John Chachas started his own boutique investment bank — Methuselah Advisors — with Lazard colleague Louis Zachary in 2010, soon after falling short in a bid to unseat then-U.S. Senate Majority Leader Harry Reid in his home state of Nevada. (He placed fourth in the Republican primary, losing to Sharron Angle, who was later defeated by Democratic incumbent Reid.) For the longtime financial executive, with decades of experience as an investment banker with Lazard, Merrill Lynch and First Boston, it was a blessing in disguise. Methuselah carved out a niche in broadcast deals, most recently advising E.W. Scripps in its $2.65 billion purchase of Ion Media. The boutique bank was instrumental in bringing Warren Buffett’s Berkshire Hathaway in as an equity participant. In part to ensure regulatory approval of that deal, Chachas bought 23 Ion stations, creating Inyo, which reaches about 16% of U.S. TV households. He spoke with Multichannel News about the television industry and his plans for the broadcaster. An edited transcript follows.
How did Methuselah come about? About 11 years ago, I had done something nuts and ran in the Republican primary for the U.S. Senate. When I lost in that primary back in my home state of Nevada, rather than returning to a larger firm, I decided I wanted to do something that was a little more entrepreneurial. Today, Methuselah is a small place, but we punch above our weight. I have a great team in place. My partner Louis Zachary and I have been together for 35 years, starting back to First Boston in the early 1980s. Whether it’s selling Rolling Stone or the New York Daily News, which we did, or working on bigger deals like Ion, now we are putting our own money to work in things like Inyo.
How did you get Berkshire involved in the Scripps deal? Some years ago, I got to know one of the key people at Berkshire Hathaway, a really terrific guy named Ted Wechsler [Berkshire’s investment manager], and I talk to Ted actively about deals. Having known Scripps for 40 years and knowing Ted like I did, I felt the two of them would get along pretty well from their history, roots and value systems. Frankly the credit goes to [Scripps CEO] Adam Symson and Ted. I had a good hunch and the hunch worked out, but it was really their work that turned it into a deal.
Why did you think it’s a good time to get into broadcast? I think there is a reckoning on the horizon, which is going to be very positive for over-the-air television and for people that have good creative content. Big tech in this country has financially benefited disproportionately from the content created by others. I think there's a big comeuppance that is about to happen and personally I think, notwithstanding how great it is to have all these choices for streaming, the American consumer wants good content and wants it preferably free. We made a tactical bet that the over-the-air station ecosystem was going to be healthy and grow.
All-time favorite TV show? Seinfeld
Books on your nightstand? The Splendid and the Vile: A Saga of Churchill, Family and Defiance During the Blitz by Erik Larson; Invent and Wander: The Collected Writings of Jeff Bezos; The Reagan Diaries by Ronald Reagan
Favorite app? Probably YouTube, just because I find increasingly there are so many useful applications beyond the entertainment aspect.
Destinations on your vacation bucket list? I am Greek by heritage, so I go back to Greece virtually every summer. Croatia, Vietnam, New Zealand.
Favorite podcast? I love listening to Ben Shapiro [The Ben Shapiro Show] and Joe Rogan [The Joe Rogan Experience], not necessarily because I agree with all of their politics, but I just find the pace of the podcasts incredibly entertaining.
Scripps has said it will not seek retransmission-consent fees for the Ion stations it bought. Will Inyo do the same? We will do the same. I think the retrans fee marketplace is suitable for certain kinds of local over-the-air broadcast assets. In this instance we’re best served by preserving our channel position and making sure that we’re carried, that the multicast channels that all these stations have are carried. I think we are better off focusing on the continuation of that model than we are trying to extract money out of the MVPDs that feel already burdened.
How do you compete with other larger network-affiliated broadcasters? Is there a big enough niche? People don’t realize Ion makes a lot of money. It is a very successful, genre-specific entertainment asset. The management team did a great job building awareness of Ion as a destination for specific kinds of content. Our relationship is that as long as Ion is successful, we’ll be successful. We’ll just continue to ride in that wake for now. Might we do something else in other broadcast areas in the future? I don’t know. Maybe, if we see attractive things to add, but in the near term we intend to be a supportive partner of that asset.
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