Call Me Ted (44 page)

Jerry grew increasingly concerned that we were missing out. I never doubted that the Internet was important—plenty of people that I respected assured me that it was—it’s just that as someone who never uses a computer, it wasn’t something I was engaged in. I thought that we had a lot of growth upside in our core businesses—advertising- and subscriber-supported media—and I was worried that we were taking our eye off more important opportunities like the purchase of a broadcast network (and in that market these were increasingly undervalued).

But in the late 1990s, if you didn’t think that most of your future was going online, it was hard to get anyone’s attention, including Jerry’s. He was obsessed with formulating an Internet strategy for Time Warner that would be, as he described it, “transformational.” His passion for new distribution technologies went all the way back to the early 1970s when he pushed to put HBO on a satellite. He was also an early advocate for interactive product. In 1994 he was a strong proponent of the Full Service Network, an expensive and high-profile test run by Time Warner Cable in their Orlando, Florida, system. This offered consumers the ability to shop, play games, and order videos on demand, all through an interactive TV platform. In many ways the technology was ahead of its time but the test was deemed a failure and was shut down after about eighteen months.

Time Warner had also invested a lot of time and money in a project called Pathfinder, a free Web site where they highlighted content from the various magazines. The plan upset people at the individual magazines who didn’t like having their sites merged into this larger grouping, and consumers seemed to prefer going to the individual magazine sites directly. Ultimately, this expensive, high-profile effort was viewed by media observers and Wall Street as another failure.

By 1999, Time Warner was taking flak from investors and the press for not being more successful on the Internet—for neither making any bold acquisitions nor creating any successful online businesses of our own. After a run-up in Time Warner stock for the first few years after the Turner merger, our shares were no longer in favor. Feeling increased pressure to do something, Jerry created a group called Time Warner Digital Media, whose charge was to coordinate the online businesses under one management umbrella. This sounded like a reasonable idea but it caused a lot of tension across the company when existing Web operations like Time Inc. magazine sites and CNN.com were essentially pulled out from underneath their companies’ management and told to report into a centralized structure. Rich Bressler, who had been CFO of Time Warner, was named CEO of the unit and given the task of trying to pull this all together. In addition to thinking that Rich would do a good job coordinating these efforts, by putting his CFO in charge it seemed clear that Jerry saw mergers and acquisitions as a key part of his plan.

A TED STORY

“So We’re Going to Put Ourselves Out of Business?”

—Jeff Bewkes

The heads of the various divisions of Time Warner were invited to a dinner at the 21 Club to discuss our Internet strategy. Ted was there, as were Bob Daly and Terry Semel from Warner Brothers, Joe Collins from Time Warner Cable, Terry McGuirk from Turner, and Don Logan from Time Inc. I was there representing HBO. Jerry Levin had called the meeting and Dick Parsons was also in attendance but the bulk of the evening was a long, fairly formal presentation from Rich Bressler, who was running Time Warner Digital Media. He went through a series of flip charts on an easel, covering everything from internal strategies he was proposing to possible acquisitions of companies that were emerging at the time, like Lycos and AltaVista. It was all fairly awkward as several of the people gathered didn’t really know or care a whole lot about the Internet and there weren’t many questions asked throughout the presentation.

For his part, Ted remained unusually quiet until the very end. As Jerry was wrapping things up by stressing the importance of the company moving aggressively in all these areas and as people were literally getting ready to get up from their chairs, Ted suddenly spoke up. “So, are you telling us we need to move aggressively to put all our content on the Internet, is that what you’re saying?” to which Rich and Jerry agreed.

“So, that would include putting material from our magazines on the Internet free of charge, right?” When he got agreement again, Ted turned to Don Logan and asked, “Don, what are you charging for
Time
magazine?”

Don responded, “What do you mean, the cover price?”

And Ted said, “Yeah, it’s like a buck-fifty, right? And for
People
it’s something like two dollars, right? So you make millions and millions of dollars from magazine subscriptions now but we’re going to put it all online free of charge?” Ted then waited a beat and said,
“So we’re going to put ourselves out of business?”

It was hilarious, and typical Ted Turner. After a three-hour presentation on a topic he’s supposed to know nothing about he puts his finger right on the center of the problem.

Driven by Wall Street’s “irrational exuberance” around Internet stocks, the general discussions around our digital strategy took us in some strange directions. Based on the high valuations of online companies, it looked like Time Warner wasn’t getting nearly the value we deserved for our own properties. One of the most glaring examples was CNN.com. Unlike most online businesses, this one not only had a lot of traffic, it also generated meaningful revenue. If you valued CNN.com like an Internet start-up, it could have been worth as much as the rest of Turner Broadcasting. These valuations may have been irrational but they were also impossible to ignore, and some within Time Warner suggested that to capture this value we should take CNN.com public.

But when you worked that through, you quickly realized it was impractical, since CNN’s Web business relied so heavily on the newsgathering and sales infrastructure of the cable network that you couldn’t separate the businesses. Given that, some suggested that we should spin off the entire CNN News Group. Driven entirely by the bizarre behavior of the investors during the dot-com boom, smart people at Time Warner were seriously considering taking CNN public simply to take advantage of the potential value of CNN.com. This would have caused our company tremendous disruption, and fortunately, we never got too far along with these plans, but the fact that we even thought about it says a lot about what crazy times these dot-com boom years really were.

With this kind of mind-set swirling around the corporate world in the fall of 1999, Jerry Levin scheduled a Time Warner management meeting in China, timed to precede immediately the
Fortune
Global Forum, which was held that year in Beijing. One of
Fortune
’s invited guests was Steve Case—the founder of AOL—and at some point during the conference, Steve met with Jerry and mentioned the idea of merging his company with ours. After his return from China, Jerry told me about this discussion but he didn’t seem overly interested in Case’s idea and I assumed this deal wasn’t going anywhere. Based on the relative value of our two companies at that time, AOL would actually be in a position to acquire Time Warner. By the fourth quarter of 1999, despite the fact that our company’s revenue was five times AOL’s, their market capitalization was nearly twice that of Time Warner’s.

