

How Did Billy’s Earlier Years Impact His Journey?

The death of his father led to Billy working in the film industry. Over roughly fifteen years, he worked in various roles at various companies in film production and distribution. He also managed his friend’s nickelodeon (i.e., theatre) and sold ads and wrote for a motion picture trade paper. These years of experience schooled Billy on the industry from various perspectives and led to key insights about himself and the industry. First, he was an entrepreneur and wanted to be his own boss. Next, the owners of movie studios amassed more of the industry’s profits than anyone else. Last, trade publications could wield immense power over an industry. These three key insights shaped his trajectory.

Billy’s first wife leaving him scarred him deeply. He was married five times. He wasn’t particularly close with wives two through four because he put his work ahead of them. Only after he had children with his fifth wife did he make spending time with his family a priority.

How Did Billy Become So Successful?

This book details Billy’s questionable actions and associations with criminal figures. It painted a picture of someone who didn’t mind using illegal means to accomplish a goal or obtain wealth. Partly this may be a sign of his time and place, but it’s clear that Billy’s comfort with doing things that weren’t aboveboard led to financial success and outsize influence. Billy was willing to do things and go places others weren’t to get what he wanted. This approach came with a cost. Billy went into hiding in Paris to avoid being killed by Bugsy Siegel, he owned several bulletproof cars, and his house was stocked with guns.

Billy was driven to succeed by hatred for movie studio bosses. Movie studio heads ran monopolies and operated similarly to robber barons. Billy felt wronged when they didn’t give his film a chance and held that grudge for decades. His desire to topple the studio bosses fueled his passion to make the Hollywood Reporter successful and dismantle what he viewed as an unfair studio system.

Billy was naturally gifted at understanding the psychology of the rich and famous. He repeatedly used this understanding to create content in the Reporter and numerous successful entertainment and dining venues that resonated with this group and made them want to be associated with Billy.

What Kind of Entrepreneur Was Billy?

Billy was a founder who enjoyed taking an idea from inception to an operating business, but he got bored easily and didn’t enjoy managing businesses. He ruled with an iron fist, which wasn’t uncommon for that period in history. This book highlighted Billy’s ability to weather massive misfortunes. Billy refused to be taken out of the game regardless of what life threw at him. He simply took the hit and kept going.

What Did I Learn from Billy’s Journey?

Billy’s journey is a cautionary tale. He had outsize success and impacted the movie industry, but the costs of operating unethically were high. His relationships, personal and professional, weren’t healthy. He was hated by many people whose lives he harmed. And the book never described a man who lived a happy life.

Billy had an outsize impact on Hollywood and Las Vegas. He was a complex man who lived a complicated life. Anyone interested in learning more about Billy or old Hollywood may enjoy this book.

In 1938, William Richard “Billy” Wilkerson and Edith divorced. Once again, Billy wasn’t single long. According to the biography I’m reading, he met Estelle Jackson Brown in October 1939, and they were married by December 1939. Billy’s personal life was stable again, but his business empire was shaky. He’d sold Café Trocadero so he wouldn’t have to pay bribes anymore, and California cracked down on vices like gambling.

Billy wasn’t the only one with business problems. Joe Schenck began having trouble coming up with $100,000 in cash for Willie Bioff every month to avoid unions striking at his 20th Century Fox. In early 1939, he gave Bioff a $100,000 company check, knowing that if the gangster deposited it, that would be enough evidence for authorities to bring Bioff down. Schenck alerted authorities to the deposited check, which instigated an FBI investigation. Schenck had opened Pandora’s box.  

With investigators’ scrutiny heightened, Schenck convinced Billy to revamp his new investment, Arrowhead Springs Hotel, three hours from Hollywood in San Bernardino. Billy agreed and turned the hotel into an exclusive getaway for the rich and famous. Unable to shake his old habit, he introduced gambling, which exploded in popularity. It was so popular that U.S. Marshals raided the hotel and shut it down.

In April 1941, Schenck was convicted of tax evasion and faced three years in prison. He agreed to testify against Bioff for a reduced sentence. In May 1941, Bioff was indicted for tax evasion and extortion, but he turned the tables. He entered federal witness protection and agreed to spill everything he knew to have all charges dropped. In 1942, Schenck began serving eighteen months but was released in four months after favors were called in. In December 1943, Johnny Rosselli was convicted of extortion and sentenced to ten years. The Hollywood Syndicate had collapsed, but Billy was never arrested. He narrowly escaped jail, but he couldn’t avoid another divorce. He and Brownie divorced in August 1942.

