Bold Women, Big Ideas

Kay Koplovitz - Introduction

ou have a brilliant business idea. You know it can work. Now, how do you put it in motion? How do you draw up a convincing business plan? How do you wow potential investors and get the financing you need?

Kay Koplovitz knows. She went from selling cable TV services to local politicians in northern New Jersey to founding and running one of the most successful television franchises in America, USA Networks. But, when the company was sold in 1997 for $4.5 billion, not a nickel of the sale proceeds came her way. Instead, she was on the street without a job. Why? She didn't have equity. And equity - ownership - is all that counts.

Looking for money to start new businesses, Koplovitz soon learned another tough lesson: More than 95 percent of American venture capitalists are men, and 95 percent of the money they invest goes to male-owned businesses. So, how do women get money to fund their start-ups? They don't.

This realization spurred Koplovitz into action. She started a venture capital forum called Springboard, designed to help women develop the networks and presentation skills to get the money they need.

In Bold Women, Big Ideas, Kay Koplovitz introduces a new generation of gutsy, ambitious, smart women who are breaking the barriers of the old-boy network and forging their own start-ups. She shares personal stories of courage, failure and, ultimately, success. She shows how to craft a bulletproof business plan, create a winning pitch, meet the right investors, and walk away with the money you need.

The following excerpt from Bold Women, Big Ideas: Learning to Play the High-Risk Entrepreneurial Game was reprinted with the permission of the publisher, Public Affairs,™ a member of the Perseus Books Group.

Bold Women, Big Ideas

BY KAY KOPLOVITZ

This is a book about women in business, particularly about the new generations of women entrepreneurs. In recent years, I have become a kind of beacon to any number of them in the fast track, high-tech areas of the new economy, and I've come to care passionately about helping them pierce the veil of equity ownership.

In fact, I'm one of them myself. As I shall explain later, I am out there, too, hell-bent on raising money for a great new business in the tough capital markets of the new century. But, the truth is that those of us who are taking the high-risk road have wrestled with the same decisions facing all women who want to start their own businesses: Where's the start-up money coming from, excluding my credit cards? How am I going to cover the overhead - salaries, rent, taxes, utilities? How can I find good people to work for me - and pay them and keep them? How will I keep it all afloat until the revenue stream starts?

These are the basics we all have to consider, whether we're opening a shop, hanging out the shingle for a personal-service business, or shooting the moon with a technological break-through that is going to revolutionize (we hope) healthcare in America.

Capital.

Any start-up business requires capital, even if it's for the entrepreneur to feed herself and her family while she pitches her services over the phone. On a recent holiday in Puerto Rico, I ran into a woman who was staying at the same hotel I was and who, it turned out, wanted to start her own bridal-gown business. She had some business experience, and once she learned who I was, she wanted to know all about how to raise venture capital.

"The bridal business might be great for you," I said, "but venture capitalists are just not going to be interested in it."

"Why not?" she asked. "I think I can do very well at it."

"I'm sure you can. But, equity investors, like venture capitalists, want high-growth companies that are quickly scalable and have the potential for a significant market share. They're looking to cash in with a sale or a public offering within a window of three to five years. Your business will require building a consumer market from the ground up, with Vera Wang and thousands of others for competition. It could take years."

"Then what am I going to do?" she asked. "I don't have the money myself."

"There are plenty of places to go," I assured her. "You just need to understand some things about the borrowing market."

"Banks and S&Ls, yes." And soon, I was willingly giving her a short course in lending. In fact, two banks with large national footprints - Wells Fargo and Fleet - have made a very strong play for women's business, and there are any number of so-called micro lenders that have cropped up in the United States in recent years, probably inspired by the famous Grameen Bank of Bangladesh that has lent small amounts of money to millions of borrowers in the past 25 years.

By far the most dynamic of these as a resource for women is Count-Me-In, a nonprofit, online, women-to-women "lending and learning" association founded by Nell Merlino, who also launched the "Take Your Daughters to Work" campaign, and her partner, Iris Burnett. Count-Me-In has raised millions of dollars from individual donors and corporations and is making micro-loans to women-owned businesses under a credit-scoring system radically different from that used by traditional lenders.

