The wit and wisdom of Ted Rogers

Fifty years ago, most television programming made its way to people’s TV sets via rabbit ears. The newest mass communication technology—frequency modulation (FM) radio—was still struggling to catch on. And in Canada, the broadcasting business was dominated by the CBC. But in a few months in 1960 and 1961, a young lawyer, Ted Rogers, arrived on the scene and for the next five decades would radically shake up the media landscape, laying the groundwork for what would eventually become one of the world’s biggest communications companies.

In 1960, while still a law school student, Rogers and his then partner, media personality Joel Aldred, paid $85,000 to buy CHFI-FM, the first FM radio station in Canada. It was a bold venture, coming at a time when only five per cent of homes had FM radios. He also ventured into television broadcasting with a cold call from a law office library to media tycoon John Bassett. After wrangling a meeting for the next morning, the pair was soon pitching the Board of Broadcast governors (a precursor to the CRTC) for a licence to start the first private TV station in Toronto. In 1961, CFTO-TV hit the air, with Rogers as a minority owner. Those early forays into radio and television—marked by equal parts hard work, attitude and vision (and a little luck, of course)—would come to define the next several decades for the company, which has been celebrating its 50th anniversary over the past several months. “We were always trying to do the impossible,” Rogers wrote about the period in his book, Relentless.

Rogers credited his driving ambition to the ghost of his father, who died when he was just six years old. Edward Samuel Rogers invented the plug-in radio at a time when most radios were powered by cumbersome, messy batteries. He also started the CFRB radio station in Toronto to help increase demand for the radio sets he manufactured. But his life was cut short when he died at age 38 of an aneurysm. The business would later be dismantled, with young Ted determined to regain what had been taken from the family.

Unlike his father, Rogers wasn’t an inventor. But he excelled at spotting a good business idea and making it happen, regardless of the financial risks. He would be dubbed by former Maclean’s editor Peter C. Newman as Canada’s “riverboat gambler” for building an empire “based almost entirely on bank debt and his nerve.” In 1962, he bought 43 hectares of farmland in Mississauga for $477,500 as a place to put transmitters for the company’s newest AM radio station, 680, despite not yet having won the actual licence for that space on the dial. When Rogers scooped up its first cable licences in Ontario in 1967, only about 15 per cent of Canadians had signed up for cable TV services. The rest watched over the air for free. But Rogers figured people would pay for a better quality signal and set about building a cable system from scratch. “The loss you take on the first few subscribers you sign up is enough to blow your ears off,” Robert Francis, a former RCI executive, told a Toronto newspaper in 1985. “But the solid base of assets you’re creating ensures that there will be a pot at the end of the rainbow.”

Entering the wireless business seemed an even wilder venture in the early 1980s, when cellular phones cost up to $2,000 and were the size of small kitchen appliances. But Rogers pushed ahead even after his board of directors, including his wife, Loretta, voted against the idea. He had spent a great deal of time reading whatever he could get his hands on about newfangled cellular technologies, and his gut told him that wireless would be embraced by customers because it made sense. “I just knew it was crazy being tethered to the wall with a wire on your telephone,” he said. “Lifestyles were changing and technology could—and should—cut the cord.”

Rogers’s unflinching attitude toward growth at any cost created some thrilling moments. At various times he would mortgage his house, offer up his cottage as security, and, in 1971, he pushed the company to the brink of bankruptcy, only to pull it back with an 11th-hour deal. But it also led to some dramatic blockbuster deals. In the mid-1990s, Rogers orchestrated the $3.1-billion purchase of Maclean-Hunter, then the largest takeover in Canadian history and one of the first big bets on convergence. (While boosting the cable business, it also gave the company valuable media properties, including magazines, newspapers and a TV station.) In 2004, Rogers catapulted his company from a successful cableco into a telecommunications powerhouse with the purchase of Microcell Communications, an upstart carrier that owned the popular and innovative Fido brand.

Pro sports also appeared on Rogers’s radar, despite the fact that Rogers himself wasn’t a sports fan. He bought the Toronto Blue Jays in 2000 and later the SkyDome stadium where they played, renaming it the Rogers Centre. Again, it was despite the better judgment of some board members and close advisers. Though the team continued to be a massive money-loser—roughly $300 million in losses by 2008—he would later explain it was about more than the bottom line. “Don’t get me wrong: $300 million is a lot of money,” Rogers stated. “But I take a broader view. We would have paid the same money just for the equivalent branding opportunity.” Ownership of the stadium also opened the door to a five-year, US$78-million deal in 2008 to bring the NFL Buffalo Bills to play eight games in Toronto.

