The Dish on Stanley Hubbard
Disarming fellow, Stanley S. Hubbard. His demeanor is that of a cordial, self-effacing, small-town banker circa 1965, the sort of conservative, detail guy who’ll walk you through your decision on that new Oldsmobile you want before he makes you the loan—just, you know, to be sure you’ve got your ducks in a row and that you’ve thought of everything, upside and down. The vibe is most definitely not what you’d expect from someone who, depending on the year, ranks between number 236 and 297 on Forbes’ list of “Richest Americans.”
Hubbard, 77, is in his office at the St. Paul headquarters of Hubbard Broadcasting Corporation most days that he’s in town. He says his children are in complete control of the sprawling family business, though Stan (who runs the Reelz cable-satellite channel), Rob (11 TV stations), and Ginny (four radio properties) check in with him regularly, especially when a major decision is in the air.
His low-key manner and relatively low profile around town are curious for someone whose family is so deeply rooted in the Twin Cities and whose business has led profound evolutions of the media that we all view every day: the advent of television itself, TV news, broadcasts in color, chatty “personality” news anchors, and satellite signals sent directly to our rooftops.
“I’m not a big party guy,” Hubbard says, asked about his quiet-seeming life. “I don’t hang out much.” He gets together with a few buddies at the Town and Country Club in St. Paul, or the Minneapolis Club. He entertains on his boat on the St. Croix. Beyond that, he says he’ll catch an occasional movie and that Desperate Housewives is a guilty pleasure: “God, that show makes me laugh.”
About the family business, he also concedes this: “I admit I was never a good manager. I just didn’t enjoy that as much as working on new ideas.”
Hubbard seems most animated these days about a business he started in 2009, St. Paul–based Hubbard Aviation Technologies, after buying the technology from a California firm. Its core task is building “hush kits”—elaborate mufflers—for older Gulfstream private jets.
“There are roughly 380 G2s and G3s out there that can’t land at places like Naples, Florida; Jackson Hole; Paris; and a lot of other places because of noise restrictions,” he says. “With these kits, you don’t have to buy a new $20-, $30-million airplane. For a fraction of that cost, you have full access again. This is a terrific market.”
It’s the latest chapter in a long career that has otherwise been spent in broadcasting. Whenever Hubbard talks about his trajectory there, he prefaces his remarks with a caveat: “I was lucky. I had a head start, and I admit it.” The leg up was due to his father, the legendarily crusty Stanley E. Hubbard, an unequivocally self-made man responsible for the birth of commercial radio in Minnesota and for many of Hubbard Broadcasting’s later innovations. Young Stanley S. had a tough act to follow.
“By the time I was 40,” Hubbard says, “I knew more about the TV business than my Dad. I just did. He was at the end of his career. He had a different way of looking at things.”
“Stanley E.,” as many associates referred to the original patriarch, had ushered in the age of television, buying the first television camera in the country in 1938, and creating the first television station between Chicago and the West Coast. (More on S. E. Hubbard and Hubbard Broadcasting’s firsts follows this article.) But Stanley the Elder was thoroughly old school about debt, refusing several times to allow Stanley S. to mortgage family properties to buy more stations.
The younger Hubbard understood that by the 1960s, the television game was in rapid evolution. The number of households with television sets was soaring. Broadcasts in color were becoming commonplace.
“I could have bought WDAF in Kansas City for $5 million,” in the early ’60s, Hubbard says. “I could have bought stations in San Diego [KGTV] and Palm Beach [WPBF] for about the same. But Dad didn’t want to do it. I couldn’t talk him into it. He told me he didn’t want to take the risk. He said, ‘I’ve built this and I don’t want to lose it.’ It pissed me off, but I understood.”
When he did have a chance to go station shopping in St. Petersburg, Florida, in 1968, Stanley S. moved deftly on a lackluster UHF property, WTOG-TV, which he bought, upgraded, and had turning a profit in 30 months.
The mind boggles at the missed opportunity to get three network-affiliated stations for $5 million apiece, especially because, not so long ago, before the recession, the industry was rife with rumors of a big media conglomerate, most likely ABC-Disney, hinting at a $1 billion price for KSTP. A billion dollars might have been the stuff of funny cigarettes and pixie dust, but there’s no question that such a sale—more realistically in the fat nine figures—would have driven Hubbard’s Forbes ranking up a few dozen more notches. It still could, if it weren’t for the fact that Hubbard isn’t interested.
“Nobody calls anymore,” he says. “They don’t bother. They know we’re not selling.” Hubbard is by all indications entirely content with the operation as it stands today, though he confides that Reelz still has some distance to go to reach a black bottom line: “It’s getting better. I’d be happier if it got there faster, but Stan’s doing a good job. He’s got it under control.”
