Interview Date: Monday January 12, 2004
Interview Location: Houston, TX
Interviewer: Paul Maxwell
Collection: Hauser Collection
MAXWELL: I'm Paul Maxwell, and I'm here with Clive Runnells to participate in the Gus Hauser Oral History series for The Cable Center. We're talking to Clive in Houston, and it's January something, the 12th, I think.
RUNNELLS: January 12th.
MAXWELL: Clive, I wanted to ask you the first time you remember television.
RUNNELLS: The first time, basically, I remember television, I'd moved down here from Chicago. I was working in Wilson's Supply Company, and this was out on Maury Street. I was working in the backend of the pump department and across the street was a café called Wilson's Café, no relation to Wilson's Supply Company, and every morning after you had your coffee, or during coffee, they had a discussion about what they saw on Channel 2 the night before.
MAXWELL: It was the only channel in Houston?
RUNNELLS: The only channel in town.
MAXWELL: So what year was that?
RUNNELLS: About 1951. So that's the first year I knew anything about television, and of course I got a ratty old set after a while and watched it, too.
MAXWELL: So what then got you in the cable television business?
RUNNELLS: Well, I'll explain it very simply. In 1955, I think it was, I'd left Wilson Supply Company to do things on my own, and a friend of mine's uncle asked me if I'd be interested in helping a group that had bought the cable system in Williamsport, Pennsylvania.
MAXWELL: A long way from home.
RUNNELLS: It's a long way from here, and I said, well, I don't know, but let's go talk. So I did, I went to talk to one man named George Bruce, who was the uncle of my friend, Buster Vandergord, and then to Aaron Farfell, who was more or less ram-rodding the group. The group were all people older than I was, and I had no experience in cable television at all. So I said, okay, I'll go up and take a look. So I went up to Williamsport, and when you went to Williamsport in those days, you went from here, you went from Houston to Idlewild, not Kennedy at that time, Idlewild, and then if you had a little money you took a helicopter from there to Newark, and then got on Alleghany Airlines, a DC-3, and bounced over to Wilkes-Barre, and then on to Williamsport. You landed in Montoursville. So I landed, not feeling very well after bouncing around.
MAXWELL: DC-3s were great.
RUNNELLS: They were something else. And Ray Schneider was the resident manager, and Ray was a fellow who had, I think, gone to college in Williamsport, Lycoming College, played a little football. The people who had owned the system before were the G.H. Whitney & Company people, and Jerrold and Milt Shapp at Jerrold Electronics, and the two guys were very nice guys. One's still alive, one's dead. They were both Ivy Leaguers, they'd gone to Princeton. I happened to be an Ivy Leaguer also, and I'd gone to Yale. Ray wasn't sure whether he really wanted to have another Ivy Leaguer as his boss, but I was a different type of Ivy League because they lived in New York City and I lived in Houston. So, that evening we sat and had, I think, about three or four martinis a piece and agreed to agree. We looked over the system and saw what was going on. At that point you were charging $3.50 a month to retransmit the signals off the top of the mountain, and then we paid Jerrold either 15 or 25 cents royalty fee for using their equipment that you had bought.
MAXWELL: One of Milt's smart moves.
RUNNELLS: Right. So that was my introduction, and I stayed with that... That was the days also you could invest in a company, as I recollect the tax laws were that when you sold a capital asset you did not have to recapture your capital gains so you could depreciate the company, which this group did, and I at that time was allowed to buy a small percentage. The most anybody had was 10%, and so we kept the company until 1960 when it was sold. It was sold to... Charlie Glatt represented them, a wonderful, wonderful guy, and Murray Cantor was involved in it. In the meantime though, when I first got up to Williamsport and I looked at the pictures, they were so bad. They were so bad you could not believe it. The cable line ran down the mountain and it absorbed all the moisture, any rainfall and anything, you could take a knife and stick it into the cable and water would run out. So one of the first things I did, I told Ray we had to go ahead and replace that cable, and it was expensive, so the first year we didn't make our payments because we were rebuilding the system. They were all tubes – God knows how many tubes you had in there, but they were all tubes – and they were RCA tubes and they went out quite often, too. So that was my introduction to cable.