This boggled my mind. Time Warner was a company with solid, valuable assets (Time Inc.’s magazines, CNN and our other cable channels, Warner Brothers and our movie libraries, Time Warner Cable, among others) and I couldn’t see how they arrived at AOL’s value. Investors said they placed a premium on AOL’s growth prospects but given my knowledge of the cable industry, I couldn’t see AOL growing much more once cable operators rolled out their high-speed Internet services. Why would they give that franchise over to AOL when they could introduce their own services like Road Runner (in which Time Warner already owned a stake)? These were days when lots of wild merger speculations were swirling around and I assumed this was another one of those.

When I found out that spouses weren’t invited on that Time Warner management trip to China, I decided not to go. There was no way I could be that far away from Jane for that length of time. Even without a trip to China, our schedules were already hard enough to keep up with. For example, Jane couldn’t even be with me the night I announced my pledge to create the U.N. Foundation since she was making a speech of her own to a women’s group in Colorado. I had to go straight from the
Larry King Live
set to the airport in New Jersey and fly overnight to meet Jane in Los Angeles so I could spend the weekend with her and her family. This kind of juggling became typical as Jane attempted to maintain her independence while we both tried to keep up with our professional and philanthropic pursuits and at the same time maintain a relationship with each other and our children.

Our travel and crowded schedules took a toll on our relationship and there came a time when we had trouble communicating with each other even when we were together. This was the point when I started to worry about our marriage.

After we split up, some media reports speculated that our marriage ended because I was mad at Jane for becoming a Christian, but that is not correct. The press has portrayed me as being anti-religion but that’s not fair, either. They often refer to the time when I said “Christianity is a religion for losers.” I’ve regretted using those words and I apologized for them repeatedly, but in fairness, the statement has been taken completely out of context. What I meant when I made that unfortunate comment was that the teachings of Jesus appealed largely to the downtrodden. While making the rich and powerful nervous, Jesus gave hope to those near the bottom of society: the poor, the sick, and the hungry. I’ve studied the Bible extensively and have great respect for people of all faiths.

A TED STORY

“He Knows I’m Not a Loser”

—President Jimmy Carter

I’ve discussed religion with Ted as much as I would consider appropriate and Rosalynn and I have talked to Jane extensively about our Christian faith. We’ve been distressed in the past when Ted has said things like “Christians are losers.” He knows I’m a Christian and he knows I’m not a loser, but he says things in the heat of the moment and often underestimates the permanence of what he says. An average college professor can say anything and it’s never recorded but I know from being president, forty years after you’ve said three words about a subject George Will or somebody’s going to go back through the ancient files and find that you said this or that. Ted’s that way, too, and many people will never forget what he said about Christianity.

My hope is that, eventually, Ted will have a profound religious experience and have an unequivocal awareness that Christ is Savior, and that he can be relaxed with this. He’s an agnostic by temperament, and not just about religion. He’s a skeptic by nature and when somebody tells Ted something he really feels an innate need to explore the issue and see if it’s really true or not. I think this is what’s made him an explorer in the finest sense of the word.

It is true that I was upset when I found out about Jane’s conversion but it wasn’t because she had become Christian. My frustration was because she didn’t discuss it with me. This sort of thing doesn’t happen to someone overnight and having such an important matter dropped on me out of the blue made me realize just how much our communication had broken down.

A TED STORY

“I Was Being Led”

—Jane Fonda

There’s this thing that has to happen, it’s like a softening, a giving up—it’s a humbling and opening to the spirit. It’s an amazing thing, and because it happened to me late in life, I was very aware of it and conscious of it. Ted can’t let that happen. He believes that there’s a God but he can’t allow himself to have that become an event or an experiential revelation because that opens you up to everything and he can’t truly open his soul to the holy spirit, or whatever you want to call it. It’s the same reason that he can’t go back to the past and heal himself. He can’t because he can’t really open up because he’s too afraid that it will all come in and drown him. His notion of God is a very cerebral one.

I didn’t see it as religion at the time. I just felt for about six years that I was being led. When I came to Atlanta, for the first time I met so many great, smart people who were religious and went to church. Ted didn’t know it but for all those years when we would go to the endless receptions and parties I was off always in a corner often talking to Nancy McGuirk—Terry’s wife—or Rosalynn Carter or Jimmy Carter. I was exploring and Ted had no idea. I would never tell him about these conversations because I knew he would try to talk me out of what I was doing.

For me, being in nature is when I feel the most transcendent and the most presence of God. I hiked a lot with Ted and there’s one slope that goes up behind the house on the Flying D, where one spring the bitterroot flowers were beautiful. Bitterroot is the Montana state flower but they only come out at certain moments and on certain kinds of terrain—rocky soil in full sun—and they look like they’re lit from the inside. I showed one to Ted and it blew his mind. From then on every time he saw one it would be a big epiphany. If I’d say, “Wait! Stop, Ted look at that. Look at the way the sun is hitting that grove of aspen,” he would begin to take the time to really notice. He definitely changed a little with me and became more open to that kind of observation.

We wanted our marriage to work, so when our communication deteriorated significantly we decided to get counseling. I’m a believer in the value of therapy and had myself started seeing a psychiatrist in Atlanta when I sold my company to Time Warner. I knew that would be a difficult transition and having someone to talk to proved to be helpful. I was hopeful that seeing a couples counselor might help Jane and me as well.

A TED STORY

“Playing on Different Teams”

—Jane Fonda