Hubbard has always operated just a little apart from the norms of his peers and competitors. There are distinct qualities to what might be called the “Hubbard Way,” among them the insularity of the family operation, a remarkable loyalty to a small collection of friends, and a fierce pride in his own integrity. Even his office—essentially a conference room with a small table and half a dozen chairs—seems out of keeping with his chairman-and-CEO title. His guests mostly arrive in suits; Hubbard’s customary attire is shirt sleeves, none of which scream Milan couture.
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The key moment in his career will always be the successful launch of United States Satellite Broadcasting (USSB), a bet-the-farm gamble a decade and a half in the making that became a giant leap forward in competing with cable and gaining access to a national audience. It was not the sort of move you’d have seen from his father, who died a year before the satellite lifted off from Guyana in 1994.
USSB grew from Hubbard’s belief, at the dawn of the cable age, that “it just made sense” to blow past the staggering cost of laying wire to every house in the country and instead deliver programming from the sky.
“I remember exactly where I was when I decided I was going to do what I had to do to get into direct broadcast [satellite],” he says. It was 1981. “I had just dropped Rob off at school, and it was raining. The wipers were going. The idea of delivering satellite to houses wasn’t new. Comsat [a private corporation set up by an act of Congress to administer communications satellites] had tinkered with one. But no one had come out and grasped what it really meant. But as I was sitting there in the car, it just struck me that a license for direct broadcast wasn’t just a satellite license, it was a national broadcasting license. Not just one market. The whole country. That was the moment.”
That year, the Federal Communications Commission awarded Hubbard the first permit for direct broadcast satellite. But it would take 13 more years of coaxing investors and holding their hands when they wavered before the “bird” left the launch pad. Along the way, with his father disabled by a stroke in the early 1980s, Hubbard also created Conus, a small-dish satellite news service for other TV stations.
No twist in the story was more dramatic, however, than the 11th-hour loan that Hubbard worked out with U.S. Bank predecessor First Bank in Minneapolis and its then new and besieged CEO, Jack Grundhofer.
Hubbard’s best stories come with a refreshing lack of circumspection and a nice accent of salt, especially for the bad guys as he sees them. His friend, Jim Dowdle, now retired from Tribune Company broadcasting, jokes about Hubbard’s penchant for “quotability.” “Slow news day?” Dowdle laughs. “Call Stanley.” (You want to prime the pump? Get Hubbard going on Ted Turner, Arianna Huffington, or George Soros, the latter an investor in USSB. Or, God help you, just mention global warming.) The bad guys in the USSB deal were the Norwest Bank executives who pulled their financing with the satellite rocket nearly ready for launch.
Hubbard recalls unburdening himself about this at the Minneapolis Club to his friend Rod Burwell. Burwell had built his fortune through engineering underground gasoline storage tanks with Xerxes Corporation, then acquired other businesses under the umbrella of Bloomington-based Burwell Enterprises. He had a relationship with Grundhofer, who had recently returned to the Twin Cities after years with Wells Fargo in California. Grundhofer’s unenviable charge: setting a reeling First Bank back on track.
“The other bank all of a sudden shut him off,” Grundhofer recalls of his first meeting with Hubbard. “It was December, not long before Christmas, if I’m correct, and Stanley had to have [the satellite] up by the first of the year. Although I was relatively new to town, I, of course, knew who he was and that his family was very deeply rooted here. Point being, we needed three or four big accounts like the Hubbards to turn the bank around, and he obviously needed us.” Grundhofer sent his officers over to Hubbard’s offices for a weekend crash–due diligence session.
First Bank’s own situation was “precarious” then, Grundhofer says. “And I told Stanley—who, as I got to know him, I came to see as this really wonderful creature, a really deep-thinking person who is very loyal to those who do right by him—I told him that because it was such a big loan for us in the situation we were in, I had to do it in a way that I couldn’t be criticized. This was about the time I was taking all this ‘Jack the Ripper’ stuff in the press because of the people we had to lay off. The bank was not in good shape. Heck, we were going broke.” Everything about the loan had to be rock solid, he told Hubbard.
And it was. Grundhofer says that though the final loan “was in the hundreds of millions, the value of the various Hubbard properties covered the risk” to the bank.
“I also told Stanley that if we did the loan, I wanted all his family’s business,” Grundhofer recalls with a chuckle. “I got his word on that.”
The technical and market details of satellite television were murky then, but the mega-loan took just three days from start to finish. “We had confidence, mainly because we made sure we were protected, but partly because I had such faith in Stanley,” Grundhofer says. “So I was never all that worried about it, even though, obviously, it could have blown up on the pad.”
“We absolutely bet the farm,” Hubbard says. “The whole business was on the line. Because I believed in it. I knew it would work.”
After an initial public offering in 1994, USSB’s stock price spiked to $37 a share and slumped as low $11 over the next few years. In the end, Hubbard says the 1999 sale of the business to what is now DirecTV netted the family “a billion, in round numbers.”
