Granite Associates LP
A high school dropout, Alan Gerry transformed a tiny TV repair shop in New York's Catskills region into one of the nation's largest cable television systems. A pioneer in cable television, Gerry started small, providing reliable television reception to 300 subscribers in his hometown of Liberty, New York. Borrowing heavily but wisely, he built his cable system into the eighth largest in the United States. In 1996 he sold it to media giant Time Warner for $2.7 billion. But Gerry was far from through. Two years later, as chairman and chief executive officer of Granite Foundation LP, a venture capital firm he founded, Gerry purchased 2,000 acres of woods and pastureland in his native Sullivan County. It was not just any woods and pastureland, however, but the Bethel, New York, farm of the late Max Yasgur, home to the original Woodstock concert in 1969. Gerry announced plans to turn the near–sacred Woodstock site into a music–themed tourist attraction. Gerry, who has never strayed far from his roots in Sullivan County, made clear that his motives for the purchase had more to do with stimulating economic growth in the moribund Catskills region than any great love of rock music.
One of America's 250 richest people, Alan Gerry lives today with his wife, Sandra, in Sullivan County, New York, not far from the place of his birth. The couple has three children, daughters Robyn and Annelise, both of whom are married and live nearby, and son Adam, a recent graduate of Syracuse University's College of Law. The Gerrys have a second home in Naples, Florida, but spend most of their time in Sullivan County, not far from the Ferndale headquarters of Granite Associates LP, a venture capital firm founded by Gerry after his $2.7 billion sale of Cablevision Industries to Time Warner. It was Granite Associates that purchased the rural site of the original 1969 Woodstock concert for development into a theme park.
Son of a Sullivan County frozen food distributor, Gerry was born in 1928 in Ferndale, New York. During the hard years of the Great Depression, Gerry's father struggled to keep food on the table. Although Gerry and his family lived briefly in New York City's borough of Bronx during World War II, he spent most of his life in and around Liberty, New York, the heart of Sullivan County in the Catskills region. A few months shy of getting his high school diploma in 1946, Gerry dropped out to join the marines. He was not running away from an education but pursuing a specific program of study offered by the U.S. Marines and scheduled to be phased out. That program trained Gerry to service the electrical systems of aircraft. In 1949 he left the military and enrolled in a three–year television repair training course at New York City's Dellahany University. In his spare time, he began repairing TV sets, a business he later undertook on a full-time basis.
In 1951, Gerry opened a two–man TV sales, repair, and installation shop in a converted grain elevator in Liberty. One of the common complaints he heard from his customers was the difficulty that most of them encountered in getting decent TV reception in the mountainous resort region more than 100 miles from Manhattan. To supplement his regular business, Gerry began creating tiny neighborhood cable systems, linking 10 to 15 homes to a nearby master antenna mounted on the highest point in the neighborhood. The neighborhood cable systems were not terribly sophisticated, but they worked. In 1955, Gerry met with some representatives of Jerrold Electronics, one of the pioneer manufacturers of equipment for community antenna television systems. He learned that there was technology and equipment available to create large–scale cable systems that could deliver clear TV signals to hundreds of customers.
As a first step, Gerry appealed to Liberty's town fathers for permission to run 15 miles of cable throughout the town so that he could link together all the neighborhood clusters of customers he'd been serving. He then won local approval to erect a massive master antenna atop Liberty's Ravonnah Hill. When everything was finally in place in 1956, Gerry's first city–wide cable service began operations, providing his 300 initial subscribers with crystal clear reception of five TV channels. Pleased with the results in Liberty, Gerry began to aggressively expand to other communities in Sullivan County, obtained franchises in neighboring counties, and paid roughly $300 a subscriber to buy up existing small–scale cable systems in the region.
Convinced that his fledgling business—now dubbed Cablevision Industries—would fly much sooner if he alone were mapping its future, Gerry got a loan so he could buy out his partners in the cable operation. One of his stockholders, he later recalled, was the company accountant, "and he used to declare a dividend every 90 days—so there was no money to run the company." By the early 1970s, Gerry had expanded his cable system into nearby Pennsylvania and was making inroads into Massachusetts, but it was a painstaking process. John Rigas, chairman and CEO of Adelphia Communications, recently recalled the many obstacles faced by cable operators during that period. "To survive in those early years, you had to go to council after council—almost hat in hand—to get a franchise renewed or ask for a quarter increase." Rigas hailed Gerry for his contribution to the industry as a whole, saying: "Alan Gerry's tenacity and his strong commitment to properly serving his customers carried him through some difficult years, helped bring the industry to a higher level, and made him the giant he became."
Chronology: Alan Gerry
1946: Dropped out of high school to join the U.S. Marine Corps.
1951: Opened TV repair shop in Liberty, NY.
1956: Expanded into cable television.
1978: Negotiates $5.2 million loan from John Hancock Insurance to expand cable system.
1989: Converts Los Angeles area cable system to fiber optic.
1995: Received cable–Warner for $2.7 billion in stock.
1997: Purchased 2,000 acres near Bethel, NY, site of original Woodstock concert.
1998: Staged weekend concert at Woodstock site.
It was Gerry's practice to finance his regional expansions with loans from banks in the region into which he was expanding. Getting to know the local bankers upfront often paid off down the line when he needed community support for his plans or additional funding. As his financing needs became more extensive, he was forced to go to nationwide lenders. In the late 1970s, he negotiated a $5.2 million loan from John Hancock Insurance. When Cablevision passed the 100,000–subscriber mark, it went to the junk bond market for additional financing. Of Gerry's day–to–day involvement in the business, industry colleague Bill Bresnan, president of Bresnan Communications, said: "Alan Gerry really lived his company. He didn't sit in an ivory tower but visited his systems and went into those communities and met the mayors, city councils, and local newspapers. He rolled up his sleeves and got involved. So he got a real appreciation for the business and the people in it—the kind of understanding that you can't get in a distant office."