Around this time, Billy embarked on his Flamingo Hotel project and inadvertently ended up partnering with Bugsy Siegel, which I detailed in posts here, here, and here. In February 1946, Billie met 27-year-old Vivian Dubois at his Hollywood restaurant LaRue. In May they were married in Las Vegas. Billy started expressing his hatred for communism and displeasure that the U.S. didn’t stop Russia and Joseph Stalin from drawing an iron curtain around Eastern Europe. With the help of Howard Hughes, Billy obtained an FBI list of movie-industry people who supported communism. He then published editorials in the Reporter naming these people. Billy was a free speech advocate, but not when it came to communism. The Reporter’s sales increased, and other publications followed suit. Congress issued subpoenas, and studio heads were forced to testify. Billy created an anti-Communist movement. Many people on the Hollywood blacklist lost their jobs or were denied employment, even if they were innocent.

As this crusade was happening, movie studio bosses were grappling with competition from television and an antitrust lawsuit that reached the Supreme Court. In 1948, the Court ruled 7 to 1 that movie studios owning theatres constituted a monopoly. Studios tried to negotiate a compromise with the government, and Billy sensed that he could finally get revenge against the studios. He convinced recently paroled Rosselli, who was angry that studio bosses refused to help him after he got out of prison, to pressure government contacts Rosselli had paid off for years to reject any compromise from studios. The studios were forced to sell their theatres, their revenue declined, and they could no longer lock talent into long-term contracts. Actors and agents gained leverage by forcing studios to bid against each other for their services. After twenty years, Billy had finally exacted revenge on the studio bosses who rejected him and the studio system he hated.

In 1950, Billy and Vivian divorced, and in 1951, he met Beatrice Ruby Noble, known as Tichi. The 24-year-old was a housekeeper at Schenck’s beach house. Tichi became pregnant within a year, and after Billy realized she wasn’t trying to shake him down and medical tests confirmed he wasn’t sterile, the 60-year-old was excited to become a father. The two wed in 1951 and their son was born in October. Their daughter was born in 1953. Billy, now a family man, stopped gambling and started spending more time enjoying his wife and children.

Billy entertained the idea of selling the Reporter, but he decided to keep it. He continued running it in his mercurial style. Going to great lengths to end his partnership with Tom Seward after Seward sued him for paying gambling debts with partnership funds, Billy burned twenty years of business records. He ended up paying Seward $150,000 after much litigation, subpoenas, and search warrants, but he maintained complete control of his empire, which he ruled over until he died in 1962.

Billy was a complicated and flawed entrepreneur. Despite his shortcomings, he had a significant impact on Hollywood and entertainment in the United States. The Reporter is still in existence over ninety years after its founding.

As prohibition ended, organized crime, needing new revenue streams, began looking at the movie industry. Mobster Johnny Rosselli approached William Richard “Billy” Wilkerson about taking over Hollywood labor unions. According to the biography I’m reading, Billy brought in Joseph Schenck, head of 20th Century Fox, and the trio formed the Hollywood Syndicate. The group helped gangster George Browne get elected as the president of the International Alliance of Theatrical Stage Employees (IATSE), and Browne appointed Willie Bioff, also a gangster, as “his personal representative.” If IATSE called a strike, no movies could be produced. The Hollywood Syndicate started extracting a roughly $ 50,000-a-year bribe from each studio.

Around this time, Edith and Billy divorced. Edith was frustrated by their inability to have children and blamed Billy for not paying his 1929 debt to the New York City loan shark when her sister disappeared. Even though they divorced in August 1935, Edith continued working at The Hollywood Reporter until she retired in 1948. Billy was about 45, and he didn’t stay single long. In September, he met 20-year-old Rita Anne “Billie” Seward and married her by the end of that month. Billie’s brother, Tom Seward, became Billy’s right-hand man.

Gossip was a big part of what the Reporter published, and it sometimes led to scandals. This rubbed the studios the wrong way, and they would pull advertising from the publication. Billy’s response wasn’t always aboveboard. Sometimes he’d sell the same charity ad to several sponsors. Billy’s trick was to name only the charity in the ad, not the sponsor, so he could sell the ad up to a dozen times. This and other questionable tactics helped Billy fight back against the studios, and by 1936, the Reporter was known as “Hollywood’s Bible” and was capable of launching or killing careers. The studios had to respect the power Billy wielded.

As Billy’s success continued, he wanted to expand. He viewed London as a rapidly growing film market and launched the London Reporter in 1936. But British advertisers were part of an old-boy network, and Billy wasn’t invited in. The publication failed within five months. Billy next expanded his building and decided to try a new concept in the unused space. He started a high-end barbershop and men’s clothing store called Sunset House. It failed, and Billy lost $250,000.

