Mel's Diner: A Toni, Tony Affair

THE DISH: Lunch in Hawaii would probably be a more fitting setting for the first interview TV industry power couple Toni Knight and Tony Vinciquerra have done together. They got married there, have a house there and know the market so well that they’d love to buy a TV station in Hawaii. But we’re meeting up during the NAB Show in Las Vegas, so…alas, it’s “aloha” to the hopping Social Café in the Encore Hotel instead.

Before sliding into the booth with her husband, Tony Vinciquerra, the former chairman- CEO of Fox Networks Group who is now on the boards of DirecTV, Machinima, STX Filmworks and Univision and senior advisor for TPG Capital, WorldLink founder-CEO Toni Knight tucks away her NAB Show badge.

The couple has three kids under the age of 10 and they try not to be away from them for more than a night together. So they staggered their trip to Vegas: Knight came in Monday, Vinciquerra on Tuesday and they’re returning home to Los Angeles this afternoon (Wednesday).

They first met through business. Knight pitched WorldLink to Vinciquerra—Tony V, as many know him—while he was a top exec at Hearst. They don’t do business together now, but still know a lot of the same people in the industry, so the bar at the Encore during NAB felt like an ongoing reunion. “It was like, oh my gosh, all these people that you’ve seen throughout your life,” Knight says.

“I don’t get the opportunity to see that many people anymore, so it’s a good opportunity to do that,” adds Vinciquerra, who was inducted into the B&C Hall of Fame in 2009.

Vinciquerra is quick to point out that Knight’s company is one of the largest women-owned businesses in television. And while he has been adding more professional roles of his own lately—he joined Machinima last month—he says one of the reasons he stopped working the kind of job he had at Fox, which was global in scope, was the birth of their third child. A two-CEO, three-baby household “just couldn’t work,” he says of leaving Fox in 2011. “So that’s why—one of the reasons, not the only reason—that I decided not to continue,” he says. “But now the kids are all in school so it’s not quite as structured.”

“When they’re littler, there’s a lot more time demand,” Knight adds. “But now it’s a good quality life balance: To still have the ability to have that work focus, but you still get that quality time at home with the kids.”

Highlights of a wide-ranging chat about that balance, how to improve the representation of women on boards and their individual businesses follow.

How much do you guys talk about business?

Vinciquerra: We try not to talk too much about it, but when there are things we need to tell each other we will. You know, when I came to Fox, Toni’s company was already representing a lot of the Fox businesses so I had to have that in my agreement that that was already happening because it’s a public company.

Knight: It’s important, obviously, we work together as a husband and wife, but we also respect each other’s area of business and the confidentiality. And we get it, which is cool. It’s great. He’s great to bounce things off of and work together with, but ultimately, we know that there has to be some separation.

Toni, you had your business certified as a woman-owned business. Why did you do that and how important is that?

Knight: We did it in the beginning just because we found that it might have some benefit because a lot of people weren’t aware that I was the owner of the company and we didn’t know if that would create some opportunities for the company or not. It really hasn’t transpired into a lot of new opportunities because of it, but it’s still great to have that. I’m proud to be owning the company and to be part of that kind of organization.

This interview will appear in B&C’s inaugural Women’s Issue, and one thing we look at as a marker of opportunity for women in TV is board seats. Tony, you sit on some boards. So I’m curious, how are you seeing things for women today as far as getting those seats?

Vinciquerra: From the board perspective, there’s great demand for women to be on boards. Companies want different perspectives on their boards, so that they can approach their customers—all their customers. Since women are obviously a huge part of the marketplace, you need to have their perspective. I’ve been considered for a number of boards that went to women because they wanted women on the seat…but it’s the right thing, I think, because most boards don’t have that many women on them.…Most board searches now focus on really trying to find qualified women.

How can we get more women on boards?

Vinciquerra: First of all, it’s difficult to do when you’re working a full-time job. And if you have kids and all the other things going on, it’s really difficult. I think the path is, as more and more women mature in their business life and retire, leave their primary occupation, they’ll be looking at board seats more and more. I think that will happen over time. I think it will happen naturally.