Gerry also helped to pioneer some of the technology that has allowed the cable industry to grow more rapidly. In the early 1980s, Cablevision installed the first high–powered microwave delivery system, using it to link together the company's cable systems in the Catskills region's Orange, Sullivan, and Ulster counties. Gerry used the microwave technology to link together 17 franchises his company had won in Massachusetts, and similar systems were constructed in the Middle Atlantic States and Florida. Speaking about the company's growth in this period, Gerry said: "For three or four years during the high–growth mid–1980s, we were the nation's fastest growing cable system, percentage-wise." Cable-vision was also one of the first cable systems to use fiber optic cable. In the late 1980s, the company purchased a cable system in the San Fernando Valley outside Los Angeles from a Canadian operator. To try to restore subscribers' faith in the system's reliability, Cablevision in 1989 converted the system to fiber optic, paving the way for many other cable operators across the country to follow.
In 1995, Gerry received the National Cable & Telecommunications Association's (NCTA) coveted Vanguard Award in recognition of his leadership in the cable industry. Each year, NCTA awards two of the Vanguard Awards for Leadership; one called the Larry Boggs Award is awarded to the man the association deems most worthy for his leadership role and the other called the Idell Kaitz Award is given to a leading woman in the industry.
Because Gerry had never taken a major equity partner nor offered Cablevision stock to the public, he owned more than 95 percent of the company himself when Time Warner began showing interest an interest in acquiring it in the mid–1990s. Over the previous four decades, Gerry had transformed the little TV sales and repair shop in a converted grain elevator into the eighth largest cable operator in the nation. The deal finally struck for Time Warner's acquisition of Cablevision brought Gerry approximately $2.7 billion in Time Warner stock. Cablevision, at the time of the acquisition, had 2,500 employees and approximately 1.3 million subscribers in 18 states.
On the far side of 65 after the sale of Cablevision to Time Warner, Gerry might reasonably have been expected to take the billions he'd made in the deal and retire to a sunnier clime to enjoy life away from the front-lines of the business world. But Gerry is not your average guy. Anxious to help others get a leg up in the field that had been so good to him, he founded Granite Associates LP, a venture capital firm that seeks to finance promising entrepreneurs in the technology field. He headquartered the new company, which he serves as chairman and CEO, in Ferndale, New York, the place of his birth, just a few miles down the road from Liberty, scene of his first business triumph.
Social and Economic Impact
As a pioneer in cable television, Alan Gerry helped to shape the industry as it matured into the vast business enterprise it is today. Although he dropped out of high school before getting his diploma, Gerry puts a high value on education and doesn't recommend his course of action to young people looking to make their personal fortunes in the high–tech field that was so good to him. Timing had a great deal to do with his success in the cable industry. By getting on board while the business was still in its infancy, he was able to parlay his modest investments into billions over four decades. A strong supporter of higher education, Gerry still recognizes that an occasional flash of inspiration or creativity can sometimes overshadow the value of a college diploma on your wall. "When you have a brilliant idea, nobody is going to ask your diploma," he once told Forbes. "You don't need a four–year college degree if you have burning ambition or a great plan."
Gerry's importance in the development of the cable industry is indisputable, but the folks in Sullivan County, New York, value him for the loyalty he's shown to the place of his birth. In the heart of the Catskills region, once a lively summer and winter playground for people from nearby New York City, Sullivan County and some of its neighboring counties have seen their fortunes reversed in recent years. Many of the big hotels and resorts on the Borscht Belt have been shuttered for a decade or more, including the famed Grossinger's in Liberty. The regional economy has been on the skids since the tourism business began its decline. But Gerry came up with a novel plan to draw more outsiders into the Catskills, especially into Sullivan County. In 1997, he bought up more than 1,000 acres of the Bethel, New York, site of the 1969 Woodstock rock festival, and announced a plan to transform the property into a theme park. Not because he's an unrepentant fan of rock and roll but because he thinks such a development could go a long way toward reviving the economy of the region where he has spent almost all of his life. It remains to be seen whether Gerry's plan will ever be realized, but it's clear to county development officials that he's doing what he can to help revive the region. And with a record like his, who's going to be against him?
Sources of Information
Contact at: Granite Associates LP
225 Sullivan Ave.
Ferndale, NY 12734–4313
Business Phone: (845) 295–2410
"Alan Gerry, Chairman and CEO, Granite Associates LP," National Cable Television Center and Museum. Available at http://www.cablecenter.org/Main/Museum/Hall_of_Fame. (26 November 2001).
Berger, Joseph. "Theme Park on Woodstock Is Envisioned." New York Times, 24 April 1997.
Bianco, Anthony. "Alan Gerry's Woodstock Notion." Business Week, 22 March 1999.
The Complete Marquis Who's Who. New Providence, NJ: Marquis Who's Who, 2001.
"Some Billionaires Choose School of Hard Knocks." Forbes, 29 June 2000.
"Gerry, Alan." Business Leader Profiles for Students. . Encyclopedia.com. (September 21, 2018). http://www.encyclopedia.com/education/economics-magazines/gerry-alan
"Gerry, Alan." Business Leader Profiles for Students. . Retrieved September 21, 2018 from Encyclopedia.com: http://www.encyclopedia.com/education/economics-magazines/gerry-alan
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