By 1937, Billy’s marriage was falling apart. Billie wanted to adopt children, but the sterile Billy refused. In 1938, they divorced. That wasn’t the only thing falling apart. The Hollywood Syndicate was having problems with Bioff. Drunk on power, be began shaking down people the Syndicate hadn’t approved. Then he took things to the extreme and started to shake down Billy, demanding 50% of his restaurant profits or he’d have the workers strike at Café Trocadero. He demanded a $100,000 monthly payment from Schenck to avoid a strike at his 20th Century Fox studios. Both men agree to pay, with Billy paying roughly $20,000 a month. That same year, Billy decided he wanted out of the restaurant business and hired gangster Nola Hahn to stage a kitchen fire at Café Trocadero. Billy collected the insurance money and sold the property to Hahn for $268,000.

Billy’s problems were far from over. The secretive Hollywood Syndicate wouldn’t remain a secret for much longer.

William Richard “Billy” Wilkerson arrived in California in 1930 and set up Daily Printers Corporation in July. According to the biography, he borrowed $5,000 and launched The Hollywood Reporter. Printing costs were so high at the time that he bought a printing company so he could print in-house. His wife, Edith, handled administration and customer accounts and wrote much of the editorial copy.

Billy focused on writing a front-page editorial column called “Tradeviews.” It was part gossip and part Billy’s opinions. This column made him famous and would be a valuable weapon. Billy used it to criticize the Hollywood studio system, and the studio heads didn’t appreciate it. They tried to strong-arm Billy into writing what they wanted, but he refused. The studios retaliated and refused to advertise with him until he did as they said.

Billy was focused on providing content that readers wanted, which would grow his reader base. He instructed his reporters to do whatever had to be done to gather information—even go through the studios’ garbage. And Billy knew the studios didn’t treat workers well, so he championed the causes of blue-collar studio workers, directors, and others, which built him a loyal fan base. When newspapers around the country started picking up the Reporter’s editorials, Billy had the power to stop people from going to the movies, which reduced studio revenue.

By 1931, the Reporter was flush with ads and had power over the studios, who realized their plan to crush Billy had backfired. When Billy proved to Metro-Goldwyn-Mayer (MGM) head Louis B. Mayer that 5,000 papers nationwide reprinted the Reporter’s articles, Mayer was dumbfounded. Mayer and other studio heads agreed to yearly ad contracts with the Reporter to keep the peace with Billy. In just two years, Billy made the Reporter the most important film industry publication in Hollywood and was getting revenge on the people who killed his dream of owning a studio.

Billy and Edith missed New York food, and Billy was tired of driving around town for meetings. In May 1933, Billy opened Vendome, a lunchtime restaurant in Hollywood. He stocked delicacies from Europe and even sold European booze under the counter. This, combined with daily ads in the Reporter, made the restaurant the place to be seen by celebrities and the wealthy. It was wildly successful.  

In 1933, President Roosevelt’s five-day bank holiday closed banks nationwide to prevent bank runs. Studios took advantage of this, and MGM forced employees to take a 50% pay cut for eight weeks or be fired. Billy learned about MGM’s plan to make the reductions permanent and wrote a blistering piece in the Reporter backing the writers’ union. Furious, Mayer reversed the pay reduction at MGM. He was so worried about Billy’s power and influence through the Reporter that he tried to buy Billy’s business for $300,000. Billy refused to sell.

Billy didn’t just fight the studios; he also had to fight competition. New York City–based Variety was a successful weekly trade publication that began covering Hollywood in 1933 when it launched Daily Variety. Realizing he could be put out of business by the larger competitor, Billy began a war to stop Variety from getting advertising sales. He even set up a dirty-tricks department to wage this war. The tactics worked and Billy fended off the competitor, albeit with questionable tactics.

In 1934, Billy faced a challenge when his insurance required that the abandoned building he was renting for wine storage not remain vacant. Unable to rent it out or find another use, he decided to open Café Trocadero, a French-themed restaurant and nightclub. To get people to come to the empty establishment, he claimed reservations were booked two weeks out and put velvet ropes outside to make people wait. In 24 months, it had grossed $3.8 million, making it the most successful Depression-era restaurant and nightclub in America. Billy had the Midas touch.

In a few short years, Billy had gone from broke to the upper echelons of entertainment and business by fighting against the studio heads. Billy was about to take his hatred of the studios to another level—one that was illegal.

Last month, I posted about a book about William Richard "Billy" Wilkerson, who founded The Hollywood Reporter and the Flamingo Hotel in Las Vegas. The Man Who Invented Las Vegas, written by his son, W.R. Wilkerson III, focused on Wilkerson’s Flamingo Hotel project. I wanted to learn more about how Wilkerson built The Hollywood Reporter and his other Hollywood businesses, so I read Hollywood Godfather: The Life and Crimes of Billy Wilkerson, also by W.R. Wilkerson III.

