They all laughed. Ted was a newcomer from the south, with limited resources or clout. Yet, he had the audacity to presume that he knew better how to restructure and lead a legacy institution. Didn’t he understand the way things worked?
How could Ted — Ted Turner — possibly leverage his tiny forty million dollar company to acquire media giant CBS with a net worth of more than $1.5 billion?
But this was June 1985, and Ted had an idea. Turner understood — and was happy to tell all who listened — that the terrestrial broadcasting paradigm of the past 50 years was over, and revenues would have to come from new streams. He proposed that, upon acquisition of CBS, he would raise the necessary purchase funds by pre-selling parts of the company and issuing high yield bonds, the newly-popular debt instrument which scoffers called “junk.”
But the big boys would have none of it. Ted had already humiliated them a few years previously by starting a then-revolutionary cable channel called CNN. This Atlanta-based success particularly stung the media barons because they possessed far greater resources to launch an all news channel — but they hadn’t.
Ridicule for Ted’s takeover plan came from all quarters — the news media, the broadcasting industry, the banking industry. There was a heavy sense of “how dare he?” and “who does he think he is?” His financing strategy was labeled ludicrous and his sanity questioned.
Quickly, though, the chortling morphed into fear as the real CBS insiders factored in the new realities of capital formation and reassessed the vulnerability of their stock to a tender offer. Quietly, behind the bluster, management took extraordinary actions to rearrange leadership and expand backup financial resources, incurring nearly one billion dollars in debt but rendering the company immune to takeover. By August, Ted knew he had lost and ceased his efforts.
But what had he lost? Less than a year later, apparently now accepted as a player, Ted smoothly purchased MGM-UA, selling back the studio but acquiring a content library that was a significantly better fit to his organization that any single piece of CBS.
While they still called Ted names, “stupid” was no longer one of them. Take colorization (please) — a forty year object of derision among sensitive cinema fans. Immune to the snobs, Turner’s paint job on chestnuts such as Miracle on 34th St. and It’s a Wonderful Life represented a textbook example of a buyer understanding underlying value where the seller could not.
THE OTHER TED — Senator Cruz — is this year’s cowboy. The similarity to Turner extends far beyond each man’s choice to go by his middle name. Both are traitors to their Ivy League educations. Both inspired collusion among their enemies. Both endured ridicule — until they generated panic.
Most importantly, both grasped shifting dynamics of power and initiated their own “creative destruction.” Just as junk bonds empowered Turner, Ted Cruz propelled his cause via the synergistic deployment of New Media tools. By communicating a consistent, coherent message to an ad hoc national constituency, Cruz rendered political parties irrelevant as an organizing force, and seniority irrelevant as a path to senatorial power.
During the government shutdown in early October, critics in both parties labeled Cruz “un-serious.” They claimed he pursued unrealistic and unreachable goals that distracted the “adults in the room” from solving the real challenges.
Then came the great awakening of late October. The shutdown — billed (even by Cruz’s friends) as the imminent and inevitable self-generated Republican Götterdämmerung — has in fact turned out to be a mere prologue — an appetizer — for the more interesting, more convulsive, and far more consequential national tragedy called Obamacare. Thanks partly to a rococo website — by design or ineptitude — a sizable percentage of the populace suddenly realized they’d been had.
Suddenly, instead of being the jerk who turned the lights out on both the government and Republican political dreams, Senator Cruz is quickly gaining the redemption of one who nobly unflinchingly plays a losing hand. Think Nathan Hale, Jim Bowie — or the tank man in Tiananmen Square.
It’s still open for debate whether Ted Cruz’s fandango will stand as more than symbolism. Unlike Mr. Turner, no one is yet handing him consolation prizes to induce his passivity.
But one thing is certain: they’ve stopped laughing.
BEING A CHANGE AGENT in either American Business or Politics is never for the faint of heart. A century ago, a determined candidate disrupted the status quo by exploiting the Progressive shift away from “smoke filled room” toward (some) party primaries. Possessing a distinct vision and a Nietzschean faith in the power of the individual, the presidential candidate exploded contemporary assumptions about party loyalty and political tradition. Running against the two major parties, but with insufficient time to gestate a new organization, his doomed attempt nonetheless remains the high-water mark for a third party vote in presidential history. Interestingly, his name, too, was Ted.