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TIP619: The Cable Cowboy: John Malone w/ Kyle Grieve

whatshot 41 snips

Mar 31, 2024

Explore the fascinating journey of John Malone, a titan in the cable industry who transformed shareholder value through innovative strategies. Discover how he built TCI into a monopoly-like powerhouse while keeping costs low and maximizing cash flow. Learn about his unique tactics, including the creation of a super voting class of shares and the 500-channel offering that redefined cable. Delve into Malone's disdain for taxes and his clever maneuvering with regulators, showcasing how he secured wealth for himself and his shareholders.

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ANECDOTE

Malone's Gamble

John Malone chose a lower salary at TCI over a lucrative offer from Warner Communications.
He prioritized control and growth potential, purchasing TCI stock with a personal loan.

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ANECDOTE

NTA Dilemma

Malone, as TCI's CEO, urged selling NTA, a debt-ridden subsidiary TCI guaranteed.
NTA's questionable management and financial risk threatened TCI's stability.

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ANECDOTE

Vail Blackout

When Vail refused to renew TCI's contract, Malone blacked out their service.
He displayed TCI's power, broadcasting officials' contact details until the city relented.

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Long-Term Vision vs. Short-Term Gains in Corporate Strategy

04:40 • 2min

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John Malone: The Early Innovator

06:44 • 11min

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Strategic Maneuvers of TCI

17:15 • 18min

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John Malone's Strategic Maneuvers in the Cable Industry

35:01 • 4min

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John Malone's Strategic Mastery at TCI

39:18 • 26min

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Outsider

Stephen King

100 baggers

Christopher Mayer

Cable Cowboy

John Malone and the Rise of the Modern Cable Business

Mark Robichaux

This book is a penetrating portrait of John Malone's complex persona and a captivating history of the cable TV industry. Written with Malone's unprecedented cooperation, it brings to life the story of how an unassuming copper strand evolved into the digital nervous system of the U.S., providing consumers with the fastest route to the Internet. The narrative details Malone's transformation of TCI into a media colossus, his dealings with competitors and regulators, and his significant influence on the industry. The book also explores the broader history of the cable industry, including its early days of providing access to broadcast signals in rural areas and its evolution into a high-speed electronic pipeline known as broadband[1][4][5].

In today’s episode, Kyle Grieve discusses the book Cable Cowboy: John Malone and the Rise of the Modern Cable Business. He covers why and how John Malone was such a prodigious creator of value, how he aligned himself with shareholders, how he helped build his monopoly-like business, TCI, how he dealt with competitors and regulators, why he trained Wall Street to see value differently, why Malone despised paying taxes, how Malone engineered deals to enrich himself and shareholder simultaneously, and much more!

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

07:41 - Why John Malone chose to work for TCI at a significant discount

09:52 - How Malone kept costs down to maximize cash flow

16:24 - How John Malone used his knowledge of scale and leverage to build TCI

19:08 - How John created his accounting terms to best display TCI's abilities to create value

27:57 - How Malone used his scale advantages to secure better rates from programmers

36:34 - The monopoly-like power that TCI could yield that featured its bargaining power

38:17 - How Malone created life-changing wealth for himself from the Liberty Media spin-off

42:54 - Why John invented the 500-channel offering and how it protected the cable industry

45:51 - Malone's tactics to try and divert attention away from TCI's monopoly-like power

50:58 - How John Malone quickly improved TCI's financial statements through industry consolidation

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
Get Cable Cowboy here
Learn more about the Berkshire Summit by clicking here or emailing Clay at clay@theinvestorspodcast.com
Follow Kyle on Twitter and LinkedIn
Check out all the books mentioned and discussed in our podcast episodes here.
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