Billy’s dad, William Richard Wilkerson Sr., was a prolific gambler and alcoholic who passed out drunk after gambling while Billy was being born in 1890 in Nashville, Tennessee. He physically and verbally abused Billy, his only child, to the point where Billy’s mother, Mary, transferred him to a school run by Benedictine monks in Alabama. Billy flourished in the religious environment and transferred to Mount St. Mary’s prep school in Maryland in 1904. When Billy declared his intention of studying for the priesthood, his father went ballistic. He forced Billy to attend medical school.

In 1912, his father died, and Billy, who had failed almost half his courses that year, dropped out to support himself and his mother. He also married Helen Durkin that year. Billy started working at Lubin Manufacturing Company, which produced low-budget comedic shorts in Philadelphia. Lubkin shuttered five years later, and in 1916 Billy began managing a New Jersey nickelodeon his medical school friend had won in a bet. Billy renovated the nickelodeon to appeal to the highest-end customers so he could charge the highest prices. Within six months, it was doing well, and Billy bought a Ford Model T.

Billy was drafted for World War I in 1917, but during his medical exam, the doctor left the room to take a call, leaving behind Billy’s personnel record. Billy swiped it and bolted. With no record of him ever being in the Army, he never reported for service. When the 1918 influenza pandemic struck, it decimated the nickelodeon’s business. Billy quit and started working for Universal Studios delivering movies to nickelodeons. He was promoted to district manager of film distribution in Kansas City. Helen stayed in New York and Billy split his time between the two cities. In 1920, Billy returned to find Helen had left him for another man. After eight years of marriage, Billy was devastated. In 1921 he quit his job and traveled Europe to escape his grief. In 1922, he started working for what would later become Paramount Pictures as a film salesman. This job sent him on sales trips to Hollywood, where he saw the early beginnings of the film industry’s migration from New York City to this new location.

Billy was restless by the end of 1923. In 1924 he held several jobs in the industry, and in 1925 he started selling ads and writing for Film Daily, the main motion picture trade paper. The owner was a tyrant, and Billy missed being his own boss and keeping some of the profits he generated. He wanted to own a film studio, so in 1926 he took a train to Hollywood. Using a fake-it-till-you-make-it approach, Billy convinced popular actor/comedian El Brendel to star in the movie he and his friend Joe Pasternak would produce. Billy shopped the film to studios in New York, but they were controlled by autocratic moguls who “rivaled robber barons.” Billy failed to convince the studios. Wilkerson Studios never got off the ground.

To make money, Billy opened a speakeasy in November 1926 to fill a gap he saw in the Prohibition-era market. His operation was high class but illegal. By February 1927, he opened a second one and charged a $1,500-per-person initiation fee. He paid off police and DAs and worked with the mafia and Joe Kennedy to get his liquor supply. He did such a great job that James Walker, mayor of New York City, asked Billy to manage his speakeasies for 45% of the profits. Billy was making $1 million per year, although he lost much of that in the backroom card games he hosted. He also started dating Edith Goldenhorn, the 25-year-old daughter of his ethically challenged lawyer. Billy, then 35, married Edith in Las Vegas in June 1927. When he returned, his speakeasies were raided, which spooked him. He immediately quit the speakeasy business for good.

Billy was still resentful about his film and believed Jewish studio heads didn’t give him a chance because he wasn’t Jewish. He took the rejection personally and wanted revenge. His time at Film Daily taught him that trade papers could be powerful, and he decided to start the first daily trade paper for the Hollywood motion picture industry. In February 1929, he acquired 50% of a faltering Manhattan trade paper. He turned it around and sold the paper seven months later, pocketing $20,000. He borrowed $25,000 from a loan shark and bet the combined $45,000 on a single company in the stock market. It was October 29, 1929, better known as Black Monday. Forty-five minutes after his purchase, the market crashed. Billy was wiped out. Unable to pay the loan shark, Billy, Edith, and Billy’s mother Mary drove cross-country to start over in Hollywood.

Little did Billy know that his decision to start a trade publication in Hollywood would change his life and the movie industry forever.

I finished reading about Robert Edward “Ted” Turner III’s journey. His autobiography details his life through 2009, when he was about 71. Today Turner is 85 and lives a less public live.

How Did Turner’s Early Years Impact His Journey?

Turner’s father had an outsize impact on him and was the reason he became an entrepreneur. His father was a complicated man. He instilled a strong work ethic in his son at an early age. He openly shared with Ted the wisdom he’d gained building his billboard business, and he gave Ted the opportunity to learn lessons by leading a division within his company. However, he was also controlling, an alcoholic, and a womanizer. He physically beat, psychologically manipulated, and rarely praised his son. His suicide shattered Turner’s world and left a void that would never be filled.