Speaking of boards you sit on, we have heard at B&C is that an IPO for Univision might be imminent. Can you confirm that?

Vinciquerra:[Editor’s note: In answering a previous question, Vinciquerra clarified he can’t speak for the company as a board member.] Well, Univision is owned by a group of private equity companies. And you know, private equity companies are in the business to monetize their investments. I don’t know if there is something imminent, whether it’s an IPO or sale, whatever it is. The company—it’s clear what private equity companies do.

Recently you joined the board of Machinima. Why did you do that? What do you see as the potential there?

Vinciquerra: The potential of Machinima is it has a huge audience of young men who are so passionate and so focused and so dedicated to that channel, there’s got to be a future to it. We’ve got to figure that out. It is an audience that is hard to get at any other way and Machinima has figured out how to. And we saw a little bit of this at Fox when we had Fuel, if you remember that channel. It never developed a huge audience, but the people that watched were watching it for five, six hours a day. And there’s a small, passionate, aggressive audience that we couldn’t reach any other way. That’s what I think Machinima has. I think there is a way to maximize that.

Plus, the board: One of the things that was really attractive to me was the other people on the board. It’s a who’s who of new media people that are on that board. The people who are on that board I wanted to get to know and I wanted to hear what they’re thinking about media.

DirecTV finally came to an agreement with Weather Channel April 8. As part of it, DirecTV got Weather to agree to programming changes, which I haven’t heard of happening any time recently. More and more of what we’re seeing is cable networks rebranding, changing their name, changing their programming, with apparently no problem with any of their contract clauses.

Vinciquerra: I don’t know if that’s true, that there’s no problem with it. I’m not speaking for DirecTV here, I’m speaking from my history of the business, but when you make an agreement with an MVPD [multichannel video programming distributor] you agree to a programming description. You agree to provide that programming because the MVPD wants to provide to its customers a broad array of entertainment and information and try to balance that in some way. So if a programmer decides, ‘I don’t like what I’m doing. I’m going to do something else,’ they have to get the agreement of the other MVPDs to do that. That’s always been the way it’s happened. There’s always some give and take. On the Weather Channel’s point, the Weather Channel had gone away from its core.

Was it really about that though?

Vinciquerra: It was about that. We didn’t have a weather service. It was about that and the fact that people were not watching the Weather Channel anywhere near as much, because you can get it on your iPad, on your iPhone—from the Weather Channel.

Do you think we’ll see more situations like this, where programmers are made to make adjustments to their programming as part of these carriage negotiations?

Vinciquerra: I think there have been. It’s been happening that you may not see. It may not have been public. This one was unfortunately very public.

Knight: He didn’t talk about his best part [to Vinciquerra], you talked about the board seats and TPG, but his most relished job that he’s doing right now is being a ref for [American Youth Soccer Organization] soccer.

Vinciquerra: Not relishing it. But I have to do it for our daughter to play [the league requires families to volunteer]. Our 9-yearold daughter has become a soccer player.…I always say to the coaches, I just want you to know that having me as a coach—or referee— will be your worst nightmare. I’m horrible at it. I never played soccer. I negotiated billions of dollars of soccer deals around the world, but I’ve never played.

How do you manage being on DirecTV and Univision boards?

Vinciquerra: At Univision I recuse myself from any distribution discussions and I don’t even sit in the boardroom during those discussions. And at DirecTV, there really is generally no conversation about individual negotiations. I stay as far away from them as I can.

Let’s talk a little bit about NAB. For a lot of the broadcasters we have been talking to, the big things on their mind this year at the show are D.C. stuff. It’s all about regulation. Do you feel like the big focus indeed has been Washington?

Vinciquerra: Oh, no question. That’s all anybody’s is talking about here....Ownership—all the things that the FCC was ordered to do by Congress [biennial and then quadrennial rules review] they just never did. And now, the chairman of the commission is trying to catch up with that, but the water is way over the dam and the horses are way out of the barn, whatever you want to describe it as. It’s going to be really difficult to unwind a lot of this stuff.