MAXWELL: Do you remember how many subscribers Williamsport had?
RUNNELLS: We were the largest system in the country at the time under one headend. I think we had about 6,000, something like that.
MAXWELL: That's early '50s still.
RUNNELLS: That was middle '50s, '55 to 1960.
MAXWELL: How big is Williamsport today?
RUNNELLS: I have no idea.
MAXWELL: No, I don't either.
RUNNELLS: After we got done I didn't go back for pleasure reasons or anything, but I remember how bad the hotel was.
MAXWELL: It was probably one of the old downtown ones.
RUNNELLS: The Lycoming Hotel.
MAXWELL: Well, it was Lycoming College, right? So what was the next experience with cable? You sold that, and I presume came out okay.
RUNNELLS: Yeah, well, my little percentage, but yeah. I'd gotten to know... I was elected to the board, and then I was the treasurer of the association. The NCTA, when I first got on it at that time, had a budget of $110,000. Quite a difference.
MAXWELL: That's the light bill now.
RUNNELLS: That's right, that's exactly right. And then I got to know a bunch of the guys – George Barco, an outstanding guy, outstanding guy. Marty Malarkey was there, Bill Daniels was there, Fred Stevenson, Toby Flynn – all of the old timers were there. Fred and I got to know each other pretty well, and he was working for Senator Fulbright. The Fulbright family owned a cable system in Arkansas, and he wanted to branch out on his own, and I said, okay, we'll do it together. So we looked around and we ended up with a system in Nevada, Missouri. It was a franchise which was a long way from here. But the one in Nevada, first of all they didn't want to give us a franchise. The other fellow, a lawyer by the name of Boyd Yealing, took up the cudgel force and he was the founder of the savings and loan laws in the state of Missouri. Boyd was something else. He drove his car and talked to you at the same time, like this, going down the road. His car had dents and nicks, God knows! Just awful. So we got our franchise, and we built that up.
MAXWELL: Where's that town?
RUNNELLS: In Nevada, Missouri. Nevada, Missouri.
MAXWELL: In Nevada? I don't know what part of the state.
RUNNELLS: Nevada is south of Kansas City, 120 miles south of Kansas City. Fred and I had a good time. Fred, actually though, he had a heart attack in the late '60s and he got scared, and he wanted to really travel, so I bought him out and we really hadn't finished building the whole town, so I built the whole town, got it in good shape, and it was a good little system. I had my family involved in it, but it was off the beaten track for me, and I was also at the same time in the ranching business and the mutual fund business, so I had those things going and I couldn't spend that much time. Jack Tyler was my manager and Jack did a very good job for me. As I recall, in about 1975 I went to try to get a rate increase, and I thought everything was fine, why not get a rate increase. Well, the senior citizens of the town objected so much at city council that they said no. I was a little irritated by that, a little irritated, and in the meantime, I had seen the mutual fund business in the '70s and the market going badly. The ranching business was great, but it was more a labor of love because it's so capital intensive plus land intensive. So I decided I'd look around here, here being Houston, and in Houston my ranch headquarters were down near Bay City, Texas, which you've got nine miles southwest of here, and it was Bay City, and it was Horton and El Campo. I thought, well, I'd look at those communities, and I found, my attorney when going through the records found that actually Communications Properties' predecessor had gotten franchises and had done nothing with them back around 1970. So I decided I'd go ahead and go for the Bay City franchise, and my attorney and I, because I had business and did business with the ranchmen around here I was known, and I went through all the proper things to do, and the mayor, Mayor Gussman was very nice, and so I got the franchise in Bay City. Then I went to Horton and I got the franchise in Horton. Then I went to El Campo, which I presently own, and somebody else sort of stepped in and said that they'd already franchised there, so I didn't get that. At that point I went ahead and was building Bay City and Horton and things around there, I got Sweeney, a couple things like that, and Markham – little towns, but they were all good cable towns. Here in Houston the signal was not that good, you didn't have all the choices. That was prior to the days of the dish, and I'm going to step back a little because during this time I saw a friend of mine going for city council down here in town asking for the franchise for Houston, and this was 1972. So I went and called a friend of mine, and I called Crosby at CPI and said would you guys be interested in trying to get the Houston franchise. Well, we got a group together, and we went through everything. We had two very, very strong groups. We came up to the hearings down here at city hall, and Louis Russ was mayor, a good mayor, good mayor. The only problem was Louis had friends on both the competing groups. Our group, which was Gulf Coast Cable, lost. Then, as it turns out, there were some people who said cable's a monopoly, which I turned a deaf ear to, and then said we want more than one. Well, the more than one campaign actually was run by Cathy Whitmire's former brother-in-law, as I recall. And it came up for a vote to the city, and we won the referendum, so that negated all cable in Houston. In the meantime, Gulf Coast Cable had made a commitment to the city of Bellaire. So we got to build Bellaire, and of course it was a money loser but it got our foot in the door, and that's when I went to Chicago to the national convention and we bought the first dish down here. And man, it was expensive!
