Book Review: Cable Cowboy

I just finished the Cable Cowboy – another fascinating biography about John Malone, a key figure in the US cable, media and telecom industries, known for building an enormous empire via savvy M&A (effectively investing). There are lots of similarities between his approach and Buffett’s. Here are a few takeaways from the tale –

  • Don’t get involved in manias: buy distressed and cheap (by knowing the turnaround metrics). In the early 1980’s American Express, General Electric, etc. all saw potential in cable, bid up prices and then sold a few years later once disillusioned.
  • Keep it low key, stay highly decentralized, keep terrific managers and make sure there’s little hierarchy.
  • Lever low volatility equities where there are secular themes (rolling up cable) and you can double down every time there’s a dip
  • Seemed like he could get ahead whereever there is a dynamism, in this case it was an industry that was de-regulating.
  • Had vertical insights: content had 2 revenue streams and Malone could get great deals in owning content since he could provide huge scale for distribution (but had to do it early on before they were popular, because he could provide popularity).
  • Tough honesty: passed on bribery to gain county-level franchises, but fought hard to maintain franchises when he had already put $ in to build the systems
  • Interview people and listen. Just listen. Pick up the phone and make direct calls (called Magness’ sons to fix inheritance, lots of issues caused by not calling like Gates)
  • Negotiated hard and played people against each other by sponsoring alternatives (in content with MTV, Gates vs. Sun MIcro)
  • Allied with talented frenemies – valued trust over control and would trust if economics were aligned (tended to be aligned through partnerships and if the other person was an entrepreneur with skin in the game).
  • Be #1 or don’t enter – don’t try to be #4 (Murdoch with the satellite entry in the mid 90s)
  • 1992 Cable Act – you can push monopolies too far and deals will break
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