Was there a time in your career when there was more movement in D.C. that had such potential to impact the business?

Vinciquerra: Well, yes, I think. Back in 2008-9 with the indecency stuff, if you remember, all we focused on at that point was what we put on the air. Fox was being sued by the government. It could have been really damaging to the business. It could have been multiple millions of dollars in fines.

You think the indecency stuff posed a greater potential than Aereo and all the FCC stuff going on now to impact things?

Vinciquerra: [Vinciquerra reiterates that his comments are his opinions and don’t represent any of the companies he’s affiliated with.] In terms of the amount of focus and attention paid to it, yes. And I’m not so sure Aereo is all that impactful on the business at the end of the day. From what I am hearing, the deals that are being done under retrans are being done whether or not there is Aereo.…I think the real impact is, is there another path for broadcast stations to get to the home using this technology going forward? And you know, I just don’t see that having as big an impact as people are thinking.

I think the ownership issues are going to have a lot of impact, but at the end of the day, I think four or five of these companies will go sit in a room and start trading stations and trying to figure all that out.

But if Aereo is deemed legal, what if all the MVPDs modify set-top boxes with Aereo-type technology and not have to pay retrans at all?

Vinciquerra: It will be very expensive to do that—to put an Aereo-like device in each home, in their set-top box. People will start running the numbers and with today’s retrans numbers, it’s probably not cost-efficient or effective to do it.

You once told me before, here’s something you need to pay attention to: retrans cash. What’s the next thing we should be paying attention to?

Vinciquerra: I think how this FCC stuff all plays out. I didn’t see Wheeler’s presentation the other day, but what I’m told is that he was pretty focused on saying ‘these are the rules.’ The JSAs and SSAs that allow for giant retrans negotiations and sales agreements in markets, if they are going away, my guess is that there will be a lot of lawsuits and it will be tied up in court for a long time. I just think we need to keep an eye on station groups and see what they’re thinking about and how they’re going to try and accommodate that.

Do you anticipate any of that confusion slowing down M&A and stations?

Vinciquerra: I think it already has slowed down. There are a bunch of deals pending that haven’t been approved.

Toni, how did you start your business? You were at Fox Sports Net at the time, right?

Knight: Well, I was at Prime Ticket Network and then Liberty Media bought us and it became Liberty Sports and then Fox and Liberty merged and it became Fox Sports Net. I was originally doing regular ad sales, just brand ad sales, and then all of a sudden we started to do some paid. Back when I was at Prime Ticket, someone wanted to put a half-hour fitness show on and when I first was at Prime Ticket, they weren’t even on 24/7. So I put together a business plan, showed the general manager that if we book these half-hour fitness shows, we’d make a certain amount of money and there wasn’t a lot of cost because it was all dark. And so that was kind of what spurred the whole area of the [direct response] business that we developed.

Then it just turned into a nice revenue stream and then when Liberty bought us—they had six regional sports networks and that was really when they said, ‘Do you want to go do brand sales? Do you want to do direct response? Because this has been something you’ve worked on.’ And so that was when I made the decision to focus on the direct response side of the business and then an in-house division for all the regional sports networks.

And then when Fox and Liberty merged, they were talking about growing original programming, reducing the half-hour infomercial programming. It became pretty clear that this was not an area they wanted to grow, they wanted to shrink.

So they were going to replace—

Knight: They were going to replace the half-hour infomercial time with original programs.

Vinciquerra: Original programming. The constant turmoil of regional sports networks. ‘We could put programming on that will do better ratings’ and then they do it, they spend millions of dollars, doesn’t work, they go back, then new people come in. ‘We can do original programming that can make millions of dollars!’ Then it fails. Then they go back—it goes back and forth.

So you thought there would be business, not just with regional sports networks, but you saw potential with other clients?

Knight: Yeah, and I think that was really the premise when I was talking to management about spinning out. This was not an area they wanted to grow, so they didn’t want to put a lot of resources against it. But it was an area that I was becoming passionate about. And so we worked out an arrangement for me to spin out and then do a deal with them. So that as they reduced the infomercial time, we could grow our business outside of the regionals, create leverage in the market so that we could still maximize revenue for them.