Ted Rogers, who died in 2008 of a heart condition, is widely considered one of the great entrepreneurs in Canadian history, having left behind one of the country’s biggest communications conglomerates with interests in cable, wireless and media properties (which includes Maclean’s). Analysts and Bay Streeters were often critical of his moves and his comfort with debt. Many predicted his downfall when the company either looked vulnerable (for instance, after losing half a billion dollars in an effort to compete head-on with Bell Canada in the long-distance calling business) or just plain slipped up (as it did with its “negative option” billing plan in 1995, causing a consumer revolt). But Rogers always clawed his way back. For that reason his story has taken on near-mythical status in Canadian business history: that of the outsider who not only took on the establishment but who put his fortune and reputation on the line again and again to do it.

In his own words

ON BEING UP TO YOUR EARS IN DEBT

“After meeting payroll, I would put all the bills in a hat and keep drawing invoices until our chief financial officer Pel Bell-Smith shouted: ‘That’s enough. No more money’…I was in the water and hanging on to the side of the boat, hoping for landfall.”

—Rogers was in a particularly tough spot in the early 1970s as he struggled to build the cable business. To stave off bankruptcy, he sold his shares in CFTO-TV, raising $1.5 million. He also took out a third mortgage on his family’s home. Some managers and employees borrowed against their own homes to chip in. Ultimately, everyone was paid back. “No one in my lifetime has ever lost one cent in receivables or interest on a Rogers’ account,” Rogers said.

ON WORKING CONDITIONS:

“Our first chief financial officer, a less than adventurous man named John Grinksy, quit the company abruptly, claiming he couldn’t tolerate going to the washroom and having cockroaches climb up his pant legs while he was on the toilet.”

—In September 1960, Rogers bought radio station CHFI-FM. It faced some “internal challenges” in its early days, including the state of its offices on Toronto’s Adelaide Street.

ON HEALTH

“I’ve had a lot of heart stuff since 1987 and one illness after another since age one. I’ve got more cuts up and down than you’ve got zippers on your clothes. But I’m surviving and I enjoy it.”

—Rogers summed up his long history of health problems in a Toronto newspaper interview on the eve of his 75th birthday. As a child, he was skinny and sickly, forced to eat sugar pills. He had also lost most of the sight in his right eye. By the mid-1980s, he learned that he was suffering from heart failure, and that he had had a “silent” heart attack without knowing it. That resulted in two decades of procedures and treatments, including a quadruple bypass in 1992. Given his father’s early death, Rogers often behaved as though he was living on borrowed time.

ON TAKEOVERS

“I am determined—the only acquisition that I really wanted and did not get was CFRB radio station.”

—Rogers completed many acquisitions over the years. A high point was the $3.1 billion purchase of Maclean Hunter, which owned more than 200 magazines (including Maclean’s), radio stations, a TV station, a newspaper chain and a cable business. However, despite numerous attempts, Rogers was never able to buy back the CFRB radio station his father launched, which was sold when Rogers was a child. The call letters stood for Canada’s First Rogers Batteryless, a reference to his father’s role in inventing the plug-in radio.

ON FIGHTING FIRE WITH FIRE

“You keep it up. I’m gonna hit you. I’ll be very blunt. If they screw us around too much, I’ll screw them around where it really hurts.”

—In 2005, Bell and Telus launched a price war, offering free phones and a year of cheap service to try and lure away Rogers and Fido customers. Rogers, in a newspaper interview at the time, offered a warning to his rivals.

ON ART

“One day, I was struck by one of [Loretta’s] beautiful paintings, and I said, ‘You’re such a good painter. I wish I were an artist, too.’ She retorted, ‘But you are, Ted. You’re one of the great bullshit artists.’ ”

—Rogers could be very convincing, a key to his ability to forge critical business ties. His first venture into broadcasting began with a cold call from a law office library to media tycoon John Bassett, whom he convinced to give him a meeting the next day. He once followed prime minister John Diefenbaker into his private washroom to pitch him an idea. “He always teased me afterwards that I was the only person with the gumption to go into the prime minister’s washroom while he was using it!”

ON BANKERS

“On one occasion, Robin Korthals wanted new and onerous covenants for outstanding loans to the TD Bank. I was infuriated because his demands would have put me and my company in a position where we simply could not manoeuvre quickly enough just when we needed to grow and expand. I hurled my keys across the room to him and shouted, ‘Here, you run the bloody company then!’ and stormed out…Robin, who would later serve on the board of directors of Rogers Communications Inc. for 10 years, jokes that I didn’t toss him the keys to the business, but the keys to my convertible Chrysler LeBaron.”

—Rogers had a love-hate relationship with bankers. He once estimated he borrowed $30 billion from them over the years.

ON HUMILITY

“Unitel will always stick in my craw as the worst business disaster of my life. Having said that, every entrepreneur has to learn from his or her failures.”

—Rogers unsuccessfully tried to enter into the long-distance phone business to compete head to head with Bell Canada. But his investment in the CP-owned company that would later be known as Unitel ended up becoming a quagmire costing Rogers half a billion dollars.

ON WHEN TO SAY YES

“The Houston Light & Power executives thought we had played a dirty trick. But, as Lord is my witness, I just wanted to sign the deal…They were so self-important that I was delighted to take all the extra money and get out of town.”