As I explained to my bridal-shop acquaintance, anyone with access to the Internet - and most businesswomen have it, as she did - has a great deal of exploring to do. All the women's business centers have Web sites, and all are ready and eager to dispense advice and give resources information and referrals.

The important thing to remember is that times are changing for women in business. Although nothing is as tough as starting out on your own - whoever said business was supposed to be easy, by the way? - there's a ton of information just a click away and help at all levels, for all manner of borrowers.

But, I made another point to the woman in Puerto Rico, and it's why I mention her here.

Although the stories I recount and the lessons to be learned from them concern the high-risk, venture capital end of entrepreneurship, the principles are the same for all of us! Unless we are independently wealthy (some entrepreneurs are) or have husbands with deep pockets (some of us do), wherever we go to raise money, we'll have to pitch our businesses.

Any formal written loan application will contain elements of a business plan in it, so we'd better know how to describe our business and our goals concisely and accurately. We'll be inter-viewed, too, and we're going to make an impression (good or bad). Our poise, our knowledge, our experience, our confidence - all these will be appraised.

But, above all, as we will find out, many people are out there ready to lend us a hand. And there are more surfacing all the time.

For me, as for women in general, it's been an astonishing evolution - or revolution. Think about it.

A half century ago, Rosie the Riveter was sent back to the kitchen when the men returned from World War II and took up their old jobs and careers. The only professions where women predominated were nursing and elementary school teaching. Maybe through the war years, our mothers and grandmothers got glimpses of different possibilities, a different future, but there were few women lawyers in 1950 and even fewer women doctors. (Harvard Law School, at mid-century, didn't even admit women.)

Still, when the breakthroughs came, they were in the professions and in small, personal-service businesses, while secretaries and gofers and "girl Fridays" (how I always loathed that term) began to climb their way into the managerial ranks of corporations.

In certain industries - communications, entertainment, publishing - progress was quicker. But, even there, with a sprinkling of highly publicized exceptions, the glass ceiling prevailed. Other industries - manufacturing, banking, transportation, Wall Street - remained totally in the control of the old boys.

When I joined the workforce in the early 1970s, women owned less than 5 percent of American businesses, generating less than 1 percent of total revenues. Yet, by 1998, they owned 9.1 million enterprises in the country, contributing $3.6 trillion to the GNP each year and employing over 27.5 million people. Along the way, they demonstrated repeatedly not only that they were good at business, but also that they were better credit risks than their male counterparts.

And yet, as I found out when I started looking, of the billions invested by venture capitalists in new businesses the previous year, only 1.7 percent went to enterprises owned or led by women.

Only 1.7 percent!

The number shocked me. Behind it, as I would discover, lay a harsh reality: How difficult it was for women in business to attract and obtain financing from any investing or lending source.

It was a reality, furthermore, that the feminist movement had, by and large, failed to address, and it was one I set out to change. But, there was a personal side to my motivation, too.

Although I didn't feel the bitter edge I've heard in many women's voices as they described their adventures and misadventures in the male-dominated worlds of business and finance, I learned the same lessons as they did in my field, which was cable television.

Male-dominated? Hell, when I started out in cable in the early seventies, all full of ambition and competitiveness, it wasn't just male-dominated. It was male.

It also happened to be a field full of potential that few people recognized.

In those days, cable was what you subscribed to when you'd just moved to the country and your TV screen registered snow or jagged lines or double images or perhaps nothing at all. Unless you were willing to put up your own giant antenna at great expense, cable, for a modest monthly fee, was your only path to clear reception.

In most parts of the country, it was local businessmen who saw the market opportunity; they erected the requisite antenna and set out to sell cable subscriptions to residents in their community. But, a clear image was all you got from your cable company in the beginning.

