Steve Ross (Time Warner CEO) - Warner Communications

Warner Communications

In 1971, Warner expanded into the cable television business by purchasing various small cable companies. Where others feared to compete with the Big Three television networks who dominated television broadcasting, Ross saw the potential in narrowcasting whereby separate cable channels were developed to target specific audiences with narrower interests, mirroring the radio station model. This pioneering approach led to the creation of the successful cable TV channels MTV and Nickelodeon which were both later sold at a great profit.

In 1972, Ross was appointed CEO, president and chairman of Warner Communications. He introduced an incentive-based compensation, put the right people at the right place, and let them get on with their work. His support and commitment to his employees combined with lucrative financial incentives and a hands-off management style, inspired deep loyalty. Many employees saw him as a father figure, "Steve was very much what I wish my father was," Steven Spielberg said.

In 1976, Warner Communications purchased Atari, Inc. and had great success with its Atari 2600 consoles. In 1983, Atari dramatically collapsed, leaving Warner Communications vulnerable to a hostile takeover. Rupert Murdoch tried to buy Warner, but Ross was able to impede him by selling 20 percent of Warner to Chris-Craft Industries.

In 1979, needing financing to further expand its cable television business, Ross partnered with American Express, convincing its executives on the potential of selling AmEx credit cards direct to Warner cable TV customers. Warner-AmEx Cable was established and Warner received a much needed capital injection. AmEx's cross-sale expectations never materialized and in 1984, Warner bought out American Express's remaining share. The cable TV business eventually became the cornerstone of the company until being spun-off of in 2009.

In 1989, Warner Communications was merged with Time Inc. in a $14 billion deal creating the largest media and entertainment company at the time. The merger was seen as a perfect fit: Warner's business was 40 percent international while Time's business was 91% percent domestic; Warner had no magazines while Time had 23 titles; Warner had the world's largest record business while Time was not involved in music; and both were big in the capital intensive cable business where economies of scale mattered. Originally advertised as a combination of equals with both Ross and J. Richard Munro of Time Inc. listed as Co-Chief Operating Officers, Ross eventually became the sole CEO within a year of the merger. In 1989, Time Warner owned: Time, People and Sports Illustrated magazines (the three largest advertising draws in American publishing); the Warner Brothers studio in Hollywood; the Warner, Atlantic, Elektra and Asylum record companies; Warner Books; DC Comics; Home Box Office and some of the country's largest cable television systems.