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.”