On the financing end - wiring a community, after all, required capital - investment was also strictly local. No venture capitalist - and there were some, 30 years ago - would have deigned to consider this cottage industry, even if it had appeared on his radar screen, which it hadn't.

The business caught on nevertheless: If you wanted decent reception in a town like San Clemente, CA, midway between Los Angeles and San Diego, you had no other practical choice. And soon enough there were mergers, buyouts, and a kind of gold-rush competition among cable operators who rushed to franchise every township, village and municipality before their competitors could gain footholds.

Commercial television, meanwhile, remained firmly in the grip of the three broadcast networks. Local channels gave their viewers local news and sports, reruns of network shows, and million-dollar movies.

There were no superstations, no HBO or Showtime, no MTV or Nickelodeon or ESPN, much less a Food Channel, a Golf Channel, a Learning Channel, or a Discovery Channel. Only when the cable operators tried to invade the suburbs closer to metropolitan areas where there was clearer reception did they begin to realize, however slowly, that they had to offer prospective customers something new.

This was still largely the state of the industry in 1973 when my husband Billy and I took our roadshow into the woods of northern New Jersey and Westchester County, selling our cable system to the mayors and town councils of a slew of communities.

We were working for a very smart entrepreneur, Bob Rosencrans, whose company, UA-Columbia Cablevision, was by then the ninth-largest cable operation in the country. We had 26 channels to offer in our basic package for a fee of $7.50 a month.

For an additional $8.00, viewers could get something called Home Box Office, which had been started by a smart fellow named Chuck Dolan. HBO bought up rights for movies just after their theatrical run ended and long before they were offered to the networks. But, HBO could broadcast them only in the immediate New York region, along with selected sporting events from Madison Square Garden.

All this was about to change - explode might be a better word - and I had the foresight to see it coming.

In 1968, I'd received my master's degree at Michigan State University in an interdisciplinary program in international studies. My area of specialty was communications, and the subject of my thesis was the coming impact of satellite technology on communications, television, government, and society.

The topic seemed pretty esoteric at the time. The first communications satellites had been sent aloft by the military in the 1950s, but they circled the globe at low orbits. Commercial applications followed in the 1960s, and the first geosynchronous orbiting satellites were launched, the same ones used today.

It wasn't until Sept. 30, 1975, though, that the telecast took place that would truly launch the cable television industry: The "Thrilla from Manila," the famous classic heavyweight championship bout between Muhammad Ali and Joe Frazier, was transmitted 90,000 miles via satellite from the Philippines to a 10-meter dish antennae in Vero Beach, FL, and Jackson, MS, and thence to television screens. The transmission passed its test with flying colors, to the satisfaction of the 200 congressional and industry leaders in attendance at Vero Beach.

New programming - the forgotten element of cable TV - was about to come suddenly and dramatically into its own.

In 1976, the option HBO held on Madison Square Garden sporting events was coming due. If HBO didn't take it up, Joe Cohen of MSG was willing to talk to potential competitors. I had already left UA-Columbia to start my own consulting business, but Bob Rosencrans, my former boss, could be persuasive.

He wanted to bid for the MSG broadcasting rights, but only if I would come back and run the show.

"I'll do it only if you will," he told me. "You're the only person I know who can pull it off."

At stake were 125 sporting events from the Garden, including the home games of the Knicks and Rangers, boxing, wrestling, and the Westminster Kennel Club Dog Show. All were now available for nationwide broadcast via satellite.

The clock ticked down on the HBO option. When it hit zero, the doors to the Garden opened wide, and in we walked. The result was the launch of the National Madison Square Garden Sports Network, which we announced in spring 1977.

We kicked off the campaign for the country's first basic cable network at the National Cable Television Show in Chicago that spring. By September, we had brought the network to 750,000 subscribers across the nation. For me, it was a dream come true.

But, let me stop here to make a crucial point. Years later, in view of what happened, I regularly got this question from people: Why didn't you hold out for a piece of the company?

It never even came up, I'd answer.

But, why not? How could that be?

Good questions - years later.

