By John M. Higgins -- Broadcasting & Cable, 10/23/2005 8:00:00 PM
In an industry dominated by giants, Mike Willner's clout far exceeds the size of his company, Insight Communications. He controls just 1.3 million subscribers
But he's a confidant of many of the cable industry's top leaders. They tapped him twice to serve as chairman of the National Cable & Telecommunications Association and lean on him frequently to plead cable's case with regulators and congressmen.
It's a role he sought out early in his career, as a young executive at a small company, Vision Cable. After Advance/Newhouse bought Vision in 1981, recalls Advance/Newhouse CEO Bob Miron, Willner quickly pushed for introductions to other industry executives. “He said, 'Can you help me get active in the NCTA?'” Miron says. “He wanted the contacts. Michael enjoys the public part of the industry, as much as I do not.”
But Willner is about to get a little more private, in business terms. He and Insight Chairman Sid Knafel are teaming with buyout firm Carlyle Group to take the company private, buying out public shareholders for $650 million.
Willner is attempting such a move at an interesting time in cable history. Though not specifically worried about the entry of telephone companies into the video business, he has a general fear about operators' response to threats from telcos, direct-broadcast satellite, nascent Internet video players—the whole gamut of new or reinvigorated distribution systems.
“What I worry about the most,” he says, “is that the industry learns to effectively compete against whatever competition is thrown at it.”
If the buyout is successful, it will start another chapter in Willner's cable story, which started right after he graduated from Boston University in 1974. He was hired to sell ads at a small Vision Cable system in Fort Lee, N.J., founded by Knafel, an investment banker.
Figuring it would help attract local advertisers, Vision launched The West Bank (of the Hudson, that is), a three-times-weekly public-affairs show. From a studio in the basement of a high-rise apartment building, Willner interviewed such stirring local officials as the city librarian. “Every time someone flushed the toilet,” he says, “you heard 'whoosh.'”
Willner, 53, credits his career advance to neither news nor the system's meager ad sales. It was Home Box Office. Shortly after Vision promoted him to general manager, the Fort Lee system became one of the first to launch the pay-movie service. In the days before VCRs, HBO was both revolutionary and financially lucrative. But those were also the days before even satellite giant receivers were widespread, so only cable systems that could “see” one of HBO's microwave relays could resell it. Vision had the chance.
HBO was a roaring success, and Willner became the company's expert at launching it at other Vision outlets. It was no big deal. “At the time, HBO was selling itself,” he admits. His star rose, and he was ultimately named chief operating officer.
By 1981, Vision had expanded to 150,000 subscribers, and Knafel sold the company to Advance/ Newhouse for an estimated $120 million.
The takeover exposed Willner to a different operating regime under Newhouse's Miron, who is legendary for holding executives to a rigid budgeting process. Willner did well over the next three years but realized that he was at a dead end. “I was reporting directly to a family member,” he says. “At the ripe age of 32, I was asking myself what I was I going to do for a career?”
Says Miron, “We parted company on extremely friendly terms. For me, he was the COO of a company. He wanted to be the CEO.”
When Knafel heard that Willner was scouting for a new opportunity, he recruited investors, and in 1985, they created Insight.
They focused quickly. Cable was getting hot, but buyers didn't differentiate between systems in high-growth markets and those in declining towns. '“We looked for high levels of housing growth,” Willner says. “That put us in suburbs of major metropolitan areas, right in growth corridors like Indianapolis, Louisville, Phoenix and Salt Lake City.”
In 1991, Knafel and Willner turned their sights overseas, where cities were just starting to build cable systems but with new technology permitting them to offer phone service as well.
And U.S. cable operators were starting to face heavy regulation. “I liked the political climate in England a lot better,” says Willner. The company eventually merged with British operator NTL, which unfortunately got into financial trouble.
In the U.S., Insight remained a small company—just 180,000 subscribers—until 1998 when Willner took advantage of Tele-Communications Inc. President Leo Hindery's offer to trim TCI's bloated operations by putting chunks of TCI franchises into partnerships for other operators to run. After deals with TCI (now owned by Comcast), Insight went public and bought more systems, pushing its portfolio to 1.3 million subscribers.
What's next? “We'll get this private,” Willner says. Next is rolling out telephone service throughout the company. The partnership with Comcast may break up sometime next year.“At the end of the day, we're not consolidators. We're in intense operations mode right now.”
There was another program produced in that high rise basement..."Insight". Liked the name, glad it lives on.
Joyce - 6/30/2007 10:23:00 PM EDT
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