—The Texas buyers of Rogers’s U.S. cable assets insisted on a clause tying the purchase price to the number of subscribers, anticipating a loss of customers before the deal closed. So Rogers launched a marketing scheme, including $100 grocery vouchers for new subscribers, which added 42,000 new customers and upped the sale price by US$110 million to $1.37 billion.

ON WIRELESS

“I will always be a broadcaster at heart and a cable guy in mind, but wireless is a juggernaut. Often I am referred to as a ‘media mogul’ or a ‘cable czar,’ but those monikers are outdated, if they ever were applicable, given the vulnerability of the company due to debt loads before wireless took off.”

—Rogers was forced to make his initial investments in wireless from his own pocket after his board of directors, including his wife, Loretta, voted against the idea. They (probably correctly) feared that Rogers Cablesystems couldn’t handle any more debt at a time of 20 per cent interest rates. Today, Rogers is Canada’s biggest wireless provider and the business accounts for more than half of annual sales.

ON HIS SCHOLARLY PURSUITS

“I didn’t do real well at law school. I never did well in any school. In fact, I never got into any school on my own. John Graham, my second father, got me into every school because I couldn’t get in with my marks. They weren’t any good.”

—Rogers, though undeniably bright, told a Toronto newspaper that education was never among his top priorities. While boarding at Upper Canada College in Toronto, he was already tinkering with communications equipment. He built a four-metre antenna on the roof of his dorm that could be retracted out of sight during the day with a system of pulleys. Later, while attending law school at York University, he purchased his first radio station.

ON GIVING BACK

“Loretta and I both believe strongly in the need to give back to the community. We have been so fortunate in life and think it is our obligation to help others.”

—Rogers made his first charitable donation back in the 1950s, when he gave $200 in his father’s name to the University of Toronto. He and his wife, Loretta, ultimately donated a total of nearly $60 million to U of T and Toronto’s Ryerson University. They also gave to the University of Western Ontario, the University of New Brunswick and Upper Canada College. Beyond education, the family has been involved in numerous other charitable endeavours, ranging from organizations that support people with eating disorders to helping underprivileged children access activity programs in neighbourhood parks.

ON THE BIG PICTURE

“There are people who complain and who are not willing to put off the harvest. But I want to reinvest the harvest so there will be an even bigger harvest in the future.”

—If there was one thing about Rogers’s approach to business that separated him from his peers, it’s that he was willing to endure short-term pain in pursuit of long-term gains. He borrowed heavily to build a cable system and later a wireless network because he knew those assets, although incredibly expensive, would pay huge dividends for decades to come. Rogers was also willing to spend heavily to attract customers and build market share, reasoning that there would be plenty of time to figure out how to make money from his subscribers.

ON HIS LEGENDARY TEMPER

“I don’t know why I would sometimes fly off the handle. But I certainly earned a reputation for shouting and slamming doors.”

—There are numerous stories of Rogers’s legendary outbursts. While he insisted it was never personal, he also admitted that he couldn’t stand it when one of his people told him that something could not be done. Rogers’s fiery temper even reared its head during relatively mundane events like quarterly conference calls with analysts, where he once famously referred to upstart wireless competitors as “scallywags.”

ON SUCCESSION

“I would like to see the Rogers family keep control of this company that I worked so damned hard to build over 50 years for as long as feasible under today’s tax law regime.”

—Rogers saw succession planning as a two-pronged affair. The first task was to find a replacement as CEO, which he left up to the board of directors, although he made it clear that the company was likely to promote someone from its executive ranks. Equally, if not more important, was maintaining family ownership of the company, which Rogers accomplished by setting up a family trust that holds the company’s voting shares.

ON FAMILY VALUES

‘[My father] didn’t have a lot of life insurance at that age, so the businesses were sold, or shut or stolen. My job, my mother made clear to me, was to get the family back in the communications business. So I knew at age eight what I had to do.’

—Rogers made no secret that a driving force in his life was the death of his father, Edward Rogers, the radio pioneer who invented the batteryless radio, at age 38.

ON SPORTS

‘I remember talking to Ted about whether or not we should buy the Blue Jays, and I actually suggested that maybe it wasn’t the wisest investment we could ever make. He looked at me and said, ‘Tony, you have been my trusted media adviser for 25 years, and I very much appreciate your opinion.’ The next day, of course, he bought the Blue Jays.’

—Tony Viner, former president and CEO of Rogers Media

Though owning a professional sports team isn’t a recipe for making money, Rogers said the high-profile deal was worth it for the marketing benefits alone, not to mention being “good for the city and the country, for civic pride.” The company name hangs prominently from the walls of the former SkyDome (which Rogers also purchased and renamed Rogers Centre) and millions of Jays fans now associate the Rogers brand with their favourite team. It also provided valuable content for the company’s Sportsnet TV channel and FAN 590 radio station.