It never came up in 1976 partly because I knew Bob didn't believe in giving ownership to executives. I figured we'd one day go public and that my equity would come. Otherwise? Well, it just never would have happened in those days. Not because I was a woman either, but because Bob was the boss and my mentor in the business, and because the equity was his, and because the launch capital - all $600,000 of it - was his company's, too.

And me? I was the bright, determined upstart who'd just been handed the career opportunity of a lifetime. The beauty of what we did, of course, was not only to bring top-flight sports events into the cable home, but also, in the process, create a new business model.

Until then, television in America had depended entirely on advertising for its revenues. We projected two revenue streams for the network - one from advertising, yes, but the other from our cable operators. Ten cents per month per subscriber.

In another first, we got Bill Donnolly, national ad executive of the giant agency Young and Rubicam, to pledge $200,000 in advertising from his client base. Bill, a former Jesuit priest and something of a maverick, was willing to place a bet on the nascent sports network. This was exactly the kind of backing we needed.

My next step was to snag George Steinbrenner and the New York Yankees. The hated and revered Yankees! As a kid growing up in Milwaukee during the 1950s, I had been a rabid sports fan, and I was particularly passionate about the Milwaukee Braves.

My mom and several of her eight sisters were sports fans, too, and I maneuvered them into taking me to Braves games. That's when I fell in love with Henry Aaron. Oh, I loved Eddie Mathews, Warren Spahn, Del Crandall, and a bunch of others, too. But, when Hank stepped up to the plate, I knew he was going to hit one out of the park - just for me.

So why aim for the Yankees? I may have grown up hating the Yankees, but I also knew there were people all across America who loved them, and either way I knew real baseball fans would watch them on cable.

The Yankees, of course, had their local television deal with WPIX. But, when we offered them an audience outside the metropolitan area, it represented found money to Steinbrenner. We quickly negotiated the rights, and in spring 1979 the Yankees joined our network. We had a glorious opening game, too: They played their archrivals, the Boston Red Sox, before devout fans from both camps, and the Yankees won on Roy White's home run in extra innings. Who could have asked for a more exciting debut?

But, the euphoria of that inaugural game evaporated the next morning when I picked up the phone to a call from Bowie Kuhn, the commissioner of Major League Baseball.

Kuhn: Ms. Koplovitz, I understand your company broadcast last night's game between the New York Yankees and the Boston Red Sox, is that correct?

Koplovitz: We sure did, Commissioner. Did you watch it? It was fabulous!

Kuhn: I'm sorry, but you had no right to do that.

Koplovitz: I'm sorry, but we did. I have a signed contract with George Steinbrenner.

Kuhn: The rights don't belong to the New York Yankees, Ms. Koplovitz. They belong to Major League Baseball.

Koplovitz: But, how can that be? George Steinbrenner…

Kuhn: Beyond a 75-mile radius of New York City, Mr. Steinbrenner has nothing to say about it. That's where his territory ends and ours begins.

Koplovitz: But, we're only talking about two million households, Commissioner Kuhn. Maximum three million. And if you insisted, we could black out any cities where there's a major-league game scheduled.

Kuhn: That's not the point. It changes nothing. Either you voluntarily stop televising the games, or failing that, Major League Baseball will be obliged to get a restraining order to stop you.

A restraining order? But, how could I let that happen? I'd already sold the Yankee telecasts to cable systems all over the country! I managed to hide my shock and told Bowie Kuhn I'd call him back. Then, I got on the phone to my lawyer-husband Billy and related the conversation to him. Is this possible, I asked? Can he stop us?

Billy's advice was not what I wanted to hear. If Kuhn's statement about the 75-mile radius was accurate, Billy said, Kuhn could very likely get a restraining order against us. In that case, although I might have recourse against the Yankees for having sold us the proverbial Brooklyn Bridge, my programming would have gone up in smoke.

Still, there is nothing like an inspiration born of sheer desperation. I called the commissioner back.

Koplovitz: Mr. Kuhn, I want you to understand something. I believe I have a valid contract with the New York Yankees. I certainly liked what I saw last night. But, if the league is going to persist with this restraining order, I have something to propose to you instead.