And so this way they didn’t have the head count internally, the expenses internally, we could still be a sales arm to them and then at the same time it allowed me to start talking to other media clients about representing them, because at the time there was really no one else doing it. It was a burgeoning area for ad revenue. I just thought that there was a niche opportunity and there was definitely no one doing it globally, which is why our focus with WorldLink was, how can we put together this cross-platform media company selling direct response and making it kind of a specialty area instead of an afterthought? Because a lot of the folks that were doing direct response, you know, it wasn’t really their main focus. They were doing it, but not really 100% behind it. And so I just wanted more of a boutique company that had systems in place to support, senior-level management to support and then seasoned sales people, so that we could really kind of raise the bar in this area of business.

When did you grow out on your own?

Knight: March of ‘97. I created a company and then the company did a deal with Fox. When I did the spin out—and at the time I had to sit with the employees and let them know what I was doing. And I talked with Fox and said, if this is not a path they want to take, is there opportunity internally at Fox? And so we kind of worked together.

I sat with each employee and said, ‘Really, it’s your choice. If you want to come with me, that’s great. If not, we’ll work with Fox to see if there’s other opportunities internally.’ And I did this on a Friday afternoon. And I said, ‘Take the weekend, think about it and then come back and let me know.’ And within five minutes, each one came into my office one at a time and said, ‘I’ll go wherever you go.’ And so it was really—it was a great opportunity and a moment.

Vinciquerra: It was five or six people.

Knight: Yeah, it was five people. So we launched with five people.

And now you have how many?

Knight: We have about 75 employees and it’s great because when we were started we were just doing the regional sports networks, which was a tremendous opportunity, and in the first year grew with other regional sports networks. We had a lot of leverage in the agencies because people wanted to buy regional sports, we were kind of the one-stop shop for that. And then from there we just wanted to grow cross-platform, so we started talking to national cable networks, then broadcasters. We started in the broadcast station business in ‘98. We started growing in—like we were doing syndication, in Spanish, and we grew internationally, and then over the years really was just whenever there was a new opportunity, how can we launch our efforts in those areas? And so we now have a number of platforms that we represent and offices East Coast, West Coast. And so it’s pretty great because as the business has evolved, we’ve been able to be part of each area.

And we were doing U.S. Hispanic business when we first started the company and then I started in ‘99 in Latin America, where we have a number of pan-regional cable satellite delivered channels in Latin America. And really, it was just looking at the way the population was exploding. We knew that that consumer base was going to be important to our clients. So early on we set up a whole division that was bilingual, both on the sales side and the backroom side so that we could service that business.

In the beginning, it was hard because there weren’t a lot of marketers that believed in that side of the business. We had to get people to try creative in English and then if they saw that it was working, then we got them to dub it into Spanish. And then when they saw that it really started to work, we were able to get them to start putting some resources against it and really making the Spanish creative fit for each different property.

Vinciquerra: There was also the challenge of fulfillment of payment, because it’s direct response.

Knight: Another big issue that we had was that a lot of the business on the Spanish side was cash. And obviously, it really needs to be credit cards. And so we really got more integrated with our clients because we had to help them with our whole backroom so that they could support the media buys.

That also translated when we were in Latin America, because in Latin America the way that the feed was sent out across the country, each country had its own unique legal issues, unique currencies. Everything was unique, and so we had to work closely with distributors in each country to make sure that we could put an advertiser on the air and that they could fulfill it. It was a great experience because I felt like I really learned more about the business than I ever had in the U.S.

Vinciquerra: It was the same thing in Europe and Asia, too.

Knight: And then when we grew into Europe and Asia, we had similar issues, but they were all unique to their own regions of the world. But it was great. Then we were able to go to agencies and help them grow globally, which was really kind of our goal.