MAXWELL: I remember that, yeah.
RUNNELLS: But we had HBO on though, and that was a real winner. HBO was great. So I had a guy working for me, Don Loggins. We didn't know if it was going to make it or not, let's put it that way. But as we added some customers there, we also went and got the town of West University, which is not far from here, and Southside, and we built those little communities so they were all tied into that Bellaire headend then, knowing that something was going to happen with cable sooner or later. In the meantime, I was still doing my own thing over here. I was not on any salary. It was a group deal, and I was the general partner, so I had to fund. We built a line, a cable line, from our headend in Bellaire out to The Villages. And so we started building line and getting the franchises in The Villages, which as you know, is the Memorial Drive area, very affluent, but a hell of a lot of trees. Lots of trees. You could pull ahead in a clear right of way and before you got it built the trees would come back. Well, we fought that and we had to buy a million dollars worth of equipment, and we bought from RCA and I had to go in the back of the note. So I fund that for a million bucks and it went over pretty well. With that we were spread... they were entities of Gulf Coast Cable, of which I was general partner, and I had a guy who came on board after a while. First I had Jerry Horton – I don't know if you ever knew Jerry, Jerry was an old-timer who did a great job for me – and we struggled to keep this thing going. On the other hand, I snuck down below and I finally got El Campo in '75-'76, and I had Sweeney, El Campo, Matagorda, Blessing – I didn't have Blessing then, I have it now – Horton. So those little communities were Mid-Coast Cable, which was mine 100%, and I had a guy who was working for me there to take care of this, and that worked out fine. Then the time came when Jim McConn became mayor, and he told some of the people that he wanted to have a cable franchise in Houston and talked to someone. They said, well, Clive Runnells seems to be doing a good job elsewhere, why don't we talk to him. We had a PR firm, Chamberlain Flaherty, they're both, I think, deceased, and Bill knew the mayor pretty well, and I got to know the mayor and we had others in our group who did, and then there was another group that came up, and I hired, because of what I had done to the Villages, I hired a fellow named Dick Barron, who actually had worked for Lester Cayman who was one of our opponents. Dick was from Massachusetts, and I give lots of credit to Dick. He was a fellow who knew how to get things done, and he loved working, loved cable, loved selling PR, a good guy, still a good guy, smoked one cigarette after another, a lot of irreverence but still, he was fun and I recall the day we got the franchise finally. We whopped and hollered and we got to celebrate. It was a great moment in our life when we got that franchise. Dick did all the work. I was the front guy, let's say, but Dick ran the organization. In the meantime, Jake Landrum who used to be with CPI went to work for me down in Bay City and he ran Mid-Coast. Of course by that time, we had dishes and we had all sorts of... we had bells and whistles for the whole systems, and I can remember the night we turned HBO on. Dick helped me with that, and he was a sales person. We went on the air and he said there's only 20 places left to get on here, and people would come up there with their nickels, dimes, and quarters to get it. At that point you had HBO, and you had Showtime and Cinemax and the whole shmear and then they took all of them, and today it's not different. So that's basically what's happened with cable. We built the cable system here, part of it, and then Gus Hauser with Warner Amex came in, and frankly I really didn't care about selling the system but my partners said they wanted to so it was sold. ???? shortly got sued, got taken to the courthouse, it all worked out. I kept my small systems until the late '80s, and I still have 6,500 subs in El Campo.