Kuhn: What's that?

Koplovitz: A trade.

Kuhn: I'm not understanding. What kind of trade?

Koplovitz: If you insist, I'll trade in the Yankee deal for a deal with Major League Baseball. I'll televise the games of all the teams.

Kuhn: All of Major League Baseball?

Koplovitz: That's right. Let me explain.

It took some doing, but, out of that 11th-hour conversation came a negotiation, and out of that negotiation - this occurred, remember, before ESPN existed - came Thursday Night Major League Baseball. Commissioner Kuhn, it turned out, was delighted to have his own found money, as long as it went into Major League Baseball's pockets and not George Steinbrenner's.

Not long after that, we jumped into negotiations with David Stern, then general counsel of the National Basketball Association, for an NBA package, and with John Ziegler and Joel Nixon for rights to the National Hockey League. Within another year, we had over 500 live sporting events, most of them in professional sports.

By 1979, we had expanded programming to include a bloc of shows from Black Entertainment Television on Friday nights and from C-SPAN in the afternoon during the week. We quickly added children's shows and women's series, and in 1980, we changed the name to USA Network (and later to USA Networks) to better reflect our diverse program offering. I was on my way, and I never looked back . . . until 1997.

I ran USA Networks for 21 years. I was present, as they say, at the revolution - the revolution in programming and distribution that splintered the broadcasting monopoly of the networks and led to the diversity and multiplicity of choice that are television today.

I was one of the leaders in a growing industry that benefited enormously from the new kinds of high-yield ("junk") bond financing invented almost single-handedly by Michael Milken at Drexel Burnham.

It was Milken who backed people like Ted Turner, who built the superstation TBS into an empire that, after near-brushes with bankruptcy, he eventually sold to Time Warner, becoming thereby the largest single stockholder in the company; Charles (Chuck) Dolan of Cablevision, previously mentioned; and John Malone, who built TCI (Telecommunications, Inc.) into a cable powerhouse. I knew them all, worked with them all, and when our industry went to Washington to fight for our rights during congressional hearings, I was frequently among those who testified.

I was the working boss of USA Networks, and most of the time, I operated without interference. I'm naturally proud of all we accomplished; among other things, we successfully launched the Sci-Fi Channel in 1992. And although I certainly flourished as an executive in a mostly male world, there was that one important sense in which I was never permitted to play the game.

I'm back to the subject of equity. Ownership. To put it succinctly, the company that we launched with initial capitalization of $600,000 ended up being sold in 1997 for $4.5 billion.

That's right, 4.5 billion dollars.

If I'm not mistaken, that's a 7,000-time return on the original investment. Logically, a piece of that $4.5 billion should have been mine.

But, it wasn't.

Mind you, I had tried.

In 1981, Bob Rosencrans' cable empire, with all its build-outs, came under financial pressure, and the threat of a takeover by Canadian interests hung over Bob's head. He had to raise cash in a hurry, and our USA Networks became expendable. I desperately wanted to take the company public, but Bob was dubious.

Besides, he had to act quickly. I was in Spain on vacation when he called me.

"I know you want to take us public, Kay," he said. "But, I have this offer, and it's a good one. I have to take it."

The offer was $30 million, and it came from Time Inc., which by then, thanks to Jerry Levin, had huge investments in cable. Jerry wanted 100 percent of the stock. Initially, our working partners at Paramount (whose parent, Gulf & Western, owned Madison Square Garden) acquiesced in the sale, but Barry Diller, then chief executive at Paramount, convinced his boss, Martin Davis, to hang onto half of USA. Within the week, Barry brought in Sid Sheinberg and Lew Wasserman from Universal Studios (MCA), and Time agreed to a three-way split.

The playing field shifted overnight, from New York to Hollywood, and I became what has been dubbed in the industry the "bicoastal exec." I also felt a bit like Dorothy from Kansas. My still-small company suddenly had 15 members on its board of directors, representing three of the great heavyweights in the entertainment and communications industries.