The McCallie School, then a Christian military academy, had a positive impact on Turner and turned him into a leader. The structured environment was different than his unstable upbringing and one that he thrived in. It allowed him to channel his high energy and work ethic toward positive outcomes. As he succeeded and led others, he received positive reinforcement, which made him strive for more achievement. His desire to excel and be noticed drove him to join the debate team, where he developed analytical and persuasion skills that were critical to navigating problems as an entrepreneur.

How Did Turner Become So Successful?

Turner inherited a sizable business from his father, so he avoided the challenging start-up period during which many businesses fail. Instead, he was able to focus on building on his father's success. Turner inherited this company when he was just 25. Considering that runway length is one of the most important inputs in the compounding formula, his inheritance at an early age positioned him well for outsize success.

Turner quickly understood the impact that new technology would have on his ability to grow his business rapidly. Turner realized that billboard advertising was no longer a growth business and shifted to television advertising. This led to his owning a television station, which led to his discovery of cable TV and satellite distribution. He understood that cable was growing rapidly and that as more houses were wired for cable, subscriber fees from cable operators would grow rapidly while his costs stayed relatively flat. Cable distribution was an amazing form of leverage to create a rapidly growing and highly profitable business.

Turner understood the value of good content and how to maximize its value creation. He bought libraries of movies and cartoons that weren’t being used. He knew he could create cable channels dedicated to these content genres and distribute them to millions of households via cable TV. He could pay more than rival bidders for these libraries because he had the know-how and distribution means to maximize their value.

Turner was a master at using stock-based deals to grow his business and his wealth. He used his company stock to acquire companies when he could, which preserved cash and reduced the debt required to close deals. It also aligned his interests with the owner of the company he was acquiring. When he sold Turner Broadcasting, he didn’t sell for cash. He was compensated in Time Warner stock. He didn’t have to pay taxes on the sale and was able to continue compounding his wealth through significant ownership of Timer Warner shares.

What Kind of Entrepreneur Was Turner?

Turner preferred to buy businesses rather than build them from scratch. He had some founder traits and was gifted at launching new channels, but that’s different than launching new companies. He did more buying of existing businesses than starting them from zero. The foundation of Turner Broadcasting was a company he inherited from his father, and he continually built on this foundation through acquisitions.

Turner was a visionary entrepreneur. He was not operationally gifted or detail oriented. He focused on identifying growth opportunities and left the details of execution and managing day-to-day operations to his managers.  

What Did I Learn from Turner’s Journey?

Turner’s journey taught me that you can maximize the value of evergreen content by repackaging and distributing it differently. Turner created immense value from decades-old movies and cartoons by repackaging them as part of channels focused on those types of content. He also was able to get the content to consumers who otherwise wouldn’t have access to it by distributing it via cable TV. The content was old, but it was new to viewers of his channels, and it helped those channels generate high ratings.

Turner is an amazing entrepreneur and an Atlanta legend. His autobiography describes a life of extreme highs and extreme lows. Anyone interested in learning more about him will benefit from reading this book.

Prefer listening? Catch audio versions of these blog posts, with more context added, on Apple Podcasts here or Spotify here!

In 1995, Robert Edward “Ted” Turner III sold his company in a $8 billion deal with Time Warner. After almost twenty years of ownership, his Atlanta Braves won the World Series. And his marriage with Jane Fonda was the “most intense and fulfilling” of all his marriages. Turner was riding high.

According to his autobiography, Turner began adjusting to being an executive at Time Warner. The extravagant sums spent at headquarters while post-merger cuts were being made bothered Turner. The culture was also different. Turner Broadcasting’s strength came from the division heads working together toward the parent’s goals. Timer Warner was a series of fiefdoms that didn’t work together. Turner and Time Warner CEO Jerry Levin worked well together, but they never became friends and didn’t socialize outside work. Regardless, the business was doing well, and by 1997, Ted’s Time Warner stock holdings were worth $3.2 billion.

Part of the reason Time Warner was growing wasn’t obvious at first. But eventually Turner noticed that “dot-coms” were showing up frequently in his sales reports for the cable networks he managed. Start-ups had raised tons of money and spent it with traditional media companies like Time Warner to acquire customers. Turner realized the internet craze was boosting their ad sales.

Time Warner’s business was doing well, but public market investors perceived it as an “old media” company. As a result, they sold Time Warner stock to buy dot-com stocks. Jerry Levine felt pressure from financial media and analysts to do more on the internet to lift the company’s stock price, so he rushed to develop a digital strategy. Around this time, Ted and Jane started having difficulty communicating and started attending counseling sessions as a couple and individually.