MAXWELL: Oh, you do?
RUNNELLS: Yes, I still have a few systems, and got a fellow named Wayne Neil working for me, very, very good, a good guy. So, it's been very good for me, a very good business to be in, and I made a lot of acquaintances in the past. I don't go now, if I got to the national conventions it's a whole new ballgame.
MAXWELL: I'm afraid it is. Almost no one is still around.
RUNNELLS: No, they all have left, or they're all dead or too old to get around.
MAXWELL: Or sold off and go off and do other things. So, how big was the Houston system when Warner Amex bought it from you?
RUNNELLS: I really can't tell you, I don't remember. Maybe 10,000-20,000 subscribers? It wasn't a whole lot, but all we had really built up at the time were those smaller communities.
MAXWELL: I remember when you built Bellaire, and that was right at the distant signal brouhaha just before HBO started.
RUNNELLS: Yeah, we built that and then we got HBO. That was a big kicker for us.
MAXWELL: That was a huge difference in the business. That actually helped Dick Jackson put the dish in in Vero Beach, Florida.
RUNNELLS: I've got pictures of the one when we put ours in.
MAXWELL: When you put yours in? That was the first one in Texas, wasn't it?
RUNNELLS: I don't think so, no.
MAXWELL: No? Who else had one before you?
RUNNELLS: We used CommScope cable, Times Wire, all that stuff, and Ray Schneider went to work for Times Wire. He did a good job. Poor Ray died, he smoked one cigarette after another.
MAXWELL: After another, I remember him. And Jake just had a tragedy.
RUNNELLS: Jake, I saw him the other day at the service, and Jake still smokes like a chimney.
MAXWELL: I know, he's a good guy.
RUNNELLS: Yeah, he is, he is.
MAXWELL: So were you active in the Texas association back in those days?
RUNNELLS: Not really. I let Jake... I was the Texas representative on the national, so actually I was on the national board four decades. Let's see, I was on '56 to the '60s, so I take two decades in there, and then I went back in '70, and then '80, and then '90, so I think five or six of them in there, whatever it is. I had a lot of fun with it, too, and I knew a lot of the Republican senators, not as many Democrat senators. Lloyd Dents was a good friend of mine, and Lloyd was an investor...
MAXWELL: But he's a Texas Democrat.
RUNNELLS: He always has been.
MAXWELL: Yes, I know.
RUNNELLS: He's not that well, unfortunately.
MAXWELL: He's a good man though.
RUNNELLS: His wife was outstanding. She was on our mutual fund board, so I know her quite well.
MAXWELL: Do you remember any of the big political battles that you helped fight at the NCTA?
RUNNELLS: The '83 job, we did the '83. Reagan signed that, and what was the one Strom Thurman signed? It was another one that he did. Basically we had more... the '83 was really the only... but there was always a fire somewhere that you had to put out.
MAXWELL: There still is.
RUNNELLS: That's correct, that's correct.
MAXWELL: It never goes away.
RUNNELLS: And Wheeler, Tom Wheeler, I enjoyed Tom, and Tom couldn't believe that I could get in some of the doors, but I could get in the doors because I was doing some other things. Tom was very good, after I got him in the door then he could sell.
MAXWELL: He could, he truly can. He just left the cellular industry finally.
RUNNELLS: He's done that a long time.
MAXWELL: He has. He was good at his job, I though, too.