Representing the East was Time Inc., then a formidable publishing house with cable systems and HBO as part of the Time stable. Time was a big player in the emerging cable industry and liked the idea of a programming network with a lot of original programming. The cast of characters included Jerry Levin, now retired as CEO of AOL Time Warner; Jim Heyworth, then CEO of Home Box Office; Michael Fuchs, who would become CEO of Home Box Office; Thayer Bigelow, a Time Inc. executive; and Dick Monroe, then president of Time Inc.

From the West Coast came the two studios. Paramount was represented by Michael Eisner, now chairman and CEO of Disney; Barry Diller, now chairman of Vivendi-Universal Entertainment; Mel Harris, now co-president of Sony Studios; Rich Frank, the former president of Disney; and Art Barron, the ingenious general counsel of Paramount. Representing MCA, parent of Universal Studios, were Sid Sheinberg, MCA's president; Tom Wertheimer, executive vice president; Al Rush, chairman of MCA Television; Bob Hadl, corporate counsel; and Charles Engel, a program executive.

And me.

Mind you, the trio of owners made strange bedfellows. They had just survived a protracted lawsuit against each other - Time on one side and Paramount, Universal, and three other studios on the other - over the pay-movie rights granted to the studio-owned Premiere Movie Network.

Premiere had been launched by the studios, under the capable leadership of industry veteran Burt Harris, as an assault on Home Box Office. HBO, now owned by Time, was taking the country by storm with its offerings of recent movies, and the studios feared finding themselves at its mercy.

After a series of skirmishes, the main battle was played out in court. Time Inc. won the suit, whereupon the parties decided it was time to make nice. That's precisely when USA Networks came along, and I often felt afterward that we just happened by the night peace broke out among the warring parties.

The peace turned out to be short-lived, and six years later, in 1987, Time Inc. decided it wanted out - at almost any price. Here was my second opportunity.

I went to see Martin Davis, the CEO of Gulf & Western and, therefore, one of my three bosses. I was ready to pay $100 million for Time's third of the business - I actually had my backing in place - but, I was also ready to raise $300 million to buy out both Gulf & Western and Universal, as well.

And Mr. Davis, in his wisdom, turned me down.

Instead, Paramount and Universal joined forces. They agreed to pay Time Inc. $52 million for its third of USA. In other words, they got it for about half of the valuation I'd established.

Well, you win some, and you lose some. In practical terms, all the deal meant was that I now had two bosses instead of three. And life went on.

Some years later, Lew Wasserman and Sid Sheinberg, chairman and president, respectively, of MCA, sold their company to the Japanese conglomerate Matsushita. Five desperately frustrating years later, having never understood Hollywood, the Japanese sold MCA to Seagram's, and Lew and Sid went off to count their money.

Meanwhile, Gulf & Western trimmed down as a conglomerate and consolidated into Paramount Studios, which itself soon became the object of the affections of two media barons, Sumner Redstone and Barry Diller, who duked it out in a bidding war.

Redstone eventually won and absorbed Paramount into Viacom, itself a growing media power. The original agreement between MCA and Paramount, however, dating back to their acquisition of USA Networks, contained a clause that appeared to provide that any basic cable channels owned by, or acquired by, either parent company had to be placed under the USA Networks umbrella; in other words, they had to be owned equally by the partners.

When Viacom acquired Paramount, therefore, it was obliged to sell a one-half interest in its two major television assets, MTV and Nickelodeon, to MCA and put them under USA management. But, it never happened.

Since Viacom had owned MTV and Nickelodeon prior to the Paramount acquisition, Sumner Redstone felt no obligation to share them. Besides, he'd never been known to sell anything once it was his. And when I once asked Sid Sheinberg of MCA if he intended to try to enforce the clause - after all, it did involve the company I ran - he replied, "Only if I have the stomach to spend five years in court fighting Sumner Redstone."