We started working with each client, maybe here, maybe it was cable, and then we wanted to grow them across broadcast and then go from English-language to Spanish and then domestic to international, and when you do that, I think you create very strong relationships with the owners of the agencies because we’re helping them grow their business. And it was great for us because we were making them a much larger presence across the globe to do ad sales. It was a win-win for everybody.

Was there anything you learned from the international territories just about business in general that you could bring back?

Knight: It’s just very complex, just because of the legal issues internationally. There are so many nuances in each region that you have to deal with. It made me appreciate the U.S. because things were a little more simplified here. So it was a lot more challenging, but it was also a lot more rewarding when you figured it out.

And like I said, when you took that wisdom, then you could really be connected to what they were up against in setting up each campaign. Each one had its own issues. Even in Latin America, we had situations where there was civil unrest in you know, Argentina or something. And so all of a sudden we’d get a call from the networks saying, ‘We can’t do advertising anymore,’ and so then we’d work with them to shift the inventory to a different feed in a different country. And so it was that kind of stuff that you wouldn’t have to deal with in the U.S.

But again it was a great way just to learn the global business and whatever it’s up against. In Europe, there was a lot of legal issues because they had a whole governing body that we had to ship all our creative to to get them to approve it before it could go on the networks.

At any point, were you just thinking, ‘This might be more trouble than it’s worth?’

Knight: You’d think! No, you know why? Because I knew there weren’t a lot of people doing what we were doing and I felt like we were kind of creating the path. Because a lot of the media companies that we were working with were launching channels internationally, and so we just felt to be an effective partner, we wanted to be able to grow with them. If we’re helping them create ad revenue in the U.S., we should also be doing that in the other areas that they’re launching channels. So I think that was kind of the strategic plan. We just wanted to make sure we were the right partner and that we were able to grow when they grow.

What’s next for WorldLink? What do see as the next growth area?

Knight: You know, I think we’re working on an opportunity right now that’s kind of bringing us into more of the digital space and really kind of working on creating more service and opportunity with all our clients, so just expanding the level of service that we can offer our clients.

You already do play in the digital place, right?

Knight: Yes, but this is kind of a new area of business for us, but it complements what we’re doing right now. But it’s bringing in a kind of a different component that I think will be beneficial both to our agencies and to our media clients. And so we’re just looking at again, not only growing our media clients that we represent but how can we grow in the level of service that we provide and make sure that we’re constantly cutting edge with the right technology support. We have worked very hard since the beginning of the company to build a customized database that houses all the information for all our media and so it’s great because it’s all focused on the direct response side of the business. It creates efficiency, it creates accountability. We’re just big believers in the more that you can integrate into what you’re doing, the better you’re going to be at your job.

Tony, what’s next for you? Are you boarded out? Are you still taking seats at more boards? Are you open for working at a more full-time executive position?

Vinciquerra: It’s like every six months, two or three opportunities pop up. Most of them are not here—or, most of them are not in LA. So that’s a lot of screens—is it a short drive to my house? Is it something I’m interested in? Mostly it’s about the people that you’ve worked with. There have been a couple things I got close to thinking about, but nothing has really been—

Knight: I think he would if it was a really cool opportunity with the right group of people.

Viniciquerra: Yeah. In the right situation, the right people, the right place, I would consider. But that narrows it down quite a bit.

Knight: His strength is advising and consulting and bringing people together. I think it was one of the first ways I met him and became attracted to him because he’s so thoughtful in his approach. And I think that’s your strength [to Vinciquerra], and I think that’s what helps when you’re consulting and advising on the board. It plays to your strengths and then at the same time, it still frees up time so he can still have that life balance with the kiddos. And his reffing.

Tony, when you left Fox, I know you had a few opportunities to consult. Why didn’t you?

Vinciquerra: Well, I got a lot of opportunities to consult. People asked me to help them with various businesses they were launching or really big businesses that wanted some help in something that I had some experience with. And I always said to them, ‘Look, I’d be happy since you’re my friend, I’d be happy to help you—free. But I won’t take money because then I’d be working for you and I don’t want to work for you or anybody. But I’d be happy to give you any advice you want and help you with whatever you want me to help you with.’