RUNNELLS: He was very good. I haven't seen him in some time. Last time I saw him I was up there in the middle '90s seeing Jack Beales on some issue. Jack, I supported him when he first started running for Congress. I think it was '82 or '84. I supported Tom DeLay, Tom I know quite well. Tonight I'm going to something for Kay Bailey Hutchinson, who's done a great job. She's very good for us in Texas, and she was on the Interstate and Foreign Commerce, so she's probably done with cable then. I've been involved in that type of politics, but never run for office, never want to run for office.
MAXWELL: My father-in-law was a senator. I wouldn't want to do that.
RUNNELLS: Really? Who was that?
MAXWELL: Floyd Haskell from Colorado.
RUNNELLS: That's right, that's right, I remember the name. He wasn't there very long, was he?
MAXWELL: One term.
RUNNELLS: One term. Republican or Democrat?
MAXWELL: A Democrat, but he was formerly the senate majority leader as a Republican for the Colorado senate. He changed.
RUNNELLS: He changed the other way, right.
MAXWELL: Following the war in the '60s.
RUNNELLS: Yeah, that's right. I think I remember that.
MAXWELL: Good man, but he's gone. What about other mentors that you had in the business? Any names other than Stevenson that stick with you?
RUNNELLS: No. I knew all the older guys, the guys that have been around for a long time. I knew Jack Crosby, of course, I knew Jack well, I knew Hughes well, all those guys. But there weren't that many down here. I wasn't a golfer, so I didn't get out on the golf course and do all the schmoozing, and I had a bunch of other things to do, too.
MAXWELL: Well, ranching takes a little bit of effort.
RUNNELLS: That's right.
MAXWELL: My grandfather was a rancher north of Arlington towards Ft. Worth, and that is a tough business.
RUNNELLS: Well, right now... our Christmas present this year was the mad cow disease, and that knocked the market off 15-20%. It's coming back. We've got interest in two feedlots down on the border, and of course it doesn't hurt the feedlots because you've got to keep them full. I'm very fortunate I don't have any cattle coming off feed until April. By April I think things will be better.
MAXWELL: Things will be better, yeah.
RUNNELLS: And I really think that the Mexican border should open up fairly soon, and I think they'll get it done, but one animal that cost this country 3-4 billion dollars is really tragic. It's really tragic. It's the media, there you are. The media plays it up. When they don't have a good story then they've got to make up a story.
MAXWELL: There's enough on both sides of that. And they found where the cow came from anyway, so that's Canada.
RUNNELLS: That's exactly right, in Canada. And the probably all came from feed in England. Now they're going to start checking on dog food. I don't know who's going to eat dog food, but basically I think the figures... I think there's 134 people have died from BSC in England, and they had over 100,000 head of cattle, I believe that were eliminated.
MAXWELL: That were eliminated, right.
RUNNELLS: I guess that's a good word for it, and only ten in the rest of the world have died from it. So it's a pretty crazy thing. They were talking about Laredo, Texas. They've had 29 homicides already this year down there. I think some of the larger cities have an awful lot on Saturday night, I'm not sure, but they're not written up.
MAXWELL: Where'd you grow up?
RUNNELLS: Well, I grew up in Chicago and California. I was born in Chicago, and my father was sick and we moved to California, Santa Barbara for six or seven years, and then moved back to Chicago and then I went off to school in Concord, New Hampshire at St. Paul's, and then I went to Yale and then went into the service for a couple of years, back to Yale, worked in the Chicago area, and then moved down here.
MAXWELL: So where do you think the cable business is going now?
RUNNELLS: I really don't know. It's way over my head. It's a young man's game. It's all technical. I really don't know. The dish has taken a lot away, but I think the digital cable... you've got just as many pictures.
MAXWELL: Has DirecTV and EchoStar hurt you in El Campo?
RUNNELLS: To some degree, but we're ready to go ahead and upgrade, and do what we need to do. They have a hard time getting service. It's not as personal, and there's so much on there. There's too much on there. When I think that I was a pioneer and we only had... the networks were crying and now they charge us. You have to do this, that, and the other thing. We only had the three, I don't even think we had PBS. The thing in Williamsport was so bad. The picture... you couldn't even watch it. It was just all snow. But it was better than they had.