This was the situation under the Matsushita regime. Once Matsushita sold MCA to Seagram's, however, everything changed. Edgar Bronfman Jr., heir apparent to the Seagram's fortune and mastermind of the MCA acquisition, was eager to prove himself every way he could as an entertainment heavyweight.

Once he learned about the old clause in the agreement with Paramount, he demanded that Viacom sell him a one-half interest in MTV and Nickelodeon or, alternatively, sell him Viacom's half interest in USA. Redstone, predictably, refused. And Bronfman filed suit.

As part of the suit, Bronfman demanded 100 percent of USA Networks. And so did Sumner Redstone in his countersuit. The legal proceedings hung over us at USA like a dark shroud. I did my best to keep the Sci-Fi Channel and our USA Networks franchise humming. But, as time passed, heated charges began to fly back and forth, and as the suit wore on without resolution, I could feel the great company I had built about to be ripped asunder.

At the same time, I saw an opportunity - a way to break the deadlock and, in so doing, realize my old dream of equity. What if I could persuade one or the other of the litigants to sell out to a third party? What I really wanted, of course, was to buy USA Networks lock, stock and barrel, but realistically, I would settle for a share. The more I thought about it, the better the idea seemed.

Quietly, in the spring of 1997, I began to do some prospecting in the capital markets, sounding out investors I thought might be interested. Before long, I'd come up with a plan, and I set out to test the waters.

I've often wondered what would have happened if I'd orchestrated it differently. Suppose I'd corralled Redstone and Bronfman in the same room. Suppose I'd gone in there, gunslinger-style, cash on the table, and said, "Boys, here's the deal. I'm buying you both out." Blowing smoke off the barrel of my Colt at the same time.

Well, I didn't. For one thing, there was no way I was going to get these two titans to sit at the same table, not with the court battle in full and public fury. Instead I took them on one at a time, one day after the other.

Day One was Edgar Bronfman Jr. The Seagram's Building, on Park and 53rd, is one of New York's fabulous landmarks. Designed by Mies van der Rohe, it is an architectural treasure, an elegant gift to the city landscape from the Canadian company that, after all, was founded on bootlegged whiskey. Edgar Bronfman Jr., with his elegant clothes and good manners, clearly belonged there. He greeted me with his habitual politeness, but also with a genuine cordiality, and heard me out in the same spirit.

We chatted about the lawsuit a while, and I told him how it was hampering my operations. Then I popped the question.

"What if you lose the case?" I asked him.

"I don't believe that's going to happen," he said smoothly.

"Well, look," I said. "Maybe you're right. But, you might also be wrong. And I think I can extricate you from any risk. Suppose I were to go to Sumner and offer to buy out his half of USA. The way I've got it worked out, you could end up owning 80 percent of the company instead of 50 percent. I'd get the rest."

I worked through the numbers for him.

"It's an interesting idea," Bronfman said, "but Sumner will never sell."

"He's never been a seller, I know, but his position in this lawsuit is a tough one. I'd never underestimate his will to win, but he already owns great cable networks, even without USA. This could be an attractive exit from an embarrassing lawsuit."

"I doubt it'll work," he said.

We talked some more. I pitched and pitched.

But, Bronfman shook his head. His answer was still no.

"No thanks, Kay. It's an interesting idea, I admit, and I appreciate your bringing it to me, but I don't think I have to do anything except sit tight. We're going to win the suit, I'm very confident of that. And when we do, we'll end up owning 100 percent of USA anyway."

Sumner Redstone, I expected, would be more blunt. Viacom's offices at 1550 Broadway were as far removed in spirit from Seagram's as the Upper West Side is from the Upper East. Nothing sedate or slow tempo about the atmosphere at MTV and Nickelodeon, although Redstone's executive suite was large, well appointed, and decorous in tone.

I knew Redstone to be crusty and spirited and prone to jabbing his words at people, but he couldn't have been more laudatory and receptive toward me than he was that day. And he was full of ideas for making USA Networks a star in the Viacom firmament.

"I love USA," he enthused. "Great company, Kay. You've got a great company there."