AOL founder Steve Case and Jerry Levine met in fall 1999 and began discussing working together. At the time, Time Warner had revenue five times greater than AOL’s, but AOL’s stock market value was twice as large. Then on Friday, January 7, 2000, Levine called Turner and told him they were merging with AOL. The news shocked Turner, who wasn’t aware a deal was in the works.

Ted had a few days to decide whether to vote in favor of the deal at an emergency board meeting and whether to vote his 100 million shares in favor of the deal. He was asked to sign an irrevocable agreement that prevented him from selling shares before the deal closed, which was estimated to take a year. Turner supported the deal, and the $160 billion deal caused a media frenzy when it was announced the following Monday. Time Warner’s stock rose 40% that day, and Turner was worth $10 billion.

A few months later, things took a turn. The stock market tanked and the NASDAQ Composite Index lost a third of its value in a three-week period. AOL’s stock dropped, which made the all-stock deal less appealing. The dot-com crash had begun, and Turner knew AOL wasn’t worth what people thought, but he had no power to protect himself or do anything about it. To make matters worse, Levine informed Turner that post-merger, he would have no responsibilities and no direct reports but would continue receiving his salary. Ted felt that he was being fired. In January 2001, regulators approved the deal to close.

This was a period of extreme difficulty for Turner. He’d lost his job and his wife. His fortune was steadily declining, and insider trading laws prevented him from selling any of his shares. To make matters worse, his two-year-old granddaughter died from a rare genetic disorder. The weight of this all caused severe anxiety, and Turner couldn’t sleep.

Things went from bad to worse. The September 11, 2001, terrorist attacks drove the stock market down further and slowed the economy. Jerry Levine and Steve Case were forced to acknowledge to Wall Street that AOL Time Warner would not meet its lofty projections. The stock, which had tanked to $40 months earlier, dropped to $30. Ted’s frustration spilled over, and he pushed Jerry Levine to step down as CEO, which he did in December 2001.

In April 2002, the stock dropped below $20. Ted couldn’t take it anymore and sold $190 million in shares at $18.50 to pay off his bank debt. In July 2002, the stock fell to $13, and then the bottom dropped out when the Washington Post ran a story about accounting irregularities at AOL. The SEC opened an investigation, and the stock dropped to below $9. Turner was in shock. Over two-and-a-half years, Turner’s net worth went from $10 billion to $2 billion. He’d lost $8 billion in 30 months, which was equivalent to losing $10 million every day for two-and-a-half years.

Ted, enraged, forced Steve Case to resign as chairman of the board of directors, which he did in January 2003. In February, Ted resigned as vice chairman of the board. The company was laying off people and selling assets to stabilize itself. Ted found this painful to be part of, and he continued selling his shares. By May 2003, he’d reduced his ownership from 100 million to 7 million shares. That year, he decided not to stand for reelection to the board of directors, and in August 2003, he sold his remaining 7 million shares for $16 each.

The AOL and Time Warner ordeal was extremely stressful for Ted and gave him bouts of anxiety and frustration, but it didn’t stop him. He left the company he’d been with for fifty years, but he was still full of energy that he wanted to put to good use.  

Ted Turner is a remarkable entrepreneur with a colorful personality. His journey was inspirational—he was an outsider entrepreneur who not only thrived but built a massive company. Turner isn’t perfect, and his journey is also full of cautionary tales. Anyone interested in learning more about media, sailing, owning sports teams, ranching, or growth through acquisition will likely enjoy his autobiography.

Prefer listening? Catch audio versions of these blog posts, with more context added, on Apple Podcasts here or Spotify here!

In the early 1980s, Robert Edward “Ted” Turner III was worried that Hollywood movie studios would hike prices beyond what he could afford and cut off content that his audience valued. Merging with a movie studio would ensure a steady supply of movies. Kirk Kerkorian owned 50% of MGM/UA, and in July 1985, he told Ted he was selling everything except United Artists (UA) for $1.5 billion in an auction the following month. He invited Turner to purchase the assets before the auction.

In August 1985, Turner and Kerkorian struck a deal. Turner Broadcasting would acquire MGM/UA for $1.4 billion and Turner would immediately sell UA back to Kerkorian for $480 million, resulting in a net purchase price of just below $1 billion. Turner would also have to assume $700 million of MGM’s existing debt, which meant a total price tag of $1.6 billion. To close the deal in March 1986, Micheal Milken of Drexel Burnham helped Turner reduce the cash portion of his bid. He issued high-yield junk bonds. He also issued new preferred stock in Turner Broadcasting to Kerkorian. Deal terms gave Turner nine months to pay off $600 million in junk bond debt, and he had to pay Kerkorian a dividend on his preferred shares.

