By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
Billions and billions served: "AT&T-TCI deal could cut costs, expand services," said the Denver Post in a headline announcing last week's monster merger. It was a modest little prediction in keeping with the breathless coverage so far afforded the deal, which of course is the latest step toward all U.S. corporate entities blending into one amoebic blob that will soon be able to expand only through asexual reproduction. The predicted marriage of Internet technology with residential phone service--plus a direct uplink to government black helicopters--may indeed revolutionize the way the average dipstick orders out for pizza. But naturally, its most immediate impact will be on the bank account of TCI chief executive officer John Malone, the financial genius whom vice president Al Gore once called a corporate "Darth Vader" and who will now have enough money to build his own personal death ray--or secure an unlimited supply of Viagra.
"I've hired the smartest son of a bitch I have ever met," cable cowboy Bob Magness told friends when he recruited Malone--who's already being dubbed "Pa Bell" by the Wall Street Journal--to TCI in 1973. And Malone's haul from the new merger does nothing to contradict either of the conclusions rendered by that assessment. According to Bloomberg Business News, his net worth will soar by an estimated $4.4 billion as a result of the deal, based on his TCI stock holdings--holdings, you may recall, that Malone went to great lengths to protect during last year's messy public spat with Magness's widow and sons. That brief bloodbath was touched off when Magness's boys, Kim and Gary, sued Malone and estate executor Donne Fisher, claiming that estate executors Fisher and University of Denver chancellor Daniel Ritchie were so "afraid of pissing off John Malone" that they'd cut him a sweetheart deal on Bob's TCI shares. Responded a longtime company employee: "There's a lot of people around here who are really pissed off at those two boys." Among the other comments spurting out was Malone's aside to the TCI board that, whenever he kicks off, his heirs might prove to be as nasty as Magness's boys, a casual bit of intimidation that convinced the company to pay him $150 million for the right to buy his stock when he departs for the great satellite in the sky.
The whopping $8.5 billion premium that AT&T is paying for TCI stock--a staggering roll of the dice that may prompt its shareholders to rue the day AT&T boss C. Michael Armstrong hopped into bed with Malone--will temporarily inflate the net worth of TCI stockholders. But there are plenty of questions about the art of this deal. For instance, one of the chief claims made by both companies is that the merger absolutely, positively won't lead to layoffs. TCI even bought local employees lunch last Wednesday while assuring them they wouldn't be taken out and shot. Yet both companies have a history--and, in AT&T's case, an apparent future--of mass firings. It was only two years ago that TCI laid off 2,500 employees in a bid to make itself more attractive to Wall Street. And AT&T has said it plans to give 18,000 employees the ax as part of its own restructuring effort--in part, perhaps, to make room for the $16 billion in TCI debt it agreed to strap on as part of the deal.
There's also the question of just long it will be before anyone actually sees the space-age technology Malone and Armstrong have been crowing about (their plan: Your TV will be your telephone, your personal computer, your personal home-shopping center and your sex partner). After all, the company that's supposed to help AT&T provide state-of-the-art home shopping is the same one that just last year was having its hide blistered by local municipalities for waffling on a promise to install new fiber-optic lines. Instead, in several cases, TCI announced that to save money it was opting for digital-compression technology that allows it to increase the number of channels without installing a state-of-the-art delivery system.
Still, who wants to be a nag when the honeymoon isn't even over yet? There really is something sexy about consummating such a transaction, and both Malone and TCI president Leo Hindery oozed excitement at a New York press conference last week. Hindery, who only days before was weathering the glare of a New York Times story that strongly suggested he has fabricated hardships he suffered as a child (among other things, he's claimed that he left home at the age of thirteen and joined the merchant marine--a claim the family members he allegedly left behind dispute), now opined, "You date and date and date and one day you decide to get married." The ruddy Malone asked a throng of reporters, "Would you like to order Viagra while you're watching your favorite entertainment show?"
Get down with your bad self, Pa. As for us, we don't need the stuff when we're watching the Spice Channel.
I confess! Nathan "Gabby" Thill, the skinhead accused of gunning down unarmed African immigrant Oumar Dia last November after asking him if he "was ready to die," proved to be a real blabbermouth. Not only did Gabby tell police detectives that he'd done it, he also fessed up on camera to Channel 7 reporter Julie Hayden and then went on to unburden himself to yet another TV reporter. Now, though, Thill's had a change of heart about bragging on his bad deeds--or at least his public defenders have. Five--count 'em, five--PDs are racing against time to avert a death sentence for Thill, who's charged with killing Dia and shooting Good Samaritan Jeannie Vanvelkinburgh while the two sat at a downtown bus stop. And last week, lead counsel David Wymore took the first step toward keeping Thill alive: trying to get the televised confession to Hayden, the most damning evidence against him, ruled inadmissible. Wymore's theory: that the reporters to whom Thill spilled his guts were somehow doing the bidding of law enforcement rather than just trying to get a scoop.