This new venture received early support from a few cable companies including Storer Communications and ATC, but Hendricks had difficulty navigating the waters at TCI. There were a number of new networks entering the industry at that time and everyone was trying to get cable carriage. The company was burning through cash at an alarming rate and they needed to find some additional financing …fast. They got some relief when they arranged a deal with the Chronicle Publishing Company in early 1986. Hendricks informed his creditors to expect payment within the next couple of weeks. Then disaster hit – the Chronicle’s board rejected the deal and Hendricks found himself only a few weeks from bankruptcy.
Discovery’s employees promised Hendricks they were with him to the end. He started making some calls and one of his investors suggested he contact John Malone. Since he did not know Malone, he found someone who could make the connection for him. In his introduction to Malone, he said that Discovery would go under if it did not receive some financing. According to Hendricks, Malone said, “We cannot let anything happen to Discovery. This is what cable is all about.” Malone asked John Sie, who was one of his senior executives, to fly out and meet Hendricks. On a simple letter agreement, Malone authorized an immediate payment of $500,000. Hendricks next approached Bob Miron of Advance/Newhouse and Miron did the math on a napkin and said he was “in.” Then, Cox and United Cable provided additional financing …Discovery had raised the needed funds.
Today, Discovery is the #1 nonfiction media company in the world. They reach more than 2 billion customers in 220 countries with Discovery Channel, TLC, OWN, the Science Channel and much more. Hendricks is a classic cable entrepreneur who risked everything on his vision and changed the world. We often forget that cable was the original disruptive technology to television and that 30-something entrepreneurs with an innovative idea are a long and established tradition in the United States. Is it possible that "Through the Wormhole" on the Science Channel will ignite the imagination of a young person today? I would bet on it.
(Larry Satkowiak is president and CEO of The Cable Center, the nonprofit educational arm of the cable industry. The Center preserves cable’s enduring contributions to society, strengthens relationships between cable and academia and unites the industry around the advancement of exceptional customer service. www.cablecenter.org)