According to his autobiography, Ted realized that asset sales wouldn’t be enough to cover his $600 million obligation—he needed to refinance his debt. He went to John Malone of TCI and other cable operators for help. By June 1987, a deal was in place for Turner to raise $565 million from thirty-plus cable operators in exchange for the group owning 37% of Turner Broadcasting. Ted kept majority ownership, but the deal had other strings attached.

Ted’s autonomy was reduced, and his biggest customers, cable operators, were now on his board of directors and had input into his company strategy.

After he refinanced his debt, Turner launched a new channel that would show original movies and high-profile events such as the Emmys and the Miss America pageant. The new channel was called Turner Network Television (TNT) and would generate revenue from advertising and a subscription fee, paid by cable operators, of $0.15 per cable subscriber per month. TNT launched in October 1988 with 17 million households, and by its first anniversary it was in 50 million households and generating almost $100 million in subscriber revenue alone. By 1989, Ted was about 51 years old and his ownership in Turner Broadcasting Systems was worth over $1 billion.

Professionally, things were going well for Turner, but personally, things weren’t as smooth. By the end of 1988, he and Janie had divorced after more than twenty years of marriage. Ted was diagnosed with bipolar depression. He aggressively pursued Jane Fonda after reading about her divorce in the newspaper, and the two married in 1991.

Operation Desert Storm in early 1991 put CNN on the map. It was the first time a war was reported on from behind the lines live on TV. Ratings skyrocketed. Turner’s strategy was now clear: own as much programming as possible and air it on networks he owned and controlled. Content was the key to great programming. In 1991 he bought Hanna-Barbera Studios, creator of Scooby Doo and the Jetsons, for $312 million. Combining it with MGM’s cartoon library, he owned two-thirds of all cartoons ever made. He then launched a twenty-four-hour-a-day cartoon channel and named it Cartoon Network.

Turner was still worried about movie content. He had a library of old movies, but he was worried about being cut off from new movies by Hollywood studios. Because of the board-control issue, he couldn’t buy Paramount, so he purchased Castle Rock Entertainment and New Line Cinema for $600 million in the summer of 1993. He also maximized the value of his older movies by launching a new channel, Turner Classic Movies, in April 1994.

Turner believed that vertical integration was the key to long-term success in his industry. Owning a broadcast network and movie studio was the best way to create, distribute, and monetize proprietary content. He continued to pursue merging with a broadcaster, but his desire to own a movie studio killed a potential deal to merge with ABC’s owner, Capital Cities, because major shareholder Warren Buffet disliked the movie business. Turner even started talking to Bill Gates about getting a $1 billion investment to make a bid for CBS and came close to becoming a 50/50 partner with Gates.

In 1995, the company was doing well. It had gone from $1 billion in revenues to $3.5 billion in just six years. But Ted was frustrated with the board of directors’ veto ability, specifically the board member representing Time Warner. It limited his ability to acquire a broadcast network. He went public with his frustration and started discussing buying Time Warner’s position back at a premium. Around this time, Ted began to rethink not wanting to own a cable system. Because so many channels were launching, and FCC rules were changing, it now made sense. The board of Time Warner, which owned a cable system, was also rethinking its position and decided that owning Turner Broadcasting would provide synergies and could lift its sagging stock price. A deal was struck, and in September 1995, it was announced that Turner Broadcasting was acquired at a value of more than $8 billion in a stock deal. Turner would no longer be CEO and would have a boss. This decision would set Turner up for an epic ascent of his wealth and a terrifying crash that he had no control over.

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When Robert Edward “Ted” Turner III launched Cable News Network (CNN), he was taking a financial risk. According to his autobiography, he didn’t have enough capital to fund the channel until it reached breakeven. He saw two potential outcomes: The value of the channel would become clear, and raising capital would become easier. Or he’d built a channel valuable enough to be acquired. Both were acceptable, so he plowed ahead.

The CNN launch almost gave Turner a nervous breakdown. It launched on time but was a financial disaster. Expenses were twice the budget and revenues were half the budget. Turner was losing four times more than he projected. To make matters worse, ABC and Westinghouse, two multibillion-dollar companies, were teaming up to launch a CNN competitor, Satellite News Channel. They planned to offer the new channel to cable companies for free alongside a short news channel they would also create.

Ted went to war. He created an “all-news channel with a thirty-minute cycle of headline news.” He called the new channel CNN2 and aimed to beat his competition to market in 1982 by six months. He couldn’t afford space on a satellite for CNN2, but he found a solution. Warner Communications wasn’t using its leased satellite space. Turner took Warner’s space and paid for it by allowing Warner to take over all ad sales for Turner Broadcasting and collect a royalty on all ad revenue it generated. It was a risky deal because it meant losing control of his sales operation, but Turner had no choice. He took it further and offered cable operators a 70% yearly discount on CNN subscription fees for three years if they carried CNN and CNN2. He even filed a $300 million antitrust lawsuit against ABC and Westinghouse.