Grundhofer says, “My God, think of the thousands of jobs created by the satellite television business. That’s what you’re talking about when you talk about someone being a pioneer—the ability to create an entirely new business of that size.”
Hubbard enjoys recalling his feckless years in high school at the Breck School and at the start of college at the University of Minnesota, a time when all he really wanted to do was play hockey. It contrasts nicely with what came later, and belies a singular steadfastness that friends and associates all remark on in one way or another.
Burwell, who has hotel interests in the Aspen-Snowmass area in Colorado and in Wisconsin, and with whom Hubbard once co-owned “a boat” (actually an oceangoing yacht), invested a significant amount of money in USSB while others were still scuffing their toes in the sand. “Stan’s word is absolutely rock solid,” he says. “Absolutely. If he tells you something, it’ll happen.
“I do wonder about him sometimes,” Burwell adds with a smile. “We like to argue, and if you disagree with him, or say, ‘Well, I don’t know about that,’ you can bet that within a day or two, you’ll get an e-mail or a magazine article or a book proving his point.”
“Oh yeah,” Grundhofer chuckles. “Stanley’s a real factoid kind of guy. You have to be careful if you get in a disagreement with him, because you know he’ll go off and dig up all this information and throw it back at you pretty quick.”
Dowdle, who worked 18 years for Hubbard Broadcasting before concluding his career at Tribune Broadcasting, believes that possessing the confidence of his convictions is what’s made Hubbard a standout in the broadcast media industry.
“Stanley is very well thought of in the industry. Very well thought of,” Dowdle says. “People know his family’s history. But the satellite business is really what he’ll be remembered best for. And it really is important to remember what a voice in the wilderness he was about that at a time when almost no one else thought it would work. A lot like Ted Turner, Stanley was thought of as a maverick at the time. I’d say 95 percent of the people in broadcasting thought Ted was crazy, and I’d say 95 percent of them thought Stanley was, too.
“There aren’t many people who would continue on with something with so many people thinking he was, you know, a little touched,” Dowdle says. “But he persevered.”
Listening to Hubbard and associates, there’s a sense that the wall of skepticism Hubbard faced during the long satellite campaign was octane to the competitive spirit instilled by his bumptious, self-motivated father. Hubbard is not someone quick to concede a fundamental error in thinking. Those who knew his father, “S. E.”, can see where that came from. In the face of doubt, Hubbard’s primary response is to double down on his game plan.
He is candid about his father, saying, “Boy, he was tough. Real tough. He had to be. He started out with nothing. And he was the boss. It was his business. He told me he expected me to work harder and longer hours than anyone else, and I did. But I never got complimented on anything in my life by my dad. Never. Although I did have the advantage of being able to tell him what I thought.
“I knew, though, when he was pleased by something I had done. You know how?” Hubbard smiles, “Because he wasn’t criticizing me.”
Dowdle says, “Stanley is very misinterpreted. There’s no question that he is an eccentric. But he has a heart of absolute gold.” Hubbard’s reputation for having a more ominous side, “this weird Darth Vader stuff, because of some anchors that were let go, couldn’t be farther from the truth.”
The here-today, gone-tomorrow cast of characters on the KSTP news set figures at least as large in the local public’s perception of Stanley Hubbard as any of his innovations, risky ventures, or philanthropy. The irony behind his, shall we say, “mercurial” reputation with anchor talent is that it, too, is the product of steadfastness.
Frank Magid, whose eponymous Iowa-based media research firm introduced “action news” and “personality” anchors to the broadcast industry in the 1970s, was a longtime consultant to KSTP. Moreover, “Frank was my very best friend,” Hubbard says. Magid passed away in 2010, but through the 1980s and ’90s, it was Magid research that suggested most of the high-profile musical chairs at KSTP—changes that were effected without ever restoring the station’s 10 p.m. newscast to the ratings and revenue prominence it had enjoyed in the early 1980s. Despite persistent criticism from industry observers and terminated anchors, Hubbard remained forever resolute in his faith and confidence in Frank Magid.
“There’s no question that the family, ‘S.S.’ in particular, should be, and I think will, rightly, be remembered as true innovators,” says Magid’s son, Brent Magid, who now runs his family’s business from the Twin Cities. “They came out of a very entrepreneurial environment, and because they are a family enterprise, they maintained that environment. They weren’t afraid to try things.
“This is in contrast with so many of today’s institutional managers, who are afraid they’ll fall out of bed if an idea goes bad,” Magid adds. “They don’t give As for effort, if you know what I mean.”
Hard to believe Hubbard would have gotten any As if USSB had been just an effort and not a success. But having so far to fall—a business worth hundreds of millions and a family legacy in the balance—just put the risk on the same scale as the eventual gain.
Burwell says, “That’s the real mark of an entrepreneur, to accept the risk and go all the way.”