Damn, I thought. While he was handing out gold stars, I was about to tell him I wanted to take USA away from him.

But, that's what I'd come for, wasn't it? Undaunted, I pushed ahead, laying out my proposal to him. His response, alas, was utterly predictable.

"But, I don't have to do a damn thing, Kay," he said in his hard Boston accent. "Not a damn thing. We're going to win. We'll end up owning all of USA. Sure, if we wanted to start some new channel tomorrow morning, maybe they'd have a right to half. We might be willing to do that. But, retroactively? To make us sell them half of stuff we owned before we bought Paramount? That makes no sense. It's not going to happen. Never."

Doggedly, I persevered, even switching the scenario to make him my eventual partner in Bronfman's place, but Sumner Redstone was having none of it. He wouldn't sell. And he didn't have to buy. It was all going to be his anyway.

Droit de seigneur.

In the end, I walked back to my office at Rockefeller Center in total frustration. Where to go from here? Nowhere. Without even a quiet "maybe" from Edgar or Sumner, who in the financial community would so much as talk to me? They'd rather sit on the sidelines and play eventually with whichever one of the two moguls won the legal shootout.

And I was out in the cold.

The court decided in favor of MCA.

The very next day, Edgar Bronfman Jr. announced the sale of USA Networks for $4.5 billion. Under the deal, MCA (Seagram's) retained 45 percent of the company.

The buyer? Irony of ironies, it was none other than Barry Diller. Former head of Paramount, former head of Fox, and the bitter loser when Viacom and Sumner Redstone beat him out in the bidding for Paramount, Barry had been licking his wounds ever since and threatening to build his own entertainment empire, but he hadn't gotten much further than Home Shopping Network.

Until now.

Now, with the backing of John Malone, chairman of Liberty Media and TCI with its huge cable holdings, plus Bronfman with his 45 percent, Barry had just walked in the door and walked off with my prize.

Edgar and Barry held a 9 a.m. press conference to announce the deal. Then they headed over to my office. About 10 o'clock, they bounded into my suite at 1230 Avenue of the Americas, looking for all the world like a pair of newlyweds and glowing with the thrill of their new partnership.

Edgar, as always, was polite and somewhat formal, but clearly he was pleased at having brought his new friend Barry into the fold. He was brimming with confidence in Barry's ability to grow not only USA Networks, but the studio television production and syndication units of MCA, which he'd sold him as well.

Barry, for his part, was beaming. He announced that he would be repositioning his odd collection of properties under the umbrella name USA Networks. Furthermore, he'd already decided he would be chairman.

"Now that you've taken the helm of my company," I asked him, half in jest, "and my title, too, is there anything else I can do for you?"

This drew a nervous laugh from Barry, and the three of us joked about it for a few moments. But, once we parted company, I knew I wasn't going to like his answer.

Several months later, Diller summoned me uptown to his office at Carnegie Towers. I knew this would be the day that my question would be answered. Still, even now, I'm stunned at the turn the discussion took.

We began by talking about different roles I might play at the new and improved USA Networks, though without much enthusiasm on either side.

And then - this is the part I still can't get over, although in a way it was very Barry Diller - he treated me to a monologue of self-justification that must have lasted more than an hour. It was all about how hard his life had been the past couple of years, working out of a dreary industrial mall in Florida (Home Shopping's headquarters), and how he'd paid his dues - I think he actually used that expression - and how now, therefore, in summation, he had every right to want the trappings and perks of power.

Over 60 minutes of self-justification, and then came the punch line. I had the best job in the company, he said, and he wanted it for himself.

There it was. The other shoe had just dropped.

Even now, though, I'm not sure what he wanted from me that day. My approval, perhaps? Or my sympathy? Understanding? Forgiveness?

I'll never know. I do know that starting from scratch, I had built the first and certainly one of the most lucrative cable television franchises in the industry. And that, in the end, 21 years later, I was out on the street.

The issue wasn't careers now, or having had a good career, even a great one. The issue was ownership. And I wasn't in the game.

To the victor belong the spoils.