MAXWELL: I remember when Channel 11 was the second one on the air here, and it was Galveston...
RUNNELLS: Well, they had to have it down in Galveston, I think in Galveston county to allow it to get the permit. I'm not sure.
MAXWELL: I'm pretty sure that was it because they built it right on the county line. I remember that.
RUNNELLS: They were all very... when we did Gulf Coast Cable, they were all very supportive of us at that time, and then the interesting thing is that Dick Barron, it was his idea of HSE, Home Sports network. Dick had the idea and started off, and he didn't get any credit for it, unfortunately, and now they're trying to get together the Rockets, and the Arrows, and what's the other one?
MAXWELL: The Astros here?
RUNNELLS: Maybe the Astros, not football, and I think from there, if they do that, they'll have another pay. And frankly, I'd just as soon pay for it that way than go out to some of those things. I'm a friend of Bob McNair, I know Bob and I know a lot of people that are involved with it, but the Astrodome is just easier to park at. This one is tough.
MAXWELL: This is terrible. I went to the opening Texans game, thanks to my friends at ESPN, but it is a headache there.
RUNNELLS: I just had a call from a friend of mine. He had two tickets to the Super Bowl and I had to say no because I'm going to be out of town. I went to the one before, but this would be a circus. You might as well blow the whole day, the whole total day, and probably even more, 36 hours not 24 hours.
MAXWELL: So you've got 6,500 customers today?
RUNNELLS: Just about.
MAXWELL: Just about? And how many channels do you carry, do you know?
RUNNELLS: 40-some odd. Wayne runs it. I don't look over his shoulder. I just like to see what the cash flow is.
MAXWELL: And the other businesses you're in, you're still pretty involved in ranching today?
RUNNELLS: I still have a place in south Texas where I run steers, that's all I run is steers. I have an interest in a place in Matagorda county, and then my partner and I have an interest in two feedlots in Crystal City and Quemado, and then we have a brokerage cattle business in Laredo.
MAXWELL: And you're still in the mutual fund business, too?
RUNNELLS: No, I got out of that in '90, '89-'90. It was a group that finally ended up being called the Criterion Group, and I was the fiduciary, and I was president of our funds, so I wasn't in a day-to-day activity, but I had the fiduciary responsibility. I'm glad I'm out, but I can say when we were doing it they weren't doing those deals...
MAXWELL: They were doing after-hours hedging stuff?
RUNNELLS: No. In conflicts of interest I have done volunteer things such as being on the Texas Turnpike Authority, and chair of the Texas Turnpike Authority, so that's one side of it, and then I was chair of our MHRA, Mental Health of Harris County. John Lindsay, the former judge, now state senator, appointed me. We didn't know what a mess it was, but I've been involved with that. I just left a meeting of a mental health situation at Moursund Street, a gathering place that my wife and some other ladies started as a psycho-social clubhouse for adult schizophrenics. So, very basically I do quite a bit in mental health. I'm interested in things that go on out here at the medical center. So, I keep myself pretty busy.
MAXWELL: Good. I appreciate it. Anything else you want to add on your cable experience? What was the funniest thing you ever tried to accomplish and maybe didn't?
RUNNELLS: The funniest thing I ever tried to accomplish and didn't? Well, we didn't like being turned down. The first time when we went to the cable franchise in Houston, and we had some pretty funny things going on when we were doing the "more than one" because we were intimately involved with the "more than one" group, and we won, which was pretty nice, but we had to hire people to put the signs out on the esplanades, which people didn't like very much. He did that at dark, at night. So there were some funny times we had. Some of the people I've dealt with are wonderful people, some not so. I think going back in the early part of the '50s and early '60s, there really were some good guys. Then you've got to realize age takes over, and there's a whole new group coming along. The guys like Frank Drendel, and he's a very good guy, and he has lived through all these good, bad, and indifferent times. Frank's a nice guy, but a lot of it... I enjoyed it, I had a lot of fun, and it's time to smell the roses, I think.
MAXWELL: Good, well, thank you very much.
RUNNELLS: You're more than welcome. Thank you.