Turner’s strategy worked, but it was costly. ABC and Westinghouse agreed to discontinue their channel if Turner paid them $25 million and dropped his lawsuit. His warfare strategy was costing him $4 million a month, so $25 million, while steep, was cheaper than a prolonged war.

By 1984, CNN, Headline News, and SuperStation were growing, but Turner Broadcasting was too small to compete against the big three broadcast networks for audience and advertising dollars. Turner’s company was generating $280 million in revenue and $10 million in profit. CBS alone was generating $5 billion in revenue. Turner decided that merging with one of the big three was his best option.

But merger conversations with the networks went nowhere. At the time, unfriendly corporate takeovers by raiders were popular. Turner got close to T. Boone Pickens, a famous corporate raider, and learned how that game worked. He then partnered with Michael Milken of Drexel Burnham to issue junk bonds and, in 1985, made an unsolicited offer to take over CBS. CBS fought the effort vigorously and the takeover died. But the publicity from this attempt led to Kirk Kerkorian calling Turner with another offer.

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After his father’s suicide, Robert Edward “Ted” Turner III was CEO of Turner Advertising Company, which he had saved. According to his autobiography, his work life was improving, but his personal life was hectic. His son Teddy was born in March 1963, three months after his father’s death. And by the end of that year, he was getting divorced and Judy had moved with the children to Chicago to be near family. Turner was 25 years old and a divorced father of two. In 1964, he met Jane Smith and married her in less than a year. Shortly thereafter, his son Rhett was born.

Ted wanted to expand. He acquired a Chattanooga, Tennessee, billboard company for $1 million and a Knoxville, Tennessee, billboard company at an estate auction for $53,000. Shortly after these deals, the outdoor advertising business began looking less attractive to Turner because of proposed legislation and advertisers’ exploration of television. Television’s future looked bright, and Turner decided to model his company after Combined Communication, which Karl Eller expanded from a billboard company to include radio and television. Ted bought radio stations in Florida and South Carolina, but he decided he didn’t like the radio business.

By the late 1960s, Turner set his sights on Channel 17, eventually known as WTCG, a financially struggling UHF television station in Atlanta. The owner wanted $2.5 million. Turner didn’t have cash, so he merged with the station. He retained 47% ownership and changed the company name to Turner Communications Group. Turner also bought a bankrupt Charlotte, North Carolina, station, WRET, for less than $1 million; he did this investment personally. The stations were a financial drain. Low on cash, unable to pay suppliers, and at risk of going off the air, Turner did an on-air telethon to raise money. He raised $25,000 and generated goodwill in the community.

Ted recognized that programming should be his focus because it attracted viewers, which led to more revenue from advertisers. His strategy was to find areas where competitors weren’t meeting viewers’ needs and fill those gaps. He paid $600,000 to air sixty Atlanta Braves baseball games a year and went on to cut deals to air Atlanta Hawks basketball games and Atlanta Flames hockey games. His strategy worked: WTGC went from $900,000 in losses in 1970 to $1 million in profit in 1973.

The Braves ownership, losing $1 million a year, offered Turner the chance to purchase the team for $10 million, which he did in 1976. This gave him control of long-term TV rights and guaranteed unique programming.

Turner was still focused on growing his TV stations. This required growing viewers, but there weren’t unlimited viewers in Atlanta. He needed to gain viewers in other markets. He kept hearing about “community antenna television,” so he investigated it. This new technology, better known as cable TV, allowed him to access views in other markets. He learned through trial and error that satellites were the key and built the first satellite uplink station in Atlanta. He changed his company name to Turner Broadcasting System Inc. (TBS) and changed the Atlanta TV station name to SuperStation. The first satellite transmission occurred in December 1976.

With TBS distributed by satellite throughout the southeast, Turner recognized he was sitting on a gold mine. Cable was growing rapidly. As cable operators expanded their coverage areas, they added subscribers. As they added more subscribers, the per-subscriber fees they paid increased, which meant more revenue—but few or no incremental costs—for TBS. Programming (i.e., unique content) was the key to capitalizing on this gold mine and growing revenues and profits rapidly.

Tuner saw news as great content, but it was delivered at times that weren’t convenient for everyone. Turner decided to start a twenty-four-hour-a-day news channel to fill this gap and named it Cable News Network, or CNN. He decided to launch on June 1, 1980. This decision would change his trajectory forever.

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