• by Mark Lieberman , Op-Ed Contributor, December 5, 2011

"The entrepreneur, as a creator of the new and a destroyer of the old, is constantly in conflict with convention. He inhabits a world where belief precedes results, and where the best possibilities are usually invisible to others. His world is dominated by denial, rejection, difficulty, and doubt. And although as an innovator, he is unceasingly imitated when successful, he always remains an outsider to the 'establishment.'

--Theodore J. Forstmann, 1940-2011 

Ted Forstmann -- businessman, financier, “master of the universe” -- unfortunately passed away last month, at the not-so-ripe old age of 71. Many readers know Forstmann as Chairman of IMG, the sports- and media-management firm. But Forstmann’s rich career as a leveraged buyout investor comprised so much more. From his founding of Forstmann Little & Company in 1978, he wielded enormous influence on every sector he touched. What’s less widely known is the extent of Forstmann’s impact on the television industry. If not for him, we might not be where we are today.  Really.

As I’ve written here before, some 20 years ago the American television industry found itself at a life-or-death juncture.  The American Electronics Association lobbied the U.S. government for $1.5 billion to support R&D in high-definition television -- analog HDTV. The Japanese dominated the global television industry at the time, so investment in an analog solution would have locked us into a second-place position over the long term at best. Instead, John H. Sununu, President Bush’s Chief of Staff (and, incidentally, my college engineering professor) suggested to Secretary Mosbacher at the U.S. Department of Commerce (my former boss) that the government leave it to the industry to determine the best solution. 

Hold that thought.

Forstmann had just consummated a leveraged buyout of General Instrument, turning GI around to become a powerhouse in the TV business, delivering set-top boxes and solutions to the cable industry. Known for challenging the management teams at his portfolio companies to pursue the best possible business model, Forstmann wasn’t afraid of being disruptive -- in fact, he believed that disruption was key to innovation.  This was not considered the typical approach for an LBO shop.

So in 1990, GI responded to Mosbacher and Sununu’s challenge by defining and submitting the first-ever set of standards for digital HDTV. The industry coalesced around that digital standard to form the Grand Alliance for HDTV, leapfrogging over the Japanese analog solution, and a new industry was born. 

It’s not too big a jump to say that without Ted Forstmann, we wouldn’t be watching 500 channels, browsing digital cable guides on digital set-top boxes, pausing our digital DVRs, enjoying digital video-on-demand movies in SD or HD.  And arguably, the huge investment in Internet digital technologies may not have happened at the speed that it did, had the government invested in analog HDTV and had GI not stepped into the breach.

That’s why we need more disruption in our industry. To paraphrase Forstmann himself, we entrepreneurs in the TV industry are living the dream -- being outliers, dealing with the threat of failure, overcoming denial, certainly being imitated, and being treated as an outsider -- and yet having the courage to face up to creating the needed changes in a large and exciting industry.